Document:

exv10w21

 

EXHIBIT 10.21

LEASE AGREEMENT

BETWEEN

TRANSAMERICA REALTY INVESTMENT PROPERTIES, LLC,

A DELAWARE LIMITED LIABILITY COMPANY,

AS LANDLORD

AND

PLUMTREE SOFTWARE, INC.,

A DELAWARE CORPORATION, QUALIFIED TO DO BUSINESS IN CALIFORNIA AS

DELAWARE PLUMTREE SOFTWARE, INC.

AS TENANT

505 SANSOME STREET,

SAN FRANCISCO, CALIFORNIA

OCTOBER 22, 2004

THE DELIVERY OF THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO LEASE, OR A
RESERVATION OF, OR OPTION FOR, THE PREMISES DESCRIBED HEREIN.

THIS DOCUMENT SHALL BECOME EFFECTIVE AND BINDING ONLY UPON LANDLORD’S EXECUTION
AND DELIVERY HEREOF.

NO ACT, OMISSION OR STATEMENT OF ANY EMPLOYEE OR AGENT OF LANDLORD OR OF
LANDLORD’S BROKER SHALL ALTER, CHANGE OR MODIFY THE FOREGOING.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	1.	 	PREMISES	 	 	1	 
	

	 	1.1
	 	Lease of Premises
	 	 	1	 
	

	 	1.2
	 	Description of Premises
	 	 	1	 
	2.	 	TERM	 	 	1	 
	

	 	2.1
	 	Term
	 	 	1	 
	

	 	2.2
	 	Tenant Right of Early Termination
	 	 	2	 
	3.	 	RENT	 	 	2	 
	

	 	3.1
	 	Payments of Base Rent and Expense Increases
	 	 	2	 
	

	 	3.2
	 	Lockbox Procedures; Acceptance of Rent
	 	 	2	 
	

	 	3.3
	 	Base Rent Abatement
	 	 	3	 
	4.	 	EXPENSES	 	 	3	 
	

	 	4.1
	 	Definitions
	 	 	3	 
	

	 	4.2
	 	Operating Expenses
	 	 	3	 
	

	 	4.3
	 	Exclusions
	 	 	4	 
	

	 	4.4
	 	Insurance Expenses
	 	 	5	 
	

	 	4.5
	 	Utility Expenses
	 	 	5	 
	

	 	4.6
	 	Tax Expenses
	 	 	5	 
	

	 	4.7
	 	Payment of Expenses
	 	 	6	 
	

	 	4.8
	 	Gross Up; Other Adjustments
	 	 	6	 
	

	 	4.9
	 	Personal Property Taxes
	 	 	7	 
	5.	 	SECURITY DEPOSIT	 	 	7	 
	6.	 	USE OF PREMISES	 	 	8	 
	

	 	6.1
	 	Permitted Use
	 	 	8	 
	

	 	6.2
	 	Asbestos-Containing Materials Notification
	 	 	8	 
	

	 	6.3
	 	Compliance with Rules and Laws
	 	 	8	 
	

	 	6.4
	 	Required Alterations; Violations of Law
	 	 	9	 
	7.	 	UTILITIES AND SERVICES	 	 	9	 
	

	 	7.1
	 	Provided by Landlord
	 	 	9	 
	

	 	7.2
	 	Excess Use
	 	 	9	 
	

	 	7.3
	 	Interruption of Utilities
	 	 	10	 
	8.	 	ACCESS CONTROL; PROJECT SAFETY	 	 	10	 
	

	 	8.1
	 	Access Control and Other Landlord Rights
	 	 	10	 
	

	 	8.2
	 	Tenant’s Obligation to Cooperate
	 	 	11	 
	

	 	8.3
	 	Tenant’s Security System
	 	 	11	 
	9.	 	ALTERATIONS AND ADDITIONS	 	 	11	 
	

	 	9.1
	 	No Alterations Without Consent
	 	 	11	 
	

	 	9.2
	 	Pre-Construction Requirements
	 	 	12	 
	

	 	9.3
	 	Construction; Contractors
	 	 	12	 
	

	 	9.4
	 	Plan Review; Construction Monitoring
	 	 	12	 
	

	 	9.5
	 	Liens and Notices
	 	 	12	 
	10.	 	TELECOMMUNICATIONS SERVICES AND EQUIPMENT	 	 	13	 
	

	 	10.1
	 	Consent Required
	 	 	13	 
	

	 	10.2
	 	Communications Pathways
	 	 	13	 
	

	 	10.3
	 	Installation and Use
	 	 	13	 
	

	 	10.4
	 	Landlord not Obligated
	 	 	14	 
	11.	 	SURRENDER	 	 	14	 
	12.	 	MAINTENANCE AND REPAIRS	 	 	15	 
	13.	 	ASSIGNMENT AND SUBLETTING	 	 	15	 
	

	 	13.1
	 	Definitions
	 	 	15	 
	

	 	13.2
	 	No Transfer Without Consent; Standards
	 	 	16	 
	

	 	13.3
	 	Conditions to Consideration of Request to Transfer
	 	 	16	 
	

	 	13.4
	 	Effect of Consent
	 	 	17	 
	

	 	13.5
	 	Recapture Rights
	 	 	17	 

 

 

	 	 	 	 	 	 	 	 	 
	

	 	13.6
	 	Transfer Premium
	 	 	17	 
	

	 	13.7
	 	Right to Collect Rent Directly
	 	 	17	 
	

	 	13.8
	 	Reasonableness of Restrictions
	 	 	18	 
	14.	 	RISK ALLOCATION AND INSURANCE	 	 	18	 
	

	 	14.1
	 	Definitions
	 	 	18	 
	

	 	14.2
	 	Risk Allocation Intent
	 	 	18	 
	

	 	14.3
	 	Landlord’s Insurance
	 	 	19	 
	

	 	14.4
	 	Tenant’s Insurance
	 	 	19	 
	

	 	14.5
	 	Policy Requirements
	 	 	20	 
	

	 	14.6
	 	Evidence of Coverage
	 	 	20	 
	

	 	14.7
	 	Releases; Waivers of Subrogation
	 	 	21	 
	15.	 	INDEMNIFICATION; CONSEQUENTIAL DAMAGES	 	 	21	 
	16.	 	DAMAGE AND DESTRUCTION	 	 	21	 
	

	 	16.1
	 	Definitions
	 	 	21	 
	

	 	16.2
	 	Notices of Casualty Damage and Repair Periods
	 	 	22	 
	

	 	16.3
	 	Landlord’s Option To Terminate or Repair
	 	 	22	 
	

	 	16.4
	 	Tenant’s Option To Terminate
	 	 	23	 
	

	 	16.5
	 	Rent Abatement Due to Casualty
	 	 	23	 
	

	 	16.6
	 	General Repair and Restoration Obligations
	 	 	23	 
	17.	 	CONDEMNATION	 	 	24	 
	

	 	17.1
	 	Termination as to Portion Taken
	 	 	24	 
	

	 	17.2
	 	Partial Taking of Premises
	 	 	24	 
	

	 	17.3
	 	Partial Taking of Project
	 	 	25	 
	

	 	17.4
	 	Allocation of Compensation
	 	 	25	 
	18.	 	SIGNS	 	 	25	 
	19.	 	RIGHTS OF LANDLORD	 	 	25	 
	

	 	19.1
	 	Inspection
	 	 	25	 
	

	 	19.2
	 	Landlord Rights
	 	 	26	 
	

	 	19.3
	 	Control of Project
	 	 	26	 
	

	 	19.4
	 	Trademark Protection
	 	 	26	 
	20.	 	ESTOPPEL CERTIFICATES	 	 	27	 
	21.	 	FINANCIAL STATEMENTS	 	 	27	 
	22.	 	QUIET ENJOYMENT; MORTGAGEE PROTECTION	 	 	27	 
	

	 	22.1
	 	Covenant of Quiet Enjoyment
	 	 	27	 
	

	 	22.2
	 	Subordination and Attornment
	 	 	27	 
	

	 	22.3
	 	Requested Modifications; Cure Rights
	 	 	28	 
	23.	 	TENANT’S DEFAULT	 	 	28	 
	

	 	23.1
	 	Failure to Pay Rent
	 	 	28	 
	

	 	23.2
	 	General Non-Monetary Defaults
	 	 	28	 
	

	 	23.3
	 	Special Non-Monetary Defaults

	 	 	28	 
	

	 	23.4
	 	Abandonment
	 	 	29	 
	

	 	23.5
	 	Assignment for Creditors; Bankruptcy
	 	 	29	 
	

	 	23.6
	 	Chronic Delinquency
	 	 	29	 
	24.	 	LANDLORD’S REMEDIES	 	 	29	 
	

	 	24.1
	 	Termination
	 	 	29	 
	

	 	24.2
	 	Mitigation of Damages
	 	 	30	 
	

	 	24.3
	 	Continuation of Lease
	 	 	30	 
	

	 	24.4
	 	Cumulative Remedies
	 	 	30	 
	

	 	24.5
	 	No Surrender
	 	 	30	 
	

	 	24.6
	 	No Counterclaims; Waiver of Redemption
	 	 	31	 
	25.	 	LANDLORD’S RIGHT TO PERFORM	 	 	31	 
	26.	 	LIABILITY OF LANDLORD	 	 	31	 
	

	 	26.1
	 	Landlord’s Default
	 	 	31	 
	

	 	26.2
	 	Limitation of Liability
	 	 	31	 
	

	 	26.3
	 	Effect of Conveyance
	 	 	32	 

 

 

	 	 	 	 	 	 	 	 	 
	27.	 	LANDLORD’S LIEN	 	 	32	 
	28.	 	HOLDING OVER	 	 	32	 
	29.	 	HAZARDOUS MATERIALS	 	 	33	 
	

	 	29.1
	 	Definitions
	 	 	33	 
	

	 	29.2
	 	Use of Hazardous Materials
	 	 	33	 
	

	 	29.3
	 	Obligation to Remediate
	 	 	33	 
	

	 	29.4
	 	Inspection Rights; Condition on Surrender
	 	 	33	 
	

	 	29.5
	 	Indemnification; Survival
	 	 	33	 
	30.	 	RELOCATION	 	 	34	 
	31.	 	PARKING RIGHTS	 	 	34	 
	32.	 	MISCELLANEOUS PROVISIONS	 	 	34	 
	

	 	32.1
	 	Attorney Fees
	 	 	34	 
	

	 	32.2
	 	Entire Agreement
	 	 	35	 
	

	 	32.3
	 	Joint And Several Liability
	 	 	35	 
	

	 	32.4
	 	Notices
	 	 	35	 
	

	 	32.5
	 	Waiver
	 	 	35	 
	

	 	32.6
	 	No Third party Beneficiaries; Relationship
	 	 	35	 
	

	 	32.7
	 	Time
	 	 	35	 
	

	 	32.8
	 	Late Charges
	 	 	36	 
	

	 	32.9
	 	Interest
	 	 	36	 
	

	 	32.10
	 	Brokers
	 	 	36	 
	

	 	32.11
	 	Governing Law
	 	 	36	 
	

	 	32.12
	 	Interpretation
	 	 	37	 
	

	 	32.13
	 	Representations and Warranties of Tenant
	 	 	37	 
	

	 	32.14
	 	Jury Trial Waiver
	 	 	37	 
	

	 	32.15
	 	Recordation
	 	 	38	 
	

	 	32.16
	 	Severability
	 	 	38	 
	

	 	32.17
	 	Force Majeure
	 	 	38	 
	

	 	32.18
	 	Non-Disclosure
	 	 	38	 
	

	 	32.19
	 	Acceptance; Counterparts
	 	 	38	 

 

 

LIST OF EXHIBITS

	 	 	 
	A

	 	FLOOR PLAN

	B

	 	INTENTIONALLY OMITTED

	C

	 	INTENTIONALLY OMITTED

	D

	 	RULES AND REGULATIONS

	E

	 	FORM OF ESTOPPEL CERTIFICATE

	F

	 	ASBESTOS DISCLOSURE NOTICE

 

 

INDEX OF DEFINED TERMS

	 	 	 	 	 
	Abandonment
	 	29
	Abatement 
	 	Summary
	ACM 
	 	33
	Additional Rent 
	 	2
	Alterations 
	 	11
	Base Building Improvements 
	 	21
	Base Building Systems 
	 	15
	Base Operating Expenses 
	 	3
	Base Rent 
	 	Summary
	Base Tax Expenses 
	 	3
	Base Year 
	 	Summary
	Brokers 
	 	Summary
	Building 
	 	Summary
	Casualty 
	 	21
	Casualty Damage 
	 	21
	Collection Agent 
	 	2
	Commencement Date 
	 	i
	Common Areas 
	 	1
	Communications Pathways 
	 	13
	Comparison Year 
	 	3
	Condemnation 
	 	24
	Condemnor 
	 	24
	Cosmetic Alterations 
	 	11
	Default 
	 	28
	Early Termination Date 
	 	2
	Earthquake Damage 
	 	5
	Eligibility Period 
	 	10
	Environmental Laws 
	 	33
	Event of Default 
	 	28
	Expense Category 
	 	3
	Expense Increases 
	 	6
	Expense Payment 
	 	6
	Expenses 
	 	3
	Expiration Date 
	 	Summary
	Floor Plan 
	 	Summary
	Force Majeure Delay 
	 	38
	GAAP 
	 	16
	Governmental Authority 
	 	9
	Hazardous Material 
	 	33
	Holidays 
	 	9
	HVAC 
	 	9
	Insurance Expenses 
	 	5
	Insured Casualty 
	 	21
	Interest Rate 
	 	36
	Interruption 
	 	10
	Land 
	 	Summary
	Landlord 
	 	Summary
	Landlord Deductible Amounts 
	 	5
	Landlord Insured Casualty 
	 	21
	Landlord Parties 
	 	31
	Landlord Protected Parties 
	 	18
	Landlord’s Notice Address 
	 	Summary
	Laws 
	 	8
	Lease 
	 	1
	Lease Date 
	 	Summary
	Loss of Service 
	 	10
	Memorandum 
	 	38
	Normal Hours 
	 	9
	Notice 
	 	35
	Notice of Termination 
	 	2
	Operating Expenses 
	 	3
	Park Area 
	 	1
	Parking Facilities 
	 	1
	Permitted Capital Expenses 
	 	4
	Permitted Transfer 
	 	15
	Permitted Use 
	 	Summary
	Premises 
	 	Summary
	Premises Improvements 
	 	22
	Premises Rentable Area 
	 	Summary
	Premises Systems 
	 	15
	Prepaid Rent 
	 	Summary
	Project 
	 	Summary
	Project Improvements 
	 	22
	Proposition 8 Reduction 
	 	5
	Reconciliation Statement 
	 	6
	Rent 
	 	2
	Repair Period 
	 	22
	Repair Period Notice 
	 	22

 

 

	 	 	 	 	 
	Requirements 
	 	8
	Review Period 
	 	16
	RSF 
	 	Summary
	Rules 
	 	8
	Security Deposit 
	 	Summary
	SNDA 
	 	28
	State 
	 	36
	Successor Landlord 
	 	27
	Summary 
	 	1
	Superior Interest Holder 
	 	27
	Superior Interests 
	 	27
	Superior Lease 
	 	27
	Superior Mortgage 
	 	27
	Systems 
	 	15
	Tax Expenses 
	 	5
	Telecommunications Equipment 
	 	13
	Telecommunications Providers 
	 	13
	Telecommunications Services 
	 	13
	Temporary Taking 
	 	25
	Tenant 
	 	Summary
	Tenant Insured Casualty 
	 	21
	Tenant Protected Parties 
	 	18
	Tenant’s Excess Restoration Proceeds 
	 	24
	Tenant’s Notice Address 
	 	Summary
	Tenant’s Security System 
	 	11
	Tenant’s Share 
	 	Summary
	Tenant’s Termination Notice 
	 	23
	Term 
	 	Summary
	Transfer 
	 	15
	Transfer Premium 
	 	17
	Transferee 
	 	15
	Utilities 
	 	5
	Utility Expenses 
	 	5
	Utility Service Provider 
	 	9
	Wiring 
	 	13

ii

 

LEASE SUMMARY

	 	 	 
	Lease Date:

	 	October 22, 2004
	 
	 	 
	Landlord:

	 	Transamerica Realty Investment Properties, LLC,

a Delaware limited liability company
	 
	 	 
	Landlord’s Notice Address

	 	Landlord’s Notice Address is:
	and Address for
Payment of Rent:

	 	Transamerica Realty Investment Properties, LLC

c/o Property Management Office

600 Montgomery Street

4th Floor

San Francisco, CA 94111

Attention: General Manager
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	AEGON USA Realty Advisors, Inc.

4333 Edgewood Road NE

Cedar Rapids, IA 52499-5555

Attention: General Counsel
	 
	 	 
	Tenant:

	 	Plumtree Software, Inc.,

a Delaware corporation, qualified to do business in California as Delaware Plumtree
Software, Inc.
	 
	 	 
	Tenant’s Notice Address:

	 	Plumtree Software, Inc.,

500 Sansome Street

Suite 100

San Francisco, California 94111
	 
	 	 
	Premises:

	 	Suite 1100 of the Building, containing approximately 9,570 rentable square feet
(“RSF”) (the “Premises Rentable Area”), in the area designated by cross-hatching on
the floor plan attached hereto as Exhibit A (the “Floor Plan”), and excluding any
shaded areas on the Floor Plan
	 
	 	 
	Building:

	 	The building in which the Premises are located, having an address of 505 Sansome
Street, San Francisco, California
	 
	 	 
	Project:

	 	The parcel or parcels of real property (the “Land”) and the improvements thereon
comprising the development of which the Building is a part
	 
	 	 
	Tenant’s Share:

	 	5.3%, subject to the provisions of Section 4.8
	 
	 	 
	Term:

	 	Approximately Twenty-Five (25) months, subject to the provisions of Article 2
	 
	 	 
	Commencement Date:

	 	October 22, 2004
	 
	 	 
	Expiration Date:

	 	October 31, 2006, subject to the provisions of Article 2

	 	 	 	 	 	 	 
	Base Rent:

	 	Months
	 	Monthly Base Rent

	

	 	1 – Expiration Date
	 	$	22,330.00	 

	 	 	 	 	 
	

	 	Abatement:
	 	Subject to the provisions of Section 3.3, Base Rent shall be abated for the period
from the Commencement Date through and including October 31, 2004, for a per diem
Base Rent abatement of $720.32 per day (the “Abatement”).
	 
	 	 	 	 
	

	 	Prepaid Base Rent:
	 	$22,330.00 to be applied as provided in Section 3.1
	 
	 	 	 	 
	

	 	Base Year:
	 	Calendar year 2004
	 
	 	 	 	 
	

	 	Security Deposit:
	 	$22,330.00
	 
	 	 	 	 
	

	 	Permitted Use:
	 	General office use, consistent with a Class A office building
	 
	 	 	 	 
	

	 	Brokers:
	 	Landlord’s Broker: Lowe Enterprises Real Estate Group
Tenant’s Broker: Jones Lang LaSalle Americas, Inc.

i

 

LEASE AGREEMENT

This LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant as of the Lease Date. Terms which are not defined in the body of this
Lease shall have the meanings set forth in the preceding Lease Summary (the
“Summary”). The Summary, this Lease Agreement, and all Exhibits attached
hereto, are and shall be construed as a single instrument, and are collectively
referred to herein as the “Lease.” If there is any conflict between the Lease
Agreement and the Summary or any Exhibits hereto, the provisions of the Lease
Agreement shall control except to the extent otherwise expressly provided in
any Exhibit.

1. PREMISES

1.1 Lease of Premises

Landlord hereby leases the Premises to Tenant, and Tenant hereby leases
the Premises from Landlord, for the Term and upon the terms and subject to
the conditions of this Lease. Tenant shall have the non-exclusive right
during the Term, in common with all other persons permitted use thereof by
Landlord, to use the Common Areas (as hereinafter defined), except that
with respect to the Parking Facilities Tenant shall have only those
rights, if any, set forth in Article 31. The term “Common Areas” means all
areas and facilities outside the Premises and within the exterior boundary
line of the Project that are, from time to time, provided and designated
by Landlord for the non-exclusive use of Landlord, Tenant, other tenants
of the Project and their respective employees, guests and invitees. The
term “Parking Facilities” means the parking facilities made available by
Landlord for use by tenants of and visitors to the Project. Tenant
acknowledges that each lawful use made by Tenant, its employees and
invitees, of the park area and facilities immediately adjacent to the
Building (the “Park Area”) is pursuant to permission granted by the owner
of the Park Area and under a license from such owner which may be revoked
at any time or from time to time without notice; that neither the Park
Area nor the right to its use is a part of the Premises, the Building or
Building facilities or is otherwise covered by this Lease; and that
Landlord has made no representations to Tenant with respect to the use,
maintenance or continued existence of the Park Area.

1.2 Description of Premises

The dimensions and general location of the Premises are depicted on the
Space Plan and the Floor Plan, respectively. Tenant acknowledges that it
is leasing the Premises in “as-is, where is” condition, without any
obligation on the part of Landlord to make or pay for any improvements
therein. Tenant’s initial occupancy of the Premises shall constitute
Tenant’s acknowledgment that the Premises are in good and tenantable
order. No representation or warranty, express or implied, has been made by
Landlord or any Landlord Party with respect to any matter whatsoever,
including the condition of the Premises or the Project, the suitability of
the Premises or the Project for Tenant’s particular use, or any other
conditions which may affect Tenant’s use and enjoyment of the Premises or
Project. No rights to any view or to light or air over the Project or any
other property, whether belonging to Landlord or any other person, are
granted to Tenant by this Lease. All statements of rentable or usable
square footage set forth in this Lease, or that may have been used in
calculating any of the economic terms hereof, are approximations which
Landlord and Tenant agree are reasonable; and, except as expressly set
forth in Section 4.8, such square footages are deemed final and binding,
and no economic terms based thereon shall be subject to revision whether
or not any actual square footage is more or less. The parties acknowledge
that the general expressions “rentable square feet” and “rentable square
footage” have the same meaning as the defined term Rentable Area; and
“usable square feet” and “usable square footage” have the same meaning as
the defined term Usable Area.

2. TERM

2.1 Term

The Term shall commence on the Commencement Date, and, unless sooner
terminated in accordance with the provisions of this Lease, shall expire
on the Expiration Date. Landlord shall tender possession of the Premises
to Tenant on the Commencement Date, and Tenant shall accept delivery of
the Premises on such date, which acceptance shall constitute agreement by
Tenant that the Premises are in the condition required by this Lease. If
the Premises are available for occupancy prior to the Commencement Date,
Landlord will endeavor to give written notice of such availability, and
upon written request of Tenant, Landlord will grant Tenant the right to
enter the Premises after the full execution and delivery of this Lease and
prior to the scheduled Commencement Date, for the limited purpose of
installing furniture and equipment (including Telecommunications
Equipment) and otherwise preparing the Premises for the conduct of
Tenant’s business therein. Any such entry prior to the
Commencement Date shall be on all of the terms and conditions of this
Lease (including, without limitation, the

1

 

terms of Sections 14 and 15)
other than the payment of Base Rent; provided, however, if Landlord
determines that Tenant has commenced the conduct of business in the
Premises prior to the Commencement Date, the Commencement Date shall be
automatically accelerated and amended to be the date determined by
Landlord as the date Tenant commenced the conduct of business in the
Premises. This Lease shall not be void or voidable, no obligation of
Tenant shall be affected, and Landlord shall have no liability to Tenant
for any Claims arising out of or resulting from any failure of Landlord to
tender possession of the Premises to Tenant on or before the Commencement
Date.

2.2 Tenant Right of Early Termination

Notwithstanding anything to the contrary in Section 2.1 above, provided no
uncured Default shall then be in effect under this Lease either (i) as of
the date of Tenant’s delivery of a Notice of Termination, or (ii) as of
the Early Termination Date, Tenant shall have the right to terminate this
Lease effective as of October 31, 2005 (the “Early Termination Date ”), by
written notice given to Landlord of Tenant’s election to terminate this
Lease (a “Notice of Termination”), which Notice of Termination, in order
to be timely and effective, shall be given, if at all, no later than July
1, 2005. Should Tenant elect to terminate this Lease as herein provided,
Tenant shall, concurrently with, and as a condition to the effectiveness
of Tenant’s Notice of Termination, pay to Landlord an amount equal to the
aggregate of (A) one month’s Base Rent under this Lease, and (B) the
unamortized portion of any leasing commissions payable by Landlord in
connection with this Lease (amortization to be on a straight line basis).
The foregoing termination right is personal to the named Tenant under this
Lease and shall be deemed revoked and of no further force and effect
following any Transfer (other than a Permitted Transfer under Section 13.1
of this Lease).

3. RENT

3.1 Payments of Base Rent and Expense Increases

Tenant shall pay the Prepaid Base Rent concurrently with Tenant’s
execution of this Lease. If the Commencement Date is not the first day of
a month, then a portion of the Prepaid Base Rent shall be allocated to
such partial month (based on the number of days from the Commencement Date
through the expiration of such partial month), and the balance of the
Prepaid Base Rent shall be applied to Base Rent due in the following
month. All monthly installments of Base Rent and Tenant’s Share of
estimated Expense Increases shall be payable to Landlord in advance, on or
before the first day of each calendar month of the Term, without any
invoice, Notice or other demand therefor, and without any abatement,
deduction, credit or offset whatsoever. Any Rent which is not received by
Landlord by the date due shall be deemed to be late, and any Rent which is
not received by Landlord within five (5) days following the date due shall
be subject to late charges and interest as provided in Sections 32.8 and
32.9, respectively. Notwithstanding the foregoing, no late charge shall be
assessed on late payments of Rent provided Tenant delivers such late Rent
payment to Landlord within 48 hours following Notice to Tenant that such
Rent is due and unpaid; however, if Landlord has already provided Tenant
with any such notice either (a) once in the immediately preceding twelve
(12) month period; or (b) at least three (3) times during the preceding
portion of the entire Term, Landlord may thereafter impose late charges
for any subsequent late payment of Rent without first providing any such
Notice to Tenant. All sums of money required to be paid by Tenant to
Landlord under this Lease are deemed to be obligations in the nature of
rent whether or not such obligations are expressly so designated, and are
collectively referred to herein as “Rent.” All Rent other than Base Rent
is sometimes referred to herein as “Additional Rent.” Except for Base Rent
and Expense Increases (which are payable as described above), and late
charges and interest (which are payable as described in Sections 32.8 and
32.9), all Rent is due and payable within ten (10) days following
Landlord’s invoice therefor. All Rent shall be paid by check in lawful
money of the United States of America to Landlord (or to any other Person
designated by Landlord in a Notice to Tenant) at Landlord’s Address for
Payment of Rent. No payment shall be made in cash. Tenant shall not pay
any Rent more than one (1) month in advance without the prior written
consent of Landlord and any Superior Interest Holder of which Tenant has
notice and whose consent to such payment is required. Tenant shall pay
Landlord, as Additional Rent, in addition to any interest and late charges
payable by Tenant, the sum of One Hundred Dollars ($100.00) for each check
that is returned to Landlord for non-sufficient funds or which is
otherwise dishonored. If any check of Tenant’s is dishonored, any or all
subsequent payments of Rent shall, at Landlord’s option, be made by
certified check or other form of guaranteed payment acceptable to
Landlord.

3.2 Lockbox Procedures; Acceptance of Rent

From time to time during the Term, Landlord may designate a lockbox
collection agent or any other agent (each such agent, during the period of
its agency, a “Collection Agent”) to collect Rent. For purposes of
determining whether any payment of Rent is late, whether any late charge
or interest is payable, or whether any Event of

2

 

Default with respect to
the payment of Rent has occurred, any payment of Rent to Landlord’s
Collection Agent shall be deemed to have been made as of the date the
Collection Agent receives such payment, provided the payment is not
dishonored for any reason. If such payment is dishonored for any reason,
such payment shall not be deemed to have been made until the date Landlord
receives such payment in good funds. Tenant waives any right to specify
the items against which any Rent paid is to be credited, and Landlord may
apply such payments to any Rent due or past due under the Lease. No
writing on any check, or statement in any letter or other document
accompanying any payment of Rent from Tenant, and no acceptance by
Landlord or any Collection Agent of less than the full amount of Rent
owing, shall effect any accord and satisfaction. Any such partial payment
shall be treated as a payment on account. and Landlord or such Collection
Agent may accept such payment without prejudice to Landlord’s right to
recover any balance due or to pursue any other remedy permitted by this
Lease. Accordingly, Tenant hereby waives the provisions of California
Uniform Commercial Code §3311 (and any similar Law which would permit an
accord and satisfaction contrary to the provisions of this Section 3.2).
No payment, receipt or acceptance of Rent following (a) any Event of
Default; (b) the commencement of any action against Tenant; (c)
termination of this Lease or the entry of judgment against Tenant for
possession of the Premises; or (d) the exercise of any other remedy by
Landlord, shall cure the Event of Default, reinstate the Lease, grant any
relief from forfeiture, continue or extend the Term, or otherwise affect
Landlord’s right to or exercise of any remedy, including Landlord’s right
to terminate the Lease and recover possession of the Premises. Tenant
acknowledges and agrees that the foregoing constitutes actual notice to
Tenant, and Tenant’s waiver of any benefit, of the provisions of
California Code of Civil Procedure §§1161.1(b) and (c). In order to give
effect to the foregoing provisions, Landlord may return to Tenant, at any
time within fifteen (15) days after receiving same (or, if Landlord uses a
Collection Agent, at any time within fifteen (15) days following the
Collection Agent’s written notice to Landlord that such payment has been
received by the Collection Agent), any payment of Rent (x) made following
any Event of Default (irrespective of whether Landlord has commenced the
exercise of any remedy), or (y) which is less than the amount due. Each
such returned payment (whether made by returning Tenant’s actual check, or
by issuing a refund in the event Tenant’s check was deposited) shall be
conclusively presumed not to have been received or approved by Landlord.

3.3 Base Rent Abatement

Tenant acknowledges that the Abatement is being granted to Tenant in
consideration of the timely and faithful performance by Tenant of all the
terms and conditions of the Lease throughout the entire Term. Therefore,
Tenant agrees that upon the occurrence of an Event of Default, (a) all
portions of the Abatement credited to Tenant prior to the Event of Default
shall become due and payable to Landlord upon demand; and (b) from and
after the Event of Default, the Base Rent shall be payable by Tenant as if
no Abatement had been contemplated in this Lease. No such recapture by
Landlord of the Abatement shall constitute a waiver of any Default of
Tenant or any election of remedies by Landlord.

4. EXPENSES

4.1 Definitions

“Comparison Year” means each calendar year after the Base Year; provided,
however, that Landlord, upon Notice to Tenant, may from time to time
change the Comparison Year to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant’s Share of Operating
Expenses and Tax Expenses shall be equitably adjusted for the Comparison
Years involved in any such change. Subject to the terms of Section 4.8,
“Base Operating Expenses” means the amount of Operating Expenses paid or
incurred by Landlord in the Base Year, and “Base Tax Expenses” means the
amount of Tax Expenses paid or incurred by Landlord in the Base Year. The
term “Expenses” is sometimes used in this Lease to refer to Operating
Expenses and Tax Expenses generally, each of which is referred to herein
as an “Expense Category.”

4.2 Operating Expenses

“Operating Expenses” means, except to the extent excluded under Section
4.3, all amounts paid or incurred by or on behalf of Landlord in
connection with the ownership, operation, maintenance, management, repair,
security, replacement or restoration of the Project or any part thereof
(including city sidewalks), and all fixtures and personal property used in
conjunction therewith. Without limiting the generality of
the foregoing, Operating Expenses include Insurance Expenses, Utility
Expenses, and any and all costs of the following: (a) operating, repairing
and maintaining the Building, including parts and labor, the cost of
maintenance and service contracts in connection therewith, and normal
repair and replacement of worn-out equipment, facilities and
installations, but excluding the replacement of Base Building Systems
(except to the extent otherwise included in Permitted Capital Expenses);
(b) sales, use and excise taxes on goods and services purchased by
Landlord in connection with the

3

 

operation, maintenance or repair of the
Project; (c) licenses, certificates, permits and inspections; (d) costs of
contesting any governmental enactments, compliance with which would
reasonably be expected to increase Expenses, (e) implementation and
operation of any transportation system management program for the purpose
of complying with applicable Laws; (f) detention or retention ponds; (g)
landscaping and irrigation for Common Areas of the Project, as well as for
the Park Area; (h) relamping, and maintenance and repair of lighting
systems; (i) window cleaning and window repair (including glass
replacement); (j) [intentionally omitted]; (k) fees, costs and expenses
for management, consulting, legal, accounting, financial management, data
processing and information services, auditing and property tax services;
(l) expenses of telephone service, billing and postage, and stationery
supplies; (m) the fair rental value of any management office space, (n)
furniture, window coverings, carpeting, decorations and other customary
and ordinary items of personal property provided by Landlord for use in
common areas of the Project or in the Project management office, such
costs to be amortized over the useful life thereof; (o) wages, salaries,
bonuses and benefits (including life, health, disability and other
insurance, retirement and pension plans, union dues, welfare and other
fringe benefits, and vacation, holidays and other paid absence benefits),
and all payroll, social security, workers’ compensation, unemployment and
similar taxes levied thereon, for employees of Landlord or its agents
engaged in the management, operation, repair, or maintenance of the Real
Property; (p) uniforms (including the cleaning, replacement and pressing
thereof) provided to such employees and costs of training such employees;
(q) payments under any easement, license, operating agreement,
declaration, restrictive covenant, or instrument pertaining to the sharing
of costs by the Project; (r) janitorial service, extermination and refuse
removal; (s) alarm and other security services (including guards); (t)
maintenance and repair of the Common Areas, including replacements (as
needed in Landlord’s reasonable judgment) of cosmetic items such as wall
and floor coverings, ceiling tiles and light fixtures, and painting or
other maintenance and repair of exterior walls and interior Common Area
walls; (u) maintenance and repair of roofs and roof coverings; (v)
maintenance and repair of sidewalks, walkways, driveways, curbs and
lighting systems; (w) tenant service programs, and Utilities and
janitorial services for any Project amenities provided for the convenience
of tenants; (x) supplies, tools, machinery, equipment and materials,
whether purchased or leased, used in the operation, repair and maintenance
of the Project or any portion thereof; (y) costs, fees, charges or
assessments imposed by, or resulting from any mandate imposed on Landlord
by any Governmental Authority for fire and police protection, trash
removal, community services, or other services; (z) administration of
Landlord’s operations and maintenance program with respect to ACM; (aa)
appropriate reserves to provide for maintenance, repair and replacement of
improvements, fixtures, equipment and personal property, as determined by
Landlord consistent with prudent accounting practices; and (bb) Permitted
Capital Expenses. “Permitted Capital Expenses” means (i) the costs of
capital improvements undertaken in (or capital assets acquired for) the
Project after the Base Year, to the extent such capital items (a) are
reasonably anticipated by Landlord to effect economies in the operation or
maintenance of the Project, or any portion thereof; (b) are undertaken for
the purpose of enhancing the general security, health, safety and welfare
of occupants of the Project; or (c) are required under any Law going into
effect on or after the Commencement Date; (ii) the cost of any capital
improvements made to or capital assets acquired for the Building after the
Base Year to the extent that the cost of any such improvement or asset is
less than ten thousand dollars ($10,000); and (iii) the cost of any
capital improvements made to or capital assets acquired for the Building
after the Base Year which have a useful life of five (5) years or less.
Permitted Capital Expenses shall include amortization of the cost of each
permitted capital improvement or asset over its useful life as reasonably
estimated by Landlord at an interest rate equal to Landlord’s actual cost
of funds (for any such item, the cost of which is financed by a third
party), or the Interest Rate (for any such item, the cost of which is
financed by Landlord); provided, however, in no event shall such interest
rate exceed the maximum interest rate permitted by applicable Law.

4.3 Exclusions

The following items shall be excluded from Operating Expenses: (a) costs
associated with the operation of the business of the ownership or entity
which constitutes “Landlord,” as distinguished from the cost of Project
operations; (b) costs of selling, syndicating or financing any of
Landlord’s interest in the Project; (c) legal fees and costs arising from
any disputes between Landlord and its employees or agents not engaged in
Project operations; (d) ground lease rent, if any; (e) interest and
principal payments secured by any mortgage or deed of trust on the
Project; (f) costs for which Landlord is reimbursed by insurance proceeds;
(g) bad debt loss, rent loss, or reserves for such losses (except for the
premiums, if any, for rent loss insurance); (h) fines, penalties and
interest on past
due accounts; (i) leasing commissions, legal fees, design fees and
construction costs (including permit, license and inspection fees)
incurred in connection with the leasing of specific space in the Project
to new or existing tenants; and (j) costs of capital improvements except
to the extent permitted under Section 4.2.

4

 

4.4 Insurance Expenses

“Insurance Expenses” means all costs, expenses and obligations paid or
incurred by or on behalf of Landlord in connection with insuring the
Project or any part thereof or interest therein, including premiums for
property insurance, commercial general liability insurance, rent loss or
other business income insurance, earthquake insurance, flood or surface
water insurance, and other insurance as Landlord deems necessary in its
sole discretion. The term “Insurance Expenses” also includes all
deductible and self-insured retention amounts paid or incurred by Landlord
(collectively, “Landlord Deductible Amounts”) up to a maximum amount, per
occurrence, of (a) Fifty Cents ($0.50) per rentable square foot of the
Project for all losses other than Earthquake Damage; and (b) Two Dollars
($2.00) per rentable square foot of the Project for Earthquake Damage.
“Earthquake Damage” means damage to the Project or portions thereof
resulting from earthquakes and related aftershocks.

4.5 Utility Expenses

“Utility Expenses” means all costs, expenses and obligations paid or
incurred by or on behalf of Landlord in connection with the provision of
all heating, ventilating and air conditioning, electricity, water, sewer,
telephone, and other services and utilities serving the Project or any
part thereof (collectively, “Utilities”), and any amounts, taxes, charges,
surcharges, assessments or impositions levied, assessed or imposed upon
the Premises, the Building or the Project or any part thereof as a result
of the use of Utilities, rationing of Utility services, or restrictions on
Utility use. Utility Expenses do not include costs paid or incurred in
connection with repair or maintenance of the Base Building Systems through
which the Utilities are provided, all of which costs are deemed to be
Operating Expenses. Utility Expenses do not include any Utilities that are
separately metered to, and directly payable to the Utility provider by,
Tenant or by any other tenant of the Project.

4.6 Tax Expenses

(a) Included and Excluded Costs

“Tax Expenses” means all taxes, assessments, excises, fees, levies,
impositions and charges, of every kind, imposed on the use or
ownership of the Project or any part thereof, including all special,
general or supplemental assessments, entitlement fees, allocation
unit fees, and all other charges imposed by any Governmental
Authority having the direct or indirect power to tax (including all
sales, use, rent, gross receipts or similar taxes now or hereafter
imposed or assessed against Landlord by any taxing authority against
Landlord’s receipt of any Rent payable under the Lease), and whether
the amounts of such Tax Expenses are determined (a) by the area of
the Premises, the Building and/or the Project or any part thereof;
(b) upon any legal or equitable interest of Landlord in the Project;
(c) in connection with the creation or transfer of any interest in
the Project, or as a result of any construction, improvement or
renovation performed at the Project; or (d) by any other method of
valuation. The term “Tax Expenses” also includes legal and
consultants’ fees, costs and disbursements incurred in connection
with proceedings to contest, determine or reduce Tax Expenses, and
Landlord reserves the right, but has no obligation, to contest by
appropriate legal proceedings the amount or validity thereof. Tenant
and Landlord acknowledge that Proposition 13 was adopted by the
voters of the State of California in the June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by
Governmental Authorities for such purposes as fire protection,
street, sidewalk, road and utility construction and maintenance,
refuse removal, and for other governmental services which may
formerly have been provided without charge to property owners or
occupants, and that it is the intention of the parties that all new
and increased assessments, taxes, fees, levies and charges,
irrespective of their purpose, are included within the term “Tax
Expenses”. The term “Tax Expenses” does not include (x) any amounts
payable by Tenant pursuant to the terms of Section 4.9; (y) any of
Landlord’s federal or state income, estate, succession, inheritance
or franchise taxes, unless such taxes are levied, assessed or
imposed in lieu of or as a substitute for any amounts which would
otherwise constitute Tax Expenses under this Lease; or (z)
documentary transfer taxes payable pursuant to California Revenue &
Taxation Code Section 11901 et seq. (the Documentary Transfer Tax
Act).

(b) Effect of Proposition 8 Reductions

Notwithstanding any other provision of this Lease, the amount of Tax
Expenses for the Base Year shall be calculated without taking into
account any subsequent decreases in real estate taxes obtained in
any Comparison Year in connection with California Revenue and
Taxation Code Section 51 (each, a “Proposition 8 Reduction”).
Subject to the terms of Section 4.7, Tax Expenses for any Comparison
Year shall be calculated taking into account any Proposition 8
Reduction applicable to any one or more Comparison Year(s).
Therefore, Tenant acknowledges that, under certain limited
circumstances where

5

 

Landlord has obtained a Proposition 8 Reduction,
the Tax Expenses for the Base Year or any Comparison Year may be
greater than those actually incurred by Landlord, but shall
nonetheless be deemed to be the Tax Expenses from which Tenant’s
Share is determined.

4.7 Payment of Expenses

Tenant shall pay Landlord, as Additional Rent, Tenant’s Share of
Operating Expenses and Tax Expenses attributable to each Comparison
Year, to the extent each of such expense categories exceeds Base
Operating Expenses, Base Insurance Expenses, Base Utility Expenses,
and Base Tax Expenses, respectively (the “Expense Increases”), and
each Expense Category shall be treated separately for the purpose of
making such determinations. Landlord shall give Notice to Tenant of
the estimated Expense Increases for each Expense Category in each
Comparison Year; provided, however, Landlord shall have the right to
revise any of such estimates at any time and from time to time
throughout the Term. Commencing on the first day of the first
Comparison Year, and thereafter on the first day of each month
during the Term, Tenant shall pay one-twelfth of Tenant’s Share of
the estimated Expense Increase for each Expense Category (each such
payment, an “Expense Payment”). Within one hundred twenty (120) days
following the end of each Comparison Year, or as soon thereafter as
such information has been reconciled and compiled by Landlord,
Landlord shall provide Tenant a statement (each, a “Reconciliation
Statement”) showing the actual Expense Increases for the prior
Comparison Year in each Expense Category. If the total amount of
Expense Payments made by Tenant for estimated Expense Increases in
the prior Comparison Year is less than Tenant’s Share of the actual
Expense Increases for such Comparison Year, Tenant shall pay the
difference in a lump sum within thirty (30) days following the date
of the Reconciliation Statement. Any overpayment by Tenant of any
Expense Increases in any Expense Category for the prior Comparison
Year shall, at Landlord’s option, either be credited to Expense
Increases next due from Tenant, or returned to Tenant in a lump sum
payment within thirty (30) days following delivery of the
Reconciliation Statement. Each Reconciliation Statement furnished by
Landlord to Tenant shall be conclusive and binding upon Tenant
unless, within thirty (30) days after receipt thereof, Tenant gives
Notice to Landlord that Tenant disputes the correctness of such
Reconciliation Statement, specifying the particular respects in
which such Reconciliation statement is claimed to be incorrect. Such
Notice shall be deemed ineffective unless Tenant has timely paid,
and pending the determination of any such dispute continues to
timely make all Expense Payments in accordance with the terms of the
disputed Reconciliation Statement, which payments shall be without
prejudice to Tenant’s position. The obligations set forth in this
Section 3.3 shall survive the expiration or sooner termination of
the Lease. No failure by Landlord to timely submit Reconciliation
Statements or revised estimates of Expense Increases, or to timely
bill all or any portion of Tenant’s Share of any Expense Increases,
shall constitute a waiver of Landlord’s right to make such estimates
or reconciliations and to bill Tenant for and collect such amounts
at any time thereafter. Tenant shall not be entitled to any
reduction, refund, offset, allowance or rebate in any Rent due
hereunder if Operating Expenses or Tax Expenses for any Comparison
Year are less than Base Operating Expenses or Base Tax Expenses,
respectively (and the applicable Expense Category shall be
determined as if actual expenditures in said Comparison Year were
the amount utilized in determining Base Operating Expenses or Base
Tax Expenses, as the case may be).

4.8 Gross Up; Other Adjustments

(a) Based on Occupancy and Use

Landlord may adjust Tenant’s Share from time to time to reflect any
remeasurement by Landlord of substantially all of the Building, or
any additions to or deletions from the Rentable Area of the Building
or the Project, provided that any such adjustments in Rentable Area
shall be determined in accordance with BOMA’s Standard Method of
Measuring Floor Area in Office Buildings (ANSI/BOMA Z.65.1–1996) or
any successor or amended BOMA standard method of measuring floor
area in office buildings. Expenses that vary with the rate of
occupancy and that are attributable to the Base Year or any
Comparison Year in which less than one hundred percent (100%) of the
Rentable Area of the Building or Project is occupied, will be
adjusted by Landlord to the amount that Landlord reasonably
calculates such Expenses would have been if one hundred percent
(100%) of the Rentable Area of the Building or Project had been
occupied. Expenses as so adjusted shall be deemed, for the purposes
of determining any amount payable as Tenant’s Share, to be the
actual Expenses for such period. Landlord may also equitably adjust
Tenant’s Share for all or part of any Expense that relates to a
repair, replacement, or service that is provided on an excess basis
to the Premises, or that benefits only the Premises or only a
portion of the Building or Project. By way of example, to the extent
any increase in Tax Expenses is attributable to any Premises
Improvements, Landlord may (but shall not be required to) bill
Tenant directly for such

6

 

amounts as Additional Rent in lieu of
including such amounts as a portion of the Expense Increases for Tax
Expenses. Expense Increases payable by Tenant for the Comparison
Year in which the Lease expires shall be prorated on the number of
days in such Comparison Year falling within the Term, based on the
actual number of days in such year.

(b) Other Adjustments

The parties acknowledge that certain uncontrollable Expenses can
result in artificially high or low Base Year or Comparison Year
Expenses to the detriment of both parties. The parties therefore
agree that (i) for the purpose of determining the amount of
Utilities Expenses incurred in the Base Year, the amounts deemed to
have been paid or incurred by Landlord for Utilities services shall
be calculated as though there were no Utility rate increases imposed
during or prior to the Base Year due to extraordinary circumstances
including conservation surcharges, boycotts, embargoes or shortages;
and (ii) for the purpose of determining the amount of Insurance
Expenses, no Landlord Deductible Amounts shall be included (or be
deemed to have been included) in Insurance Expenses.

4.9 Personal Property Taxes

Tenant shall be liable for and shall pay not less than ten (10) days
before delinquency, all taxes assessed against and levied upon Tenant’s
Property. If any of Tenant’s Property is taxed or assessed with the
Project, Landlord may pay the taxing authority all amounts billed to
Landlord as a result thereof and Landlord may, but shall have no
obligation to, determine the validity of any such assessment or otherwise
object thereto. Tenant shall pay all such amounts to Landlord as
Additional Rent within ten (10) days following Landlord’s invoice
therefor. To the extent any such amounts are not included by Landlord in
Tax Expenses, Tenant shall pay, prior to delinquency, any (a) rent tax or
sales tax, service tax, transfer tax or value added tax, or any other
applicable tax on the rent or services herein or otherwise respecting this
Lease; (b) taxes assessed upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy
by Tenant of the Premises or any portion of the Project, including the
Parking Facilities; or (c) taxes assessed upon this transaction or any
document to which Tenant is a party creating or transferring an interest
or an estate in the Premises.

5. SECURITY DEPOSIT

Tenant shall pay the Security Deposit to Landlord concurrently with Tenant’s
execution of this Lease, as security for the faithful performance by Tenant of
all of the terms, covenants, conditions and agreements of this Lease. Any
pledge, transfer or other encumbrance by Tenant of Tenant’s interest in the
Security Deposit shall be null and void. Landlord may retain, use or apply all
or any part of the Security Deposit to compensate Landlord for any expense,
loss or damage suffered or expected to be suffered by Landlord as a result of
any Default by Tenant under this Lease, including any amounts Landlord is
obligated or elects to spend in order to cure any such Default. Tenant waives
the provisions of California Civil Code §1950.7 (which restricts application of

a security deposit only to those sums reasonably necessary to remedy defaults
in the payment of rent, to repair damage caused by Tenant, or to clean
premises) and all similar Laws now in force or subsequently adopted which
restrict application of security deposits to specific purposes. If all or any
portion of the Security is so applied by Landlord, Tenant shall, within ten
(10) days following demand by Landlord, deposit with Landlord an amount
sufficient to restore the Security Deposit to the original amount plus any
increased amounts as required by this Lease. If Tenant fails to timely restore
the Security Deposit, Landlord shall have the right to increase the Security
Deposit amount to 150% of the maximum monthly Base Rent amount payable under
this Lease during the Term. Landlord’s application of all or any portion of the
Security Deposit to any obligation of Tenant hereunder shall not limit
Landlord’s damages or constitute a waiver by Landlord of any claims against or
obligations of Tenant, other than the specific monetary obligations to which
the Security Deposit is applied, and then only to the extent such obligations
are thereby satisfied. Landlord shall not be required to keep the Security
Deposit separate from its general funds, Tenant shall not be entitled to
interest thereon, and Tenant waives the benefit of any Law to the contrary. In
no event shall Tenant have the right to apply any part of the Security Deposit
to any Rent payable under this Lease. Provided Tenant is not in Default at the
expiration or sooner termination of this Lease, and except to the extent
necessary to cure any Default or perform any continuing
obligation of Tenant hereunder, the Security Deposit shall be returned to
Tenant within sixty (60) days following the later of the expiration of the Term
or Tenant’s surrender of the Premises in the condition required under this
Lease. If Landlord disposes of its interest in the Premises, Landlord may
deliver or credit the Security Deposit to Landlord’s successor in interest in
the Premises and the transferring Landlord shall thereupon be relieved of
further responsibility with respect to the Security Deposit, and Tenant shall
look solely to the successor Landlord for any claims therefor.

7

 

6. USE OF PREMISES

6.1 Permitted Use

Tenant shall use the Premises solely for Tenant’s Permitted Use and for no
other purpose whatsoever without Landlord’s prior written consent, which
consent shall not be unreasonably withheld; provided, however, the factors
and conditions provided in this Lease for assignment and subletting may be
considered by Landlord in its consideration of the approval of any change
in use. In addition, and without limiting the generality of the foregoing,
uses prohibited under this Lease include use of the Premises or any
portion thereof for (a) offices of any agency or bureau of the United
States, any state or municipality, or any political subdivision thereof;
(b) offices or agencies of any foreign government or political subdivision
thereof; (c) offices of any health care professionals or health care
service organization; (d) schools or other training facilities which are
not ancillary to corporate, executive or professional office use; (e)
retail or restaurant uses; (f) communications firms such as radio and/or
television stations; or (g) any use which would result in an occupancy
density in the Premises which is greater than the average occupancy
density of the other tenants of the Building. Tenant shall not create any
nuisance or permit any waste in the Premises or elsewhere in the Project,
nor shall Tenant permit any odor, smoke, dust, gas, noise or vibration to
emanate from the Premises. Tenant shall not use or permit the use of the
Premises for any purpose or in any manner that would invalidate coverage
or increase premiums for any insurance covering the Premises, the Building
or the Project; or that would interfere with any other tenant’s use or
occupancy of the Project. Tenant shall, at its sole cost and expense,
comply with any and all reasonable requirements of Landlord’s and Tenant’s
insurers. Tenant shall pay Landlord, as Additional Rent, any increases in
insurance premiums resulting from any use of the Premises for any purpose
other than Tenant’s Permitted Use.

6.2 Asbestos-Containing Materials Notification

Tenant acknowledges that the Building was constructed before 1979 and that
there is ACM in areas of the Building (outside the Premises) and Project.
Attached hereto as Exhibit F is an Asbestos Disclosure Statement
describing such matters as the location of ACM in the Building. Tenant
acknowledges that such Asbestos Disclosure Statement complies with the
requirements of California Health & Safety Code §§ 25915 et seq., and
Tenant shall in turn provide all such notices required by such Law to all
Tenant Parties who work in the Building. Tenant shall comply, and cause
all Tenant Parties to comply, with all Laws applicable to ACM, including
without limitation work practice and notification regulations in the event
of any work or activities which might disturb the ACM. Tenant shall not
cause, suffer or permit any such activities to commence or continue
without first notifying and obtaining the consent of Landlord, in addition
to any notices or consents required by Law. Tenant shall comply, and cause
all Tenant Parties to comply, with any and all Rules (including any ACM
management programs) which may be adopted by Landlord with respect to the
ACM. If any asbestos-related work is performed by or at the instance of
Tenant, Tenant shall promptly provide Landlord with documentation
establishing, as to each and every performance of such work, that the same
was performed strictly in accordance with all Laws and the requirements of
this Lease. Tenant agrees that there shall be no abatement or other
diminution of Rent as a result of the presence of ACM in the Building or
as a result of any asbestos-related work performed by Landlord or others,
nor shall Landlord be liable for any annoyance, inconvenience or injury to
business, persons or property resulting from any of the foregoing. Tenant
waives and releases any claim against Landlord which Tenant may now or
hereafter have or acquire arising in connection with the presence of ACM
in the Building or Project.

6.3 Compliance with Rules and Laws

Tenant shall, at Tenant’s expense, faithfully observe and comply with, and
shall cause all Tenant Parties to so observe and comply with, (a) all
laws, statutes, codes, rules, regulations, ordinances, requirements,
guidelines and orders, now in force or hereafter promulgated or adopted,
by any Governmental Authority (collectively, “Laws”) which are applicable
to the occupancy of the Premises, the conduct of Tenant’s business
therein, and the use by Tenant or any Tenant Party of the Premises or any
other portion of the Project; (b) all recorded covenants, conditions and
restrictions affecting the Project, whether presently existing or
subsequently recorded (collectively, “CC&Rs”); (c) all current and future
requirements of any applicable fire rating bureau or other body exercising
similar functions (collectively, “Requirements”); and (d) all of the Rules
and Regulations attached hereto as Exhibit D, along with any amendments or
additions thereto as adopted by Landlord
from time to time for the Building or the Project (collectively, the
“Rules”). Notwithstanding the foregoing, Tenant shall not be required to
comply with any subsequently adopted Rules to the extent they conflict
with the expressly negotiated provisions of this Lease. All subsequently
adopted Rules shall be binding upon Tenant upon delivery of a copy thereof
to Tenant. Landlord shall not be responsible to Tenant for the failure of
any other person to observe or abide by any Rules; however, Landlord shall
make a reasonable effort to encourage compliance therewith in a
non-discriminatory manner. Tenant acknowledges and agrees that its
obligation to comply with Laws includes

8

 

compliance with all present or
future programs intended to manage parking, transportation or traffic in
and around the Project, and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
Tenant’s employees at the Project by working directly with Landlord,
Governmental Authorities, and any applicable transportation-related
committees and entities.

6.4 Required Alterations; Violations of Law

Tenant shall be responsible, at its sole cost and expense, for the making
of all Alterations to the Premises, as are required to comply with
applicable Laws to the extent the compliance obligation relates to or is
triggered by (a) Tenant’s particular use of the Premises, or (b) the
Premises Improvements; provided, however, Tenant shall not be responsible
for the remediation of any ACM in the Building unless such remediation is
triggered by any Alterations to the Premises made by Tenant. The judgment
of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that
Tenant has violated any Laws, shall be conclusive of that fact as between
Landlord and Tenant. Tenant shall advise Landlord in writing, with copies
of all notices and other correspondence, within ten (10) days following
the date Tenant first has knowledge of any claim, action or investigation
(whether oral or written, actual or threatened) by any person or
Governmental Authority, with respect to any real or alleged noncompliance
by Landlord or Tenant with any Law relating to the Premises, the Building
or the Project. “Governmental Authority” means any federal, state or local
legislative, executive or judicial or regulatory authority agency with
jurisdiction to regulate, determine or otherwise affect the ownership,
construction, use, occupancy, possession, operation, maintenance,
alteration, repair, demolition or reconstruction of any portion or element
of the Project.

7. UTILITIES AND SERVICES

7.1 Provided by Landlord

Subject to applicable Laws, and the rules or actions of any public utility
furnishing such service and any other limitations set forth in this Lease,
Landlord shall provide the following utilities and services to the
Premises: (a) heating, ventilation and air-conditioning (“HVAC”) as
necessary for normal comfort under conditions of normal office use in the
Premises, as reasonably determined by Landlord, during Normal Hours on
Mondays through Fridays from 7:30 a.m. to 6:00 p.m., and on Saturdays from
8:00 a.m. to 4:30 p.m. (“Normal Hours”), except for the dates of
observation of New Year’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day and other locally or nationally recognized
holidays (“Holidays”); (b) city water from regular Building outlets for
drinking, lavatory, and toilet purposes; and (c) electricity for light and
power in the Premises. Landlord shall also provide regular janitorial
services to the Building; however, Landlord shall not be required to
provide janitorial services for non-Building Standard Tenant Improvements
such as metallic trim, wood floor covering, glass panels, interior
windows, kitchens, executive workrooms, and shower facilities. Landlord
may, in Landlord’s sole discretion, at any time and from time to time,
contract for any or all Utilities (including generation, transmission, or
delivery thereof) with utility service providers of Landlord’s choosing
(each, a “Utility Service Provider”). Tenant shall fully cooperate with
Landlord and its Utility Service Provider(s). Tenant shall permit Landlord
and its Utility Service Provider(s) to have reasonable access to the
Premises and the utility equipment serving the Premises, including lines,
feeders, risers, wiring, pipes, and meters.

7.2 Excess Use

Tenant’s use of electricity shall not exceed the capacity of the feeders,
risers or wiring serving the Premises. Specifically, Tenant agrees that
(a) its connected electrical load for lighting shall not exceed an average
of one (1) watt per square foot of the Premises during Normal Hours on a
monthly basis; and (b) its connected electrical load for all other power
purposes shall not exceed an average of two (2) watts per square foot of
the Premises during Normal Hours on a monthly basis. Electricity for
Tenant’s lighting and other power purposes shall be at a nominal one
hundred twenty (120) volts. No electrical circuit for the supply of power
shall require a current capacity exceeding twenty (20) amperes. Tenant
shall not, without Landlord’s prior written consent, use heat-generating
machines, machines other than normal fractional horsepower office
machines, or equipment or lighting other than
Building Standard lights in the Premises that may affect the temperature
otherwise maintained by the HVAC system or increase the amount of water
normally furnished to the Premises. If such consent is given, Landlord
shall have the right to install supplementary air-conditioning units or
other facilities in the Premises, including additional metering devices.
Tenant shall pay Landlord for all costs for such supplementary facilities,
including the costs of: (a) installation, operation, and maintenance; (b)
increased wear and tear on existing equipment; and (c) other similar
charges. If Tenant uses water, electricity, heat, or HVAC in excess of
that required to be supplied by Landlord under this Section 7.2, Tenant
shall pay Landlord for all costs of: (x) the excess service; and (y)
increased wear and tear on existing equipment caused by Tenant’s excess
consumption. Landlord may install

9

 

devices to separately meter or submeter
any increased use, and Tenant shall pay Landlord for all such costs,
including the cost of purchasing the additional metering devices and the
expense of reading same. If Tenant wishes to use HVAC during hours other
than Normal Hours, Tenant shall give Landlord such prior Notice as
Landlord shall from time to time establish as appropriate, and Landlord
shall supply such HVAC to Tenant at an hourly cost reasonably determined
by Landlord to cover all costs of such service, including any overhead and
other expenses incurred by Landlord in connection therewith. All amounts
payable by Tenant pursuant to this Section 7.2 shall be paid to Landlord
as Additional Rent within thirty (30) days following Landlord’s invoice
therefor.

7.3 Interruption of Utilities

	(a)	 	Landlord shall not be liable for any Claim arising out of any
failure to furnish, delay in furnishing, interruption of, or defect
in any Utilities or services (including telephone and
telecommunication services) for the Premises or Project, or for
diminution in the quality or quantity thereof (each of such events,
an “Interruption”) when the Interruption is entirely or partially
caused by (a) breakage, damage or destruction; (b) the making of
repairs, replacements, or improvements; (c) strike, lockout, or other
labor trouble; (d) inability to secure Utilities or services of any
kind at the Project after reasonable effort to do so; (e) Casualty or
Condemnation; (f) any act or omission of Tenant or of any other
party; (g) changes in Utility Service Providers or the providers of
other services; (h) failure of any Utility Service Provider to
provide adequate services; or (i) any other Force Majeure event or
cause beyond Landlord’s reasonable control. No such Interruption
shall constitute an actual or constructive eviction of Tenant or,
except as provided in Section 7.3(bUnable to cross reference 7.3(b) –
heading 8?) below, relieve Tenant of any of its obligations under
this Lease, and Landlord shall not be liable under any circumstances
for loss of or injury to property, or for injury to or interference
with Tenant’s business, including any loss of profits, as a result
thereof. Tenant shall fully cooperate with all Rules imposed by
Landlord or any Utility Service Provider relating to the use or
conservation of Utilities.
	 
	(b)	 	Notwithstanding the foregoing, if Tenant is prevented from
using, and does not use, the Premises due to the loss of services,
utilities or access to the Premises (collectively, “Loss of
Services”), and such interruption is directly caused by Landlord’s
negligence or willful misconduct, Tenant shall provide Landlord with
written notice of such fact. Provided that such Loss of Services
results in Tenant being prevented from using the Premises, and Tenant
does not use the Premises for at least five (5) consecutive business
days (the “Eligibility Period”) as a result of any such Loss of
Services, then Base Rent and Expenses shall be abated after
expiration of the Eligibility Period for such time that Tenant
continues to be so prevented from using, and does not use, the
Premises. To the extent Tenant is entitled to abatement because of
an event covered by the damage or destruction or condemnation
provisions of the Lease, then the provisions hereof shall not be
applicable, and no period of time that Tenant is unable to use the
Premises or any portion thereof as a result of such event shall be
considered in determining whether any Eligibility Period has expired.
Notwithstanding any of the foregoing provisions to the contrary,
Tenant shall not be permitted any of the abatement rights granted in
this Section unless Tenant shall have first used commercially
reasonable efforts to conduct business in the Premises despite any
such Loss of Services.

8. ACCESS CONTROL; PROJECT SAFETY

8.1 Access Control and Other Landlord Rights

Landlord shall have the right to implement in the exercise of its good
faith business judgment any and all access control or other security
measures that Landlord, in the exercise of its sole discretion, deems
necessary or desirable for the protection of the Project and Landlord’s
interests therein, and Tenant acknowledges that such measures, if any, are
undertaken by Landlord solely for the protection of Landlord and its
interest in the Project. No interruption of Tenant’s business or loss of
access to the Premises resulting from Landlord’s exercise of any such
measures shall constitute an eviction of Tenant or a disturbance of
Tenant’s right of quiet enjoyment. Tenant acknowledges that (a) no person
performing access control or other security services for Landlord at the
Project is
or will be an on-duty law enforcement officer; (b) no such person is
authorized by any Governmental Authority to exercise police powers; and
(c) Landlord makes no representation or warranty whatsoever that any
access control or other security requirements of Landlord, whether
required by this Lease or discretionary on the part of Landlord, will be
sufficient to protect Tenant, any Tenant Party, or any other person, or to
deter or prevent bodily injury (including death resulting therefrom) or
the loss of or damage to property from any cause (including the commission
or attempted commission of any crime or terrorist act). Accordingly, no
failure or inadequacy of any security measures undertaken by Landlord or
any Landlord Party shall relieve Tenant of any of its obligations

10

 

under
this Lease, or give rise to any liability on the part of Landlord or any

Landlord Party, and Tenant hereby waives any and all Claims and defenses
against Landlord and any Landlord Party arising therefrom.

8.2 Tenant’s Obligation to Cooperate

Tenant shall at all times fully submit to and comply, and shall cause all
Tenant Parties to so submit to and comply, with all access control and any
other security measures implemented by Landlord from time to time during
the Term. Such measures may include, by way of example only, any or all of
the following: (a) the evacuation of, or denial of access to, all or any
portion of the Building or Project for cause, suspected cause or for drill
purposes; (b) closure of the Building or Project during periods other than
Normal Hours (provided, however, that Tenant’s employees shall be
permitted access to the Premises twenty-four (24) hours a day, seven (7)
days a week, subject to the requirements of Governmental Authorities,
applicable Laws, and Landlord’s Rules governing after-hours access); (c)
monitoring or recording, by closed circuit television or otherwise,
persons entering or leaving the Building or Project; (d) requiring proof
of identity (by electronic or other means) of any such persons; (e)
recording (through the use of sign in sheets or otherwise) the time of
arrival and departure of any such persons; and (f) such other measures as
Landlord considers desirable, in the exercise of its reasonable
discretion.

8.3 Tenant’s Security System

Tenant may, at its sole cost and expense, install its own security system
(“Tenant’s Security System”) in the Premises; provided, however, that
Tenant’s Security System shall at all times be fully compatible with all
Base Building Systems now or hereafter existing at the Project, as well as
with all Premises Systems, if any. Tenant shall be solely responsible for
ensuring such full compatibility, and acknowledges and agrees that Tenant
shall not install, nor shall Tenant have any right to operate, any
Tenant’s Security System which is not so compatible. By way of example,
and without limiting the generality of the foregoing, Tenant’s Security
System shall be considered incompatible if it is not completely
independent of all other security systems at the Project, or if the
installation, monitoring, use, operation, maintenance or removal thereof
could reasonably be expected to adversely affect (a) any Base Building
Systems (including any other security systems) or Premises Systems; (b)
Landlord’s management or leasing operations at the Project; or (c) the
property or business of any other tenant at the Project. Tenant shall, at
Tenant’s sole cost and expense, cause Tenant’s Security System to be
properly installed, monitored, maintained and operated at all times during
the Term. Tenant’s Security System, if any, shall be part of Tenant’s
Property, and any installation, modification or removal thereof shall be
deemed to be an Alteration.

9. ALTERATIONS AND ADDITIONS

9.1 No Alterations Without Consent

“Alterations” means all alterations, additions or improvements to the
Premises made by or at the request of Tenant during the Term. Tenant shall
not make, or permit to be made, any Alterations without the prior written
consent of Landlord. Notwithstanding the foregoing, Landlord’s prior
written consent shall not be required for the making of Cosmetic
Alterations; provided, however, that all other obligations of Tenant
applicable to the making of Alterations shall also apply to the making of
Cosmetic Alterations, and further provided that Tenant gives at least
fifteen (15) days Notice to Landlord prior to commencing any work thereon;
which notice shall include (i) a detailed description of the nature and
extent of the work, (ii) copies of all plans and specifications relating
thereto, and (iii) copies of all estimates and bids received by Tenant
from its contractors evidencing the cost thereof. “Cosmetic Alterations”
means those Alterations which are strictly cosmetic, cost less than Ten
Thousand Dollars ($10,000) in the aggregate in any consecutive twelve 12
month period, and could not under any circumstances be expected to cause
any of the results described in clauses (a) through (h) below. All
Alterations (whether or not the prior consent of Landlord thereto is
required) shall be undertaken and completed at Tenant’s sole cost and
expense. Landlord shall not unreasonably withhold its consent to any
proposed Alterations; however, Landlord’s consent shall be deemed to have
been reasonably withheld if the proposed Alterations could (a) affect any
structural component of the Building; (b) be visible from or otherwise
affect any portion of the Project other than the interior of the Premises;
(c) affect any Base Building
Systems; (d) result in Landlord being required under any Laws to perform
any work that Landlord could otherwise avoid or defer; (e) result in an
increase in the demand for Utilities or services which Landlord is
required to provide (whether to Tenant or to any other tenant in the
Project); (f) cause an increase in any Insurance Expenses; (g) result in
the disturbance or exposure of, or damage to, any ACM or other Hazardous
Material; or (h) violate or result in a violation of any Law, Rule or
Requirement. All permanent Alterations, including HVAC, lighting,
electrical, fixed partitioning, drapery, floor coverings, wall coverings
and built-in cabinetry, shall at once be and become the property of
Landlord, and shall not be a part of Tenant’s Property.

11

 

9.2 Pre-Construction Requirements

Any request for consent to Alterations shall be accompanied by detailed
plans and specifications prepared by a duly licensed architect or
engineer. Among other things, Landlord may condition its consent on the
requirement that Tenant provide Landlord with a surety bond, letter of
credit, or other financial assurance to ensure that the Alterations will
be promptly completed, that all costs of the Alterations will be fully and
timely paid, and that Landlord will be protected from any liability for
mechanic’s and materialmen’s liens. Prior to commencing construction,
Tenant shall provide Landlord with a list of all design professionals,
contractors, subcontractors and materialmen performing work on or
providing materials for the Alterations, along with the contract sum
payable to each. No work in connection with any Alterations shall commence
until Tenant has furnished Landlord with a complete copy of all contracts
for the provision of services, labor and materials in connection
therewith. Tenant shall obtain all building permits and licenses required
by Law, and shall furnish copies thereof to Landlord prior to the
commencement of any work in connection with the Alterations.

9.3 Construction; Contractors

Tenant shall cause all Alterations and all construction activities in
connection therewith to comply with all Applicable Laws, Rules and
Requirements, including any construction Rules adopted by Landlord. All
Alterations shall be constructed entirely within the Premises, in a good
and workmanlike manner, using new materials of at least Building Standard
quality. All work shall be diligently performed and promptly completed, in
a manner that does not obstruct access anywhere in the Project, disrupt
the business activities of other tenants, or interfere with any other work
being undertaken by Landlord or others in the Project. Tenant shall
promptly pay all costs of Alterations, as and when required by the terms
of the contracts for such work. Within twenty (20) business days after
substantial completion of any Alterations, Tenant shall deliver to
Landlord a reproducible plan of the as-built Alterations. The Alterations
shall be constructed only by duly licensed, reputable contractors and
subcontractors acceptable to Landlord. Tenant acknowledges that Landlord
may require the use of union labor in the performance of any Alterations
at the Project if necessary or desirable, in Landlord’s judgment, for the
maintenance of labor peace. Tenant shall take all measures necessary to
ensure that labor peace is maintained at all times, and shall not employ
or permit the employment of any contractor, subcontractor or laborer in
the Premises if it is reasonably foreseeable that such employment will
cause conflict or interference with other contractors, subcontractors or
laborers engaged in the performance of work at the Project. In the event
of any such interference or conflict, Tenant, upon demand of Landlord,
shall require all contractors, subcontractors or laborers causing such
interference or conflict to leave the Project immediately. Tenant shall
not permit any contractor or subcontractor to perform any work on the
Premises until acceptable evidence of all insurance required of Tenant’s
contractors under Section 14.4 has been furnished to Landlord.

9.4 Plan Review; Construction Monitoring

Tenant shall pay Landlord, as Additional Rent, within ten (10) days
following Landlord’s invoice therefor, all fees and costs of Landlord’s
architects, engineers or other consultants in connection with the review
of plans and specifications in connection with any proposed Alteration,
whether or not approved, as well as the reasonable fees or costs incurred
by Landlord in connection with monitoring the progress of the Alterations.
Landlord may, in the exercise of its reasonable discretion, require a
deposit of its estimated fees in advance of performing any review. Neither
the payment of any such fees or costs, nor the monitoring, administration
or control by Landlord of any contractor or any part of the Alterations
shall be deemed to constitute any express or implied warranty or
representation that any Alteration was properly designed or constructed,
nor shall it create any liability on the part of Landlord. Tenant
acknowledges that such monitoring, administration or control by Landlord,
if any, and the payment of any such fees or costs, is solely for the
benefit of Landlord and the Project. Landlord’s approval of the plans,
specifications and working drawings in connection with any Alterations
shall create no responsibility or liability to Tenant on the part of
Landlord or Landlord’s consultants for the design sufficiency of such
plans, or their compliance with any Laws.

9.5 Liens and Notices

Tenant shall not allow any liens to exist, attach to, be placed on, or
encumber Landlord’s or Tenant’s interest in the Premises, Building, or
Project by operation of Law or otherwise, including any lien of mechanics,
material suppliers, or others with respect to work or services performed
or claimed to have been performed for, or materials furnished or claimed
to have been furnished to, Tenant or the Premises. Landlord has the right
at all times to post and keep posted on the Premises any notice that it
considers necessary for protection from such liens, and Tenant shall give
Landlord at least seven (7) business days prior Notice of the date any
Alterations work is expected to commence, to permit Landlord to post and
record a notice of nonresponsibility. If any such lien attaches or Tenant
receives notice of any such lien, Tenant shall cause the lien to be
immediately released and removed of record,

12

 

either by payment of the claim
or by posting of a proper bond. If any such lien is not released and
removed of record within ten (10) days following Notice from Landlord to
do so, Landlord may take any and all action necessary to release and
remove the lien of record (including payment of the claim), without any
duty to investigate the validity thereof or to provide any further notice
to Tenant, and all expenses (including attorney fees and costs) incurred
by Landlord in connection therewith shall be payable by Tenant as
Additional Rent within ten (10) days following Landlord’s Notice therefor.
Upon substantial completion of any Alteration, Tenant shall (a) cause a
timely notice of completion to be recorded in the Office of the Recorder
of the county in which the Project is located, in accordance with
California Civil Code §3093 or any successor statute; and (b) deliver to
Landlord evidence of full payment and unconditional final lien waivers for
all labor, services and materials furnished in connection therewith.

10. TELECOMMUNICATIONS SERVICES AND EQUIPMENT

10.1 Consent Required

Neither Tenant nor any Tenant Party shall, without Landlord’s prior
written consent, install, maintain, operate, alter, repair, or replace
(collectively, “installation or use”) any wire, cable, conduit, antenna,
satellite dish or other facility or equipment for use in connection with
any telephone, television, telecommunications, computer, Internet, or
other communications or electronic systems, services or equipment (such
systems and equipment being referred to collectively as
“Telecommunications Equipment,” and such services as “Telecommunications
Services”) in, on, or about the Building, including its roof or exterior
walls, except for installations or alterations wholly within the Premises.
Landlord shall have the right to adopt Rules governing the installation or
use of Telecommunications Equipment, and to limit the number of carriers,
vendors, or other operators (“Telecommunications Providers”) providing
Telecommunications Equipment or Services in or to the Building, as deemed
necessary or appropriate by Landlord for the orderly and efficient
management and operation of the Building. With regard to any request by
Tenant to install Telecommunications Equipment on the roof of the
Building, Tenant agrees that Landlord may, without limitation, condition
its consent on (a) Tenant’s payment of Rent for Tenant’s use of such roof
space, in an amount determined by Landlord in its sole discretion, and (b)
the installation by Tenant, at its sole cost and expense, of a structural
platform and/or access walkway to protect the roof from damage from the
placement of and access to such Telecommunications Equipment. Landlord may
also require that any such work on or involving the roof (including any
roof penetrations approved by Landlord) be performed, at Tenant’s cost, by
a contractor designated or approved by Landlord.

10.2 Communications Pathways

Tenant acknowledges that there is limited space in the Building to
accommodate Telecommunications Equipment, and agrees to reasonably
cooperate with Landlord and with other providers and users of
Telecommunications Equipment to share the available space and facilities
and to coordinate the efficient collocation of Telecommunications
Equipment in the Building. Access to and use of space within conduit,
utility closets, risers, raceways, switching rooms, the roof, and other
facilities in the Building for the installation, maintenance, operation,
alteration, repair, or replacement of Telecommunications Equipment
(collectively, the “Communications Pathways”) shall be subject to
Landlord’s approval and to such Rules as may be promulgated by Landlord
from time to time. If Landlord determines that any Communications Pathways
in the Building are inadequate to accommodate any Telecommunications
Equipment proposed by Tenant (when considered along with the existing or
prospective needs of other occupants and users of the Building), Landlord
may condition Landlord’s approval of Tenant’s Telecommunications Equipment
on the construction of additional Communications Pathways as required by
Landlord at Tenant’s expense.

10.3 Installation and Use

All installations, alterations and replacements of Telecommunications
Equipment shall be deemed to be Alterations, and shall be performed
strictly in accordance with the requirements of Article 8. Tenant shall be
solely responsible for the payment of all fees, costs and expenses
incurred as a result of the installation or use of any Telecommunications
Equipment or Services by or at the request of Tenant. If any
Telecommunications Equipment installed by or for Tenant could create an
electromagnetic field exceeding the normal insulation ratings of ordinary
twisted pair riser cable, or cause radiation higher than normal background
radiation, the lines, cabling or other wiring therefor, including riser
cables (collectively, “Wiring”) shall be adequately insulated to prevent
such excessive electromagnetic fields or radiation. Tenant shall
immediately remove, on demand by Landlord, any Telecommunications
Equipment installed or used in violation of any provision of this Lease.
Tenant shall cause all Wiring connected to any Telecommunications
Equipment used or installed by Tenant to be clearly and accurately labeled
at each end. Tenant shall not grant to any third party (by operation of
Law or otherwise) any security

13

 

interest in any Wiring, and any such
security interest granted without Landlord’s prior written consent shall
be null and void. No installation or use of Telecommunications Equipment
by or for Tenant shall interfere with the operation (including, without
limitation, transmissions, or reception) of any other Telecommunications
Equipment located in the Building. Tenant shall repair any damage caused
by Tenant’s installation or use of Telecommunications Equipment, and shall
indemnify, protect, defend, and hold Landlord harmless from all Claims
arising in connection therewith, including (a) any claims by other tenants
of the Building or other third parties that Tenant’s installation or use
of Telecommunications Equipment has interfered with or interrupted the
operation of other Telecommunications Equipment; (b) any voiding of or
other effect that Tenant’s installation or use of Telecommunications
Equipment may have on any warranty with respect to the roof or other
portions of the Building; and (c) any claim of ownership or interest in
Telecommunications Equipment or Wiring by any Telecommunications Providers
or any third party. Landlord shall not be liable for any damage to or
interference with Tenant’s business or any loss of income from it, or for
loss of, damage to, or interference with Tenant’s Telecommunications
Equipment, or the operation of it, including without limitation, damage or
interference caused by or resulting from the installation or use of other
Telecommunications Equipment in the Building, whether by or for Landlord,
other tenants of the Building, or other third parties, and Tenant waives
all Claims against Landlord therefor except to the extent directly arising
out of the gross negligence or willful misconduct of Landlord. No approval
by Landlord of Tenant’s installation of any Telecommunications Equipment
shall constitute a representation that such Telecommunications Equipment
will function effectively in or on the Building.

10.4 Landlord not Obligated

Landlord shall have no obligation to provide, maintain or repair any
Telecommunications Equipment; make available to Tenant any particular
Telecommunications Services through any particular Telecommunications
Provider, or allow any particular Telecommunications Provider access to
the Building or Project; or continue to grant access to any
Telecommunications Provider who has previously been given access. Landlord
shall have no responsibility for the maintenance of any infrastructure to
which any Telecommunications Equipment may be connected. If any
Telecommunications Services are interrupted, curtailed or discontinued,
Landlord shall have no obligation or liability with respect thereto and it
shall be the sole obligation of Tenant at its own expense to obtain
substitute service. Landlord shall have the right to interrupt any
Telecommunications Services on a temporary basis (a) in the event of any
emergency; (b) following reasonable advance written notice to Tenant, as
necessary in connection with maintenance, repairs, construction or any
other activity or work at the Building; (c) following reasonable advance
written notice to Tenant, to permit the installation, repair, replacement
or removal of Telecommunications Equipment by any party; (d) following
reasonable advance written notice to Tenant, on account of any violation,
by any Telecommunications Provider or user of the Telecommunications
Equipment, of any obligation to Landlord; or (e) following reasonable
advance written notice to Tenant, if Tenant’s installation or use of
Telecommunications Equipment causes interference with Landlord or other
parties.

11. SURRENDER

On or before the Expiration Date or sooner termination date of this Lease,
Tenant shall surrender the Premises and all Premises Improvements (except those
which Tenant is required to remove) to Landlord in good condition and repair,
normal wear and tear excepted, with all interior walls, floors and floor
coverings cleaned, and otherwise in the condition required under this Article
11. Tenant shall not, however, be required to repair (or pay for the repair of)
any Casualty Damage except to the extent such repairs are the obligation of
Tenant under Article 16. The term “normal wear and tear” does not, and shall
not be deemed to, include any damage or deterioration that could have been
prevented through proper maintenance, or by Tenant’s full and timely
performance of all its obligations under this Lease. On or before the
expiration
or sooner termination of this Lease, Tenant shall (a) remove all of Tenant’s
Property from the Project; (b) remove all Premises Improvements which Tenant is
required to remove, and all Premises Improvements which Tenant is permitted
(and has elected) to remove; and (c) fully repair any damage to the Premises or
other portions of the Project caused by the removal of Tenant’s Property and
the Premises Improvements. If requested by Landlord in writing at the time
Landlord approves of the installation or construction of said Premises
Improvements, Tenant shall remove or cause to be removed at its expense, upon
the expiration or any sooner termination of this Lease, any and all Premises
Improvements made in or upon the Premises during the Term by or for Tenant. Any
of Tenant’s Property not removed from the Project by Tenant as required herein
shall be deemed abandoned and may be retained, used, stored, removed or
disposed of by Landlord as Landlord sees fit in the exercise of its sole
discretion, and Tenant waives all Claims against Landlord resulting therefrom.
Within ten (10) days following Landlord’s invoice therefor, Tenant shall
reimburse Landlord for all costs incurred by Landlord in (x) storing, removing
or disposing of any abandoned Tenant’s Property; and (y) repairing any damage
to the Premises or Project caused by Tenant, but only to the extent the making
of (or payment for) such repairs is the responsibility of Tenant under this
Lease; and (z) removing any Premises Improvements which Tenant was required to
remove, and all repair and restoration work necessitated by such removal.
Tenant shall leave in place all Premises

14

 

Improvements (including Wiring) except
those which Landlord requires Tenant to remove in accordance with the
provisions of this Article 11, without any obligation on the part of Landlord
to reimburse Tenant for the value thereof. Tenant represents and warrants that
all Tenant’s Property and Premises Improvements shall be free and clear of all
liens and encumbrances, and that no other person shall have any ownership or
use interest therein as of the Expiration Date or sooner termination of the
Lease. All Tenant’s obligations under this Article 11 shall survive the
expiration or sooner termination of this Lease.

12. MAINTENANCE AND REPAIRS

“Base Building Systems” means all HVAC, electrical, plumbing, mechanical,
elevator, escalator, sprinklers, sewer, drainage, fire/life safety, security,
communications, and energy management systems and equipment (collectively,
“Systems”) serving the Building or other areas of the Project, except for any
Premises Systems. “Premises Systems” means any Systems that serve only the
Premises, regardless of whether all or any portions of such Systems are located
within or outside of the Premises. Except for normal wear and tear, and damage
to the extent caused by any Uninsured Peril or Landlord Insured Peril, Tenant
shall, at all times and at its sole cost and expense, maintain, repair and keep
in good and sanitary order, condition and repair (a) all portions of the
Premises (including all Premises Improvements and Tenant’s Property); (b) all
portions of any Base Building Systems located within the Premises (i.e., the
distribution portions as opposed to the main loop); and (c) all Premises
Systems. Tenant shall cause any repair or maintenance work affecting the Base
Building Systems to be performed solely by contractors approved by Landlord for
the performance of such work. If Landlord performs any of Tenant’s maintenance
or repair obligations hereunder, whether at Tenant’s request or because of any
Default by Tenant in the performance thereof, Tenant shall reimburse Landlord
all Landlord’s costs in connection therewith in accordance with the terms of
Article 25. Subject to the provisions of Article 19, Landlord shall maintain,
repair, and keep in reasonably good condition (a) all Project Improvements; (b)
the Base Building Systems located outside the Premises; and (c) the Base
Building Improvements. Subject to the provisions of Section 14.7, Tenant shall
reimburse Landlord upon demand for all costs and expenses incurred by Landlord
for the repair of any damage to the Premises or the Project caused by the
negligence or willful misconduct of Tenant or any Tenant Party. Tenant shall
promptly report in writing to Landlord any defective condition known to Tenant
which Landlord is required to repair. Tenant waives all rights to make repairs
at the expense of Landlord or to terminate this Lease, as provided in
California Civil Code §§1941 and 1942, and 1932(l), respectively, and any
similar Law.

13. ASSIGNMENT AND SUBLETTING

13.1 Definitions

“Transfer” means any assignment, sale, mortgage, pledge, encumbrance,
conveyance, or other transfer of all or any part of the leasehold estate
granted to Tenant under this Lease; any sublease of the Premises or any
portion thereof; any granting of permission to any person other than
Tenant to occupy the Premises; any merger, division, consolidation or
liquidation of Tenant or of any parent of Tenant that results in a change
of control over Tenant (including new management or other changes in
decision-making authority); or any dissolution of Tenant (unless, in the
case of any partnership or limited liability company, such entity is
immediately reconstituted following such dissolution). If Tenant is any
entity other than a publicly traded corporation, the term “Transfer” also
means any transfer of twenty-five percent (25%) or more of the ownership
interests in Tenant, or of the unencumbered assets of Tenant, whether such
transfer is effected voluntarily, involuntarily, or by operation of Law.
“Transferee” means any person to whom Tenant Transfers any right or
interest hereunder. Notwithstanding anything in this Section 13.1 to the
contrary, subject to
satisfaction of the terms and conditions of this paragraph, the following
events (each a “Permitted Transfer”) shall not be subject to Landlord’s
rights under Sections 13.2, 13.3 or 13.5 hereof: the voluntary transfer
of twenty-five percent (25%) or more of the ownership interests in Tenant,
or the sale of substantially all of the assets of Tenant (including this
Lease), in each case in connection with the merger, change in control
(including a transfer of ownership interests in Tenant in connection with
an initial public offering of Tenant’s stock on a major exchange) or the
sale of the business of Tenant as a going concern (and which sale, merger
or change in control transaction is not undertaken for the purpose of
circumventing the requirements to obtain Landlord’s consent), and provided
that (i) the net worth (excluding goodwill) of the transferee or of Tenant
(on a consolidated return basis, if applicable), as the case may be,
determined in accordance with generally accepted accounting principles and
practices, immediately after the transaction is not less than the greater
of the net worth of Tenant (excluding goodwill) as of the Commencement
Date or for the one-year period immediately prior to the transaction; and
(ii) there shall be no change in the Permitted Use set forth in the
Summary; and (iii) Tenant shall not be released from liability under this
Lease and the transferee, if applicable, shall assume in writing all of
the obligations and covenants of Tenant under this Lease, whether arising
prior to or after such transaction; and (iv) Tenant shall provide Landlord
with financial statements and other documentation reasonably requested by
Landlord prior to the effectiveness of the Permitted Transfer transaction
in order to enable

15

 

Landlord to confirm the satisfaction of the net worth
test hereinabove provided. Tenant shall pay Landlord’s administrative and
processing fees incurred by Landlord in connection with any Permitted
Transfer.

13.2 No Transfer Without Consent; Standards

Tenant shall not make or permit to be effected any Transfer without
Landlord’s prior written consent. Landlord shall not unreasonably withhold
its consent to any proposed sublease or assignment; however, Landlord may,
in its sole discretion, withhold consent to any other Transfer (including
any assignment by Tenant of any security interest in this Lease or the
Premises). In determining whether to consent to any proposed Transfer,
Landlord may consider all reasonable criteria, and Landlord shall be
deemed to have reasonably withheld consent to any proposed Transfer if any
Superior Interest Holder with the right to withhold consent to such
proposed Transfer refuses to consent thereto; or if, in Landlord’s
reasonable business judgment: (a) the proposed Transferee’s character,
reputation, credit history, or business is inconsistent with the character
or quality of the Project; (b) the proposed Transferee or its business is
subject to compliance with any Law which would require new construction
anywhere in the Project, including in the Premises; (c) the proposed
Transferee is a Governmental Authority or an instrumentality of one; (d)
the proposed Transferee’s use of the Premises would be different than the
Permitted Use; (e) the proposed Transferee’s use of the Premises would
result in significantly increased pedestrian traffic to or in the
Building, or would require increased Project or Building services or
increased demands on Parking Facilities; (f) the proposed Transferee is a
Telecommunications Provider, or intends to use the Premises or any portion
thereof for server space for the provision of Telecommunications Services;
(g) the proposed Transferee’s financial condition is inadequate to support
its prospective obligations under the terms of the instruments evidencing
the proposed Transfer; (h) the proposed Transfer would cause Landlord to
be in violation of any other agreement to which Landlord is a party, or
would give any tenant in the Project a right to cancel or modify the
existing terms of its occupancy; or (i) the proposed Transferee (or any of
its affiliates) is a tenant under any lease for other space in the
Project, or has negotiated with Landlord to lease space in the Project
within the six (6) months preceding Tenant’s Transfer request.

13.3 Conditions to Consideration of Request to Transfer

Landlord shall have sixty (60) days (the “Review Period”), to respond to
any request for consent to any proposed Transfer, during which period
Landlord may consent, refuse consent, consent conditionally, or exercise
its rights under Section 13.4. Landlord’s failure to respond within the
Review Period shall constitute Landlord’s refusal to consent to the
proposed Transfer. The Review Period shall commence upon delivery to
Landlord of all the following documents, information and payments:

(a) Business Information

Tenant shall provide Landlord with a statement containing (i) the
name and address of the proposed Transferee; (ii) the proposed
Transferee’s bank and credit references; (iii) the proposed
Transferee’s financial statements, prepared in accordance with
generally accepted accounting principles (“GAAP”); (iv) all of the
material terms and conditions of the proposed Transfer, including
the proposed commencement and expiration dates, the precise area of
the Premises subject thereto; (v) an itemized statement detailing
all costs and expenses Tenant expects to incur in connection with
the proposed Transfer; and (vi) an itemized statement detailing all
monetary and non-monetary consideration to be received by Tenant or
any other party in connection therewith.

(b) Transfer Documentation

Tenant shall deliver to Landlord an original assignment or sublease
executed by Tenant, the proposed Transferee, and all Guarantors, if
any, of Tenant’s obligations under this Lease. Such document shall
be in form and substance acceptable to Landlord, and shall expressly
provide, among other things, that: (i) the Transferee assumes all of
Tenant’s obligations under this Lease (relating, in the case of a
sublease, only to those portions of the Premises which are subject
to such sublease); (ii) neither the current Transfer nor any
subsequent Transfer (irrespective of whether Tenant is a party
thereto) shall relieve Tenant or any Guarantor of any obligation or
liability arising out of this Lease; and (iii) the Transfer shall
not be deemed effective for any purpose unless and until Landlord’s
written consent thereto is obtained; and (iv) if the Transfer is an
assignment, no modification of the terms of the Lease between
Landlord and the Transferee (including the extension of time for
performance or the waiver of any obligation to be performed by the
Transferee) will operate to release Tenant or any Guarantor of its
obligations with respect to this Lease, and, in the case of an
assignment, all of the Tenant’s rights in the Security Deposit are,
as of the effective date of the Transfer, the sole property of the
Transferee.

16

 

(c) Payment of Expenses

Tenant shall deliver to Landlord the sum of $1,000.00 as a
processing fee to reimburse Landlord for the administrative costs of
reviewing the information provided under Paragraph 13.3(a), and the
amount of legal, accounting and other professional fees and costs
which Landlord reasonably estimates it will incur in connection with
the review and negotiation of documents provided under Paragraph
13.3(b). Tenant’s payment of the actual amount of all such fees and
costs shall be a condition precedent to the effectiveness of the
proposed Transfer.

13.4 Effect of Consent

Neither any Transfer (including any subsequent Transfer, irrespective of
whether Tenant, any Transferee or any Guarantor is a party thereto), nor
any consent of Landlord thereto, shall operate to relieve Tenant, any
Transferee, or any Guarantor of such party’s liability for the payment of
all Rent and the performance of all other obligations under or arising out
of this Lease. With respect to any Transfer that is an assignment of the
Lease, no modification of the terms of the Lease between Landlord and any
Transferee (including any extension of time for performance or any waiver
of any obligation to be performed) will operate to so release Tenant, any
prior Transferee or any Guarantor.

13.5 Recapture Rights

Landlord shall have the option, to be exercised by Notice to Tenant prior
to expiration of the Review Period, to (a) terminate this Lease effective
as of the commencement date of the proposed Transfer (provided, that if
the proposed Transfer is a sublease, such termination shall be limited to
the area of the Premises proposed to be sublet); or (b) sublease or take
an assignment, as the case may be, from Tenant of the interest, or any
portion thereof, in this Lease or the Premises that Tenant proposes to
Transfer, on the same terms and conditions as stated in the proposed
Transfer agreement, and no such subleasing or assignment to Landlord shall
work a merger. If Landlord makes an election described under clause (a) or
(b) above, then Landlord shall have the right (but not the obligation) to
negotiate directly with the proposed Transferee and to enter into any
agreement with such party on such terms as may be acceptable to Landlord
in its sole discretion, and Tenant waives any and all Claims against
Landlord related thereto. Notwithstanding anything to the contrary in the
foregoing, the terms of this Section 13.5 shall not be applicable with
respect to any Transfer proposed by Tenant during the Term of this Lease
expiring on October 31, 2006.

13.6 Transfer Premium

As a condition to Landlord’s consent to any Transfer, Tenant shall pay
Landlord, as Additional Rent, fifty percent (50%) of any Transfer Premium.
“Transfer Premium” means all Base Rent, additional rent, and all other
consideration payable by each Transferee in connection with its respective
Transfer (including key money, bonus money, and any payment in excess of
fair market value for goodwill, services rendered by Tenant to Transferee,
or any of Tenant’s Property), after deducting therefrom: (a) the Base Rent
and Expenses Increases payable by Tenant under this Lease for the portion
of the Premises to be transferred during the period subject to the
Transfer; and (b) actual and reasonable leasing commissions and
improvement costs paid by Tenant in connection with the Transfer. The
Transfer Premium shall be calculated and paid by Tenant monthly on a cash
basis, along with Tenant’s payment of Base Rent. Within ten (10) days
following the effective date of the Transfer, Tenant shall furnish a
complete statement, certified by an independent certified public
accountant or Tenant’s chief financial officer, and sworn to by Tenant,
describing in detail the consideration payable by the
Transferee in connection with the Transfer and the computation of the
Transfer Premium payable by Tenant to Landlord, all of which shall be
determined in accordance with generally accepted accounting principles.
All books and records of Tenant which are reasonably necessary in order to
perform an audit to determine whether the Transfer Premium was correctly
calculated shall be made available to Landlord for review or audit upon
request. If Landlord’s independent certified public accountant finds that
the Transfer Premium for any Transfer has been understated, Tenant shall,
within thirty (30) days following Notice from Landlord, pay the deficiency
and Landlord’s costs of such audit. Any understatement by Tenant of the
Transfer Premium by more than ten percent (10%), shall, at Landlord’s
option, constitute an Event of Default by Tenant.

13.7 Right to Collect Rent Directly

If this Lease is assigned, whether or not in violation of the provisions
of this Lease, Landlord may collect Rent from the assignee. If the
Premises or any part thereof is sublet or used or occupied by anyone other
than Tenant, whether or not in violation of this Lease, Landlord may,
after any Default by Tenant (or if Tenant becomes insolvent), collect from
the subtenant or occupant all amounts due from such party to Tenant.
Tenant hereby authorizes and directs any Transferee to make payments of
rent or other consideration directly to Landlord upon

17

 

receipt of any
Notice from Landlord requesting such action. Landlord may apply all such
amounts collected to Rent due or coming due hereunder, and no such
collection or application shall be deemed a waiver of any of Landlord’s
rights or remedies hereunder, or the acceptance by Landlord of such party
as a permitted Transferee, or the release of Tenant or any Guarantor from
any of its obligations under or in connection with this Lease. The consent
by Landlord to any Transfer shall not relieve Tenant from obtaining the
express written consent of Landlord to any other Transfer. The listing of
any name other than that of Tenant on any door of the Premises or on any
directory or in any elevator in the Building, or otherwise, shall not
operate to vest in the person so named any right or interest in this Lease
or in the Premises, or be deemed to constitute, or serve as a substitute
for, or any waiver of, any consent of Landlord required under this
Section.

13.8 Reasonableness of Restrictions

Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Article 13 on Tenant’s ability to Transfer any
interest under this Lease or in the Premises are, for the purposes of
California Civil Code §§1951.4 and 1995.010 et seq. (as such Laws may be
amended from time to time), and for all other purposes, reasonable at the
time that the Lease was entered into, and shall be deemed to be reasonable
at the time that Tenant seeks the consent of Landlord to any proposed
Transfer. Tenant hereby waives and relinquishes any present or future
right (including any right under California Civil Code §1995.310 or any
similar Law) to cancel or terminate this Lease in the event Landlord is
determined to have unreasonably withheld or delayed its consent to a
proposed Transfer.

14. RISK ALLOCATION AND INSURANCE

14.1 Definitions

The following terms are hereby defined as follows. “Claims” means claims,
demands, suits, actions, causes of action (whether in contract or in tort,
at law or in equity, or otherwise), liabilities, injuries, losses,
damages, proceedings, judgments, liens, charges, assessments, fines,
penalties, costs and expenses (including attorney and expert witness fees
and costs, including those incurred in connection with matters on appeal).
“Tenant Protected Parties” means Tenant, its partners, shareholders,
members, managers, directors, officers, employees and agents. “Landlord
Protected Parties” means Landlord, its beneficiaries (if Landlord is a
land trust), its agents for asset and property management, and all of such
parties’ respective partners, shareholders, members, managers, directors,
officers, employees and agents.

14.2 Risk Allocation Intent

The parties desire, to the extent permitted by Law, to allocate certain
risks of personal injury, bodily injury or property damage, and risks of
loss of real or personal property by reason of fire, explosion or other
casualty, and to provide for the responsibility for insuring such risks.
To the extent any Claim arising out of or resulting from any accident,
event, casualty or other occurrence (each, an “Event”) is actually insured
or required under the terms of this Lease to be insured, it is the intent
of the parties that such Claim be covered by insurance, without regard to
the fault of any Tenant Protected Parties or Landlord Protected Parties,
except as otherwise expressly provided in Section 15. Accordingly, as
between the Landlord Protected Parties and the Tenant Protected Parties,
such risks are allocated as follows:

	(a)	 	Tenant shall bear the risk of bodily injury (including death),
personal injury, and damage to property of third persons arising out
of or resulting from Events occurring within the Premises or within
any other
area of the Building which is leased to or otherwise exclusively
occupied by Tenant, irrespective of the fault of any Landlord
Protected Party. Such risks shall be insured as provided in Section
14.4.
	 
	(b)	 	Landlord shall bear the risk of bodily injury (including
death), personal injury, and damage to the property of third persons
arising out of or resulting from Events occurring in the Building or
on the real property of which the Building is a part (other than in
the Premises or in other space leased to or occupied by tenants or
third parties), to the extent such Event results from the negligence
or willful misconduct of any Landlord Protected Party. Such risks
shall be insured as provided in Section 14.3.
	 
	(c)	 	Tenant shall bear the risk of loss of, damage to, or
destruction of all contents, trade fixtures, machinery, furniture,
fixtures, equipment and other personal property in the Premises or
otherwise in the care, custody and control of Tenant arising out of
or resulting from any Event required to be insured against as
provided in Section 14.4.
	 
	(d)	 	Landlord shall bear the risk of damage to the Building arising
out of or resulting from any Event required to be insured against as
provided in Section 14.3.

18

 

Notwithstanding the foregoing, provided the party required to bear the
risk described in subparagraph (a) or (b) above (the
“At Risk Party”) does
not default in its obligation to carry the insurance coverage required
under this Lease, if the other party (the “At Fault Party”) is at fault
for any actual loss suffered by the At Risk Party, then to the extent that
such loss (i) is occasioned by an Event of the type described in
subparagraph (a) or (b) above, and exceeds the amount of insurance
coverage required to be carried by the At Risk Party (or the amount of
insurance actually carried, if greater than the amount required), or (ii)
results from an Event neither required to be insured against nor actually
insured against, the At Fault Party shall pay for the uncovered portion of
such loss.

14.3 Landlord’s Insurance

During the Term, Landlord shall maintain (a) commercial property
insurance, insuring the Building and all other improvements on the Project
for an agreed amount not less than ninety percent (90%) of full
replacement cost, with coverage no less broad than that provided under the
ISO Broad Causes of Loss Form (CP 10 20); and (b) commercial general
liability insurance, written on an occurrence basis, with coverage no less
broad than that provided under ISO 1996 form CG 00 01 (without any
endorsement which would have the effect of reducing or eliminating the
contractual liability, cross-liability, insured employee, or any other
coverage provided under such form), in an amount not less than Five
Million Dollars ($5,000,000.00) combined single limit per
occurrence/aggregate. In addition, Landlord may carry such other types of
insurance with such coverage limits as Landlord deems to be prudent,
desirable or necessary from time to time. All Landlord’s insurance
policies may be subject to such deductibles or self-insured retentions as
Landlord shall determine in the exercise of its sole discretion.

14.4 Tenant’s Insurance

During the Term, Tenant shall, at Tenant’s sole cost and expense, obtain
and keep in full force and effect all of the following insurance
coverages:

	(a)	 	Property insurance covering all Tenant’s contents, trade
fixtures, machinery, equipment, furniture and furnishings in the
Premises (or elsewhere in or about the Building), including contents
which are the property of third parties but which are in the care,
custody or control of Tenant, all Premises Improvements and all
Alterations, for an agreed amount not less than 100% of their
replacement cost (without regard to the value of any use interest of
Tenant therein), and with coverage no less broad than that provided
under the ISO Broad Causes of Loss Form (CP 10 20);
	 
	(b)	 	Loss of income, extra expense and business interruption
insurance in such amounts as will reimburse Tenant for direct or
indirect loss of earnings attributable to all perils required to be
insured against under subparagraph (d) above for a period not less
than twelve (12) months;
	 
	(c)	 	Commercial general liability insurance, written on an
occurrence basis, with coverage no less broad than that provided
under ISO 1996 form CG 00 01 (without any endorsement which would
have the effect of reducing or eliminating the contractual liability,
cross-liability, insured employee, or any other coverage provided
under such form), in an amount not less than Five Million Dollars
($5,000,000.00) combined single limit per occurrence/aggregate.
Umbrella liability insurance may be used to achieve the above minimum
liability limits, provided that the policy coverages are absolutely
concurrent;
	 
	(d)	 	Automobile liability insurance with coverage at least as broad
as that provided on ISO form CA 00 01, and including owned, non-owned
and hired vehicle coverages, with minimum limits of One Million
Dollars ($1,000,000.00) combined single limit;
	 
	(e)	 	If any goods not owned by Tenant are stored in or shipped from
the Premises, warehousemen’s or carriers’ legal liability insurance
with limits no less than the aggregate value of all such goods. All
receipts, bills of lading, consignment agreements or other agreements
with persons depositing any such goods with Tenant for storage or
shipment shall require such persons to (a) insure such goods
substantially in the same manner and to the same extent that Tenant
is required hereunder to insure its own personal property in the
Premises, and (b) waive and release all Claims and rights of recovery
against Landlord (including any rights in the nature of subrogation)
arising out of any damage or loss to, or destruction of, such goods
irrespective of the cause;
	 
	(f)	 	Prior to the sale, storage, consumption or service (whether
free or for charge) of any alcoholic beverages on or from the
Premises by Tenant or any other person (which activity is absolutely
prohibited unless Landlord expressly consents thereto in writing,
which consent may be withheld in Landlord’s sole discretion), Tenant
shall obtain liquor liability insurance covering Tenant and all
Landlord Protected Parties against any and all risks associated with
the sale, storage, consumption or service of alcoholic

19

 

	 	 	beverages on
or from the Premises. Such policy or policies of insurance shall have
a minimum combined single limit of One Million Dollars
($1,000,000.00) per occurrence, covering bodily injury, loss of life,
injury to means of support, and property damage;
	 
	(g)	 	Worker’s compensation insurance as required by law, and
employers’ liability insurance with minimum limits of at least One
Million Dollars ($1,000,000.00); and
	 
	(h)	 	During the course of construction of any Alterations, Tenant
shall maintain, at its sole cost and expense, builders’ risk
insurance for the amount of the completed value of the Alterations on
an “all-risk” non-reporting form covering all Alterations under
construction, including building materials, and other insurance in
amounts and against such risks as Landlord shall reasonably require
in connection with the Alterations. Tenant shall cause each of its
contractors and subcontractors to maintain (a) workers’ compensation
insurance required by law; (b) employers’ liability insurance with
minimum limits of at least One Million Dollars ($1,000,000.00); and
(c) commercial general liability insurance with minimum coverage
limits of at least Two Million Dollars ($2,000,000.00) combined
single limit per occurrence/aggregate, and otherwise meeting the same
policy requirements (as set forth below) as are applicable to
Tenant’s insurance policies.

14.5 Policy Requirements

Each policy of insurance required to be carried by Tenant shall be written
on a form satisfactory to Landlord; and shall be issued by a company rated
not less than A:X in Best’s Insurance Guide and authorized to do insurance
business in the State where the Building is located. All Tenant’s
liability policies shall name as additional insureds (a) Landlord, (b)
Landlord’s agents for asset and property management (which agents, as of
the date hereof are AEGON USA Realty Advisors, Inc. and Lowe Enterprises
Real Estate Group, respectively), (c) the holders of any Superior
Interests of which Tenant has been given notice, and (d) all Tenant
Protected Parties who are not automatically included as additional
insureds under such policies. Landlord and any Superior Interest Holders
designated by Landlord shall be named as additional insureds (or as
mortgagee, as required), as their interests may appear. Tenant may provide
any of its required insurance coverage under blanket policies, but only
upon furnishing Landlord with a “per location” endorsement confirming that
such coverage shall not be limited, diminished, or reduced as a result
thereof. Tenant shall structure its property and business income insurance
policies so that no coinsurance penalty shall be imposed and no valuation
shortfalls shall occur. No deductible (including any self-insured
retention) under any policy of insurance carried by Tenant shall exceed
Ten Thousand Dollars ($10,000.00). If Tenant fails to procure or maintain
insurance coverages as provided above, or fails to timely deliver any
certificates or policies as required by this Lease, Landlord shall have
the right (but not the obligation) to procure and maintain coverage, and
Tenant shall pay Landlord all costs in connection therewith as Additional
Rent within ten (10) days following Landlord’s invoice therefor. Tenant
shall, at its own expense, procure and maintain any additional insurance
coverage that Landlord or the holder of any Superior Interest may
reasonably require from time to time; provided, however, Landlord shall
not require any subsequent modification to Tenant’s insurance coverage
that would result in such coverage exceeding the scope or amount of
coverage typically being required by institutional landlords for
comparable tenants entering into new leases for comparable amounts of
space for comparable uses in the greater metropolitan area in which the
Building is located. All Tenant’s liability insurance shall be primary,
and any liability insurance carried by Landlord, any Landlord
Protected Party, and the holder of any Superior Interest shall be strictly
excess, secondary, and noncontributing with any insurance carried by
Tenant. No insurance coverage limits shall limit the liability of Tenant,
and no act or omission of Tenant shall limit, void or otherwise reduce the
obligation of any insurer to pay the amount of the loss sustained. Tenant
shall be solely responsible for the payment of all premiums for its
insurance policies and no additional insured, loss payee or mortgagee
shall have any obligation therefor.

14.6 Evidence of Coverage

Certificates of insurance evidencing Tenant’s insurance and issued by a
duly authorized agent shall be delivered to Landlord not less than ten
(10) days prior to the earlier of the Commencement Date or the date Tenant
enters the Premises for the purpose of performing any installations or
other work therein. Within ten (10) days following written notice from
Landlord, Tenant shall provide Landlord with a certified copy of any
insurance policy or policies required hereunder. No insurance policy
required to be carried by Tenant shall be subject to cancellation or
modification except upon thirty (30) days prior written notice from the
insurance carrier to Landlord, and to all other parties named in such
policy as additional insured, loss payee, mortgagee, or any other
designation. Tenant shall furnish Landlord with a replacement certificate
(and, at Landlord’s option, evidence of premium payment) evidencing the
uninterrupted continuation of each insurance policy not less than thirty
(30) days prior to its expiration.

20

 

14.7 Releases; Waivers of Subrogation

Landlord and Tenant each waive and release all Claims and all rights of
recovery against the other for any loss or damage that may occur to the
Premises, the Project, and the parties’ respective fixtures and personal
property, arising from any cause that (i) is required to be insured
against under the terms of this Lease by the party suffering the loss,
regardless of whether such insurance is actually carried; or (ii) is
actually insured against under any insurance carried by such party,
regardless of whether such insurance is required hereunder. To the fullest
extent permitted by law, each party’s waiver and release shall apply
irrespective of the cause or origin of the claim, including the negligence
of the other party or of any person acting at the direction or under the
control of such party. The parties agree that the foregoing waiver shall
be binding upon their respective property and business income insurance
carriers, and (except for any insurance policy which provides that the
insured thereunder may effectively waive subrogation without further
action on the part of the insured) each party shall obtain any
endorsements or take such other action as may be required to effect such
insurer’s waiver of subrogation under each such policy. Notwithstanding
the foregoing, if such Landlord Insured Casualty is caused by the
negligence or willful misconduct of Tenant or any Tenant Parties, Tenant
shall reimburse Landlord, as Additional Rent, within ten (10) days
following Landlord’s invoice therefor, all deductible amounts and other
expenses payable by Landlord in connection with such Landlord Insured
Casualty which are not covered by the proceeds of Landlord’s property or
business income insurance.

15. INDEMNIFICATION; CONSEQUENTIAL DAMAGES

Except to the extent caused by the gross negligence or willful misconduct of
Landlord, its agents or employees, Tenant shall defend, protect, indemnify and
hold harmless Landlord and each of the Landlord Protected Parties from and
against any and all Claims from any cause arising out of or relating (directly
or indirectly) to this Lease, the tenancy created under this Lease, or the
Premises, including (a) the use or occupancy, or manner of use or occupancy, of
the Premises during the Term (including any period following expiration or
termination of the Lease but prior to Tenant’s vacating of the Premises); (b)
any negligent or willfully wrongful act or omission of Tenant, its agents,
employees or contractors, or by anyone else acting at the direction, with the
permission, or under the control of Tenant; (c) any breach of or default under
this Lease by Tenant; (d) the conduct of Tenant’s business, including the use
of the Premises or any part thereof for storage or shipment of goods not
belonging to Tenant; and (e) any action or proceeding brought on account of any
matter described above. In addition, to the fullest extent permitted by law,
and as a material part of the consideration to Landlord for this Lease, Tenant
hereby releases Landlord, and all Landlord Parties, from responsibility for,
waives Tenant’s entire claim of recovery for, and assumes all risk of: (x)
damage to property or injury to persons (including death) in the Premises from
any cause whatsoever, (y) damage to property or injury to persons (including
death) as a result of Events occurring outside the Premises, except to the
extent the risk thereof is assumed by Landlord under the provisions of Section
14.2 of the Lease, and (z) business interruption or other consequential
damages. No defense, indemnification or hold harmless obligations hereunder
shall relieve any insurance carrier of its obligations under any insurance
policies carried by either party pursuant to this Lease. The indemnification
obligations hereunder shall survive the expiration or earlier termination of
this Lease until all Claims involving any of the indemnified matters are fully,
finally, and absolutely barred by the applicable statutes of limitations. The
prevailing party shall be entitled to recover its actual attorney fees and
court costs incurred in enforcing such indemnification obligations.

16. DAMAGE AND DESTRUCTION

16.1 Definitions

	(a)	 	“Casualty Damage” means any damage or destruction of property
owned by Landlord or Tenant and resulting from fire, earthquake, or
any other identifiable event of a sudden, unexpected or unusual
nature (each, a “Casualty”).
	 
	(b)	 	“Insured Casualty” means any Casualty Damage that (a) is
required by the terms of this Lease to be insured against, regardless
of whether such insurance is actually carried; or (b) is actually
insured against, regardless of whether such insurance is required
hereunder. “Landlord Insured Casualty” means any Casualty Damage
insured against or required to be insured against by Landlord; and
“Tenant Insured Casualty” means any Casualty Damage insured against
or required to be insured against by Tenant.
	 
	(c)	 	“Base Building Improvements” means the following: (i) the
Building shell and exterior, (ii) the Building core area, including
necessary Base Building Systems within the core, stubbed out to the
face of the core wall at locations determined by Landlord, (iii)
finished core area toilet rooms, including necessary plumbing
fixtures, ceramic tile floors, accessories, ceilings and lighting,
(iv) unpainted exterior dry wall or lath and plaster covering the
exposed side of all exposed core walls, core and perimeter

21

 

	 	 	columns,
and the interior exposed side of all exterior building wall areas
except at the under windows, (v) public stairways, (vi) passenger and
freight elevators, and finished elevator lobbies, (vii) ground floor
lobbies, (viii) loading docks, and (ix) drinking fountains required
by applicable building codes. “Base Building Improvements” does not
include any Premises Systems, any Premises Improvements (whether
Building Standard or otherwise), or any item or improvement that was
not part of the Base Building Improvements prior to the occurrence of
a Casualty except to the extent any Governmental Authority requires
the installation of such additional item or improvement as a
condition to permitting or approving any portion of Landlord’s
Restoration Work.
	 
	(d)	 	“Project Improvements” means Parking Facilities, exterior
plazas, sidewalks, driveways, landscaping, lighting, amenities and
all other improvements within the Project that are not located within
the Building.
	 
	(e)	 	“Premises Improvements” means all Alterations, Premises
Systems, Tenant Improvements, and other improvements in the Premises
(irrespective of whether the cost thereof was originally borne by
Landlord or Tenant) which are not Base Building Improvements,
including the following: (i) ceilings and lighting in the Premises;
(ii) floor finish in the Premises (except elevator lobbies and public
corridors on single-tenant floors and core area toilet rooms); (iii)
interior finishes of any kind within the Premises (except elevator
lobbies and public corridors on single-tenant floors and core area
toilet rooms); (iv) interior partitions, doors, and hardware within
the Premises; (v) terminal boxes and reheat coils or other HVAC or
air distribution devices, including distribution ductwork and
controls beyond the core of the Building; (vi) Tenant’s furniture,
fixtures and equipment, including telephones, computers and cabling
therefor; (vii) distribution of electrical, plumbing, or other
utility services from the Building core (including sprinklers);
(viii) domestic hot water heater and associated hot water piping;
(ix) any and all signs for Tenant and the power therefor; (x)
security, fire and life-safety systems throughout the Premises,
including exit signs, intercoms and extinguishers; and (xi) window
coverings.
	 
	(f)	 	“Landlord’s Restoration Work” means all repair and restoration
required under this Lease to be performed at Landlord’s expense
following the occurrence of any Casualty. “Tenant’s Restoration Work”
means all repair and restoration required under this Lease to be
performed at Tenant’s expense following the occurrence of any
Casualty.
	 
	16.2	 	Notices of Casualty Damage and Repair Periods

Tenant shall promptly give Notice to Landlord of any Casualty Damage
affecting the Premises or Tenant’s access thereto. Within (a) sixty (60)
days thereafter, Landlord shall provide Notice to Tenant (the “Repair
Period Notice”) indicating the estimated time required (from the date of
the Casualty) for Substantial Completion of Landlord’s and Tenant’s
Restoration Work (the “Repair Period”). If Landlord has a right to
terminate the Lease as a result of the Casualty Damage, the Repair Period
Notice shall confirm Landlord’s election to either exercise such
termination right or to continue the Lease in effect. If neither Landlord
nor Tenant elects to terminate the Lease as permitted under Section 16.3
or Section 16.4, respectively, this Lease shall remain in full force and
effect, and Landlord shall (subject to delays caused by the
insurance adjustment process and other Force Majeure Delays) promptly
commence and diligently complete Landlord’s Restoration Work. If this
Lease is so terminated by either party, the termination shall be effective
thirty (30) days following Notice of such election. Subject to the terms
of Section 16.5, Tenant shall pay Base Rent and Tenant’s Share of Expense
Increases through the date of termination. Landlord and Tenant hereby
waive the provisions of California Civil Code §§1932(2), 1933(4), 1941 and
1942, and the provisions of any similar Law now or hereinafter in effect
which would permit termination of a lease or the right to make repairs at
the Landlord’s expense upon destruction of or damage to leased premises,
and agree that the provisions of this Article 16 shall govern exclusively
in the event of any Casualty Damage.

16.3 Landlord’s Option To Terminate or Repair

Landlord may terminate this Lease as a result of any Casualty Damage to
the Project, or any portion thereof, if (a) in Landlord’s reasonable
estimation, the Repair Period would exceed three hundred sixty (360) days
(calculated without overtime labor) from the date Tenant gave Landlord
Notice of the Casualty Damage; (b) such Casualty Damage is insured, but
the estimated cost of Landlord’s Restoration Work exceeds the amount of
insurance proceeds available for such purpose under Landlord’s property
insurance, excluding any deficiency caused by the applicable Landlord
Deductible Amount, (c) such Casualty Damage is uninsured because such
insurance coverage was, as determined by Landlord in the exercise of its
reasonable business judgment, not readily obtainable at a commercially
reasonable premium under existing insurance market conditions at the time
of the Casualty, and the estimated cost of Landlord’s Restoration Work
exceeds the amount that would have been payable as the applicable Landlord
Deductible Amount if such Casualty Damage had been insured; (d) the
estimated cost of Landlord’s Restoration Work, irrespective of whether
such Casualty Damage is covered by insurance, exceeds twenty-five

22

 

percent
(25%) of the full replacement cost of the Building (provided, however,
that if the Casualty Damage is covered by Landlord’s property insurance,
Landlord exercises such termination right in a non-discriminatory manner);
(e) the Building cannot be restored except in a substantially different
structural or architectural form; (f) Project Improvements necessary to
the efficient operation of the Building cannot be adequately restored to
their necessary function; (g) any Superior Interest Holder does not allow
Landlord to use sufficient proceeds to perform Landlord’s Restoration
Work; or (h) the Casualty occurs within the twelve (12) month period
preceding the Expiration Date, unless Tenant has timely exercised any
applicable Option to Extend.

16.4 Tenant’s Option To Terminate

Tenant may elect to terminate this Lease as a result of any Casualty
Damage materially adversely affecting Tenant’s ability to conduct business
in or gain access to the Premises if (a) the Repair Period Notice
indicates that the portion of Landlord’s and Tenant’s Restoration Work
cannot reasonably be expected to be Substantially Completed within one
hundred eighty (180) days from the date of the Casualty; or (b) the
Casualty occurs within the twelve (12) month period preceding the
Expiration Date and would result in Tenant being unable to gain access to
or conduct business in the Premises for a period of at least sixty (60)
consecutive days. Tenant shall provide Landlord with Notice of any such
election by Tenant to terminate the Lease (“Tenant’s Termination Notice”)
within ten (10) days following Tenant’s receipt of the Repair Period
Notice. If Tenant does not provide Landlord with Tenant’s Termination
Notice within such ten (10) day period, Tenant shall be deemed to have
elected not to terminate the Lease. Notwithstanding the foregoing,
however, Tenant’s Termination Notice shall be void and of no effect if
within twenty (20) days after receiving Tenant’s Termination Notice,
Landlord offers to provide Tenant with temporary or permanent space in the
Project which is substantially similar in size to the Premises.

16.5 Rent Abatement Due to Casualty

If, as a result of any Landlord Insured Casualty, Tenant is unable to gain
access to or conduct business in the Premises, Tenant shall be entitled to
a proportionate abatement of Base Rent from the date of the Landlord
Insured Casualty through the date the Lease is terminated or the earlier
of (i) the date Tenant occupies the Premises; or (ii) the date Landlord’s
and Tenant’s Restoration Work is Substantially Completed (or, in the event
of any Tenant Delay, the date all such work would have been so completed
in the absence of such Tenant Delay). The amount of such abatement shall
be equal to the product of the Base Rent and Expense Increases payable
during the restoration period, multiplied by a fraction, the numerator of
which is the RSF of that portion of the Premises which is rendered
unusable by the Landlord Insured Casualty, and the denominator of which is
the RSF of the entire Premises. In the case of any temporary space
provided by Landlord pursuant to this Article, such abatement shall be
equal to the amount by which the Base Rent plus Tenant’s Share of Expense
Increases payable for the Premises from the Casualty Notice Date through
the Tenant Improvements Completion Date, exceeds the fair market base
rental value of such temporary space plus the equitably adjusted (based on
rentable square feet) Tenant’s Share of Expense Increases for such
temporary space. Tenant’s right to an abatement of Base Rent as
described in this Section 16.5 shall be Tenant’s sole remedy in connection
with any Casualty Damage described in this Article 16 and the repair
thereof, and Tenant shall have no claim for, and hereby releases Landlord
and all Landlord Parties from all Claims arising out of any Casualty
Damage to the Premises, the Building or the Project or the repair or
restoration thereof, including any cost, loss or expense resulting from
any loss of use or any inconvenience or annoyance thereby occasioned.

16.6 General Repair and Restoration Obligations

In the event of any Casualty Damage, provided this Lease is not terminated
by either party pursuant to the terms of this Article 16, Landlord shall
(subject to delays caused by the insurance adjustment process and other
Force Majeure Delays) promptly commence and diligently complete, at
Landlord’s expense (subject to Landlord’s right to include Landlord
Deductible Amounts in Expenses), the repair and restoration of those Base
Building Improvements and Project Improvements located in or directly
serving the Premises (including those Base Building Improvements and
Project Improvements which are reasonably necessary for access to the
Premises and Parking Facilities). Such repair or restoration shall be to
substantially the same condition as existed prior to the occurrence of the
Casualty; provided, however, Landlord may make any modifications which are
(a) required by Laws, (b) required by any Superior Interest Holder
(provided the Premises is not materially adversely affected), or (c)
deemed by Landlord to be necessary or desirable and approved by Tenant,
which approval shall not be unreasonably withheld, conditioned or delayed,
and provided that, upon completion, access to the Premises and the Parking
Facilities is not materially impaired. Upon the occurrence of any Casualty
Damage to the Premises Improvements, if the Lease is not terminated,
Tenant shall deposit into a third party escrow account reasonably
acceptable to Landlord all insurance proceeds payable to Tenant under
Tenant’s insurance required under Section

23

 

14.4 or otherwise, and Landlord
shall repair such Casualty Damage and return the Premises Improvements to
their original condition; provided, that if the cost of such repairs
exceeds the amount of insurance proceeds received by Landlord from
Tenant’s insurance carrier, the portion of the repair costs not covered by
such insurance proceeds (including any deductible or self-insured
retention amounts under such policies) shall be paid by Tenant to Landlord
prior to Landlord’s commencement of repair of such Casualty Damage.
Landlord and Tenant shall each pay one half of the costs of such escrow,
and funds therefrom shall be disbursed to Landlord (or to any party
designated by Landlord) on a progress payment basis following receipt of
conditional or unconditional lien releases (as appropriate), for all costs
and expenses incurred by Landlord in connection with the repair of
Casualty Damage to the Premises Improvements pursuant to a disbursement
procedure approved by Landlord and Tenant, which approval shall not be
withheld so long as such procedure reflects commercially reasonable
disbursement standards for construction loans. Notwithstanding the
foregoing, Landlord may elect, by Notice to Tenant given within sixty (60)
days following the date Landlord has actual knowledge of the Casualty,
that Tenant, at its sole cost and expense (subject to application of
Tenant’s insurance proceeds), repair all Casualty Damage to the Premises
Improvements and return the Premises Improvements to their original
condition. Irrespective of whether Landlord or Tenant makes such repairs,
prior to the commencement of construction, Tenant shall submit to
Landlord, for Landlord’s review and approval, all plans, specifications
and working drawings relating thereto, and Landlord shall select
non-affiliated, third party contractors to perform such improvement work.
Landlord shall not be liable for any inconvenience or annoyance to Tenant
or any Tenant Parties, or injury to Tenant’s business resulting in any way
from such damage or the repair thereof; provided however, Tenant shall be
entitled to a proportionate abatement of Base Rent and Expenses as
provided in Section 16.5. Within thirty (30) days following completion of
restoration of the Premises, Tenant shall be entitled to receive Tenant’s
Excess Restoration Proceeds, if any. If this Lease is not terminated by
either party as a result of the Casualty, “Tenant’s Excess Restoration
Proceeds” means the difference between (a) the sum of all proceeds of
Tenant’s property insurance and all uninsured costs of restoring the
Premises Improvements paid by Tenant, including any deductible and
self-insured retention amounts; and (b) all actual costs incurred in
connection with the restoration (including any replacements) to their
original condition of the Premises Improvements. If this Lease is
terminated by either party as a result of any Casualty, “Tenant’s Excess
Restoration Proceeds” means the difference between (a) the sum of all
proceeds of Tenant’s property insurance and all uninsured costs of
restoring the Premises Improvements not repaired, including any deductible
and self-insured retention amounts; and (b) the sum of (i) all actual
costs incurred in connection with the restoration (including any
replacements) to their original condition of those Premises Improvements
which Landlord elects to retain, and (ii) all additional costs incurred by
Landlord in restoring the Premises to the condition in which Tenant would,
in the absence of the Casualty, have been required to surrender it upon
the expiration or sooner termination of the Lease. All Tenant’s
obligations with respect to the assignment of insurance proceeds and
payment for uninsured costs of restoring Premises Improvements, and all
obligations of Landlord for the refund to Tenant of Tenant’s Excess
Restoration Proceeds, shall survive the expiration or termination of this
Lease.

17. CONDEMNATION

17.1 Termination as to Portion Taken

Subject to the Temporary Taking provisions of this Lease, if all or a part
of the Premises is taken by any public or quasi-public authority
(collectively, “Condemnor”), whether under the power of eminent domain or
a conveyance by Landlord in lieu thereof (collectively, “Condemnation”),
this Lease shall terminate as to any portion of the Premises so taken or
conveyed on the date title or the right to possession vests in the
Condemnor. Tenant waives the benefit of Sections 1165.110 through 1265.160
of the California Code of Civil Procedure, and agrees that the provisions
of this Article 17 shall govern in the event of any Condemnation.

17.2 Partial Taking of Premises

If a portion of the Premises is taken by Condemnation and neither party
exercises its right, if any, to terminate this Lease as a result thereof,
Landlord shall restore the remaining portion of the Premises to an
architectural whole, this Lease shall remain in effect as to the remaining
portion of the Premises and the Base Rent for the Premises shall be
reduced by an amount equal to the product of the monthly Base Rent in
effect during the restoration period, multiplied by a fraction, the
numerator of which is the rentable square footage of that portion of the
Premises which is taken in the Condemnation, and the denominator of which
is the rentable square footage of the Premises immediately prior to such
Condemnation. Tenant’s Share shall also be proportionately reduced. If,
after a partial Condemnation resulting in the taking of at least 35% of
the Premises, Tenant is not reasonably able to continue the operation of
its business in the Premises or if Landlord elects not to restore the
remaining portion of the Premises to an architectural whole, this Lease
may be terminated by either Landlord or Tenant upon Notice to

24

 

the other
within thirty (30) days following the Condemnation. Such Notice shall
specify the date of termination, which shall be not less than thirty (30)
or more than sixty (60) days after the giving of such Notice. If such
Notice of termination is given, the Lease and all interest of Tenant in
the Premises shall terminate as of the date specified in the Notice.
“Temporary Taking” means a Condemnation of all or a portion of the
Premises on a temporary basis, the duration of which will expire prior to
the Expiration Date. Notwithstanding any other provision to the contrary
in this Article 17, this Lease shall not terminate by reason of any
Temporary Taking, but Tenant’s obligation to pay monthly Base Rent and
Expenses for the portion of the Premises subject to such Temporary Taking
shall abate for the period during which such Temporary Taking is in
effect.

17.3 Partial Taking of Project

If any portion of the Project is taken by Condemnation, whether any
portion of the Premises is taken or not, and Landlord (or any Superior
Interest Holder) determines that it is not economically feasible to
continue operating the Project or any Building or Buildings in which the
Premises are located, then Landlord shall have the option, for a period of
sixty (60) days following the Condemnation, to elect to terminate this
Lease. If Landlord determines that it is economically feasible to continue
operating such Building or Buildings following such Condemnation, then
this Lease shall remain in effect, and Landlord shall, at Landlord’s
expense, restore the remaining portions of the Project to an architectural
whole. Any Notice by Landlord of its election to terminate the Lease
pursuant to this Section shall specify the date of termination, which
shall be not less than thirty (30) or more than sixty (60) days after the
giving of such Notice. If such Notice of termination is given, the Lease
and all interest of Tenant in the Premises shall terminate as of the date
specified in the Notice.

17.4 Allocation of Compensation

Landlord shall be entitled to any and all compensation, damages, income,
rent, awards, or any interest therein whatsoever which may be paid in
connection with any Condemnation. Without limiting the generality of the
foregoing, Tenant agrees that it shall have no claim against Landlord or
the Condemnor for the value of any unexpired portion of the Term or for
the value of any Premises Improvements, and Tenant hereby assigns all such
claims to Landlord. Notwithstanding the foregoing, Tenant shall be
entitled to make a separate claim directly to the Condemnor for Tenant’s
relocation expenses and for any loss of or damage to Tenant’s Property,
provided Landlord’s recovery for such Condemnation is not thereby
diminished.

18. SIGNS

Landlord shall provide, at Landlord’s expense, one (1) Building Standard
directory strip for each 1,000 RSF in the Premises in each directory located in
the Building; and one (1) Building Standard identification sign at the entrance
to the Premises; provided, however, any non-Building Standard signage or
identification shall be deemed an Alteration, subject to the terms of Section
9.1, and any changes to the Building Standard signage requested by Tenant
subsequent to the Lease Date shall be at Tenant’s sole cost and expense. Tenant
shall not place or permit to be placed any lights, decorations, banners, signs,
window or door lettering, advertising media, or any other item which can be
viewed from the exterior of the Premises without obtaining Landlord’s prior
written consent, which may be withheld in Landlord’s sole discretion. Tenant
shall remove any such items upon the expiration or sooner termination of this
Lease, and shall repair any damage to the Premises or the Building caused by
any installation, maintenance or removal of same, all at Tenant’s expense. If
any such items are installed without Landlord’s consent, or are not timely
removed, or repairs are not timely made, Landlord shall have the right (but not
the obligation) to remove any or all of such items and/or repair any such
damage or injury, all at Tenant’s sole cost and expense.

19. RIGHTS OF LANDLORD

19.1 Inspection

Landlord, its agents, employees and contractors, shall have the right to
enter the Premises at all times to: (a) make inspections; (b) exhibit the
Premises to prospective purchasers, lenders or tenants; (c) determine
whether Tenant is complying with all of its obligations under this Lease;
(d) supply janitorial and other services to be provided by Landlord to
Tenant under this Lease; (e) post notices of non-responsibility; and (f)
make repairs or improvements in or to the Building or the Premises. Tenant
waives any claim for damages for any injury or inconvenience to, or
interference with, Tenant’s business, any loss of occupancy or quiet
enjoyment of the Premises or any other loss occasioned by such entry.
Landlord shall at all times have and retain a key with which to unlock all
of the doors in, on or about the Premises (excluding Tenant’s approved
vaults, safes and similar areas designated by Tenant in writing in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open such doors to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord by any such
means, or otherwise, shall not under any circumstances be deemed or
construed to be a forcible or unlawful

25

 

entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from any part
of the Premises. Such entry by Landlord shall not constitute a
termination, or give rise to any right of abatement, of Tenant’s
obligations under this Lease. If Landlord shall be required to obtain
entry by means other than a key provided by Tenant, the cost of such entry
shall by payable by Tenant to Landlord as Additional Rent within ten (10)
days following Landlord’s demand therefor.

19.2 Landlord Rights

Landlord reserves the following rights, exercisable without Notice and
without being deemed an eviction or disturbance of Tenant’s use or
possession of the Premises or giving rise to any claim for offset or
abatement of Rent, to (a) designate and/or approve prior to installation,
all types of signs, window shades, blinds, drapes, awnings or other
similar items, and all internal lighting that may be visible from the
exterior of the Premises and the general appearance of all areas of the
Premises visible from the exterior, and contents thereof, including
furniture, fixtures, wall and floor coverings, and decorations, and all
changes, additions and removals thereto; (b) grant any party the exclusive
right to conduct any business or render any service in the Building or
Project, provided such exclusive right shall not operate to prohibit
Tenant from using the Premises for the purposes permitted under this
Lease; (c) prohibit the placement of vending machines and video or other
electronic games in the Premises; (d) have access for Landlord and other
tenants of the Project to any mail chutes and boxes located in or about
the Premises according to the rules of the United States Post Office and
to discontinue any mail chute business in the Building or Project; and (e)
retain at all times master keys or pass keys to the Premises.

19.3 Control of Project

All of the outside walls, windows and roof areas of the Project, and all
space within the Premises used for shafts, stacks, pipes, conduits, ducts,
electric or other utilities, Project facilities and Base Building Systems,
along with the use thereof and access thereto, are reserved to Landlord.
Landlord reserves the right from time to time to install, use, maintain,
repair, relocate and replace pipes, ducts, conduits, wires, and
appurtenant meters and equipment for service to the Premises or to other
parts of the Project which are above the ceiling surfaces, below the floor
surfaces, within the walls and in the central core areas of the Building
whether located within the Premises or elsewhere in the Project. Landlord
shall have the right in its sole discretion, at any time and from time to
time, without the same constituting a breach of Landlord’s covenant of
quiet enjoyment or an actual or constructive eviction, and without
incurring any liability to Tenant or otherwise affecting Tenant’s
obligations under this Lease: (a) to change the location, size, shape and
number of the Project’s driveways, entrances, parking spaces, Parking
Facilities, hallways, corridors, lobby areas, walkways and other Common
Areas; (b) to change the manner of ingress and egress and the direction of
driveways; (c) to close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available; (d) to construct additional improvements in the Common Areas or
remove existing improvements therefrom; (e) to use the Common Areas while
engaged in making improvements, repairs or alterations to the Project or
any portion
thereof; (f) to construct additional buildings, signs or other structures
upon the Project; and (g) to make any other changes in, to or with respect
to the Project or any portion thereof as Landlord may deem to be
appropriate. Landlord may temporarily close any of the Common Areas or
other portions of the Project under any circumstances which Landlord
reasonably perceives to constitute an emergency or when Landlord otherwise
deems such closure necessary. Landlord shall be permitted to grant such
easements, grants, dedications and other consents or permissions as
Landlord may deem necessary or desirable. Landlord may at any time and
from time to time, change the name and address of the Building or Project.
Landlord reserves the absolute right to effect such other tenancies in the
Project as Landlord in the exercise of its sole business judgment
determines best promotes the interest of Landlord in the Project. Tenant
does not rely on the fact, nor does Landlord represent, that any specific
tenant or type or number of tenants shall, during the Term, occupy any
space in the Project.

19.4 Trademark Protection

The name “Transamerica,” the Transamerica Pyramid building and the
Transamerica Pyramid logo are all federally registered trademarks and
service marks of Transamerica Corporation and may not be used without
Transamerica Corporation’s prior written consent. No license for any use
thereof has been granted to Tenant, and Tenant acknowledges that any
unauthorized use thereof may violate copyright laws, trademark laws,
privacy and publicity laws and communications regulations and statutes.
Tenant acknowledges that the name, image and likeness of the Transamerica
Pyramid, along with all representations thereof, are valuable intellectual
property assets of Landlord and certain of Landlord’s affiliates.
Accordingly, Tenant shall not, without the prior written consent of
Landlord (which may be withheld in Landlord’s sole discretion), use or
permit the use of the name of the Transamerica Pyramid for any purpose
other than as part of the address for the Premises, or use or permit the

26

 

use of, for any purpose whatsoever, any image or rendering of, or any
design based on, the exterior appearance or profile of the Transamerica
Pyramid.

20. ESTOPPEL CERTIFICATES

Within ten (10) business days following Landlord’s request therefor, Tenant
shall execute, acknowledge and deliver to Landlord (or to its designee), an
Estoppel Certificate in substantially the form attached hereto as Exhibit E
along with any other statements reasonably requested by Landlord. Any such
Estoppel Certificate may be relied upon by Landlord, any current or prospective
Superior Interest Holder, and any prospective purchaser of any interest of
Landlord in the Project. Tenant acknowledges its obligation to pay late charges
as provided in Section 32.8 for each day that Tenant is late in providing any
such Estoppel Certificate, commencing on the 11th day following Landlord’s
request therefor, and continuing through the 20th day thereafter. If Tenant has
not provided any such Estoppel Certificate within twenty (20) days following
Landlord’s written request therefor, Tenant hereby appoints Landlord as
Tenant’s attorney-in-fact, which appointment is coupled with an interest, to
execute, acknowledge and deliver any such Estoppel Certificate for and on
behalf of Tenant, without any liability on the part of Landlord for the
accuracy of any information contained therein, and Tenant shall thereupon be
deemed to have acknowledged the accuracy of all information set forth therein
for the benefit of Landlord, any current or prospective Superior Interest
Holder, and any prospective purchaser of any interest of Landlord in the
Project. However, if any such party is unwilling to rely on such Estoppel
Certificate from Landlord (or if Landlord is unwilling for any reason to
execute such Estoppel Certificate as attorney-in-fact for Tenant), the daily
late charges described in Section 32.8 shall continue until such time as Tenant
has provided the Estoppel Certificate as originally requested.

21. FINANCIAL STATEMENTS

Within ten (10) business days following Landlord’s request therefor, Tenant
shall deliver to Landlord, for review by Landlord, its accountants, attorneys,
and current or prospective purchasers, investors and Superior Interest Holders,
the annual and quarterly financial statements of Tenant (and any Guarantors)
for the most recent fiscal year and quarter, which financial statements shall
be prepared in accordance with GAAP (or in accordance with a method other than
GAAP, provided that such financial statements fully and accurately reflect the
financial condition of Tenant (or Guarantor, as the case may be), and the
actual method of preparation is fully disclosed in writing), certified as to
accuracy and completeness by Tenant’s chief financial officer (in the case of
any Guarantor, certified by the Guarantor’s chief financial officer, or by
Guarantor personally, if Guarantor is an individual), and audited by an
independent certified public accountant who shall issue an accountant’s audit
report in conjunction therewith.

22. QUIET ENJOYMENT; MORTGAGEE PROTECTION

22.1 Covenant of Quiet Enjoyment

Landlord covenants that Tenant shall peaceably and quietly have, hold and
enjoy the Premises during the Term, subject to all of the terms and
conditions of this Lease, without disturbance by Landlord or any person
lawfully claiming by, through or under Landlord, provided that no Event of
Default has occurred under this Lease.

22.2 Subordination and Attornment

This Lease, along with all rights of Tenant hereunder, is and shall be
subject and subordinate to: (a) all ground leases encumbering all or any
portion of the Project (each, a “Superior Lease”); (b) all mortgages or
deeds of trust encumbering all or any portion of the Project (each, a
“Superior Mortgage”), whether or not affecting properties or interests
other than the Premises or the Project; (c) each and every advance made or
hereafter to be made under each Superior Mortgage; (d) all renewals,
modifications, replacements and extensions of any such Superior Lease; and
(e) all renewals, modifications, replacements, extensions, spreaders and
consolidations of any Superior Mortgage (all such interests in clauses (a)
through (e) collectively, the “Superior Interests,” and each holder of any
such Superior Interest [including its successors in interest], a “Superior
Interest Holder”). Notwithstanding the foregoing, any Superior Interest
Holder may elect, at any time, to subordinate its Superior Interest to the
lien of this Lease. If any Superior Interest Holder succeeds to the rights
of Landlord under this Lease, whether through possession or foreclosure
action or delivery of a new lease or deed (such party so succeeding to
Landlord’s rights herein called “Successor Landlord”), then Tenant shall
attorn to and recognize such Successor Landlord as Landlord under this
Lease, and this Lease shall continue in full force and effect as a direct
lease between the Successor Landlord and Tenant, and Successor Landlord
shall not disturb Tenant’s quiet enjoyment and possession of the Premises
for so long as Tenant faithfully performs its obligations under the Lease.
No Successor Landlord shall be (w) deemed to have assumed or to otherwise
have liability for any default, act or omission of any Landlord having an
interest in the Project prior to the date such Successor Landlord

27

 

acquires
title thereto; (x) subject to any defense which accrued to Tenant prior to
such date, or (y) bound by any modification of the Lease made without the
prior written consent of such Successor Landlord; or (z) bound by any Rent
paid more than one month in advance, unless such Rent is actually received
by Successor Landlord. The agreements set forth in this Section 22.2 shall
be self-operative and no further agreement of Tenant shall be necessary in
order to effect any such subordination and attornment; however, Tenant
shall nonetheless, within ten (10) days after Notice, execute, acknowledge
and deliver any instrument that Landlord or any Superior Interest Holder
may reasonably request to evidence such subordination and attornment,
including any Subordination, Non-Disturbance and Attornment Agreement (an
“SNDA”). Tenant acknowledges its obligation to pay late charges as
provided in Section 32.8 for each day that Tenant is late in providing any
such SNDA, commencing on the 11th day following Landlord’s request
therefor, and continuing through the 20th day thereafter. If Tenant has
not provided any such SNDA within twenty (20) days following Landlord’s
written request therefor, Tenant hereby appoints Landlord as Tenant’s
attorney-in-fact, which appointment is coupled with an interest, to
execute, acknowledge and deliver any SNDA, in the form provided, for and
on behalf of Tenant to the party requesting same, without any liability on
the part of Landlord for anything contained therein. However, if any such
party is unwilling to rely on such SNDA from Landlord (or if Landlord is
unwilling for any reason to execute such SNDA as attorney-in-fact for
Tenant), the daily late charges described in Section 32.8 shall continue
until such time as Tenant has provided the SNDA as originally requested.

22.3 Requested Modifications; Cure Rights

If any Superior Interest Holder shall request reasonable modifications to
this Lease as a condition to providing financing for the Project or any
portion thereof, Tenant shall not unreasonably withhold, condition or
delay its consent to such modifications. Tenant shall not, however, be
required to consent to any modification which materially adversely
decreases Tenant’s rights or increase Tenant’s obligations under this
Lease, or which modify the expressly negotiated economic terms of this
Lease. Tenant shall give each Superior Interest Holder of which Tenant has
notice, in the manner provided for in Section 32.4, a copy of every Notice
of default given by Tenant to Landlord, concurrently with the giving of
such Notice to Landlord. If Landlord fails to cure such default within the
time provided for in this Lease, then such Superior Interest Holder shall
have an additional reasonable period within which to cure such default, or
if such default cannot be cured without the Superior Interest Holder
pursuing its remedies against Landlord, then such additional time as may
be reasonably necessary, provided the Superior Interest Holder commences
and thereafter diligently pursues the remedies necessary to cure such
default (including commencement of foreclosure proceedings, if necessary
to effect such cure).

23. TENANT’S DEFAULT

A default by Tenant under this Lease (“Default”) shall be deemed to have
occurred, without the necessity of any prior Notice thereof from Landlord, if
(a) any Rent required to be paid by Tenant hereunder is not received by
Landlord on or before the date such Rent is due; (b) Tenant fails to fully
perform any other obligation required of Tenant under this Lease within the
time required for such performance; or (c) Tenant fails to timely pay any
amount due or fully perform in a timely manner any other obligation of Tenant
within the time required for such payment or performance under the terms any
other agreement entered into by and between Landlord and Tenant, including the
Improvement Agreement. The occurrence of any of the following shall constitute
an event of default on the part of Tenant (“Event of Default”):

23.1 Failure to Pay Rent

Tenant’s failure to pay any Rent required to be paid under this Lease
within five (5) days following Notice from Landlord that such Rent is due
and unpaid.

23.2 General Non-Monetary Defaults

Tenant’s failure to perform any of Tenant’s covenants, agreements or
obligations under the Lease not otherwise specified in this Article 23
within ten (10) days following Notice from Landlord to do so. However, if
such Default is of a nature that could not reasonably be considered
curable within such ten (10) day period despite Tenant’s diligent efforts,
then the ten (10) day cure period shall be increased to that number of
days as may be reasonably required under the circumstances, provided that
(a) Tenant commences to cure such Default within the original ten (10) day
period and thereafter diligently and continuously pursues a course of
action to complete such cure within the shortest possible time; and (b)
such Default has been completely cured within sixty (60) days following
Landlord’s Notice.

23.3 Special Non-Monetary Defaults

Tenant’s failure, within ten (10) days following Notice from Landlord, to
timely execute, acknowledge where requested, and deliver any Estoppel
Certificate, financial statements, or SNDA in the manner and within the
time

28

 

required by Articles 20 and 21, and Section 22.1, respectively; to
timely remove any lien as required by Section 9.5; or to timely restore
any insurance required to be maintained by Tenant pursuant to this Lease
if any such insurance expires or is canceled, reduced or materially
changed. Any Tenant Delay in excess of twenty (20) days, in the aggregate,
shall also constitute an Event of Default, without the need for any
additional Notice from Landlord.

23.4 Abandonment

Tenant’s Abandonment of the Premises. “Abandonment” means the vacating by
Tenant of the Premises for more than ten (10) consecutive business days if
Tenant is, or with the giving of Notice or passage of time would be, in
Default under any other provision of this Lease.

23.5 Assignment for Creditors; Bankruptcy

A general assignment by Tenant for the benefit of creditors, the filing of
a voluntary or involuntary petition in bankruptcy by or against Tenant
which remains undischarged for a period of sixty (60) days; or the
receivership, attachment, or other judicial seizure of substantially all
of Tenant’s assets on the Premises, which attachment or other seizure
remains undismissed or undischarged for a period of sixty (60) days after
the levy thereof.

23.6 Chronic Delinquency

Tenant’s failure to make any payment of Rent under this Lease within five
(5) days of the date such Rent is required to be paid, if Tenant has
received two (2) or more Notices of Default from Landlord any time within
the preceding twelve (12) month period, irrespective of whether any such
Default was cured prior to becoming an Event of Default.

Tenant agrees that any Notice of Default described above, including any Notice
required in order for Landlord to commence an unlawful detainer proceeding,
shall replace and satisfy any equivalent or lesser statutory notice
requirement, including any notices required by California Code of Civil
Procedure §1161. When a statute requires service of a notice in a particular
manner, service of such notice in the manner required by this Lease shall
replace and satisfy the statutory service of notice procedures, including those
required by California Code of Civil Procedure §1162.

24. LANDLORD’S REMEDIES

Upon the occurrence of any Event of Default by Tenant, Landlord shall have the
right to pursue any one or more of the following remedies in addition to any
other remedies available to Landlord at law or in equity, all of which remedies
shall be deemed to be cumulative and not exclusive:

24.1 Termination

Landlord may terminate this Lease and recover possession of the Premises,
and Tenant shall thereupon immediately surrender the Premises to Landlord.
If Landlord elects to terminate the Lease, Landlord may recover from
Tenant all of the following:

	(a)	 	the worth at the time of award of any Rent which, at the time
of such termination, is due and unpaid; plus
	 
	(b)	 	the worth at the time of award of the amount by which the
unpaid Base Rent and Additional Rent due and payable which would have
been earned after termination until the time of award exceeds the
amount of such rental loss Tenant proves could have been reasonably
avoided; plus
	 
	(c)	 	the worth at the time of award of the amount by which the
unpaid Base Rent and Additional Rent due and payable for the balance
of the Term after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; plus
	 
	(d)	 	any other reasonable amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary
course would be likely to result therefrom, including (i) any costs
or expenses incurred by Landlord (a) in retaking possession of the
Premises; (b) in maintaining, repairing, preserving, restoring,
replacing, cleaning, altering, remodeling or rehabilitating the
Premises or any affected portions of the Building or the Project,
including such actions undertaken in connection with the reletting or
attempted reletting of the Premises to a new tenant or tenants; (c)
for leasing commissions, advertising costs and other expenses of
reletting the Premises; or (d) in carrying the Premises, including
taxes, insurance premiums, utilities and security precautions; (ii)
any unearned brokerage commissions paid in connection with this
Lease; (iii) reimbursement of any previously waived or abated Base
Rent or Additional Rent or any free rent or reduced rental rate
granted hereunder; and (iv) any concession made by Landlord to or for
the benefit of

29

 

	 	 	Tenant in consideration of this Lease including any
moving allowances, contributions, payments or loans by Landlord for
tenant improvements or build-out allowances (including any
unamortized portion of the Allowance), if any, or assumptions by
Landlord of any of Tenant’s previous lease obligations; plus
	 
	(e)	 	reasonable attorneys’ fees incurred by Landlord as a result of
Tenant’s Default and any exercise by Landlord of its remedies, along
with all costs if suit is filed by Landlord to enforce such remedy
(including all such fees and costs for any matters on appeal); plus
	 
	(f)	 	at Landlord’s election, such other amounts in addition to or in
lieu of the foregoing as may be permitted by Law.

As used in subparagraphs (a) and (b) above, the “worth at the time of
award” is computed by allowing interest at an annual rate equal to twelve
percent (12%) per annum or the maximum rate permitted by law, whichever is
less. As used in subparagraph (c) above, the “worth at the time of award”
is computed by discounting such amount at the discount rate of Federal
Reserve Bank of San Francisco at the time of award, plus one percent (1%).
On behalf of Tenant and all parties claiming under Tenant, Tenant waives
all present and future rights to redeem, by order or judgment of any court
or by any legal process or writ, Tenant’s right of occupancy of the
Premises after any termination of this Lease.

24.2 Mitigation of Damages

If Landlord terminates this Lease or Tenant’s right to possession of the
Premises, Landlord shall have no obligation to mitigate Landlord’s damages
except to the extent required by Law. If Landlord has not terminated this
Lease or Tenant’s right to possession of the Premises, Landlord shall have
no obligation to mitigate under any circumstances and may permit the
Premises to remain vacant or abandoned. If Landlord is required to
mitigate damages as provided herein: (a) 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 in the Building, (b)
Landlord will not be deemed to have failed to mitigate if Landlord or its
affiliates lease any other portions of the Building or other projects
owned by Landlord or its affiliates in the same geographic area, before
reletting all or any portion of the Premises; and (c) 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. In recognition that the value of the Building 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
Building at the time 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.

24.3 Continuation of Lease

Upon the occurrence of any Event of Default, Landlord shall have, in
addition to any other remedies available to Landlord at law or in equity
and under this Lease, the remedy described in California Civil Code
§1951.4 (which provides that a landlord may continue the Lease in effect
after Tenant’s breach and abandonment, and recover Rent as it becomes due,
provided Tenant has the right to sublet or assign, subject only to
reasonable limitations). In addition, Landlord shall not be liable in any
way whatsoever for its failure or refusal to relet the Premises. For
purposes of this Section 24.3, and by way of example only, the following
acts by Landlord shall not under any circumstances constitute the
termination of Tenant’s right to possession of the Premises: (a) acts of
maintenance or preservation or efforts to relet the Premises, including
alterations, remodeling, redecorating, repairs, replacements and/or
painting as Landlord shall consider advisable for the purpose of reletting
the Premises or any part thereof, or (b) the appointment of a receiver
upon the initiative of Landlord to protect Landlord’s interest under this
Lease or in the Premises.

24.4 Cumulative Remedies

The remedies herein provided are not exclusive and Landlord shall have any
and all other remedies provided herein or by law or in equity, including
the right to all provisional remedies such as specific performance,
injunction, and declaratory relief. No act or omission of Landlord
pursuant to this Article 24 shall be construed as an election to terminate
this Lease unless Landlord provides Tenant with express Notice of such
intention or unless such termination is decreed by a court of competent
jurisdiction.

24.5 No Surrender

No act of Landlord or of any Landlord Party, including Landlord’s
acceptance of the keys to the Premises, shall constitute Landlord’s
acceptance of a surrender or abandonment of the Premises by Tenant prior
to the expiration of the Term unless such acceptance is expressly
acknowledged by Landlord in a written agreement executed by

30

 

both parties.
At Landlord’s option, a surrender and termination of this Lease shall
operate either (a) as an assignment to Landlord of any or all subleases of
the Premises (without effecting a merger); or (b) as a merger resulting in
the termination of any or all such subleases. Landlord’s option may be
exercised as to each such sublease by written notice to each subtenant
given at any time within thirty (30) days following the effective date of
the surrender and termination. Landlord’s failure to provide such notice
to any individual subtenant shall constitute an election by Landlord that
the surrender and termination of this Lease shall not operate as a merger
resulting in the termination of such sublease.

24.6 No Counterclaims; Waiver of Redemption

Tenant acknowledges that its obligation to pay Rent hereunder is a
condition as well as a covenant, and that such obligation is independent
of any and all covenants of Landlord hereunder. Tenant shall not interpose
any counterclaim of whatever nature or description in any summary
proceeding commenced by Landlord for non-payment of Rent. Tenant waives
any rights of redemption or relief from forfeiture under California Code
of Civil Procedure §§1174 and 1179, or under any other applicable present
or future Law, if Tenant is evicted or Landlord takes possession of the
Premises by reason of any Event of Default.

25. LANDLORD’S RIGHT TO PERFORM

Without limiting the rights and remedies of Landlord described in Article 24,
if Tenant is in Default in the performance of any of its obligations hereunder
(irrespective of whether any Event of Default has occurred), Landlord may, but
shall not be required to, upon three (3) business days Notice to Tenant,
perform any such obligation (including the making of any payment), and Landlord
shall not be responsible for any loss or damage sustained by Tenant or any
Tenant Party as a result thereof. Notwithstanding the foregoing, Landlord may
perform any of Tenant’s obligations under this Lease without Notice to Tenant
under any circumstances which Landlord reasonably perceives to constitute an
emergency, or if Landlord otherwise determines in its sole discretion that such
performance is necessary or desirable for the proper management and operation
of the Building or the Project or for the preservation of the rights and
interests or safety of other tenants therein. If Landlord performs any such
obligations of Tenant, Tenant shall pay to Landlord, as Additional Rent, within
ten (10) days following demand, all costs and expenses incurred by Landlord in
connection with such performance, with interest thereon at the Interest Rate.

26. LIABILITY OF LANDLORD

26.1 Landlord’s Default

Landlord shall not be in default under the Lease unless Landlord has
failed to perform any obligation required to be performed by Landlord
hereunder within thirty (30) days following Notice from Tenant specifying
in detail Landlord’s failure to perform; provided, however, that if the
nature of Landlord’s obligation is such that more than thirty (30) days is
required to effect such cure, then Landlord shall not be in default unless
Landlord fails to commence such cure within such thirty (30) day period
and thereafter diligently pursue such cure to completion. Tenant shall
have no right to terminate or rescind this Lease, or the right to make
repairs at the expense of Landlord (through deductions against Rent or
otherwise), in the event of any default by Landlord. Tenant acknowledges
and agrees that its sole remedy in the event of any failure by Landlord to
grant consent under any circumstances where Landlord’s consent is required
shall be an action for declaratory relief; and that Tenant’s sole remedies
in the event of any other default by Landlord shall be limited to actions
for damages or injunctive relief.

26.2 Limitation of Liability

(a) General Limitations

Landlord’s liability for damages in connection with any matters
arising out of this Lease shall be limited to an amount equal to the
lesser of (a) Landlord’s actual equity interest in the Building; or
(b) the equity interest Landlord would have in the Building if the
Building were encumbered by third party debt in an amount equal to
eighty percent (80%) of the value of the Building; provided that in
no event shall such liability extend to any insurance proceeds
received by Landlord or any Landlord Parties. The term “Landlord
Parties” means, collectively, Landlord, its partners, shareholders,
officers, directors, managers, members, trustees, beneficiaries,
investment advisors, managing agents, the successors in interest of
each of such parties, and all employees of all such parties and
their respective successors in interest. Notwithstanding any
provision of this Lease to the contrary, neither Landlord nor any
Landlord Party shall be liable to Tenant under any circumstances for
consequential, indirect, special or punitive damages, whether
arising out of any injury or damage to, or interference with,
Tenant’s business, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use. Neither Landlord,

31

 

nor
any Landlord Party shall have any personal liability to Tenant, and
Tenant waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant. The
provisions of this Article are intended to benefit Landlord and the
Landlord Parties only, shall not be applied for the benefit of any
insurer or third party, and shall survive the expiration or sooner
termination of this Lease.

(b) Waiver and Release

To the fullest extent permitted by applicable Laws, and as a
material part of the consideration to Landlord for this Lease,
Tenant hereby releases Landlord, and all Landlord Parties, from
responsibility for, waives Tenant’s entire claim of recovery for,
and assumes all risk of Claims arising from or resulting out of: (i)
damage to property or injury (including death) to persons in or
about the Premises from any cause whatsoever, including the
negligence of Landlord or any Landlord Party; (ii) damage to
property or injury to persons outside the Premises from any cause
whatsoever, except solely to the extent such damage or injury is
directly caused by the gross negligence or willful misconduct of
Landlord; and (iii) business interruption or other consequential
damages. Without limiting the generality of the foregoing, except to
the extent of any Landlord Party’s liability for the acts and
omissions of its own agents and employees acting within the scope of
their agency or employment, no Landlord Party shall be deemed to
have assumed any liability for the acts or omissions of any other
Landlord Party.

26.3 Effect of Conveyance

The term “Landlord” means the then current owner of the property of which
the Premises are a part. In the event of any sale or transfer of
Landlord’s interest in such property, the transferring Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations
of Landlord hereunder arising as of the effective date of such transfer,
and Tenant shall look solely to the transferee of Landlord’s interest for
the performance of all covenants and obligations of Landlord hereunder.
Tenant waives the benefit of any Law that gives or purports to give Tenant
any right to terminate this Lease or surrender possession of the Premises
upon the transfer of any interest of Landlord in the Project or in this
Lease.

27. LANDLORD’S LIEN

In addition to any statutory lien to which Landlord is or may become entitled,
Tenant hereby grants Landlord a continuing security interest in all personal
property of Tenant located on the Premises for all Rent coming due hereunder,
and none of such property of Tenant shall be removed therefrom without the
consent of Landlord until all Rent due to Landlord has first been paid and
discharged. Upon the occurrence of any Event of Default, Landlord shall have,
in addition to all other remedies provided herein, all rights and remedies
under the Uniform Commercial Code, including the right to sell such property of
Tenant at public or private sale upon five (5) days Notice to Tenant.

28. HOLDING OVER

If Tenant holds over in possession of the Premises or any portion thereof after
the expiration or sooner termination of the Lease, such holding over shall, at
Landlord’s option and without limiting any of Landlord’s remedies, be construed
as a tenancy at will, terminable on no less than thirty (30) days Notice, and
Tenant acknowledges that such Notice may be given at any time within the last
two (2) months of the Term. Landlord shall provide Tenant with Notice prior to
the expiration or sooner termination of the Lease of Landlord’s election that
such holding over be construed as a tenancy at sufferance; if Landlord fails to
provide such Notice, such holding over shall be deemed to be a tenancy at will.
Tenant’s use of the Premises during any such holdover period shall be at a Base
Rent equal to one hundred fifty percent (150%) of the Base Rent in effect at
the expiration of the Term of this Lease for the first fifteen (15) days of
said holdover, and thereafter at two hundred (200%) of the Base Rent in effect
at the expiration of the Term of this Lease for any additional period of
holdover (without considering any abatement of such amount to which Tenant may
have been entitled in such month as a result of any event for which the terms
of this Lease expressly provide abatement or otherwise), and otherwise be on
the terms and conditions herein specified; provided, however, that all renewal,
expansion or other optional rights of Tenant contained in this Lease, if any,
shall be deemed void during any such holdover tenancy. No ongoing negotiation
regarding the extension or renewal of this Lease (or any occupancy rights of
Tenant in the Project) shall constitute a waiver by Landlord of Tenant’s
holdover status or a consent by Landlord to any such holdover, or any waiver of
Landlord’s right to receive or Tenant’s obligation to pay such increased Base
Rent during any such holdover period. Tenant shall indemnify, protect, defend
and hold Landlord harmless from and against any and all Claims resulting from
any holding over by Tenant, including any consequential damages arising out of
any Claims against Landlord by any succeeding or prospective tenant and losses
suffered by Landlord due to lost opportunities to lease any portion of the
Premises to any succeeding or prospective tenant.

32

 

29. HAZARDOUS MATERIALS

29.1 Definitions

“Environmental Laws” means all Laws pertaining to (a) protection of health
against environmental hazards; (b) the protection of the environment,
including air, soils, wetlands, and surface and underground water, from
contamination by any substance that may have any adverse health effect;
(c) underground storage tank regulation or removal; (d) protection or
regulation of natural resources; (e) protection of wetlands or wildlife;
(f) management, regulation and disposal of solid and hazardous wastes; (g)
radioactive materials; (h) biologically hazardous materials; (i) indoor
air quality; (j) the manufacture, possession, presence, use, generation,
storage, transportation, treatment, release, emission, discharge,
disposal, abatement, cleanup, removal, remediation or handling of any
Hazardous Substances. Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601 et
seq. (“CERCLA”); the Resource Conservation and Recovery Act, 42 U.S.C.
§6901 et seq. (“RCRA”); the Federal Water Pollution Control Act, as
amended by the Clean Water Act, 33 U.S.C. §1251 et seq.; the Clean Air
Act, 42 U.S.C. §7401 et seq.; and the Toxic Substances Control Act, 15
U.S.C. §2601 et seq., as well as all similar state and local Laws.
“Hazardous Material” means any substance the release of or the exposure to
which is prohibited, limited or regulated by any Environmental Law, or
which poses a hazard to human health because of its toxicity or other
adverse effect, including (a) any “oil,” as defined by the Federal Water
Pollution Control Act and regulations promulgated thereunder (including
crude oil or any fraction of crude oil); (b) any radioactive material,
including any source, special nuclear, or byproduct material as defined in
42 United States Code §2011 et seq.; (c) Stacchybotris chartarum and other
molds; (d) asbestos containing materials (“ACM”) in any form or condition;
and (e) polychlorinated biphenyls (“PCBs”) and any substances or compounds
containing PCBs.

29.2 Use of Hazardous Materials

Tenant shall not use, store or permit Hazardous Materials to be present on
or about the Premises. Notwithstanding the foregoing, Tenant may keep and
use, solely for maintenance and administrative purposes, small amounts of
ordinary cleaning and office supplies customarily used in business offices
(such as, for example, glass cleaner,
carpet spot remover, and toner for Tenant’s business equipment in use on
the Premises), provided that Tenant complies with all Environmental Laws
relating to the use, storage or disposal of all such supplies.

29.3 Obligation to Remediate

If the use, storage or possession of Hazardous Materials by Tenant or any
Tenant Party on or about the Premises results in a release, discharge or
disposal of Hazardous Materials on, in, at, under, or emanating from, the
Premises or the Project, Tenant agrees to investigate, clean up, remove or
remediate such Hazardous Materials in full compliance with (a) the
requirements of all Environmental Laws, and any Governmental Authority
responsible for the enforcement of any Environmental Laws; and (b) any
additional requirements of Landlord that are necessary, in Landlord’s sole
discretion, to protect the value of the Premises and the Project. Landlord
shall also have the right, but not the obligation, to take whatever action
with respect to any such Hazardous Materials that it deems necessary, in
Landlord’s sole discretion, to protect the value of the Premises and the
Project. All costs and expenses paid or incurred by Landlord in the
exercise of such right shall be payable by Tenant upon demand.

29.4 Inspection Rights; Condition on Surrender

Upon reasonable Notice to Tenant, Landlord may inspect the Premises for
the purpose of determining whether there exists on the Premises any
Hazardous Materials or other condition or activity that is in violation of
the requirements of this Lease or of any Environmental Laws. The right
granted to Landlord herein to perform inspections shall not create a duty
on Landlord’s part to inspect the Premises, or liability on the part of
Landlord for Tenant’s use, storage or disposal of Hazardous Materials, it
being understood that Tenant shall be solely responsible for all liability
in connection therewith. Tenant shall surrender the Premises to Landlord
upon the expiration or earlier termination of this Lease free of debris,
waste or Hazardous Materials placed on or about the Premises by Tenant or
any Tenant Party, and in a condition which complies with all Environmental
Laws.

29.5 Indemnification; Survival

Tenant shall indemnify, defend, protect and hold harmless Landlord from
and against any and all claims, damages, liabilities, fines, judgments,
penalties, costs, losses (including loss in value of the Premises or the
Project, the loss of rentable or usable space, any adverse effect on
marketability of the Project or space therein, and all sums paid for
settlement of claims), costs incurred in connection with any site
investigation or any cleanup, removal or restoration mandated by any
Governmental Authority, and expenses (including attorneys’ fees,
consultant and

33

 

expert fees) to the extent attributable to (i) any
Hazardous Materials placed on or about the Project by Tenant or any Tenant
Party, or on or about the Premises by any party other than Landlord, at
any time during the Term, or (ii) Tenant’s failure to comply with any of
its obligations under this Article 29, all of which shall survive the
expiration or earlier termination of this Lease.

30. RELOCATION

Landlord shall have the right at any time during the Term to relocate the
Premises to substitute space (for purposes of this Article, the “Relocation
Space”) in another part of the Building or to another building in the Project
provided that: (a) the size of the Relocation Space shall not be less than 90%
of the size of the Premises from which Tenant is being relocated (for purposes
of this Article, the “Previous Space”); (b) the physical relocation of the
Premises shall be accomplished by Landlord at its cost; (c) Landlord shall give
Tenant at least thirty (30) days prior Notice of Landlord’s intention to
relocate the Premises; (d) all reasonable and actual out of pocket costs
incurred by Tenant as a result of the relocation, including costs incurred in
changing addresses on stationery, business cards, directories, advertising, and
other such items, shall be paid by Landlord, in an amount not to exceed One
Thousand Dollars ($1,000.00); and (e) if the square footage of the Relocation
Space is not the same as the square footage of the Previous Space, the Base
Rent shall be adjusted to a sum computed by multiplying the Base Rent specified
in the Summary by a fraction, the numerator of which shall be the total number
of square feet in the Relocation Space, and the denominator of which shall be
the total number of square feet in the Previous Space, and Tenant’s Share shall
be adjusted to reflect the percentage of Rentable Area in the Building
allocable to the Relocation Space. Within ten (10) days following the request
of Landlord, Tenant shall execute and return to Landlord an amendment to this
Lease confirming the new location of the Premises and any resulting adjustment
of Base Rent and Tenant’s Share. Landlord shall reimburse Tenant’s relocation
costs within thirty (30) days following Landlord’s receipt of such amendment
executed by Tenant and reasonably acceptable evidence of Tenant’s payment for
all such relocation costs, including unconditional lien releases and invoices
evidencing the actual costs. Tenant agrees that it shall make request for
reimbursement of all such costs at the same time, and in no event later than
ninety (90) days following the date the Relocation Space is made available for
occupancy by Tenant. Landlord shall have no obligation to reimburse any item
for which Tenant has not requested reimbursement by such date. Notwithstanding
anything to the contrary in the foregoing, the provisions of this Article 30
shall not be applicable or enforceable by Landlord during the Term of this
Lease expiring on October 31, 2006.

31. PARKING RIGHTS

Provided Tenant is not in Default, Tenant shall have a non-exclusive license to
use the Parking Facilities for the parking of automobiles on an “as available”
basis, subject to payment of all parking fees as then in effect for the
Project. Landlord shall not be required to enforce Tenant’s right to use such
parking spaces. Each automobile shall, at Landlord’s option to be exercised
from time to time, bear a visible identification tag, provided by Landlord, on
the rear view mirror or such other location as Landlord specifies. Tenant shall
not, and shall not permit any Tenant Party to, park any vehicles overnight in
the Parking Facilities, or to park in locations other than those specifically
designated by Landlord as being for Tenant’s use. Neither Landlord nor any
Landlord Party shall be liable for: (a) loss or damage to any vehicle or other
personal property parked or located within any Parking Facilities; or (b)
injury to or death of any person in, about or around any Parking Facilities,
whether caused by fire, theft, assault, explosion, riot or any other cause
whatsoever, and Tenant waives all Claims arising therefrom. Tenant shall not
assign any of its parking rights under this Lease and any attempted assignment
thereof shall be void.

32. MISCELLANEOUS PROVISIONS

32.1 Attorney Fees

If any dispute arises between the parties hereto concerning the breach,
enforcement or interpretation of any provision of this Lease, then the
party not prevailing in such dispute shall pay any and all court costs,
reasonable attorney and expert witness fees and disbursements, and all
other costs and expenses incurred by the other party on account thereof,
including those incurred in connection with any matters on appeal. Any
such fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Lease shall be recoverable separately
from and in addition to any other amount included in such judgment, and
such obligation is intended to be severable from the other provisions of
this Lease and to survive and not be merged into any such judgment.
Without limiting the generality of the foregoing, if Landlord utilizes the
services of an attorney for the purpose of collecting any Rent due and
unpaid by Tenant or in connection with any other breach of this Lease by
Tenant following a written demand of Landlord to pay such amounts or cure
such breach, Tenant agrees to pay Landlord actual attorneys’ fees as
determined by Landlord for such services, irrespective of whether any
legal action may be commenced or filed by Landlord. If any such work is
performed by in-house counsel for Landlord, the value of

34

 

such work shall
be determined at a reasonable hourly rate for comparable outside counsel;
provided, however, the parties hereby confirm that such fees shall be
recoverable with respect to legal work performed by Landlord’s in-house
counsel only to the extent that such work is not duplicative of legal work
performed by outside counsel representing Landlord in such matter.

32.2 Entire Agreement

This Lease constitutes the final, complete and exclusive statement among
the parties hereto, supersedes all prior and contemporaneous
understandings or agreements of the parties, and is binding on and,
subject to the provisions of Article 13, inures to the benefit of their
respective heirs, representatives, successors and assigns. No party has
been induced to enter into this Lease by, nor is any party relying on, any
representation or warranty outside those expressly set forth in this
Lease. Any agreement made after the date of this Lease is ineffective to
modify, waive, or terminate this Lease, in whole or in part, unless such
agreement is in writing, signed by the parties to this Lease, and
specifically states that such agreement modifies this Lease.

32.3 Joint And Several Liability

If Tenant comprises more than one person, all such persons shall be
jointly and severally liable for payment of Rent and the performance of
Tenant’s obligations hereunder. If Tenant is a partnership, all current
and future general partners of Tenant shall be jointly and severally
liable for such obligations. No individual partner or other person shall
be deemed to be released from its obligations hereunder except to the
extent any such release is expressly set forth in a written agreement
executed by Landlord in the exercise of its sole discretion.

32.4 Notices

No demand, consent, approval or other communication of either party shall
be deemed effective under the terms of this Lease until notice thereof,
meeting all of the requirements of this Section 32.4 (“Notice”) has been
given to the other party. All Notices must be in writing, delivered to the
Notice Address of the recipient, and given by one of the following
methods: (a) delivered by hand; (b) transmitted by fax, with a copy sent
by first class mail, postage prepaid, (c) sent by certified mail, postage
prepaid, return receipt requested; or (d) sent by reputable overnight
courier service, delivery charges prepaid. Notice delivered by hand shall
be deemed given when actually received, or, if delivery is refused, upon
such refusal. Notice transmitted by fax shall be deemed delivered when a
legible copy has been received, provided receipt has been verified by
telephone confirmation or
one of the other permitted methods of giving Notice. Notice sent by
certified mail shall be deemed given on the date of the first attempted
delivery thereof (whether or not actually received). Notice sent by
overnight courier service shall be deemed given one (1) business day
following deposit of the Notice with such courier, provided such deposit
is evidenced by a written receipt. Any party may change its Notice Address
(and Landlord may change its Address for Payment of Rent) at any time, and
from time to time, upon at least ten (10) days prior Notice given in the
manner provided herein.

32.5 Waiver

Neither the failure of either party to insist upon the performance or
satisfaction by the other party of any obligation or condition under this
Lease, nor the failure of either party to exercise any right or remedy
available to it, shall constitute a waiver of any such obligation,
condition, right or remedy. No such obligation, condition, right or remedy
may be waived except pursuant to the express terms of a written
instrument, executed by the waiving party, and unconditionally confirming
such waiver. No waiver or waivers of any obligation, condition, right or
remedy shall be construed as a waiver of the same or any other
subsequently arising obligation, condition, right or remedy.

32.6 No Third party Beneficiaries; Relationship

This Lease is made and entered into solely for the benefit of Landlord and
Tenant, and does not confer any rights or benefits on any other person.
Nothing contained in this Lease shall be deemed or construed by the
parties hereto or by any third party to create the relationship of
principal and agent, partnership, joint venturer or any association
between Landlord and Tenant.

32.7 Time

Time is of the essence of each and every term, condition and provision of
this Lease in which time of performance is a factor. The parties agree
that notwithstanding any Law to the contrary, Landlord has no duty to
notify Tenant that Tenant has failed to give any notice which Tenant has
the right to give under the Lease, including notice of the exercise of any
option.

35

 

32.8 Late Charges

If any payment of Rent is not received by Landlord within five (5) days
after such Rent is due, Tenant shall pay to Landlord, in lieu of actual
damages, a late charge equal to the greater of (a) One Hundred Dollars
($100.00), or (b) ten percent (10%) of such overdue amount, and the
parties agree that such late charge represents a reasonable estimate of
the expenses that Landlord will incur because of any late payment of Rent,
the exact amount of which are unascertainable and difficult to prove.
Tenant further acknowledges and agrees that Tenant’s failure to timely
perform certain non-monetary obligations required under this Lease is
likely to cause Landlord to suffer substantial economic injury, which
injury may include the loss of Landlord’s ability to sell or finance the
Project (or to sell or finance the Project for a favorable price or at a
favorable interest rate), or claims that Landlord defaulted under the
terms of any agreement to sell or finance the Project (where such sale or
financing is conditioned upon the state of title or the delivery of
certain documents from Tenant). Therefore, if Tenant fails to (a) provide
any Estoppel Certificate, financial statements, or SNDA in the manner and
within the time required under Articles 20 and 21, and Section 22.2,
respectively; or (b) remove any lien in the manner and within the time
required under Section 9.5, Tenant shall pay to Landlord a late charge
equal to One Hundred Dollars ($100.00) per day, commencing on the date
following the last day permitted for such performance and continuing until
such time as such obligation has been fully satisfied. Landlord and Tenant
agree that such late charge represents a fair and reasonable estimate of
the additional expenses that Landlord will incur by reason of Tenant’s
late performance of such obligations, the exact amount of which are
unascertainable and difficult to prove. Landlord and Tenant further
acknowledge that the late charges described in this Section do not include
interest under Section 32.9, or attorney fees and costs under Section
32.1, all of which are recoverable by Landlord in addition to each late
charge. No acceptance by Landlord of any late charge shall constitute an
election of remedies or a waiver of any Default by Tenant with respect to
the payment of any Rent or the performance of any other obligation, nor
shall it estop Landlord from exercising any of its other rights and
remedies available under the Law or expressly provided for in this Lease.
Any late charge incurred by Tenant shall be due and payable, as Additional
Rent, with the next installment of Base Rent payable following the date
such late charge is incurred. Landlord’s acceptance of any liquidated
damages shall not constitute a waiver of any Event of Default by Tenant,
or prevent Landlord from exercising any of the rights and remedies
available to Landlord under this Lease.

32.9 Interest

Any Rent not received by Landlord within five (5) days of the due date
shall accrue interest, payable as Additional Rent, from the date such Rent
was due through the date paid. Such interest shall be calculated monthly,
and shall be payable at a rate (the “Interest Rate”) equal to the greater
of: (a) two percent (2%) over the prime rate as quoted in The Wall Street
Journal as the base rate charged by the nation’s largest banks on
corporate loans as of the date such Rent payment was due; or (b) eighteen
percent (18%) per annum. Notwithstanding the foregoing, interest shall not
be charged on late charges or accrued interest, and the aggregate
liability for any interest accruing under this Lease shall not exceed the
limits, if any, imposed by applicable Laws. Any interest paid in excess of
such limits shall be credited to Tenant by application of the amount of
excess interest paid against any outstanding Rent obligations in any order
that Landlord elects. If the amount of excess interest paid exceeds the
amount of outstanding Rent, such excess portion shall be refunded to
Tenant by Landlord. To ascertain whether any interest payable exceeds the
limits imposed, any non-principal payment (including late charges) shall
be considered to the extent permitted by Law to be an expense or a fee,
premium or penalty, rather than interest.

32.10 Brokers

Landlord and Tenant each represents and warrants to the other that it has
had no dealings with any real estate broker or agent in connection with
the negotiation or making of this Lease, except for the Broker(s)
specified in the Summary. Each party shall indemnify, protect, defend, and
hold harmless the other party from all Claims, including attorney fees,
arising out of any leasing commission, finder’s fee, or equivalent
compensation alleged to be owing to any person on account of the
indemnifying party’s dealings with any real estate broker or agent other
than the Brokers. No Broker shall be deemed to have earned, or be entitled
to receive, any commission or fee as a result of the making of this Lease
or the occupancy by Tenant of any space in the Project, except in
accordance with the express terms of a separate written agreement, if any,
executed by the Broker entitled to receive such commission or fee and the
party obligated to pay it. The terms of this Section 32.10 shall survive
the expiration or earlier termination of the Lease.

32.11 Governing Law

This Lease shall be governed, enforced and construed under the laws of the
state in which the Premises are located (the “State”), without regard to
any choice of law principles requiring the application of the law of
another jurisdiction. Each party hereby submits to local jurisdiction in
such State and agrees that any action by either party

36

 

against the other
shall be instituted in the State and that each of them shall have personal
jurisdiction over the other for any action brought by either of them in
the State.

32.12 Interpretation

This Lease has been negotiated at arms’ length between persons
knowledgeable in business and real estate matters who have had the
opportunity to confer with counsel in the negotiation hereof. Accordingly,
any rule of law or legal decision that would require interpretation of
this Lease against the party that drafted it is not applicable and is
waived, and this Lease shall be given a fair and reasonable interpretation
in accordance with the meaning of its terms. References in this Lease to
articles, sections, paragraphs or exhibits pertain to articles, sections,
paragraphs and exhibits of this Lease unless otherwise specified. The word
“including” means “including, without limitation.” The word “or” means
“and/or” unless the context clearly indicates an obligation to choose one
of two or more alternatives. The word “person” includes legal entities as
well as natural persons. The word “may” means “may, but shall not be
required to.” Unless otherwise expressly specified in the applicable
provisions, the phrase “at any time” means “at any time and from time to
time.” The article, section and paragraph headings in this Lease are
solely for convenience of reference and shall not constitute a part of
this Lease, nor shall they affect the meaning, construction or effect
hereof. All terms and words used in this Lease, regardless of the number
or gender in which they are used, shall be deemed to include the
appropriate number and gender, as the context may require. Any reference
to any specific statute, ordinance or other Law shall be deemed to include
any amendments thereto, or any successor or similar Law addressing the
same subject matter.

32.13 Representations and Warranties of Tenant

Tenant makes the following representations and warranties, each of which
is material and is being relied upon by Landlord, is true in all respects
as of the date of this Lease, and shall survive the expiration or
termination of the Lease:

	(a)	 	If Tenant is an entity, Tenant is duly organized, validly
existing and in good standing under the Laws of the state in which it
was organized, and is qualified to do business and in good standing
in the State. The persons executing this Lease on behalf of Tenant
have been duly authorized and directed to do so on
behalf of Tenant and to bind Tenant without the necessity for
consent or approval of any other person. Tenant has full power,
capacity, authority and legal right to execute and deliver this
Lease and to perform all of its obligations hereunder. This Lease is
a legal, valid and binding obligation of Tenant, enforceable in
accordance with its terms. The execution hereof or performance
hereunder by Tenant does not and will not cause Tenant to be in
default under any other agreement to which Tenant is a party.
	 
	(b)	 	Tenant has, and will have throughout the Term, the financial
capacity to meet its obligations under this Lease as they come due,
and all permits, authorizations and licenses which may be required by
Law for the conduct of Tenant’s Permitted Use in the Premises. All
financial statements and financial information furnished by Tenant to
Landlord prior to the execution of this Lease fairly, accurately and
completely reflect the financial condition of Tenant, and Tenant
acknowledges that Landlord materially relied upon all such
information in making its decision to enter into this Lease with
Tenant. Tenant has not: (i) made a general assignment for the benefit
of creditors; (ii) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by any creditors;
(iii) suffered the appointment of a receiver to take possession of
all or substantially all of its assets; (iv) suffered the attachment
or other judicial seizure of all or substantially all of its assets;
(v) admitted in writing its inability to pay its debts as they come
due; or (vi) made any offer of settlement, extension or composition
to its creditors generally.

32.14 Jury Trial Waiver

Landlord and Tenant agree not to seek, and each waives any right to, trial
by jury in any action, proceeding or counterclaim brought by either of
them against the other on any matter or claim arising out of or in any way
relating to this Lease, the Project, the relationship of Landlord and
Tenant, Tenant’s use or occupancy of the Premises, any claim of injury or
damage, or the enforcement of any remedy under any Law or any provisions
of this Lease, irrespective of whether any such matter or claim is based
in contract or in tort. Neither party shall seek to consolidate any such
action in which the right to trial by jury has been waived with any other
action in which such right has not been or cannot be waived, it being the
intention of the parties that the jury trial waiver shall be subject to no
exceptions. The parties agree that the foregoing constitutes a written
consent to waiver of trial by jury pursuant to the provisions of
California Code of Civil Procedure §631. Tenant hereby constitutes and
appoints Landlord as Tenant’s true and lawful attorney-in-fact, which
appointment is coupled with an interest, and hereby authorizes and
empowers Landlord, in the name, place and stead of Tenant, to file this
Lease with the clerk or

37

 

judge of any court of competent jurisdiction as a
statutory written consent to waiver of trial by jury. The provisions of
this Section 32.14 shall survive the expiration or sooner termination of
this Lease.

32.15 Recordation

Neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant, by any Tenant Party, or by
any other person except Landlord. Any such recording in violation of this
Section 32.15 shall constitute a Default by Tenant. Within ten (10) days
following any request by Landlord or any Superior Interest Holder, Tenant
shall execute, acknowledge and deliver to Landlord a Memorandum of Lease
(“Memorandum”) for recordation in such form as may be necessary to provide
constructive notice of the Lease (including present words of leasing) and
specifying the Lease Date, Commencement Date and Expiration Date, the
names of the parties, a description of the Premises, and such other terms
of the Lease as Landlord or the Superior Interest Holder deem necessary or
desirable. Within ten (10) days following any request by Landlord, which
request may be made at any time, Tenant shall execute, acknowledge and
deliver to Landlord a quitclaim deed to the Premises, in such form and
including such information as may be necessary to effectuate the transfer
to Landlord of all Tenant’s interest in the Premises, and Landlord shall
have the right to record such quitclaim deed at any time following
expiration or termination of the Lease. Landlord’s right to request, and
Tenant’s obligation to execute, any such quitclaim deed shall survive the
expiration or termination of this Lease.

32.16 Severability

If any provision of this Lease is found to be unenforceable, the remainder
of this Lease shall not be affected, and any provision found to be invalid
shall be enforceable to the extent permitted by Law. The parties agree
that if two different interpretations may be given to any provision
hereunder, one of which will render the provision unenforceable, and one
of which will render the provision enforceable, the interpretation
rendering the provision enforceable shall be adopted.

32.17 Force Majeure

“Force Majeure Delay” means any delay in the timely performance of any
obligation required under this Lease caused by (a) strike, lockout or
other labor or industrial dispute or
disturbance, civil commotion, act of a public enemy, war, riot, sabotage,
blockade or embargo; (b) inability to secure building permits or other
required approvals by any Governmental Authority despite diligent efforts
to do so; (c) changes in Laws, or changes in the interpretation thereof by
any Governmental Authority; (d) lightning, earthquake, fire, storm,
hurricane, tornado, flood, washout, explosion or act of God; or (e) any
other cause beyond the reasonable control of the party obligated to
perform. To the extent any obligation required under this Lease cannot
timely be performed because of any Force Majeure Delay, the time for
performance of such obligation shall be extended by a period equal to the
period of such Force Majeure Delay. Notwithstanding the foregoing,
however, under no circumstances shall any Force Majeure Delay operate to
(x) excuse or postpone any obligation of Tenant to timely pay Rent under
this Lease; (y) postpone the Commencement Date or relieve Tenant of any
liability or obligation under this Lease as a result of Tenant’s inability
to qualify for or obtain any license, approval, conditional use permit, or
other permission required by any Governmental Authority in order for
Tenant to occupy or conduct any particular business in the Premises; or
(z) excuse or postpone any obligation of Tenant, the non-performance of
which would cause Landlord to be in breach of any obligation to any
Superior Interest Holder.

32.18 Non-Disclosure

The terms of this Lease and the details of its negotiation constitute
confidential information pertaining to the Project that is proprietary to
Landlord. Tenant acknowledges that its disclosure of any of such
information could adversely affect the ability of Landlord to negotiate
other leases and impair Landlord’s relationship with other tenants.
Accordingly, Tenant agrees that it shall keep (and shall cause its
employees, agents, principals and all other Tenant Parties to keep) all
such information confidential and shall not disclose all or any portion
thereof to any person except: (a) as and to the extent required by Law;
and (b) to bona fide prospective assignees or sublessees of Tenant, or to
Tenant’s attorneys, tax and financial advisors, lenders and investors, to
the extent such persons have a need to know and as necessary for the
conduct of Tenant’s business, provided that such persons also first agree
in writing to keep all such information confidential for the benefit of
Landlord.

32.19 Acceptance; Counterparts

The submission of this Lease by Landlord to Tenant, or to its broker or
other agent, does not constitute an offer from Landlord to Tenant for the
lease of the Premises. Execution and delivery of this Lease by Tenant to
Landlord shall, in consideration of the time and expense incurred by
Landlord in reviewing the Lease and Tenant’s credit, constitute an offer
by Tenant to lease the Premises upon the terms and conditions set forth
herein (which offer to

38

 

Lease shall be irrevocable for twenty (20) business
days following the date of delivery). This Lease shall only become
effective and binding upon full execution hereof by Landlord and delivery
of a signed copy to Tenant. This Lease may be executed in one or more
counterparts, and each of which, so executed, shall be deemed to be an
original, and all such counterparts together shall constitute one and the
same instrument.

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

LANDLORD

Transamerica Realty Investment Properties, LLC,

a Delaware limited liability company

		
	By: Thomas J. Schefter 	
 

	Name: Thomas J. Schefter 	
 

	Its: Senior Vice President 	
 

TENANT

Plumtree Software, Inc., a Delaware corporation

qualified to do business in California as

Delaware Plumtree Software, Inc.

		
	By: Gary Klintworth 	
 

	Name: Gary Klintwort 	
 

	Its: Controller 	
 

		
	By: 	
 

	Name: 	
 

	Its: 	
 

[NOTE: PLEASE PROVIDE

Tenant’s Federal Tax ID No.               
                     
       ]

39

 

EXHIBIT A

FLOOR PLAN OF BUILDING

TO BE PROVIDED BY ASSET MANAGER

 

 

EXHIBIT B

TENANT IMPROVEMENT AGREEMENT

INTENTIONALLY OMITTED

 

 

EXHIBIT C

COMMENCEMENT DATE AGREEMENT

INTENTIONALLY OMITTED

 

 

EXHIBIT D

RULES AND REGULATIONS

	1.	 	No sign, advertisement, name or notice shall be installed or displayed on
any part of the outside or inside of the Building without the prior
written consent of Landlord. 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
by a person approved by Landlord, using materials and in a style and
format approved by Landlord.
	 
	2.	 	Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly
from outside the Premises. No awnings or other projection shall be
attached to the outside walls of the Building without the prior written
consent of Landlord. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of
the Premises, other than Building standard materials, without the prior
written consent of Landlord.
	 
	3.	 	Tenant shall not obstruct any sidewalks, halls, passages, exits or
entrances of the Building. The passages, exits, and entrances are not for
the general public, and Landlord shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the
judgment of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants.
	 
	4.	 	The directory of the Building, if any, will be provided exclusively for
the display of the name and location of tenants only, and Landlord
reserves the right to exclude any other names therefrom.
	 
	5.	 	Landlord shall clean the Premises as provided in the Lease, and except
upon the prior written consent of Landlord, no other person or persons
shall be employed by Tenant or permitted to enter the Building for the
purpose of cleaning any part thereof. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Premises.
	 
	6.	 	Landlord may impose a charge for any additional keys to the Premises.
Tenant may not make or have made additional keys, and Tenant shall not
alter any lock or install a new additional lock or bolt on any door or
window of its Premises. Tenant, upon termination of its tenancy, shall
deliver to Landlord the keys of all doors which have been furnished to, or
otherwise procured by Tenant, and, in the event of loss of any keys, shall
pay Landlord the cost of replacing the same or of changing the lock or
locks opened by such lost key if Landlord shall deem it necessary to make
such change.
	 
	7.	 	No furniture, freight, or equipment of any kind shall be brought into the
Building without prior Notice to Landlord and all moving of the same into
or out of the Building shall be done at such time and in such manner as
Landlord shall designate. Deliveries during normal office hours shall be
limited to normal office supplies and other small items. No deliveries
shall be made which impede or interfere with other tenants or the
operation of the Building.
	 
	8.	 	Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in
any manner except by a paste, or other material which may easily be
removed with water, the use of cement or other similar adhesive materials
being prohibited. The method of affixing any such linoleum, tile, carpet
or other similar floor covering shall be subject to the approval of
Landlord. The expense of repairing any damage resulting from a violation
of this rule shall be borne by Tenant.
	 
	9.	 	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 right to prescribe
the weight, size and position of all equipment, materials, furniture or
other property brought into the Building. Heavy objects, if such objects
are considered necessary by Tenant, as determined by Landlord, shall stand
on such platforms as determined by Landlord to be necessary to properly
distribute the weight. Business machines and mechanical equipment which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space outside the Premises to such a degree as to be
objectionable to Landlord or to any tenants in the Building, shall be
placed and maintained by Tenant, at Tenant’s expense, on vibration
eliminators or other devices sufficient to eliminate noise or vibration.
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
Building by maintaining or moving such equipment or other property shall
be repaired at the expense of Tenant.
	 
	10.	 	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 or other
occupants of the

 

 

	 	 	Project by reason of noise, odors or vibrations, nor shall Tenant bring
into or keep in or about the Premises any birds or animals.
	 
	11.	 	Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord except upon Landlord’s prior written approval.
	 
	12.	 	Tenant shall not waste electricity, water or air-conditioning and agrees
to cooperate fully with Landlord to assure the most effective operation of
the Building’s heating and air-conditioning and to comply with all Laws,
Rules and Requirements governing energy conservation. Tenant shall not
adjust any controls other than room thermostats installed for Tenant’s
use. Tenant shall keep corridor doors closed and shall close window
coverings at the end of each business day.
	 
	13.	 	Landlord reserves the right from time to time, in Landlord’s sole
discretion, exercisable without prior notice and without liability to
Tenant, to: (a) name or change the name of the Building or Project; (b)
change the address of the Building or Project, and/or (c) install, replace
or change any signs in, on or about the Common Areas, the Building or
Project.
	 
	14.	 	Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 7:00 a.m., or such other hours as may be
established from time to time by Landlord, and on legal holidays, any
person unless that person is known to the person or employee in charge of
the Building and has a pass or is properly identified. Landlord shall not
be liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. Tenant shall be responsible for
all persons for whom it requests passes and shall be liable to Landlord
for all acts of such persons. Landlord reserves the right to prevent
access to the Building in case of invasion, mob, riot, public excitement
or other commotion by closing the doors or by other appropriate action.
	 
	15.	 	Tenant shall close and lock all doors of its Premises and entirely shut
off all water faucets or other water apparatus, and, except with regard to
Tenant’s computers and other equipment which reasonably require
electricity on a 24-hour basis, all electricity, gas or air outlets before
Tenant and its employees leave the Premises. Tenant shall be responsible
for any damage or injuries sustained by other tenants or occupants of the
Building or by Landlord for noncompliance with this rule.
	 
	16.	 	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 substances of any kind whatsoever shall be
thrown therein.
	 
	17.	 	Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets, or any other goods or merchandise
to the general public in or on the Premises. Tenant shall not solicit
business from other tenants in the Project. Tenant shall not use the
Premises for any business or activity other than that specifically
provided for in the Lease.
	 
	18.	 	Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall
not interfere with radio or television broadcasting or reception from or
in the Building or elsewhere.
	 
	19.	 	Except as expressly permitted in the Lease, Tenant shall not mark, drive
nails, screw or drill into the partitions, window mullions, woodwork,
plaster or ceilings, or in any way deface the Premises or any part
thereof, except to install normal wall hangings.
	 
	20.	 	Tenant shall not install, maintain or operate upon the Premises any
vending machines without the prior written consent of Landlord, which
shall not be unreasonably withheld. Notwithstanding anything to the
contrary in the foregoing, Tenant may maintain vending machines in a
location approved by Landlord for the sale to Tenant’s employees of
pre-prepared and pre-packaged dry good, snacks, sandwiches and soft drinks
to Tenant employees.
	 
	21.	 	Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in and around the Project or the Building are
prohibited, and each tenant shall cooperate to prevent same.
	 
	22.	 	Landlord reserves the right to exclude or expel from the Project or the
Building 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 Project.
	 
	23.	 	Tenant shall store all its trash and garbage within its Premises. 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
directions reasonably issued from time to time by Landlord.

 

 

	24.	 	The Premises shall not be used for the storage of merchandise held for
sale to the general public, or for lodging or for manufacturing of any
kind. No cooking shall be done or permitted by Tenant on the Premises,
except that Tenant shall be permitted to use a small microwave oven for
heating foods, and small appliances for brewing coffee, tea, and similar
beverages, provided that all such equipment and use is in accordance with
all applicable Laws.
	 
	25.	 	Tenant shall not use in any space, or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and side
guards, or such other material-handling equipment as Landlord may approve.
Tenant shall not bring any vehicles of any kind into the Building.
	 
	26.	 	Tenant shall not use the name of the Project or Building in connection
with, or in promoting or advertising, the business of Tenant, except for
Tenant’s address.
	 
	27.	 	Tenant shall not overload the floor of the Premises. At no time during
the Term shall Tenant have access to or be entitled to the use of any roof
areas of the Project for any purpose, nor shall Tenant have any right to
install, operate, maintain, modify or remove any antenna, satellite dish,
or other telecommunications equipment anywhere in the Project.
	 
	28.	 	Tenant agrees that it shall comply with all fire, safety and security
regulations that may be issued from time to time by Landlord, and Tenant
also shall provide Landlord with the name of a designated responsible
employee to represent Tenant in all matters pertaining to such
regulations. Tenant shall cooperate fully with Landlord in all matters
concerning fire and other emergency procedures.
	 
	29.	 	Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage. Such responsibility shall include
keeping doors locked and other means of entry to the Premises closed.
	 
	30.	 	Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of
Tenant or any other such tenant, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any and all of the
tenants in the Building.
	 
	31.	 	These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of premises in the
Project or Building.
	 
	32.	 	Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for
safety, security, care and cleanliness of the Project and/or Building and
for the preservation of good order therein. Tenant shall abide by all such
Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
	 
	33.	 	Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant’s employees, agents, clients, customers, invitees or
guests.

 

 

EXHIBIT E

FORM OF ESTOPPEL CERTIFICATE

                (“Tenant”) certifies to           (along with its successors and assigns, “Lender”
or “Purchaser”) that Tenant leases from            (“Landlord”) approximately            square feet
of space (the “Premises”)            in pursuant to that certain Lease Agreement dated            by      
and between Landlord and Tenant (with all exhibits, addenda and amendments
thereto, the “Lease”), a true and correct copy of which is attached hereto as
Exhibit A. Tenant certifies to Landlord and [Lender/Purchaser], that as of the
date hereof:

	34.	 	The Lease is in full force and effect and has not been modified,
supplemented or amended.
	 
	35.	 	Tenant has accepted the Premises and is in actual occupancy thereof.
Landlord has performed all obligations under the Lease to be performed by
Landlord as a condition to such acceptance and occupancy, including,
without limitation, completion of all Landlord’s Work required under the
Lease and the payment of any required Allowance or other contributions
therefor. Tenant is not entitled to any further payment or credit for
tenant work.
	 
	36.	 	The
initial term of the
Lease commenced            and shall expire
          . Tenant has the
following rights to
renew or extend the
term of the Lease
or to expand the
Premises:           .
	 
	37.	 	Tenant has not paid
any rentals or
other payments more
than one (1) month
in advance except
as follows:           .
	 
	38.	 	Base Rent payable under the Lease is currently           . Base Rent and all
Expense estimates have been paid in full through           . There currently
exist no claims, defenses, rights of set-off or abatement to or
against the obligations of Tenant to pay Base Rent or Additional Rent
or relating to any other term, covenant or condition under the Lease.
	 
	39.	 	There are no
concessions,
bonuses, Rent
abatements, rebates
or other matters
affecting the
payment of rent
under the Lease
except as follows:
          .
	 
	40.	 	No
security or other
deposit has been
paid with respect
to the Lease except
as follows:                     .
	 
	41.	 	Landlord is not
currently in
default under the
Lease and there are
no events or
conditions existing
which, with the
giving of notice or
the lapse of time,
or both, could
constitute a
default of the
Landlord under the
Lease or entitle
Tenant to offsets
or defenses against
the prompt payment
of rent except as
follows:                     .
	 
	42.	 	Tenant is not in default under any of the terms and conditions of the
Lease. nor is there now any fact or condition which, with the giving of
notice or lapse of time or both, will become such a default.
	 
	43.	 	Tenant has not assigned, transferred, mortgaged or otherwise encumbered
its interest under the lease, subleased all or any portion of the
Premises, or permitted any person or entity to use the Premises except as
follows:                     .
	 
	44.	 	Tenant has no rights of first refusal or options to purchase the property
of which the Premises are a part.
	 
	45.	 	The Lease represents the entire agreement between the parties with
respect to Tenant’s right to use and occupy the Premises.
	 
	46.	 	Tenant acknowledges that the parties to whom this certificate is
addressed will be relying upon the accuracy of this certificate in
connection with their acquisition and/or financing of the Premises.

IN WITNESS WHEREOF, Tenant has caused this certificate to be executed as of                     .

[TENANT SIGNATURE]

 

 

EXHIBIT F

505 SANSOME STREET ASBESTOS DISCLOSURE STATEMENT

Asbestos-containing materials (“ACM”) were first discovered in the building at
505 Sansome Street in San Francisco, California (the “Building”), as the result
of bulk sampling and visual inspection activities conducted in October 1990 by
Crawford/FPE Risk Control Services (Crawford/FPE), an independent industrial
hygienist retained by Building management. In December 1990, a comprehensive
asbestos survey of the Building was conducted by ACC Environmental Consultants
(ACC), and in January 1999 such survey was confirmed by Hygienetics
Environmental (Hygienetics), to determine all types and locations of ACM in the
Building. ACC’s Asbestos Survey Report, as confirmed by Hygienetics’ survey,
based on visual inspection and bulk sampling of suspected ACM, indicates that
ACM is present in the Building floor tile adhesive, and sub-flooring adhesive
throughout the Building. ACM is also present in the Building as floor tile of
the following types: 12”x12” gray floor tile (10th floor),
9”x9” brown floor
tile (11th and 12th floors), and 12”x12” brown floor tile (19th floor). These
types of floor tiles were found and tested on the floors as shown in the above
parentheses; however, the floor tile types described above should be treated as
ACM wherever they are found in the Building. All adhesive materials found below
floor finishes may contain asbestos and should be treated as ACM until you are
notified otherwise. In addition, the cores of fire-rated doors may contain
asbestos and should be treated as ACM until you are notified otherwise.

Because of the presence of ACM in the Building, Landlord has prepared an
Asbestos Management Plan, which, among other things sets forth the
responsibilities of Landlord, Landlord’s industrial hygienist, Building
tenants, and contractors and workers performing work in or to areas of the
Building where ACM is located.

UNDER THE ASBESTOS MANAGEMENT PLAN, EACH TENANT IN THE BUILDING, OR ANY PERSON
(INCLUDING A CONTRACTOR) ACTING ON A TENANT’S BEHALF, IS REQUIRED:

	(a)	 	To obtain WRITTEN PERMISSION from Landlord’s asbestos site
manager (“ASM”) before the tenant, or any person acting on such
tenant’s behalf, performs ANY construction, renovation, maintenance,
repair, alteration, addition, modification, improvement, or like work
in or to the Premises.
	 
	(b)	 	To obtain a WORK PERMIT from the ASM before the tenant, or any
person acting on such tenant’s behalf, engages in (a) any work on the
Building floors that involves disturbance of floor tiles or
disturbance to the flooring material and underlying black mastic, (b)
any other work which could disturb ACM in the Building, or (c) such
other work as the ASM may designate from time to time. The work
permit shall serve as that written permission required by paragraph
(1), but only for work requiring a work permit.
	 
	(c)	 	When contacting the ASM to request permission to do the work,
to describe the scope of the work, and the name of the contractor(s),
if any, who will perform the work. The ASM shall then determine,
based upon the nature and scope of the work described by the tenant,
or a person acting on such tenant’s behalf, whether the work requires
a work permit. In the case of all work requiring a work permit, the
ASM shall also determine whether it is appropriate for the tenant or
the tenant’s contractor(s) to perform the work.
	 
	(d)	 	To strictly comply with all work permit requirements and
procedures supplied by the ASM as well as all directions given by the
ASM.
	 
	(e)	 	To immediately report to the ASM any and all spills or other
releases of ACM (including the presence of any debris which may
contain asbestos) which the tenant, or any person acting on such
tenant’s behalf, observes or suspects, so that Landlord can respond
as appropriate.

Under no circumstances, shall any tenant, or any person acting on such tenant’s
behalf, engage in work involving the disturbance (in any fashion) of any wall
or floor in the Premises, including the removal of any item or fixture from any
wall or floor in the Premises, until and unless written permission is obtained
from the ASM.

No tenant, or any person acting on a tenant’s behalf, shall touch or disturb
the ACM in the Building, including any debris suspected of containing asbestos,
except as specifically authorized in writing by the ASM on a case-by-case
basis.exv10w22

 

EXHIBIT 10.22

LOAN MODIFICATION AGREEMENT

     This Loan Modification Agreement (the “Modification”) is entered into as
of October 25, 2004, by and between Plumtree Software, Inc., a Delaware
corporation (the “Borrower”), and Silicon Valley Bank, a California — chartered
bank (“Bank”).

1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other obligations which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among
other documents, a Loan and Security Agreement, dated on or about March 14,
2001 (as may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”). The Loan Agreement provided for, among other
things, a Committed Revolving Line in the original principal amount of
$7,500,000 (such amount has been subsequently revised to various amounts by
Loan Modification Agreements of various dates and was most recently increased
to $3,509,000 by a Loan Modification Agreement dated as of March 18, 2004).
Capitalized terms used but not otherwise defined herein shall have the same
meanings as in the Loan Agreement; provided, that hereinafter all indebtedness
owing by Borrower to Bank shall be referred to as the “Indebtedness.”

2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement. Hereinafter, all
other documents securing repayment of the Indebtedness shall be referred to as
the “Security Documents” and the Security Documents, together with all other
documents evidencing the Indebtedness shall be referred to as the “Existing
Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS OF EXISTING LOAN DOCUMENTS.

	3.1	 	Letters of Credit Sublimit. Section 2.1.2 of the Loan
Agreement is hereby amended by replacing the amount “$3,209,000” set
forth in the first sentence therein with the amount “$4,000,000”.
	 
	3.2	 	Cash Management Services Sublimit. Section 2.1.4 of the Loan
Agreement is hereby amended by replacing the amount “$3,209,000” set
forth in the first sentence therein with the amount “$500,000”.
	 
	3.3	 	Financial Covenants. Section 6.7 of the Loan Agreement is
hereby amended in its entirety to read as follows:

6.7 Financial Covenants.

Borrower shall maintain at all times:

(i) Quick Ratio (Adjusted). As of the last day of each month
(“Date of Determination”), a ratio of Quick Assets to Current
Liabilities plus all

 

 

Indebtedness (including all outstanding Letters of Credit)
minus Deferred Revenue of at least 3.00:1.00.

(ii) Tangible Net Worth. As of the Date of Determination,
Tangible Net Worth of at least $40,000,000.

	3.4	 	Definitions. The following defined terms under Section 13.1
of the Loan Agreement are each hereby amended to read as follows:

“Committed Revolving Line” is aggregate Advances of up to
$4,000,000.

“Revolving Maturity Date” is October 24, 2005.

	3.5	 	Amended Exhibit D. Exhibit D to the Loan Agreement is hereby
amended to read in full as attached hereto as Attachment No. 1.

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

5. PAYMENT OF LOAN FEE. Borrower shall pay, on or prior to the date hereof, a
$5,000 nonrefundable loan fee.

6. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it has
no defenses against its obligations to pay all of the Indebtedness.

7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
Existing Loan Documents, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan Documents.
Except as expressly modified pursuant to this Modification, the terms of the
Existing Loan Documents remain unchanged and in full force and effect. Bank’s
agreement to modify the Existing Loan Documents pursuant to this Modification
in no way shall obligate Bank to make any future modifications to the Existing
Loan Documents. Nothing in this Modification shall constitute a satisfaction
of the Indebtedness. It is the intention of Bank and Borrower to retain as
liable parties all makers and endorsers of the Existing Loan Documents unless
the party is expressly released by Bank in writing, and no maker, endorser or
guarantor will be released by virtue of this Modification.

8. CONDITIONS. The effectiveness of this Modification is conditioned upon (i)
payment of all reasonable Bank Expenses relating to this Modification, (ii)
payment of the loan fee as set forth under Section 5 hereof, and (iii)
execution and delivery to Bank of a fully executed copy of this Modification.

[Execution Page Follows Immediately]

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this
Modification to be executed and delivered by its duly authorized
representative as of the date first written above.

BORROWER:

PLUMTREE SOFTWARE, INC.,

a Delaware corporation

		
	By:	/s/ Eric Borrman 
 

	Name: Eric Borrman 	 

Title: Chief Financial Officer

 

 

ATTACHMENT NO. 1

REVISED FORM OF

EXHIBIT D

COMPLIANCE CERTIFICATE

	 	 	 
	TO:

	 	SILICON VALLEY BANK, INC.
	FROM:

	 	PLUMTREE SOFTWARE, INC.
	DATED:

	 	                                      

     The undersigned authorized officer (the “Officer”) of Plumtree Software,
Inc. (“Borrower”) certifies that, under the terms and conditions of the Loan
and Security Agreement dated as of March 14, 2001 between Borrower and Bank (as
amended from time to time, the “Agreement”): (i) Borrower is in complete
compliance for the period ending on the date first set forth above with all
required covenants except as noted below and (ii) all representations and
warranties in the Agreement are true and correct in all material respects on
this date. In addition, the Officer certifies that Borrower and each
Subsidiary (a) has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested in
good faith with adequate reserves under Generally Accepted Accounting
Principles (GAAP) and (b) does not have any legal actions pending or threatened
against Borrower or any Subsidiary which Borrower has not previously notified
in writing to Bank. Attached are the required documents supporting the
certification. The Officer certifies that these are prepared in accordance
with GAAP consistently applied from one period to the next except as explained
in an accompanying letter or footnotes. The Officer acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	Reporting Covenants
	 	 Required
	 	Complies

	1. Interim financial statements + CC

	 	Monthly within 30 days
	 	Yes      No
	2. Annual audited financial statements

	 	Within 120 days of FYE
	 	Yes      No

	 	 	 	 	 	 	 	 	 
	Financial Covenants
	 	Required
	 	Actual
	 	Complies

	1. Minimum Adjusted Quick Ratio

	 	 	3.00:1.00	 	 	   
	 	Yes      No
	2. Minimum Tangible Net Worth

	 	$	40,000,000	 	 	   
	 	Yes      No
	Have there been updates to Borrower’s intellectual property?	 	Yes      No

 

 

Comments Regarding Exceptions: See Attached.

Sincerely,

Plumtree Softree, Inc.,

a Delaware corporation

Signature

Title

Date

BANK USE ONLY

		
	Received by: 	
 

AUTHORIZED SIGNER

		
	Date: 	
 

		
	Verified: 	
 

AUTHORIZED SIGNER

		
	Date: 	
 

Compliance Status:
       Yes            No

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]