Document:

Exhibit 10.18

 

OFFICE LEASE

 

520 PIKE
TOWER

 

 

WITH

 

 

EQUATOR TECHNOLOGIES, INC.

 

 

SUITE: 900

 

 

DATED: April 12, 2001

 

 

Table Of Contents

 

	
  ARTICLE 1:

  	
   

  	
  BASIC
  PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2:

  	
   

  	
  PREMISES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3:

  	
   

  	
  TERM AND COMMENCEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4:

  	
   

  	
  BASE RENT AND ADDITIONAL
  RENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5:

  	
   

  	
  QUIET ENJOYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6:

  	
   

  	
  UTILITIES AND SERVICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7:

  	
   

  	
  USE, COMPLIANCE WITH LAWS,
  AND RULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8:

  	
   

  	
  MAINTENANCE
  AND REPAIRS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9:

  	
   

  	
  ALTERATIONS AND LIENS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10:

  	
   

  	
  INSURANCE AND WAIVER OF
  CLAIMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11:

  	
   

  	
  CASUALTY DAMAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12:

  	
   

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13:

  	
   

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14:

  	
   

  	
  PERSONAL PROPERTY, RENT AND
  OTHER TAXES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15:

  	
   

  	
  LANDLORD’S REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16:

  	
   

  	
  SECURITY DEPOSIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17:

  	
   

  	
  ATTORNEYS’ FEES, JURY TRIAL,
  COUNTERCLAIMS AND VENUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18:

  	
   

  	
  SUBORDINATION, ATTORNMENT
  AND LENDER PROTECTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 19:

  	
   

  	
  ESTOPPEL CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 20:

  	
   

  	
  RIGHTS RESERVED BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 21:

  	
   

  	
  LANDLORD’S RIGHT TO CURE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 22:

  	
   

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 23:

  	
   

  	
  RETURN OF POSSESSION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 24:

  	
   

  	
  HOLDING OVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 25:

  	
   

  	
  NOTICES

  	
   

  

 

i

 

	
  ARTICLE 26:

  	
   

  	
  REAL ESTATE BROKERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 27:

  	
   

  	
  NO WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 28:

  	
   

  	
  SAFETY AND SECURITY DEVICES,
  SERVICES AND PROGRAMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 29:

  	
   

  	
  TELECOMMUNICATION LINES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 30:

  	
   

  	
  HAZARDOUS
  MATERIALS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 31:

  	
   

  	
  DISABILITIES ACTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 32:

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 33:

  	
   

  	
  OFFER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 34:

  	
   

  	
  YEAR 2000
  PERFORMANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 35:

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 36:

  	
   

  	
  ENTIRE
  AGREEMENT

  	
   

  

 

	
  EXHIBITS/RIDERS

  	
   

  
	
  1.M

  	
   

  	
   

  	
   

  
				

 

ii

 

OFFICE LEASE

 

THIS OFFICE LEASE
(“Lease”) is made and entered into as of the 12th day of April,
2001, by and between PIKE STREET DELAWARE, INC. (“Landlord”), a Delaware
corporation, and EQUATOR TECHNOLOGIES, INC. (“Tenant”), a California
corporation.

 

WITNESSETH:

 

ARTICLE 1:
BASIC PROVISIONS

 

This Article contains the basic lease provisions between Landlord
and Tenant.

 

	
  A.
  Building:

  	
   

  	
  520
  Pike Tower, located at 520 Pike Street, Seattle, Washington (the “Property”,
  as further described in Article 32 and Exhibit A-1).

  
	
   

  	
   

  	
   

  
	
  B.
  Premises:

  	
   

  	
  Suite 900
  in the Building as outlined or cross-hatched on Exhibit A-2.

  
	
   

  	
   

  	
   

  
	
  C.
  Commencement Date:

  	
   

  	
  October 1,
  2001 subject to Article 3.

  
	
   

  	
   

  	
   

  
	
  D. Expiration
  Date:

  	
   

  	
  September 30,
  2006 subject to Article 3.

  
	
   

  	
   

  	
   

  
	
  E.
  Rentable Area:

  	
   

  	
  The
  rentable area of the Premises shall be deemed 16,500 square feet, and the
  rentable area of the Property shall be deemed 362,690 square feet, for
  purposes of this Lease, subject to Article 32.

  
	
   

  	
   

  	
   

  
	
  F.
  Tenant’s Share:

  	
   

  	
  Four
  point five five percent (4.55%), subject to Articles 4 and 32.

  
	
   

  	
   

  	
   

  
	
  G.
  Base Rent:

  	
   

  	
  $48,125.00
  per month from the Commencement Date through September 30, 2002, and

  $49,500.00 per month from October 1, 2002 through September 30,
  2003, and

  $50,875.00 per month from October 1, 2003 through September 30,
  2004, and

  $52,250.00 per month from October 1, 2004 through September 30,
  2005, and

  $53,625.00 per month thereafter through the Expiration Date, as further
  described in Article 4.

  
	
   

  	
   

  	
   

  
	
  H.
  Additional Rent:

  	
   

  	
  Tenant
  shall pay Tenant’s Share of Taxes and Expenses in excess of the amounts
  respectively for the years 2001 (“Base Tax Year”) and 2001 (“Base Expense
  Year”), as further described in Article 4.

  
	
   

  	
   

  	
   

  
	
  I.
  Permitted Use:

  	
   

  	
  Executive
  and administrative offices, subject to Article 7. 

  
	
   

  	
   

  	
   

  
	
  J. Security
  Deposit:

  	
   

  	
  $59,000.00,
  which shall be subject to Article 16.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRIOR
  LEASE BETWEEN THE PARTIES:   Landlord, as successor in interest to
  Sixth & Pike Associates, L.P., and Tenant are parties to a lease for
  the Premises dated September 13, 1996 which lease was modified by the
  Lease Termination Agreement between the parties dated July 17, 2000 (the
  “Prior Lease”). Upon the Commencement Date herein, this Lease shall supercede
  the Prior Lease and provided Tenant is not in default under the Prior Lease,
  the security deposit shall be applied toward the Security Deposit required
  herein.

  
	
   

  	
   

  	
   

  
	
  K.
  Broker (if any):

  	
   

  	
  Washington
  Partners, Inc. who shall be paid by Landlord, subject to Article 26.

  
	
   

  	
   

  	
   

  
	
  L.
  Guarantor(s):

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  M.
  Riders/Exhibits:

  	
   

  	
  In
  addition to Exhibit A-1 (Property), Exhibit A-2 (Premises) and
  Rider One (Rules), this Lease includes: Work Agreement and Parking Agreement.

  

 

1

 

	
  N. Landlord’s Notice Address (subject to
  Article 25):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Tower Realty Management Corporation

  520 Pike Street - Office of the Building

  Seattle, Washington 98101

  Attention: Property Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Tower Realty Management Corporation

  255 Shoreline Drive, Suite 600

  Redwood City, California 94065

  Attention: Asset Manager

  
	
   

  	
   

  	
   

  
	
  O.
  Tenant’s Notice Address (subject to Article 25):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equator
  Technologies, Inc.

  520 Pike Street, Suite 900

  Seattle, Washington 98101

  Attention: Office Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equator
  Technologies, Inc.

  1300 Whit Oaks Road

  Campbell, CA 95008

  Attention: Facilities/Human Resources Director

  
	
   

  	
   

  	
   

  
	
  P.
  Rent Payments:

  	
   

  	
  Rent
  shall be paid to “Pike Street Delaware, Inc.” at 75 Remittance Drive,
  Suite 1118, Chicago, Illinois 60675-1118 or such other parties and
  addresses as to which Landlord shall provide advance notice.

  

 

The foregoing
provisions shall be interpreted and applied in accordance with the other
provisions of this Lease. The terms of this Article, and the terms defined in Article 32
and other Articles, shall have the meanings specified therefor when used as
capitalized terms in other provisions of this Lease or related documentation
(except as expressly provided to the contrary therein).

 

ARTICLE 2: PREMISES

 

Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the Premises subject to
the provisions herein contained. Tenant has inspected the Premises (and
portions of the Property, Systems and Equipment providing access to or serving
the Premises) or has had an opportunity to do so, and agrees to accept the same
“as is” without any agreements, representations, understandings or obligations
on the part of Landlord to perform any alterations, repairs, installations or
improvements unless expressly provided under this Lease.

 

ARTICLE 3: TERM AND
COMMENCEMENT

 

A.            Term and Confirmation.
  The term (“Term”) of this Lease shall
commence on the Commencement Date and
end on the Expiration Date, unless sooner terminated as provided herein, subject to adjustment as provided
below and the other provisions hereof. If the Commencement Date is advanced or
postponed as provided below, the Expiration Date set forth in Article 1
shall not be changed, unless Landlord so elects by notice to Tenant. Tenant
shall execute a confirmation of the Commencement Date and other matters in such
form as Landlord may reasonably request within ten (10) days after
requested; any failure to respond within such time shall be deemed an
acceptance of the matters as set forth in Landlord’s confirmation. If Tenant
disagrees with Landlord’s adjustment of the Commencement Date, Tenant shall pay
Rent and perform all other obligations commencing on the date determined by
Landlord, subject to refund or credit when the matter is resolved.

 

2

 

B.            Early Commencement.
  The Commencement Date, Rent and Tenant’s
other obligations shall be advanced to such earlier date as: (i) Landlord
substantially completes any improvements to the Premises required under this
Lease to an extent that Tenant is able to occupy the Premises, and Landlord
delivers possession thereof, or (ii) Tenant, with Landlord’s written
permission, otherwise commences occupying the Premises. If either such events
occurs with respect to a portion of the Premises, the Commencement Date, Rent
and Tenant’s other obligations shall be so advanced with respect to such
portion (and fairly prorated based on the rentable square footage involved).
During any period that Tenant shall be permitted to enter the Premises prior to
the Commencement Date other than to occupy the same (e.g., to perform
alterations or improvements), Tenant shall comply with all terms and provisions
of this Lease, except those provisions requiring the payment of Base Rent.
Landlord shall permit early entry, so long as the Premises are legally
available, Landlord has completed any work required under this Lease, and
Tenant is in compliance with the other provisions of this Lease, including the
insurance requirements under Article 10.

 

C.            Commencement Delays.
  The Commencement Date, Rent and Tenant’s
other obligations shall be postponed to the extent Tenant is unable to occupy
the Premises because Landlord fails: (i) to substantially complete any
improvements to the Premises required to be performed by Landlord under this
Lease, or (ii) to deliver possession of the Premises for any other reason,
including holding over by prior occupants, except to the extent that Tenant,
its contractors, agents or employees in any way contribute to either such
failures. If either such event occurs with respect to a portion of the
Premises, the Commencement Date, Rent and Tenant’s other obligations shall be
so postponed with respect to such portion (and fairly prorated based on the
rentable square footage involved). If Landlord so fails for a ninety (90) day
initial grace period, Tenant shall have the right to terminate this Lease by
notice within ten (10) days thereafter, subject to Landlord’s right to
cure as provided in Article 21. Any such delay in the Commencement Date
shall not subject Landlord to liability for loss or damage resulting therefrom,
and Tenant’s sole recourse with respect thereto shall be the postponement of
Rent and other obligations and right to terminate this Lease described herein.

 

ARTICLE 4: BASE RENT AND
ADDITIONAL RENT

 

A.            Base Rent.  Tenant shall pay Landlord the monthly Base
Rent set forth in Article 1 in advance on or before the first day of each
calendar month during the Term; provided, Tenant shall pay Base Rent for the
first full calendar month for which Base Rent shall be due (and any initial
partial month) when Tenant executes this Lease.

 

B.            Taxes and Expenses.
 Tenant shall pay Landlord Tenant’s Share
of Taxes and Expenses in excess of the amounts of Taxes and Expenses
respectively for the Base Tax Year and Base Expense Year in the manner
described below. The foregoing capitalized terms shall have the meanings
specified therefor in Articles 1 and 32.

 

C.            Payments.  Tenant
shall pay such amounts as follows:

 

(i)            Landlord may reasonably estimate in
advance the amounts Tenant shall owe for Taxes and Expenses for any full or
partial calendar year of the Term. In such event, Tenant shall pay such
estimated amounts, on a monthly basis, on or before the first day of each
calendar month, together with Tenant’s payment of Base Rent. Such estimate may
be reasonably adjusted from time to time by Landlord, including adjustments to
reflect the final Tax bills each year.

 

(ii)           Within 120 days after the end of each
calendar year, or as soon thereafter as practicable, Landlord shall provide a
statement (the “Statement”) to Tenant showing: (a) the amount of actual
Taxes and Expenses for such calendar year, with a listing of amounts for major
categories of Expenses, (b) any amount paid by Tenant towards Taxes and
Expenses during such calendar year on an estimated basis, and (c) any
revised estimate of Tenant’s obligations for Taxes and Expenses for the current
calendar year.

 

(iii)          If the Statement shows that Tenant’s
estimated payments were less than Tenant’s actual obligations for Taxes and
Expenses for such year, Tenant shall pay the difference within ten (10) days
after Landlord sends the Statement.

 

(iv)          If the Statement shows an increase in
Tenant’s estimated payments for the current calendar year, Tenant shall: (a) pay
the difference between the new and former estimates

 

3

 

for
the period from January 1 of the current calendar year through the month
in which the Statement is sent within ten (10) days after Landlord sends
the Statement, and (b) thereafter pay the new estimated amount until
Landlord further revises such estimated amount.

 

(v)           If the Statement shows that Tenant’s
estimated payments exceeded Tenant’s actual obligations for Taxes and Expenses,
Landlord shall credit the difference against payment of Rent next due. If the
Term shall have expired and no further Rent shall be due, Landlord shall
provide a refund of such difference at the time Landlord sends the Statement.

 

(vi)          Landlord reserves the right to
reasonably change, from time to time, the manner or timing of Tenant’s payments
for Taxes and Expenses. In lieu of providing one Statement covering all such
items, Landlord may provide separate statements, at the same or different
times, including separate statements for Taxes after bills are received.

 

(vii)         Tenant acknowledges that Landlord’s
ability to budget and incur expenses depends on the finality of such Statement,
and accordingly agrees that time is of the essence of this Paragraph. If Tenant
takes exception to any matter contained in the Statement as provided herein,
Tenant shall notify Landlord of such exception in writing not later than thirty
(30) days following Tenant’s receipt of such statement, and Landlord shall
refer the matter to an independent certified public accountant, whose
certification as to the proper amount shall be final and conclusive as between
Landlord and Tenant. Tenant shall promptly pay the cost of such certification unless
such certification determines that Tenant was overbilled by more than 5%.
Pending resolution of any such exceptions in the foregoing manner, Tenant shall
continue paying Tenant’s Share of Taxes and Expenses in the amounts determined
by Landlord, subject to adjustment after any such exceptions are so resolved.
If such certification determines that Tenant was overbilled, then Tenant shall
receive a credit for the amount of such overbilling against payments of Rent
next due.

 

D.            Fiscal Years and Tax Years.   If
Landlord now or hereafter uses a non-calendar fiscal year: (i) all references
to calendar years herein shall refer to such fiscal years, (ii) all references
to January 1 and December 31 herein shall refer, respectively, to the
first and last days of such fiscal years as the context requires, and (iii) if
Landlord changes fiscal years, Landlord shall make appropriate prorations such
that Tenant’s obligations hereunder are not materially adversely affected
thereby. Subject to Paragraph E below, Landlord shall include in Taxes each
year hereunder: (a) in general, the amounts levied, assessed or imposed
for such year, whether paid or payable in another year, (b) for personal
property taxes, the amounts paid during such year, and (c) for Taxes paid
in installments over more than one year, the amounts paid each year, and any
interest thereon. If any taxing authority uses a fiscal year other than a calendar
year, Landlord may elect from time to time, consistent with sound accounting
and management practices, to require payments by Tenant based on: (x) amounts
paid or payable during each calendar year without regard to such fiscal years,
(y) amounts paid or payable during each calendar year, averaging the bills for
each calendar year based on the number of days or months of such calendar year
included in each fiscal tax year, or (z) amounts paid or payable for or during
each fiscal tax year.

 

E.             Tax Refunds, Protest Costs, and
Expense Adjustments For Prior Years.   Landlord
shall each year: (i) credit against Taxes any refunds received during such
year, (ii) include in Taxes any additional amount paid during such year,
involving an adjustment to Taxes for a prior year, due to error by the taxing
authority, supplemental assessment, or other reason, (iii) include, in
either Taxes or Expenses, any fees for attorneys, consultants and experts, and
other costs paid during such year in attempting to protest, appeal or otherwise
seek to reduce or minimize Taxes, whether or not successful, (iv) credit
against Expenses the cost of any item previously included in Expenses, to the
extent that Landlord receives reimbursement from insurance proceeds or a third
party during such year (excluding tenant payments for Taxes and Expenses), and (v) make
any other appropriate changes to reflect adjustments to Taxes or Expenses for
prior years, regardless of whether Landlord uses an accrual system of
accounting for other purposes.

 

F.             Grossing Up.   If the
Property is not at least 95% occupied during all or a portion of any calendar
year, Landlord may, in accordance with sound accounting and management practices,
determine the amount of variable Taxes and Expenses (i.e. those items which
vary according to occupancy levels) that would have been paid had the Property
been at least 95% occupied, and the amount so determined shall be deemed to
have been the amount of Taxes and Expenses for such year. If Landlord is not
furnishing any particular utility or service (the cost of which, if performed
by Landlord, would be included in Expenses) to a tenant during any period, Landlord
may for such period: (i) adjust Expenses to reflect the additional amount
that would reasonably have been incurred during such period had Landlord
furnished such utility or service to

 

4

 

such tenant, or (ii) exclude the rentable area of such tenant from
the rentable area of the Property in computing Tenant’s Share of the component
of Expenses for such utility or service.

 

G.            Tenant’s Share Adjustments.   If the Property or any development of which it
is a part, shall contain non-office uses during any period, Landlord shall have
the right to determine, in accordance with sound accounting and management
practices, Tenant’s Share of Taxes and Expenses for only the office portion of
the Property or of such development; in such event, Tenant’s Share shall be
based on the ratio of the rentable area of the Premises to the rentable area of
such office portion for such period. Tenant’s Share shall be subject to such
other adjustments for such periods as may be applicable pursuant to Paragraph
E, above, and pursuant to the definition of Tenant’s Share in Article 32.

 

H.            Prorations.   If the Term commences on a day other than the
first day of a calendar month or ends on a day other than the last day of a
calendar month, the Base Rent and any other amounts payable on a monthly basis
shall be prorated on a per diem basis for such partial calendar months. If the
Base Rent is scheduled to increase under Article 1 other than on the first
day of a calendar month, the amount for such month shall be prorated on a per
diem basis to reflect the number of days of such month at the then current and
increased rates, respectively. If the Term commences other than on January 1,
or ends other than on December 31, Tenant’s obligations to pay amounts
towards Taxes and Expenses for such first or final calendar years shall be
prorated on a per diem basis to reflect the portion of such years included in
the Term.

 

I.              Payments After Lease Term Ends.   Tenant’s obligations to pay Taxes and Expenses (or any other amounts) accruing
during, or relating to, the period prior to expiration or earlier termination
of this Lease, shall survive such expiration or termination. Landlord may
reasonably estimate all or any of such obligations within a reasonable time
before, or anytime after, such expiration or termination. Tenant shall pay the
full amount of such estimate, and any additional amount due after the actual
amounts are determined, in each case within ten (10) days after Landlord
sends a statement therefor. If the actual amount is less than the amount Tenant
pays as an estimate, Landlord shall refund the difference within thirty (30)
days after such determination is made.

 

J.             Landlord’s Accounting Practices and
Records.   Landlord
shall maintain records respecting Taxes and Expenses and determine the same in
accordance with sound accounting and management practices. Subject to the other
provisions of this Article, Landlord may from time to time use a full accrual
system of accounting, or a modified cash basis of accounting with appropriate
accrual adjustments to ensure that each year includes substantially the same
major recurring items. Unless Tenant takes exception by notice to Landlord
within thirty (30) days after Landlord provides any Statement to Tenant, such
Statement shall be considered final and binding on Tenant (except as to
additional Expenses or Taxes not then known or omitted by error). If Tenant
takes exception by notice within such time, Landlord may seek certification
from Landlord’s independent certified public accountant as to the proper amount
of Taxes and Expenses. In such case: (i) such certification shall be
considered final and binding on both parties (except as to additional Expenses
or Taxes not then known or omitted by error), and (ii) Tenant shall pay
Landlord for the cost of such certification, unless it shows that Taxes and
Expenses were overstated by at least five (5) percent. Pending resolution
of any such exceptions, Tenant shall pay Tenant’s Share of Taxes and Expenses
in the amounts shown on such Statement, subject to credit, refund or additional
payment after any such exceptions are resolved.

 

K.            Base Year Adjustments.   If Taxes for the Base Tax Year are
reduced as the result of protest, or by means of agreement, or as the result of
legal proceedings or otherwise, Landlord shall adjust Tenant’s obligations for
Taxes in all years following the Base Tax Year, and Tenant shall pay Landlord
within 30 days after notice any additional amount required by such adjustment
for any such years or portions thereof that have theretofore occurred. Landlord
shall exclude from Base Year Expenses any non-recurring items, including
capital expenditures otherwise permitted under Article 32 of the Lease
(and shall only include the amortization of such expenditures in subsequent
year Expenses to the extent permitted under Article 32, including any
remaining amortization of permitted capital expenditures made prior to or after
the Commencement Date). If Landlord eliminates from any subsequent year
Expenses a recurring category of expenses previously included in Base Year
Expenses, Landlord shall subtract such category from Base Year Expenses
commencing with such subsequent year.

 

L.            General Payment Matters.   Base
Rent, Taxes, Expenses and any other amounts which Tenant is or becomes obligated to pay Landlord under this Lease
or other agreement entered in connection herewith, are sometimes herein
referred to collectively as “Rent,” and all remedies applicable to the
non-payment of rent shall be applicable thereto. Rent shall be paid in good
funds and legal tender of the United States of America. Tenant shall pay Rent
without any

 

5

 

deduction, recoupment, set-off or counterclaim, and without relief from
any valuation or appraisement laws. Rent obligations hereunder are independent
covenants. Provided that Landlord shall provide such statement within seven (7) months
of the expiration of this Lease, no delay by Landlord in providing the
Statement (or separate statements) shall be deemed a default by Landlord or a
waiver of Landlord’s right to require payment of Tenant’s obligations for
actual or estimated Taxes or Expenses. In no event shall a decrease in Taxes or
Expenses ever decrease the monthly Base Rent or give rise to a credit in favor
of Tenant. Landlord may apply payments received from Tenant to any obligations
of Tenant then accrued, without regard to such obligations as may be designated
by Tenant.

 

ARTICLE 5: QUIET ENJOYMENT

 

Landlord agrees
that if Tenant timely pays the Rent and performs the terms and provisions
hereunder, Tenant shall hold the Premises during the Term, free of lawful
claims by any party acting by or through Landlord, subject to all other terms
and provisions of this Lease.

 

ARTICLE 6: UTILITIES AND
SERVICES

 

A.            Standard Landlord Utilities and Services.
  Landlord
shall provide the following utilities and services (the cost of which shall be
included in Expenses, except as provided below):

 

(i)            Heat and air-conditioning to provide
a temperature required, In Landlord’s reasonable opinion, for occupancy of the
Premises as offices, from 8:00 a.m. until 6:00 p.m. Monday through
Friday, excluding all Holidays.

 

(ii)           Water from city mains for drinking,
lavatory and toilet purposes only, at those points of supply provided for
nonexclusive general use of tenants at the Property, or points of supply in the
Premises installed by or with Landlord’s written consent for such purposes.

 

(iii)          Cleaning and trash removal service in
and about the Premises as is customary for office space in office buildings.

 

(iv)          Passenger elevator service at all
times (subject to changes in the number of elevators in service after hours or
at other times), and freight elevator service (subject to scheduling by
Landlord and such standard charges as Landlord may impose), in common with
Landlord and other parties.

 

(v)           Electricity for building-standard
overhead office lighting fixtures, and equipment and accessories customary for
offices (up to 280 hours per month), where: (a) the connected electrical
load of all of the same does not exceed an average of 4 watts per usable square
foot of the Premises (or such lesser amount as may be available, based on the
safe and lawful capacity of the electrical circuit(s) and facilities serving
the Premises), (b) the electricity is at nominal 120 volts, single phase
(or 110 volts, depending on available service in the Building), and (c) the
Systems and Equipment are suitable, the safe and lawful capacity thereof is not
exceeded, and sufficient capacity remains at all times for other existing and
future tenants, as determined in Landlord’s reasonable discretion.

 

B.            Additional Utilities and Services.
  Landlord
shall not be responsible for inadequate air-conditioning or ventilation
whenever the use or occupancy of the Premises exceeds the normal capacity or
design loads of, affects the temperature or humidity otherwise maintained by, or
otherwise adversely affects the operation of, the Systems and Equipment for the
Property, whether due to items of equipment or machinery generating heat, above
normal concentrations of personnel or equipment, alterations to the Premises
made by or through Tenant without balancing the air or installing supplemental
HVAC equipment. Without limiting the generality of the foregoing, Landlord
shall not be responsible for inadequate air conditioning or ventilation to the
extent that the same occurs because Tenant, without providing adequate air
conditioning and ventilation: (i) uses or permits the use of any item, or
concentrated group, of equipment consuming more than 500 watts in the aggregate
at rated capacity, or (ii) occupies or permits the Premises to be occupied
with concentrations of personnel greater than one person per 200 usable square
feet. In any such case, Landlord may elect to balance the air, install,
operate, maintain and replace such supplemental HVAC equipment during the Term,
at Tenant’s expense, as an extra utility or service (or require that Tenant
arrange for the same as Work under Article 9). Landlord shall seek to
provide such extra utilities or services as Tenant may from time to time
request, if the same are reasonable and feasible for Landlord to provide and do
not involve modifications or additions to the Property or existing Systems and
Equipment, and if Landlord

 

6

 

shall receive Tenant’s request within a reasonable period prior to the
time such extra utilities or services are required. Tenant shall pay, for any
extra utilities or services, such standard charges as Landlord shall from time
to time establish, Landlord’s out-of-pocket costs for architects, engineers,
consultants and other parties relating to such extra utilities or services, and
a fee equal to fifteen percent (15%) of such costs. All payments for such extra
utilities or services shall be due at the same time as the installment of Base
Rent with which the same are billed, or if billed separately, shall be due
within ten (10) days after such billing. Notwithstanding the foregoing to
the contrary, in lieu of charging separately for additional utilities and
services, Landlord may reasonably elect from time to time to expand or modify
the amounts of services and utilities available without separate charge, in
which case the costs thereof shall be included in Expenses.

 

C.            Monitoring.   Landlord
may install and operate meters, submeters or any other reasonable system for
monitoring or estimating any services or utilities used by Tenant in excess of
those required to be provided by Landlord under this Article (including a
system for Landlord’s engineer to reasonably estimate any such excess usage). If
such system indicates such excess services or utilities, Tenant shall pay
Landlord’s charges and fees as described in Paragraph B, above, for installing and
operating such system and any supplementary air-conditioning, ventilation,
heat, electrical or other systems or equipment (or adjustments or modifications
to the existing Systems and Equipment) which Landlord may make, and Landlord’s
charges for such amount of excess services or utilities used by Tenant.

 

D.            Interruptions and Changes.   Landlord
shall have no liability for interruptions, variations, shortages, failures,
changes in quality, quantity, character or availability of any utilities or
services caused by repairs, maintenance, replacements, alterations (including
any freon retrofit work), labor controversies, accidents, inability to obtain services,
utilities or supplies, governmental or utility company acts or omissions,
requirements, guidelines or requests, or other causes beyond Landlord’s
reasonable control (or under any circumstances with respect to utilities or services
not required to be provided by Landlord hereunder). Under no circumstances whatsoever
shall any of the foregoing be deemed an eviction or disturbance of Tenant’s use
and possession of the Premises or any part thereof, serve to abate Rent, or
relieve Tenant from performance of Tenant’s obligations under this Lease. Landlord
in no event shall be liable for damages by reason of loss of profits, business
interruption or other consequential damages in connection with the foregoing
events. Nevertheless, in any such events after receiving notice, Landlord shall
use reasonable efforts to restore such utilities or services required to be
provided hereunder to reasonable levels.

 

ARTICLE 7: USE, COMPLIANCE
WITH LAWS, AND RULES

 

A.            Use of Premises.   Tenant
shall use the Premises only for the permitted use identified in Article 1,
and no other purpose whatsoever, subject to the other provisions hereof and of
this Lease. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not use or permit the Premises to be used as a: (i) political
party or social-welfare office, (ii) medical, dental, psychology or
science office or laboratory, including for treatment, research, testing or counseling,
(iii) multi-party “executive” or “legal” suite type offices, (iv) data processing,
telecommunications or telemarketing center, (v) school, educational or training
facility, (vi) employment, placement, recruiting or clerical support
agency, (vii) computerized vehicle sales, loan or “finder” service, (viii) governmental
or quasi-governmental office, whether local, state, federal or foreign, including
diplomatic and consulate, (ix) travel agency or reservation center, (x) radio
or television studio or broadcasting or recording facility, or (xi) retail real
estate brokerage, retail stock brokerage, retail bank or other retail financial
institution, loan office, depository, check-cashing or wire-transferring
service.

 

B.            Laws and Other Requirements.   Tenant
shall not use or permit within the Premises anything that will: (i) violate
the requirements of Landlord’s insurers, the American Insurance Association, or
any board of underwriters, (ii) cause a cancellation of Landlord’s
policies, impair the insurability of the Property, or increase Landlord’s
premiums (any such increase shall be paid by
Tenant without such payment being deemed permission to continue such activity
or a waiver of any other
remedies of Landlord), or (iii) violate the reasonable requirements of any
Lenders, the certificates of occupancy issued for the Premises or the Property,
or any other requirements, covenants, conditions or restrictions affecting the
Property at any time. Tenant shall comply with all Laws relating to the
Premises and Tenant’s use of the Premises and Property, including Laws
governing Hazardous Materials as described in Article 30, and the
Disabilities Acts as described in Article 31. Tenant’s obligations to
comply with Laws shall include, without limitation: (a) obtaining all
permits, licenses, certificates and approvals to conduct its business in the
Premises, or any necessary waivers or variances, without thereby subjecting
Landlord, the Property or other occupants to any costs, requirements,
liabilities or restrictions, (b) any work to

 

7

 

or for the Premises (or any systems or equipment exclusively serving
the Premises, including any freon retrofitting work for such exclusive systems
and equipment) required by Laws, and (c) any work outside the Premises (if
Landlord permits such work) required by Laws based on Tenant’s use of, work
within, or systems or equipment exclusively serving, the Premises, whether any
such work is deemed structural, involves a capital expenditure or results in a
benefit extending beyond the Term. Any work hereunder shall be deemed “Work”
subject to Article 9.

 

C.            Rules.   Tenant
shall comply with the Rules set forth in Rider One attached hereto (the “Rules”).
Landlord shall have the right, by notice to Tenant or by posting at the
Property, to reasonably amend such Rules and supplement the same with
other reasonable Rules relating to the Property, or the promotion of
safety, care, efficiency, cleanliness or good order therein. Nothing herein
shall be construed to give Tenant or any other Person any claim, demand or
cause of action against Landlord arising out of the violation of such Rules by
any other tenant or visitor of the Property, or out of the enforcement,
modification or waiver of the Rules by Landlord in any particular
instance.

 

ARTICLE 8:
MAINTENANCE AND REPAIRS

 

Except for
customary cleaning and trash removal provided by Landlord under Article 6,
and casualty damage to be repaired by Landlord under Article 11, Tenant
shall keep and maintain (or cause to be kept and maintained) the Premises in
good and sanitary condition, working order and repair, in compliance with all
applicable Laws as described in Article 7, and as required under other
provisions of this Lease, including the Rules (including any carpet and
other flooring material, paint and wall-coverings, doors, windows, ceilings,
interior surfaces of walls, lighting (including lamps, bulbs, ballasts and
starters), plumbing and other fixtures, alterations, improvements, systems and
equipment in or exclusively serving the Premises whether installed by Landlord
or Tenant). In the event that any repairs, maintenance or replacements are
required, Tenant shall promptly notify Landlord and arrange for the same
either: (i) through Landlord for such reasonable charges as Landlord may
establish from time to time, payable within ten (10) days after billed, or
(ii) at Landlord’s option, by engaging such contractors as Landlord shall
first designate or approve in writing to perform such work, all in a first
class, workmanlike manner approved by Landlord in advance in writing and
otherwise in compliance with Article 9 respecting “Work”. Tenant shall
promptly notify Landlord concerning the necessity for any repairs or other work
hereunder and upon completion thereof. Tenant shall pay Landlord for any
repairs, maintenance and replacements to areas of the Property outside the
Premises, caused, in whole or in part, as a result of moving any furniture,
fixtures, or other property to or from the Premises, or otherwise by Tenant or
its employees, agents, contractors, or visitors (notwithstanding anything to
the contrary contained in this Lease). Except as provided in the preceding
sentence, or for damage covered under Article 11, Landlord shall keep the
common areas of the Property in good and sanitary condition, working order and
repair (the cost of which shall be included in Expenses).

 

ARTICLE 9: ALTERATIONS AND
LIENS

 

A.            Alterations and Approval.   Tenant
shall not attach any fixtures, equipment or other items to the Premises, or paint
or make any other additions, changes, alterations or improvements to the
Premises or the Systems and Equipment serving the Premises (all such work is
referred to collectively herein as the “Work”), without the prior written
consent of Landlord. Landlord shall not unreasonably withhold consent, except
that Landlord reserves the right to withhold consent in Landlord’s sole
discretion for Work affecting the structure, safety, efficiency or security of
the Property or Premises, the Systems and Equipment, or the appearance of the Premises
from any common or public areas. In seeking approval, Tenant shall submit for Landlord’s
prior written approval: (i) the names, addresses and background information concerning
all architects, engineers, contractors, subcontractors and suppliers Tenant
proposes to use, and (ii) detailed plans and specifications prepared by the approved
architects and engineers. In addition, Tenant shall provide Landlord with
notice of whether the Work will involve
or affect any Hazardous Materials, whether such materials are customary and
usual based on standard industry
practices, and all other details relating thereto.

 

B.            Approval Conditions.   Landlord
reserves the right to impose requirements as a condition of such consent or
otherwise in connection with the Work, including requirements that Tenant: (i) obtain
and post permits, (ii) provide bonds, additional insurance, and/or a cash
deposit of the total amount required to pay for the Work (including plans,
specifications, engineering and other lienable costs, and Landlord’s fee
described below) for Landlord to release or apply as the Work is properly completed
and lien waivers, affidavits and other documentation satisfactory to Landlord
are submitted, (iii) submit architect, engineer, contractor, subcontractor
and supplier

 

8

 

affidavits of payment and recordable lien waivers in compliance with
the Laws of the State of Washington, (iv) use union labor (if Landlord
uses union labor), (v permit Landlord or its representatives to inspect the
Work at reasonable times, and (vi) comply with such other requirements as
Landlord may impose concerning the manner and times in which such Work shall be
done. Landlord may require that all Work be performed under Landlord’s
supervision, and Landlord reserves the right to designate the architects,
engineers, contractors, subcontractors and suppliers who will design and
perform all Work and supply all materials affecting the Systems and Equipment
or structure of the Property. If Landlord approves, inspects, supervises,
recommends or designates any architects, engineers, contractors, subcontractors
or suppliers, the same shall not be deemed a warranty as to the adequacy of the
design, workmanship or quality of materials, or compliance of the Work with the
plans and specifications or any Laws.

 

C.            Performance of Work.   All
Work shall be performed: (i) in a thoroughly first class, professional and
workmanlike manner, (ii) only with materials that are new, high quality,
and free of material defects, (iii) strictly in accordance with plans,
specifications, parties and other matters approved or designated by Landlord in
advance in writing, (iv) not to adversely affect the Systems and Equipment or
the structure of the Property, (v) diligently to completion and so as to avoid
any disturbance, disruption or inconvenience to other tenants and the operation
of the Property, and (vi) in compliance with all Laws, the Rules and
other provisions of this Lease, and such other requirements as Landlord may
impose concerning the manner and times in which such Work shall be done. Any
floor, wall or ceiling coring work or penetrations or use of noisy or heavy
equipment which may interfere with the conduct of business by other tenants at
the Property shall, at Landlord’s option, be performed at times other than
Landlord’s normal business hours (at Tenant’s sole cost). If Tenant fails to
perform the Work as required herein or the materials supplied fail to comply
herewith or with the specifications approved by Landlord, and Tenant fails to
commence to cure such failure within 48 hours after notice by Landlord, and diligently
prosecute until completion (except notice shall not be required in emergencies),
Landlord shall have the right to stop the Work until such failure is cured
(which shall not be in limitation of Landlord’s other remedies and shall not
serve to abate the Rent or Tenant’s other obligations under this Lease). Upon
completion of any Work hereunder, Tenant shall provide Landlord with “as built”
plans, copies of all construction contracts, and proof of payment for all labor
and materials.

 

D.            Liens.   Tenant
shall pay all costs for the Work when due. Tenant shall keep the Property, Premises
and this Lease free from any mechanic’s, materialman’s, architect’s, engineer’s
or similar liens or encumbrances, and any claims therefor, or stop or violation
notices, in connection with any Work. Tenant shall give Landlord notice at
least ten (10) days prior to the commencement of any Work (or such
additional time as may be necessary under applicable Laws), to afford Landlord
the opportunity of posting and recording appropriate notices of non- responsibility.
Tenant shall remove any such claim, lien or encumbrance, or stop or violation notices
of record, by bond or otherwise within ten (10) days after notice by
Landlord. If Tenant fails to do so, Landlord may pay the amount (or any portion
thereof) or take such other action as Landlord deems necessary to remove such claim,
lien or encumbrance, or stop or violation notices, without being responsible
for investigating the validity thereof. The amount so paid and costs incurred by
Landlord shall be deemed additional Rent under this Lease payable upon demand,
without limitation as to other remedies available to Landlord. Nothing
contained in this Lease shall authorize Tenant to do any act which shall
subject Landlord’s title to, or any Lender’s interest in, the Property or
Premises to any such claims, liens or encumbrances, or stop or violation notices,
whether claimed pursuant to statute or other Law or express or implied contract.

 

E.             Removal of Work Upon Termination of
Lease.   All Work hereunder shall remain or be removed
from the Premises upon expiration or earlier termination of this Lease to the
extent required under Article 23.

 

F.             Landlord’s Fees and Costs.   If
Landlord acts as Tenant’s construction manager for Work under this Lease,
Tenant shall pay Landlord a fee for reviewing, scheduling, monitoring, supervising,
and providing access for or in connection with the Work, in an amount equal to fifteen
percent (15%) of the total cost of the Work (including costs of plans and permits
therefor), and Landlord’s out-of-pocket costs, including any costs for
security, utilities, trash removal, temporary barricades, janitorial, engineering,
architectural or consulting services, and other matters in connection with the
Work, payable within ten (10) business days after billed. If Landlord is
not the construction manager, the parties shall mutually agree upon the fee to
be charged for Landlord’s reviewing, scheduling, monitoring, supervising,
and/or providing access for or in connection with the Work, in addition to
Landlord’s out-of-pocket costs, including any costs for security, utilities,
trash removal, temporary barricades, janitorial, engineering, architectural or

 

9

 

consulting services, and other matters in connection with the Work,
which shall be payable within
ten (10) business days after billed.

 

ARTICLE 10: INSURANCE AND
WAIVER OF CLAIMS

 

A.            Required Insurance.   Tenant shall maintain at its expense during
the Term with respect to the Premises and Tenant’s use thereof and of the
Property:

 

(i)            Worker’s Compensation Insurance in the
amounts required by statute, and Employer Liability Insurance in at least the
following amounts: (a) Bodily Injury by Accident -$500,000 per accident, (b) Bodily
Injury by Disease - $500,000 per employee, and (c) Aggregate Limit -
$1,000,000 per policy year.

 

(ii)           Property Damage Insurance for the
protection of Tenant and Landlord, as their interests may appear, covering any
alterations or improvements in excess of any work provided or paid for by
Landlord under this Lease, Tenant’s personal property, business records,
fixtures and equipment, and other insurable risks in amounts not less than the
full insurable replacement cost of such property and full insurable value of
such other interests of Tenant, with coverage at least as broad as the most
recent editions published by Insurance Services Office, Inc. or any
successor organization (“ISO”), of: (a) Building and Personal Property
Coverage Form (CP0010), (b) Business Income Coverage Form (CP0030), covering at least one
year of anticipated income, (c) Boiler and Machinery Coverage Form (BM0025),
(d) Causes of Special Loss Form (CP1030), and (e) Sprinkler
Leakage - Earthquake Extension (CP1039).

 

(iii)          Commercial General Liability Insurance
(“CGL”) at least as broad as the most recent ISO edition of Commercial General
Liability Coverage Form (CG0001) with limits of at least the following
amounts: (a) Death or Bodily Injury - $2,000,000, (b) Property Damage
or Destruction (including loss of use thereof) - $1,000,000, (c) Products/Completed
Operations -$1,000,000, (d) Personal or Advertising injury - $1,000,000, (e) Each
Occurrence Limit -$2,000,000, and (f) General Aggregate Limit - $3,000,000
per policy year. Such policy shall include endorsements: (1) for
contractual liability covering Tenant’s indemnity obligations under this Lease,
and (2) adding Landlord, the management company for the Property, and
other parties designated by Landlord, as Additional Insureds, on a form at
least as broad as the most recent edition of Additional Insured - Manager or
Lessor of Premises Endorsement Form (CG2011) published by ISO.

 

B.            Certificates, Subrogation and Other
Matters.   Tenant shall provide Landlord with certificates
evidencing the coverage required hereunder prior to the Commencement Date, or Tenant’s
entry to the Premises for construction of improvements or any other purpose (whichever
first occurs). Such certificates shall: (i) be on ACORD Form 27 or
such other form approved or required by Landlord, (ii) state that such
insurance coverage may not be changed, canceled or non-renewed without at least
thirty (30) days’ prior written notice to Landlord, and (iii) include, as
attachments, originals of the Additional Insured endorsements to Tenant’s CGL policy
required above. Tenant shall provide renewal certificates to Landlord at least
thirty (30) days prior to expiration of such policies. Except as expressly
provided to the contrary herein, coverage hereunder shall apply to events
occurring during the policy year regardless of when a claim is made. Landlord
may periodically require that Tenant reasonably increase or expand the aforementioned
coverage. Except as provided to the contrary herein, any insurance carried by Landlord
or Tenant shall be for the sole benefit of the party carrying such insurance. If
Tenant obtains insurance under “blanket policies,” Tenant shall obtain an
endorsement providing that the insurance limits required hereunder are not subject
to reduction or impairment by claims or losses at other locations. Tenant’s
insurance policies shall be primary to all policies of Landlord and any other
Additional Insureds (whose policies shall be deemed excess and
non-contributory). All insurance required hereunder shall be provided by
responsible insurers licensed in the State of Washington, and shall have a
general policy holder’s rating of at least A and a financial rating of at least
X in the then current edition of Best’s Insurance Reports. The parties mutually
hereby waive all rights and claims against each other for all losses covered by
their respective insurance policies (or
required to be covered by insurance under this Lease), and waive all rights of
subrogation of their respective insurers. The parties agree that their
respective insurance policies are now, or shall be, endorsed such that said
waiver of subrogation shall not affect the right of the insured to recover
thereunder. Landlord disclaims any representation as to whether the foregoing
coverages will be adequate to protect Tenant, and Tenant agrees to carry such
additional coverage as may be necessary or appropriate.

 

C.            Waiver of Claims.   Except
for claims arising from Landlord’s intentional or grossly negligent acts,
Tenant waives all claims against Landlord for injury or death to persons,
damage to property or to any other interest of Tenant sustained by Tenant or
any party claiming by or

 

10

 

through Tenant resulting from: (i) any occurrence in or upon the
Premises, (ii) leaking of roofs, bursting, stoppage or leaking of
water, gas, sewer or steam pipes or equipment, including sprinklers, (iii) wind,
rain, snow, ice, flooding (including flooding of basements and other subsurface
areas), freezing, fire, explosion, earthquake, excessive heat or cold,
dampness, fire or other casualty, (iv) the Property, Premises, Systems and
Equipment being defective, out of repair, or failing, and (v) vandalism,
malicious mischief, theft, misappropriation or other acts or omissions of any
parties including Tenant’s employees, other tenants, and their respective
agents, employees, invitees and contractors (and Tenant shall give Landlord
immediate notice of any such occurrences). This provision is in addition to,
and not in limitation of, other provisions of this Lease limiting Landlord’s
liability.

 

D.            Mutual Waiver of Claims; Waiver of
Subrogation.   Landlord and Tenant release each other, and their respective officers,
directors, trustees, beneficiaries, partners, members, managers, agents, and
employees, from, and waive their entire claim of recovery for, any claims for
damage to the Premises and the Building and to Tenant’s alterations, trade
fixtures and personal property that are caused by or result from fire,
lightening or any other perils normally included in an “all risk” property
insurance policy whether or not such loss or damage is due to the negligence of
Landlord, or its officers, directors, trustees, beneficiaries, partners,
members, managers, agents, and employees, or of Tenant, or its officers,
directors, trustees, beneficiaries, partners, members, managers, agents, and
employees. Landlord and Tenant shall cause each insurance policy obtained by it
to provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by such
insurance policy.

 

ARTICLE 11: CASUALTY DAMAGE

 

A.            Restoration.   Tenant shall promptly notify Landlord of any
damage to the Premises by fire or other casualty. If the Premises or any common
areas of the Property providing access thereto shall be damaged by fire or other
casualty, Landlord shall use available insurance proceeds to restore the same. Such
restoration shall be to substantially the same condition prior to the casualty,
except for modifications required by zoning and building codes and other Laws
or by any Lender, any other modifications to the common areas deemed desirable
by Landlord (provided access to the Premises is not materially impaired), and
except that Landlord shall not be required to repair or replace any of Tenant’s
furniture, furnishings, fixtures or equipment, or any alterations or
improvements in excess of any work provided or paid for by Landlord under this Lease.
Landlord shall not be liable for any inconvenience or annoyance to Tenant or
its visitors, or injury to Tenant’s business resulting in any way from such
damage or the repair thereof. Promptly following completion of Landlord’s
restoration work, Tenant shall repair and replace Tenant’s furniture,
furnishings, fixtures, equipment, and any alterations or improvements made by
Tenant in excess of those provided or paid for by Landlord, subject to and in
compliance with the other provisions of this Lease.

 

B.            Abatement of Rent.   Landlord
shall allow Tenant a proportionate abatement of Base Rent from the date of the
casualty through the date that Landlord substantially completes Landlord’s repair
obligations hereunder (or the date that Landlord would have substantially completed
such repairs, but for delays by Tenant or any other occupant of the Premises,
or any of their agents, employees, invitees, Transferees and contractors),
provided such abatement: (i) shall apply only to the extent the Premises
are untenantable for the purposes permitted under this Lease and not used by
Tenant as a result thereof, based proportionately on the square footage of the
Premises so affected and not used, and (ii) shall not apply if Tenant or
any other occupant of the Premises, or any of their agents, employees,
invitees, Transferees or contractors caused the damage.

 

C.            Termination of Lease.   Notwithstanding
the foregoing to the contrary, in lieu of performing the restoration work,
Landlord may elect to terminate this Lease by notifying Tenant in writing of
such termination within sixty (60) days after the date of damage (such
termination notice to include a termination date providing at least thirty (30)
days for Tenant to vacate the Premises), or if the Property shall be damaged by
fire or other casualty or cause such that: (a) repairs to the Premises and
access thereto cannot reasonably be completed within 120 days after the
casualty without the payment of overtime or other premiums, (b) more than
twenty-five percent (25%) of the Premises is affected by the damage and fewer
than eighteen (18) months remain in the Term, or any material damage occurs to
the Premises during the last twelve (12) months of the Term, (c) any
Lender shall require that the insurance proceeds or any portion thereof be used
to retire the Mortgage debt (or shall terminate the ground lease, as the case
may be), or the damage is not fully covered, except for deductible amounts, by
Landlord’s insurance policies, or (d) the cost of the repairs,
alterations, restoration or improvement work would exceed

 

11

 

twenty-five percent (25%) of the replacement value of the Building
(whether or not the Premises are affected by the damage). Tenant agrees that
the abatement of Rent provided herein shall be Tenant’s sole recourse in the
event of such damage, and waives any other rights Tenant may have under any
applicable Law to perform repairs or terminate the Lease by reason of damage to
the Premises or Property.

 

ARTICLE 12: CONDEMNATION

 

If at least fifty
percent (50%) of the rentable area of the Premises shall be taken by power of
eminent domain or condemned by a competent authority or by conveyance in lieu
thereof for public or quasi-public use (“Condemnation”), including any temporary
taking for a period of one year or longer, this Lease shall terminate on the
date possession for such use is so taken. If: (i) less than fifty percent
(50%) of the Premises is taken, but the taking includes or affects a material
portion of the Building or Property, or the economical operation thereof, or (ii) the
taking is temporary and
will be in effect for less than one year but more than thirty (30) days, then
in either such event, Landlord may elect to terminate this Lease upon at
least thirty (30) days’ prior notice to Tenant. The parties further agree that:
(a) if this Lease is terminated, all Rent shall be apportioned as of the
date of such termination or the date of such taking, whichever shall first
occur, (b) if the taking is temporary, Rent shall not be abated for the
period of the taking, but Tenant may seek a condemnation award therefor (and
the Term shall not be extended thereby), and (c) if this Lease is not
terminated but any part of the Premises is permanently taken, the Rent shall be
proportionately abated based on the square footage of the Premises so taken.
Landlord shall be entitled to receive the entire award or payment in connection
with such Condemnation and Tenant hereby assigns to Landlord any interest
therein for the value of Tenant’s unexpired leasehold estate or any other claim
and waives any right to participate therein, except that Tenant shall have the
right to claim damages for a temporary taking of the leasehold as described
above, and for moving expenses and any taking of Tenant’s personal property.

 

ARTICLE 13: ASSIGNMENT AND
SUBLETTING

 

A.            Transfers.   Tenant shall not, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld as
further described below: (i) assign, mortgage, pledge, hypothecate, encumber,
or permit any lien to attach to, or otherwise transfer, this Lease or any
interest hereunder, by operation of Law or otherwise, (ii) sublet the
Premises or any part thereof, (iii) permit the use of the Premises by any
Persons other than Tenant and its employees (all of the foregoing are
hereinafter sometimes referred to collectively as “Transfers” and any Person to
whom any Transfer is made or sought to be made is hereinafter sometimes
referred to as a “Transferee”), or (iv) advertise the Premises or Lease
for Transfers. If Tenant shall desire Landlord’s consent to any Transfer,
Tenant shall notify Landlord in writing, which notice shall include: (a) the
proposed effective date (which shall not be less than thirty (30) nor more than
180 days after Tenant’s notice), (b) the portion of the Premises to be
Transferred (herein called the “Subject Space”), (c) the terms of the
proposed Transfer and the consideration therefor, the name, address and
background information concerning the proposed Transferee, and a true and complete
copy of all proposed Transfer documentation, and (d) financial statements
(balance sheets and income/expense statements for the current and prior three (3) years
(if three years are available)) of the proposed Transferee, in form and detail
reasonably satisfactory to Landlord, certified by an officer, partner or owner
of the Transferee, and any other information to enable Landlord to determine
the financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee’s business and proposed use of the Subject Space, and
such other information as Landlord may reasonably require. Any Transfer made without
complying with this Article shall at Landlord’s option be null, void and of
no effect, or shall constitute a Default under this Lease. Whether or not
Landlord shall grant consent, Tenant shall pay a reasonable fee (but not less
than $500.00) towards Landlord’s review and processing expenses (such fee shall
be estimated by Landlord and approved by Tenant in advance), as well as any
reasonable legal fees incurred by Landlord within ten (10) days after
written request by Landlord.

 

B.            Approval.   Landlord will not unreasonably withhold
its consent to any proposed Transfer of the Subject Space to the Transferee on
the terms specified in Tenant’s notice. The parties hereby agree that it shall
be reasonable under this Lease and under any applicable Law for Landlord to
withhold consent to any proposed Transfer where one or more of the following applies
(without limitation as to other reasonable grounds for withholding consent): (i)
the Transferee is of a character or reputation or engaged in a business which
is not consistent with the quality or nature of the Property or other tenants
of the Property, or would be a significantly

 

12

 

less prestigious occupant of the Property than Tenant, (ii) the
Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease, (iii) the Subject Space is not regular in
shape with appropriate means of ingress and egress suitable for normal renting
purposes, would result in more than a reasonable number of occupants, or would
require increased services by Landlord, (iv) the Transferee is either a
government (or agency or instrumentality thereof), (v) the proposed
Transferee or any affiliate thereof is an occupant of the Property, (vi) the
proposed Transferee does not have, in Landlord’s sole good faith determination,
satisfactory references or a reasonable financial condition in relation to the
obligations to be assumed in connection with the Transfer, (vii) the
Transfer is other than a sublease or a non-collateral complete assignment, (viii) the
proposed Transfer would cause Landlord to be in violation of any Laws or any
other lease, Mortgage or agreement to which Landlord is a party, would give a
tenant of the Property a right to cancel its lease, or would create adverse tax
consequences for Landlord, or (ix) Tenant has committed and failed to cure
a Default. If Tenant disagrees with Landlord’s decision to deny approval,
Tenant’s sole remedy shall be to seek injunctive relief.

 

C.            Transfer Premiums.   If
Landlord consents to a Transfer, and as a condition thereto which the parties
hereby agree is reasonable, Tenant shall pay Landlord fifty percent (50%) of
any Transfer Premium derived by Tenant from such Transfer. “Transfer Premium”
shall mean, for a lease assignment, all consideration paid or payable therefor.
“Transfer Premium” shall mean, for a sublease, all rent, additional rent or
other consideration paid by such Transferee in excess of the Rent payable by
Tenant under this Lease (on a monthly basis during the Term, and on a per
rentable square foot basis, if less than all of the Premises is transferred). “Transfer
Premium” shall also include so-called “key money,” or other bonus amount paid
by Transferee to Tenant, and any payment in excess of fair market value for
services rendered by Tenant to Transferee or in excess of Tenant’s depreciated
tax basis for assets, fixtures, inventory, equipment or furniture transferred
by Tenant to Transferee. If part of the consideration for such Transfer shall
be payable other than in cash, Landlord’s share of such non-cash consideration
shall be in such form as is reasonably satisfactory to Landlord. The percentage
of the Transfer Premium due Landlord hereunder shall be paid within ten (10) days
after Tenant receives any Transfer Premium from the Transferee.

 

D.            Recapture.   Notwithstanding
anything to the contrary contained in this Article, Landlord shall have the
option, by giving notice to Tenant within thirty (30) days after receipt of Tenant’s
notice of any proposed Transfer, to recapture the Subject Space. Such recapture
notice shall cancel and terminate this Lease with respect to the Subject Space
as of the date stated in Tenant’s notice as the effective date of the proposed
Transfer (or at Landlord’s option, shall cause the Transfer to be made to
Landlord or its agent or nominee, in which case the parties shall execute
reasonable Transfer documentation promptly thereafter). If this Lease shall be canceled
with respect to less than the entire Premises, the Rent herein shall be
prorated on the basis of the number of rentable square feet retained by Tenant
in proportion to the number of rentable square feet contained in the Premises, this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party the parties shall execute written confirmation of
the same. Tenant shall surrender and vacate the Subject Space when required
hereunder in accordance with Article 23 and any failure to do so shall be
subject to Article 24.

 

E.             Terms of Consent.
  If Landlord consents to a Transfer: (i) the
terms and conditions of this Lease, including Tenant’s liability for the
Subject Space, shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or
a Transferee, (iii) no Transferee shall succeed to any rights provided in
this Lease or any amendment hereto to extend the Term of this Lease, expand the
Premises, or lease other space, any such rights being deemed personal to the
initial Tenant, (iv) Tenant shall deliver to Landlord promptly after execution,
an original executed copy of all documentation pertaining to the Transfer in
form reasonably acceptable to Landlord, and (v) Tenant shall furnish a
complete statement, certified by an independent certified public accountant, or
Tenant’s chief financial officer, setting forth in detail the computation of
any Transfer Premium that Tenant has derived and shall derive from such
Transfer. Landlord or its authorized representatives shall have the right at
all reasonable times to audit the books, records and papers of Tenant and any Transferee
relating to any Transfer, and shall have the right to make copies thereof. If
the Transfer Premium respecting any Transfer shall be found understated, Tenant
shall within thirty (30) days after demand pay the deficiency, and if
understated by more than five percent (5%) Tenant shall pay Landlord’s costs of
such audit. Any sublease hereunder shall be subordinate and subject to the
provisions of this Lease, and if this Lease shall be terminated during the term
of any sublease, Landlord shall have the right to: (a) deem such sublease
as merged and canceled

 

13

 

and repossess the Subject Space by any lawful means, or (b) deem
such termination as an assignment of such sublease to Landlord and not as a
merger, and require that such subtenant attorn to and recognize Landlord as its
landlord under any such sublease. If Tenant shall commit a Default under this
Lease, and such Default remains uncured after the expiration of notice and cure
periods, Landlord is hereby irrevocably authorized, as Tenant’s agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant’s obligations under this Lease).

 

F.             Certain Transfers.   For purposes of this Lease, the term “Transfer”
shall also include, and all of the
foregoing provisions shall apply to: (i) the conversion, merger or
consolidation of Tenant into a limited liability company or limited liability
partnership, (ii) if Tenant is a partnership or limited liability company,
the withdrawal or change, voluntary, involuntary or by operation of law, of a
majority of the partners or members, or a transfer of a majority of partnership
or membership interests, within a twelve month period, or the dissolution of
the partnership or company, and (iii) if Tenant is a closely held
corporation (i.e., whose stock is not publicly held and not traded through an
exchange or over the counter), the dissolution, merger, consolidation or other
reorganization of Tenant, or within a twelve month period: (a) the sale or
other transfer of more than an aggregate of 50% of the voting shares of Tenant
(other than to immediate family members by reason or gift or death) or (b) the
sale, mortgage, hypothecation or pledge of more than an aggregate of 50% of
Tenant’s net assets.

 

ARTICLE 14: PERSONAL
PROPERTY, RENT AND OTHER TAXES

 

Tenant shall pay
prior to delinquency all taxes, charges or other governmental impositions
assessed against or levied upon all fixtures, furnishings, personal property,
systems and equipment located in or exclusively serving the Premises, and any
Work to the Premises under Article 9 or other provisions of this Lease or
related documentation. Whenever possible, Tenant shall cause all such items to
be assessed and billed separately from the other property of Landlord. In the
event any such items shall be assessed and billed with the other property of
Landlord, Tenant shall pay Landlord its share of such taxes, charges or other
governmental impositions within ten (10) days after Landlord delivers a
statement and a copy of the assessment or other documentation showing the
amount of impositions applicable to Tenant’s property. Tenant shall pay any
rent tax, sales tax, service tax, transfer tax, value added tax, or any other
applicable tax on the Rent, utilities or services herein, the privilege of
renting, using or occupying the Premises, or collecting Rent therefrom, or
otherwise respecting this Lease or any other document entered in connection
herewith.

 

ARTICLE 15: LANDLORD’S
REMEDIES

 

A.            Default.   The occurrence of any one or more of the following
events shall constitute a “Default” by Tenant and shall give rise to Landlord’s
remedies set forth in Paragraph B below: (i) failure to make when due any
payment of Rent, unless such failure is cured within five (5) days after
notice; (ii) failure to observe or perform any term or condition of this
Lease other than the payment of Rent (or the other matters expressly described
herein), unless such failure is cured within any period of time following
notice expressly provided with respect thereto in other Articles hereof, or
otherwise within a reasonable time, but in no event more than twenty (20) days
following notice (provided, if the nature of Tenant’s failure is such that more
time is reasonably required in order to cure, Tenant shall not be in Default if
Tenant commences to cure promptly within such period, diligently seeks and
keeps Landlord reasonably advised of efforts to cure such failure to completion,
and completes such cure within sixty (60) days following Landlord’s notice); (iii) failure
to cure immediately upon notice thereof any condition which is hazardous,
interferes with another Tenant or the operation or leasing of the Property, or
may cause the imposition of a fine, penalty or other remedy on Landlord or its
agents or affiliates, (iv) violating Article 13 respecting Transfers, or
abandoning, vacating or failing to occupy the Premises for more than ten (10) days,
or removing or making arrangements to remove substantial portions of the
furniture or other personal property from the Premises or any material portion
thereof, or (v) (a) making by Tenant or any guarantor of this Lease (“Guarantor”)
of any general assignment for the benefit of creditors, (b) filing by or
for reorganization or arrangement under any Law relating to bankruptcy or
insolvency (unless, in the case of a petition filed against Tenant or such
Guarantor, the same is dismissed within sixty (60) days), (c) appointment
of a trustee or receiver to take possession of substantially all of Tenant’s
assets located in the Premises or of Tenant’s interest in this Lease, where
possession is not restored to Tenant within sixty (60) days, (d) attachment,
execution or other judicial seizure of substantially all of Tenant’s assets located
in the Premises or of Tenant’s interest in this Lease, (e) Tenant’s or any
Guarantor’s convening of a meeting of its creditors or any class thereof for
the purpose of

 

14

 

effecting a moratorium upon or composition of its
debts, (f) Tenant’s or any Guarantor’s insolvency or failure, or admission
of an inability, to pay debts as they mature, or (g) a violation by Tenant
or any affiliate of Tenant under any other lease or agreement with Landlord or
any affiliate thereof which is not cured within the time permitted for cure
thereunder. If Tenant violates the same term or condition of this Lease on two (2) occasions
during any twelve (12) month period, Landlord shall have the right to exercise
all remedies for any violations of the same term or condition during the next
twelve (12) months without providing further notice or an opportunity to cure.
The notice and cure periods provided herein are in lieu of, and not in addition
to, any notice and cure periods provided by Law; provided, Landlord may elect
to comply with such notice and cure periods provided by Law in lieu of the
notice and cure periods provided herein.

 

B.            Remedies.   If a
Default occurs, Landlord shall have the rights and remedies hereinafter set
forth to the extent permitted by Law, which shall be distinct, separate and
cumulative with and in addition to any other right or remedy allowed under any
Law or other provision of this Lease:

 

(1)           Landlord may terminate this Lease and
Tenant’s right of possession, reenter and repossess the Premises by detainer
suit, summary proceedings or other lawful means, and recover from Tenant: (i) any
unpaid Rent as of the termination date, (ii) the amount by which: (a) any
unpaid Rent which would have accrued after the termination date during the
balance of the Term exceeds (b) the reasonable rental value of the
Premises under a lease substantially similar to this Lease, taking into account
among other things the condition of the Premises, market conditions and the
period of time the Premises may reasonably remain vacant before Landlord is able
to re-lease the same to a suitable replacement tenant, and Costs of Reletting
(as defined in Paragraph H below) that Landlord may incur in order to enter
such replacement lease, (iii) any other amounts necessary to compensate Landlord
for all damages proximately caused by Tenant’s failure to perform its
obligations under this Lease. For purposes of computing the amount of Rent
herein that would have accrued after the termination date, Tenant’s obligations
for Taxes and Expenses shall be projected based upon the average rate of
increase in such items from the Commencement Date through the termination date
(or if such period shall be less than three years, then based on Landlord’s reasonable
estimates). The amounts computed in accordance with the foregoing subclauses (a) and
(b) shall both be discounted in accordance with accepted financial
practice at the rate of four percent (4%) per annum to the then present value.

 

(2)           Landlord may terminate Tenant’s right
of possession, reenter and repossess the Premises by detainer suit, summary
proceedings or other lawful means, without terminating this Lease, and recover
from Tenant: (i) any unpaid Rent as of the date possession is terminated, (ii) any
unpaid Rent which thereafter accrues during the Term from the date possession
is terminated through the time of judgment (or which may have accrued from the
time of any earlier judgment obtained by Landlord), less any consideration received
from replacement tenants as further described and applied pursuant to Paragraph
H, below, and (iii) any other amounts necessary to compensate Landlord for
all damages proximately caused by Tenant’s failure to perform its obligations
under this Lease, including all Costs of Reletting (as defined in Paragraph H
below). Tenant shall pay any such amounts to Landlord as the same accrue or
after the same have accrued from time to time upon demand. At any time after
terminating Tenant’s right to possession as provided herein, Landlord may
terminate this Lease as provided in clause (1) above by notice to Tenant,
and Landlord may pursue such other remedies as may be available to Landlord
under this Lease or applicable Law.

 

C.            Mitigation of Damages.   If
Landlord terminates this Lease or Tenant’s right to possession, Landlord shall
have no obligation to mitigate Landlord’s damages, except to the extent
required by applicable Law. If Landlord has not terminated this Lease or Tenant’s
right to possession, Landlord shall have no obligation to mitigate under any
circumstances and may permit the Premises to remain vacant or abandoned; in
such case, Tenant may seek to mitigate damages by attempting to sublease the
Premises or assign this Lease pursuant to Article 13. If Landlord is
required to mitigate damages: (i) Landlord shall be required only to use
reasonable efforts to mitigate, which shall not exceed such efforts as Landlord
generally uses to lease other space at the Property, (ii) Landlord will
not be deemed to have failed to mitigate if Landlord or its affiliates lease
any other portions of the Property or other projects owned by Landlord or its
affiliates in the same geographic area, before reletting all or any portion of
the Premises, and (iii) any failure to mitigate as described herein with
respect to any period of time shall only reduce the Rent and other amounts to
which Landlord is entitled hereunder by the reasonable rental value of the
Premises during such period, taking into account the factors described in
clause B(1) above. In recognition that the value of the Property depends
on the rental rates and terms of leases therein, Landlord’s rejection of a
prospective replacement tenant based on an offer of rentals below Landlord’s
published rates for new leases of comparable space at the Property at the time

 

15

 

in question, or at Landlord’s option, below the rates provided in this
Lease, or containing terms less favorable than those contained herein, shall
not give rise to a claim by Tenant that Landlord failed to mitigate Landlord’s
damages.

 

D.            Reletting.   If
this Lease or Tenant’s right to possession is terminated, or Tenant abandons
the Premises, Landlord may: (i) enter and secure the Premises, change the
locks, install barricades, remove any improvements, fixtures or other property
of Tenant therein, perform any decorating, remodelling, repairs, alterations, improvements
or additions and take such other actions as Landlord shall determine in Landlord’s
sole discretion to prevent damage or deterioration to the Premises or prepare
the same for reletting, and (ii) relet all or any portion of the Premises
(separately or as part of a larger space), for any rent, use or period of time
(which may extend beyond the Term hereof), and upon any other terms as Landlord
shall determine in Landlord’s sole discretion, directly or as Tenant’s agent
(if permitted or required by applicable Law). The consideration received from
such reletting shall be applied pursuant to the terms of Paragraph H hereof,
and if such consideration, as so applied, is not sufficient to cover all Rent and
damages to which Landlord may be entitled hereunder, Tenant shall pay any
deficiency to Landlord as the same accrues or after the same has accrued from
time to time upon demand, subject to the other provisions hereof.

 

E.             Specific Performance, Collection of
Rent and Acceleration. 
 Landlord shall at all times have
the right without prior demand or notice except as required by applicable Law
to: (i) seek any declaratory, injunctive or other equitable relief, and
specifically enforce this Lease or restrain or enjoin a violation of any
provision hereof, and Tenant hereby waives any right to require that Landlord
post a bond or other security in connection therewith, and (ii) sue for
and collect any unpaid Rent which has accrued. Notwithstanding anything to the
contrary contained in this Lease, to the extent not expressly prohibited by
applicable Law, in the event of any Default by Tenant, Landlord may terminate
this Lease or Tenant’s right to possession and accelerate and declare all Rent
reserved for the remainder of the Term to be immediately due and payable (in
which event, Tenant’s obligations for Taxes and Expenses that would have
accrued thereafter shall be projected in the manner described in Section B
(1), above); provided the Rent so accelerated shall be discounted in accordance
with accepted financial practice at the rate of four percent (4%) per annum to the
then present value, and Landlord shall, after receiving payment of the same
from Tenant, be obligated to turn over to Tenant any actual net reletting proceeds
(net of all Costs of Reletting) thereafter received during the remainder of the
Term, up to the amount so received from Tenant pursuant to this provision.

 

F.             Late Charges, Interest, and
Returned Checks.   Tenant shall pay, as additional Rent, a
service charge of Three Hundred Dollars ($300.00) or four percent (4%) of the
delinquent amount, whichever is greater, if any portion of Rent is not received
when due. In addition, any Rent not paid when due shall accrue interest from
the due date at the Default Rate until payment is received by Landlord. Such
service charges and interest payments shall not be deemed consent by Landlord
to late payments, nor a waiver of Landlord’s right to insist upon timely
payments at any time, nor a waiver of any remedies to which Landlord is
entitled as a result of the late payment of Rent. If Landlord receives two (2) or
more checks from Tenant which are returned by Tenant’s bank for insufficient
funds, Landlord may require that all checks thereafter be bank certified or cashier’s
checks (without limiting Landlord’s other remedies). All bank service charges
resulting from any returned checks shall be borne by Tenant.

 

G.            Landlord’s Cure of Tenant Defaults.   If
Tenant fails to perform any obligation under this Lease for five (5) days
after notice thereof by Landlord (except that no notice shall be required in
emergencies), Landlord shall have the right (but not the duty), to perform such
obligation on behalf and for the account of Tenant. In such event, Tenant shall
reimburse Landlord upon demand, as additional Rent, for all expenses incurred
by Landlord in performing such obligation together with an amount equal to
fifteen (15%) thereof for Landlord’s overhead, and interest thereon at the
Default Rate from the date such expenses were incurred. Landlord’s performance
of Tenant’s obligations hereunder shall not be deemed a waiver or release of
Tenant therefrom.

 

H.            Other Matters.   No
re-entry or repossession, repairs, changes, alterations and additions,
reletting, or any other action or omission by Landlord shall be construed as an
election by Landlord to terminate this Lease or Tenant’s right to possession,
nor shall the same operate to release Tenant in whole or in part from any of
Tenant’s obligations hereunder, unless express notice of such intention is sent
by Landlord to Tenant. Landlord may bring suits for amounts owed by Tenant
hereunder or any portions thereof, as the same accrue or after the same have
accrued, and no suit or recovery of any portion due hereunder shall be deemed a
waiver of Landlord’s right to collect all amounts to which Landlord is entitled
hereunder, nor shall the same serve as any defense to any subsequent suit
brought for any amount not therefor reduced to

 

16

 

judgment. Landlord may pursue one or more remedies against Tenant and
need not make an election of remedies until findings of fact are made by a
court of competent jurisdiction. All rent and other consideration paid by any
replacement tenants shall be applied at Landlord’s option: (i) first, to
the Costs of Reletting, (ii) second, to the payment of all costs of
enforcing this Lease against Tenant or any Guarantor, (iii) third, to the
payment of all interest and service charges accruing hereunder, (iv) fourth,
to the payment of Rent theretofore accrued, and (v) with the residue, if
any, to be held by Landlord and applied to the payment of Rent and other
obligations of Tenant as the same become due (and with any remaining residue to
be retained by Landlord). “Costs of Reletting” shall include without
limitation, all costs and expenses incurred by Landlord for any repairs or
other matters described in Paragraph D above, brokerage commissions,
advertising costs, attorneys’ fees, any economic incentives given to enter
leases with replacement tenants, and costs of collecting rent from replacement
tenants. Landlord shall be under no obligation to observe or perform any
provision of this Lease on its part to be observed or performed which accrues
while Tenant is in Default hereunder. The times set forth herein for the curing
of Defaults by Tenant are of the essence of this Lease. Tenant hereby
irrevocably waives any right otherwise available under any Law to redeem or
reinstate this Lease, or Tenant’s right to possession, after this Lease, or
Tenant’s right to possession, is terminated based on a Default by Tenant.

 

ARTICLE 16: SECURITY DEPOSIT

 

Tenant shall
deposit with Landlord the amount set forth in Article 1 (“Security Deposit”),
upon Tenant’s execution and submission of this Lease. The Security Deposit
shall serve as security for the prompt, full and faithful performance by Tenant
of the terms and provisions of this Lease. If Tenant commits a Default, or owes
any amounts to Landlord upon the expiration of this Lease, Landlord may use or
apply the whole or any part of the Security Deposit for the payment of Tenant’s
obligations hereunder. The use or application of the Security Deposit or any
portion thereof shall not prevent Landlord from exercising any other right or
remedy provided hereunder or under any Law and shall not be construed as
liquidated damages. In the event the Security Deposit is reduced by such use or
application, Tenant shall deposit with Landlord within ten (10) days after
notice, an amount sufficient to restore the full amount of the Security
Deposit. Landlord shall not be required to keep the Security Deposit separate
from Landlord’s general funds or pay interest on the Security Deposit. Any
remaining portion of the Security Deposit shall be returned to Tenant (or, at
Landlord’s option, to the last assignee of Tenant’s interest in this Lease)
within sixty (60) days after Tenant (or such assignee) has vacated the Premises
in accordance with Article 23. If the Premises shall be expanded at any
time, or if the Term shall be extended at an increased rate of Rent, the
Security Deposit shall thereupon be proportionately increased. Tenant shall not
assign, pledge or otherwise transfer any interest in the Security Deposit
except as part of an assignment of this Lease approved by Landlord under Article 13,
and any attempt to do so shall be null and void.

 

ARTICLE 17: ATTORNEYS’ FEES,
JURY TRIAL, COUNTERCLAIMS AND VENUE

 

In the event of
any litigation or arbitration between the parties relating to this Lease, the
Premises or Property (including pretrial, trial, appellate, administrative,
bankruptcy or insolvency proceedings), the prevailing party shall be entitled
to recover its attorneys’ fees and costs as part of the judgment, award or
settlement therein. In the event of a breach of this Lease by either party
which does not result in litigation but which causes the non-breaching party to
incur attorneys’ fees or costs, the breaching party shall reimburse such fees
and costs to the non-breaching party upon demand. If either party or any of its
officers, directors, trustees, beneficiaries, partners, agents, affiliates or
employees shall be made a party to any litigation or arbitration commenced by
or against the other party and is not at fault, the other party shall pay all
costs, expenses and attorneys’ fees incurred by such parties in connection with
such litigation. IN THE INTEREST OF OBTAINING
A SPEEDIER AND LESS COSTLY HEARING OF ANY DISPUTE, LANDLORD AND TENANT HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
PARTY AGAINST THE OTHER ARISING OUT OF OR RELATING TO THIS LEASE, THE PREMISES
OR THE PROPERTY. Although
such jury waiver is intended to be self-operative and irrevocable, Landlord and
Tenant each further agree, if requested, to confirm such waivers in writing at
the time of commencement of any such action, proceeding or counterclaim. If
Landlord commences any detainer suit, summary proceedings or other action
seeking possession of the Premises, Tenant agrees not to interpose by
consolidation of actions, removal to chancery or otherwise, any counterclaim,
claim of set-off, recoupment or deduction of Rent, or other claim seeking
affirmative relief of any kind (except a
mandatory or compulsory counterclaim which Tenant would forfeit if not
so interposed). Any action or proceeding brought by either party against the
other for any matter arising out of or in

 

17

 

any way relating to this Lease, the Premises or the Property, shall be
heard, at Landlord’s option, in the court having jurisdiction located closest
to the Property.

 

ARTICLE 18: SUBORDINATION,
ATTORNMENT AND LENDER PROTECTION

 

This Lease is
subject and subordinate to all Mortgages now or hereafter placed upon the
Property, and all other encumbrances and matters of public record applicable to
the Property. Whether before or after any foreclosure or power of sale
proceedings are initiated or completed by any Lender or a deed in lieu is
granted (or any ground lease is terminated), Tenant agrees upon written request
of any such Lender or any purchaser at such sale, to attorn and pay Rent to
such party, and recognize such party as Landlord (provided such Lender or
purchaser shall agree not to disturb Tenant’s occupancy so long as Tenant does
not Default hereunder, on a form customarily used by, or otherwise reasonably
acceptable to, such party). However, in the event of attornment, no Lender
shall be: (i) liable for any act or omission of Landlord, or subject to
any offsets or defenses which Tenant might have against Landlord (arising prior
to such Lender becoming Landlord under such attornment), (ii) liable for
any security deposit or bound by any prepaid Rent not actually received by such
Lender, or (iii) bound by any modification of this Lease not consented to
by such Lender. Any Lender may elect to make this Lease prior to the lien of
its Mortgage by written notice to Tenant, and if the Lender of any prior
Mortgage shall require, this Lease shall be prior to any subordinate Mortgage;
such elections shall be effective upon written notice to Tenant, or shall be
effective as of such earlier or later date set forth in such notice. Tenant
agrees to give any Lender by certified mail, return receipt requested, a copy
of any notice of default served by Tenant upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of service on Tenant of
a copy of an assignment of leases, or otherwise) of the address of such Lender.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time permitted Landlord for cure under this Lease, any such Lender
whose address has been provided to Tenant shall have an additional period of
thirty (30) days in which to cure (or such additional time as may be required
due to causes beyond such Lender’s control, including time to obtain possession
of the Property by appointment of receiver, power of sale or judicial action).
Except as expressly provided to the contrary herein, the provisions of this Article shall
be self-operative; however Tenant shall execute and deliver, within ten (10) days
after requested, such documentation as Landlord or any Lender may reasonably
request from time to time, whether prior to or after a foreclosure or power of
sale proceeding is initiated or completed, a deed in lieu is delivered, or a
ground lease is terminated, in order to further confirm or effectuate the
matters set forth in this Article in recordable form (and Tenant hereby
authorizes Landlord acting in good faith to execute any such documentation as
Tenant’s agent and attorney-in-fact). Tenant hereby waives the provisions of
any Law (now or hereafter adopted) which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease or
Tenant’s obligations hereunder if foreclosure or power of sale proceedings are
initiated, prosecuted or completed.

 

ARTICLE 19: ESTOPPEL
CERTIFICATES

 

Tenant shall from
time to time, within five (5) business days after written request from
Landlord, execute, acknowledge and deliver a statement certifying: (i) that
this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying that this Lease as so modified,
is in full force and effect (or specifying the ground for claiming that this
Lease is not in force and effect), (ii) the dates to which the Rent has
been paid, and the amount of any Security Deposit, (iii) that Tenant is in
possession of the Premises, and paying Rent on a current basis with no offsets,
defenses or claims, or specifying the same if any are claimed, (iv) that
there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord or Tenant which are pertinent to the request, or specifying the same
if any are claimed, and (v) certifying such other matters, and including
such current financial statements, as Landlord may reasonably request, or as
may be requested by Landlord’s current or prospective Lenders, insurance
carriers, auditors, and prospective purchasers (and including a comparable
certification statement from any subtenant respecting its sublease). Any such
statement may be relied upon by any such parties. If Tenant shall fail to
execute and return such statement within the time required herein, Tenant shall
be deemed to have agreed with the matters set forth therein, and Landlord
acting in good faith shall be authorized as Tenant’s agent and attorney-in-fact
to execute such statement on behalf of Tenant (which shall not be in limitation
of Landlord’s other remedies).

 

18

 

ARTICLE 20: RIGHTS RESERVED
BY LANDLORD

 

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

 

A.            General Matters.   To: (i) change
the name or street address of the Property or designation of the Premises, (ii) install
and maintain signs on the exterior and interior of the Property, and grant any
other Person the right to do so, (iii) retain at all times, and use in appropriate
instances, keys to all doors within and into the Premises, except for secured
areas identified to Landlord in writing (iv) grant to any Person the right
to conduct any business or render any service at the Property, whether or not
the same are similar to the use permitted Tenant by this Lease, (v) grant
any Person the right to use separate security personnel and systems respecting
access to their premises, (vi) have access for Landlord and other tenants
of the Property to any mail chutes located on the Premises according to the rules of
the United States Postal Service (and to install or remove such chutes), and (vii) in
case of fire, invasion, insurrection, riot, civil disorder, public excitement
or other dangerous condition, or threat thereof: (a) limit or prevent
access to the Property, (b) shut down elevator service, (c) activate
elevator emergency controls, and (d) otherwise take such reasonable action or
preventative measures deemed necessary by Landlord for the safety of tenants of
the Property or the protection of the Property and other property located
thereon or therein (but this provision shall impose no duty on Landlord to take
such actions, and no liability for actions taken in good faith).

 

B.            Access To Premises.   To
enter the Premises in order to: (i) inspect, (ii) supply cleaning
service or other services to be provided Tenant hereunder, (iii) show the
Premises to current and prospective Lenders, insurers, purchasers, tenants, brokers
and governmental authorities, (iv) decorate, remodel or alter the Premises
if Tenant shall abandon the Premises at any time, or shall vacate the same during
the last 120 days of the Term (without thereby terminating this Lease), and (v) perform
any work or take any other actions under Paragraph (C) below, or exercise
other rights of Landlord under this Lease or applicable Laws. However, Landlord
shall: (a) provide reasonable advance written or oral notice to Tenant’s
on-site manager or other appropriate person for matters which will involve a
significant disruption to Tenant’s business (except in emergencies), (b) take
reasonable steps to minimize any significant disruption to Tenant’s business, and
following completion of any work, return Tenant’s leasehold improvements, fixtures,
property and equipment to the original locations and condition to the fullest
extent reasonably possible, and (c) take reasonable steps to avoid
materially changing the configuration or reducing the square footage of the
Premises, unless required by Laws or other causes beyond Landlord’s reasonable control
(and in the event of any permanent material reduction, the Rent and other
rights and obligations of the parties based on the square footage of the
Premises shall be proportionately reduced). Tenant shall not place partitions,
furniture or other obstructions in the Premises which may prevent or impair Landlord’s
access to the Systems and Equipment for the Property or the systems and
equipment for the Premises. If Tenant requests that any such access occur
before or after Landlord’s regular business hours and Landlord approves, Tenant
shall pay all overtime and other additional costs in connection therewith.

 

C.            Changes To The Property.   To: (i)
paint and decorate, (ii) perform repairs or maintenance, and (iii) make
replacements, restorations, renovations, alterations, additions and improvements,
structural or otherwise (including freon retrofit work), in and to the Property
or any part thereof, including any adjacent building, structure, facility, land,
street or alley, or change the uses thereof (including changes, reductions or
additions of corridors, entrances, doors, lobbies, parking facilities and other
areas, structural support columns and shear walls, elevators, stairs,
escalators, mezzanines, solar tint windows or film, kiosks, planters,
sculptures, displays, and other amenities and features therein, and changes
relating to the connection with or entrance into or use of the Property or any
other adjoining or adjacent building or buildings, now existing or hereafter
constructed). In connection with such matters, Landlord may among other things
erect scaffolding, barricades and other structures, open ceilings, close entry
ways, restrooms, elevators, stairways,
corridors, parking and other areas and facilities, and take such other actions
as Landlord deems appropriate. However, Landlord shall: (a) take reasonable
steps to minimize or avoid any denial of access to the Premises except when
necessary on a temporary basis, and (b) in connection with entering the
Premises shall comply with Paragraph B above.

 

D.            New Premises.   To substitute for the Premises other premises
(herein referred to as the “new premises”) in the Property, provided: (i) the
new premises shall be similar to the Premises in size (up to 10% larger or
smaller with the Rent and any other rights and obligations of the parties based
on the square footage of the Premises adjusted proportionately to reflect the any
decrease), (ii) Landlord shall provide the new premises in a condition substantially
comparable to the Premises at the time of the substitution (and Tenant shall
diligently cooperate

 

19

 

in the preparation or approval of any plans or specifications for the
new premises as requested by Landlord or Landlord’s representatives), (iii) the
parties shall execute an appropriate amendment to the Lease confirming the
change within thirty (30) days after Landlord requests, and (iv) if Tenant
shall already have taken possession of the Premises: (a) Landlord shall
pay the direct, out-of-pocket, reasonable expenses of Tenant in moving from the
Premises to the new premises, and (b) Landlord shall give Tenant at least
thirty (30) days’ notice before making such change, and such move shall be made
during evenings, weekends, or otherwise so as to incur the least inconvenience
to Tenant. Tenant shall surrender and vacate the Premises on the date required
in Landlord’s notice of substitution, in the condition and as required under Article 23,
and any failure to do so shall be subject to Article 24.

 

ARTICLE 21: LANDLORD’S RIGHT
TO CURE

 

If Landlord shall
fail to perform any obligation under this Lease required to be performed by
Landlord, Landlord shall not be deemed to be in default hereunder nor subject
to any claims for damages of any kind, unless such failure shall have continued
for a period of thirty (30) days after notice thereof by Tenant (provided, if
the nature of Landlord’s failure is such that more time is reasonably required
in order to cure, Landlord shall not be in default if Landlord commences to
cure within such period and thereafter diligently seeks to cure such failure to
completion). If Landlord shall default and failure to cure as provided herein,
Tenant shall have such rights and remedies as may be available to Tenant under
applicable Laws, subject to the other provisions of this Lease; provided,
Tenant shall have no right of self-help to perform repairs or any other
obligation of Landlord, and shall have no right to withhold, set-off, or abate
Rent, or terminate this Lease, and Tenant hereby expressly waives the benefit
of any Law to the contrary.

 

ARTICLE 22: INDEMNIFICATION

 

Tenant shall
defend, indemnify and hold Landlord harmless from and against any and all
claims, demands, losses, penalties, fines, fees, charges, assessments,
liabilities, damages, judgments, orders, decrees, actions, administrative or
other proceedings, costs and expenses (including court costs, attorneys’ fees,
and expert witness fees), including consequential damages, and any diminution
in value or loss or interference with the transfer, use or enjoyment of the
Premises, Property or other property or business or affecting title thereto,
howsoever caused, which directly or indirectly relate to or result wholly or in
part from, or are alleged to relate to or arise wholly or in part from: (i) any
violation or breach of this Lease or applicable Law by any Tenant Parties (as
defined below), (ii) damage, loss or injury to persons, property or
business occurring in, about or from the Premises, (iii) damage, loss or
injury to persons, property or business directly or indirectly arising out of
any Tenant Party’s use of the Premises or Property, or out of any other act or
omission of any Tenant Parties. For purposes of this provision, “Tenant Parties”
shall mean Tenant, any other occupant of the Premises and any of their
respective agents, employees, invitees, Transferees and contractors. Without
limiting the generality of the foregoing, Tenant specifically acknowledges that
the undertaking herein shall apply to claims in connection with or arising out
of any “Work” as described in Article 9, the installation, maintenance,
use or removal of any “Lines” as described in Article 29, the
transportation, use, storage, maintenance, generation, manufacturing, handling,
disposal, release, discharge, spill or leak of any “Hazardous Material” as
described in Article 30, and violations of Tenant’s responsibilities
respecting the Disabilities Acts as described in Article 31 (whether or
not any of such matters shall have been theretofore approved by Landlord).
Notwithstanding the foregoing to the contrary, the foregoing indemnity shall
not apply to claims finally determined by a court of competent jurisdiction to
have been caused solely by the gross negligence or willful misconduct of the
party seeking to be indemnified.

 

ARTICLE 23: RETURN OF POSSESSION

 

At the expiration
or earlier termination of this Lease or Tenant’s right of possession, Tenant
shall vacate and surrender possession of the entire Premises in the condition
required under Article 8 and the Rules, ordinary wear and tear excepted, shall
surrender all keys and key cards, and any parking transmitters, stickers or
cards, to Landlord, and shall remove all personal property and office trade
fixtures that may be readily removed without damage to the Premises or
Property. All improvements, fixtures and other items, including ceiling light
fixtures, HVAC equipment, plumbing fixtures, hot water heaters, fire
suppression and sprinkler systems, “Lines”

 

20

 

under Article 29, interior stairs, wall coverings, carpeting and
other flooring, blinds, drapes and window treatments, in or serving the
Premises, whether installed by Tenant or Landlord, shall be Landlord’s property
and shall remain upon the Premises, all without compensation, allowance or
credit to Tenant, unless Landlord elects otherwise as provided herein. If prior
to such termination or within three (3) months thereafter Landlord so
directs by notice, Tenant shall promptly remove such of the foregoing items as
are designated in such notice and restore the Premises to the condition prior
to the installation of such items in a good and workmanlike manner; provided,
Landlord shall not require removal of customary office improvements installed
with Landlord’s written approval (except as expressly and reasonably required
by Landlord in connection with granting such approval). If Tenant shall fail to
perform any repairs or restoration, or fail to remove any items from the
Premises required hereunder, Landlord may do so and Tenant shall pay Landlord’s
actual, reasonable charges therefor upon demand. All property removed from the
Premises by Landlord pursuant to any provisions of this Lease or any Law may be
handled or stored by Landlord at Tenant’s expense, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
property not removed from the Premises or retaken from storage by Tenant within
thirty (30) days after expiration or earlier termination of this Lease or
Tenant’s right to possession, shall at Landlord’s option be conclusively deemed
to have been conveyed by Tenant to Landlord as if by bill of sale without
payment by Landlord. Unless prohibited by applicable Law, Landlord shall have a
lien against such property for the costs incurred in removing and storing the
same. Tenant hereby waives any statutory notices to vacate or quit the Premises
upon expiration of this Lease.

 

ARTICLE 24: HOLDING OVER

 

Unless Landlord
expressly agrees otherwise in writing, Tenant shall pay Landlord 200% of the
amount of Rent then applicable prorated on a per diem basis for each day Tenant
shall fail to vacate or surrender possession of the Premises or any part
thereof after expiration or earlier termination of this Lease as required under
Article 23, together with all damages (direct and consequential) sustained
by Landlord on account thereof. Tenant shall pay such amounts on demand, and,
in the absence of demand, monthly in advance. The foregoing provisions, and
Landlord’s acceptance of any such amounts, shall not serve as permission for
Tenant to hold-over, nor serve to extend the Term (although Tenant shall remain
a tenant-at-sufferance bound to comply with all provisions of this Lease until
Tenant properly vacates the Premises, and shall be subject to the provisions of
Article 23). Landlord shall have the right at any time after expiration or
earlier termination of this Lease or Tenant’s right to possession to reenter
and possess the Premises and remove all property and persons therefrom, and
Landlord shall have such other remedies for holdover as may be available to
Landlord under other provisions of this Lease or applicable Laws.

 

ARTICLE 25: NOTICES

 

Except as
expressly provided to the contrary in this Lease, every notice or other
communication to be given by either party to the other with respect hereto or
to the Premises or Property, shall be in writing and shall not be effective for
any purpose unless the same shall be served personally or by national air
courier service, or United States certified mail, return receipt requested,
postage prepaid, to the parties at the addresses set forth in Article 1,
or such other address or addresses as Tenant or Landlord may from time to time
designate by notice given as above provided. Every notice or other
communication hereunder shall be deemed to have been given as of the third
business day following the date of such mailing (or as of any earlier date
evidenced by a receipt from such national air courier service or the United
States Postal Service) or immediately if personally delivered. Notices not sent
in accordance with the foregoing shall be of no force or effect until received
by the foregoing parties at such addresses required herein.

 

ARTICLE 26: REAL ESTATE
BROKERS

 

Tenant represents
that Tenant has dealt only with the broker, if any, designated in Article 1
(whose commission, if any, shall be paid by Landlord pursuant to separate
agreement) as broker, agent or finder in connection with this Lease, and agrees
to indemnify and hold Landlord harmless from all damages, judgments,
liabilities and expenses (including reasonable attorneys’ fees) arising from
any claims or demands of any other broker, agent or finder with whom Tenant

 

21

 

has dealt for any commission or fee alleged to be due in connection
with its participation in the procurement of Tenant or the negotiation with
Tenant of this Lease.

 

ARTICLE 27: NO WAIVER

 

No provision of this Lease will be deemed waived by
either party unless expressly waived in writing and signed by the waiving
party. No waiver shall be implied by delay or any other act or omission of
either party. No waiver by either party of any provision of this Lease shall be
deemed a waiver of such provision with respect to any subsequent matter
relating to such provision, and Landlord’s consent or approval respecting any
action by Tenant shall not constitute a waiver of the requirement for obtaining
Landlord’s consent or approval respecting any subsequent action. Acceptance of
Rent by Landlord directly or through any agent or lockbox arrangement shall not
constitute a waiver of any breach by Tenant of any term or provision of this
Lease (and Landlord reserves the right to return or refund any untimely
payments if necessary to preserve Landlord’s remedies). No acceptance of a
lesser amount of Rent shall be deemed a waiver of Landlord’s right to receive
the full amount due, nor shall any endorsement or statement on any check or
payment or any letter accompanying such check or payment be deemed an accord
and satisfaction, and Landlord may accept such check or payment without prejudice
to Landlord’s right to recover the full amount due. The acceptance of Rent or
of the performance of any other term or provision from, or providing directory
listings or services for, any Person other than Tenant shall not constitute a
waiver of Landlord’s right to approve any Transfer. No delivery to, or
acceptance by, Landlord or its agents or employees of keys, nor any other act
or omission of Tenant or Landlord or their agents or employees, shall be deemed
a surrender, or acceptance of a surrender, of the Premises or a termination of
this Lease, unless stated expressly in writing by Landlord.

 

ARTICLE 28: SAFETY AND
SECURITY DEVICES, SERVICES AND PROGRAMS

 

The parties acknowledge that safety and security
devices, services and programs provided by Landlord, if any, while intended to
deter crime and ensure safety, may not in given instances prevent theft or
other criminal acts, or ensure safety of persons or property. The risk that any
safety or security device, service or program may not be effective, or may
malfunction, or be circumvented by a criminal, is assumed by Tenant with
respect to Tenant’s property and interests, and Tenant shall obtain insurance
coverage to the extent Tenant desires protection against such criminal acts and
other losses, as further described in Article 10. Tenant agrees to cooperate
in any reasonable safety or security program developed by Landlord or required
by Law.

 

ARTICLE 29:
TELECOMMUNICATION LINES

 

A.            Telecommunication Lines.   Subject to Landlord’s continuing right of
supervision and approval, and the other provisions hereof, Tenant may: (i) install
telecommunication lines (“Lines”) connecting the Premises to Landlord’s
terminal block on the floor or floors on which the Premises are located, or (ii) use
such Lines as may currently exist and already connect the Premises to such
terminal block. Landlord’s predecessor or independent contractor has heretofore
connected such terminal block through riser system Lines to Landlord’s main distribution
frame (“MDF”) for the Property. Landlord disclaims any representations,
warranties or understandings concerning the capacity, design or suitability of
Landlord’s riser Lines, MDF or related equipment. If there is, or will be, more
than one tenant on any floor, at any time, Landlord may allocate, and
periodically reallocate, connections to the terminal block based on the proportion
of square feet each tenant occupies on such floor, or the type of business
operations or requirements of such tenants, in Landlord’s reasonable
discretion. Landlord may arrange for an independent contractor to review Tenant’s
requests for approval hereunder, monitor or supervise Tenant’s installation,
connection and disconnection of Lines, and provide other such services, or
Landlord may provide the same. In each case, Tenant shall pay Landlord’s
reasonable fees and costs therefor as provided in Article 9.

 

B.            Installation.   Tenant may install and use Tenant’s
Lines and make connections and disconnections at the terminal blocks as
described above, provided Tenant shall: (i) obtain Landlord’s prior
written approval of all aspects thereof, (ii use an experienced and qualified contractor
designated or approved in writing in advance by Landlord (whom Landlord may
require to enter an access and indemnity agreement on Landlord’s then standard
form of agreement therefor), (iii) comply with such inside wire standards
as Landlord may adopt from time to time, and all other provisions of this
Lease, including Article 9 respecting Work, and the Rules

 

22

 

respecting access to the
wire closets, (iv) not install Lines in the same sleeve, chase way or other
enclosure in close proximity
with electrical wire, and not install PVC-coated Lines under any circumstances,
(v) thoroughly test any riser Lines to which Tenant intends to connect any
Lines to ensure that such riser Lines are available and are not then connected
to or used for telephone, data transmission or any other purpose by any other
party (whether or not Landlord has previously approved such connections), and
not connect to any such unavailable or connected riser Lines, and (vi) not
connect any equipment to the Lines which may create an electromagnetic field
exceeding the normal insulation ratings of ordinary twisted pair riser cable or
cause radiation higher than normal background radiation, unless the Lines
therefor (including riser Lines) are appropriately insulated to prevent such
excessive electromagnetic fields or radiation (and such insulation shall not be
provided by the use of additional unused twisted pair Lines). As a condition to
permitting installation of new Lines, Landlord may require that Tenant remove
any existing Lines located in or serving the Premises.

 

C.            Limitation of Liability.   Unless due solely to Landlord’s intentional misconduct or grossly
negligent acts, Landlord shall have no liability for damages arising, and
Landlord does not warrant that the Tenant’s use of the Lines will be free, from
the following (collectively called “Line Problems”): (i) any eavesdropping,
wire-tapping or theft of long distance access codes by unauthorized parties,
(ii) any failure of the Lines to satisfy Tenant’s requirements, or (iii)
any capacitance, attenuation,
cross-talk or other problems with the Lines, any misdesignation of the Lines in
the MDF room or wire closets, or any shortages, failures, variations,
interruptions, disconnections, loss or damage caused by or in connection with
the installation, maintenance, replacement, use or removal of any other Lines
or equipment at the Property by or for other tenants at the Property, by any
failure of the environmental conditions at or the power supply for the Property
to conform to any requirements of the Lines or any other problems associated
with any Lines or by any other cause. Under no circumstances shall any Line
Problems be deemed an actual or constructive eviction of Tenant, render
Landlord liable to Tenant for abatement of any Rent or other charges under the
Lease, or relieve Tenant from performance of Tenant’s obligations under the
Lease as amended herein. Landlord in no event shall be liable for damages by
reason of loss of profits, business interruption or other consequential damage
arising from any Line Problems.

 

ARTICLE 30: HAZARDOUS MATERIALS

 

A.            Hazardous Materials Generally
Prohibited.   Tenant shall not transport, use, store, maintain,
generate, manufacture, handle, dispose, release, discharge, spill or leak any “Hazardous
Material” (as defined below), or permit Tenant’s employees, agents,
contractors, or other occupants of the Premises to engage in such activities on
or about the Property. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within,
the Premises of substances customarily and lawfully used in the business which
Tenant is permitted to conduct in the Premises under this Lease, but only as an
incidental and minor part of such business, and provided: (i) such substances
shall be properly labeled, contained, used and stored only in small quantities
reasonably necessary for such permitted use of the Premises and the ordinary
course of Tenant’s business therein, strictly in accordance with applicable
Laws, highest prevailing standards, and the manufacturers’ instructions
therefor, and as Landlord shall reasonably require, (ii) Tenant shall provide
Landlord with ten (10) days advance notice and current Material Safety Data
Sheets (“MSDSs”) therefor, and Landlord reserves the right to prohibit or limit
such substances in each such instance, (iii)such substances shall not be disposed of, released, discharged or
permitted to spill or leak in or about the Premises or the Property (and under
no circumstances shall any Hazardous Material be disposed of within the drains
or plumbing facilities in or serving the Premises or Property or in any other
public or private drain or sewer, regardless of quantity or concentration),
(iv) if any applicable Law or Landlord’s trash removal contractor requires that
any such substances be disposed of separately from ordinary trash, Tenant shall
make arrangements at Tenant’s expense for such disposal in approved containers
directly with a qualified and licensed disposal company at a lawful disposal
site, (v) any remaining such substances shall be completely, properly and
lawfully removed from the Property upon expiration or earlier termination of
this Lease, and (vi) for purposes of removal and disposal of any such
substances, Tenant shall be named as the owner,
operator and generator, shall obtain a waste generator identification number,
and shall execute all permit applications, manifests, waste characterization
documents and any other required forms,

 

B.            Notifications and Records.   Tenant shall immediately notify Landlord of: (i) any inspection,
enforcement, cleanup or other regulatory action taken or threatened by any
regulatory authority with respect to any Hazardous Material on or from the
Premises or the migration thereof from or to other property, (ii any demands or claims made or threatened by
any party

 

23

 

relating to any loss or
injury claimed to have resulted from any Hazardous Material on or from the
Premises, (iii) any release, discharge, spill, leak, disposal or transportation
of any Hazardous  Material
on or from the Premises in violation of
this Article, and any damage, loss or injury to persons, property or
business resulting or claimed to have resulted therefrom, and (iv) any matters
where Tenant is required by Law
to give a notice to any regulatory authority respecting any Hazardous Materials
on or from the Premises. Landlord shall have the right (but not the obligation)
to notify regulatory authorities concerning actual and claimed violations of
this Article. Tenant shall immediately upon written request from time to time
provide Landlord with copies of all MSDSs, permits, approvals, memos, reports,
correspondence, complaints, demands, claims, subpoenas, requests, remediation and cleanup plans, and all papers of
any kind filed with or by any regulatory authority and any other books, records
or items pertaining to Hazardous Materials that are subject to the provisions of this Article (collectively
referred to herein as “Tenant’s Hazardous Materials Records”).

 

C.            Clean Up Responsibility.   If any Hazardous
Material is released, discharged or disposed of, or permitted to
spill or leak, in violation of the foregoing provisions, Tenant shall
immediately and properly clean up and remove the Hazardous Materials from the
Premises, Property and any other affected property and clean or replace any
affected personal property (whether or not owned by Landlord) in compliance with applicable Laws and then
prevailing industry practices and standards, at Tenant’s expense (without
limiting Landlord’s other remedies therefor). Such clean up and removal work (“Tenant
Remedial Work”) shall be considered Work under Article 9 and subject to the
provisions thereof, including Landlord’s prior written approval (except in
emergencies), and any testing, investigation, feasibility and impact studies, and
the preparation and implementation of any remedial action plan required by any
court or regulatory authority having jurisdiction or reasonably required by
Landlord. In connection therewith, Tenant shall provide documentation
evidencing that all Tenant Remedial Work or other action required hereunder has
been properly and lawfully completed (including a certificate addressed to
Landlord from a environmental consultant reasonably acceptable to Landlord, in
such detail and form as Landlord may reasonably require). If any Hazardous Material is released,
discharged, disposed of, or permitted to spill or leak on or about the Property
and is not caused by Tenant or other occupants of the Premises, or their
agents, employees, Transferees, or contractors, such release, discharge,
disposal, spill or leak shall be deemed casualty damage under Article 11 to the
extent that the Premises and Tenant’s use thereof is affected thereby; in such
case, Landlord and Tenant shall have the obligations and rights respecting such
casualty damage provided under this Lease.

 

D.            Hazardous Material Defined.   The term “Hazardous Material” for purposes hereof shall include, but
not be limited to: (i) any flammable, explosive, toxic, radioactive,
biological, corrosive or otherwise hazardous chemical, substance, liquid, gas,
device, form of energy, material or waste or component thereof, (ii)
petroleum-based products, diesel fuel, paints, solvents, lead, radioactive
materials, cyanide, biohazards, medical and infectious waste and “sharps”,
printing inks, acids, DDT, pesticides, ammonia compounds, and any other items
which now or subsequently are found to have an adverse effect on the
environment or the health and safety of persons or animals or the presence of
which require investigation or remediation under any Law or governmental
policy, and (iii) any item defined as a “hazardous substance”, “hazardous
material”, “hazardous waste”, “regulated substance” or “toxic substance” under
any federal, state or local Laws, and all regulations, guidelines, directives
and other requirements thereunder, all as may be amended or supplemented from
time to time. 

 

E.             Fees, Taxes, Fines and Remedies.   Tenant shall pay, prior to delinquency, any and all fees, taxes
(including excise taxes), penalties and fines arising from or based on Tenant’s
activities involving Hazardous Material on or about the Premises or Property,
and shall not allow such obligations to become a lien or charge against the
Property or Landlord. If Tenant violates any provision of this Article with
respect to any Hazardous Materials, Landlord may: (i) require that Tenant
immediately remove all Hazardous Materials from the Premises and discontinue using,
storing and handling Hazardous Materials in the Premises, and/or (ii) pursue
such other remedies as may be available to Landlord under this Lease or
applicable Law.

 

ARTICLE 31: DISABILITIES ACTS

 

The Parties acknowledge that
the Americans With Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and guidelines promulgated thereunder (“ADA”),
and any similarly motivated state and local Laws (“Local Barriers Acts”), as
the same may be amended and supplemented from time to time (collectively
referred to herein as the “Disabilities Acts”) establish requirements for
business operations, accessibility and barrier removal, and that such requirements may or may not apply to the
Premises and Property depending on, among other

 

24

 

things: (i) whether Tenant’s
business is deemed a “public accommodation” or “commercial  facility”, (ii) whether such requirements are
“readily achievable”, and (iii) whether a given alteration affects a “primary
function area” or triggers “path of travel” requirements. The parties hereby
agree that: (a) Landlord shall perform any required ADA Title III and related
Local Barriers Acts compliance in the common areas, except as provided below,
(b) Tenant shall perform any required ADA Title III and related Local Barriers
Acts compliance in the Premises, and (c) Landlord may perform, or require that
Tenant perform, and Tenant shall be responsible for the cost of, ADA Title Ill
and related Local Barriers Acts “path of travel” and other requirements
triggered by any public accommodation or other use of, or alterations in, the
Premises. Tenant shall be responsible for ADA Title I and related Local
Barriers Acts requirements relating to Tenant’s employees, and Landlord shall
be responsible for ADA Title I and related Local Barriers Acts requirements
relating to Landlord’s employees.

 

ARTICLE 32:
DEFINITIONS

 

(A)          “Building” shall mean the structure (or the portion thereof
owned by Landlord) identified in Article 1.

 

(B)           “Default Rate” shall mean eighteen percent (18%) per
annum, or the highest rate permitted by applicable Law, whichever shall be
less.

 

(C)           “Expenses” shall mean all expenses, costs and amounts
(other than Taxes) of every kind and nature relating to the ownership,
management, repair, maintenance, replacement, insurance and operation of the
Property, including any amounts paid for: (i) utilities for the Property,
including electricity, power, gas, steam, oil or other fuel, water, sewer,
lighting,  heating, air
conditioning and ventilating, (ii) permits, licenses, inspections, warrants and
certificates necessary to operate, manage and lease the Property, (iii) costs
of complying with Laws, including any freon retrofitting and compliance with
the “Disabilities Acts” (as described in Article 31), (iv) Insurance Applicable to
the Property, not limited to that required under this Lease, and which may include earthquake, boiler,
rent loss, workers’ compensation and employers’ liability, builders’ risk,
automobile and other coverages, including a reasonable allocation of costs
under any blanket policies, (v) supplies, materials, tools, equipment,
uniforms, and vehicles used in
the operation, repair, maintenance, security, and other services for the
Property, including rental, installment purchase and financing agreements
therefor and interest thereunder, (vi) accounting, legal, inspection,
consulting, concierge, alarm monitoring, security, janitorial, trash removal,
snow and ice removal, and other services, (vii) management company fees (which
shall not be in excess of those
fees charged by comparable on-site management companies in competing Class A
buildings in comparable locations in Seattle Central Business District), (viii)
wages, salaries and other compensation and benefits (including health, life and
disability insurance, savings,
retirement and pension programs, and the fair value of any parking privileges,
including those provided through collective bargaining agreements) for any
manager and other personnel or parties engaged in the operation, repair,
maintenance, security or other services for the Property, and employer’s FICA
contributions, unemployment taxes or insurance, any other taxes which may be
levied on such wages, salaries, compensation and benefits, and data or payroll
processing expenses relating thereto (if the manager or other personnel handle
other properties, the foregoing expenses shall be allocated appropriately
between the Property and such other properties), (ix) payments pursuant to any
easement, cross or reciprocal easement, operating agreement, development and/or
parking rights agreement, declaration, covenant, or other agreement or
instrument pertaining to the payment or sharing of costs for common or parking
areas or other matters (except to the extent Included in Taxes hereunder), (x)
parking surcharges or fees that may result from any environmental or other Law or
guideline, and any sales, use, value-added or other taxes on supplies or
services for the Property, (xi) the costs of operating and maintaining any
on-site office at the Property or an adjoining property (such costs to be
appropriately allocated between the Property and any such adjoining property
served by such office), including the fair rental value thereof, telephone
charges, postage, stationery and Photocopying expenses, and telephone directory
listings, (xii) the amount of insurance premiums saved by electing higher than
customary deductibles, if Landlord does not also include in Expenses the losses
incurred as a result of having such higher deductibles, (xiii) the Cost of auditing,
assessing and implementing Year 2000 Performance solutions under Article 34,
and (xiv) operation, maintenance, repair, installation, replacement,
inspection, testing, painting, decorating and cleaning of the Property, and any
items located off-site but installed for the benefit of the Property, including:
(a) Property identification and pylon signs, directional signs, traffic signals
and markers, flagpoles and canopies, (b) sidewalks, curbs, stairways, parking structures,
lots, loading and service areas and driveways, (c) storm and sanitary drainage
systems, including disposal plants, lift stations and detention ponds and
basins, (d) irrigation systems, (e) elevators, escalators, “Lines” under
Article 29, and other Systems and Equipment,

 

25

 

(f) interior and exterior
flowers and landscaping, and (g) all other portions, facilities, features and
amenities of the Property,
including common area fixtures, equipment and other items therein or thereon,
floors, floor coverings, corridors, ceilings, foundations, walls,
wall-coverings, restrooms, lobbies, trash compactors, doors, locks and
hardware, windows, gutters, downspouts, roof flashings and roofs. The foregoing provision is for definitional
purposes only and shall not be construed
to impose any obligation upon Landlord to incur such expenses. Landlord may
retain independent contractors (or affiliated contractors at market rates) to
provide any services or perform
any work, in which case the costs thereof shall be deemed Expenses. Expenses
shall not, however, include:

 

(1)           costs relating to non-office rentable areas of the
Property to the extent that Landlord deducts Such rentable areas in determining Tenant’s Share of Expenses under Article 4; and costs relating solely to any
parking garage for the Property (such as utilities, attendants, cashiers, scavenger and
janitorial services), except to the extent that Landlord elects to credit
parking revenues, if any, derived from such garage against Expenses;

 

(2)           depreciation, interest and amortization on
any Mortgages and other debt costs
or ground lease payments (except interest on the cost of capital expenditures
to the extent permitted below, and ground lease payments for Taxes and
Expenses); legal fees in connection with leasing, tenant disputes or
enforcement of leases; real estate brokers’ leasing commissions; improvements or alterations to tenant spaces;
the cost of providing any service directly to, and paid directly by, any
tenant; costs of any items to the extent Landlord receives reimbursement from
insurance proceeds or from a third party (excluding payments by tenants for
Taxes and Expenses); and 

 

(3)           capital expenditures, except those: (i) made primarily to
reduce Expenses,  or to
comply with Laws or insurance requirements imposed after the Property was constructed,
or (ii) for replacements or upgrades of nonstructural items located in the
common areas of the Property required to keep such areas in first class
condition. To the extent that any such permitted capital expenditure exceeds $5,000, such excess shall be
amortized for purposes of this Lease over the shorter of: (x) the period during
which the reasonably estimated savings in Expenses equals the expenditure, (y)
the shortest period over which Landlord may depreciate such item under the Federal Tax Code then in effect, or (z) the useful life of the item, but in no event more than
ten (10) years; provided, Landlord may elect any longer period in Landlord’s discretion.
In each such case, Landlord may include interest on the unamortized amount at
the prevailing loan rate available to Landlord when the cost was incurred.
Expenses shall include any remaining
amortization of such permitted capital expenditures made prior to the date of
this Lease.

 

(D)          “Holidays” shall mean all federal holidays, and holidays
observed by the State of  Washington,
including New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor
Day, Veterans’ Day, Thanksgiving Day, Christmas Day, and to the extent of
utilities or services provided by union members engaged at the Property, such
other holidays observed by such unions.

 

(E)           “Landlord” shall mean only the landlord from time to time,
except for purposes of  any
provisions defending, indemnifying and holding Landlord harmless hereunder, “Landlord”
shall include past, present and future landlords and their respective partners,
beneficiaries, trustees, officers, directors, employees, shareholders,
principals, agents, affiliates, successors and assigns.

 

(F)           “Law” or “Laws” shall mean all federal, state, county and
local governmental and  municipal
laws, statutes, ordinances, rules, regulations, codes, decrees, orders and
other such requirements, applicable equitable remedies and decisions by courts
in cases where such decisions are considered binding precedents in the State of
Washington, and decisions of federal Courts applying the Laws of such State, at the time in question. This
Lease shall be interpreted and governed by the Laws of the State of Washington.

 

(G)           “Lender” shall mean the holder of any Mortgage at the time
in question, and  where
such Mortgage is a ground lease, such term shall refer to the ground lessor
(and the term “ground lease” although not separately capitalized is intended
through out this Lease to include any superior or master lease).

 

(H)          “Mortgage” shall mean all mortgages, deeds of trust, ground
leases and other  such
encumbrances now or hereafter placed upon the Property or Building, or any part
thereof, and all renewals, modifications, consolidations, replacements or
extensions thereof, and all indebtedness now or hereafter secured thereby and
all interest thereon.

 

26

 

(I)            “Person” shall mean an individual, trust, partnership,
limited liability company,  joint
venture, association, corporation and any other entity.

 

(J)            “Premises” shall mean the area within the Building
identified in Article 1 and Exhibit A. Possession of areas necessary for
utilities, services, safety and operation of the Property, including the
Systems and Equipment, fire stairways, perimeter walls, space between the
finished ceiling of the Premises and the slab of the floor or roof of the
Property thereabove,  and
the use thereof together with the right to install, maintain, operate, repair
and replace the Systems and Equipment, including any of the same in, through,
under or above the Premises in locations that will not materially interfere
with Tenant’s use of the Premises, are hereby excepted and reserved by
Landlord, and not demised to Tenant.

 

(K)          “Property” shall mean the Building, and any common or
public areas or facilities,  easements,
corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, air
rights, development rights, parking rights, skywalks, parking garages and lots,
and any and all other rights, structures or facilities operated or maintained
in connection with or for the benefit of the Building, and all parcels or
tracts of land on which all or any portion of the Building or any of the other
foregoing items are located, and any fixtures, machinery, apparatus, Systems and Equipment, furniture and other
personal property located thereon or therein and used in connection therewith.

 

(L)           “Rent” shall have the meaning specified therefor in
Article 4.

 

(M)         “Systems and Equipment” shall mean any plant, machinery,
transformers, duct work, cable, wires, and other equipment, facilities, and
systems designed to supply light, heat, ventilation, air conditioning and
humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler,
communications, alarm, security, or fire/life/safety systems or equipment, or
any elevators, escalators or other mechanical, electrical, electronic, computer
or other systems or equipment for the Property, except to the extent that any
of the same serves particular tenants exclusively (and “systems and equipment”
without capitalization shall refer to such of the foregoing items serving particular
tenants exclusively).

 

(N)          “Taxes” shall mean all amounts (unless required by Landlord
to be paid under Article 14) for federal, state, county, or local governmental,
special district, improvement district, municipal or other political
subdivision taxes, fees, levies, assessments, charges or other impositions of
every kind and nature in connection with the ownership, leasing and operation
of the Property, whether foreseen or unforeseen, general, special, ordinary or
extraordinary (including real estate and ad valorem taxes, general and special
assessments, interest on special assessments paid in installments, transit
taxes, water and sewer rents, license and business license fees, use or
occupancy taxes, taxes based upon the receipt of rent including gross receipts
or sales taxes applicable to the receipt of rent or service or value added
taxes, personal property taxes, taxes on fees for property management services,
and taxes or charges for fire protection, streets, sidewalks, road maintenance,
refuse or other services). If the
method of taxation of real estate prevailing at the time of execution hereof
shall be, or has been, altered so as to cause the whole or any part of the
Taxes now, hereafter or heretofore levied, assessed or imposed on real estate
to be levied, assessed or imposed on Landlord, wholly or partially, as a capital
stock levy or otherwise, or on or measured by the rents, income or gross
receipts received therefrom, then such new or altered taxes attributable to the
Property shall be included within the term “Taxes,” except that the same shall
not include any portion of such tax attributable to other income of Landlord
not relating to the Property. Tenant shall pay increased Taxes whether Taxes
are increased as a result of increases in the assessment or valuation of the
Property (whether based on a sale, change in ownership or refinancing of the
Property or otherwise), increases in tax rates, reduction or elimination of any
rollbacks or other deductions available under current  law, scheduled reductions of any tax abatement, as a result of the
elimination, invalidity or withdrawal of any tax abatement, or for any other
cause whatsoever. If Taxes are reduced by, or credited with, any abatement or
exemption issued by a taxing authority to help finance or reimburse Landlord
for costs incurred to comply with Laws or otherwise,
Taxes hereunder shall be computed without regard to such abatement or exemption
(Tenant hereby acknowledging that Landlord, having incurred such costs, is
solely entitled to such abatement or exemption), except to the extent that
Landlord includes such costs in Expenses under this Lease. Notwithstanding the
foregoing, there shall be excluded from Taxes all excess profits taxes,
franchise taxes, gift taxes, capital stock taxes, inheritance and succession
taxes, estate taxes, federal and state income taxes, and other taxes to the
extent applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable
to operations at the Property).

 

27

 

(O)          “Tenant” shall be applicable to one or more Persons as the
case may be, the singular shall
include the plural, and if there be more than one Tenant, the obligations
thereof shall be joint and several. When used in the lower case, “tenant” shall
mean any other tenant, subtenant or occupant of the Property.

 

(P)           “Tenant’s Share” of Taxes and Expenses shall be the
percentage set forth in Article 1, but if the rentable area of the Premises or
Property shall change, Tenant’s Share shall thereupon become the rentable area
of the Premises divided by the rentable area of the Property, excluding any
parking facilities, subject at all times to adjustment under Article 4. Tenant
acknowledges that the “rentable area of the Premises” under this Lease includes
the usable area, without deduction for columns or projections, multiplied by a
load or conversion factor, to reflect a share of certain areas, which may
include lobbies, corridors, mechanical, utility, janitorial, boiler and service
rooms and closets, restrooms, and other public, common and service areas.
Except as provided expressly to the contrary herein, the “rentable area of the
Property” shall include all rentable area of all space leased or available for
lease at the Property, which Landlord may reasonably re-determine from time to
time, to reflect re-configurations, additions or modifications  to the Property.

 

ARTICLE 33:
OFFER

 

The submission and
negotiation of this Lease shall not be deemed an offer to enter the same by
Landlord (nor an option or reservation for the Premises), but the solicitation
of such an offer by Tenant. Tenant agrees that its execution of this Lease
constitutes a firm offer to enter the same which may not be withdrawn for a
period of thirty (30) days after delivery to Landlord. During such period and
in reliance on the foregoing, Landlord may, at Landlord’s option, deposit any
Security Deposit and Rent, proceed with any plans, specifications, alterations
or improvements, and permit Tenant to enter the Premises, but such acts shall
not be deemed an acceptance of Tenant’s offer to enter this Lease, and such
acceptance shall be evidenced only by Landlord signing and delivering this
Lease to Tenant.

 

ARTICLE 34: YEAR 2000 PERFORMANCE

 

Landlord is in the process
of performing a readiness audit with respect to Year 2000 Performance. As used
herein, the term “Year 2000 Performance” means that the Systems and Equipment
under Landlord’s control which are material to proper Building operations can
reasonably be expected to perform without material adverse effect despite the
change of century from 1999 to 2000 and the leap year. The parties acknowledge
that the process of auditing, assessing and implementing Year 2000 Performance
solutions is time consuming and uncertain, and dependent in part on the
performance of third parties not under Landlord’s control. Thus, Landlord makes
no representations or warranties with respect to Year 2000 Performance of the
Systems and Equipment, and interruptions of services as a result of Year 2000
Performance problems will be deemed to be interruptions out of Landlord’s
reasonable control. Landlord will inform Tenant promptly after Landlord gains
actual knowledge of any significant Year 2000 performance problem which
Landlord reasonably believes may adversely impact building operations, and will
use commercially reasonable efforts to audit, assess and implement programs to
meet the goal of Year 2000 performance. The cost of such efforts shall be
included in Expenses in the year incurred, provided, however, that capital
replacement costs, if any, shall be amortized over the useful life of the
replacement. Some information may be obtained from third parties, and may not
have been independently verified. Any information which Landlord provides will
be subject to and made in reliance on the Year 2000 Information Readiness and
Disclosure Act.

 

ARTICLE 35:
MISCELLANEOUS

 

A.            Captions and Interpretation.   The captions of the Articles and Paragraphs of this Lease, and any
computer highlighting of changes from earlier drafts, are for convenience of
reference only and shall not be considered or referred to in resolving
questions of interpretation. Tenant acknowledges that it has read this Lease
and that it has had the opportunity to confer with counsel in negotiating this
Lease; accordingly, this Lease shall be construed neither for nor against
Landlord or Tenant, but shall be given a fair and reasonable interpretation in
accordance

 

28

 

with the meaning of its
terms. The nouter shall include the masculine and feminine, and the  singular shall include the plural. The term “including”
shall be interpreted to mean “including, but not limited to.”

 

B.            Survival of Provisions.   All obligations (including indemnity, Rent and other payment obligations) or rights of either
party arising during or attributable to the period prior to expiration or
earlier termination of this Lease shall survive such expiration or earlier
termination.

 

C.            Severability.   If
any term or provision of this Lease or portion thereof shall be found invalid,
void, illegal, or unenforceable generally or with respect to any particular
party, by a court of competent
jurisdiction, it shall not affect, impair or invalidate any other terms or
provisions or the remaining portion thereof, or its enforceability with respect
to any other party.

 

D.            Failure to Commence.   If the Commencement Date is delayed in accordance with Article 3 for more than nine (9) months,
Landlord may declare this Lease terminated by notice to Tenant, and if the Commencement Date is so delayed
for more than three years, this Lease shall thereupon be deemed terminated
without further action by either party.

 

E.             Short Form Lease.   Neither this Lease nor any memorandum of
lease or short form lease shall
be recorded by Tenant, but Landlord or any Lender may elect to record a short
form of this Lease, in which case Tenant shall promptly execute, acknowledge
and deliver the same on a form prepared by Landlord or such Lender.

 

F.             Light, Air and Other Interests.   This Lease does not grant any legal rights to “light and air” outside the Premises nor any
particular view visible from the Premises, nor any easements, licenses or other
interests unless expressly contained in this Lease.

 

G.            Authority.   If Landlord or Tenant is any form of
corporation, partnership, limited liability
company or partnership, association or other organization, such party below
hereby represent that this Lease has been fully authorized and no further
approvals are required, and such party is duly organized, in good standing and
legally qualified to do business in the Premises (and has any required certificates, licenses, permits and other such
items).

 

H.            Partnership Tenant.   If Tenant is a partnership, all current and new general partnersshall be jointly and severally liable
for all obligations of Tenant hereunder and as this Lease may hereafter be
modified, whether such obligations accrue before or after admission of future partners
or after any partners die or leave the partnership. Tenant shall cause each new
partner to sign and deliver to
Landlord written confirmation of such liability, in form and content satisfactory
to Landlord, but failure to do so shall not avoid such liability.

 

I.              Financial Statements.   Tenant shall, within ten (10) days
after requested from time to
time, deliver to Landlord financial statements (including balance sheets and income/expense
statements) for Tenant’s then most recent full and partial fiscal year
preceding such request,
certified by an independent certified public accountant or Tenant’s chief
financial officer, in form reasonably satisfactory to
Landlord. Landlord shall keep
such information confidential in the manner consistent with Landlord’s normal
course of business.

 

J.             Successors and Assigns;   Transfer of Property and Security Deposit. Each
of the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties’ respective
heirs, executors, administrators, guardians, custodians, successors and
assigns, subject to Article 13 respecting Transfers and Article 18 respecting
rights of Lenders. Subject to Article
18, if Landlord shall convey or transfer the Property or any portion thereof in
which the Premises are contained to
another party, such party shall thereupon be and become landlord hereunder and
shall be deemed to have fully assumed all of Landlord’s obligations under this
Lease accruing during such party’s ownership, including the return of any
Security Deposit (provided Landlord shall have turned over such Security
Deposit to such party), and Landlord shall be free of all such obligations
accruing from and after the date of conveyance or transfer.

 

K.            Limitation of Landlord’s Liability.   Tenant agrees to look solely to Landlord’s interest in the Property for the enforcement
of any judgment, award, order or other remedy under or in connection with this
Lease or any related agreement, instrument or document or for any other matter
whatsoever relating thereto or to the Property or Premises. Under no
circumstances shall any present
or future, direct or indirect, principals or investors, general or limited
partners, officers, directors, shareholders, trustees, beneficiaries,
participants, advisors, managers, employees, agents or affiliates of Landlord,
or of any of the other foregoing parties, or any of their heirs, successors or
assigns have any liability for any of the foregoing matters.

 

29

 

L.            Confidentiality.   Tenant shall keep the content and all copies of this Lease, relateddocuments or amendments now or
hereafter entered, and all proposals, materials, information and matters
relating thereto strictly confidential, and shall not disclose, disseminate or
distribute any of the same, or permit the same to occur, except to the extent
reasonably required for proper business purposes by Tenant’s employees,
attorneys, insurers, auditors, lenders and Transferees (and Tenant shall
obligate any such parties to whom disclosure is permitted to honor the confidentiality
provisions hereof), and except as may be required by Law or court proceedings.

 

ARTICLE 36: ENTIRE AGREEMENT

 

This Lease, together with
the Riders, Exhibits and other documents listed in Article 1 (WHICH COLLECTIVELY ARE
HEREBY INCORPORATED WHERE REFERRED TO HEREIN AND MADE A PART HEREOF AS THOUGH
FULLY SET FORTH), contains
all the terms and provisions between
Landlord and Tenant relating to the matters set forth herein and no prior orcontemporaneous agreement or
understanding pertaining to the same shall be of any force or effect, except
any such contemporaneous agreement specifically referring to and modifying this
Lease, signed by both parties. Without limitation as to the generality of the
foregoing, Tenant hereby acknowledges and agrees that Landlord’s leasing agents
and field personnel are only authorized
to show the Premises and negotiate terms and conditions for leases subject to Landlord’s
final approval, and are not authorized to make any agreements, representations,
understandings or obligations, binding upon Landlord, respecting the condition
of the Premises or Property,
suitability of the same for Tenant’s business, the current or future amount of
Taxes or Expenses or any
component thereof, the amount of rent or other terms applicable under other leases
at the Property, whether Landlord is furnishing the same utilities or services
to other tenants at all, on the same level or on the same basis, or any other
matter, and no such agreements,
representations, understandings or obligations not expressly contained herein
or in such contemporaneous agreement shall be of any force or effect. TENANT HAS RELIED ON TENANT’S INSPECTIONS AND DUE
DILIGENCE IN ENTERING THIS LEASE, AND NOT ON ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, CONCERNING THE HABITABILITY, CONDITION OR SUITABILITY OF
THE PREMISES OR PROPERTY FOR ANY PARTICULAR PURPOSE OR ANY OTHER MATTER NOT
EXPRESSLY CONTAINED HEREIN. Neither
this Lease, nor any Riders or Exhibits referred to above may be modified,
except in writing signed by both
parties.

 

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

 

 

	
   

  	
   

  	
  LANDLORD:

  	
  PIKE STREET DELAWARE,
  INC.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ Allison
  Delong

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE: 

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  	
  EQUATOR
  TECHNOLOGIES, INC.,

  
	
   

  	
   

  	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ Brian T. McGee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NAME
  TYPED: 

  	
   

  	
  Brian T. Mcgee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE: 

  	
   

  	
   CFO

  	
   

  
										

 

CERTIFICATE

 

I,
Brian T. Mcgee, as
CFO of the aforesaid Tenant, hereby certify that the
individual(s) executing the foregoing Lease on behalf of Tenant was/were duly
authorized to act in his/their capacities as set forth above, and his/theiraction(s) are the action of Tenant.

 

 

	
  (Corporate Seal)

  	
   

  	
   

  	
  /s/ Brian T. Mcgee

  	
   

  

 

30

 

LANDLORD ACKNOWLEDGMENTS

 

 

	
  STATE OF WASHINGTON

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF
  KING

  	
  )

  	
   

  

 

I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that Allison Delong, personally known to me to be the Authorized Signatory of Pike Street
Delaware, Inc., a Delaware corporation, and personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in

person and acknowledged that
in such capacity of said corporation being authorized so to do, (s)he executed
the foregoing instrument on behalf of said corporation, by subscribing the name
of such corporation by himself /herself as such officer, as a free and voluntary
act, and as the free and voluntary act and deed of said corporation, as partner
or agent for the Landlord designated in  the foregoing instrument, for the uses and purposes therein set forth.

 

Given under my hand and
official seal this 19th day of April, 2001.

 

 

	
   

  	
  /s/ Sherri
  L. Pruett

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
  Residing in King County

  

 

My Commission
Expires: 12-19-02

 

	
   

  	
   

  	
  [SEAL]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHERRI L. PRUETT

  COMMISSION EXPIRES

  NOTARY PUBLIC

  12-19-02

  STATE OF WASHINGTON

  

 

TENANT ACKNOWLEDGMENTS

 

Corporation

 

	
  STATE OF:
  CALIF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF:
  SANTA CLARA

  	
  )

  	
   

  

 

On this the 12day of April, 2001, before me a Notary Public duly authorized in and for the said County in the State
aforesaid to take acknowledgments personally appeared Brian T. Mcgee known to me to
be Vice President of Equator
Technologies one of the corporations described in the foregoing instrument, and acknowledged that as such
officer, being authorized so to do, he executed the foregoing instrument on behalf of said
corporation by subscribing the name of such corporation by himself as such
officer and caused the corporate seal of said corporation to be affixed thereto,
as his free and voluntary act, and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth.

 

IN WITNESS WHEREOF, I
hereunto set my hand and official seal.

 

	
   

  	
  /s/ Jo Ann Chaney

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Residing
  in Santacruz County

  	
   

  
	
   

  
	
  My
  Commission Expires: May 31, 2003

  

 

[SEAL]

 

JO ANN CHANEY

Commission # 1219986

Notary Public - California

Santa Cruz County

My Comm. Expires May 31, 2003

 

1

 

EXHIBIT A-1

 

PROPERTY LEGAL DESCRIPTION

 

520 PIKE TOWER

 

Lots 10 and
11, Block 18, Addition to the Town of Seattle, as laid out by A.A. Denny
(commonly known as A.A. Denny’s 3rd Addition to the City of Seattle), according
to the plat thereof recorded in Volume 1 of Plats, page 33, in King County,
Washington, EXCEPT the southerly 10 feet of said Lot 11, condemned in King
County Superior Court Cause No. 41394 for the widening of Pike Street, as
provided by Ordinance No. 10051 of the City of Seattle.

 

SUBJECT TO AND TOGETHER WITH
all rights and obligations granted and undertaken pursuant to: (a) Development
and Parking Rights Agreement dated April 8, 1982 recorded under King County,
Washington recording number 8204080464, as amended by agreements recorded under
King County, Washington recording numbers 8208240318 and 8208240316, and as it
may be further amended from time to time, and (b) Development Rights Agreement dated
May 30, 1982 recorded under King County, Washington recording number
8208240314, as amended by agreement recorded under King County, Washington
recording number 8208240316, and a Memorandum dated December 5, 1988 recorded
under King County, Washington recording number 8812051221, and as it may be
further amended from time to time

 

 

 

EXHIBIT A-2

 

(Floor Plate Showing Premises Cross-Hatched)

 

 

 

 

RIDER ONE

 

RULES

 

(1) Access to Property.   On Saturdays, Sundays and
Holidays, and on other days between the hours of 6:00 P.M. and 8:00 A.M. the
following day, or such other hours as Landlord shall determine from time to
time, access to and within the Property and/or to the passageways, lobbies,
entrances, exits, loading areas, corridors, elevators or stairways and other
areas in the Property may be restricted  and access gained by use of a key to the outside
doors of the Property, or pursuant to such security procedures Landlord may
from time to time impose. Landlord shall in all cases retain the right to control
and prevent access to such areas by Persons engaged in activities which are
illegal or violate these Rules, or whose presence in the judgment of Landlord
shall be prejudicial to the safety, character, reputation and interests of the Property and its tenants (and
Landlord shall have no liability in damages for such actions taken in good
faith). No Tenant and no employee or invitee of Tenant shall enter areas
reserved for the exclusive use of Landlord, its employees or invitees or other
Persons. Tenant shall keep doors to corridors and lobbies closed except when
persons are entering or leaving.

 

(2) Signs.  Tenant shall not paint, display,
inscribe, maintain or affix any sign, placard, picture, advertisement, name,
notice, lettering or direction on any part of the outside or inside of the
Property, or on any part of the inside of the Premises which can be seen from
the outside of the Premises without the prior consent of Landlord, and then
only such name or names or matter and in such color, size, style, character and
material, and with professional designers, fabricators and installers as may be
first approved or designated by Landlord in writing. Landlord shall prescribe
the suite number and identification sign for the Premises (which shall be prepared
and installed by Landlord at Tenant’s expense). Landlord reserves the right to
remove at Tenant’s expense all matter not so installed or approved without
notice to Tenant.

 

(3) Window and
Door Treatments.   Tenant
shall not place anything or allow anything to be  placed in the Premises near the glass of any
door, partition, wall or window which may be unsightly from outside the
Premises, and Tenant shall not place or permit to be placed any article of any
kind on any window ledge or on the exterior walls. Blinds, shades, awnings or
other forms of inside or outside
window ventilators or similar devices, shall not be placed in or about the
outside windows or doors in the Premises except to the extent, if any, that the
design, character, shape, color, material and make thereof is first approved or
designated by the Landlord. Tenant shall not install or remove any solar tint
film from the windows.

 

(4) Lighting and General
Appearance of Premises.
Landlord reserves the right to designate and/or approve in writing all internal
lighting that may be visible from the public, common or exterior areas. The
design, arrangement, style, color, character, quality and general appearance of
the portion of the Premises visible from public, common and exterior areas, and
contents of such portion of the Premises, including furniture, fixtures, signs,
art work, wall coverings, carpet and decorations, and all changes, additions
and replacements thereto shall at all times have a neat, professional,
attractive, first class office appearance.

 

(5) Property
Tradename, Likeness, Trademarks.   Tenant shall not in any manner use the name of
the Property for any purpose, or use any tradenames or trademarks used by
Landlord, any other tenant, or its affiliates, or any picture or likeness of
the Property for any purpose other than that of the business address of Tenant,
in any letterheads, envelopes, circulars, notices, advertisements, containers,
wrapping or other material. 

 

(6) Deliveries
and Removals.   Furniture,
freight and other large or heavy articles, and all other  deliveries may be brought into the Property
only at times and in the manner designated by Landlord, and always at the
Tenant’s sole responsibility and risk. Landlord may inspect items brought into
the Property or Premises with respect to weight or dangerous nature or
compliance with this Lease or Laws.
Landlord may (but shall have no obligation to) require that all furniture,
equipment, cartons and other
articles removed from the Premises or the Property be listed and a removal
permit therefor first be obtained from Landlord. Tenant shall not take or
permit to be taken in or out of other entrances or elevators of the Property,
any item normally taken, or which Landlord otherwise reasonably requires to be
taken, in or out through service doors or on freight elevators. Landlord may
impose reasonable charges and
requirements for the use of freight elevators and loading areas, and reserves
the right to alter schedules without notice. Any hand-carts used at the
Property shall have rubber wheels and sideguards, and no other material
handling equipment may be brought upon the Property without Landlord’s prior
written approval.

 

(7) Outside
Vendors.   Tenant shall not obtain for use upon the Premises ice,
drinking water, vending machine, towel, janitor and other services, except from
Persons designated or approved by Landlord. Any Person engaged by Tenant to
provide any other services shall be subject to scheduling and direction by the
manager or security personnel of the Property. Vendors must use freight elevators
and service entrances. 

 

(8) Overloading Floors; Vaults.   Tenant
shall not overload any floor or part thereof in the Premises, or Property,
including any public corridors or elevators therein bringing in or removing any

 

R-1

 

large or heavy articles, and
Landlord may prohibit, or direct and control the location and size of, safes
and all other heavy articles and
require at Tenant’s expense supplementary supports of such material and
dimensions as Landlord may deem necessary to properly distribute the weight. 

 

(9) Locks and
Keys.   Tenant shall use such
standard key system designated by Landlord on all  keyed doors to and within the Premises,
excluding any permitted vaults or safes (but Landlord’s designation shall not
be deemed a representation of adequacy to prevent unlawful entry or criminal acts,
and Tenant shall maintain such additional insurance as Tenant deems advisable
for such events). Tenant shall
not attach or permit to be attached additional locks or similar devices to any
door or window, change existing locks or the mechanism thereof, or make or
permit to be made any keys for any door other than those provided by Landlord.
If more than two keys for one lock are desired, Landlord will provide them upon
payment of Landlord’s charges. In the event of loss of any keys furnished by
Landlord, Tenant shall pay Landlord’s reasonable charges therefor. The term “key”
shall include mechanical, electronic or other keys, cards and passes. 

 

(10) Utility
Closets and Connections.  Landlord
reserves the right to control access to and use of, and monitor and supervise
any work in or affecting, the “wire” or telephone, electrical, plumbing or other
utility closets, the Systems and Equipment, and any changes, connections, new
installations, and wiring work relating thereto (or Landlord may engage or
designate an independent contractor to provide such services). Tenant shall obtain Landlord’s prior written consent for any
such access, use and work in each instance, and shall comply with such
requirements as Landlord may impose, and the other provisions of Article 6
respecting electric installations and connections, Article 29 respecting telephone
Lines and connections, and Article 9 respecting Work in general. Tenant shall
have no right to use any broom closets, storage closets, janitorial closets, or
other such closets, rooms and areas whatsoever. Tenant shall not install in or
for the Premises any equipment which requires more electric current than
Landlord is required to provide under this Lease, without Landlord’s prior
written approval, and Tenant shall ascertain from Landlord the maximum amount
of load or demand for or use of electrical current which can safely be
permitted in and for the Premises, taking into account the capacity of electric
wiring in the Property and the Premises and the needs of tenants of the
Property, and shall not in any event connect a greater load than such safe
capacity.

 

(11) Plumbing
Equipment.   The toilet rooms,
urinals, wash bowls, drains, sewers and other plumbing fixtures, equipment and
lines shall not be misused or used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
thrown therein.

 

(12) Trash.   All
garbage, refuse, trash and other waste shall be kept in the kind of container, placed
in the areas, and prepared for collection in the manner and at the times and
places specified by Landlord, subject to Article 30 respecting Hazardous
Materials. Landlord reserves the right to require that Tenant participate in
any recycling program designated by Landlord.

 

(13) Alcohol,
Drugs, Food and Smoking.   Landlord reserves the right to
exclude or expel from the Property any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who
shall in any manner do any act in violation of any of these Rules. Tenant shall
not at any time manufacture, sell, use or give away, any spirituous, fermented,
intoxicating or alcoholic liquors on the Premises, nor permit any of the same
to occur. Tenant shall not at any time cook, sell, purchase or give away, food
in any form by or to any of Tenant’s agents or employees or any other parties
on the Premises, nor permit any of the same to occur (other than in microwave ovens
and coffee makers properly maintained in good and safe working order and repair
in lunch rooms or kitchens for employees as may be permitted or installed by
Landlord, which does not violate any Laws or bother or annoy any other tenant).
Tenant and its employees shall not smoke tobacco on any part of the Property
(including exterior areas) except those areas, if any, that are designated or approved
as smoking areas by Landlord.

 

(14) Use of
Common Areas; No Soliciting.   Tenant shall not use the common areas,
including areas adjacent to the Premises, for any purpose other than ingress
and egress, and any such use thereof shall be subject to the other
provisions of this Lease, including these Rules. Without limiting the
generality of the foregoing, Tenant shall not allow anything to remain in any
passageway, sidewalk, court, corridor, stairway, entrance, exit, elevator,
parking or shipping area, or other area outside the Premises. Tenant shall not
use the common areas to canvass, solicit business or information from, or
distribute any article or material to, other tenants or invitees of the
Property. Tenant shall not make any room-to-room canvass to solicit business or
information or to distribute any article or material to or from other tenants
of the Property and shall not exhibit, sell or offer to sell, use, rent or
exchange any products or services in or from the Premise unless ordinarily
embraced within the Tenant’s use of the Premises expressly permitted in the
Lease.

 

(15) Energy and
Utility Conservation.   Tenant shall not waste electricity, water,
heat or air conditioning or other utilities or services, and agrees to
cooperate fully with Landlord to assure the most effective and energy efficient
operation of the Property and shall not allow the adjustment (except by
Landlord’s authorized Property personnel) of any controls. Tenant shall not
obstruct, alter or impair the efficient operation of the Systems and Equipment,
and shall not place any item so as to interfere with air flow. Tenant shall
keep corridor doors closed and shall not open any windows, 

 

R-2

 

except that if the air
circulation shall not be in operation, windows which are openable may be opened
with Landlord’s consent. If
reasonably requested by Landlord (and as a condition to claiming any deficiency
in the air-conditioning or
ventilation services provided by Landlord), Tenant shall close any blinds or
drapes in the Premises to prevent or minimize direct sunlight.

 

(16) Unattended Premises. 
 Before leaving the
Premises unattended, Tenant shall close and securely lock all doors or other
means of entry to the Premises and shut off all lights and water faucets in the
Premises (except heat to the extent necessary to prevent the freezing or
bursting of pipes).

 

(17) Going-Out-Of-Business Sales and Auctions.   Tenant shall not use, or permit
any other party to use, the Premises for any distress, fire, bankruptcy,
close-out, “lost our lease” or going-out-of-business sale or auction. Tenant
shall not display any signs advertising the foregoing anywhere in or about the Premises. This prohibition shall
also apply to Tenant’s creditors.

 

(18) Labor Harmony.   Tenant shall not use (and
upon notice from Landlord shall cease using) contractors, services, workmen,
labor, materials or equipment, or labor and employment practices that, in
Landlord’s good faith judgment, may cause strikes, picketing or boycotts or
disturb labor harmony with the workforce or trades engaged in performing other
work, labor or services in or about  the Property.

 

(19) Prohibited Activities. Tenant shall not:
(i) use strobe or flashing lights in or on the Premises, (ii) install or operate any internal combustion
engine, boiler, machinery, refrigerating, heating or air conditioning equipment
in or about the Premises, (iii) use the
Premises for housing, lodging or sleeping purposes or for the washing of
clothes, (iv) place any radio or television antennae other than inside of the
Premises, (v) operate or permit to be operated any musical or sound producing
instrument or device which may be heard outside the Premises, (vi) use any
source of power other than electricity, (vii) operate any electrical or other
device from which may emanate electrical, electromagnetic, energy, microwave,
radiation or other waves or fields which may interfere with or impair radio,
television, microwave, or other broadcasting or reception from or in the
Property or elsewhere, or impair or interfere with computers, faxes or
telecommunication lines or equipment at the Property or elsewhere, or create a
health hazard, (viii) bring or permit any bicycle or other vehicle, or dog
(except in the company of a blind person or except where specifically
permitted) or other animal or bird in the Property, (ix) make or permit
objectionable noise, vibration or odor to emanate from the Premises, (x) do anything in or about the Premises or Property
that is illegal, immoral, obscene, pornographic, or anything that may in
Landlord’s good faith opinion create or maintain a nuisance, cause physical
damage to the Premises or Property, interfere with the normal operation of the Systems
and Equipment, impair the appearance, character or reputation of the Premises
or Property, create waste to the Premises or Property, cause demonstrations,
protests, loitering, bomb threats or other events that may require evacuation
of the Building, (xi) advertise or engage in any activities which violate the
spirit or letter of any code of ethics or licensing requirements of any
professional or business organization, (xii) throw or permit to be thrown or
dropped any article from any window or other opening in the Property, (xiii)
use the Premises for any purpose, or permit upon the Premises or Property anything,
that may be dangerous to persons or property (including firearms or other
weapons (whether or not licensed or used by security guards) or any explosive
or combustible articles or materials) (xiv) place vending or game machines in
the Premises, except vending machines for employees, (xv) adversely affect the
indoor air quality of the Premises or Property, or (xvi) do or permit anything to be done upon the Premises or Property in any
way tending to disturb, bother, annoy or interfere with Landlord or any other
tenant at the Property or the tenants of neighboring property, or otherwise
disrupt orderly and quiet use and occupancy of the Property.

 

(20) Transportation Management.   Tenant shall comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Property, and in connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the Premises
by working directly with Landlord, any governmental transportation management
organization or any other transportation-related committees or entities.

 

(21) Responsibility for Compliance. Tenant shall
be responsible for ensuring compliance with these Rules, as they may be
amended, by Tenant’s employees and as applicable, by Tenant’s agents, invitees,
contractors, subcontractors, and suppliers. Tenant shall cooperate with any
reasonable program or requests by Landlord to monitor and enforce the Rules,
including providing vehicle numbers and taking appropriate action against such of the foregoing parties who violate these provisions.

 

R-3

 

108D (11/96)

Tenant Performance

 

EXHIBIT B

WORK LETTER

 

This Exhibit is a “Work
Letter” to the foregoing document captioned Office Lease  (referred to herein for
convenience as the “Lease”) between PIKE STREET DELAWARE, INC. (“Landlord”), a Delaware corporation, and
EQUATOR TECHNOLOGIES, INC. a California corporation (“Tenant”) relating to Suite 900 (referred to herein for
convenience as the Premises”) in
the property known as 520 Pike Tower (the “Property”).

 

I.              Tenant’s  Work.   Under the Lease to which this
Exhibit is attached, Tenant has agreed to accept the Premises “as is,” without any obligation for the performance
of improvements or other work by
Landlord, and Tenant desires to perform certain improvements thereto (the “Work,”
as further described below).
Such Work shall be planned and performed strictly in accordance with the provisions of this Exhibit and applicable
provisions of the Lease. Tenant shall take all actions necessary to cause Tenant’s Planners to
prepare the Approved Plans, and to cause Tenant’s Contractors to obtain permits or other
approvals, diligently prosecute the Work to completion, and obtain any inspections and occupancy
certificates for Tenant’s occupancy of the Premises by the Commencement Date. Any delays in the
foregoing shall not serve to abate or extend the time for the commencement of Rent under the Lease, except to the extent
of one (1) day for each day that
Landlord delays approvals required hereunder beyond the times permitted hereinwithout good cause, provided
substantial completion of the Work and Tenant’s ability to reasonably use the Premises by the
Commencement Date (or by such later date when Tenant would otherwise have substantially completed
the Work) is actually delayed thereby. Tenant shall notify Landlord upon completion of the Work
(and record any notice of completion contemplated by law).

 

II.                    Planning. The term “Plans” herein shall
refer to the “Space Plan” and “Construction Drawings” collectively (as such
terms are further defined in Section IX). The term “Approved Plans” shall refer
to the Plans as approved by Landlord in writing in accordance with this
Section.

 

a.             Tenant’s Space Planner, Architect and Engineer.  Tenant shall engage an interior office space
planner (“Space Planner”), a licensed architect (“Architect,” who may be the
same as the Space Planner), each subject to Landlord’s prior written approval.
Tenant shall also engage such licensed engineering firms (“Engineers”) as may
be required or appropriate in connection with preparing the Plans (e.g.
mechanical, electrical, plumbing, structural, HVAC or other), all of whom shall
be designated or approved by Landlord in writing. Landlord may require that
Tenant select each of Tenant’s Planners from a list of such parties. The term “Tenant’s
Planners” herein shall refer collectively or individually, as the context
requires, to the Space Planner, Architect or Engineers, as appropriate, engaged
by Tenant, and approved or designated by Landlord in writing in accordance with
this Exhibit. Tenant has sole responsibility to provide all information
concerning its space requirements to Tenant’s Planners, to cause Tenant’s Planners
to prepare the Plans, and to obtain Landlord’s final approval thereof
(including all revisions). Tenant and Tenant’s Planners may review such
existing drawings as Landlord may provide relating to the Premises or Property,
but shall not rely thereon (and shall perform independent verifications of all
field conditions, dimensions and other such matters), and Landlord shall have no
liability for any errors, omissions or other deficiencies therein. 

 

b.             Space Plan.

 

i.              Tenant shall promptly hereafter cause the Space Planner
to submit three  (3) sets
of a “Space Plan” (as defined in Section IX) to Landlord for approval.

 

ii.             Landlord shall, within ten (10) working days after
receipt thereof, either approve said Space Plan, or disapprove the same
advising Tenant of the reasons for such disapproval. In the event Landlord
disapproves said Space Plan, Tenant shall modify the same, taking into account
the reasons given by Landlord for said disapproval, and shall submit three (3) sets
of the revised Space Plan to Landlord within five (5) working days after
receipt of Landlord’s initial disapproval.

 

iii.            The parties shall continue such process in the same time
frames until Landlord grants approval.

 

R-4

 

c.             Construction Drawings and Engineering Report.

 

i.              No later than ten (10) working days after receipt of
Landlord’s approval of the Space Plan, Tenant shall cause the Architect to
submit to Landlord for approval three (3) sets of mylar sepia “Construction
Drawings” (as defined in Section IX), and cause the Engineers to Submit for Landlord’s approval a report (the “Engineering Report”) from Tenant’s
mechanical, structural and electrical engineers indicating any special heating,
cooling, ventilation, electrical, heavy load or other special or unusual
requirements of Tenant, including calculations.

 

ii.             Landlord shall, within fifteen (15) working days after
receipt thereof (or such longer time as may be reasonably required in order to
obtain any additional architectural, engineering or HVAC report or due to other
special or unusual features of the Work or Plans), either approve the
Construction Drawings and Engineering Report, or disapprove the same advising
Tenant of the reasons for disapproval. If Landlord disapproves of the
Construction Drawings or Engineering Report, Tenant shall modify and submit
three (3) sets of revised mylar sepia Construction Drawings, and a revised
Engineering Report, taking into account the reasons given by Landlord for
disapproval, within five (5) working days after receipt of Landlord’s initial disapproval.

 

iii.            The parties shall continue such process in the same time
frames until Landlord grants approval.

 

d.             Landlord’s Approval.  Landlord shall not unreasonably withhold
approval of any Space Plans, Construction Drawings, or Engineering Report
submitted hereunder, if they provide for a customary office layout, with
finishes and materials generally conforming to building standard finishes and
materials currently being used by Landlord at the Property, are compatible with
the Property’s shell and core construction, and if no modifications will be
required for the Property electrical, heating, air-conditioning, ventilation,
plumbing, fire protection, life safety, or other systems or equipment, and will
not require any structural modifications to the Property, whether required by
heavy loads or otherwise, and will not create any potentially dangerous conditions,
potentially violate any codes or other governmental requirements, potentially
interfere with any other occupant’s use of its premises, or potentially
increase the cost of operating the Property. Construction Drawings approved by
Landlord in writing (including approved revisions) are referred to herein as
the “Approved Plans.”

 

e.             Governmental
Approval of Plans; Building Permits.  Tenant shall cause Tenant’s Contractors
(as defined in Section III.a) to apply for any building permits, inspections
and occupancy certificates required for or in connection with the Work. If the
Plans must be revised in order to obtain such building permits, Tenant shall promptly notify Landlord, promptly
arrange for the Plans to be
revised to satisfy the building permit requirements, and shall submit the revised
Plans to Landlord for approval as a Change Order under Section II.f. Landlord
shall have no obligation to apply for any zoning, parking or sign code
amendments, approvals, permits or variances, or any other governmental
approval, permit or action. If any such other matters are required, Tenant
shall promptly seek to satisfy such requirements (if Landlord first approves in
writing), or shall revise the Plans to eliminate such requirements and submit
such revised Plans to Landlord for approval in the manner described above.
Delays in substantially completing the Work by the Commencement Date as a
result of requirements for building permits or other governmental approvals,
permits or actions shall not affect the Commencement Date and commencement of
Rent.

 

f.              Changes After Plans Are Approved.  If Tenant shall desire, or any governmental body
shall require, any changes, alterations, or additions to the Approved Plans,
Tenant shall submit a detailed written request or revised Plans (the “Change
Order”) to Landlord for approval.  If
reasonable and practicable and generally consistent with the Plans theretofore
approved, Landlord shall not unreasonably withhold approval. All costs in
connection therewith, including, without limitation, construction costs, permit
fees, and any additional plans, drawings and engineering reports or other
studies or tests, or revisions of such existing items, shall be included in the
Cost of the Work under Section IV. No delays resulting from any Change Orders
or requests therefor shall delay the Commencement Date or Commencement of Rent.
In the event that the Premises are not constructed in accordance with the
Approved Plans, Tenant shall not be permitted to occupy the Premises until the
Premises reasonably comply in all respects therewith; in such case, the Rent
shall nevertheless commence to accrue and be payable as otherwise provided in
the Lease.

 

R-5

 

III.           Contractors, Bids and Contracts.

 

a.             Contractors.   Tenant shall engage to perform the Work such
contractors, subcontractors and suppliers (“Tenant’s Contractors”) as Landlord
customarily engages or recommends for use at the Property; provided, Tenant may
substitute other licensed, bonded, reputable and qualified parties capable of
performing quality workmanship who have good labor relations and will be able
to work in harmony with each other and those of Landlord and other occupants of
the Property so as to ensure proper maintenance of good labor relationships,
and in compliance with all applicable labor agreements existing between trade
unions and the relevant chapter of the Association of General Contractors of
America. Such substitutions may be made only with Landlord’s prior written
approval. Such approval shall be granted, subject to specified conditions, or
denied within fifteen (15) days after Landlord receives from Tenant a written request
for such substitution, containing a reasonable description of the proposed
party’s background, finances, references, qualifications, and other such
information as Landlord may request. Landlord may require that Tenant select
Tenant’s Contractors from a list of such parties for Work involving any
mechanical, electrical, plumbing, structural, demolition or HVAC matters, or
any Work required to be performed outside the Premises or involving Tenant’s
entrance.

 

b.             Contracts and Guaranties.  Tenant shall promptly submit to Landlord for
approval, prior to entering any contracts for the Work, an itemized statement
of the estimated Cost of the Work, including all bids and quotes, and copies of
proposed contracts. All contracts shall contain insurance, indemnity and other
provisions consistent herewith. All contracts involving progress payments shall
include appropriate retention provisions, liquidated damages for delays (if
desired by Tenant), and payment application requirements consistent with this
Exhibit. Each Tenant Contractor shall guarantee that the portion of the Work
for which it is responsible shall be free from any defects or deficiencies in
workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Every such party shall be responsible for the replacement
or repair, without additional charge, of all such defects or deficiencies in
accordance with its contract within one (1) year after completion of such work
or the correction thereof. The correction of such work shall include, without
additional charge, all additional expenses and damages in connection with such removal or replacement of all or any part
of Tenant’s Work, and/or the Property and/or common areas, or work which may be
damaged or disturbed thereby.  All such warranties or guarantees as to materials or workmanship of or with
respect to Tenant’s Work shall be contained in the contract or subcontract
which shall be written such that said warranties or guarantees shall
inure to the benefit of both Landlord and Tenant, as their respective interests
may appear, and can be directly enforced by either. Tenant covenants to give
Landlord any assignment or other assurances necessary to effect such right of
direct enforcement. Copies of all contracts and subcontracts shall be furnished
to Landlord promptly after the same are entered.

 

IV.           Cost of the Work and Allowance.

 

a.             Cost of the Work.  Except for the Allowance to be provided by
Landlord hereunder, Tenant shall pay all costs (the “Costs of the Work”)
associated with the Work whatsoever, including without limitation, all costs
for or related to: (1) the so-called “hard costs” of the Work, including,
without limitation, costs of labor, hardware, equipment and materials, contractors’
charges for overhead and fees, and so-called “general conditions” (including
rubbish removal, utilities, freight elevators, hoisting, field supervision,
building permits, occupancy certificates, inspection fees, utility connections,
bonds, insurance, sales taxes, and the like), (2) the so-called “soft costs” of
the Plans, including, without limitation, all revisions thereto, and engineering
reports, or other studies, reports or tests, air balancing or related work in
connection therewith, and (3) Landlord’s costs and administrative fee described
below. “Work” herein means: (i) the improvements and items of work shown on the
final Approved Plans (including changes thereto), and (ii) any demolition,
preparation or other work required in connection therewith, including without
limitation, structural or mechanical work, additional HVAC equipment or
sprinkler heads, or modifications to any building mechanical, electrical,
plumbing or other systems and equipment or relocation of any existing sprinkler
heads, either within or outside the Premises required as a result of the
layout, design, or construction of the Work or in order to extend any
mechanical distribution, fire protection or other systems from existing points of
distribution or connection, or in order to obtain building permits for the work
to be performed within the 

Premises
(unless Landlord requires that the Plans be revised to eliminate the necessity
for such work).

 

b.             Allowance.  Landlord shall provide a construction allowance
(the “Allowance”) of up to $133,500.00 towards: (i) costs of the Space Plan and Construction
Drawings, provided such costs, as a share of the Allowance, shall not exceed
$2.00 per square foot, (ii) costs of permanent leasehold improvements included
in the Work, including labor, hardware, equipment and materials, contractors’
charges for overhead and fees, and general conditions, and (iii)

 

R-6

 

Landlord’s costs and
administrative fee, as described below. The Allowance shall not be used for any
other purpose, such as, but not limited to, furniture, trade fixtures, or
personal property. The Allowance also covers Work that began in December 1,
2000 and is scheduled to finish by the end of March, 2001. If all or any
portion of the Allowance shall not be used, Landlord shall be entitled to the
savings and Tenant shall receive no credit therefor. If Landlord terminates the
Lease or Tenant’s right to possession based on a Default by Tenant, Tenant
shall repay Landlord on demand for the amount of the Allowance provided
hereunder, as additional damages, without in any way limiting Landlord’s other
rights or remedies.

 

c.             Tenant’s Cost Deposit.  Any portion of the Cost of the Work exceeding
the Allowance is referred to herein as “Tenant’s Cost.” Landlord may at any
time estimate Tenant’s Cost in advance, or revise any such estimate, in which
case, Tenant shall deposit (“Tenant’s Deposit”) the estimated amount (or the
increase reflected in any revised estimate) with Landlord within three (3) days
after Landlord so requests. If the Work involves progress payments, Landlord
shall apply the amounts deposited by Tenant first. If, after final completion
and payment for the Work, the actual amount of Tenant’s Cost exceeds the estimated
amount, Tenant shall pay the difference to Landlord within three (3) days after
Landlord so requests. If such estimated amount exceeds the actual amount of
Tenant’s Cost, Landlord shall provide a refund or credit of the difference.
Tenant’s Cost shall be deemed “Rent” under the Lease (and all remedies for the
non-payment of Rent shall be available to Landlord therefor), and Tenant’s obligations
under the Lease to keep the Premises and Property free of liens shall apply to
any liens arising from any failure to pay Tenant’s Cost hereunder.

 

d.             Funding and Disbursement.   Landlord shall fund and disburse the Allowance
(and any Tenant’s Deposit hereunder) within thirty (30) days after the Work has
been completed in accordance with the “Space Plan” and “Construction Drawings”
approved by Landlord in writing in accordance with the provisions hereof, and
Tenant has submitted all invoices, architect’s certificates, a Tenant’s
affidavit, partial or complete lien waivers (depending on whether progress payments
are involved) and affidavits of payment by all Tenant’s Contractors, and such
other evidence as Landlord may reasonably require that the cost of the Work has
been paid and that no architect’s, mechanic’s, materialmen’s or other such
liens have been or may be filed against the Property or the Premises arising
out of the design or performance of such Work. Landlord may issue checks to
fund the Allowance jointly or separately to Tenant, its general contractor, and
any other of Tenant’s Contractors. At Landlord’s option, Landlord may fund the
Allowance (and any Tenant’s Deposit hereunder) in monthly progress payment
installments, based on the submission of the foregoing items, subject to
withholding 10% of each draw as retention (at Landlord’s option). In such
event, Landlord shall disburse Tenant’s Deposit before disbursing the Allowance.
If all or any portion of the Allowance shall not be used, Landlord shall be
entitled to the savings and Tenant shall receive no credit therefor.

 

e.             Landlord’s Costs and Administrative Fee.  Tenant shall pay Landlord’s costs for architectural
and engineering review of Tenant’s Space Plan, Construction Drawings and Engineering
Report, and all revisions thereof, together with an administrative fee equal to
ten percent (10%) of the cost of the Plans and Work. Landlord may also charge
Tenant for services (including, but not limited to, security and freight
elevator charges) and utilities for the Work or otherwise consumed in or for
the Premises during the Work (whether based on meters or estimates by Landlord’s
engineer).

 

V.            Performance of the Work.

 

a.             Conditions to Performing Work.  Before commencing any Work, Tenant shall:

 

i.              Obtain Landlord’s written approval of Tenant’s Planners
and the Plans, as described in Section II.

 

ii.             Obtain, provide copies and post all necessary
governmental approvals and permits as described in Section II.e.

 

iii.            Obtain Landlord’s written approval of an itemization of
the Costs of the Work, Tenant’s Contractors, and the proposed contracts as
described in Section III.

 

iv.            Provide Tenant’s Deposit, if required under Section IV.

 

v.             Provide evidence of insurance to Landlord as described
in Section VI.

 

vi.            Provide such performance and payment bonds as Landlord
may reasonably require, in form and content and issued by a company acceptable
to Landlord, and showing Landlord as a dual obligee.

 

R-7

 

b.             Compliance and Standards.  Tenant shall cause the Work to comply in all
respects with the following: (a) the Approved Plans, (b) the Property Code of
the City and State in which the Property is located and Federal, State, County,
City or other laws, codes, ordinances, rules, regulations and guidance,
including the Disabilities Acts as described in Section X, below, as each may
apply according to the rulings of the controlling public official, agent or
other such person, (c) applicable standards of the National Board of Fire
Underwriters (or successor organization) and National Electrical Code, (d)
applicable manufacturer’s specifications, (e) any work rules and regulations as
Landlord or its agent may have adopted for the Property, and the Rules attached
as Rider One to this Lease. Tenant shall use only new, first-class materials in
the Work, except where explicitly shown in the Approved Plans. Tenant’s Work
shall be performed in a thoroughly safe, first-class and workmanlike manner,
and shall be in good and usable condition at the date of completion. In case of
inconsistency, the requirement with the highest standard protecting or favoring
Landlord shall govern.

 

c.             Labor Harmony.  Tenant shall conduct its labor relations and
relations with employees so as to avoid strikes, picketing, and boycotts of, on
or about the Premises or Property. If any employees strike, or if picket lines
or boycotts or other visible activities objectionable to Landlord are
established, conducted or carried out against Tenant, its employees, agents,
contractors, subcontractors or suppliers, in or about the Premises or Property,
Tenant shall immediately close the Premises and remove or cause to be removed
all such employees, agents, contractors, subcontractors and suppliers until the
dispute has been settled.

 

d.             Property Operations, Dirt, Debris and Noise.  Tenant and Tenant’s Contractors shall make all
efforts and take all steps appropriate to assure that all construction
activities do not interfere with the operation of the Property or with other
occupants of the Property. Tenant’s Work shall be coordinated under Landlord’s
direction with the work being done or to be performed, and other activities,
for or by other occupants in the Property so that Tenant’s Work will not
interfere with or delay the completion of any other construction work or other
activity in the Property. Construction equipment and materials are to be kept
within the Premises, and delivery and loading of equipment and materials shall
be done at such locations and at such time as Landlord shall direct so as not
to burden the construction or operation of the Property.  Tenant’s contractors shall comply with any
work rules of the Property and Landlord’s requirements respecting the hours of
availability of elevators and manner of handling materials, equipment and
debris. Demolition must be performed after 6:00 p.m. and on weekends, or as otherwise
required by Landlord or the work rules for the Property. Construction which
creates noise, odors or other matters that may bother other occupants may be
rescheduled by Landlord at Landlord’s sole discretion. Delivery of materials,
equipment and removal of debris must be arranged to avoid any inconvenience or
annoyance to other occupants. The Work and all cleaning in the Premises must be
controlled to prevent dirt, dust or other matter from infiltrating into adjacent
occupant, common or mechanical areas. Tenant and Tenant’s Contractors shall
take all precautionary steps to minimize dust, dirt, odors, noise and
construction traffic, and to protect their facilities and the facilities of
others affected by the Work and to properly police the same. If and as required
by Landlord, the Premises shall be sealed off from the balance of the space on the
floor(s) containing the Premises (and from other floors or areas of the
Property) so as to minimize the disbursement or infiltration of dust, dirt, odors,
debris and noise.

 

e.             Removal of Debris.  The contractors and subcontractors shall be
required to remove from the Premises and dispose of, at least once a week and
more frequently as Landlord may direct, all debris and rubbish caused by or
resulting from the Work, and shall not place debris in the Property’s waste
containers. If required by Landlord, Tenant shall sort and separate its waste
and debris for recycling and/or environmental law compliance purposes. Upon
completion of Tenant’s Work, Tenant’s Contractors shall remove all surplus
materials, debris and rubbish of whatever kind remaining within the Property
which has been brought in or created by the contractors and subcontractors in
the performance of Tenant’s Work. If any contractor or subcontractor shall
neglect, refuse or fail to remove any such debris, rubbish, surplus material or
temporary structures within 48 hours after notice to Tenant from Landlord with
respect thereto, Landlord may cause the same to be removed by contract or
otherwise as Landlord may determine expedient, and charge the cost thereof to
Tenant as additional Rent under the Lease.

 

f.              Utilities and Services.  Utility costs or charges for any service
(including electricity, HVAC, security hoisting or freight elevator and the
like) to the Premises or for the Work shall be the responsibility of Tenant
from the date Tenant is obligated to commence or commences the Work and shall
be paid for by Tenant at Landlord’s standard rates then in effect. Tenant shall
apply and pay for all utility meters required, and in the absence of meters
shall pay for usage reasonably estimated by Landlord’s engineer. Tenant shall
pay for all support services or work provided by Landlord’s contractors at
Tenant’s request or at Landlord’s discretion resulting from

 

R-8

 

breaches or defaults by
Tenant under this Exhibit. All use of freight elevators is subject to scheduling
by Landlord and the rules and regulations of the Property, as described above.

 

g.             Landlord Rights.  Tenant shall permit access to the Premises,
and inspection of  the
Work, by Landlord and Landlord’s architects, engineers, contractors and otherrepresentatives, at all times during
the period in which the Work is being planned, constructed and installed and following completion of the
Work. Landlord shall have the right, but not the obligation, to order Tenant or any of Tenant’s Contractors who violate
the requirements imposed on
Tenant or Tenant’s Contractors in performing Work to cease the Work and remove
its equipment and employees from
the Property. Landlord shall have the right, but not the obligation, to perform, on behalf of and for
the account of Tenant, subject to reimbursement by Tenant, any work required to cure or complete
any Work which has violated this Exhibit, or which pertains to patching of the Work and other work in the Property,
or involves Work outside the
Premises, or affects the base building core or structure or systems or
equipment for the Property. No
such action by Landlord shall delay the commencement of the Lease or theobligation to pay Rent or any other
obligations therein set forth.

 

h.             General Requirements.  Tenant
shall impose on and enforce all applicable terms of this Exhibit against Tenant’s Planners and Tenant’s
Contractors. Landlord shall have the right to require Tenant to furnish bonds or other security in form and amount
reasonably satisfactory to Landlord
for the prompt and faithful performance and payment for Tenant’s Work. Landlord
shall have the right to run
utility lines, pipes, conduits, duct work and component parts of all mechanical and electrical systems where
necessary or desirable through the Premises, to repair, alter, replace or remove the same, and to
require Tenant to install and maintain proper access panels thereto. If an expansion joint occurs
within the Premises, Tenant shall install finish floor covering to or covering such joint in a
workmanlike manner, and Landlord shall not accept responsibility for any finish floor covering
applied to or installed over the expansion joint. Landlord may impose reasonable additional
requirements from time to time in order to ensure that the Work, and the construction thereof does
not disturb or interfere with any other occupants of the Property, or their visitors, contractors
or agents, nor interfere with the efficient, safe and secure operation of the Property. Tenant
shall provide Landlord with “as built” drawings no later than thirty (30) days after completion of the
Work.

 

VI.           Insurance.  In
addition to any insurance which may be required under the Lease, Tenant shall secure, pay for and maintain or
cause Tenant’s Contractors to secure, pay for and maintain during the continuance of
construction and fixturing work within the Property or Premises, insurance in the following minimum
coverages and the following minimum limits of liability:

 

a.             Worker’s compensation and employer’s liability insurance
with limits of not less  than
$2,000,000.00, or such higher amounts as may be required from time to time by
any employee benefit acts or
other statutes applicable where the work is to be performed, and, in anyevent sufficient to protect Tenant’s
Contractors from liability under the aforementioned acts.

 

b.             Comprehensive General Liability Insurance (including Contractors’
Protective  Liability) in
an amount not less than $1,000,000.00 per occurrence, whether involving bodilyinjury liability (or death resulting
therefrom) or property damage liability or a combination thereof, with a minimum aggregate limit of $2,000,000.00,
and with umbrella coverage with limits not less than $5,000,000.00. Such insurance shall contain an endorsement
covering Tenant’s and Tenant’s
Contractors’ indemnity obligations under the contracts and the Lease. Such
insurance shall provide for
explosion and collapse, completed operations coverage and broad form blanketcontractual liability coverage and
shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting
therefrom, and damage to the property of others and arising from its operations under the
contracts whether such operations are performed by Tenant’s Contractors or by anyone directly or
indirectly employed by any of them.

 

c.             Comprehensive Automobile Liability Insurance, including
the ownership,  maintenance
and operation of any automotive equipment, owned, hired, or non-owned in anamount not less than $500,000.00 for
each person in one accident, and $1,000,000.00 for injuries sustained by two or more persons in
any one accident and property damage liability in an amount not less than $1,000,000.00 for each
accident. Such insurance shall insure Tenant’s Contractors against any and all claims for bodily injury, including
death resulting therefrom, and damage
to the property of others arising from its operations under the contracts,
whether such operations are
performed by Tenant’s Contractors, or by anyone directly or indirectly employedby any of them.

 

d.             “All-risk” builder’s risk insurance upon the entire Work
to the full insurable value thereof.  This
insurance shall include the interests of Landlord and Tenant (and their
respective

 

R-9

 

contractors and
subcontractors of any tier to the extent of any insurable interest therein) in
the  Work and shall insure
against the perils of fire and extended coverage and shall include “all-risk”builder’s risk insurance for physical
loss or damage including, without duplication of coverage, theft vandalism and malicious mischief. If
portions of the Work are stored off the site of the Property or in transit to said site are not
covered under said “all-risk” builder’s risk insurance, then Tenant shall effect and maintain similar
property insurance on such portions of the Work. Any loss insured under said “all-risk” builder’s risk insurance is to
be adjusted with Landlord and Tenant
and made payable to Landlord, as trustee for the insureds, as their interests
may appear.

 

e.             All policies (except the worker’s compensation policy)
shall be endorsed to include  as additional insured parties, Landlord, the property management
company for the Property, the parties
listed on, or required by, the Lease, Landlord’s contractors, Landlord’s
architects, and their respective
beneficiaries, partners, directors, officers, employees and agents, and suchadditional persons as Landlord may
designate. The waiver of subrogation provisions contained in the Lease shall apply to all insurance
policies (except the workmen’s compensation policy) to be obtained by Tenant pursuant to this paragraph.
The insurance policy endorsements shall also provide that all additional insured parties shall be given thirty (30)
days’ prior written notice of any
reduction, cancellation or non-renewal of coverage (except that ten (10) days’
notice shall be sufficient in
the case of cancellation for non-payment of premium) and shall provide that theinsurance coverage afforded to the
additional insured parties thereunder shall be primary to any insurance carried independently by said
additional insured parties. Additionally, where applicable, each policy shall contain a cross-liability
and severability of interest clause. All insurance carriers hereunder shall be rated at least A and X in
Best’s Insurance Guide. Certificates for all such insurance shall be delivered to Landlord
before the construction is commenced or contractor’s equipment is moved onto the Property. In the
event that during the course of Tenant’s Work any damage shall occur to the construction and
improvements being made by Tenant, then Tenant shall repair the same at Tenant’s cost.

 

VII.         Signage, Window Blinds and HVAC Balancing.  Notwithstanding anything contained herein to the contrary, in
connection with or following the Work, Landlord shall install building standard suite identification signage,
and may install building standard window blinds (to the extent not already existing). Tenant
shall promptly advise Landlord of the name Tenant wishes for said signage. The content of all
signage shall be subject to Landlord’s prior written approval. No other signage may be installed
or placed outside the Premises by Tenant. Landlord may also cause a contractor to perform air
balancing tests on the Premises and adjust the HVAC system as a result thereof. Landlord shall
not be responsible for any disturbance or deficiency created in the air conditioning or other
mechanical, electrical or structural facilities within the Property or Premises as a result of the Work.
If such disturbances or deficiencies result, and Landlord does not elect to correct the same for Tenant, Tenant shall
correct the same and restore the
services to Landlord’s reasonable satisfaction, within a reasonable time. The
costs of such signage, blinds
and HVAC tests and work may be charged against the Allowance, and if theAllowance shall be insufficient, Tenant
shall pay Landlord for such costs as additional Rent within five (5) days after billed.

 

VIII.        Asbestos.  If the
Property was constructed at a time when asbestos was commonly used in construction, Tenant
acknowledges that asbestos-containing materials (“ACM”) may be present at the Property, and that airborne asbestos
fibers may involve a potential
health hazard unless proper procedures are followed. In such case, before
commencing the Work, Tenant and
its contractor shall consult with Landlord and Landlord’s asbestos consultant concerning appropriate procedures
to be followed.

 

IX.           Certain Definitions.

 

a.             Space Plan.  “Space Plan” herein means a floor plan, drawn
to scale, showing (i)  demising
walls, interior walls and other partitions, including type of wall or partition
and height, (ii) doors and other
openings in such walls or partitions, including type of door and hardware,
(iii) any floor or ceiling
openings, and any variations to building standard floor or ceiling heights, (iv)electrical outlets, and any restrooms,
kitchens, computer rooms, file cabinets, file rooms and other special purpose rooms, and any sinks or
other plumbing facilities, or other special electrical, HVAC, plumbing or other facilities or
equipment, including all special loading, (v) communications system, including location and dimensions of
equipment rooms, and telephone and computer outlet locations, (vi) special cabinet work or other millwork items,
(vii) any space planning considerations
under the Disabilities Acts, (viii) finish selections (i.e. color selection of
painted areas, and selection of
floor and any special wall coverings from Landlord’s available building standard selections (which selections Tenant
may defer and include with the Construction Drawings), and (ix) any other details or features requested by
Architect, Engineer or Landlord in order
for the Space Plan to serve as a basis for preparing the Construction Drawings.

 

R-10

 

b.             Construction Drawings.  “Construction Drawings” herein means fully
dimensioned  architectural
construction drawings and specifications, and any required engineering drawings(including mechanical, electrical,
plumbing, structural, air-conditioning, ventilation and heating), and shall include any applicable items
described above for the Space Plan, and to the extent applicable: (i) electrical outlet locations,
circuits and anticipated usage therefor, (ii) reflected ceiling plan, including lighting, switching,
and any special ceiling specifications, (iii) duct locations for heating, ventilating and air-conditioning
equipment, (iv) details of all millwork, (v) dimensions of all equipment and cabinets to be built in,
(vi) furniture plan showing details of space occupancy, (vii) keying schedule, (viii) lighting arrangement, (ix)
location of print machines, equipment
in lunch rooms, concentrated file and library loadings and any other equipment
or systems (with brand names
wherever possible) which require special consideration relative to air-conditioning, ventilation, electrical,
plumbing, structural, fire protection, life-fire-safety system, or mechanical systems, (x) special heating,
ventilating and air conditioning equipment and requirements, (xi) weight and location of heavy equipment, and
anticipated loads for special usage
rooms, (xii) demolition plan, (xiii) partition construction plan, (xiv) all
requirements under the
Disabilities Acts and other governmental requirements, and (xv) final finish
selections, and any other details
or features requested by Architect, Engineer or Landlord in order for theConstruction Drawings to serve as a
basis for contracting the Work.

 

X.            Taxes.  Tenant shall pay prior to delinquency all taxes, charges or othergovernmental impositions (including
without limitation, any real estate taxes or assessments, sales tax or value added tax) assessed
against or levied upon Tenant’s fixtures, furnishings, equipment and personal property located in
the Premises and the Work to the Premises under this Exhibit. Whenever possible, Tenant shall
cause all such items to be assessed and billed separately from the property of Landlord. In the event
any such items shall be assessed and billed with the property of Landlord, Tenant shall pay its
share of such taxes, charges or other governmental impositions to Landlord within ten (10) days
after Landlord delivers a statement and a copy of the assessment or other documentation showing
the amount of such impositions applicable to Tenant.

 

XI.           Disabilities Acts.  Tenant
shall be responsible for matters under any laws or governmental regulations, rules or guidance
materials pertaining to persons with disabilities (referred to herein as the “Disabilities Acts”)
relating to the Premises or Work hereunder. Without limiting the generality of the forgoing,
Tenant shall: (a) provide complete and accurate information such that the Plans will comply with the Disabilities Acts,
and update such information as
needed, and (b) be responsible for any changes to the Work or Premises resultingfrom changes in Tenant’s employees,
business operations or the Disabilities Acts. Without limitation as to other provisions, Tenant
hereby expressly acknowledges that Tenant’s indemnity and related obligations under the Lease shall
apply to violations of this provision.

 

XII.         Miscellaneous.

 

a.             Interpretation.  If this Work Letter is attached as an Exhibit
to an amendment to  an
existing lease (“Original Lease”), whether such amendment adds space, relocates
the Premises or makes any other
modifications, the term “Lease” herein shall refer to such amendment, or theOriginal Lease as amended, as the
context implies. By way of example, in such case, references to the “Premises” and “Commencement Date”
herein shall refer, respectively, to such additional or relocated space and the effective date for
delivery thereof under such amendment, unless expressly provided to the contrary herein. Capitalized terms not
otherwise defined herein shall have
the meanings ascribed thereto in the Lease.

 

b.             Application.  This Exhibit shall not apply to any additional
space added to the  Premises
at any time, whether by any options or rights under the Lease or otherwise, or
to any portion of the Premises
in the event of a renewal or extension of the Term of the Lease, whetherby any options or rights under the
Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement thereto.

 

c.             Lease Provisions and Modification.  This Exhibit is intended to supplement and be
subject to the provisions of the
Lease, including, without limitation, those provisions requiring that any modification or amendment be in
writing and signed by authorized representatives of both parties.

 

d.             Limitation of Landlord’s Liability.   Landlord shall not be liable in any way for
any  injury, loss or
damage which may occur to any decorations, fixtures, personal property, installations or other improvements or items
of work installed, constructed or brought upon the Premises by or for Tenant or Tenant’s
Contractors prior to completion of the Work and commencement of Tenant’s occupancy, all of the same being at Tenant’s
sole risk, and Tenant hereby
agrees to protect, defend, indemnify and hold Landlord and its employees,
agents, and

 

R-11

 

affiliates harmless from all
liabilities, losses, damages, claims, demands, and expenses (including  attorneys’ fees). The parties acknowledge
that neither Landlord nor its managing agent is an architect or engineer, and that the Work will
be designed and performed by independent architects, engineers and contractors. Landlord and its managing agent
shall have no responsibility for
construction means, methods or techniques or safety precautions in connectionwith the Work, and do not guarantee
that the Plans or Work will be free from errors, omissions or defects, and shall have no liability
therefor. Landlord’s approval of Tenant’s Plans and contracts, and Landlord’s designations, lists,
recommendations or approvals concerning Tenant’s Planners and Contractors shall not be deemed a
warranty as to the quality or adequacy thereof or of the Plans or the Work, or the design thereof, or
of its compliance with laws, codes and other legal requirements.

 

e.             No Third-Party Beneficiaries.  The Lease and this Exhibit are not intended to
create  any third-party
beneficiaries. Without limiting the generality of the foregoing, no TenantContractors or Tenant Planners shall
have any legal or beneficial interest in the Allowance.

 

R-12

 

PARKING AGREEMENT

 

THIS AGREEMENT made as of
the 12th day of April 2001 between Pike Street
Delaware, Inc. (“Landlord”) and Equator Technologies, Inc. (“Tenant”).

 

1.             The parties hereby acknowledge that
they have heretofore entered, or are contemporaneously herewith entering, a
certain lease dated April 12, 2001 ( the “Lease”) for premises known as
Suite 900 (the “Premises”) located in the property known as 520 Pike Tower (the
“Property”). In the event of any conflict between the Lease and this Agreement,
the latter shall control.

 

2.             Landlord hereby grants to Tenant
and persons designated by Tenant a license to use eleven (11) parking spaces in
the Property Parking Garage (the “Garage”) at then current rates which Landlord
may adjust from time to time. The Term of such license shall commence on the Commencement
Date under the Lease and shall continue until the earlier to occur of the Expiration
Date under the Lease; termination of the Lease or Tenant’s abandonment of the Premises
thereunder. Tenant may, from time to time, request additional parking spaces,
and if Landlord shall provide the same, such spaces shall be provided and used
on a month-to-month basis, and otherwise on the foregoing terms and provisions,
and such monthly parking charges as Landlord shall establish from time to time.

 

3.             Tenant shall at all times comply
with all applicable ordinances, rules, regulations, codes, laws, statutes and
requirements of all federal, state, county and municipal governmental bodies or
their subdivisions respecting the use of the Garage. Landlord reserves the
right to adopt, modify and enforce reasonable Rules governing the use of the
Garage from time to time, including any key card, parking sticker or other
identification or entrance system, and hours of operation. The Rules set forth
hereinafter are currently in effect. Landlord may refuse to permit any person
who violates such Rules to park in the Garage, and any violation of the Rules
shall subject the car to removal from the Garage.

 

4.             The parking spaces hereunder shall
be provided on an unreserved “first-come, first served” basis. Tenant
acknowledges that Landlord has arranged or may arrange from time to time for
the Garage to be operated by an independent contractor, not affiliated with
Landlord (the “Parking Operator”). In such event, Tenant acknowledges that
Landlord shall have no liability for claims arising through acts or omissions
of the Parking Operator. Except for its intentional acts or gross negligence,
Landlord shall have no liability whatsoever for (a) any damage to property or
any other items located in the Garage, (b) theft or vandalism to any vehicle or
property or other items located in the Garage, or (c) any personal injuries or
death arising out of any matter relating to the Garage, and in all events,
Tenant agrees to look first to its insurance carrier and to require that Tenant’s
employees look first to their respective insurance carriers for payment of any
losses sustained in connection with any use of the Garage. Tenant hereby waives
on behalf of its insurance carriers all rights of subrogation against Landlord
or Landlord’s agents. Landlord reserves the right to assign specific spaces, and
to reserve space for visitors, small cars, handicapped persons and for other
tenants, guests of tenants or other parties, and Tenant and persons designated
by Tenant hereunder shall not park in any such assigned or reserved spaces.
Landlord also reserves the right to close all or any portion of the Garage in
order to make repairs or perform maintenance services, or to alter, modify,
re-stripe or renovate the Garage, or if required by casualty, strike,
condemnation, act of God, governmental law or requirement or other reason
beyond Landlord’s reasonable control.

 

5.             If Tenant shall default under this
Agreement, Landlord shall have the right to remove from the Garage any vehicles
hereunder which shall have been involved or shall have been owned or driven by
parties involved in causing such default, without any liability therefor whatsoever.
In addition, if Tenant shall default under this Agreement, Landlord shall have
the right to cancel this Agreement on ten days’ written notice, unless within
such ten day period, Tenant cures such default. If Tenant defaults under this
Agreement more than three times during any twelve month period, and Landlord
notifies Tenant thereof promptly after each such default, the next default
during the succeeding twelve month period, shall, at Landlord’s election,
constitute an incurable default. Such cancellation right shall be cumulative
and in addition to any other rights or remedies available to Landlord at law or
equity, or provided under the Lease (all of
which rights and remedies under the Lease are hereby incorporated  herein, as though fully set forth). Any
default by Tenant under the Lease shall be a default under this Agreement, and
any default under this Agreement shall be a default under the Lease. Tenant
shall comply with the following Rules governing the use of the Garage:

 

(i)            Garage hours shall be as posted in
the Garage from time to time. Landlord shall have the right to change hours of
operation of the Garage from time to time.

 

R-13

 

(ii)           Cars must be parked entirely within
the stall lines painted on the floor, and only small cars may be parked in
areas reserved for small cars.

 

(iii)          All directional signs, arrows and lane
markings must be strictly observed.

 

(iv)          The speed limit shall be 5 miles per
hour.

 

(v)           Spaces reserved for handicapped
parking must be used only by vehicles properly designated.

 

(vi)          Parking is prohibited in all areas not
expressly designated for parking, including without limitation:

 

(a) areas not
striped for parking

 

(b) aisles

 

(c) where “no
parking” signs are posted

 

(d) ramps

 

(e) loading
zones

 

(f) cross
hatched areas

 

(g) such other
areas as may be designated by Landlord or the Parking Operator

 

(vii)         Landlord shall have the right to
establish, and Tenant shall cooperate with, a parking system in order to allow
for use of the Garage by all of the tenants of the Property. Such system may
include key cards and gates, parking stickers, designated parking stalls, or
any other reasonable system. Key cards, parking stickers or any other devices
or forms of identification or entry supplied by Landlord, if any, shall remain
the property of Landlord. Such devices must be displayed as requested and may
not be mutilated in any manner. The serial number of the parking identification
device may not be obliterated. Devices are not transferable and any device in
the possession of an unauthorized holder will be void.

 

(viii)        The monthly parking charge or rent for
parking spaces is as posted in the Garage and subject to adjustment
periodically at the discretion of the Landlord. Notice of such adjustments will
be sent at least 30 days prior to the effective date of the adjustment. Monthly
parking charges or rent for parking spaces is payable in advance on the first
day of each month and must be paid on or before the fifth day of each month. No
statement or invoice will be sent. Failure to pay such parking charge or rent
for parking spaces on or before the fifth of each month will automatically
cancel parking privileges and a charge at the prevailing daily rate will be
charged. No deduction or allowances from the monthly rate will be made for days
user does not use the Garage.

 

(ix)           Parking Operator or its attendants
are not authorized to make or allow any exceptions to these Rules and
Regulations.

 

(x)            Every parker is required to park and
lock his/her own car.

 

(xi)           Loss or theft of key cards, parking
stickers or other identification, or other such devices must be reported to
Landlord or any Garage manager immediately. Any parking devices reported lost
or stolen found on any unauthorized car will be confiscated and the illegal holder
will be subject to prosecution. Lost or stolen parking devices found by Tenant
or its employees must be reported to the office of the Garage immediately.

 

(xii)          Washing, waxing, cleaning or servicing
of any vehicle by the customer and/or his/her agents is prohibited. Parking
spaces may be used only for parking automobiles.

 

(xiii)         Landlord or the Parking Operator
reserves the right to refuse the sale of monthly stickers or other parking
identification devices to any Tenant or person and/or his agents or representatives
who refuse to comply with this Agreement and these Rules and all posted City, State
or Federal ordinances, laws or agreements.

 

(xiv)        By signing this Parking Agreement,
Tenant agrees to acquaint all persons to whom Tenant assigns parking spaces
with this Agreement and these Rules.

 

R-14

 

(xv)         If a cardholder takes a ticket to gain
access to the Garage, that ticket must be presented for validation to the
Parking Operator the same day prior to exiting the Garage, otherwise the posted
daily parking rate will apply.

 

(xvi)        Except as otherwise provided in the
Lease, parking privileges under this Parking Agreement are granted on a
month-to-month basis and are revocable by Landlord on thirty (30) days prior
written notice.

 

(xvii)       Parking privileges may be on an
unassigned or executive valet basis as designated by Landlord or the Parking
Operator from time to time.

 

	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  Equator
  Technologies, Inc

  	
  Pike Street
  Delaware, Inc.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CFO

  	
   

  	
  Its: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: Authorized Signatory

  
							

 

R-15Exhibit 10.19

 

WHITE OAKS BUSINESS PARK

STANDARD NNN LEASE – Multi-Tenant Business Park

 

 

W I  T  N  E  S  S
E  T  H

 

This lease (“Lease”) is entered into by and between Limar Realty Corp.
#30, a California corporation (“Landlord”) and
Equator Technologies, Inc., a Delaware corporation (“Tenant”).
For and in consideration of the payment of rents and the performance of the
covenants herein set forth by Tenant, Landlord does lease to Tenant and Tenant
accepts the Premises described below subject to the agreements herein
contained.

 

	
  1.

  	
  BASIC
  LEASE TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  DATE OF
  LEASE:

  	
  March
  19, 2001

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  TENANT:

  	
  Equator Technologies,
  Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address (of the Premises):

  	
  1300 White Oaks Road,
  Campbell, California

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address (for Notices):

  	
  (Please
  provide if other than Premises.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  LANDLORD:

  	
  Limar Realty Corp. #30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address (for Notices):

  	
  1730 S. El Camino Real

  
	
   

  	
   

  	
   

  	
  Suite 400

  
	
   

  	
   

  	
   

  	
  San Mateo, California
  94402

  
	
   

  	
   

  	
   

  	
  Attn: Thomas A.
  Numainville

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  TENANT’S USE OF PREMISES:

  	
  Office, research and
  development

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  PREMISES AREA:

  	
  30,000 Rentable Square
  Feet

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  INSURING PARTY:

  	
  Landlord is the “Insuring Party” unless otherwise stated herein.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  BUILDING:

  	
  1300 White Oaks Road,
  Campbell, California

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  BUSINESS PARK:

  	
  White Oaks Business Park

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  TERM (inclusive):

  	
  Commencement Date:

  	
  November 1, 2001 (“Commencement Date”)

  
	
   

  	
   

  	
   

  	
  This Lease shall
  automatically commence upon the expiration of that certain lease dated April
  25, 1997, as amended, between Landlord and Tenant.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Expiration Date: October
  31, 2006 (“Expiration Date”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Months: Sixty
  (60)

  
	
   

  	
   

  	
   

  
	
   

  	
  j.

  	
  TENANT’S
  SHARE OF BUILDING:

  	
  75%
  (30,000 sq. ft./40,000 sq. ft.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  k.

  	
  TENANT’S
  SHARE OF BUSINESS PARK:

  	
  75%
  (30,000 sq. ft./40,000 sq. ft.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  l.

  	
  TENANT’S
  NUMBER OF NON-RESERVED PARKING SPACES:

  	
  104
  spaces

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  m.

  	
  INITIAL BASE RENT:

  	
  Seventy Seven Thousand Two
  Hundred Eighty-Two & 88/100 Dollars ($77,282.88) per month.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  n.

  	
  BASE RENT
  ADJUSTMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Step Increase. The step adjustment provisions of ¶4.b.
  apply for the periods shown below:

  
							

 

	
   

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  Periods (inclusive)

  	
   

  	
  Amount

  	
   

  
	
  11/01/02–10/31/03

  	
   

  	
  $

  	
  79,214.95

  	
   

  
	
  11/01/03–10/31/04

  	
   

  	
  81,195.32

  	
   

  
	
  11/01/04 –10/31/05

  	
   

  	
  83,225.21

  	
   

  
	
  11/01/05–10/31/06

  	
   

  	
  85,305.84

  	
   

  
					

 

	
   

  	
  o.

  	
  TOTAL TERM
  BASE RENT:                                   $4,874,690.40

  

 

1

 

	
  p.

  	
  PREPAID BASE RENT:

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  q.

  	
  SECURITY DEPOSIT:

  	
  $240,000.00

  
	
   

  	
   

  	
   

  
	
  r.

  	
  BROKER(S):

  	
  None

  
	
   

  	
   

  	
   

  
	
  s.

  	
  GUARANTOR(S):

  	
  None

  
	
   

  	
   

  	
   

  
	
  t.

  	
  EXHIBITS:

  	
  Exhibits lettered “A”
  through “D” are attached hereto and made a part hereof.

  
				

 

2.                                       PREMISES, PARKING AND COMMON
AREAS

 

a.                                       Premises. The Premises as described in ¶1. and Exhibit
A, are a portion of a building, herein sometimes referred to as the “Building” identified in ¶1. 
The Premises, the Building, the Common Areas, the land upon which the
same are located, along with all other buildings and improvements thereon or
thereunder, are herein collectively referred to as the “Business
Park” as described in ¶1. and Exhibit B.   Landlord hereby leases to Tenant and Tenant
leases from Landlord for the Term (as defined below), at the rental, and upon
all of the conditions set forth herein, the real property referred to in the
Basic Lease Terms, ¶1. as the “Premises”,
including rights to the Common Areas as hereinafter specified.    Subject to any additional work Landlord has
agreed herein to do, Tenant hereby accepts the Premises in their condition existing
as of the date of the execution hereof, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and
regulating the use of the Premises, and accepts this Lease subject thereto and
to all matters disclosed thereby and by any exhibits attached hereto. Tenant
agrees with the square footage specified for the Premises in ¶l. and will not
hereafter challenge such determination and agreement. The rental payable by
Tenant pursuant to this Lease is not subject to revision in the event of any
discrepancy in the rentable square footage for the Premises.

 

b.                                      Vehicle Parking.   So
long as Tenant is not in default, and subject to the Rules and Regulations
attached hereto as Exhibit C, and as reasonably established by Landlord
from time to time, Tenant shall be entitled to use the number of parking spaces
set forth in ¶1.   If
Tenant commits, permits or allows any of the prohibited activities described in
the Lease or the Rules and Regulations then in effect, then Landlord shall have
the right, without notice, in addition to such other rights and remedies that
it may have, to remove or tow away the vehicle involved and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord.

 

c.                                       Common Areas — Definition. The term “Common
Areas” is defined as all areas and facilities outside the Premises
and within the exterior boundary line of the Business Park that are provided
and designated by the Landlord from time to time for the general non-exclusive
use of Landlord, Tenant and of other tenants of the Business Park and their
respective employees, suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, parking areas to the extent not otherwise prohibited by this Lease,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, ramps, driveways, landscaped areas and decorative walls.

 

d.                                      Common Areas — Rules and
Regulations.   Tenant agrees to abide by and conform to the
Rules and Regulations attached hereto as Exhibit C with respect to the
Business Park and Common Areas, and to cause its employees, suppliers,
shippers, customers and invitees to so abide and conform.  Landlord, or such other person(s) as Landlord
may appoint, shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to reasonably modify, amend
and enforce said rules and regulations. Landlord shall not be responsible to
Tenant for the non-compliance with said rules and regulations by other tenants,
their agents, employees and invitees.

 

e.                                       Building and Common Areas — Changes.  
Landlord shall have the right, in Landlord’s reasonable discretion, from
time to time:

 

1)                                      To make changes to the Building interior and
exterior and Common Areas, including, without limitation, changes in the
location, size, shape, number and appearance thereof, including but not limited
to the lobbies, windows, stairways, air shafts, elevators, restrooms,
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, decorative walls, landscaped
areas and walkways so long as Tenant’s use and occupancy is not unreasonably
impaired thereby;

 

2)                                      To close temporarily any of the Common Areas
for maintenance purposes so long as reasonable access to the Premises remains
available;

 

3)                                      To designate other land and improvements
outside the boundaries of the Business Park to be a part of the Common Areas,
provided that such other land and improvements have a reasonable and functional
relationship to the Business Park;

 

4)                                      To add additional buildings and improvements
to the Common Areas;

 

5)                                      To use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Business Park or
any portion thereof; and

 

2

 

6)                                      To do and perform such other acts and make
such other changes in, to or with respect to the Common Areas and Business Park
as Landlord may, in the exercise of sound business judgment deem to be
appropriate so long as Tenant’s use and occupancy is not unreasonably impaired
thereby.

 

f.                                         Acceptance; Quiet Enjoyment. Landlord represents that it is the fee
simple owner of the Premises and has
full right and authority to make this Lease. Landlord hereby leases the Premises
to Tenant and Tenant hereby accepts the same from Landlord, in accordance with
the provisions of this Lease. Landlord covenants that Tenant shall have
peaceful and quiet enjoyment of the Premises during the Term (as defined below)
of this Lease. Tenant covenants that it will not interfere with other tenants’
quiet enjoyment of their premises.

 

3.                                       TERM.  The
term (“Term”) of this Lease is for the period
that commences at 12:01 a.m. on the Commencement Date and expires at 11:59 p.m.
on the Expiration Date. If Landlord, for any reason, cannot deliver possession
of the Premises to Tenant on or before the Commencement Date, this Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting from such delay. In that event, however, there shall be an
abatement of Rent (as defined below) covering the period between the
Commencement Date and the date when Landlord delivers possession to Tenant, all
other terms and conditions of this Lease shall remain in full force and effect.
If a delay in possession is caused by Tenant’s failure to perform any
obligation in accordance with this Lease, the Term shall commence as of the
Commencement Date, and there shall be no reduction of Rent between the
Commencement Date and the time Tenant takes possession.

 

4.                                       RENT

 

a.                                       Base
Rent.   Tenant shall pay Landlord in lawful money of the United States, without
notice, demand, offset or deduction, rent in the amount(s) set forth in ¶1.
which shall be payable in advance on the first day of each and every calendar
month (“Base Rent”) provided, however, the
first month’s Base Rent is due and payable upon execution of this Lease.   Unless otherwise specified in writing by
Landlord, all installments of Base Rent shall be payable to Limar Realty Corp.
#30, Department #44294, P.O. Box 44000, San Francisco, California
94144-4294.  Base Rent for any partial
month at the beginning or end of this Lease will be prorated in accordance with
the number of days in the subject month.  
If the Term of this Lease contains any rental abatement period, other
than in accordance with ¶3, hereof. Tenant hereby agrees that if Tenant
breaches the Lease and/or abandons the Premises before the end of the Term, or
if Tenant’s right to possession is terminated by Landlord because of Tenant’s
breach of the Lease, Landlord may, at its option, (1) void the rental abatement
period, or (2) recover from Tenant, in addition to any damages due Landlord
under the terms and conditions of the Lease, Base Rent prorated for the entirety
of the rental abatement period at a rental rate equivalent to two (2) times the
Base Rent at such time of proration.

 

For
purposes of Section 467 of the Internal Revenue Code, the parties to this Lease
hereby agree to allocate the stated Base Rent provided herein to the periods
which correspond to the actual Base Rent payments as provided under the terms
and conditions of this Agreement.

 

b.                                      Step Increase.  The
Base Rent shall be increased periodically to the amounts and at the times set
forth in ¶1.

 

c.                                       Rent Without Offset and Late
Charge.   All Rent shall be paid without prior demand
or notice and without any deduction or offset whatsoever. All Rent shall be
paid in lawful currency of the United States of America.  Tenant acknowledges that late payment by
Tenant to Landlord of any Rent will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of such cost being extremely difficult
and impracticable to ascertain.  Such
costs include, without limitation, processing and accounting charges and late
charges that may be imposed on Landlord by the terms of any encumbrance or note
secured by the Premises. Therefor, if any Rent is not received by Landlord
within five (5) days of its due date, Tenant shall pay to Landlord a late
charge equal to six percent (6%) of such overdue payment. Landlord and Tenant
hereby agree that such late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of any such late payment and that
the late charge is in addition to any and all remedies available to the
Landlord and that the assessment and/or collection of the late charge shall not
be deemed a waiver of any other default. 
Additionally, all such delinquent Rent or other sums, plus this late
charge, shall bear interest from the due date thereof at the lesser of ten
percent (10%) per annum or the maximum legal interest rate permitted by law.  Any payments of any kind returned for
insufficient funds will be subject to an additional handling charge of $25.00,
and thereafter for the remainder of the Term hereof, Landlord may require
Tenant to pay all future payments of Rent or other sums due by cashier’s check.

 

d.                                      Prepaid Base Rent.  Upon
the execution of this Lease, Tenant shall pay to Landlord the Prepaid Base Rent
set forth in ¶1 ., and such Prepaid Base Rent shall be applied toward the Base
Rent due for the first month of the Term for which Base Rent is due.  Landlord shall be entitled to immediately
endorse and cash Tenant’s Prepaid Base Rent.

 

e.                                       Rent. The term “Rent”
as used in this Lease shall refer to Base Rent, Prepaid Base Rent, Real
Property Taxes, Operating Expenses, Insurance Costs, repairs and maintenance
costs, utilities, late charges and other similar charges payable by Tenant
pursuant to this Lease either directly to Landlord or otherwise.

 

3

 

OPERATING EXPENSES.

 

a.                                       Payment by Tenant.  During
the Term of this Lease, Tenant shall pay to Landlord, as additional Rent, on a
monthly basis Tenant’s Share of the Operating Expenses. To the extent that
Operating Expenses are accounted for on a building by building basis, the
Tenant’s Share of Building shall apply. To the extent that Operating Expenses
are accounted for on an overall Business Park basis, then Tenant’s Share of
Business Park shall apply.

 

b.                                      Operating Expenses.  The
term “Operating Expenses” shall mean all
expenses, costs and disbursements (not specifically excluded from the
definition of Operating Expenses below) of every kind and nature which Landlord
shall pay or become obligated to pay because of or in connection with the
ownership, maintenance, repair and operation of the Business Park or any
portion thereof (including all Buildings and Common Areas of the Business
Park). Operating Expenses shall include, but not be limited to, the following:

 

1)                                      Wages and salaries of all employees engaged
in the operation, maintenance and security of the Business Park, including
taxes, insurance and benefits relating thereto; and the rental cost and overhead
of any office and storage space used to provide such services.

 

2)                                      All supplies and materials used in the
operation, repair or maintenance of the Business Park.

 

3)                                      Cost of all utilities, including surcharges,
for the Business Park, including the cost of water, power and lighting which
are not separately billed to and paid for by Tenant.

 

4)                                      Cost of all maintenance and service
agreements for the Business Park and the equipment thereon, including but not
limited to, security services, exterior window cleaning, janitorial service, engineers,
gardeners and trash removal services.

 

5)                                      All Insurance Costs, as such term is defined
in ¶16.

 

6)                                      Cost of all repairs and general maintenance
(excluding repairs and general maintenance paid by proceeds of insurance or by
Tenant or other third parties, and alterations attributable solely to the other
tenants of the Business Park).

 

7)                                      A reasonable management fee for the property
management of the Business Park.

 

8)                                      The costs of any additional services not
provided to the Business Park at the Commencement Date but thereafter provided
by Landlord in its management of the Business Park.

 

9)                                      The cost of any capital improvements to the
Business Park or any part thereof which are made during the Term hereof with
such cost to be amortized over the useful life of the improvement as reasonably
determined by Landlord.

 

10)                                Real Property Taxes, as that term is defined
in ¶11.

 

11)                                All costs to maintain, repair and replace the
heating, ventilation and air conditioning systems (“HVAC”)
serving the Building and/or the Premises, including the cost of maintenance
contracts.

 

c.                                       Operating Expenses shall not
include:

 

1)                                      Costs paid for directly by Tenant or other
tenants;

 

2)                                      Costs incurred in connection with the
financing, sale or acquisition of the Business Park or any portion thereof;

 

3)                                      Costs incurred in leasing or procuring
tenants (including without limitation, lease commissions, advertising expenses,
attorneys’ fees and expenses of renovating space for tenants);

 

4)                                      Executive salaries of off-site personnel
employed by Landlord except for the charge (or pro rata share) of the property
manager of the Business Park;

 

5)                                      Subject to the provisions of ¶5.b.9)
above, depreciation on the Building or other improvements on the Business Park;

 

6)                                      Legal expenses for disputes with tenants and
any other professional fees of attorneys, auditors or consultants not incurred
in connection with the normal maintenance and operation of the Business Park;

 

7)                                      Expenses which relate to the preparation of
rental space for tenants, including without limitation building permit, license
and inspection costs incurred with respect to the installation or improvements
made for occupants of the Business Park or incurred in renovating or otherwise improving,
decorating, painting or decorating vacant tenant space for the Business Park or
other occupants of the Business Park;

 

8)                                      Costs incurred that are reimbursed by tenants
of the Business Park, including Tenant, or third parties, including insurers;

 

4

 

9)                                      Expenses for repair or replacement covered by
warranties, and any costs due to casualty that are covered by insurance carried
by Landlord;

 

10)                                Rentals and other payments by Landlord under
any ground lease or other lease underlying the Lease, and interest, principal,
points and other fees on debt or amortization of any debt secured in whole or
part by all or any portion of the Business Park;

 

11)                                Repairs or replacements caused by Landlord’s
gross negligence or the gross negligence of Landlord’s employees or agents;

 

12)                                Net income, franchise, capital stock, estate
or inheritance taxes or taxes which are the personal obligation of Landlord or
another tenant of the Business Park;

 

13)                                Landlord’s charitable or political
contributions;

 

14)                                Payments to subsidiaries and affiliates of
Landlord for services to the Business Park for supplies or other materials to
the extent that the cost of such services, supplies or materials exceed the cost
which would have been paid had the services, supplies or materials been
provided by unaffiliated parties on a competitive basis (provided, however, any
fee for management services paid to an affiliate of Landlord shall be in the
amount set forth in ¶5.b.7);

 

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

 

16)                                Advertising and promotional expenditures;

 

17)                                Costs or repairs and other work occasioned by
fire, windstorm or other casualty of an insurable nature to the extent covered
by insurance; or

 

18)                                Costs for sculpture, paintings or other
objects of art other than for normal and customary lobby furnishings (nor
insurance thereon or extraordinary security in connection therewith).

 

d.                                      Extraordinary Services. Tenant shall pay within twenty (20) days of
receipt of an invoice from Landlord the cost of additional or extraordinary services provided to Tenant at
Tenant’s request and not paid or payable by Tenant pursuant to other provisions
of this Lease.

 

e.                                       Impound.  
Landlord reserves the right, at Landlord’s option, to estimate the
annual cost of Operating Expenses performed by Landlord (“Projected
Operating Expenses”) and to require same to be paid in advance.
Tenant shall pay to Landlord, monthly in advance as additional Rent,
one-twelfth (1/12) of the Projected Operating Expenses.

 

f.                                         Adjustment.

 

1)                                      Accounting. 
Within ninety (90) days (or as soon thereafter as possible) after the
close of each calendar year or portion thereof of occupancy, Landlord shall
provide Tenant a statement of such year’s actual Operating Expenses compared to
the Projected Operating Expenses.  If the
actual Operating Expenses are more than the Projected Operating Expenses then
Tenant shall pay Landlord, within twenty (20) days of receipt of a bill
therefor, the difference.    If the
actual Operating Expenses are less than the Projected Operating Expenses, then
Tenant shall receive a credit against future Operating Expenses payments equal
to the difference; provided, that in the case of an overpayment for the final
lease year of the Term, Landlord shall credit the difference against any sums
due from Tenant to Landlord in accordance with the terms of this Lease; and if no
sums are due and unpaid, shall promptly refund the net amount to Tenant.

 

2)                                      Tenant’s Right to Audit. Within sixty (60) days after receipt of
Landlord’s statement setting forth actual Operating Expenses (the “Statement”), Tenant shall have the right to audit at
Landlord’s local offices, at Tenant’s expense, Landlord’s accounts and records
relating to Operating Expenses. Such audit shall be conducted by a certified
public accountant approved by Landlord, which approval shall not be
unreasonably withheld.    If such audit
reveals that Landlord has overcharged Tenant, the amount overcharged shall be
paid to Tenant within thirty (30) days after the audit is concluded. If such
audit reveals that Landlord has undercharged Tenant, the amount of undercharge
shall be paid by Tenant to Landlord within 30 days after the audit is
conducted.  In addition, if the Statement
exceeds the actual Operating Expenses which should have been charged to Tenant
by more than ten percent (10%), the cost of the audit shall be paid by Landlord.

 

3)                                      Proration. 
Tenant’s liability to pay Operating Expenses shall be prorated on the
basis of a 365 (or 366, as the case may be) day year to account for any
fractional portion of a year included at the commencement or expiration of the
Term of this Lease.

 

4)                                      Survival.  
Landlord and Tenant’s obligations to pay for or credit any increase or
decrease in payments pursuant to this ¶5. shall survive this Lease.

 

g.                                      Failure to Pay.  
Failure of Tenant to pay any of the charges required to be paid under
this ¶5. shall constitute a material default and
breach of this Lease and Landlord’s remedies shall be as specified in ¶21.

 

5

 

SECURITY DEPOSIT.  Tenant has previously provided a cash security
deposit (“Security Deposit”) held by Landlord in
the amount set forth in ¶1. with Landlord. If Tenant is in default beyond
applicable notice and cure periods, Landlord can (but without any requirement
to do so) use the Security Deposit or any portion of it to cure the default or
to compensate Landlord for any damages sustained by Landlord resulting from
Tenant’s default. Upon demand, Tenant shall immediately pay to Landlord a sum
equal to the portion of the Security Deposit expended or applied by Landlord to
restore the Security Deposit to its full amount. In no event will Tenant have
the right to apply any part of the Security Deposit to any Rent due under this
Lease. Landlord’s obligations with respect to the Security Deposit are those of
a debtor and not a trustee, and Landlord can commingle the Security Deposit
with Landlord’s general funds. Landlord shall not be required to pay Tenant
interest on the Security Deposit. Each time the Base Rent is increased, Tenant
shall deposit additional funds with Landlord sufficient to increase the
Security Deposit to an amount which bears the same relationship to the Base
Rent as the initial Security Deposit bore to the initial Base Rent. If Tenant
is not in default at the expiration or termination of this Lease and has fully
complied with the provisions of ¶9., ¶13.d.6) and ¶26., Landlord shall return
the Security Deposit to Tenant.

 

USE OF PREMISES

 

a.                                       Tenant’s Use.  
Tenant shall use the Premises solely for the purposes stated in ¶1. and
for no other purposes without obtaining the prior written consent of
Landlord.   Tenant acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises or with respect to the suitability of the
Premises to the conduct of Tenant’s business, nor has Landlord agreed to
undertake any modification, alteration or improvement to the Premises, except
as provided in writing in this Lease. Tenant shall promptly comply with all
laws, statutes, ordinances, orders and governmental regulations now or
hereafter existing affecting the Premises.  
Tenant shall not do or permit anything to be done in or about the
Premises or bring or keep anything in the Premises that will in any way
increase the premiums paid by Landlord on its insurance related to the
Premises.   Tenant will not perform any
act or carry on any practices that may injure the Premises.  Tenant shall not use the Premises for
sleeping, washing clothes, or the preparation, manufacture or mixing of
anything that emits any objectionable odor, noises, vibrations or lights onto
such other tenants.   If, in Landlord’s
reasonable judgment, sound insulation is required to muffle noise produced by
Tenant on the Premises. Tenant at its own cost shall provide all necessary
insulation. Tenant shall not do anything on the Premises which will overload
any existing parking or service to the Premises.   Pets and/or animals of any type (other than seeing
eye dogs) shall not be kept on or about the Premises. Tenant covenants that it
will not interfere with other tenants’ quiet enjoyment of their premises.

 

b.                                      Rules and Regulations. 
Tenant shall comply with and use the Premises in accordance with the
Rules and Regulations attached hereto as Exhibit C and to any reasonable
modifications to such Rules and Regulations as Landlord may adopt from time to
time, provided however that if any rule or regulation is in conflict with any
term, covenant or condition of this Lease, this Lease shall prevail.   In addition, no such rule or regulation, or
any subsequent amendment thereto adopted by Landlord, shall in any material way
alter, reduce or adversely affect any of Tenant’s rights or materially enlarge
Tenant’s obligations under this Lease.

 

EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE

 

a.                                       Emissions. Tenant shall not:

 

1)                                      Knowingly permit any vehicle on the Premises
or in the Commons Areas to emit exhaust which is in violation of any
governmental law, rule, regulation or requirement;

 

2)                                      Discharge, emit or permit to be discharged or
emitted, any liquid, solid or gaseous matter, or any combination thereof, into
the atmosphere or on, into or under the Premises, any building or other improvements
of which the Premises are a part, or the ground or any body of water which
matter, as reasonably determined by Landlord or any governmental entity to be
in violation of law or regulation, and does or may pollute or contaminate the
same, or is, or may become, radioactive or does, or may, adversely affect (a)
the health or safety of persons, wherever located, whether on the Premises or
anywhere else, (b) the condition, use or enjoyment of the Premises or any other
real or personal property, whether on the Premises or anywhere else, or (c) the
Premises or any of the improvements thereto including buildings, foundations,
pipes, utility lines, landscaping or parking areas;

 

3)                                      Produce, or permit to be produced, any
intense glare, light or heat in violation of law or regulations;

 

4)                                      Create, or permit to be created, any sound
pressure level which will interfere with the quiet enjoyment of any real
property outside the Premises, or which will create a nuisance or violate any
governmental law, rule, regulation or requirement;

 

5)                                      Create, or permit to be created, any
vibration that is discernible outside the Premises; or

 

6)                                      Transmit, receive or permit to be transmitted
or received from or to the Premises, any electromagnetic, microwave or other radiation which is or may be harmful or hazardous to any person or property in, or about the Premises,
or anywhere else.

 

6

 

b.                                      Storage and Use.

 

1)                                      Storage. Subject to the uses permitted and prohibited
to Tenant under this Lease, Tenant shall store in appropriate leak proof
containers all solid, liquid or gaseous matter, or any combination thereof,
which matter, if discharged or emitted into the atmosphere, the ground or any
body of water would be in violation of law or regulation and does or may (a)
pollute or contaminate the same, or (b) adversely affect the (i) health or
safety of persons, whether on the Premises or anywhere else, (ii) condition,
use or enjoyment of the Premises or any real or personal property, whether on
the Premises or anywhere else, or (iii) Premises.

 

2)                                      Use.  In
addition, without Landlord’s prior written consent, Tenant shall not use, store
or permit to remain on or about the Premises any solid, liquid or gaseous
matter which is, or may become dangerously radioactive. If Landlord does give
its consent, Tenant shall store the materials in such a manner that no
radioactivity will be detectable outside a designated storage area and Tenant
shall use the materials in such a manner that (a) no real or personal property
outside the designated storage area shall become contaminated thereby and (b)
there are and shall be no adverse effects on the (i) health or safety of
persons, whether on the Premises or anywhere else, (ii) condition, use or enjoyment
of the Premises or any real or personal property thereon or therein, or (iii)
Premises or any of the improvements thereto or thereon.

 

3)                                      Hazardous Materials. Subject to the uses permitted and prohibited
to Tenant under this Lease, Tenant shall store, use, employ, transport and
otherwise deal with all Hazardous Materials (as defined below) employed on or
about the Premises in accordance with all federal, state, or local law,
ordinances, rules or regulations applicable to Hazardous Materials in connection
with or respect to the Premises.

 

c.                                       Disposal of Waste.

 

1)                                      Refuse Disposal.  
Tenant shall not keep any trash, garbage, waste or other refuse on the Premises
except in sanitary containers and shall regularly and frequently remove same
from the Premises. Tenant shall keep all incinerators, containers or other
equipment used for storage or disposal of such materials in a clean and
sanitary condition.

 

2)                                      Sewage Disposal.  
Tenant shall properly dispose of all sanitary sewage and shall not use
the sewage disposal system (a) for the disposal of anything except sanitary
sewage or (b) amounts in excess of the lesser of: (i) that reasonably
contemplated by the uses permitted under this Lease or (ii) that permitted by
any governmental entity. Tenant shall keep the sewage disposal system free of
all obstructions and in good operating condition.

 

3)                                      Disposal of Other Waste.  
Tenant shall properly dispose of all other waste or other matter delivered
to, stored upon, located upon or within, used on, or removed from, the Premises
in such a manner that it does not, and will not, violate any law or regulation
and adversely affect the (a) health or safety of persons, wherever located,
whether on the Premises or elsewhere, (b) condition, use or enjoyment of the
Premises or any other real or personal property, wherever located, whether on
the Premises or anywhere else, or (c) Premises or any of the improvements thereto
or thereon including buildings, foundations, pipes, utility lines, landscaping
or parking areas.

 

d.                                      Information. 
Tenant shall provide Landlord with any and all information regarding
Hazardous Materials in the Premises, including copies of all filings and
reports to governmental entities at the time they are originated, and any other
information requested by Landlord. In the event of any accident, spill or other
incident involving Hazardous Materials, Tenant shall immediately report the
same to Landlord and supply Landlord with all information and reports with
respect to the same. All information described herein shall be provided to
Landlord regardless of any claim by Tenant that it is confidential or
privileged.

 

e.                                       Compliance with Law.  
Notwithstanding any other provision in this Lease to the contrary,
Tenant shall comply with all
laws, statutes, ordinances, regulations, rules and other governmental
requirements now or hereafter existing in complying with its obligations under
this Lease, and in particular, relating to the storage, use and disposal of
Hazardous Materials.

 

f.                                         Indemnity.  
Tenant hereby agrees to indemnify, defend and hold Landlord, its agents,
employees, lenders, shareholders, directors, representatives, successors and
assigns harmless from and against any and all actions, causes of action,
losses, damages, costs, claims, expenses, penalties, obligations or liabilities
of any kind whatsoever (including but not limited to reasonable attorneys’
fees) arising out of or relating to any Hazardous Materials employed, used,
transported across, or otherwise dealt with by Tenant (or invitees, or persons
or entities under the control of Tenant) in connection with or with respect to
the Premises and the Business Park. Notwithstanding any of the provisions of
this Lease, the indemnity obligation of Tenant pursuant to this ¶8.f.
shall survive the termination of this Lease and shall relate to any occurrence
as described in this ¶8.f. occurring in connection with this Lease.
Landlord hereby agrees to indemnify, defend and hold Tenant harmless from and
against any and all actions, causes of action, losses, damages, costs, claims,
expenses, penalties, obligations or liabilities of any kind whatsoever
(including reasonable attorneys’ fees) arising out of or relating to (i)
Hazardous Materials employed, used, transported to the Premises, for which the
Premises are a part thereof, by Landlord, its agents or employees or (ii)
Hazardous Materials existing on, in or under the Premises as of the date of
this Lease. For purposes of this Lease the term “Hazardous
Materials” shall mean any hazardous, toxic or dangerous waste,
substance or material, pollutant or contaminant, as defined for purposes of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Sections

 

7

 

9601
et seq.), as amended, or the Resource Conservation and Recovery Act (42 U.S.C.
Sections 6901 et seq.), as amended, or any other federal, state, or local law,
ordinance, rule or regulation applicable to the Premises, or any substance
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous, or any substance which
contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated
biphenyls (PCB’s), or radon gas, urea formaldehyde, asbestos or lead.

 

9.                                       SIGNS AND COMMUNICATIONS ANTENNAE.  Tenant
shall not place any sign or communications antennae upon or adjacent to the
Premises, except that Tenant may, with Landlord’s prior written consent*,
install (but not on the roof) such signs as are reasonably required to indicate
Tenant’s company name or logo provided such signs are in compliance with
Landlord’s standard sign criteria or install communications antennae used
exclusively by Tenant provided such signs and/or communications antennae are in
compliance with all applicable governmental requirements. The installation of
any sign or communications antennae on or adjacent to the Premises by or for
Tenant shall be subject to the provisions of ¶13. (Repairs and
Maintenance). Tenant shall remove any sign or communications antennae placed on
or adjacent to the Premises by Tenant upon the expiration of the Term or sooner
termination of this Lease, and Tenant shall repair any damage or injury to the
Premises caused thereby, all at Tenant’s expense. If any signs or communications
antennae are not removed, or necessary repairs not made, Landlord shall have
the right to remove the signs or communications antennae and repair any damage
or injury to the Premises at Tenant’s sole cost and expense. Notwithstanding
any other provision of this Lease to the contrary, Landlord reserves all rights
to the use of the roof and the right to install and receive all revenues from
the installation of such other signs or communications antennae (including
related equipment which is currently installed within the Premises) on the
Premises as do not unreasonably interfere with the conduct of Tenant’s business
within the Premises.

 

* Landlord hereby approves existing exterior signage.

 

10.                                 PERSONAL PROPERTY TAXES. Tenant shall pay at least ten (10) days
prior to delinquency all taxes assessed against and levied upon Tenant owned
leasehold improvements, trade fixtures, furnishings, equipment and all personal
property of Tenant contained in the Premises or elsewhere.   When possible, Tenant shall cause its leasehold
improvements, trade fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of
Landlord.  If any of Tenant’s said
personal property shall be assessed with Landlord’s real property, Tenant shall
pay Landlord the taxes attributable to Tenant within ten (10) days after
receipt of a written statement setting forth the taxes applicable to Tenant’s
property.

 

11.                                 REAL PROPERTY TAXES

 

a.                                       Payment of Taxes. 
Landlord shall pay the Building’s Real Property Taxes, as defined in ¶11.c.,
during the Term of this Lease. Subject to ¶11.b., Tenant shall promptly
reimburse Landlord according to ¶5. for Tenant’s Share of Business Park of such
Real Property Taxes paid by Landlord.

 

b.                                      Advance Payment.   In
order to ensure payment when due and before delinquency of any or all Real Property
Taxes, Landlord shall estimate the current Real Property Taxes applicable to
the Premises, and require Tenant to pay monthly in advance with the payment of
the Base Rent an amount which, over the number of months remaining before the
month in which the applicable tax installment would become delinquent, would
provide a fund large enough to fully discharge before delinquency the estimated
installment of Real Property Taxes to be paid. When the actual amount of the
applicable tax bill is known, Landlord may, but is not required to, adjust the
amount of such equal monthly advance payment so as to provide the funds needed
to pay the applicable Real Property Taxes before delinquency.   If the amounts paid to Landlord by Tenant
under the provisions of this ¶11. are insufficient to discharge the obligations
of Tenant to pay such Real Property Taxes as the same become due. Tenant shall
pay to Landlord, upon Landlord’s demand, such additional sums as are necessary
to pay such obligations.   All moneys
paid to Landlord under this ¶11. may be intermingled with other moneys of
Landlord and shall not bear interest.

 

c.                                       Definition of “Real Property
Taxes”.   As used herein, the term “Real
Property Taxes” shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax or other fee, charge, or
excise which may be imposed as a substitute for any of the foregoing (other
than inheritance, personal income or estate taxes) imposed upon the Business
Park by any authority having the direct or indirect power to tax, including any
city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, levied
against any legal or equitable interest of Landlord in the Business Park,
Landlord’s right to rent or other income therefrom, and/or Landlord’s business
of leasing the Business Park.    The term
“Real Property Taxes” shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring, or
changes in applicable law taking effect, during the Term of this Lease,
including but not limited to a change in the ownership of the Business Park or
in the improvements thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated by the parties
hereto.

 

12.                                 UTILITIES. Tenant shall pay for all water, gas, heat,
light, power, telephone, trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon.   If any such services are not separately metered
to Tenant, Tenant shall pay a reasonable proportion, to be determined by
Landlord, of all charges jointly metered with other premises.

 

13.                                 REPAIRS AND MAINTENANCE

 

a.                                       Landlord’s Obligations.   Landlord
shall keep the Business Park, including the foundation, exterior walls, roof,
and common area of the Business Park, and the equipment whether used
exclusively for the Premises or in common with other premises, in good
condition and repair subject to reimbursement by Tenant in accordance with ¶5.
There shall be no abatement of Rent or liability to Tenant on account of any
injury or interference with Tenant’s business with respect to any improvements,
alterations or repairs

 

8

 

made
by Landlord to the Business Park or any part thereof. Notwithstanding the
above, Landlord, at Landlord’s cost, shall repair and maintain the structural
parts of the Premises which structural parts include only the foundation,
exterior walls (excluding the surfaces of all walls and the exterior and
interior of all windows, doors, plate glass, showcases and interior ceiling),
roof structure (but not roof membrane), columns and foundations of the Premises
unless such maintenance and repairs are caused in part or in whole by the act,
neglect, fault of or omission of any duty by Tenant, its agents, servants,
employees or invitees, in which case Tenant shall pay to Landlord, as
additional Rent, the reasonable cost of such maintenance and repairs to the
extent such cost is not covered by insurance proceeds received Landlord.
Landlord shall not be liable for any failure to make any such repairs or to
perform any maintenance unless Landlord shall fail to commence to make such
repairs or perform such maintenance within thirty (30) days after written notice
of the need for such repairs or maintenance is given to Landlord by Tenant,
except in the event of an emergency in which case Landlord shall commence to
perform as soon as practicable possible. In event Landlord fails to perform
such maintenance or commence such repairs with in the time period set forth
above. Tenant shall have the right, after five (5) days written notice to
Landlord, to perform the repairs or maintenance which are the subject of the
notice at Landlord’s cost and Landlord shall reimburse Tenant for the
reasonable costs Tenant incurred in performing Landlord’s obligations under
this ¶13.a.; provided, however, that in no event shall Tenant have the right to
offset against Rent or other sums owing under this Lease, any amount so
incurred by Tenant. There shall be no abatement of Rent and no liability of
Landlord by reason of any injury to or interference with Tenant’s business
arising from the making of any repairs, alterations or improvements in or to or
maintenance of any portion of the Premises or in or to fixtures, appurtenances
and equipment therein. Tenant waives the right to make repairs at Landlord’s
expense under California Civil Code Section 1942 or any other law, statute or
ordinance now or hereafter in effect. Except for the cost of repairing and
maintaining those structural portions of the Premises as described in the first
sentence of this ¶13.a., the cost of any repair, maintenance, alteration or
improvement provided for herein and which is paid for by Landlord shall be
included in the Operating Expenses as defined in ¶5.

 

b.                                      Tenant’s Obligations.

 

1)                                      General.   Tenant
shall, at Tenant’s sole cost and expense and at all times, contract for
janitorial services and supplies, keep the Premises in good order, condition
and repair, including, without limiting the generality of the foregoing, all
equipment or facilities serving the Premises, (except for HVAC which shall be
part of the Operating Expenses as set forth in ¶5.b. hereof) such as
electrical, lighting facilities, boilers, fired or unfired pressure vessels,
fixtures, interior walls, ceilings, floors, windows, window frames, interior
and exterior doors and door frames, plate glass and skylights. Tenant shall not
cause or permit any Hazardous Material to be spilled or released in, on, under
or about the Premises (including through the plumbing or sanitary sewer system)
and shall promptly, at Tenant’s expense, take all investigatory and/or remedial
action reasonably recommended, whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises, the elements surrounding same, or neighboring
properties, that was caused or materially contributed to by Tenant, or
pertaining to or involving any Hazardous Materials and/or storage tank brought
onto the Premises by or for Tenant or under its control. Tenant, in keeping the
Premises in good order, condition and repair, shall exercise and perform good
maintenance practices. Tenant’s obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair.

 

2)                                      Contracts.   Tenant
shall, at Tenant’s sole cost and expense, procure and maintain contracts, with
copies to Landlord, in customary form and substance for, and with contractors
specializing and experienced in, the inspection, maintenance and service of
mechanical, electrical and other systems serving the Premises (except the HVAC
system), if any, servicing the Premises. Tenant shall keep a detailed
preventative maintenance schedule and log showing the frequency of maintenance
on all mechanical, electrical and other systems, (excluding HVAC) servicing the
Premises and provide Landlord with a copy
of same quarterly.

 

3)                                      As-is Condition.   The
parties affirm that Landlord, its subsidiaries, officers, shareholders, directors,
agents and/or employees have made no representations to Tenant respecting the condition
of the Premises except as specifically stated herein.

 

4)                                      ADA.   Tenant
acknowledges that as of the Commencement Date, the Premises may not comply with
the accessibility provisions of Title 24 of the California Code of Regulations
as interpreted by the Office of the State Architect, and that Landlord shall
have no obligation with respect to any such failure of the Premises to so
comply. Tenant shall, at its cost, at any time during the Term as required by
any applicable governmental agency having jurisdiction over the Premises, make such
modifications and alterations to the Premises as may be required in order to
fully comply with the provisions of the ADA, as from time to time amended, and
any and all regulations issued pursuant to or in connection with the ADA in
such a manner as to satisfy the applicable governmental agency or agencies
requiring remediation.   Tenant shall at
least thirty (30) days prior to the commencement of any construction in
connection with satisfaction of the ADA, give written notice to Landlord of its
intended commencement of construction together with sufficient details so as to
reasonably disclose to Landlord the nature of the proposed construction, copies
of any notices received by Tenant from applicable governmental agencies in
connection with the ADA and such other documents or information as Landlord may
reasonably request.    In any event,
notwithstanding anything to the contrary contained in this Lease, prior to the
termination of the Term, Tenant shall, at its cost, make such modifications and
alterations to the Premises as

 

9

 

may
be required to comply fully with the ADA as from time to time amended and any
and all regulations issued thereunder. Tenant shall give the Landlord thirty
(30) days prior written notice as described above in connection with any such
construction. Any and all construction required to so comply with the ADA shall
be completed by Tenant prior to the expiration of the Term.

 

c.                                       Compliance with Governmental
Regulations.   Tenant
shall, at its own cost and expense, promptly and properly observe and comply
with all present and future orders, regulations, directions, rules, laws, ordinances,
and requirements of all governmental authorities (including but not limited to
state, municipal, county and federal governments and their departments,
bureaus, boards and officials) arising from the use or occupancy of, or
applicable to, the Premises or privileges appurtenant to or in connection with
the enjoyment of the Premises.    Tenant
shall also comply with all such rules, laws, ordinances and requirements at the
time Tenant makes any alteration, addition or change to the Premises.

 

d.                                      Miscellaneous.

 

1)                                      Landlord and Tenant shall each do all acts
required to comply with all applicable laws, ordinances and rules of any public
authority relating to their respective maintenance obligations as set forth
herein.

 

2)                                      Tenant expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford the Tenant the
right to make repairs at Landlord’s expense or to terminate this Lease because
of Landlord’s failure to keep the Premises and the Business Park in good order,
condition and repair.  Specifically,
Tenant waives the provisions of California Civil Code Sections 1941 and 1942 with
respect to Landlord’s obligations for Tenant tenantability of the Premises and Tenant’s
right to make repairs and deduct the expenses of such repairs from Rent.

 

3)                                      Tenant shall not place a load upon any floor
of the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord’s structural engineer.   The cost of any such determination made by
Landlord’s structural engineer shall be paid for by Tenant upon demand.

 

4)                                      Except as otherwise expressly provided in
this Lease, Landlord shall have no liability to Tenant nor shall Tenant’s
obligations under this Lease be reduced or abated in any manner whatsoever by
reason of any inconvenience, annoyance, interruption or injury to business
arising from Landlord making any repairs or changes which Landlord is required
to make or is permitted to make by this Lease or by any tenant’s lease or is
required by law to make in or to any portion of the Premises.   Landlord shall nevertheless use reasonable efforts
to minimize any interference with Tenant’s business in the Premises.

 

5)                                      Tenant shall give Landlord prompt notice of
any damage to or defective condition in any part or appurtenance of the
Premises’ mechanical, electrical, plumbing, HVAC or other systems serving,
located in or passing through the Premises. Upon request by Landlord, Tenant
shall provide Landlord with evidence reasonably acceptable to Landlord of
service contracts on such systems.

 

6)                                      Upon the expiration or early termination of
this Lease, Tenant shall return the Premises to Landlord clean and in the same
condition as on the date Tenant took possession, except for normal wear and tear. Any damage to the
Premises, including any structural damage, resulting from Tenant’s use or from
the removal of Tenant’s fixtures, furnishings and equipment shall be repaired
by Tenant prior to the end of the Term at Tenant’s expense.

 

7)                                      Landlord may, at Landlord’s option, choose to
perform any of the Tenant’s obligations in this ¶13.  The cost of any such Tenant’s obligations so
performed by Landlord shall be at Tenant’s sole cost and expense. Tenant shall
reimburse Landlord for any such costs incurred by Landlord in the performance
of such Tenant’s obligations within ten (10) days of receipt of a billing from
Landlord.

 

ALTERATIONS.   Tenant shall not make any alterations to the
Premises or the Business Park without Landlord’s prior written consent, which
consent shall not be unreasonably withheld. Tenant may make non-structural
alterations costing less than $15,000 per event without Landlord’s consent.
Regardless of whether Landlord’s consent for alteration is required, Tenant
must provide Landlord at least fifteen (15) business days prior to the
commencement of any alteration with a complete description of each such
alteration including any building permit drawing(s) and specifications.
Landlord may post notices regarding non-responsibility in accordance with the
laws of the state in which the Premises are located. All alterations made by
Tenant, whether or not subject to the approval of Landlord, shall be performed
by Tenant and its contractors in a first class workmanlike manner and permits
and inspections shall be obtained from all required governmental entities. Any
alterations made shall remain on and be surrendered with the Premises upon
expiration or termination of this Lease, except that Landlord may, within
thirty (30) days before or thirty (30) days after expiration of the Term, elect
to require Tenant to remove some or all some or all of the alterations which
Tenant may have made to the Premises. If Landlord so elects, Tenant shall at
its own cost restore the Premises to the condition designated by Landlord in
its election, before the last day of the Term or within thirty (30) days after
notice of its election is given, whichever is later. If requested by Tenant at
the time of Tenant’s request for approval of alterations or improvements,
Landlord shall advise Tenant in writing whether Landlord shall require Tenant
to remove some or all of said alterations or improvements upon expiration or
termination of the Lease. Should Landlord consent in writing to Tenant’s
alteration of the Premises, Tenant shall contract with a contractor approved by
Landlord for the construction of such alterations, shall secure all appropriate
governmental approvals and permits, and shall complete such alterations with
due diligence in compliance with plans and specifications approved by Landlord.
Tenant shall pay all costs for such construction and shall keep the Premises free
and clear of all mechanics’ liens which may result from construction by Tenant.

 

10

 

15.                                 RELEASE AND INDEMNITY.  As
material consideration to Landlord, Tenant agrees that Landlord shall not be liable
to Tenant for any damage to Tenant or Tenant’s property from any cause, except
for damages resulting from Landlord’s gross negligence or willful misconduct,
and Tenant waives all claims against Landlord for damage to persons or property
arising for any reason, except for damage resulting directly from Landlord’s
breach of its express obligations under this Lease which Landlord has not cured
within a reasonable time after written notice of such breach from Tenant.   Tenant shall indemnify and hold Landlord
harmless from all damages including attorneys’ fees and costs arising out of
any damage to any person or property occurring in, on or about the Premises or
Tenant’s use of the Premises or Tenant’s breach of any term of this Lease.

 

16.                                 INSURANCE

 

a.                                       Payment For Insurance.  
Regardless of whether the Landlord or Tenant is the Insuring Party,
Tenant shall pay for its proportionate share of all insurance required under
this ¶16, (“Insurance Costs”) either directly
or by reimbursement to Landlord as specified in this ¶16.  Premiums for policy periods commencing prior
to or extending beyond the Lease Term shall be prorated to correspond to the
Lease Term. Payment shall be made by Tenant to Landlord within thirty (30) days
following receipt of an invoice for any amount due.

 

b.                                      Liability Insurance.

 

1)                                      Carried by Tenant.   Whether or not Tenant is the Insuring Party.
Tenant shall obtain and keep in force during the Term of this Lease a
commercial general liability policy of insurance protecting Tenant and Landlord
(as an additional insured) against claims for bodily injury, personal injury
and property damage based upon, involving or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto.
Such insurance shall be on an occurrence basis providing single limit coverage
in an amount not less than $13,000,000 per occurrence with an “Additional
Insured-Managers or Landlords of Premises” endorsement and contain an “Amendment
of the Pollution Exclusion” for damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an “insured contract” for the performance
of Tenant’s indemnity obligations under this Lease. The limits of said
insurance required by this Lease or as carried by Tenant shall not, however,
limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All
insurance to be earned by Tenant shall be primary to and not contributory with
any similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only. All insurance coverage required pursuant to this ¶16.
which is to name Landlord as a named insured shall also name Landlord’s
subsidiaries, directors, agents, officers and employees as named insureds.

 

2)                                      Carried by Landlord. In the event Landlord is the Insuring Party,
Landlord shall also maintain liability insurance as described in ¶16.b.1), in
addition to, and not in lieu of the insurance required to be maintained by
Tenant. In the event Tenant is the Insuring Party, Landlord shall in addition
carry Landlord’s Risk Coverage and insure the Premises on Landlord’s umbrelIa
policy and Tenant shall reimburse Landlord the cost thereof. Tenant shall not
be named as an additional insured therein under any insurance obtained by
Landlord in accordance with this ¶16.b.2).

 

c.                                       Property Insurance - Building,
Improvements and Rental Value.

 

1)                                      Building and Improvements.  The
Insuring Party shall obtain and keep in force during the Term of this Lease a
policy or policies in the name of Landlord, with loss payable to Landlord and
to the holders of any mortgages, deeds of trust or ground leases on the
Business Park  (“Lender(s)”),
insuring loss or damage to the Business Park. 
The amount of such insurance shall be equal to the full replacement cost
of the Business Park, as the same shall exist from time to time, or the amount
required by Lender(s), but in no event more than the commercially reasonable
and available insurable value thereof if, by reason of the unique nature or age
of the improvements involved, such latter amount is less than full replacement
cost.    Such policy or policies shall insure
against all risks of direct physical loss or damage (including Boiler and
Machinery coverage and the perils of flood and earthquake), including coverage
for any additional costs resulting from debris removal and reasonable amounts
of coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Business Park
required to be demolished shall also contain an agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation and inflation guard protection
causing an increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor Consumer Price
Index for All Urban Consumers for the city nearest to where the Business Park
is located.   If such insurance coverage
has a deductible clause, then Tenant shall be liable for its proportionate
share of such deductible amount. Even if Landlord is the Insuring Party, Tenant’s
personal property shall be insured by Tenant under ¶16.d. rather than by Landlord.

 

2)                                      Rental Value.  The
Insuring Party shall, in addition, obtain and keep in force during the term of this
Lease a policy or policies in the name of Landlord, with loss payable to
Landlord and Lender(s), insuring
the loss of the full rental and other charges payable by Tenant to Landlord
under this Lease for one (1) year (including all Real Property Taxes, Insurance
Costs and any scheduled Rent
increases).   Said insurance shall
provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year’s loss of Rent from
the date of any such loss. Said insurance shall contain an

 

11

 

agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent, Real
Property Taxes, Insurance Costs and other expenses, if any, otherwise payable
by Tenant, for the next twelve (12) month period. Tenant shall be liable for
any deductible amount in the event of such loss.

 

3)                                      Adjacent Premises.  If
the Premises are part of a larger building, or if the Premises are part of a group
of buildings owned by Landlord which are adjacent to the Premises, the Tenant
shall pay for any increase in the premiums for the property insurance of such
building or buildings if said increase is caused by Tenant’s acts, omissions,
use or occupancy of the Premises.

 

4)                                      Tenant’s Improvements. If the Landlord is the Insuring Party, the
Landlord shall not be required to
insure Tenant’s personal property and leasehold improvements unless the item in
question has become the property of Landlord under the terms of this Lease. If
Tenant is the Insuring Party the policy carried by Tenant under this ¶16.c.
shall insure Tenant’s personal property and leasehold improvements.

 

d.                                      Tenant’s Property Insurance. 
Subject to the requirements of ¶16.e., Tenant at its
cost shall either by separate policy or by endorsement to a policy already
carried, maintain insurance coverage on all of Tenant’s personal property and
Tenant’s leasehold improvements in, on or about the Premises similar in coverage
to that carried by the Insuring Party under ¶16.c. Such insurance
shall be full replacement cost coverage with a deductible of not to exceed
$10,000 per occurrence.   The proceeds
from any such insurance shall be used by Tenant for the replacement of personal
property or the restoration of Tenant owned leasehold improvements.    Tenant shall be the Insuring Party with
respect to the insurance required by this ¶16.d. and shall provide
Landlord with written evidence that such insurance is in force.

 

e.                                       Insurance Policies.    If
Tenant is the Insuring Party, insurance required per this ¶16.
shall be with companies duly licensed to transact business in the state where
the Premises are located, and maintaining during the policy term a “General
Policyholders Rating” of at least A- X, or such other minimal rating as may be
required by Lender(s) as set forth in the most current issue of “Best’s
Insurance Guide.” Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this ¶16.
If Tenant is the Insuring Party, Tenant shall cause to be delivered to Landlord
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of such insurance with the insureds and loss payable
clauses as required by this Lease.  No
such policy shall be cancelable or subject to modification or lapse except
after thirty (30) days prior written notice to Landlord. Tenant shall at least
thirty (30) days prior to the expiration of such policies, furnish Landlord
with evidence of renewals or “insurance binders” evidencing renewal thereof, or
Landlord may order such insurance and charge the cost thereof to Tenant, which
amount shall be payable by Tenant to Landlord upon demand.   If the Insuring Party shall fail to procure
and maintain the insurance required to be carried by the Insuring Party under
this ¶16., the other Party may, but shall not be
required to, procure and maintain the same, but at Tenant’s expense.

 

f.                                         Mutual Waiver. 
Notwithstanding anything to the contrary contained in this Lease, to the
extent that this release and waiver does not invalidate or impair their
respective insurance policies, the parties hereto release each other and their
respective agents, employees, officers, directors, shareholders, successors, assignees
and subtenants from all liability for injury to any person or damage to any
property that is caused by or results from a risk which is actually insured
against pursuant to the provisions of this Lease without regard to the
negligence or willful misconduct of the parties so released. Each party shall
use its best efforts to cause each insurance policy it obtains to provide that
the insurer thereunder waives all right of recovery by way of subrogation as
required herein in connection with any injury or damage covered by the policy.
If such insurance policy cannot be obtained with such waiver of subrogation, or
if such waiver of subrogation is only available at additional cost and the
party for whose benefit the waiver is not obtained does not pay such additional
costs after reasonable notice, then the party obtaining such insurance shall
promptly notify the other party of the inability to obtain insurance coverage
with the waiver of subrogation.

 

DAMAGE AND DESTRUCTION

 

a.                                       Damage - Restoration Required.  In the
event that the Building containing the Premises is damaged by fire or other
casualty which is covered under insurance pursuant to the provisions of ¶16.
above, Landlord shall restore such damage provided that: (i) the destruction of
the Building containing the Premises does not exceed sixty percent (60%) of the
then replacement value of the Building containing the Premises; (ii) the
insurance proceeds are available (inclusive of any deductible amounts) to pay
one hundred percent (100%) of the cost of restoration; and (iii) in the
reasonable judgment of Landlord, the restoration can be completed within two
hundred and seventy (270) days after the date of the damage or casualty under
the laws and regulations of the state, federal, county and municipal authorities
having jurisdiction.   The deductible
amount of any insurance coverage for damage to the Premises shall be paid by
Tenant.  If such conditions apply so as
to require Landlord to restore such damage pursuant to this ¶17.a.,
this Lease shall continue in full force and effect, unless otherwise agreed to
in writing by Landlord and Tenant. Tenant shall be entitled to a proportionate
reduction of Rent while such restoration takes place, such proportionate
reduction to be based on the extent to which the damage and restoration efforts
interfere with Tenant’s business in the Premises. Tenant’s right to a reduction
of Rent hereunder shall be Tenant’s sole and exclusive remedy in connection
with any such damage.

 

b.                                      Damage - Restoration Not
Required. In the event that
the Building containing the Premises is damaged by a fire or other casualty and
Landlord is not required to restore such damage in accordance with the provisions of ¶17.a. immediately above,
Landlord shall have the option to either (i) repair or restore such damage,
with the Lease continuing in full force and effect, but Rent to be
proportionately abated as

 

12

 

provided
in ¶17.a. above; or (ii) give notice to Tenant at any time within thirty (30)
days after the occurrence of such damage terminating this Lease as of a date to
be specified in such notice which date shall not be less than thirty (30) nor
more than sixty (60) days after the date on which such notice of termination is
given. In the event of the giving of such notice of termination, this Lease
shall expire and all interest of Tenant in the Premises shall terminate on the
date, so specified in such notice and the Rent, reduced by any proportionate
reduction in Rent as provided for in ¶17.a. above, shall be paid to the date of
such termination. Notwithstanding the foregoing, if Tenant delivers to Landlord
the funds necessary to make up the shortage (or absence) in insurance proceeds
and the restoration can be completed in a two hundred seventy (270) day period,
as reasonably determined by Landlord, and the destruction of the Building
containing the Premises does not exceed sixty percent (60%) of the then
replacement value, Landlord shall restore the Premises as provided in ¶17.a.
above.

 

c.                                       End of Term Casualty.  
Notwithstanding the provisions of ¶17.a. and ¶17.b. above, either
Landlord or Tenant may terminate this Lease if the Building containing the
Premises is damaged by fire or other casualty, Landlord’s reasonably estimated
cost of restoration of the Building containing the Premises exceeds ten percent
(10%) of the then replacement value of the Building containing the Premises and
such damage or casualty occurs during the last twelve (12) months of the Term
of this Lease (or the Term of any renewal option, if applicable) by giving the
other notice thereof at any time within thirty (30) days following the
occurrence of such damage or casualty. Such notice shall specify the date of
such termination which date shall not be less than thirty (30) nor more than
sixty (60) days following the date on which such notice of termination is
given.  In the event of the giving of
such notice of termination, this Lease shall expire and all interest of Tenant
in the Premises shall terminate on the date so specified in such notice and the
Rent shall be paid to the date of such termination.

 

d.                                      Termination by Tenant.   In
the event that the destruction to the Building containing the Premises cannot be
restored as required herein under applicable laws and regulations within two
hundred seventy (270) days of the damage or casualty, notwithstanding the
availability of insurance proceeds. Tenant shall have the right to terminate
this Lease by giving the Landlord notice thereof within thirty (30) days of
date of the occurrence of such casualty specifying the date of termination
which shall not be less than thirty (30) days nor more than sixty (60) days
following the date on which such notice of termination is given.  In the event of the giving of such notice of
termination, this Lease shall expire and all interest of Tenant in the Premises
shall terminate on the date so specified in such notice and the Rent, reduced
by any proportionate reduction in Rent as provided for in ¶17a. above, shall be
paid to the date of such termination.

 

e.                                       Restoration. 
Landlord agrees that, in any case in which Landlord is required to, or
otherwise agrees to restore the Building containing the Premises, Landlord
shall proceed with due diligence to make all appropriate claims and
applications for the proceeds of insurance and to apply for and obtain all
permits necessary for the restoration of the Building containing the
Premises.   Landlord shall use reasonable
efforts to enforce any and all provisions in any mortgage, deed of trust or
other encumbrance on the Building containing the Premises requiring Landlord
and Lender to permit insurance proceeds to be used for restoration.   Landlord shall restore the Premises at least
equal to the condition existing prior to the date of the damage if permitted by
applicable law.   Landlord shall not be
required to restore alterations made by Tenant, Tenant’s improvements, Tenant’s
trade fixtures and Tenant’s personal property, such excluded items being the
sole responsibility of Tenant to restore provided, however, that Landlord
shall, to the extent of available insurance proceeds, restore Tenant
Improvements to the Premises made by Tenant such as interior offices, lab and
production improvements and other like improvements.

 

f.                                         Waiver. 
Tenant waives the provisions of Civil Code § 1932(2) and Civil Code §
1933(4) with respect to any destruction of the Premises.

 

8.                                       CONDEMNATION

 

a.                                       Definitions.   The
following definitions shall apply: (1) “Condemnation”
means (a) the exercise of any governmental power of eminent domain, whether by
legal proceedings or otherwise by condemnor, or (b) the voluntary sale or
transfer by Landlord to any condemnor either under threat of condemnation or
while legal proceedings for condemnation are proceeding; (2) “Date of Taking” means the date the condemnor has right to
possession of the property being condemned; (3) “Award”
means all compensation, sums or anything of value awarded, paid or received on
a total or partial Condemnation; and (4) “Condemnor”
means any public or quasi-public authority, or private corporation or
individual, having power of Condemnation.

 

b.                                      Obligations to be Governed by
Lease.  If during the Term of the Lease there is any
taking of all or any part of the Building containing the Premises, the rights
and obligations of the parties shall be determined strictly pursuant to this
Lease. Each party waives the provisions of Code of Civil Procedure § 1265.130
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial condemnation of the Premises.

 

c.                                       Total or Partial Taking. If the Building containing the Premises are
totally taken by Condemnation, this Lease shall terminate on the Date of
Taking. If any portion of the Building containing the Premises is taken by
Condemnation, this Lease shall remain in effect, except that Tenant can elect
to terminate this Lease if the remaining portion of the Premises is rendered
unsuitable for Tenant’s continued use of the Premises. If Tenant elects to
terminate this Lease, Tenant must exercise its right to terminate by giving
notice to Landlord within thirty (30) days after the nature and extent of the
Condemnation have been finally determined. If Tenant elects to terminate this
Lease, Tenant shall also notify Landlord of the date of termination, which date
shall not be earlier than thirty (30) days nor later than ninety (90) days
after Tenant has notified Landlord of its election to terminate; except that
this Lease shall terminate on the

 

13

 

Date
of Taking if the Date of Taking falls on a date before the date of termination
as designated by Tenant. If any portion of the Premises is taken by
Condemnation and this Lease remains in full force and effect, on the Date of
Taking the Base Rent shall be reduced by an amount in the same ratio as the
total number of square feet in the Premises taken bears to the total number of
square feet in the Premises immediately before the Date of Taking. Any Award
for the taking of all or any part of the Premises under the power of eminent
domain or any payment made under threat of the exercise of such power shall be
the property of Landlord, whether such Award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Tenant shall be entitled to any
compensation separately awarded to Tenant for Tenant’s relocation expenses
and/or loss of Tenant’s trade fixtures.

 

19.                                 ASSIGNMENT OR SUBLEASE

 

a.                                       Tenant shall not assign or encumber its
interest in this Lease or the Premises or sublease all or any part of the
Premises or allow any other person or entity (except Tenant’s authorized
representatives, employees, invitees or guests) to occupy or use all or any
part of the Premises without first obtaining Landlord’s consent, which consent
shall not be unreasonably withheld. Any assignment, encumbrance or sublease
without Landlord’s prior written consent shall be voidable and at Landlord’s
election, shall constitute a default. If Tenant is a partnership, a withdrawal
or change, voluntary, involuntary or by operation of law of any partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment. If
Tenant consists of more than one person, a purported assignment, voluntary or
involuntary or by operation of law from one person to the other shall be deemed
a voluntary assignment. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or sale or other transfer of a
controlling percentage of the capital stock of Tenant, or the sale of at least
fifty percent (50%) of the value of the assets of Tenant shall be deemed a
voluntary assignment. Notwithstanding the sentence immediately above, if the
Tenant is a corporation, the Tenant shall be entitled to assign this Lease
without Landlord’s prior written consent in the event of a reorganization of
Tenant through the sale of all or a portion of Tenant’s Capital Stock by
Initial Public Offering (such event shall be referred to as a transfer to a “Permitted Transferee”). In connection with any assignment,
Landlord shall be entitled to require an increase in the Security Deposit to
the extent that such increase should be commercially reasonable in Landlord’s
discretion given the financial condition of Tenant and the assignee following
such event. In connection with any Sublease, Landlord shall be entitled to hold
any Security Deposit paid by Sublessee to Sublessor, which Security Deposit
shall be held by Landlord in accordance with the provisions of the Sublease.
Tenant shall give Landlord at least sixty (60) days prior written notice of any
intended transfer to a Permitted Transferee and in connection with such
transfer shall provide to Landlord copies of any documents or other information
as Landlord may reasonably request. Unless otherwise expressly agreed in
writing by Landlord, no assignment shall relieve Tenant of any of its
obligations pursuant to this Lease.

 

In
the event of a sublease all Sublease Rent received by Tenant in excess of the
Rent payable by Tenant to Landlord under this Lease applicable to the portion
of the Premises subleased shall be deemed the “Bonus
Amount”, after deducting therefrom the “Subleasing
Costs” which shall include (i) commercially reasonable brokerage
commissions, (ii) tenant improvements made at the request of a subtenant and
(iii) attorneys’ fees incurred by Tenant in negotiating and documenting the
sublease not to exceed One Thousand Dollars ($1,000.00) per request, which
Subleasing Costs shall be amortized over the Term of the Sublease for the
purpose of determining the Bonus Amount. Fifty percent (50%) of the Bonus
Amount shall be promptly paid to Landlord following receipt by Tenant. If the
Subleasing Costs are not known at the commencement of the sublease, the 50% of
Bonus Amount due Landlord will be computed without deduction of Subleasing
Costs and promptly paid to Landlord. Once the Subleasing Costs are presented to
and verified by Landlord, the Bonus Amount paid by Tenant to date will be
adjusted and Landlord shall give Tenant a credit against the next payment(s)
due to Landlord from Tenant. The term “Sublease Rent”
as used herein shall include any consideration of any kind received by Tenant
from or on behalf of any subtenant, if the sums are related in any manner to
the Premises, including, without limitation Rent, operating expense payments,
bonus money and payments for the purchase of or usage of Tenant’s furniture,
fixtures, inventory, equipment, accounts, goodwill, general intangibles and
other assets.  Each sublease approved by
Landlord shall stand alone as to the computation of the Bonus Amount

 

In
the event of an assignment all Transfer Payments received by Tenant shall be
deemed the “Bonus Amount”, after deducting
therefrom the “Assignment Costs” which shall
include (i) commercially reasonable brokerage commissions and (ii) attorneys’
fees incurred by Tenant in negotiating and documenting the assignment not to
exceed One Thousand Dollars ($1,000.00) per request. Seventy-five percent (75%)
of the Bonus Amount shall be promptly paid to Landlord following receipt by
Tenant. If the Assignment Costs are not known at the commencement of the
Assignment, the 75% of Bonus Amount due Landlord will be computed without
deduction of Assignment Costs and promptly paid to Landlord. Once the
Assignment Costs are presented to and verified by Landlord, the Bonus Amount
paid by Tenant to date will be adjusted and Landlord shall give Tenant a credit
against the next payment(s) due to Landlord from Tenant. The term “Transfer Payments” as used herein shall include any
consideration of any kind received by Tenant from or on behalf of any assignee,
if the sums are related in any manner to the Premises, including, without
limitation assignment consideration, Rent, operating expense payments, bonus
money and payments for the purchase of or usage of Tenant’s furniture,
fixtures, inventory, equipment, accounts, goodwill, general intangibles and
other assets.

 

If
Tenant requests Landlord to consent to a proposed assignment or subletting,
Tenant shall pay to Landlord, whether or not consent is ultimately given, an
amount equal to Landlord’s reasonable attorneys’ fees and costs incurred in
connection with such request. Each request for consent to an assignment or
subletting shall be in writing, and shall be accompanied by information as may
be relevant to Landlord’s

 

14

 

determination
as to the financial and operational responsibility and stability of the
proposed assignee or sublessee and the appropriateness of the proposed use by
such assignee or sublessee. Such information shall include a summary of the
proposed use of, and any proposed modifications to, the Premises. Tenant shall
provide Landlord with such other or additional information and/or documentation
as may reasonably be requested by Landlord. Tenant shall, upon completion of
any assignment or subletting of all or any portion of the Premises, immediately
and irrevocably assign to Landlord as security for Tenant’s obligations under
the Lease, all Sublease Rent and/or Transfer Payments from any such subletting
or assignment. Landlord, as assignee and attorney in fact for Tenant, shall
have the right to collect all rent and other revenues collectable pursuant to
any such sublet or assignment and apply such rent and other revenues towards
Tenant’s obligations under the Lease.

 

b.             No interest of Tenant in this Lease shall be
assignable by involuntary assignment through operation of law (including
without limitation the transfer of this Lease by testacy or intestacy).  Each of the following acts shall be
considered an involuntary assignment: (a) if Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or institutes
proceedings under the Bankruptcy Act in which Tenant is the bankrupt; or if
Tenant is a partnership or consists of more than one person or entity, if any
partner of the partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors; or (b) if a
writ of attachment or execution is levied on this Lease; or (c) if in any
proceeding or action to which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises. An involuntary assignment shall
constitute a default by Tenant and Landlord shall have the right to elect to
terminate this Lease, in which case this Lease shall not be treated as an asset
of Tenant.

 

c.             Notwithstanding any provision to this Lease
to the contrary, in any event where Landlord’s consent is required for
assignment or sublease, Landlord may, at its option, elect to terminate the
Lease instead of approving the requested assignment or sublease. Should
Landlord so elect to terminate this Lease, all of the obligations of the
parties thereunder shall terminate on the later of sixty (60) days following
Landlord’s notice to Tenant of its election hereunder, or the effective date of
the proposed assignment or subletting sought by the Tenant, but in no event
later than one hundred twenty (120) days following the date of Landlord’s
election under this ¶19.c.  At the time
of termination, all obligations of both parties hereunder shall terminate as to
obligations thereafter accruing except as otherwise expressly provided in this
Lease.

 

DEFAULT. The
occurrence of any of the following shall constitute a default by Tenant: (a) a
failure of Tenant to pay Rent within ten (10) days of its due date or a failure
of Tenant to pay Operating Expenses and all other charges within ten (10) days
of Tenant’s receipt of Landlord’s billing for same; (b) abandonment of the
Premises; or (c) failure to timely perform any other provision of this Lease
where such failure continues for a period in excess of thirty days following
notice of such failure, provided however, that if the nature of such failure is
such that it cannot reasonably be cured within thirty days, then Tenant shall
not be in default if Tenant commences to cure such failure within thirty days
and thereafter diligently prosecutes the cure to completion. Tenant shall give
written notice to Landlord of any default by Landlord of its obligations
pursuant to this Lease asserted by Tenant (with a copy of such notice to any
lender (“Lender”) against the Premises).
Landlord and Landlord’s Lender shall be afforded a reasonable opportunity to
cure any claimed default by Landlord and Landlord shall not be considered in
default so long as Landlord (or Landlord’s Lender) commences such cure within a
reasonable period of time and thereafter, continues to attempt to complete such
cure. Landlord, from time to time, shall provide Tenant with the name and
address of its Lender.

 

LANDLORD’S REMEDIES. Landlord shall have the following remedies if Tenant is in default.
(These remedies are not exclusive; they are cumulative and in addition to any
remedies now or later allowed by law):

 

a.             Landlord may continue this Lease in full
force and effect, and this Lease will continue in effect so long as Landlord
does not terminate Tenant’s right to possession, and Landlord shall have the
right to collect Rent when due.  During
the period Tenant is in default, Landlord can enter the Premises and relet the Premises,
or any part of the Premises, to third parties for Tenant’s account.  Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises, including
without limitation, brokers’ commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease. Tenant shall pay to Landlord
the Rent due under this Lease on the dates the Rent is due, less the Rent
Landlord receives from any reletting.  No
act by Landlord allowed by this ¶21.a. shall terminate this Lease unless
Landlord notifies Tenant in writing that Landlord elects to terminate this
Lease.  After Tenant’s default and for so
long as Landlord does not terminate Tenant’s right to possession of the
Premises, if Tenant obtains Landlord’s consent, Tenant shall have the right to
assign or sublet its interest in this Lease, but Tenant shall not be released
from liability. Landlord’s consent to such a proposed assignment or subletting
shall not be unreasonably withheld.  If
Landlord elects to relet the Premises as provided in this ¶21.a., Rent that
Landlord receives from reletting shall be applied to the payment of: first, any
indebtedness from Tenant to Landlord other than Rent due from Tenant; second,
all costs, including for maintenance incurred by Landlord in reletting; and
third, Rent due and unpaid under this Lease. 
After deducting the payments referred to in this ¶21.a.,
any sum remaining from the Rent Landlord receives from reletting shall be held
by Landlord and applied in payment of future Rent as Rent becomes due under
this Lease. In no event shall Tenant be entitled to any excess Rent received by
Landlord.  If, on the date Rent is due under
this Lease, the Rent received from the reletting is less than the Rent due on
that date. Tenant shall pay to Landlord, in addition to the remaining Rent due,
all costs including for maintenance Landlord incurred in reletting that remain
after applying the Rent received from the reletting as provided in this ¶21.a.;
and

 

b.             Landlord may terminate Tenant’s right to
possession of the Premises at any time. 
No act by Landlord other than giving express written notice thereof to
Tenant shall terminate this Lease.  Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver
on Landlord’s initiative to

 

15

 

protect Landlord’s interest under this Lease shall not constitute a
termination of Tenant’s right to possession. Upon termination of Tenant’s right
to possession, Landlord has the right to recover from Tenant: (1) the Worth of
the unpaid Rent that had been earned at the time of termination of Tenant’s
right to possession; (2) the Worth of the amount by which the unpaid Rent that
would have been earned after the date of termination until the time of award
exceeds the amount of the loss of Rent that Tenant proves could have been
reasonably avoided; (3) the Worth of the amount of the unpaid Rent that would
have been earned after the award throughout the remaining Term of the Lease to
the extent such unpaid Rent exceeds the amount of the loss of Rent that Tenant
proves could have been reasonably avoided; and (4) any other amount, including
but not limited to, reasonable expenses incurred to relet the Premises, court
costs, attorneys’ fees and collection costs necessary to compensate Landlord
for all detriment caused by Tenant’s default. The “Worth”, as used above in (1)
and (2) in this ¶21.b. is to be computed by allowing interest at the lesser of 18 percent per annum or the maximum legal interest
rate permitted by law. The “Worth”, as used above in (3) in this ¶21.b., is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award, plus one percent (1%).

 

22.           ENTRY OF PREMISES. 
Landlord and/or its authorized representatives shall have the right
after twenty-four (24) hour prior notice except for emergencies to enter the
Premises at all reasonable times for any of the following purposes: (a) to
determine whether the Premises are in good condition and whether Tenant is
complying with its obligations under this Lease; (b) to do any necessary
maintenance and to make any restoration to the Premises that Landlord has the
right or obligation to perform; (c) to post “for sale” signs at any time during
the Term, or to post “for rent” or “for lease” signs during the last one
hundred eighty (180) days of the Term or during any period while Tenant is in
default; (d) to show the Premises to prospective brokers, agents, buyers,
tenants or persons interested in leasing or purchasing the Premises, at any
time during the Term: or (e) to repair, maintain or improve the Premises and to
erect scaffolding and protective barricades around and about the Premises but
not so as to prevent entry to the Premises or to unreasonably interfere with
Tenant’s use of the Premises and to do any other act or thing necessary for the
safety or preservation of the Premises. 
Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other
damage arising out of Landlord’s entry onto the Premises as provided in this ¶22.  Tenant shall not be entitled to an abatement
or reduction of Rent if Landlord exercises any rights reserved in this ¶22.  Landlord shall conduct its activities on the
Premises as provided herein in a commercially reasonable manner that will
lessen the inconvenience, annoyance or disturbance to Tenant.

 

23.           SUBORDINATION.

 

a.             Automatic 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 Landlord’s Lender, 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 Premises,
(ii) the lien of any mortgage or deed of trust which may now exist or hereafter
be executed affecting the Premises, and (iii) the lien of any mortgage or deed
of trust which may hereafter be executed in any amount for which the Premises,
ground leases or underlying leases, or Landlord’s interest or estate in any of
said items is specified as security.  In
the event that 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, attorn to and become the Tenant of the successor in interest (including
without limitation to Lender) to Landlord (“Successor”).  In connection with any such termination of a
ground lease or underlying lease or any foreclosure or conveyance in lieu of
foreclosure made in connection with any mortgage or deed of trust, then so long
as Tenant is not in default after all applicable notice and cure periods
pursuant to this Lease, Tenant shall not be disturbed in its possession of the
Premises or in the enjoyment of its rights pursuant to this Lease during the
Term of this Lease or any extension or renewal thereof.   Notwithstanding any subordination of this
Lease to the lien of any mortgage or deed of trust, the Lender, at any time
shall be entitled to subordinate the lien of its mortgage or deed of trust to
this Lease by filing a notice of subordination in the County in which the
Premises are located, and Lender shall agree in connection with any such filing,
that Tenant shall not be disturbed in its possession of the Premises so long as
Tenant is not in default pursuant to this Lease.  In connection with any such filing, Tenant
shall be obligated to attorn to and to become a Tenant of any Successor.

 

b.             Additional Subordination.  From
time to time at the request of Landlord, Tenant covenants and agrees to execute
and deliver within ten (10) days following the date of written request from
Landlord, documents evidencing the priority or subordination of this Lease with
respect to any ground lease or underlying lease or the lien of any mortgage or
deed of trust in connection with the Premises. Any and all such documents shall
be in such form as is reasonably acceptable to the Lender(s).  Any subordination agreement so requested by
Landlord shall provide for Tenant to attorn to the Successor and shall further
provide that Tenant shall not be disturbed in its possession of the Premises or
in the enjoyment of its rights pursuant to this Lease so long as Tenant is not
in default after all applicable notice and cure periods with respect to its
obligations pursuant to the Lease.  Any
such Subordination, Non-disturbance and Attornment Agreement shall be recorded
in the official records of the office of the County Recorder in the County in which
the Premises is located.

 

c.             Notice from Lender. 
Tenant shall be entitled to rely upon any notice given by a Lender in
connection with the Premises requesting that Tenant make all future Rent
payments to such Lender, and Tenant shall not be liable to Landlord for any
payment made to such Lender in accordance with such notice. Notwithstanding any
provision to the contrary of this Lease, a Successor shall not be (i) obligated
to recognize the payment of Rent for a period of more than one month in
advance; (ii) responsible for liabilities accrued pursuant to this Lease prior
to the date (“Succession Date”) upon which the
Successor becomes the “Landlord”
hereunder;  (iii) responsible to cure defaults
of the Landlord pursuant to this
Lease existing as of the Succession Date, except for defaults of a continuing
nature of which Successor received notice (as provided in Paragraph 20) and in
respect of which Tenant afforded Successor a

 

16

 

reasonable cure period following such notice; (iv) responsible for any
Security Deposit delivered by Tenant pursuant to this Lease not actually
received by the Successor; or (v) bound by any execution, modification,
termination or extension of this Lease or any grant of a purchase option or
right of first refusal or any other action taken by the Landlord pursuant to
this Lease, except in accordance with the provisions of an assignment of leases
executed by Landlord in favor of a Lender.

 

24.           ESTOPPEL CERTIFICATE; TENANT
FINANCIAL STATEMENTS.  Tenant, at any time and from time to time. upon
not less than ten (10) days written notice from Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord’s request, to any existing
or prospective purchaser, ground lessor or mortgagee of any part of the
Premises, a certificate of Tenant stating: (a) that Tenant has accepted the
Premises (or, if Tenant has not done so, Tenant has not accepted the Premises
and specifying the reasons therefor); (b) the Commencement and Expiration Dates
of this Lease; (c) that this Lease is unmodified and in full force and effect
(or, if there have been modifications, that same is in full force and effect as
modified and stating the modifications); (d) whether or not to the best of
Tenant’s knowledge there are then existing any defenses against the enforcement
of any of the obligations of Tenant under this Lease (and, if so, specifying
same); (e) whether or not to the best of Tenant’s knowledge there are then
existing any defaults by Landlord in the performance of its obligations under
this Lease (and, if so, specifying same); (f) the dates, if any, to which the
Rent and other charges under this Lease have been paid; (g) whether or not
there are Rent increases during the Lease Term and if so the amount of same;
(h) whether or not the Lease contains any options or rights of first offer or
first refusal; (i) the amount of any Security Deposit or other sums due Tenant;
(j) the current notice address for Tenant; and (k) any other information that may
reasonably be required by any of such persons. 
It is intended that any such certificate of Tenant delivered pursuant to
this ¶24. may be relied upon by Landlord and any existing or prospective
purchaser, ground lessor or mortgagee of the Building containing the
Premises.  Tenant agrees, at any lime
upon request by Landlord, to deliver to Landlord the most recent financial
statements of Tenant with an opinion from a certified public accountant, if
available, including a balance sheet and profit and loss statement for the most
recent prior three years, all prepared in accordance with generally accepted
accounting principles consistently applied. 
Landlord agrees to hold such financial statements confidential and to
share them only with prospective lenders and purchasers of the Premises.  Other than for prospective lenders and
purchasers, Landlord shall not request financial statements more often than
twice in any calendar year.

 

25.           WAIVER.  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.  No act or conduct of Landlord, including
without limitation, acceptance of the keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the Term. Only written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish termination of the
Lease. Landlord’s consent to or approval of any act by Tenant requiring
Landlord’s consent or approval shall not be deemed to waive or render
unnecessary Landlord’s consent to or approval of any subsequent act by
Tenant.  Any waiver by Landlord of any
Default must be in writing and shall not be a waiver of any other Default
concerning the same or any other provision of the Lease.

 

26.           SURRENDER OF PREMISES.  Upon
expiration of the Term, Tenant shall surrender to Landlord the Premises and all
tenant improvements and alterations in the same condition as existed at the
Commencement Date, except for ordinary wear and tear and alterations which
Tenant has the right or is obligated to remove under the provisions of ¶14.
herein.  Tenant shall remove all personal
property including, without limitation, all wallpaper, paneling and other
decorative improvements or fixtures and shall perform all restoration made
necessary by the removal of any alterations or Tenant’s personal property
before the expiration of the Term, including, for example, restoring all wall
surfaces to their condition as of the Commencement Date.  In any event, Tenant shall cause the following
to be done prior to the expiration or the sooner termination of this Lease: (i)
all interior walls shall be painted or cleaned so that they appear freshly
painted; (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 tile shall be replaced; (v) all exterior and interior
windows shall be washed; (vi) 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; and (vii) 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).  Landlord can elect to retain or dispose of in
any manner Tenant’s personal property not removed from the Premises by Tenant
prior to the expiration of the Term. 
Tenant waives all claims against Landlord for any damage to Tenant
resulting from Landlord’s retention or disposition of Tenant’s personal
property.  Tenant shall be liable to
Landlord for Landlord’s cost for storage, removal and disposal of Tenant’s
personal property.

 

27.           HOLDOVER.  If
Tenant with Landlord’s consent remains in possession of the Premises after
expiration of the Term or after the date in any notice given by Landlord to
Tenant terminating this Lease, such possession by Tenant shall be deemed to be
a month to month tenancy cancelable by either party on thirty (30) days written
notice given at any time by either party and all provisions of this Lease,
except those pertaining to Term, renewal options and Base Rent, shall apply and
Tenant shall thereafter pay monthly Base Rent computed on a per-month basis,
for each month or part thereof (without reduction for any partial month) that
Tenant remains in possession, in an amount equal to one hundred fifty percent
(150%) of the Base Rent that was in effect for the last full calendar month
immediately preceding expiration of the Term.

 

If Tenant holds over after the expiration or earlier termination of the
Term hereof, without the consent of Landlord, Tenant shall become a Tenant at
sufferance only with a continuing obligation to pay Rent provided that the Base
Rent shall be one hundred fifty percent (150%) of the Base Rent that was in
effect for the last full calendar month immediately preceding expiration of the
Term for the first thirty (30) days of such holdover, and two hundred percent
(200%) of such Base Rent thereafter during the pendency of such holdover.
Acceptance by Landlord of Rent after expiration or earlier termination of the
Term shall not constitute a consent to a holdover
hereunder or result in a renewal. The foregoing provisions of this ¶27. are in addition to and do not affect Landlord’s right of
re-entry or any rights of Landlord hereunder or as otherwise provided by law.
If Tenant fails to surrender the Premises upon the expiration of this Lease
despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability arising out of such failure, including
without limitation, any claim made

 

17

 

by any succeeding tenant founded on or resulting from such failure to
surrender. No provision of this ¶27. shall be construed as implied consent by
Landlord to any holding over by Tenant. Landlord expressly reserves the right
to require Tenant to surrender possession of the Premises to Landlord as
provided in this Lease upon expiration or other termination of this Lease. The
provisions of this ¶27. shall not be considered to limit or constitute a waiver
of any other rights or remedies of Landlord provided in this Lease or at law.

 

28.           NOTICES.  All
notices, demands, or other communications required or contemplated under this
Lease, including any notice delivered to Tenant by the Lender, shall be in
writing and shall be deemed to have been duly given 48 hours from the time of
mailing if mailed by registered or certified mail, return receipt requested,
postage prepaid, or 24 hours from the time of shipping by overnight carrier, or
the actual time of delivery if delivered by personal service to the parties at
the addresses specified in ¶1.  Either
Tenant or Landlord may change the address to which notices are to be given to
such party hereunder by giving written notice of such change of address to the other
in accordance with the notice provisions hereof.

 

29.           TENANT IMPROVEMENTS. 
Landlord shall deliver the Premises to Tenant in its “as is” condition
as of the Commencement Date. Within a reasonable period of time following the
mutual execution of this Lease, Landlord shall perform the repairs to the
Premises as set forth in Tenant’s Estimate of Repair Costs attached hereto as Exhibit
D. Within thirty (30) days of Landlord’s billing, Tenant shall reimburse
Landlord for the cost, if any, of said repairs in excess of $65,377.00.

 

30.           FIRST RIGHT TO NEGOTIATE ON
AVAILABLE EXPANSION SPACE.
Tenant shall have the First Right to Negotiate on any space that becomes vacant
and available in the Building in which the Premises is located which is not
subject to any then existing renewal, expansion or extension rights of other
tenant(s) in the Project (the “Available Expansion Space”)
at any time during the initial Term of the Lease. Should Landlord receive
either a proposal to lease or a request for proposal on behalf of a prospective
tenant for all or part of the Available Expansion Space (the “Offered Space”), Landlord will so notify Tenant.  If Tenant wishes to lease the Offered Space,
Tenant shall so notify Landlord in writing within five (5) business days and
diligently proceed with negotiations on the Offered Space.  If the negotiations do not result in Tenant
and Landlord executing a letter of intent for the Offered Space within ten (10)
days of Tenant’s notice to Landlord or if Tenant and Landlord do not execute a
lease for the Offered Space within thirty (30) days of Tenant’s notice to
Landlord, Tenant’s First Right to Negotiate on the Offered Space shall
terminate.

 

31.           MISCELLANEOUS PROVISIONS.

 

a.             Time of Essence.  Time
is of the essence of each provision of this Lease.

 

b.             Successor. This Lease shall be binding on and inure to
the benefit of the parties and their successors, except as provided in ¶19.

 

c.             Landlord’s Consent. Any consent required by Landlord under this
Lease must be granted in writing and may be withheld or conditioned by Landlord
in its sole and absolute discretion unless otherwise provided.

 

d.             Personal Rights. Notwithstanding any other provision(s) of
this Lease to the contrary, any provisions of this Lease providing for the
renewal, extension or early termination of the Lease and/or for the expansion of
the Premises (to include without limitation rights to negotiate, rights of
first refusal, etc.) shall be (i) personal to the original Tenant and shall not
be assignable or otherwise transferable other than to a Permitted Transferee
(either voluntarily or involuntarily) to any third party for any reason
whatsoever, and (ii) conditioned upon Tenant not then being in default under
this Lease.

 

e.             Commissions. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for the Broker(s) identified in ¶1., who shall be compensated by Landlord in accordance with
the separate agreement between Landlord and the Broker(s).

 

f.              Other Charges; Legal Fees.  If
Landlord becomes a party to any litigation concerning this Lease or the Premises
by reason of any act or omission of Tenant or Tenant’s authorized
representatives, Tenant shall be liable to Landlord for reasonable attorneys’
fees and court costs incurred by Landlord in the litigation. Should the court
render a decision which is thereafter appealed by any party thereto Tenant
shall be liable to Landlord for reasonable attorneys’ fees and court costs
incurred by Landlord in connection with such appeal.

 

If either party commences any litigation against the other party or
files an appeal of a decision arising out of or in connection with the Lease,
the prevailing party shall be entitled to recover from the other party
reasonable attorneys’ fees and costs of suit. If Landlord employs a collection
agency to recover delinquent charges, Tenant agrees to pay all collection
agency and attorneys’ fees charged to Landlord in addition to Rent, late
charges, interest and other sums payable under this Lease.

 

g.             Landlord’s Successors. In the event of a sale or conveyance by
Landlord of the Building containing the Premises, the same shall operate to
release Landlord from any liability under this Lease, including as to any
Security Deposit to the extent transferred to Landlord’s successor-in-interest,
and in such event Landlord’s successor in interest shall be solely responsible
for all obligations of Landlord under this Lease.

 

h.             Interpretation. This Lease shall be construed and
interpreted in accordance with the laws of the state in which the Premises are
located. This Lease constitutes the entire agreement
between the parties with respect to the Premises, except for such guarantees or
modifications as may be executed in writing by the parties from lime to time.
When required by the context of this Lease, the singular shall include the

 

18

 

plural, and the masculine shall include the feminine and/or neuter. “Party”
shall mean Landlord of Tenant If more than one person or entity constitutes
Landlord or Tenant, the obligations imposed upon that party shall be joint and
several. The enforceability, invalidity or illegality of any provision shall not
render the other provisions unenforceable, invalid or illegal.

 

i.              Auctions. 
Tenant shall not conduct, nor permit to be conducted, either voluntarily
or involuntarily, any auction upon the Premises without first having obtained
Landlord’s prior written consent. Notwithstanding anything to the contrary in
this Lease, Landlord shall not be obligated to exercise any standard of
reasonableness in determining whether to grant such consent.

 

j.              Quiet Possession.  Upon
payment by Tenant of the Rent for the Premises and the observance and performance
of all of the covenants, conditions and provisions on Tenant’s part to be
observed and performed under this Lease, Tenant shall have quiet possession of
the Premises for the entire Term hereof subject to all of the provisions of
this Lease.

 

k.             Conflict.  Any
conflict between the printed provisions of this Lease and the typewritten or
handwritten provisions shall be controlled by the typewritten or handwritten
provisions.

 

l.              Offer. Preparation of this Lease by Landlord or
Landlord’s agent and submission of same to Tenant shall not be deemed an offer
to lease to Tenant. This Lease is not intended to be binding until executed by
all Parties hereto.

 

m.            Amendments. This Lease may be modified only in writing,
signed by the Parties in interest at the time of the modification. The parties
shall amend this Lease from time to time to reflect any adjustments that are
made to the Base Rent or other Rent payable under this Lease. As long as they
do not materially change Tenant’s obligations hereunder, Tenant agrees to make
reasonable non-monetary modifications to this Lease as may be reasonably
required by Lender(s) in connection with the obtaining of normal financing or
refinancing of the property of which the Premises are a part.

 

n.             Construction. The Landlord and Tenant acknowledge that
each has had its counsel review this Lease, and hereby agree that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Lease or in any amendments or exhibits hereto.

 

o.             Captions. Article, section and paragraph
captions are not a part hereof.

 

p.             Exhibits. For reference purposes the Exhibits are
listed below:

 

Exhibit A: The Premises

Exhibit B: Business Park 

Exhibit C: Rules and Regulations

Exhibit D: Tenant’s Estimate of Repair Costs

 

	
  Limar Realty Corp. #30,
  a California corporation

  	
  Equator Technologies,
  Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Theodore H. Kruttschnitt

  	
   

  	
  By:

  	
  /s/ Brian T. McGee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Theodore H. Kruttschnitt

  	
   

  	
  Name:

  	
  Brian T. McGee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  7/25/11

  	
   

  	
  Date:

  	
  25 July 2001

  	
   

  

 

 

 

This
Exhibit A is attached to and made a part of that certain Lease (the “Lease”) dated March 19, 2001, by and between Limar
Realty Corp. #30 as Landlord and Equator Technologies, Inc. as Tenant.

 

1300 White Oaks Avenue

Campbell, California

 

FIRST FLOOR

 

 

SECOND FLOOR

 

 

 

This
Exhibit B is attached to and made a part of that certain Lease (the “Lease”) dated March 19. 2001, by and bet Limar Realty
Corp. #30 as Landlord and Equator Technologies, Inc. as Tenant.

 

1300 White Oaks Avenue

Campbell, California

 

 

 

Legal
description

 

All that certain Real Property in the City of Campbell, County of Santa
Clara, State of California, described as follows:

 

PARCEL NO. 1:

 

Beginning at a 1 inch pipe at the Northwest
corner of that certain 80 foot strip of land conveyed by Jessie L. Lewis to A.
G. Peterson by Deed recorded in Volume 287 of Official Records, Page 247, said
point of beginning being the Northeast corner of that certain tract of land
conveyed by Jessie L. Lewis to Anna R. Toepfer by Deed recorded April 22,
1932 in Vol. 614 of Official Records, Page 79, and running thence from said
point of beginning, along the West line of said 80 foot strip of land South
216.00 feet to a 1/2 inch pipe; thence West 322.31 feet to a point in the
center line of an irrigation ditch on the Westerly line of said tract of land
so conveyed to Anna R. Toepfer above referred to; thence along said West line
North 30 deg. 11’ East 249 88 feet to a 1 inch pipe at the Northeast corner of
said land so conveyed to Anna R. Toepfer; thence along the North line of land
so conveyed to Anna R. Toepfer, East 196.70 feet to the point of beginning and
being a portion of Lots 4 and 3, as shown upon the Map of the Redding Farm
Tract, which said Map was recorded September 28, 1891 in the Office of the
County Recorder of the County of Santa Clara, State of California in Volume “E”
of Maps, at Page 115.

 

Excepting therefrom so much thereof described
as follows:

 

All of that Parcel of Land described in the
Deed to Quintilio Quintarelli, et ux, recorded on October 13, 1954 in
Volume 2980, at page 644, Official Records of Santa Clara County, which lies westerly of
the following described line:

 

Beginning for reference at the Southeasterly
corner of that Parcel of Land described in the Deed to Charles Ferroni, at
alias, dated on December 4, 1959 in Volume 4628 at Page 700, Official
Records of Santa Clara County; thence along the Southerly line of last said
parcel North 88 deg. 55’ l7” West 335.52 feet to the True Point of
Commencement; thence South 23 deg. 09’ 48” West 96.17 feet to the general
Easterly line of that right of way now known as White Oaks Avenue. conveyed in the Deed to Santa Clara County, recorded on April 18,
1924 in Volume 79, at Page 448 Official Records of Santa Clara County; thence
along last said line South 10 deg. 29’ 24” West 102.35 feet and South 32 deg. 08’
24” West 35.97 feet to the Southerly line of said Quintarelli Parcel.

 

Also excepting therefrom that portion thereof
as conveyed to the City of Campbell, a municipal corporation by Deed recorded September 18,
1998 as Instrument No. 14399524, of Official Records and being more
particularly described as follows:

 

Beginning at the Northeast corner of that
Parcel of Land granted to the State of California by that certain Grant Deed
recorded March 5, 1970 in Book 8849, Page 221 of the Official Records of
Santa Clara County; thence from said point of beginning along the easterly line
of said land of the State of California South 22 deg. 32’ 20” West 96.17 feet
and South 09 deg. 51’ 56” West 2.76 feet; thence leaving said easterly line.
North 25 deg. 47’ 55” East to the easterly extension of the northerly line of
said lands of the State of California; thence along last said line, North 89
deg. 32’ 45” West 6.89 feet to the said point of beginning of this description.

 

PARCEL NO. 2:

 

Beginning at a point in the Northerly line of
Lot 3, as shown upon the Map hereinafter referred to; at the Northwest corner
of that certain 9 acre tract of land conveyed by Katie Hamilton to Antonio
Catarina, by Deed dated February 18, 1935 and recorded March 18, 1935
in Book 721 of Official Records, at Page 392, in the Office of the County
Recorder of the County of Santa Clara, State of California; thence from said
point of beginning. South along
the Westerly line of said 9 acre tract so conveyed by Katie Hamilton to Antonio
Catarina, a distance of 265.205 feet; thence East and parallel to said
Northerly line of said lot 3, at shown on the Map hereinafter referred to,
164.25 feet to the Easterly line of that certain Parcel of land conveyed by
Anna C. Jolls to Adela Le Bord, by Deed

 

 

 

This
Exhibit A is attached to and made
a part of that certain Lease (the “Lease”)
dated March 19. 2001, by and between Limar Realty Corp. #30 as Landlord and Equator Technologies, Inc. as Tenant.

 

dated February 11, 1946 and recorded February 21,
1946 in Book 1333 of Official Records, at Page 92, County of Santa Clara, State of California; thence Northerly
along said Easterly line, said line being the center line of a 40 foot right of
way hereinafter described, 265.205 feet to the said Northerly line of said Lot
3; thence West along said Northerly line 164.25 feet to the point of beginning
and being a portion of Lot 3. as shown on the Map entitled, “Redding Farm
Tract, being a part of the South 1/2 of the Northwest 1/4 of Section 2, T.
8 S.R. 1 w.”, which Map was filed for record in the Office of the Recorder of
the County of Santa Clara, State of California on September 28, 1891 in
Book of the County of Santa Clara, State of California on September 28,
1891 in Book “E” of Maps, at Page 115.

 

Excepting therefrom so much thereof described as follows:

 

Beginning at a point on the westerly line of that certain 9.0 acre
tract of land conveyed by Katie
Hamilton to Antonio Catarina by Deed dated February 18, 1935 and recorded March l8,
1935 in Book 721 of Official Records, Page 392, Santa Clara County Records,
distant Southerly thereon 215.205 feet from the intersection with the
Northerly line of Lot 3, as said Northerly line is shown on the Map hereinafter
referred to; running thence Southerly along said westerly line of the 9.0 acre tract
of land 50.0 feet; thence Easterly and parallel to said Northerly line of Lot
3, a distance of 164.25 feet to a point on the Easterly line of that certain
trace of land conveyed by Anna G. Jolls to Adela Le Bord, by Deed dated February 11.
1946 and recorded February 21, 1946
in Book 1333 of Official Records, Page 92. Santa Clara County Records; thence
Northerly along said Easterly line, said line also being the center line of the
40 foot right of way hereinafter described, 50.00 feeet; running thence Westerly
and parallel to said Northerly line of Lot 3 a distance of 165.25 feet to the
point of beginning, being a portion of Lot 3, as shown on that certain Map
entitled. “Redding Farm Tract being a part of the South 1/2 of the Northwest
1/4 of Section 2, T. 8
S.R. 1 w.”, filed record September 28, 1891 in Book “E” of Maps, at Page
115, Santa Clara County Records.

 

PARCEL NO. 3:

 

Beginning at the Northeast corner of that
certain Parcel of Land granted to the state of California by that certain Grant
Deed recorded on March 5, 1970 in Book 8849, Page 221 of the Official
Records of Santa Clara County; thence from said point of beginning along the
easterly line of said lands of the State of California South 22 deg. 32’ 20”
West 96.17 feet and South 09 deg. 51’ 56” West 2.76 feet; to the True Point of
Beginning of this description; thence continuing along said easterly line,
South 09 deg . 51’ 56” West 99.59 feet and South 31 deg. 30.
56” West 30.25 feet to the southerly line of said land of the
State of California; thence along said southerly line. North 89 deg. 32’
45” West 26.92 feet; thence leaving said outherly line, North 25 deg. 47’ 55”
East 137.38 feet to the said true point of beginning of this description.

 

PARCEL NO. 4:

 

A non-exclusive easement for street purposes
including the purpose of ingress, egress and regress, the laying out,
construction and maintenance of a street, sidewalks, curbs, gutters, sewage
pipes, lines, connection and sytem water pipes, lines, connections and systems,
gas pipes, lines, connection and systems, hot air and/or steam pipes, lines,
connection and systems, power and light conduits, lines, connections and
systems, electrolies, telephone conduits, lines, connections and systems and
similar purposes upon, over, across and/or through that certain parcel of real
property 40 feet wide, situate lying and being in the County of Santa Clara.
State of California, the middle line of which is described as follows:

 

Beginning at a point in the center line of
Redding Road and the Southerly line of lot 3 as shown on the Map of Redding
Farm Tract, recorded in Volume “E” of Maps, at Page 115, distant thereon, 120.
88 feet Westerly of the Southeasterly corner of said Lot 3; thence along the
center line of a 40 foot right of way and parallel with the Easterly line of
said Lot 3, Northerly 474.10 feet; thence continuing along the center line of
said 40 foot right of way. North 23 deg. 12’ West 109 feet; thence continuing
along said center line and parallel with the Easterly line of said Lot 3, Northerly
745.90 feet to the Northerly line of said Lot 3 and being a portion of said Lot
3, as shown on the Map herein above referred to.

 

 

EXHIBIT C 

 

Rules & Regulations

 

This
Exhibit C is attached to and made a part of that certain Lease (the “Lease”) dated March 19, 2001, by and
between Limar Realty Corp. #30 as Landlord and Equator Technologies, Inc. as
Tenant.

 

For
the purpose of these Rules & Regulations the word Premises shall refer to
the Premises Tenant is leasing and the Property containing the Premises as
described in the Lease.

 

1.             No sign, placard, picture, advertisement,
name or notice (collectively “Signs”) shall be installed or displayed on any
part of the Premises without the prior written consent of Landlord* except that
Tenant may post Signs inside the Building which are not visible from the
exterior of the Building. Landlord shall have the right to remove, at Tenant’s
expense and without notice, any sign installed or displayed in violation of
this rule. All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant.

 

* Landlord
hereby approves existing exterior signage.

 

2.             Except as consented to in writing by
Landlord, no draperies, curtains, blinds, shades, screens or other devices shall
be hung at or used in connection with any window or exterior door or doors of
the Premises and no awning shall be permitted on any part of the Premises.
Tenant shall not place anything against or near glass partitions or doors or
windows which may appear unsightly from outside the Premises.

 

3.             Neither Tenant nor
any employee or invitee of Tenant, shall make any structural roof or terrace
penetrations.

 

4.             Tenant shall not cause any unnecessary labor
by carelessness or indifference to the good order and cleanliness of the
Premises.  Landlord shall not in any way
be responsible to any Tenant for any loss of property on the Premises, or for
any damage to any Tenant’s property.

 

5.             Landlord will furnish Tenant, free of charge,
with six (6) keys to the Premises. 
Tenant shall not make or have made additional keys without Landlord’s
prior written consent, and Tenant shall not alter any lock or install a new additional
lock or bolt on any door of its Premises without Landlord’s prior written
consent. Tenant, upon the termination of its tenancy, shall deliver to Landlord
the keys of all locks for doors on the Premises, and in the event of loss of
any keys furnished by Landlord, shall pay Landlord therefor.

 

6.             If Tenant requires telegraphic, telephonic, burglar
alarm or similar services, it shall first obtain, and comply with, Landlord’s
reasonable instructions in their installation.

 

7.             Tenant
shall not place a load upon any floor of the Premises which exceeds the load
per square foot which such floor was designed to carry and which is allowed by
law. Landlord shall have the reasonable right to prescribe the weight, size and
position of all equipment, materials, furniture or other property brought into
the Premises.  Heavy objects shall, if
considered necessary by Landlord, stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight.  Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Premises to such a degree as to be objectionable to
Landlord, shall be placed and maintained by Tenant, at Tenant’s expense, on
vibration eliminators or other devices sufficient to eliminate noise or
vibrations. Landlord will not be responsible for loss of or damage to, any such
equipment or other property from any cause, and all damage done to the Premises
by maintaining or moving such equipment or other property shall be repaired at
the expense of Tenant.

 

8.             Tenant shall not use or keep in the Premises
any kerosene, gasoline or inflammable or combustible fluid or material other
than those limited quantities necessary for the operation or maintenance of
office equipment. Tenant shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord by reason
of noise, odors or vibrations not bring or keep or permit to be brought or kept
in the Premises any animal life form, other than human, except seeing eye dogs
when in the company of their masters.

 

9.             Tenant shall not waste electricity, water or
air-conditioning and agrees to cooperate fully with Landlord to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has
actual notice.

 

10.           Landlord reserves the right, exercisable with
one hundred twenty (120) days prior written notice but without liability to
Tenant, to change the name and street address of the Premises.

 

11.           Tenant shall close and lock the doors of its
Premises and entirely shut off all water faucets or other water apparatus, and
other equipment which is not required to be continuously run.

 

12.           The toilet rooms, toilets, urinals, wash
bowls and other apparatus shall not be used for any purpose other than that for
which they were constructed and no foreign substance of any kind whatsoever
shall be thrown therein. The expense of any breakage, stoppage or damage
resulting for the violation of this rule shall be borne by the Tenant who, or
whose employees or invitees, shall have caused it.

 

 

EXHIBIT C

 

13.           Tenant shall not sell, or permit the retail
sale of newspapers, magazines, periodicals, theater tickets or any other goods
or merchandise to the general public in or on the Premises. Tenant shall not
make any room-to-room solicitation of business from other tenants in the
Business Park. Tenant shall not use the Premises for any business or activity
other than that specifically provided for in Tenants Lease. Notwithstanding the
above. Tenant shall have the right to install vending machines for use by
Tenant, its employees and invitees.

 

14.           Tenant shall not interfere with radio or
television broadcasting or reception from or in neighboring areas.

 

15.           Canvassing, soliciting and distribution of
handbills or any other written materials, and peddling in the Business Park are
prohibited, and Tenant shall cooperate to prevent same.

 

16.           Landlord reserves the right to exclude or
expel from the Premises any person who, in Landlord’s judgment, is intoxicated
or under the influence of liquor or drugs or who is in violation of any of the
Rules and Regulations of the Premises or in violation of the CC&R’s.

 

17.           Tenant shall store all its trash and garbage
within its Premises or in reasonable locations specifically identified by Landlord
for such purposes. Tenant shall not place in any trash box or receptacle any
material which cannot be disposed of in the ordinary and customary manner of
trash and garbage disposal.  All garbage
and refuse disposal shall be made in accordance with reasonable directions
issued from time to time by Landlord.

 

18            The Premises shall not be used for the
storage of merchandise held for sale to the general public, or for lodging nor
shall the Premises by used for any improper, illegal or objectionable purpose.
No cooking (other than customary heating or ordinary lunchroom items for Tenant’s
employees) shall be done or permitted by any tenant on the Premises, except
that use by Tenant in its kitchen, if any, located in the Premises and
Underwriters Laboratory’s approved equipment for brewing coffee, tea, hot
chocolate and similar beverages and microwaving food shall be permitted,
provided that such kitchen, equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.

 

19.           Tenant shall not use in any part of the
Premises any hand truck except those equipped with rubber tires and side guards
or such other reasonable material-handling equipment as Landlord may approve.

 

20.           Without the written consent of Landlord,
Tenant shall not use the name of the Business Park in connection with or in
promoting or advertising the business of Tenant except as Tenant’s address.

 

21.           Tenant shall comply with all safety, fire protection
and evacuation procedures and regulations established by Landlord or any
governmental agency.

 

22.           Tenant assumes any and all responsibility for
protecting its Premises from theft, robbery and pilferage, which includes
locking doors and securing other means of entry to the Premises
closed.

 

23.           The requirements of Tenant will be attended
to only upon appropriate application to the office of Landlord by an authorized
individual.  Employees of Landlord shall
not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord.

 

24.           Tenant shall not park its vehicles in any
parking areas outside the Business Park. 
Tenant shall not store or abandon vehicles in the Business Park parking
areas nor park any vehicles in the Business Park parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles,
four-wheeled trucks, or other equipment used in the operation of Tenant’s
business.  Tenant, its agents, employees
and invitees shall not park any one (1) vehicle in more than one (1) parking
space.

 

25.           Landlord reserves the right to make such
other reasonable Rules and Regulations as, in its judgment, may from time to
time be appropriate for safety and security, for care and cleanliness of the
Premises and for the preservation of good order therein.  Tenant agrees to abide for all such Rules and
Regulations hereinabove stated and any additional Rules and Regulations which
are adopted.

 

26.           Tenant shall be responsible for the
observance of all of the foregoing Rules and Regulations by Tenant’s employees,
agents, clients, customers, invitees and guests.

 

 

Tenant’s Estimate of Repair Costs

 

This
Exhibit C is attached to and made a part of that certain Lease (the “Lease”) dated March 19, 2001, by and
between Limar Realty Corp. #30 as Landlord and Equator Technologies, Inc. as
Tenant.

 

	
  Estimate for Equator Technologies, Inc

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1300 White Oaks Rd

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Campbell, CA 95008

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Repairs

  	
   

  	
  Location

  	
   

  	
  Estimate Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Handicap parking
  stalls does not comply with ADA and must be corrected.

  	
   

  	
  Outside the building, parking lot area

  	
   

  	
  $

  	
  8,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Complete
  parking lot needs to be re-coated with paint and the striping redone

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Complete
  building needs a fresh coat of paint.

  	
   

  	
  Outside the building

  	
   

  	
  $

  	
  15,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The back wall
  by Survey.com needs to be fixed. Trespassers are using it for a shortcut.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The door in
  the electric room needs to be painted and the faded sign replace

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Needs a
  better landscaping company, to actually clean up and remove dead trees
  through out the parking lot. Better quality

  	
   

  	
  Outside the building, parking lot area

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The
  insulation on the refrigeration lines serving the smaller package units need
  to be replace

  	
   

  	
  The roof

  	
   

  	
  $

  	
  3,255

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The gas main
  line and its branches, as well as other piping and conduits need to have the
  blocking supporting their length and the stapping replace to avoid a serious
  safety situation.

  	
   

  	
  The roof

  	
   

  	
  $

  	
  5,892

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A roofing
  contractor needs to perform a through inspection of the roof. One hose bib is
  leaking and both need to be re-plumbed

  	
   

  	
  The roof

  	
   

  	
  $

  	
  35,800.00

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  $

  	
  65,377

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]