Document:

Exhibit 10.29

 

FORM OF

INDEMNITY AGREEMENT

 

This Indemnity Agreement (“Agreement”) is made
as of •,
2005 by and between NEW ATHLETICS, INC., a Delaware corporation (the “Company”),
and • (“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent persons have become
more reluctant to serve corporations as directors, officers or in other
capacities unless they are provided with adequate protection through insurance
or adequate indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the
corporation.

 

WHEREAS, the Board of Directors of the
Company (the “Board”) has determined that, in order to attract and
retain qualified individuals, the Company will attempt to maintain on an
ongoing basis, at its sole expense, liability insurance to protect persons
serving the Company and its subsidiaries from certain liabilities.  Although the furnishing of such insurance has
been a customary and widespread practice among United States-based corporations
and other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. 
At the same time, directors, officers and other persons in service to
corporations or business enterprises are being increasingly subjected to
expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the Company or
business enterprise itself.  The
Certificate of Incorporation and Bylaws of the Company require indemnification
of the officers and directors of the Company. 
Indemnitee may also be entitled to indemnification pursuant to
applicable provisions of the Delaware General Corporation Law (the “DGCL”).  The Bylaws and the DGCL expressly provide
that the indemnification provisions set forth therein are not exclusive, and
thereby contemplate that contracts may be entered into between the Company and
members of the board of directors, officers and other persons with respect to
indemnification.

 

WHEREAS, the uncertainties relating to such
insurance and to indemnification have increased the difficulty of attracting
and retaining such persons.

 

WHEREAS, the Board has determined that the
increased difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company’s stockholders and that the Company should
act to assure such persons that there will be increased certainty of such
protection in the future.

 

WHEREAS, it is reasonable, prudent and
necessary for the Company contractually to obligate itself to indemnify, and to
advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

 

WHEREAS, this Agreement is a supplement to
and in furtherance of the Certificate of Incorporation and Bylaws of the
Company and any resolutions adopted pursuant thereto, and 

 

 

shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee thereunder.

 

WHEREAS, Indemnitee does not regard the
protection available under the Company’s Certificate of Incorporation and Bylaws
and insurance as adequate in the present circumstances, and may not be willing
to serve as an officer or director without adequate protection, and the Company
desires Indemnitee to serve in such capacity. 
Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he be so
indemnified.

 

NOW, THEREFORE, in consideration of the
premises and the covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows:

 

1.                                       Services
to the Company.  Indemnitee will serve or continue to serve as
an officer, director or key employee of the Company for so long as Indemnitee
is duly elected or appointed or until Indemnitee tenders his resignation.

 

2.                                       Definitions. 
As used in this Agreement:

 

(a)                                  References to “agent” shall mean any
person who is or was a director, officer, or employee of the Company or a
subsidiary of the Company or other person authorized by the Company to act for
the Company, to include such person serving in such capacity as a director,
officer, employee, fiduciary or other official of another corporation,
partnership, limited liability company, joint venture, trust
or other enterprise at the request of, for the convenience of, or to represent
the interests of the Company or a subsidiary of the Company.

 

(b)                                 The terms “Beneficial Owner” and “Beneficial
Ownership” shall have the meanings set forth in Rule 13d-3 promulgated
under the Exchange Act (as defined below) as in effect on the date hereof.

 

(c)                                  A “Change in Control” shall be
deemed to occur upon the earliest to occur after the date of this Agreement of
any of the following events:

 

(i)                                           Acquisition of Stock by Third Party. 
Any Person (as defined below) other than VantagePoint Venture Partners
or its affiliates is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing fifteen percent (15%) or more of the
combined voting power of the Company’s then outstanding securities entitled to
vote generally in the election of directors, unless (1) the change in the
relative Beneficial Ownership of the Company’s securities by any Person results
solely from a reduction in the aggregate number of outstanding
shares of securities entitled to vote generally in the election of directors or
(2) such acquisition was approved in advance by the Continuing Directors
(as defined below) and such acquisition would not constitute a Change in
Control under part (iii) of this definition;

 

(ii)                                        Change in Board of Directors. 
Individuals who, as of the date hereof, constitute the Board, and any
new director whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors on the date hereof or whose
election for 

 

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nomination for election was previously so
approved (collectively, the “Continuing Directors”), cease for any
reason to constitute at least a majority of the members of the Board;

 

(iii)                                     Corporate Transactions. 
The effective date of a reorganization, merger or consolidation of the
Company (a “Business Combination”), in each case, unless, following such
Business Combination:  (1) all or
substantially all of the individuals and entities who were the Beneficial
Owners of securities entitled to vote generally in the election of directors
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty-one percent (51%) of the combined voting power of
the then outstanding securities of the Company entitled to vote generally in
the election of directors resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company’s assets either directly
or through one or more Subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination, of the
securities entitled to vote generally in the election of directors; (2) no
Person (excluding any corporation resulting from such Business Combination) other
than VantagePoint Venture Partners and its affiliates is the Beneficial Owner,
directly or indirectly, of fifteen percent (15%) or more of the combined voting
power of the then outstanding securities entitled to vote generally in the
election of directors of such corporation except to the extent that such
ownership existed prior to the Business Combination and (3) at least a
majority of the Board of Directors of the corporation resulting from such
Business Combination were Continuing Directors at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing
for such Business Combination;

 

(iv)                                    Liquidation. 
The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement or series of agreements for the sale
or disposition by the Company of all or substantially all of the Company’s
assets, other than factoring the Company’s current receivables or escrows due
(or, if such approval is not required, the decision by the Board to proceed
with such a liquidation, sale, or disposition in one transaction or a series of
related transactions); or

 

(v)                                       Other Events. 
There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
(or a response to any similar item on any similar schedule or form)
promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.

 

(d)                                 “Corporate Status” describes the
status of a person who is or was a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below) which such person is or was serving at the
request of the Company.

 

(e)                                  “Delaware Court” shall mean the
Court of Chancery of the State of Delaware.

 

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(f)                                    “Disinterested Director” shall mean
a director of the Company who is not and was not a party to the Proceeding (as
defined below) in respect of which indemnification is sought by Indemnitee.

 

(g)                                 “Enterprise” shall mean the Company
and any other corporation, constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger to which the Company
(or any of its wholly owned subsidiaries) is a party, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the Company
as a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent.

 

(h)                                 “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

 

(i)                                     “Expenses” shall include attorneys’
fees and costs, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses in connection with prosecuting, defending, preparing to prosecute
or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding (as defined below).  Expenses also shall include Expenses incurred
in connection with any appeal resulting from any Proceeding (as defined below),
including without limitation the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent.  Expenses, however, shall not include amounts
paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

 

(j)                                     “Independent Counsel” shall mean a
law firm or a member of a law firm that is experienced in matters of corporation
law and neither presently is, nor in the past five years has been, retained to
represent (i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification
agreements) or (ii) any other party to the Proceeding (as defined below)
giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

 

(k)                                  References to “fines” shall include
any excise tax assessed on Indemnitee with respect to any employee benefit
plan; references to “serving at the request of the Company” shall include any
service as a director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director, officer,
employee, agent or fiduciary with respect to an employee benefit plan, its
participants or beneficiaries; and if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.

 

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(l)                                     The term “Person” shall have the
meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act
as in effect on the date hereof; provided, however,
that “Person” shall exclude:  (i) the
Company; (ii) any Subsidiaries (as defined below) of the Company; (iii) any
employment benefit plan of the Company or of a Subsidiary (as defined below) of
the Company or of any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their ownership
of stock of the Company and (iv) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or of a Subsidiary (as
defined below) of the Company or of a corporation owned directly or indirectly
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.

 

(m)                               A “Potential Change in Control”
shall be deemed to have occurred if (i) the Company enters into an
agreement or arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any Person or the Company publicly
announces an intention to take or consider taking actions which if consummated
would constitute a Change in Control; (iii) any Person other than
VantagePoint Venture Partners and its affiliates who becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing ten
percent (10%) or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors
increases his Beneficial Ownership of such securities by ten percent (10%) or
more over the percentage so owned by such Person on the date hereof or (iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.

 

(n)                                 The term “Proceeding” shall include
any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether brought in the
right of the Company or otherwise and whether of a civil (including intentional
or unintentional tort claims), criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action (or failure to act) taken by him or of any
action (or failure to act) on his part while acting as a director or officer of
the Company, or by reason of the fact that he is or was serving at the request
of the Company as a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of any other Enterprise, in each case
whether or not serving in such capacity at the time any liability or expense is
incurred for which indemnification, reimbursement, or advancement of expenses
can be provided under this Agreement.

 

(o)                                 The term “Subsidiary,” with respect
to any Person, shall mean any corporation or other entity of which a majority
of the voting power of the voting equity securities or equity interest is
owned, directly or indirectly, by that Person.

 

3.                                       Indemnity in Third-Party Proceedings. 
The Company shall indemnify and hold harmless Indemnitee in accordance
with the provisions of this Section 3 if Indemnitee was, is, or is
threatened to be made, a party to or a participant (as a witness or otherwise)
in any Proceeding, other than a Proceeding by or in the right of the Company to
procure a judgment in its favor. 
Pursuant to this Section 3, Indemnitee shall be indemnified against
all Expenses, judgments, liabilities, fines, penalties and amounts paid in
settlement (including all interest, assessments and 

 

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other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties and amounts
paid in settlement) actually and reasonably incurred by Indemnitee or on his
behalf in connection with such Proceeding or any claim, issue or matter
therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, in
the case of a criminal Proceeding, had no reasonable cause to believe that his
conduct was unlawful.

 

4.                                       Indemnity in Proceedings by or in
the Right of the Company.  The Company
shall indemnify and hold harmless Indemnitee in accordance with the provisions
of this Section 4 if Indemnitee was, is, or is threatened to be made, a
party to or a participant (as a witness or otherwise) in any Proceeding by or
in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 4, Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection with such Proceeding or any claim, issue or
matter therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company.  No indemnification for Expenses shall be made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that any court in which the Proceeding
was brought or the Delaware Court shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

5.                                       Indemnification for Expenses of a
Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this
Agreement, to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or in defense
of any claim, issue or matter therein, in whole or in part, the Company shall
indemnify and hold harmless Indemnitee against all Expenses actually and
reasonably incurred by him in connection therewith.  If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify and hold harmless Indemnitee against all Expenses actually
and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. 
If the Indemnitee is not wholly successful in such Proceeding, the
Company also shall indemnify and hold harmless Indemnitee against all Expenses
reasonably incurred in connection with a claim, issue or matter related to any
claim, issue, or matter on which the Indemnitee was successful.  For purposes of this Section 5 and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

 

6.                                       Indemnification For Expenses of a
Witness.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a witness in any Proceeding to which Indemnitee is not a party, he shall be
indemnified and held harmless against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

 

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7.                                       Additional Indemnification.

 

(a)                                  Notwithstanding any limitation in
Sections 3, 4, or 5, the Company shall indemnify and hold harmless Indemnitee
if Indemnitee is a party to or threatened to be made a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, judgments, fines,
penalties and amounts paid in settlement) actually and reasonably incurred by
Indemnitee in connection with the Proceeding. 
No indemnity shall be made under this Section 7(a) on account
of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of
loyalty to the Company or its stockholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing violation of the law.

 

(b)                                 Notwithstanding any limitation in
Sections 3, 4, 5 or 7(a), the Company shall indemnify and hold harmless
Indemnitee if Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement) actually and
reasonably incurred by Indemnitee in connection with the Proceeding.

 

8.                                       Contribution in the Event of Joint
Liability.

 

(a)                                  To the fullest extent permissible
under applicable law, if the indemnification and hold harmless rights provided
for in this Agreement are unavailable to Indemnitee in whole or in part for any
reason whatsoever, the Company, in lieu of indemnifying and holding harmless
Indemnitee, shall pay, in the first instance, the entire amount incurred by
Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid
or to be paid in settlement and/or for Expenses, in connection with any
Proceeding without requiring Indemnitee to contribute to such payment, and the
Company hereby waives and relinquishes any right of contribution it may have at
any time against Indemnitee.

 

(b)                                 The Company shall not enter into any
settlement of any Proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such Proceeding) unless such settlement
provides for a full and final release of all claims asserted against
Indemnitee.

 

(c)                                  The Company hereby agrees to fully
indemnify and hold harmless Indemnitee from any claims for contribution which
may be brought by officers, directors or employees of the Company other than
Indemnitee who may be jointly liable with Indemnitee.

 

9.                                       Exclusions. 
Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:

 

(a)                                  for which payment has actually been
received by or on behalf of Indemnitee under any insurance policy or other
indemnity provision, except with respect to any 

 

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excess beyond the amount actually received
under any insurance policy, contract, agreement, other indemnity provision or
otherwise;

 

(b)                                 for an accounting of profits made
from the purchase and sale (or sale and purchase) by Indemnitee of securities
of the Company within the meaning of Section 16(b) of the Exchange
Act or similar provisions of state statutory law or common law; or

 

(c)                                  except as otherwise provided in
Sections 14(e)-(f) hereof, prior to a Change in Control, in connection with
any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part
of any Proceeding) prior to its initiation; or (ii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in
the Company under applicable law.

 

10.                                 Advances of Expenses; Defense of
Claim.

 

(a)                                  Notwithstanding any provision of
this Agreement to the contrary, and to the fullest extent permitted by
applicable law, the Company shall advance the Expenses incurred by Indemnitee
(or reasonably expected by Indemnitee to be incurred by Indemnitee within three
(3) months) in connection with any Proceeding within ten (10) days
after the receipt by the Company of a statement or statements requesting such
advances from time to time, whether prior to or after final disposition of any
Proceeding.  Advances shall be unsecured
and interest free.  Advances shall be
made without regard to Indemnitee’s ability to repay the Expenses and without
regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement.  Advances
shall include any and all reasonable Expenses incurred pursuing a Proceeding to
enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Company to support the advances claimed.  The Indemnitee shall qualify for advances, to
the fullest extent permitted by applicable law, solely upon the execution and
delivery to the Company of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company under the
provisions of this Agreement, the Certificate of Incorporation or Bylaws of the
Company, applicable law or otherwise. 
This Section 10(a) shall not apply to any claim made by Indemnitee
for which indemnity is excluded pursuant to Section 9.

 

(b)                                 The Company will be entitled to
participate in the Proceeding at its own expense.

 

(c)                                  The Company shall not settle any
action, claim or Proceeding (in whole or in part) which would impose any
Expense, judgment, fine, penalty or limitation on the Indemnitee without the
Indemnitee’s prior written consent.

 

11.                                 Procedure for Notification and
Application for Indemnification.

 

(a)                                  Indemnitee agrees to notify promptly
the Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or 

 

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advancement of Expenses covered
hereunder.  The failure of Indemnitee to
so notify the Company shall not relieve the Company of any obligation which it
may have to the Indemnitee under this Agreement, or otherwise.

 

(b)                                 Indemnitee may deliver to the
Company a written application to indemnify and hold harmless Indemnitee in
accordance with this Agreement.  Such
application(s) may be delivered from time to time and at such time(s) as
Indemnitee deems appropriate in his or her sole discretion.  Following such a written application for
indemnification by Indemnitee, the Indemnitee’s entitlement to indemnification
shall be determined according to Section 12(a) of this Agreement.

 

12.                                 Procedure Upon Application for
Indemnification.

 

(a)                                  A determination, if required by
applicable law, with respect to Indemnitee’s entitlement to indemnification
shall be made in the specific case by one of the following methods, which shall
be at the election of Indemnitee:  (i) by
a majority vote of the Disinterested Directors, even though less than a quorum
of the Board; or (ii) by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee.  The Company promptly will advise Indemnitee
in writing with respect to any determination that Indemnitee is or is not
entitled to indemnification, including a description of any reason or basis for
which indemnification has been denied. 
If it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after such
determination.  Indemnitee shall
reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. 
Any costs or Expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(b)                                 In the event the determination of
entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12(a) hereof, the Independent Counsel shall be selected as
provided in this Section 12(b).  The
Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board), and Indemnitee shall give
written notice to the Company advising it of the identity of the Independent
Counsel so selected and certifying that the Independent Counsel so selected
meets the requirements of “Independent Counsel” as defined in Section 2 of
this Agreement.  If the Independent
Counsel is selected by the Board, the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected
and certifying that the Independent Counsel so selected meets the requirements
of “Independent Counsel” as defined in Section 2 of this Agreement.  In either event, Indemnitee or the Company,
as the case may be, may, within ten (10) days after such written notice of
selection shall have been received, deliver to the Company or to Indemnitee, as
the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as 

 

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defined in Section 2 of this Agreement,
and the objection shall set forth with particularity the factual basis of such
assertion.  Absent a proper and timely
objection, the person so selected shall act as Independent Counsel.  If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court of competent
jurisdiction has determined that such objection is without merit.  If, within twenty (20) days after submission
by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Delaware Court for resolution of any
objection which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the Delaware Court, and the person with respect
to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 12(a) hereof.  Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 14(a) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

(c)                                  The Company agrees to pay the
reasonable fees and expenses of Independent Counsel and to fully indemnify and
hold harmless such Independent Counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

 

13.                                 Presumptions and Effect of Certain
Proceedings.

 

(a)                                  In making a determination with
respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 11(b) of this Agreement,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any
determination contrary to that presumption. 
Neither the failure of the Company (including by its directors or
Independent Counsel) to have made a determination prior to the commencement of
any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Company (including by its directors or
Independent Counsel) that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.

 

(b)                                 If the person, persons or entity
empowered or selected under Section 12 of this Agreement to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within thirty (30) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a final judicial determination that any or all
such indemnification is expressly prohibited under applicable law; provided, however, that such 30-day period may be extended
for a reasonable 

 

10

 

time, not to exceed an additional fifteen
(15) days, if the person, persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto.

 

(c)                                  The termination of any Proceeding or
of any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(d)                                 For purposes of any determination of
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected by the Enterprise.  The provisions of this Section 13(d) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which the Indemnitee may be deemed or found to have met the applicable standard
of conduct set forth in this Agreement.

 

(e)                                  The knowledge and/or actions, or
failure to act, of any other director, officer, trustee, partner, managing
member, fiduciary, agent or employee of the Enterprise shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this
Agreement.

 

14.                                 Remedies of Indemnitee.

 

(a)                                  In the event that (i) a
determination is made pursuant to Section 12 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement; (ii) advancement
of Expenses, to the fullest extent permitted by applicable law, is not timely
made pursuant to Section 10 of this Agreement; (iii) no determination
of entitlement to indemnification shall have been made pursuant to Section 12(a) of
this Agreement within thirty (30) days after receipt by the Company of the
request for indemnification; (iv) payment of indemnification is not made
pursuant to Section 5, 6, 7 or the last sentence of Section 12(a) of
this Agreement within ten (10) days after receipt by the Company of a
written request therefor; (v) a contribution payment is not made in a
timely manner pursuant to Section 8 of this Agreement or (vi) payment
of indemnification pursuant to Section 3 or 4 of this Agreement is not
made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication by the Delaware Court to such indemnification, contribution or
advancement of Expenses.  Alternatively,
Indemnitee, at his option, may seek an award in arbitration to be conducted by
a single arbitrator pursuant to the Commercial Arbitration Rules of the
American Arbitration Association.  Except
as set forth herein, the provisions of Delaware law (without regard to its
conflict of laws rules) shall apply to any such arbitration.  The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.

 

11

 

(b)                                 In the event that a determination
shall have been made pursuant to Section 12(a) of this Agreement that
Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be conducted in
all respects as a de novo trial, or arbitration, on
the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination.  In any judicial
proceeding or arbitration commenced pursuant to this Section 14,
Indemnitee shall be presumed to be entitled to indemnification under this
Agreement and the Company shall have the burden of proving Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be, and
the Company may not refer to or introduce into evidence any determination
pursuant to Section 12(a) of this Agreement adverse to Indemnitee for
any purpose.  If Indemnitee commences a
judicial proceeding or arbitration pursuant to this Section 14, Indemnitee
shall not be required to reimburse the Company for any advances pursuant to Section 10
until a final determination is made with respect to Indemnitee’s entitlement to
indemnification (as to which all rights of appeal have been exhausted or
lapsed).

 

(c)                                  If a determination shall have been
made pursuant to Section 12(a) of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination
in any judicial proceeding or arbitration commenced pursuant to this Section 14,
absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification or (ii) a
prohibition of such indemnification under applicable law.

 

(d)                                 The Company shall be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.

 

(e)                                  The Company shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by law against all Expenses
and, if requested by Indemnitee, shall (within ten (10) days after the
Company’s receipt of such written request) advance to Indemnitee, to the
fullest extent permitted by applicable law, such Expenses which are incurred by
Indemnitee in connection with any judicial proceeding or arbitration brought by
Indemnitee (i) to enforce his rights under, or to recover damages for
breach of, this Agreement or any other indemnification, advancement or
contribution agreement or provision of the Company’s Certificate of
Incorporation or Bylaws now or hereafter in effect; or (ii) for recovery
or advances under any insurance policy maintained by any person for the benefit
of Indemnitee, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance, contribution or insurance recovery,
as the case may be.

 

(f)                                    Interest shall be paid by the
Company to Indemnitee at the legal rate under Delaware law for amounts which
the Company indemnifies or is obliged to indemnify for the period commencing
with the date on which Indemnitee requests indemnification, contribution,  reimbursement or advancement of any Expenses
and ending with the date on which such payment is made to Indemnitee by the
Company.

 

15.                                 Establishment of Trust. 
In the event of a Potential Change in Control, the Company shall, upon
written request by Indemnitee, create a “Trust” for the benefit of 

 

12

 

Indemnitee and from time to time upon written
request of Indemnitee shall fund such Trust in an amount sufficient to satisfy
any and all Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for, participating in
or defending any Proceedings, and any and all judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such judgments,
fines penalties and amounts paid in settlement) in connection with any and all
Proceedings from time to time actually paid or claimed, reasonably anticipated
or proposed to be paid.  The trustee of
the Trust (the “Trustee”) shall be a bank or trust company or other individual
or entity chosen by the Indemnitee and reasonably acceptable to the
Company.  Nothing in this Section 15
shall relieve the Company of any of its obligations under this Agreement.  The amount or amounts to be deposited in the
Trust pursuant to the foregoing funding obligation shall be determined by
mutual agreement of the Indemnitee and the Company or, if the Company and the
Indemnitee are unable to reach such an agreement, by Independent Counsel
selected in accordance with Section 12(b) of this Agreement.  The terms of the Trust shall provide that,
except upon the consent of both the Indemnitee and the Company, upon a Change
in Control:  (a) the Trust shall not
be revoked, or the principal thereof invaded, without the written consent of
the Indemnitee; (b) the Trustee shall advance, to the fullest extent
permitted by applicable law, within two (2) business days of a request by
the Indemnitee and upon the execution and delivery to the Company of an
undertaking providing that the Indemnitee undertakes to repay the advance to
the extent that it is ultimately determined that Indemnitee is not entitled to
be indemnified by the Company, any and all Expenses to the Indemnitee; (c) the
Trust shall continue to be funded by the Company in accordance with the funding
obligations set forth above; (d) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise and (e) all
unexpended funds in such Trust shall revert to the Company upon mutual
agreement by the Indemnitee and the Company or, if the Indemnitee and the
Company are unable to reach such an agreement, by Independent Counsel selected
in accordance with Section 12(b) of this Agreement, that the
Indemnitee has been fully indemnified under the terms of this Agreement.  The Trust shall be governed by Delaware law
(without regard to its conflicts of laws rules) and the Trustee shall consent
to the exclusive jurisdiction of the Delaware Court in accordance with Section 23
of this Agreement.

 

16.                                 Security. 
Notwithstanding anything herein to the contrary, to the extent requested
by the Indemnitee and approved by the Board, the Company may at any time and
from time to time provide security to the Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral.  Any such security,
once provided to the Indemnitee, may not be revoked or released without the
prior written consent of the Indemnitee.

 

17.                                 Non-Exclusivity; Survival of Rights;
Insurance; Subrogation.

 

(a)                                  The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Company’s Certificate of Incorporation or Bylaws,
any agreement, a vote of stockholders or a resolution of directors, or
otherwise.  No amendment, alteration or
repeal of this Agreement or of any provision hereof shall limit or restrict any
right of Indemnitee under this Agreement in respect of any action taken 

 

13

 

or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in applicable
law, whether by statute or judicial decision, permits greater indemnification
or advancement of Expenses than would be afforded currently under the Company’s
Certificate of Incorporation or Bylaws or this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.  No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise.  The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.

 

(b)                                 The DGCL and the Company’s
Certificate of Incorporation and Bylaws permit the Company to purchase and
maintain insurance or furnish similar protection or make other arrangements
including, but not limited to, providing a trust fund, letter of credit, or
surety bond (“Indemnification Arrangements”) on behalf of Indemnitee
against any liability asserted against him or incurred by or on behalf of him
or in such capacity as a director, officer, employee or agent of the Company,
or arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the provisions of this
Agreement or under the DGCL, as it may then be in effect.  The purchase, establishment, and maintenance
of any such Indemnification Arrangement shall not in any way limit or affect
the rights and obligations of the Company or of the Indemnitee under this
Agreement except as expressly provided herein, and the execution and delivery
of this Agreement by the Company and the Indemnitee shall not in any way limit
or affect the rights and obligations of the Company or the other party or
parties thereto under any such Indemnification Arrangement.

 

(c)                                  To the extent that the Company
maintains an insurance policy or policies providing liability insurance for
directors, officers, trustees, partners, managing members, fiduciaries,
employees, or agents of the Company or of any other Enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any such director, officer, trustee,
partner, managing member, fiduciary, employee or agent under such policy or
policies.  If, at the time the Company
receives notice from any source of a Proceeding as to which Indemnitee is a
party or a participant (as a witness or otherwise), the Company has director
and officer liability insurance in effect, the Company shall give prompt notice
of such Proceeding to the insurers in accordance with the procedures set forth
in the respective policies.  The Company
shall thereafter take all necessary or desirable action to cause such insurers
to pay, on behalf of the Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.

 

(d)                                 In the event of any payment under
this Agreement, the Company shall be subrogated to the extent of such payment
to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

(e)                                  The Company’s obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, trustee, 

 

14

 

partner, managing member, fiduciary, employee
or agent of any other Enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of expenses from such Enterprise.

 

18.                                 Duration
of Agreement.  All
agreements and obligations of the Company contained herein shall continue
during the period Indemnitee serves as a director or officer of the Company or
as a director, officer, trustee, partner, managing member, fiduciary, employee
or agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other Enterprise which Indemnitee serves at the request of the
Company and shall continue thereafter so long as Indemnitee shall be subject to
any possible Proceeding (including any rights of appeal thereto and any
Proceeding commenced by Indemnitee pursuant to Section 14 of this
Agreement) by reason of his Corporate Status, whether or not he is acting in
any such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement.

 

19.                                 Severability. 
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever:  (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to
give the maximum effect to the intent of the parties hereto and (c) to the
fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section, paragraph or sentence of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.

 

20.                                 Enforcement and Binding Effect.

 

(a)                                  The Company expressly confirms and
agrees that it has entered into this Agreement and assumed the obligations
imposed on it hereby in order to induce Indemnitee to serve as a director,
officer or key employee of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director, officer or
key employee of the Company.

 

(b)                                 Without limiting any of the rights
of Indemnitee under the Certificate of Incorporation or Bylaws of the Company
as they may be amended from time to time, this Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.

 

(c)                                  The indemnification and advancement
of expenses provided by or granted pursuant to this Agreement shall be binding
upon and be enforceable by the parties hereto and their respective successors
and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or
assets of the 

 

15

 

Company), shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent of the Company or
of any other Enterprise at the Company’s request, and shall inure to the
benefit of Indemnitee and his or her spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.

 

(d)                                 The Company shall require and cause
any successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

(e)                                  The Company and Indemnitee agree
herein that a monetary remedy for breach of this Agreement, at some later date,
may be inadequate, impracticable and difficult of proof, and further agree that
such breach may cause Indemnitee irreparable harm.  Accordingly, the parties hereto agree that
Indemnitee may enforce this Agreement by seeking injunctive relief and/or
specific performance hereof, without any necessity of showing actual damage or
irreparable harm and that by seeking injunctive relief and/or specific
performance Indemnitee shall not be precluded from seeking or obtaining any
other relief to which he may be entitled. 
The Company and Indemnitee further agree that Indemnitee shall be
entitled to such specific performance and injunctive relief, including
temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertaking in
connection therewith.  The Company
acknowledges that in the absence of a waiver, a bond or undertaking may be
required of Indemnitee by the Delaware Court, and the Company hereby waives any
such requirement of such a bond or undertaking.

 

21.                                 Modification and Waiver. 
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
of this Agreement nor shall any waiver constitute a continuing waiver.

 

22.                                 Notices.  All notices, requests, demands and
other communications under this Agreement shall be in writing and shall be
deemed to have been duly given (i) if delivered by hand and receipted for
by the party to whom said notice or other communication shall have been
directed, or (ii) mailed by certified or registered mail with postage
prepaid, on the third (3rd) business day after the date on which it is so
mailed:

 

(a)                                  If to Indemnitee, at the address
indicated on the signature page of this Agreement, or such other address
as Indemnitee shall provide in writing to the Company.

 

(b)                                 If to the Company, to:

 

New Athletics, Inc.

440 Kings Village Road

Scotts Valley, California 95066-4027

Attention:  Chief Executive Officer

 

or to any
other address as may have been furnished to Indemnitee in writing by the Company.

 

16

 

23.                                 Applicable Law and Consent to
Jurisdiction.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.  Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 14(a) of this
Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (a) agree
that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Delaware Court and not in any other
state or federal court in the United States of America or any court in any
other country; (b) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement; (c) appoint irrevocably, to the extent
such party is not a resident of the State of Delaware, RL&F Service Corp.,
One Rodney Square, 10th Floor, 10th and King Streets,
Wilmington, Delaware 19801 as its agent in the State of Delaware as such party’s
agent for acceptance of legal process in connection with any such action or
proceeding against such party with the same legal force and validity as if
served upon such party personally within the State of Delaware; (d) waive
any objection to the laying of venue of any such action or proceeding in the
Delaware Court and (e) waive, and agree not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum, or is subject (in whole or in
part) to a jury trial.

 

24.                                 Identical Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement.  Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.

 

25.                                 Miscellaneous. 
Use of the masculine pronoun shall be deemed to include usage of the
feminine pronoun where appropriate.  The
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

 

17

 

IN WITNESS WHEREOF, the parties have caused
this Agreement to be signed as of the day and year first above written.

 

	
  NEW
  ATHLETICS, INC.

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  Title:

  	
  Name:

  Address:

  
						

 

18Exhibit
10.04

 

OFFICE
LEASE

 

8000
MARINA BOULEVARD

SIERRA POINT

 

This OFFICE LEASE
(“Lease”) is entered into as of the 20th day of October, 2003, by and between
SIERRA POINT INVESTORS, LLC (“Lessor”), and IGN ENTERTAINMENT, INC. (“Lessee”).

 

1.                                      
BASIC LEASE
TERMS:  For purposes of this Lease, the following terms have the following
definitions and meanings:

 

(a)                                 
Lessor’s Address (For
Notices):

 

Sierra Point Investors, LLC

c/o Matteson Realty Services, Inc.

1991 Broadway, Suite 300

Redwood City, CA 94063-1994

 

or such other place as
Lessor may from time to time designate by notice to Lessee.

 

(b)                                
Lessees Address
(Premises):

 

IGN Entertainment, Inc.

8000 Marina Boulevard, Suite 200

Brisbane, CA 94005

Attention:       President

 

(c)                                 
Premises: 
 Suite(s) 200 of the building located at 8000 Marina Boulevard, Brisbane,
California (the “Premises”), which Premises contains approximately 25,027
rentable square feet as shown on Exhibit A hereto and which building (the
“Building”) contains approximately 194,399 rentable square feet.  The
Building and appurtenant common areas and parking areas are sometimes referred
to herein collectively as the “Project.”

 

(d)                                
Lessee’s
Percentage:  12.87%

 

(e)                                 
Term: 
Seventy-three (73) months

 

(f)                                   
Commencement
Date:  December 1, 2003

 

(g)                                
Expiration
Date:  December 31, 2009

 

(h)                                
Initial Monthly Base
Rent:  $25,027 ($1.00 psf), subject to adjustment as provided in Paragraph
5 below and as otherwise provided in this Lease.

 

 

(i)                                    
Operating Expense
Allowance:  That portion of Lessee’s Percentage of Operating Expenses as
described in Paragraph 6 below which Lessor has included in Monthly Base Rent,
which, for purposes of this Lease, will be an amount equal to Lessee’s
Percentage of Operating Expenses for the 2004 calendar year, which shall be
Tenant’s Base Year.

 

(j)                                    
Security
Deposit:  $57,562

 

(k)                                 
Permitted Use: 
A business office and no other use without the express written consent of
Lessor, which consent Lessor may withhold in its sole and absolute discretion.

 

(l)                                    
Parking:  83
parking spaces subject to the terms and conditions of Paragraph 31 below and
the Rules and Regulations regarding parking contained in Exhibit B, plus
additional parking spaces at the rate of 3.3 spaces per 1,000 s.f. of rentable
area for any space added to the Premises pursuant to Paragraph 40 below.

 

(m)                              
Brokers:  BT
Commercial (Lessee) and CB Richard Ellis (Lessor)

 

(n)                                
Guarantor(s): 
N/A

 

(o)                                
Interest Rate: 
The greater of ten percent (10%) per annum or two percent (2%) in excess of the
prime lending or reference rate of Wells Fargo Bank N.A. or any successor bank
in effect on the twenty-fifth (25th) day of the calendar month immediately
prior to the event giving rise to the Interest Rate Imposition; provided,
however, the Interest Rate will no event exceed the maximum interest rate
permitted to be charged by applicable law.

 

(p)                                
Exhibits:  A
(Floor Plan) and B (Rules & Regulations) inclusive, which Exhibits are
attached to this Lease and incorporated herein by this reference.

 

This Paragraph 1
represents a summary of the basic terms and definitions of this Lease.  In
the event of any inconsistency between the terms contained in this Paragraph 1
and any specific provision of this Lease, the terms of the more specific
provision shall prevail.

 

2.                                      
PREMISES AND COMMON
AREAS

 

(a)                                 
Premises: 
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the
Premises upon and subject to the terms, covenants and conditions contained in
this Lease to be performed by each party.

 

(b)                                
Lessees Use of Common
Areas:  During the Term of the Lease, Lessee shall have the nonexclusive
right to use in common with all other occupants of the Project, the following
common areas of the Project (collectively, the “Common Areas”):  the
parking facilities of the Project which serve the Building, loading and
unloading areas, trash areas, roadways, sidewalks, walkway, parkways, driveway,
landscaped areas, and similar areas and facilities situated within the Project
and appurtenant to the Building which are not reserved for the exclusive use of
any Building occupants.

 

(c)                                 
Lessors Reservation
of Rights:  Provided Lessee’s use of and access to the Premises is not
interfered with in an unreasonable manner, Lessor reserves for itself and for
all

 

2

 

other owner(s) and operator(s) of the Common Areas and
the balance of the Project, the right from time to time to:  (i) install,
use, maintain, repair, replace and relocate pipes, ducts, conduits, wires and
appurtenant meters and equipment above the ceiling surfaces, below the floor
surfaces and within the walls of the Building; (ii) make changes to the design
and layout of the Project, including, without limitation, changes to buildings,
driveways, entrances, loading and unloading areas, direction of traffic,
landscaped areas and walkways, parking spaces and parking areas; and (iii) use
or close temporarily the Common Areas, and/or other portion of the Project
while engaged in making improvements, repairs or alterations to the Building,
the Project, or any portion thereof.

 

3.                                      
TERM:  The term
of this Lease (“Term”) will be for the period designated in Subparagraph 1(e),
commencing on the Commencement Date, and ending on the Expiration Date. 
Each calendar year during the Term of this Lease, commencing with 2004, will be
referred to herein as a “Lease Year”.

 

4.                                      
POSSESSION:

 

(a)                                 
Delivery of
Possession.  Lessor will deliver possession of the Premises to Lessee in
its then current “as-is” condition on November 1, 2003, provided that the
Premises shall be broom-clean and free of any occupant and free of all
furniture of Lessor and any occupant.  If the existing occupants have not
vacated by October 31, 2003, Lessor shall take such steps as shall be
necessary to relocate them to other space within the Building prior to
November 1, 2003.  If any existing occupant’s equipment (including
(x) UPS system with all related controls, electrical panels and distribution,
(y) two 10-ton air conditioning units and related piping, wiring, drains and
distribution, and (z) FM-200 fire suppression system with related wiring,
heads, distribution and EPO switch) has not been removed from the Premises by
November 1, 2003, Lessor covenants to remove such equipment not later than
November 7, 2003.  If, for any reason, Lessor cannot deliver
possession of the Premises to Lessee on such date, this Lease will not be void
or voidable by Lessor or Lessee, nor will Lessor be liable to Lessee for any
loss or damage resulting from such delay, except as provided below. 
Notwithstanding the foregoing, Lessor will not be obligated to deliver
possession of the Premises to Lessee (but Lessee will be liable for rent if
Lessor can otherwise deliver the Premises to Lessee) until Lessor has received
from Lessee all of the following:  (i) a copy of the Lease fully executed
by Lessee and the guaranty of Lessee’s obligations under this Lease, if any,
executed by the Guarantor(s); (ii) the Security Deposit and the first installment
of Monthly Base Rent; and (iii) copies of policies of insurance or certificates
thereof as required under Paragraph 19 of this lease.  If Lessor is unable
to deliver possession of the Premises on or before November 5, 2003, then
in such event Lessor will reimburse Lessee for its actual expenses incurred in
installing Lessee’s improvements in the Premises, to the extent such costs
increase as a result of the delay in possession, not to exceed the
following amounts:  if possession is delivered on November 6-10,
$3,000 for each day after the 5th that possession is not delivered, or if
possession is delivered between the 11th and the 15 th, $5,000 per day for each
day after the 10 th that possession is not delivered.  If possession of
the Premises is not delivered by the 15th, Lessee shall have the right to
terminate this Lease by written notice to Lessor given no later than
November 18th , in which case all rights and obligations of the parties
hereunder shall terminate.  If Lessee does not elect to terminate the
Lease as set forth hereinabove, the Lease shall continue in full force and
effect and Lessor shall deliver possession of the Premises as soon as possible.

 

3

 

(b)                                
Condition of
Premises:  By taking possession of the Premises, Lessee will be deemed to
have accepted the Premises in the condition required pursuant to subparagraph
(a) above on the date of delivery of possession and to have acknowledged that
all work to be completed by Lessor has been completed and there are no
additional items needing work or repair by Lessor.  Lessee acknowledges
that neither Lessor nor any agent of Lessor has made any representation or
warranty with respect to the Premises, the Building, the Project or any
portions thereof or with respect to the suitability of same for the conduct of
Lessee’s business and Lessee further acknowledges that Lessor will have no
obligation to construct or complete any additional buildings or improvements
within the Project.

 

(c)                                 
Tenant
Improvements. 
In lieu of improving the Premises for Lessee’s use, Lessor shall provide a
tenant improvement allowance to Lessee in the amount of One Hundred Thousand
Dollars ($100,000), which shall be disbursed to Lessee following completion of
improvements to the Premises, and delivery to Lessor of reasonable supporting
documentation to evidence the expenditures, including paid invoices and an
appropriate lien waiver from the general contractor.  The general scope of
tenant improvements outlined on Exhibit C
hereto is approved by Lessor.

 

5.                                      
RENT:

 

(a)                                 
Monthly Base
Rent:  Lessee agrees to pay Lessor the Monthly Base Rent for the Premises
(subject to adjustment as hereinafter provided) in advance on the first day of
each calendar month during the Term without prior notice or demand, except that
Lessee agrees to pay the Monthly Base Rent for the first month of the Term
directly to Lessor concurrently with Lessee’s delivery of the executed Lease to
Lessor.  All rent must be paid to Lessor, without any deduction or offset,
in lawful money of the United States of America, at the address designated by
Lessor or to such other person or at such other place as Lessor may from time
to time designate in writing.

 

(b)                                
Periodic
Adjustments.  Monthly Base Rent shall be adjusted in accordance with the
following schedule:

 

	
  Months 1-3

  	
   

  	
  $

  	
  0.00

  	
   

  	
  per rentable square foot

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 4-12

  	
   

  	
  $

  	
  1.00

  	
   

  	
  per rentable square
  foot

  	
   

  	
  $

  	
  25,027

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 13-24

  	
   

  	
  $

  	
  1.05

  	
   

  	
  per rentable square
  foot

  	
   

  	
  26,278

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 25-36

  	
   

  	
  $

  	
  1.05

  	
   

  	
  per rentable square
  foot

  	
   

  	
  26,278

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Month 37

  	
   

  	
  $

  	
  0.00

  	
   

  	
  per rentable square
  foot

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 38-48

  	
   

  	
  $

  	
  2.10

  	
   

  	
  per rentable square
  foot

  	
   

  	
  52,557

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 49-60

  	
   

  	
  $

  	
  2.20

  	
   

  	
  per rentable square
  foot

  	
   

  	
  55,059

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months 61-73

  	
   

  	
  $

  	
  2.30

  	
   

  	
  per rentable square
  foot

  	
   

  	
  57,562

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4

 

(c)                                 
Additional
Rent:  All amounts and charges to be paid by Lessee hereunder, including,
without limitation, payments for Operating Expenses, insurance and repairs,
will be considered additional rent for purposes of this Lease, and the word
“rent” as used in this Lease will include all such additional rent unless the
context specifically or clearly implies that only Monthly Base Rent is
intended.

 

(d)                                
Late Payments: 
Late payments of Monthly Base Rent and/or items of additional rent will be
subject to interest and a late charge as provided in Subparagraph 22(f) below.

 

6.                                      
OPERATING EXPENSES:

 

(a)                                 
Operating
Expenses.   In addition to Monthly Base Rent, throughout the Term of
this Lease, Lessee agrees to pay Lessor as additional rent in accordance with
the terms of this Paragraph 6, Lessee’s Percentage of Operating Expenses (as
defined in this Paragraph 6 below), to the extent Lessee’s Percentage of
Operating Expenses exceeds Lessee’s Operating Expense Allowance.

 

(b)                                
Estimate
Statement.  On or about March 1st of each Lease Year after Tenant’s
Base Year, or as soon thereafter as is reasonably possible, Lessor will to
deliver to Lessee a statement (“Estimate Statement”) wherein Lessor will
estimate Lessee’s Percentage of Operating Expenses for the then current
calendar year.  If the estimate of Lessee’s Percentage of Operating
Expenses in the Estimate Statement exceeds Lessee’s Operating Expense
Allowance, Lessee agrees to pay Lessor, as “additional rent”, one-twelfth
(1/12th) of such excess each month thereafter, beginning with the next
installment of rent due, until such time as Lessor issues a revised Estimate
Statement or the Estimate Statement for the succeeding calendar year; except
that, concurrently with the regular monthly rent payment next due following the
receipt of each such Estimate Statement, Lessee agrees to pay Lessor an amount
equal to one monthly installment of such excess (less any applicable Operating
Expenses already paid) multiplied by the number of months from January, in the current
calendar year, to the month of such rent payment next due, all months
inclusive.  If at any time during the Term of this Lease, but not more
often than quarterly, Lessor reasonably determines that Lessee’s Percentage of
Operating Expenses for the current calendar year will be greater or lesser than
the amount set forth in the then current Estimate Statement, Lessor shall issue
a revised Estimate Statement and Lessee agrees to pay Lessor, within ten (10)
days of receipt of the revised Estimate Statement, the difference between the
amount owed by Lessee under such revised Estimate Statement and the amount owed
by Lessee under the original Estimate Statement for the portion of the then
current calendar year which has expired.  Thereafter Lessee agrees to pay
Lessee’s Percentage of Operating Expenses based on such revised Estimate
Statement until Lessee receives the next calendar years Estimate Statement or a
new revised Estimate Statement for the current calendar year.  In the
event Lessee’s Percentage of Operating Expenses for any calendar year is less
than Lessee’s Operating Expense allowance, Lessee will not be entitled to a
credit against any rent, additional rent or Lessee’s Percentage of future
Operating Expenses payable hereunder.

 

(c)                                 
Actual
Statement.   By March 1st of each calendar year during the Term
of this Lease, commencing March 1, 2006 or as soon thereafter as is
reasonably possible, Lessor will also deliver to Lessee a statement (“Actual
Statement”) which states the actual Operating

 

5

 

Expenses for the preceding calendar year.  If the
Actual Statement reveals that Lessee’s Percentage of the actual Operating
Expenses is more than the total Additional Rent paid by Lessee for Operating
Expenses on account of the preceding calendar year, Lessee agrees to pay Lessor
the difference in a lump sum within ten (10) days of receipt of the Actual
Statement.  If the Actual Statement reveals that Lessee’s Percentage of the
actual Operating Expenses is less than the Additional Rent paid by Lessee for
Operating Expenses on account of the preceding calendar year, Lessor will
promptly refund the overpayment to Lessee.

 

(d)                                
Miscellaneous. 
Any delay or failure by Lessor in delivering any Estimate Statement or Actual
Statement pursuant to this Paragraph 6 will not constitute a waiver of its
right to require the payment of any sums due nor will it relieve Lessee of its
obligations pursuant to this Paragraph 6, except that Lessee will not be
obligated to make any payments based on such Estimate Statement or Actual
Statement until ten (10) days after receipt of such Estimate Statement or
Actual Statement.  Even though the Term has expired and Lessee has vacated
the Premises, when the final determination is made of Lessee’s Percentage of
the actual Operating Expenses for the year in which this Lease terminates,
Lessee agrees to promptly pay any increase due over the estimated expenses paid
and, conversely, any overpayment made in the event said expenses decrease shall
promptly be rebated by Lessor to Lessee.  Such obligation shall be a
continuing one which will survive the expiration or earlier termination of this
Lease.  Prior to the expiration or sooner termination of the Lease Term
and Lessor’s acceptance of Lessee’s surrender of the Premises, Lessor will have
the right to estimate the actual Operating Expenses for the then current Lease
Year and to collect from Lessee prior to Lessee’s surrender of the Premises,
Lessee’s Percentage of any excess of such actual Operating Expenses over the
estimated Operating Expenses paid by Lessee in such Lease Year.

 

(e)                                 
Operating Expenses
Defined.

 

(i)                                    
Items
Included in Operating Expenses.  The term “Operating Expenses” as used in the
Lease means:  all costs and expenses of operation and maintenance of the
Building and the Project, as determined by standard accounting practices,
including the following costs by way of illustration but not limitation: 
(a) Real Property Taxes and Assessments (as defined in Subparagraph (ii) below)
and any taxes or assessments imposed in lieu thereof; (b) any and all
assessments imposed with respect to the Building pursuant to any covenants,
conditions and restrictions affecting the Project, the Common Areas or the
Building; (c) water and sewer charges and the costs of electricity, heating,
ventilating, air conditioning and other utilities; (d) utilities surcharges and
any other costs, levies or assessments resulting from statutes or regulations
promulgated by any government or quasi-government authority in connection with
the use, occupancy or alteration of the Building or the premises or the parking
facilities serving the Building or the Premises; (e) costs of insurance
obtained by Lessor to insure the Project against such perils as Lessor and/or
any lender with a lien on the Project may require, provided that if coverage is
obtained in a year subsequent to the Tenant’s Base Year that was not carried in
Tenant’s Base Year, Operating Expenses in Tenant’s Base Year shall be increased
by the cost of such coverage for the first year in which it is obtained; (f)
waste disposal and janitorial services; (g) security; (h) costs incurred in the
management of the Building, including, without limitation; (A) supplies, (B)
wages and salaries (and payroll taxes and similar governmental charges related
thereto) of employees below the level of building manager directly engaged in
the operation and maintenance of the Building, (C) Building management office

 

6

 

rental, supplies, equipment and related operating
expenses, and (D) a management/administrative fee determined as a percentage of
the annual gross revenues of the Building, not to exceed 3%; (j) supplies,
materials, equipment and tools including rental of personal property used for
maintenance; (k) repair and maintenance of the Building systems, including the
plumbing, heating, ventilating, air-conditioning and electrical systems
installed or furnished by Lessor, (l) maintenance, costs and upkeep of all
parking and Project common areas; (m) depreciation on a straight line basis and
rental of personal property used in maintenance; (n) amortization on a straight
line basis over the useful life [together with interest at the rate incurred by
Lessor in connection with the capitalized expenditure] of all capitalized
expenditures which are:  (i) reasonably intended to produce a reduction
in operating charges or energy consumption, but not to exceed the reduction
achieved; or (ii) required under any governmental law or regulation that was
not applicable to the Building on the Commencement Date; or (iii) for
replacement of any Building equipment needed to operate the Building at the
same quality levels as prior to the replacement provided that the equipment
being replaced was not theretofore depreciated; (o) costs and expenses of
gardening and landscaping; (p) maintenance of signs (other than signs of
tenants of the Building); (q) personal property taxes levied on or attributable
to personal property used in connection with the Building or the Common Areas;
(r) reasonable accounting , audit, verification, legal and other consulting
fees, and (s) costs and expenses of repairs, resurfacing, repairing,
maintenance, painting, lighting, cleaning, refuse removal, security and similar
items, including appropriate reserves.

 

(ii)                                 
Real
Property Taxes and Assessments.  The term “Real Property Taxes and
Assessments,” as used in this Lease, means:  any form of assessment,
license fee, license tax, business license fee, commercial rental tax, levy
charge, improvement bond, tax or similar imposition imposed by any authority
having the direct power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, as against any legal or
equitable interest of Lessor in the Premises, Building, or the Project,
including the following by way of illustration but not limitation:  (a)
any tax on Lessor’s “right” to rent or “right” to other income from the
Premises or as against Lessor’s business of leasing the Premises; (b) any assessment,
tax, fee, levy or charge in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included within the definition
of real property tax, it being acknowledged by Lessee and Lessor 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 agencies for such services as fire protection,
street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants.  It is the intention of Lessee and Lessor that all such new and
increased assessments, taxes, fees, levies and charges be included within the
definition of “real property taxes” for the purposes of this Lease; (c) any
assessment, tax, fee, levy or charge allocable to or measured by the area of
the Premises or other premises in the Building or the rent payable by Lessee
hereunder or other tenants of the Building, including, without limitation, any
gross receipts tax or excise tax levied by state, city or federal government,
or any political subdivision thereof, with respect to the receipt of such rent,
or upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repairs, use or occupancy by Lessee of the Premises,
or any portion thereof but not on Lessor’s other operations; (d) any
assessment, tax, fee, levy or charge upon this transaction or any document to
which Lessee is a party, creating or transferring an interest or an estate in
the Premises; and/or

 

7

 

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

 

(iii)                              
Items
Excluded from Operating Expenses.  Notwithstanding the provisions of
Subparagraphs (i) and (ii) above to the contrary, “Operating Expenses” will not
include:  (a) Lessor’s federal or state income, franchisee,
inheritance or estate taxes; (b) any ground lease rental; (c) costs incurred by
Lessor for the repair of damage to the Building; (d) depreciation, amortization
and interest payments, except as specifically provided herein, and except on
materials, tools, supplies and vendor-type equipment purchased by Lessor to
enable Lessor to supply services Lessor might otherwise contract for with a
third party, where such depreciation, amortization and Interest payments would
otherwise have been included in the charge for such third party’s services, all
as determined in accordance with standard accounting practices;
(e) brokerage commissions, finders’ fees, attorneys’ fees, space planning
costs and other costs incurred by Lessor in leasing or attempting to lease
space in the Building; (f) costs of a capital nature, including, without
limitation, capital improvements, capital replacements, capital repairs,
capital equipment and capital tools, all as determined in accordance with
standard accounting practices; provided, however, the capital expenditures set
forth in Subparagraph (i)(n) above will in any event be included in the
definition of Operating Expenses; (g) interest, principal, points and fees on
debt or amortization on any mortgage, deed of trust or other debt encumbering
the Building or the Project; (h) costs, including permit, license and
inspection costs, incurred with respect to the installation of tenant improvements
for tenants in the Building, or incurred in renovating or otherwise improving,
decorating, painting or redecorating space for tenants or other occupants of
the Building, including space planning and interior design costs and fees;
(i) attorneys’ fees and other costs and expenses incurred in connection
with negotiations or disputes with present or prospective tenants or other
occupants of the Building; provided, however, that Operating Expenses will
include those attorneys’ fees and other costs and expenses incurred in
connection with negotiations, disputes or claims relating to items of Operating
Expenses, enforcement of rules and regulations of the Building, and such other
matters relating to the maintenance of standards required of Lessor under the
Lease; (j) except for the administrative/management fees described in
Subparagraph (i) above, costs of Lessor’s general corporate overhead, (k) all
items and services for which Lessee or any other tenant in the Building
reimburses Lessor (others than through operating expenses pass-through
provisions); (l) electric power costs for which any tenant directly
contracts with the local public service company; (m) costs arising from
Lessor’s charitable or political contributions; and (n) any Increases in Real
Property Taxes and Assessments resulting from a reassessment of the Project
following a change of ownership if the change of ownership occurs prior to
January 1, 2006, and 50% of any increases in Real Property Taxes and
Assessments resulting from a reassessment of the Project following a change of
ownership if the change of ownership occurs after December 31, 2005 but
prior to January 1, 2008.  Increases in Real Property Taxes and
Assessments resulting from a reassessment of the Project following a change of
ownership that occurs after December 31, 2007 shall not be excluded from
Operating Expenses.

 

(iv)                             
Adjustments
to Full Occupancy. 
In the event the Building is not 95% occupied in either Tenant’s Base Year or
in any subsequent Lease Year during the term of this Lease, Operating Expenses
in both Tenant’s Base Year and the subsequent Lease Year shall

 

8

 

be increased to those Operating Expenses that would
have been incurred at 95% occupancy of the Building.

 

7.                                      
SECURITY
DEPOSIT:  Concurrently with Lessee’s execution of this Lease, Lessee will
deposit with Lessor the Security Deposit designated in Subparagraph 1(j). 
The Security Deposit will be held by Lessor as security for the full and
faithful performance by Lessee of all of the terms, covenants, and conditions
of this Lease to be kept and performed by Lessee during the Term hereof. 
The Security Deposit is not, and may not be construed by Lessee to constitute,
rent for the last month or any portion thereof.  If Lessee defaults with
respect to any provisions of this Lease including, but not limited to, the
provisions relating to the payment of rent or additional rent, Lessor may (but
will not be required to) use, apply or retain all or any part of the Security
Deposit for the payment of any rent or any other sum in default, or for the
payment of any other amount which Lessor may spend by reason of Lessee’s
default or to compensate Lessor for any loss or damage which Lessor may suffer
by reason of Lessee’s default.  If any portion of the Security Deposit is
so used or applied, Lessee agrees, within ten (10) days after Lessor’s written
demand therefor, to deposit cash with Lessor in an amount sufficient to restore
the Security Deposit to its original amount and Lessee’s failure to do so shall
constitute a default under this Lease.  Lessor is not required to keep
Lessee’s Security Deposit separate from its general funds, and Lessee is not
entitled to interest on such Security Deposit.  Notwithstanding anything
to the contrary contained herein, at Lessee’s election, exercisable at any time
by notice to Lessor, Lessor shall cause the Security Deposit to be transferred
to the custody of the lender then holding a first mortgage or deed of trust on
the Building.

 

8.                                      
USE:

 

(a)                                 
Lessee’s Use of the
Premises:  The Premises may be used for the use or uses set forth in
Subparagraph 1(k) only, and Lessee will not use or permit the Premises to be
used for any other purpose without the prior written consent of Lessor, which
consent Lessor may withhold in its sole and absolute discretion.  Nothing
in this Lease will be deemed to give Lessee any exclusive right to such use in
the Project.

 

(b)                                
Compliance:  At
Lessee’s sole cost and expense, Lessee agrees to procure, maintain and hold
available for Lessor’s inspection, all governmental licenses and permits required
for the proper and lawful conduct of Lessee’s business from the Premises, if
any.  Lessee agrees not to use, alter or occupy the Premises or allow the
Premises to be used, altered and occupied in violation of, and Lessee, at its
sole cost and expense, agrees to use and occupy the Premises, and cause the
Premises to be used and occupied, in compliance with:  (i) any and all
laws, statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter in force and any requirements of any insurer,
insurance authority or duly constituted public authority having jurisdiction
over the Premises, the Building or the Project now or hereafter in force, (ii)
the requirements of the Board of Fire Underwriters and any other similar body, (iii)
the Certificate of Occupancy issued for the Building, and (iv) any recorded
covenants, conditions and restrictions and similar regulatory agreements, if
any, which affect the use, occupation or alteration of the Premises, the
Building and/or the Project.  Notwithstanding the foregoing, Lessee shall
not be obligated to make any modifications or improvements to the Premises that
Lessor or any prior tenant of the Premises was obligated to make prior to the
Commencement Date.  Lessee agrees to comply with the Rules and Regulations
attached hereto

 

9

 

as Exhibit B. 
Lessee agrees not to do or permit anything to be done in or about the Premises
which will in any manner obstruct or interfere with the rights of other tenants
or occupants of the Project, or injure or them, or use or allow the Premises to
be used for any unlawful purpose.  Lessee agrees not to place or store any
articles or materials outside of the Premises or to cause, maintain or permit
any nuisance or waste in, on under or about the Premises or elsewhere within
the Project.

 

(c)                                 
Hazardous
Materials:  Except for ordinary and general office supplies, such as
copier toner, liquid paper, glue, ink and common household cleaning materials
(some or all of which may constitute “Hazardous Materials” as defined in this
Lease), Lessee agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises, the Building, the Common Areas or any other
portion of the Project by Lessee, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, “Lessee’s Parties”), without
the prior written consent of Lessor, which consent Lessor may withhold in its
sole and absolute discretion.  Upon the expiration or earlier termination
of this Lease, Lessee agrees to promptly remove from the Premises, the Building
and the Project, at its sole cost and expense, any and all Hazardous Materials,
including any equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in, under or
about the Premises, the Building and/or the Project or any portion thereof by
Lessee or any of Lessee’s Parties.  To the fullest extent permitted by
law, Lessee agrees to promptly indemnify, protect, defend and hold harmless
Lessor and Lessor’s partners, officers, directors, employees, agents,
successors and assigns (collectively, “Lessor Indemnified Parties”) from and
against any and all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up, removal, remediation and restoration costs, sums paid in
settlement of claims, attorney’s fees, consultant fees and expert fees and
court costs) which arise or result from the presence of Hazardous Materials on,
in, under or about the Premises, the Building or any other portion of the
Project and which are caused or permitted by Lessee or any of Lessee’s
Parties.  Lessee shall have no liability hereunder whatsoever arising or
resulting from the presence of Hazardous Materials on, in, under or about the
Premises, the Building or any other portion of the Project not caused or
permitted by Lessee or any of Lessee’s Parties, and no costs attributable to
the presence, clean-up, removal or remediation of Hazardous Materials on, In,
under or about the Premises, the Building or any other portion of the Project,
and any associated restoration, settlement or attorneys’ or consultants costs
or fees shall be included in Operating Expenses.  Lessee and Lessor agree
to promptly notify the other of any release of Hazardous Materials in the
Premises, the Building or any other portion of the Project which Lessee or
Lessor becomes aware of during the Term of this Lease, irrespective of how or
by whom caused.  In the event of any release of Hazardous Materials caused
or permitted by Lessee or any of Lessee’s Parties, Lessor shall have the right,
but not the obligation, to cause Lessee to immediately take all steps Lessor
deems necessary or appropriate to remediate such release and prevent any
similar future release to the satisfaction of Lessor and Lessor’s mortgagee(s). 
At all times during the Term of this Lease, Lessor will have the right, but not
the obligation, to enter upon the Premises to inspect, investigate, sample
and/or monitor the Premises to determine if Lessee is in compliance with the
terms of this Lease regarding Hazardous Materials.  As used in this Lease,
the term “Hazardous Materials” shall mean and include any hazardous or toxic
materials, substances or wastes as now or hereafter designated under any law,
statute, ordinance, rule, regulation, order or ruling of any agency of the
State, the United States

 

10

 

Government or any local governmental authority,
including, without limitation, asbestos, petroleum, petroleum hydrocarbons and
petroleum based products, urea formaldehyde foam insulation, polychlorinated
biphenyls (“PCBs”) and freon and other chlorofluorocarbons.  The
provisions of this Subparagraph 8(c) will survive the expiration or earlier
termination of this Lease.

 

(d)                                
Refuse and
Sewage:  Lessee agrees not to keep any trash, garbage, waste or other
refuse on the Premises except in sanitary containers and agrees to regularly
and frequently remove same from the Premises.  Lessee shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition.  Lessee shall properly dispose of all sanitary sewage
and shall not use the sewage disposal system for the disposal of anything
except sanitary sewage.  Lessee shall keep the sewage disposal system free
of all obstructions and in good operating condition.  If the volume of
Lessee’s trash becomes excessive in Lessor’s judgment, Lessor shall have the
right to charge Lessee for additional trash disposal services and/or to require
that Lessee contract directly for additional trash disposal services at
Lessee’s sole cost and expense.

 

(e)                                 
Existing
Environmental Condition:  Lessor has advised Lessee that there is a
hazardous material condition at the Project related to the historical use of
the Sierra Point Project site as a municipal landfill.  Pursuant to
California Health & Safety Code Section 25359.7 and other relevant
sections of law requiring notice, Lessor hereby notifies Lessee that the
groundwater in the property contains measurable levels of certain hazardous
materials (the “Existing Environmental Condition”).  Upon the request of
Lessee, Lessor shall make available any and all reports in Lessor’s possession
concerning the Existing Environmental Condition for Lessee’s review.

 

9.                                      
NOTICES:  Any
notice required or permitted to be given hereunder must be in writing and may
be given by personal delivery (including delivery by overnight courier or an
express mailing service) or by mail, if sent by registered or certified
mail.  Notices to Lessee shall be sufficient if delivered to Lessee at the
Premises and notices to Lessor shall be sufficient if delivered to Lessor at
the address designated in Subparagraph 1(a).  Either party may specify a
different address for notice purposes by written notice to the other, except
that the Lessor may in any event use the Premises as Lessee’s address for
notice purposes.  Notices shall be deem given when received or when
delivery is refused by or on behalf of the intended recipient.

 

10.                                
BROKERS:  The
parties acknowledge that the broker(s) who negotiated this Lease are stated in
Subparagraph 1(m).  Lessor and Lessee each agree to promptly indemnify,
protect, defend and hold harmless the other from and against any and all
claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including attorney’s fees and court
costs) resulting from any breach by the indemnifying party of the foregoing
representation, including, without limitation, any claims that may be asserted
by any broker, agent or finder undisclosed by the indemnifying party.  The
foregoing mutual indemnity shall survive the expiration or earlier termination
of this Lease.  Lessee agrees that Lessor will not recognize or compensate
any broker with regards to any renewals and/or expansions.

 

11

 

11.                                
SURRENDER; HOLDING
OVER:

 

(a)                                 
Surrender:  The
voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, shall not constitute a merger, and shall, at the option
of Lessor, operate as an assignment to Lessor of any or all subleases or
subtenancies.  Upon the expiration or earlier termination of this Lease,
Lessee agrees to peaceably surrender the Premises to Lessor broom clean and in
a state of good order, repair and condition, ordinary wear and tear and casualty
damage excepted, with all of Lessee’s personal property and alterations removed
from the Premises to the extent permitted or required under Paragraph 13 and
all damage caused by such removal repaired as required by Paragraph 13. 
The delivery of keys to any employee of Lessor or to Lessor’s agent or any
employee thereof alone will not be sufficient to constitute a termination of
this Lease or a surrender of the Premises.

 

(b)                                
Holding Over: 
If Lessee holds over after the expiration or earlier termination of the Term,
Lessor may, at its option, treat Lessee as a tenant at sufferance only, and
such continued occupancy by Lessee shall be subject to all of the terms,
covenants and conditions of this Lease, so far as applicable, including the
payment of Operating Expenses, except that in connection with a holdover after
expiration of the Term, effective 30 days after the expiration of the Term, the
Monthly Base Rent for any month or partial month during which Lessee holds over
shall be increased to an amount equal to one hundred fifty percent (150%) of
Monthly Base Rent in effect under this Lease immediately prior to such
holdover.  Acceptance by Lessor of rent after such expiration or earlier
termination will not result in a renewal of this Lease.  If Lessee fails
to surrender the Premises upon the expiration of this Lease in accordance with
the terms of this Paragraph 11 despite demand to do so by Lessor, Lessee agrees
to promptly indemnify, protect, defend and hold Lessor harmless from all
claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including attorneys fees and costs),
including, without limitation, costs and expenses incurred by Lessor in
returning the Premises to the condition in which Lessee was to surrender it and
claims made by any succeeding tenant founded on or resulting from Lessee’s
failure to surrender the Premises.  The provisions of this Subparagraph
11(b) will survive the expiration or earlier termination of this Lease.

 

12.                                
TAXES ON TENANT’S
PROPERTY:  Lessee agrees to pay before delinquency, all taxes and
assessments (real and personal) levied against Lessee’s business operations or
any personal property, improvements, alterations, trade fixtures or merchandise
placed by Lessee in or about the Premises.

 

13.                                
ALTERATIONS: 
Lessee shall not make any alterations to the Premises or any other aspect of
the Project, without Lessor’s written consent, which Lessor may withhold in its
reasonable but subjective discretion.  No consent shall be required for
painting or recarpeting the Premises, installing or modifying telecom
communications facilities within the Premises, or for installing alterations
which cost not in excess of $10,000 and do not affect the structure or systems
of the Building.  All permitted alterations must be performed in
compliance with Lessor’s standard rules and regulations regarding
alterations.  All alterations will become the property of Lessor and will
remain upon and be surrendered with the Premises at the end of the Term of this
Lease; provided, however, that at the expiration or earlier termination of this
Lease Lessee shall remove all alterations which Lessor, at the time of granting
its consent, elected by

 

12

 

notice to Lessee to have Lessee remove.  Lessor
acknowledges that Lessee shall not be obligated to remove any of the tenant
improvements outlined on Exhibit C.  If Lessee fails to remove by the
expiration or earlier termination of this Lease all of its personal property,
or any alterations identified by Lessor for removal, Lessor may, at its option,
treat such failure as a hold-over pursuant to Subparagraph 11(b) above, and/or
Lessor may (without liability to Lessee for loss thereof) treat such personal
property and/or alterations as abandoned and, at Lessee’s sole cost and in
addition to Lessor’s other rights and remedies under this Lease, at law or in
equity:  (a) remove and store such items; and/or (b) upon ten days,
prior notice to Lessee, sell, discard or otherwise dispose of all or any such
items at private or public sale for such price as Lessor may obtain or by other
commercially reasonable means.  Lessee shall be liable for all costs of
disposition of Lessee’s abandoned property and Lessor shall have no liability
to Lessee with respect to any such abandoned property.  Lessor agrees to
apply the proceeds of any sale of any such property to any amounts due to
Lessor under this Lease from Lessee (including Lessor’s attorneys’ fees and
other costs incurred in the removal, storage and/or sale of such items), with
any remainder to be paid to Lessee.

 

14.                                
REPAIRS:

 

(a)                                 
Lessor’s
Obligations:  Lessor agrees to repair and maintain the structural portions
of the Building and the plumbing, heating, ventilating, air conditioning,
elevator and electrical systems installed or furnished by Lessor and the HVAC
unit in Lessee’s server room, all in good order and repair consistent with the
standards of a first class office building, unless such maintenance and repairs
are (i) attributable to items installed in Lessee’s Premises which are above
standard interior improvements (such as, for example, custom lighting, special
HVAC (other than in Lessee’s server room) and/or electrical panels or systems,
kitchen or rest room facilities and appliances constructed or installed within
Lessee’s Premises) or (ii) caused in part or in whole by the act, neglect or
omission of any duty by Lessee, its agents, servants, employees or invitees, in
which case Lessee will pay to Lessor, as additional rent, the reasonable cost
of such maintenance and repairs.  Lessee shall reimburse Lessor for the
reasonable cost incurred by Lessor in connection with the repair and
maintenance of the HVAC unit in Lessee’s server room within 30 days after
billing therefor, provided that if Lessor has undertaken the obligation to
repair and maintain any dedicated HVAC unit within the premises of another
tenant without cost reimbursement by that tenant, Lessee shall be no longer be
obligated to reimburse Lessor for the cost of repairing and maintaining
Lessee’s HVAC unit.  Except as provided in this Subparagraph 14(a),
Lessor has no obligation to alter, remodel, improve, repair, decorate or
paint the Premises or any part thereof.  Promptly upon receipt of
written notice from Lessee, or promptly upon otherwise becoming aware of the
need therefor, Lessor shall attend to necessary items of repair and
maintenance.  Except as provided in Paragraph 20, Lessee will not be
entitled to any abatement of rent and Lessor will not have any liability by
reason of any injury to or interference with Lessee’s business arising from the
making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances and equipment
therein.  Lessee waives the right to make repairs at Lessor’s expense
under any laws, statute, ordinance, rule, regulation, order or ruling
(including, without limitation, the provisions of California Civil Code
Sections 1941 and 1942 and any successor statutes or laws of a similar nature).

 

13

 

(b)                                
Lessee’s
Obligations:  Lessee agrees to keep, maintain and preserve the Premises in
a state of condition and repair consistent with the Building and, when and if
needed, at Lessee’s sole cost and expense, to make all repairs to the Premises
and every part thereof.  Any such maintenance and repairs will be
performed by Lessor’s contractor, or at Lessor’s option, by such contractor or
contractors as Lessee may choose from an approved list to be submitted by Lessor. 
Lessee agrees to pay all costs and expenses incurred in such maintenance and
repair within seven (7) days after billing by Lessor or such contractor or
contractors.  Lessee agrees to cause any mechanics’ liens or other liens
arising as a result of work performed by Lessee or at Lessee’s direction to be
eliminated as provided in Paragraph 15 below.  If Lessee refuses or
neglects to repair and maintain the Premises properly as required hereunder to
the reasonable satisfaction of Lessor, Lessor, at any time following ten (10)
days from the date on which Lessor makes a written demand on Lessee to effect
such repair and maintenance, may enter upon the Premises and make such repairs
and/or maintenance, and upon completion thereof, Lessee agrees to pay to Lessor
as additional rent, Lessor’s costs for making such repairs plus an amount not
to exceed ten percent (10%) of such costs for overhead, within ten (10) days of
receipt from Lessor of a written itemized bill therefor.  Any amounts not
reimbursed by Lessee within such ten (10) day period will bear interest at the
Interest Rate until paid by Lessee.

 

15.                                
LIENS:  Lessee
agrees not to permit any mechanic’s, materialmen’s or other liens to be filed
against all or any part of the Building or the Premises, nor against Lessee’s
leasehold interest in the Premises, by reason of or in connection with any
repairs, alterations, improvements or other work contracted for or undertaken
by Lessee or any other act or omission of Lessee or Lessee’s agents, employees,
contractors, licensees or invitees.  At Lessor’s request, Lessee agrees to
provide Lessor with enforceable, conditional and final lien release (or other
evidence reasonably requested by Lessor to demonstrate protection from liens)
from all persons furnishing labor and/or materials at the Premises. 
Lessor will have the right at all reasonable times to post on the Premises and
record any notices of nonresponsibility which it deems necessary for protection
from such liens.  If any such liens are filed, Lessee will, at its sole
cost and expense, promptly cause such liens to be released of record or bonded
so that it no longer affects title to the Building or the Premises.  If
Lessee fails to cause any such liens to be so released or bonded within ten
(10) days after Lessee first has actual notice of the filing thereof, such
failure will be deemed a material breach by Lessee under the Lease without the
benefit of any additional notice or cure period described in Paragraph 22
below, and Lessor may, without waiving its rights and remedies based on such
breach, and without releasing Lessee from any of its obligations, cause such
liens to be released by any means it shall deem proper, including payment in
satisfaction of the claims giving rise to such liens.  Lessee agrees to
pay to Lessor within ten (10) days after receipt of invoice from Lessor, any
sum paid by Lessor to remove such liens, together with interest at the Interest
Rate from the date of such payment by Lessor.

 

16.                                
ENTRY BY
LANDLORD:  Lessor and its employees and agents will at all reasonable
times have the right to enter the Premises to inspect the same, to supply
janitorial service and any other service to be provided by Lessor to Lessee
hereunder, to show the Premises to prospective purchasers or tenants, to post
notices of nonresponsibility, and/or to repair the Premises as permitted or
required by this Lease.  In exercising such entry rights, Lessor will
endeavor to minimize, as reasonably practicable, the interference with Lessee’
business, and will provide Lessee with reasonable advance notice of any such
entry (except in emergency situations).  Lessor will at all times have and
retain a key with which to unlock all

 

14

 

doors in the Premises, excluding Lessee’s vaults,
safes and computer server room.  Except in the case of the gross
negligence or willful misconduct of Lessor, any entry to the Premises obtained
by Lessor will not be construed or deemed to be a forcible or unlawful entry
into the Premises, or an eviction of Lessee from the Premises and Lessor will
not be liable to Lessee for any damages or losses resulting from any such
entry.

 

17.                                
UTILITIES AND
SERVICES:

 

(a)                                 
Provision of
Utilities to the Premises:  Throughout the Term of the Lease so long as
the Premises are occupied, Lessor agrees to furnish or cause to be furnished to
the Premises the utilities and services described in this Paragraph 17
below.  Lessor will not be liable to Lessee for any failure to furnish any
of the foregoing utilities and services if such failure, is caused by all or
any of the following:  (i) accident, breakage or repairs; (ii) strikes, lockouts
or other labor disturbance or labor dispute of any character; (iii)
governmental regulation, moratorium or other governmental action or inaction;
(iv) inability despite the exercise of reasonable diligence to obtain
electricity, water or fuel; or (v) any other cause beyond Lessor’s reasonable
control.  In addition, in the event of any stoppage or interruption of
services or utilities, Lessee shall not be entitled to any abatement or
reduction of rent (except as expressly provided in Subparagraphs 20(f) or 21(b)
if such failure results from a damage or taking described therein, or except if
Lessor has rental insurance that covers such stoppage or interruption), no
eviction of Lessee will result from such failure and Lessee will not be
relieved from the performance of any covenant or agreement in this Lease
because of such failure.  In the event of any failure, stoppage or
interruption thereof, Lessor agrees to diligently attempt to resume service
promptly.  If Lessee requires or utilizes more water or electrical power
than is normal in northern San Mateo County for general office use, Lessor may
at its option require Lessee to pay, as additional rent, the cost, as fairly
determined by Lessor, incurred by such extraordinary usage.  If Lessor and
Lessor so agree, Lessor may install separate meter(s) for the Premises, at
Lessee’s expense, and Lessee agrees thereafter to pay the cost of all such
utility service to the Premises, and Lessor will make an appropriate adjustment
to Lessee’s Operating Expenses calculation to account for the fact Lessee is
directly paying such metered charges, provided Lessee will remain obligated to
pay its proportionate share of Operating Expense subject to such adjustment.

 

(b)                                
Standards for
Utilities and Services:  The following standard for utilities and services
are in effect.  Lessor reserves the right to adopt nondiscriminatory
modifications and additions hereto.  Subject to the terms and conditions
of the Lease and provided Lessee remains in occupancy of the Premises, Lessor
will provide or make available the following utilities and services:

 

(i)                                    
On Monday through
Friday, except holidays recognized by businesses generally, from 8:00 a.m. to
6:00 p.m. (and other times for a charge of $35.00 per hour), ventilate the
Premises and furnish air conditioning or heating on such days and hours, when
in the reasonable judgment of Lessor it may be required for the comfortable
occupancy of the Premises, provided that Lessor’s HVAC system has the
capability to provide ventilation only, and if ventilation only is provided
after hours at Lessee’s request, no charge will be made for such service. 
Lessee agrees to cooperate fully at all times with Lessor, and to abide by all
reasonable regulations and requirements which Lessor may prescribe for the
proper function and

 

15

 

protection of said air conditioning system. 
Lessee agrees not to connect any apparatus, device, conduit or pipe to the
chilled and hot water air conditioning supply lines of the Building. 
Lessee further agrees that neither Lessee nor its servants, employees, agents,
visitors, licensees or contractors shall at any time enter the mechanical
installations or facilities of the Building or the Project or adjust, tamper
with, touch or otherwise in any manner affect said installations or
facilities.  The cost of maintenance and service calls to adjust and
regulate the air conditioning system will be charged to Lessee if the need for
maintenance work results from either Lessee’s adjustment of room thermostats or
Lessee’s failure to comply with its obligations under this section.  Power
and cooling loop to equipment provided by Lessee for dedicated cooling of
server room shall be available 24/7 without additional charge.

 

(ii)                                 
Lessor will make
available to the Premises, 24 hours per day, seven days a week, electric
current as required by the Building standard office lighting and fractional
horsepower office business machines including copiers, personal computer and
word processing equipment in an amount not to exceed six (6) watts per square
foot per normal business day.  Lessee agrees, should its electrical
installation or electrical consumption be in excess of the aforesaid quantity
or extend beyond normal business hours, to reimburse Lessor monthly for the
measured consumption at the average cost per kilowatt hour charged to the
building during the period.  If a separate meter is not installed at
Lessee’s cost, such excess cost will be established by an estimate agreed upon
by Lessor and Lessee, and if the parties fail to agree, such cost will be
established by an independent licensed engineer selected in Lessor’s reasonable
discretion, whose fee shall be shared equally be Lessor and Lessee. 
Lessee agrees not to use any apparatus or device in, upon or about the Premises
(other than standard office business machines, personal computers and work
processing equipment) which may in anyway increase the amount of such services
usually furnished or supplied to said Premises, and Lessee further agrees not
to connect any apparatus or device with wires, conduits or pipes, or other
means by which such services are supplied, for the purpose of using additional
or unusual amounts of such services without the written consent of
Lessor.  Should Lessee use the same to excess, the refusal on part of
Lessee to pay upon demand of Lessor the amount established by Lessor for such
excess charge will constitute a breach of the obligation to pay rent under this
Lease and will entitle Lessor to the rights therein granted for such
breach.  Lessee’s use of electric current will never exceed the capacity
of the feeders to the Building, or the risers or wiring installation and Lessees
will not install or use or permit the installation of use of any computer or
electronic data processing equipment in the Premises (except standard office
business machines, personal computers and word processing equipment) without
the prior written consent of Lessor.  Lessor hereby consents to Lessee’s
computer server room.

 

(iii)                              
Water will be
available in public areas for drinking and lavatory purposes only, but if
Lessee requires, uses or consumes water for any purpose in addition to ordinary
drinking and lavatory purposes, of which fact Lessee constitutes Lessor to be
the sole judge, Lessor may install a water meter and thereby measure Lessee’s
water consumption for all purposes.  Lessee agrees to pay Lessor for the cost
of the meter and the cost of the installation thereof and throughout the
duration of Lessee’s occupancy Lessee will keep said meter and installation
equipment in good working order and repair at Lessee’s own cost and expense, in
default of which Lessor may cause such meter and equipment to be replaced or
repaired and collect the cost thereof from Lessee.  Lessee agrees to pay
for water consumed, as shown on such meter, as and when bills and rendered, and
on default in making such payment, Lessor may pay

 

16

 

such charges and collect the same from Lessee. 
Any such costs or expenses incurred, or payments made by Lessor for any of the
reasons or purposes hereinabove stated will be deemed to be additional rent
payable by Lessee and collectible by Lessor as such.

 

(iv)                             
Lessor will provide
janitorial service to the Premises, and unless otherwise agreed to by Lessor
and Lessee, no one other than persons approved by Lessor shall be permitted to
enter the Premises for such purposes.  Janitorial service will be provided
of the character and frequency provided in first class office buildings in
northern San Mateo County.  Lessee agrees to pay to Lessor the cost of
removal of any of Lessee’s refuse and rubbish to the extend that the same
exceeds the refuse and rubbish usually attendant upon the use of the Premises
as offices.

 

(v)                                
Lessor reserves the
right to stop service of the plumbing, ventilation, air conditioning and
electrical systems, when necessary, by reason of accident or emergency or for
repairs, alterations or improvements, when in the judgment of Lessor such
actions are desirable or necessary to be made, until said repairs, alterations
or improvements shall have been completed, and Lessor will have no
responsibility or liability for failure to supply elevator facilities,
plumbing, ventilating, air conditioning or electric service, when prevented
from so doing by strike or accident or by any cause beyond Lessor’s reasonable
control, or by laws, rules orders, ordinances, directions, regulations or by
reason of the requirements of any federal, state, county or municipal authority
or failure of gas, oil or other suitable fuel supply or inability by exercise
of reasonable diligence to obtain gas, oil or other suitable fuel supply. 
It is expressly understood and agreed that any covenants on Lessor’s part to
furnish any services pursuant to any of the terms, covenants, conditions,
provisions or agreements of this Lease, or to perform any act or thing for the
benefit of Lessee, will not be deemed breached if Lessor is unable to furnish
or perform the same by virtue of a strike of labor trouble or any other cause
whatsoever beyond Lessor’s control.

 

18.                                
ASSUMPTION OF RISK
AND INDEMNIFICATION:

 

(a)                                 
Assumption of
Risk:  Lessee, as a material part of the consideration to Lessor, agrees
that neither Lessor nor any Lessor Indemnified Parties (as defined in
Subparagraph 8(c) above) will be liable to Lessee for, and Lessee expressly
assumes the risk of and waives any and all claims it may have against Lessor or
any Lessor Indemnified Parties with respect to, (i) any and all damage to
property or injury to persons in, upon or about the Premises, the Building or
the Project resulting from any act or omission (except for the negligent or
intentionally willful act or omission of Lessor or its agent or employees),
(ii) any such damage caused by other tenants or persons in or about the
Building or the Project, or caused by quasi-public work, (iii) any damage to
property entrusted to employees of the Building, (iv) any loss of or damage to
property by theft or otherwise, or (v) any injury or damage to person or
property resulting from any casualty, explosion, falling plaster or other
masonry or glass, steam, gas, electricity, water or rain which may leak from
any part of the Building or any other portion of the Project or from the roof,
street or subsurface or from any other place, or resulting from dampness. 
Neither Lessor nor any Lessor Indemnified Parties will be liable for
consequential damages arising out of any loss of the use of the Premises or any
equipment or facilities therein by Lessee or any Lessee Parties or for
interference with light.  Lessee agrees to give prompt

 

17

 

notice to Lessor in case of fire or accidents in the
Premises or the Building, or of defects therein or in the fixtures or equipment.

 

(b)                                
Indemnification: 
Lessee will be liable for, and agrees to the maximum extent permissible under
applicable law, to promptly indemnify, protect, defend and hold harmless Lessor
and all Lessor Indemnified Parties from and against, any and all claims,
damages, judgments, suits, causes of action, losses, liabilities, penalties,
fines, expenses and costs, including attorney’s fees and court costs
(collectively, “Indemnified Claims”), arising or resulting from (i) any act
or omission of Lessee or any Lessee Parties (as defined in Subparagraph 8(c)
above); (ii) the use of the Premises and Common Areas and conduct of Lessee’s
business by Lessee or any Lessee Parties, or any other activity, work or thing
done, permitted or suffered by Lessee or any Lessee Parties, in or about the
Premises, the Building or elsewhere within the Project; and/or (iii) any
default by Lessee or any obligations on Lessee’s part to be performed under the
terms of this Lease.  In case any action or proceeding is brought against
Lessor or any Lessor Indemnified Parties by reason of any such Indemnified
Claims, Lessee, upon notice from Lessor, agrees to promptly defend the same at
Lessee’s sole cost and expense by counsel approved in writing by Lessor, which
approval Lessor will not unreasonably withhold.  Lessor hereby waives all
claims against Lessee for damage to property or injury or death of any person
in, upon or about the Building or the Project arising at any time and from any
cause other than by reason of the negligence or willful act of Lessee or any
Lessee Parties, and Lessor shall indemnify, protect, defend and hold harmless
Lessee and all Lessee Indemnified Parties from and against all Indemnified
Claims arising out of any injury or death of any person or damage to or
destruction of property caused by the negligence or willful act of Lessor, its
agents, employees or contractors.

 

(c)                                 
Survival; No Release
of Insurers:  The indemnification obligations under Subparagraph 18(b)
will survive the expiration or earlier termination of this Lease.  The
covenants, agreements and indemnification obligations in Subparagraphs 18(a)
and 18(b) above, are not intended to and will not relieve any insurance carrier
of its obligations under policies required to be carried pursuant to the
provisions of this Lease.

 

19.                                
INSURANCE:

 

(a)                                 
Lessee’s
Insurance:  On or before the earlier to occur of (i) the Commencement Date,
or (ii) the date Lessee commences any work of any type in the Premises pursuant
to this Lease (which may be prior to the Commencement Date), and continuing
throughout the entire Term hereof and any other period of occupancy, Lessee
agrees to keep in full force and effect, at its sole cost and expense, the
insurance specified in this Paragraph 19 below.  Lessor reserves the right
to require any other form or forms of insurance as Lessee or Lessor or any
mortgagees of Lessor may reasonably require from time to time in form, in
amounts, and for insurance risks against which, a prudent tenant would protect
itself, but only to the extent coverage for such risks and amounts are
available in the insurance market at commercially acceptable rates. 
Lessor makes no representation that the limits of liability required to be
carried by Lessee under the terms of this Lease are adequate to protect
Lessee’s interests and Lessee should obtain such additional insurance or
increased liability limits as Lessee deems appropriate.

 

18

 

(b)                                
Supplemental Lessee
Insurance Requirements:  All polices must be in a form reasonably
satisfactory to Lessor and issued by an insurer admitted to do business in the
state in which the Building is located.  All policies must be issued by
insurers with a policyholder rating of “A” and a financial rating of “VII” at
the time of insurance placement in the most recent version of Best’s Key Rating
Guide.  All policies must contain a requirement to notify Lessor (and
Lessor’s property manager and any mortgagees or ground lessors of Lessor who
are named as additional insurers, if any) in writing not less than thirty (30)
days prior to any cancellation or other termination thereof.  Lessee
agrees to deliver to Lessor, as soon as practicable after placing the required
insurance, but in any event within the time frame specified in Subparagraph
19(a) above, certificate(s) of Insurance and/or if required by Lessor, certified
copies of each policy evidencing the existence of such insurance and Lessee’s
compliance with the provisions of this Paragraph 19.  Lessee agrees to
cause replacement polices or certificates to be delivered to Lessor not less
than thirty (30) days prior to the expiration of any such policy or
policies.  If any such initial or replacement polices or certificates are
not furnished within the time(s) specified herein, Lessor will have the right,
but not the obligation, to obtain such insurance as Lessor deems necessary to
protect Lessor’s interests at Lessee’s expense.  If Lessor obtains any
insurance that is the responsibility of Lessee under this Paragraph 19, Lessor
agrees to deliver to Lessee a written statement setting forth the cost of any
such insurance and showing in reasonable detail the manner in which it has been
computed and Lessee agrees to promptly reimburse Lessor for such costs as
additional rent.  General liability policies must name Lessor and Lessor’s
property manager (and at Lessor’s request, Lessor’s mortgagees and ground
lessors of which Lessee has been informed in writing) as additional insured and
must also contain a provision that the insurance afforded by such policy is
primary Insurance and any Insurance carried by Lessor and Lessor’s property
manager of Lessor’s mortgagees or ground lessors, if any, will be excess over
and non-contributing with Lessee’s insurance.

 

(c)                                 
Lessee’s Insurance
Requirements.  Lessee’s Certificates of Insurance must be provided to
Lessor prior to occupancy of the Premises and renewals ten (10) days before
expiration, as follows:

 

 

	
  (i)

  	
   

  	
  Comprehensive or
  Commercial General Liability Insurance:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $1,000,000.

  	
   

  	
  Combined Single Limit,
  each occurrence.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $1,000,000.

  	
   

  	
  Products/Completed
  Operations Aggregate.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $50,000.

  	
   

  	
  Fire Legal Liability
  Limit, per fire, Bodily Injury, Property Damage, Personal Injury and
  Advertising Injury; Blanket Contractual Liability; Products and Completed
  Operations Liability; Lessor as an Additional Insured; Severability of
  Interest, permitting Cross liability among insured; provision stating that
  tenant’s insurance is primary and non-contributing with any insurance carried
  by Lessor.

  

 

19

 

	
  (ii)

  	
   

  	
   

  	
   

  	
  Lessee’s Property
  Insurance:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Special Form (Causes of
  Loss) coverage of Property owned by Lessee or for which the Lessee is legally
  liable; full replacement cost basis.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
   

  	
   

  	
  Lessee’s Business
  Interruption Insurance:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Special Form (Causes of
  Loss) coverage of operations as leased premises; covering three months’
  business interruption due to insured peril.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
   

  	
   

  	
  Lessee’s Workers’
  Compensation and Employer’s Liability Insurance:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Statutory Limits and
  terms required by State;  $1,000,000.  Employer’s Liability Limit:

  

 

All insurance is to be
with licensed insurers having a Best’s rating of “A VII” or better at the
time of insurance placement, and must include waiver of subrogation in favor of
Lessor with thirty (30) day prenotice of cancellation/non renewal to Lessor.

 

(d)                                
Lessee’s Use: 
Lessee will not keep, use, sell or offer for sale in or upon the Premises any
article which may be prohibited by any insurance policy periodically in
force covering the Building or the Project Common Areas.  If Lessee’s
occupancy or business in, or on, the Premises, whether or not Lessor has
consented to the same, results in any increase in premiums for the insurance
periodically carried by Lessor with respect to the Building or the Project or
results in the need for Lessor to maintain special or additional insurance,
Lessee agrees to pay Lessor the cost of any such increase in premiums or
special or additional coverage as additional rent within ten (10) days after
being billed therefor by Lessor.  Lessee agrees to promptly comply with
all reasonable requirements of the insurance authority or any present or future
insurer relating to the Premises.

 

(e)                                 
Cancellation of
Lessor’s Policies:  If any of Lessor’s insurance policies are canceled or
cancellation is threatened or the coverage reduced or threatened to be reduced
in anyway because of the use of the Premises or any part thereof by Lessee or
any assignee or subtenant of Lessee or by anyone Lessee permits on the Premises
and, if Lessee falls to remedy the condition giving rise to such cancellation,
threatened cancellation, reduction of coverage, threatened reduction of
coverage, increase in premiums, or threatened increase in premiums, within
forty-eight (48) hours after notice thereof, Lessee will be deemed to be in
material default of this Lease and Lessor may, at its option, either terminate
this Lease or enter upon the Premises and attempt to remedy such condition, and
Lessee shall promptly pay Lessor the reasonable costs of such remedy as
additional rent.  If Lessor is unable, or elects not to remedy such
condition, then Lessor will have all of the remedies provided for in this Lease
in the event of a default by Lessee.

 

20

 

(f)                                   
Lessor’s Insurance
Requirements:  Lessor shall maintain such insurance as shall from
time to time be customary for owners of properties comparable to the Project,
provided that such insurance shall include Special Form (Causes of Loss)
property insurance with replacement cost coverage on the Building and business
income insurance covering 12 months’ rental income.

 

(g)                                
Waiver of
Subrogation:  Lessor and Lessee shall each obtain from their respective
insurers under all policies of fire, theft, public liability, worker’s
compensation and other insurance maintained by either of them at any time
during the term hereof insuring or covering the Building or any portion thereof
or operations therein, a waiver of all rights of subrogation which the insurer
of one party might have against the other party.  If either Lessor
or Lessee fails to obtain the requisite subrogation waiver, it shall not
thereby be in default hereunder, but it shall indemnify the other party against
any loss or expense, including reasonable attorneys’ fees, resulting from the
failure to obtain such waiver.

 

20.                                
DAMAGE OR
DESTRUCTION:

 

(a)                                 
Partial
Destruction:  If the Premises or the Building are damaged by fire or other
casualty to an extent that Lessor’s contractor reasonably estimates in a
writing delivered to Lessor and Lessee that the damage thereto may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within one hundred eighty (180) days from the date the repair, reconstruction
or restoration is commenced, then Lessor agrees to commence and proceed
diligently with the work of repair, reconstruction and restoration and this
Lease will continue in full force and effect.

 

(b)                                
Substantial Destruction: 
Any damage or destruction to the Premises or the Building which Lessor is not
obligated to repair pursuant to Subparagraph 20(a) above will be deemed a
substantial destruction.  In the event of a substantial destruction,
Lessor may elect to either:  (i) repair, reconstruct and restore the
portion of the Building or the Premises damaged by such casualty, in which case
this Lease will continue in full force and effect, subject to Lessee’s
termination right contained in Subparagraph 20(d) below; or (ii) terminate this
Lease effective as of the date which is thirty (30) days after Lessee’s receipt
of Lessor’s election to so terminate.

 

(c)                                 
Notice:  Under
any of the conditions of Subparagraph 20(a) or (b) above, Lessor agrees to give
written notice to Lessee of its intention to repair or terminate, as permitted
in such paragraphs, within the earlier of sixty (60) days after the occurrence
of such casualty, or fifteen (15) days after Lessor’s receipt of the estimate from
Lessor’s contractor (the applicable time period to be referred to herein as the
“Notice Period”).

 

(d)                                
Termination
Rights:  If Lessor elects to repair, reconstruct and restore pursuant to
Subparagraph 20(b)(i) hereinabove, and if Lessor’s contractor estimates that as
a result of such damage, Lessee cannot be given reasonable use of and access to
the Premises within one hundred eighty (180) days after the date of such
damage, then Lessee may terminate this Lease effective upon delivery of written
notice to Lessor within ten (10) days after Lessor delivers notice to Lessee of
its election to so repair, reconstruct or restore.

 

21

 

(e)                                 
Lessee’s Costs and
Insurance Proceeds:  In the event of any damage or destruction of all or
any part of the Premises, Lessee agrees to immediately (i) notify Lessor
thereof, and (ii) deliver to Lessor all property insurance proceeds received by
Lessee with respect to any tenant improvements installed by or at the cost of
Lessee and any alterations, but excluding proceeds for Lessee’s furniture,
fixtures, equipment and other personal property, whether or not this Lease is
terminated as permitted in this Paragraph 20, and Lessee hereby assigns to
Lessor all rights to receive such insurance proceeds.  If, for any reason
(including Lessee’s failure to obtain insurance for the full replacement cost
of any Lessee Improvements installed by or at the cost of Lessee and any alterations
from any and all casualties), Lessee fails to receive insurance proceeds
covering the full replacement cost of any such tenant improvements and any
alterations which are damaged, Lessee will be deemed to have self-insured the
replacement cost of such items, and upon any damage or destruction thereto that
is to be repaired, reconstructed or restored by Lessor, Lessee agrees to
immediately pay to Lessor the full replacement cost of such items, less any
insurance proceeds actually received by Lessor from Lessor’s or Lessee’s
insurance with respect to such items.

 

(f)                                   
Abatement of
Rent:  In the event of any damage, repair, reconstruction and/or
restoration described in this Paragraph 20, rent will be abated or reduced, as
the case may be, from the date of such casualty, in proportion to the degree to
which Lessee’s use of the Premises is impaired during such period of repair
until such use is restored.  Except for abatement of rent as provided
hereinabove, Lessee will not be entitled to any compensation or damages for
loss of, or interference with, Lessee’s business or use or access of all or any
part of the Premises or for lost profits or any other consequential damages of
any kind or nature, which result from any such damage, repair, reconstruction
or restoration.

 

(g)                                
Damage Near End of
Term:  Lessor and Lessee shall each have the right to terminate this Lease
if any damage to the Premises or the Building occurs during the last twelve
(12) months of the Term of this Lease where Lessor’s contractor estimates in a
writing delivered to Lessor and Lessee the repair, reconstruction or
restoration of such damage cannot be complete within sixty (60) days after the
commencement of the repair, reconstruction or restoration.  If either
party desires to terminate this Lease under this Subparagraph (g), it shall
provide written notice to the other party of such election within ten (10) days
after its receipt of Lessor’s contractor’s repair estimates.

 

(h)                                
Waiver of Termination
Right:  Lessor and Lessee agree that the foregoing provisions of this
Paragraph 20 are to govern their respective rights and obligations in the event
of any damage or destruction and supersede and are in lieu of the provisions of
any applicable law, statute, ordinance, rule, regulation, order or ruling now
or hereafter in force which provide remedies for damage or destruction of
leased premises (including, without limitation, the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933,
Subsection 4 and any successor statute or laws of a similar nature).

 

21.                                
EMINENT DOMAIN:

 

(a)                                 
Substantial
Taking:  If the whole of the Premises, or such part thereof as shall
substantially interfere with Lessee’s use and occupancy of the Premises, as
contemplated by this Lease, is taken for any public or quasi-public purpose by
any lawful power or authority by

 

22

 

exercise of the right of appropriation, condemnation
or eminent domain, or sold to prevent such taking, either party will have the
right to terminate this Lease effective as of the date possession is required
to be surrendered to such authority.

 

(b)                                
Partial Taking;
Abatement of Rent:  In the event of a taking of a portion of the Premises
which does not substantially interfere with Lessee’s use and occupancy of the
Premises, then, neither party will have the right to terminate this Lease and
Lessor will thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Lessor receives proceeds
therefor from the condemning authority), and rent will be abated with respect
to the part of the Premises which Lessee is deprived of on account of such
taking.  Notwithstanding the immediately preceding sentence to the
contrary, if any part of the Building or the Project is taken (whether or not such
taking substantially interferes with Lessee’s use of the Premises), Lessor may
terminate this Lease upon thirty (30) day’s prior written notice to Lessee if
Lessor also terminates the leases of the other tenants of the Building which
are leasing comparably sized space for comparable lease terms.

 

(c)                                 
Condemnation
Award:  In connection with any taking of the Premises or the Building,
Lessor will be entitled to receive the entire amount of any award which may be
made or given in such taking or condemnation, without deduction or
apportionment for any estate or interest of Lessee, it being expressly
understood and agreed by Lessee that no portion of any such award will be
allowed or paid to Lessee for any so-called bonus or excess value, and will be
the sole property of Lessor.  Lessee agrees not to assert any claim
against Lessor or the taking authority for any compensation because of such
taking (including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Lessee will have the right to
recover from the condemning authority (but not from Lessor) any compensation as
may be separately awarded or recoverable by Lessee for the taking of Lessee’s
furniture, fixtures, equipment and other personal property within the Premises,
for Lessee’s relocation expenses, and for any loss of goodwill or other damage
to Lessee’s business by reason of such taking.

 

(d)                                
Temporary
Taking:  In the event of taking of the Premises or any part thereof for
temporary use for a period ending prior to the expiration of the Term, (i) this
Lease will remain unaffected thereby and rent will not abate, and (ii) Lessee
will be entitled to receive such portion or portions of any award made for such
use with respect to the period of the taking which is within the Term, provided
that if such taking remains in force at the expiration or earlier termination
of this Lease, Lessee will then pay to Lessor a sum equal to the reasonable cost
of performing Lessee’s obligations under Paragraph 11 with respect to surrender
of the Premises and upon such payment Lessee will be excused from such
obligations.

 

22.                                
DEFAULTS AND
REMEDIES:

 

(a)                                 
Defaults:  The
occurrence of any one or more of the following events will be deemed a default
by Lessee:

 

(i)                                    
The abandonment of
the Premises by Lessee.

 

23

 

(ii)                                 
The failure by Lessee
to make any payment of rent or additional rent or any other payment required to
be made by Lessee hereunder, as and when due, where such failure continues for
a period of five (5) business days after written notice thereof from Lessor to
Lessee; provided, however, that any such notice will be in lieu of, and not in
addition to, any notice required under applicable law (including, without
limitation, the provisions of California Code of Civil Procedure
Section 1161 regarding unlawful detainer actions or any successor statute
or law of a similar nature).

 

(iii)                              
The failure by Lessee
to observe or perform any of the express or implied covenants or provisions of
this Lease to be observed or performed by Lessee, other than as specified in
Subparagraph 22(a)(i) or (ii) above, where such failure continues for a period
of thirty (30) days after written notice thereof from Lessor to Lessee. 
The provisions of any such notice will be in lieu of, and not in addition to,
any notice required under applicable law (including, without limitation,
California Code of Civil Procedure section 1161 regarding unlawful
detainer actions and any successor statute or similar law).  If the nature
of Lessee’s, default is such that more than thirty (30) days are reasonably
required for its cure, then Lessee will not be deemed to be in default if
Lessee, with Lessor’s concurrence, commences such cure within such thirty (30)
days period and thereafter diligently prosecutes such cure to completion.

 

(iv)                             
(A) the making by
Lessee of any general assignment for the benefit of creditors; (B) the filing
by or against Lessee of a petition to have Lessee adjudged a bankrupt or a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against Lessee, the same is dismissed within
sixty (60) days); (C) the appointment of a trustee or receiver to take
possession of substantially all of Lessee’s assets located at the Premises or
of Lessee’s interest in this Lease, where possession is not restored to Lessee
within sixty (60) days; or (D) the attachment, execution or other judicial
seizure of substantially all of Lessee’s assets located at the Premises or of
Lessee’s interest in this Lease where such seizure is not discharged within
sixty (60) days.

 

(b)                                
Lessor’s Remedies;
Termination:  In the event of any default by Lessee, in addition to
any other remedies available to Lessor at law or in equity under applicable law
(including, without limitation, to the extent the Premises are located in
California, the remedies of Civil Code Section 1951.4 and any successor
statute or similar law), Lessor will have the immediate right and option to
terminate this Lease and all rights of Lessee hereunder.  If Lessor elects
to terminate this Lease then, to the extent permitted under applicable law,
Lessor may recover from Lessee:  (i) the worth at the time of award of any
unpaid rent which had been earned at the time of such termination; plus (ii)
the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rent loss that Lessee proves could have been reasonably avoided;
plus (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the Term after the time of award exceeds the amount of
such rent loss that Lessee proves could be reasonably avoided; plus (iv) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by Lessee’s failure to perform its obligations under this Lease or
which, in the ordinary course of things, results therefrom including, but not
limited to:  attorneys’ fees and costs, brokers’ commissions, the costs of
refurbishment, alterations, renovation and repair of the Premises, and removal
(including the repair of any damage caused by such removal) and storage (or disposal)
of Lessee’s personal property, equipment, fixtures, alterations, the

 

24

 

tenant improvements and any other items which Lessee
is required under this Lease to remove but does not remove, as well as the unamortized
value of any free rent, reduced rent, free parking, reduced rate parking and
any tenant improvement allowance or other costs or economic concessions
provided, paid, granted or incurred by Lessor pursuant to this Lease.  The
“unamortized value” as used herein shall be determined by calculating the total
value of such concessions and multiplying such value by a fraction, the
numerator of which is the number of months of the Lease Term not yet elapsed as
of the date on which the Lease is terminated, and the denominator of which is
the total number of months of the Lease Term.  As used in Subparagraph
22(b)(iii) above, the “worth at the time of award” is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%).

 

(c)                                 
Lessor’s Remedies;
Re-Entry Rights:  In the event of any default by Lessee, in addition to
any other remedies available to Lessor under this Lease, at law or in equity,
Lessor will also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property maybe removed and stored in a public warehouse or elsewhere
and/or disposed of at the sole cost and expense of and for the account of
Lessee in accordance with the provisions of Paragraph 13 of this Lease or any
other procedures permitted by applicable law.  No re-entry or taking
possession of the Premises by Lessor pursuant to this Subparagraph 22(c) will
be construed as an election to terminate this Lease unless a written notice of
such intention is given to Lessee or unless the termination thereof is decreed
by a court of competent jurisdiction.

 

(d)                                
Lessor’s Remedies;
Re-letting:  If Lessor does not elect to terminate this Lease, Lessor may
from time to time, without terminating this Lease, either recover all rent as
it becomes due or relet the Premises or any part thereof on terms and
conditions as Lessor in its sole and absolute discretion may deem advisable
with the right to make alterations and repairs to the Premises in connection
with such reletting.  If Lessor elects to relet the Premises, then rents
received by Lessor from such reletting will be applied:  first, to the
payment of any indebtedness other than rent due hereunder from Lessee to
Lessor; second, to the payment of any cost of such reletting; third, to the
payment of the cost of any alterations and repairs to the Premises incurred in
connection with such reletting; fourth, to the payment of rent due and unpaid
hereunder and the residue, if any, will be held by Lessor and applied to
payment of future rent as the same may become due and payable hereunder. 
Should that portion of such rents received from such reletting during any
month, which is applied to the payment of rent hereunder, be less than the rent
payable during that month by Lessee hereunder, then Lessee agrees to pay such
deficiency to Lessor immediately upon demand therefor by Lessor.  Such
deficiency will be calculated and paid monthly.

 

(e)                                 
Lessor’s Remedies;
Performance for Lessee:  All covenants and agreements to be performed by
Lessee under any of the terms of this Lease are to be performed by Lessee at
Lessee’s sole cost and expense and without any abatement of rent.  If
Lessee fails to pay any sum of money owed to any party other than Lessor, for
which it is liable under this Lease, or if Lessee fails to perform any other
act on its part to be performed hereunder, and such failure continues for ten
(10) days after notice thereof by Lessor, Lessor may, without waiving or
releasing Lessee from its obligations, but shall not be obligated to, make any
such payment or perform any such other act to be made or performed by
Lessee.  Lessee agrees to reimburse

 

25

 

Lessor upon demand for all sums so paid by Lessor and
all necessary incidental costs, together with interest thereon at the Interest
Rate, from the date of such payment by Lessor until reimbursed by Lessee. 
This remedy shall be in addition to any other right or remedy of Lessor set
forth in this Paragraph 22.

 

(f)                                   
Late Payment: 
If Lessee fails to pay any installment of rent within five (5) days of the date
when due or it Lessee fails to make any other payment for which Lessee is
obligated under this Lease within five (5) days of when due, such late amount
will accrue interest at the Interest Rate and Lessee agrees to pay Lessor as
additional rent such interest on such amount from the date such amount becomes
due until such amount is paid.  In addition, Lessee agrees to pay to
Lessor concurrently with such late payment amount, as additional rent, a late
charge equal to four percent (4%) of the amount due to compensate Lessor for
the extra costs Lessor will incur as a result of such late payment. 
Acceptance of any such interest and late charge will not constitute a waiver of
the Lessee’s default with respect to the overdue amount, or prevent Lessor from
exercising any of the other rights and remedies available to Lessor.  If
Lessee incurs a late charge more than three (3) times in any period of twelve
(12) months during the Lease Term, then, notwithstanding that Lessee cures the
late payments for which such late charges are imposed, Lessor will have the
right to require Lessee thereafter to pay all installments of Monthly Base Rent
quarterly in advance throughout the remainder of the Lease Term.

 

(g)                                
Rights and Remedies
Cumulative:  All rights, options and remedies of Lessor contained in this
Lease will be construed and held to be cumulative, and no one of them will be
exclusive of the other, and Lessor shall have the right to pursue any one or
all of such remedies or any other remedy or relief which may be provided by law
or in equity, whether or not stated in this Lease.  Nothing in this
Paragraph 22 will be deemed to limit or otherwise affect Lessee’s
indemnification of Lessor pursuant to any provision of this Lease.

 

23.                                
LANDLORD’S
DEFAULT:  Lessor will not be in default in the performance of any
obligation required to be performed by Lessor under this Lease unless Lessor
falls to perform such obligation within thirty (30) days after the receipt of
written notice from Lessee specifying in detail Lessor’s failure to perform;
provided however, that if the nature of Lessor’s obligation is such that more
than thirty (30) days are required for performance, then Lessor will not be
deemed in default if it commences such performance within such thirty (30) day
period and thereafter diligently pursues the same to completion.  Upon any
default by Lessor, Lessee may exercise any of its rights provided at law or in
equity, subject to the limitations on liability set forth in Paragraph 34 of
this Lease.

 

24.                                
ASSIGNMENT AND
SUBLETTING:

 

(a)                                 
Restriction on
Transfer:  Except as expressly provided in this Paragraph 24, Lessee
will not, either voluntarily or by operation of law, assign or encumber
this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use or occupancy of the Premises by any party other than
Lessee (any such assignment, encumbrance, sublease or the like will sometimes
be referred to as a “Transfer”), without the prior written consent of
Lessor.  Notwithstanding anything to the contrary contained herein, Lessee
may effect a Transfer, with notice to Lessor but without the necessity of
Lessor’s consent and without

 

26

 

giving rise to obligation to make any payments
pursuant to subparagraph (d) below, in connection with any merger,
consolidation or sale of all or substantially all of Lessee’s assets, or to any
corporation or other entity that controls, is controlled by or is under common
control with Lessee.

 

(b)                                
Transfer
Notice:  If Lessee desires to effect a Transfer requiring Lessor’s
consent, then at least thirty (30) days prior to the date when Lessee desires
the Transfer to be effective (the “Transfer Date”), Lessee agrees to give
Lessor a notice (the “Transfer Notice”), stating the name, address and business
of the proposed assignee, sublessee or other transferee (sometimes referred to
hereinafter as “Transferee”), reasonable information (including references)
concerning the character, ownership and financial condition of the proposed
Transferee, the Transfer Date, any ownership or commercial relationship between
Lessee and the proposed Transferee, and the consideration and all other
material terms and conditions of the proposed Transfer, all in such detail
as Lessor may reasonably require.

 

(c)                                 
Lessor’s
Options:  Within fifteen (15) days of Lessor’s receipt of any Transfer
Notice, and any additional information requested by Lessor concerning the
proposed Transferee’s financial responsibility, Lessor will notify Lessee of
its election to do one of the following:  (i) consent to the proposed
Transfer subject to such reasonable conditions as Lessor may impose in
providing such consent; or (ii) refuse such consent, which refusal shall be on
reasonable grounds.

 

(d)                                
Additional
Conditions:  A condition to Lessor’s consent to any Transfer of this Lease
will be the delivery to Lessor of a true copy of the fully executed instrument
of assignment, sublease, transfer or hypothecation, inform and substance
reasonably satisfactory to Lessor.  Lessee agrees to pay to Lessor, as
additional rent, fifty percent (50%) of all sums and other consideration
payable to and for the benefit of Lessee by the assignee or sublessee in excess
of the rent payable under this Lease for the same period and portion of the
Premises.  In calculating excess rent or other consideration which
may be payable to Lessor under this paragraph, Lessee will be entitled to
deduct commercially reasonable third party brokerage commissions and attorneys’
fees and other amounts reasonably and actually expanded by Lessee in connection
with such assignment or subletting if acceptable written evidence of such
expenditures is provided to Lessor.  No Transfer will release Lessee of
Lessee’s obligations under this Lease or alter the primary liability of Lessee
to pay the rent and to perform all other obligations to be performed by Lessee
hereunder.  Lessor may require that any Transferee remit directly to
Lessor on a monthly basis, all monies due Lessee by said Transferee.  Consent
by Lessor to one Transfer will no be deemed consent to any subsequent
Transfer.  In the event of default by any Transferee of Lessee or any
successor of Lessee in the performance of any of the terms hereof, Lessor may
proceed directly against Lessee without the necessity of exhausting remedies
against such Transferee or successor.  If Lessee effects a Transfer or
requests the consent of Lessor to any Transfer (whether or not such Transfer is
consummated), then, upon demand, Lessee agrees to pay Lessor a non-refundable
administrative fee of Five Hundred Dollars ($500.00), plus Lessor’s reasonable
attorneys’ fees.

 

25.          
SUBORDINATION:  Without the necessity of any additional document being
executed by Lessee for the purpose of effecting a subordination, and at the
election of Lessor or any mortgagee or beneficiary with a deed of trust
encumbering the Building and/or the Project,

 

27

 

or any lessor of a ground or underlying lease with
respect to the Building, this Lease will be subject and subordinate at all
times to:  (i) all ground lease or underlying leases which may now exist
or hereafter be executed affecting the Building; and (ii) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed for
which the Building, the Project or any leases thereof, of Lessor’s interest and
estate in any of said items, is specified as security.  Notwithstanding
the foregoing, Lessor reserves the right to subordinate any such ground leases
or underlying leases or any such liens to this Lease.  If any such ground
lease or underlying lease terminates for any reason or any such mortgage or
deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for
any reason, at the election of Lessor’s successor in interest, Lessee agrees to
attorn to and become the tenant of such successor in which event Lessee’s right
to possession of the Premises will not be disturbed as long as Lessee is not in
default under this Lease.  Lessee hereby waives its rights under any law
which gives or purports to give Lessee any right to terminate or otherwise
adversely affect this Lease and the obligations of Lessee hereunder in the
event of any such foreclosure proceeding or sale.  To implement the foregoing
provisions of this Paragraph 25, Lessee and any existing or future mortgagee,
beneficiary or ground or underlying lessor shall execute a commercially
reasonable subordination, attornment and non-disturbance agreement
(“SNDA”).  As to any future mortgage, deed of trust or ground or
underlying lease, Lessee’s covenant to subordinate and attorn is conditioned
upon such SNDA being executed by the mortgagee, beneficiary or ground or
underlying lessor.  As to any existing mortgage, deed of trust or ground or
underlying lease, Lessee shall execute and deliver to Lessor an SNDA
concurrently with the execution and delivery of this Lease, and Lessee’s offer
to lease that is represented by the execution and delivery of this Lease may
only be accepted by the execution and delivery of the SNDA by Lessor and the
existing mortgagee, beneficiary or ground or underlying lessor concurrently
with Lessor’s execution and delivery of this Lease.

 

26.          
ESTOPPEL CERTIFICATE:  Within fifteen (15) days following any written
request which Lessor may make from time to time, Lessee agrees to execute and
deliver to Lessor an estoppel certificate certifying as to such facts
concerning the status of the Lease as may reasonably be required by Lessor or
Lessor’s lender.  Lessor and Lessee intend that any statement delivered
pursuant to this Paragraph 26 may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Building or any interest
therein.  Lessee’s failure to deliver such statement within such time will
be conclusive upon Lessee (i) that this Lease is in full force and effect,
without modification except as may be represented by Lessor, (ii) that there
are no uncured defaults in Lessor’s performance, and (iii) that not more than
one (1) month’s rent has been paid in advance.  Without limiting the
foregoing, if Lessee fails to deliver any such statement within such twenty
(20) day period, Lessor may deliver to Lessee an additional request for such
statement and Lessee’s failure to deliver such statement to Lessor within ten
(10) days after delivery of such additional request will constitute a default
under this Lease.

 

27.          
RULES AND REGULATIONS:  Lessee agrees to faithfully observe and comply
with the “Rules and Regulations,” a copy of which is attached hereto and
incorporated herein by this reference as Exhibit
B, and all reasonable and nondiscriminatory modifications thereof
and additions thereto from time to time put into effect by Lessor.  Lessor
will not be responsible to Lessee for the violation or non-performance by any
other tenant or occupant of the Building of any of the Rules and Regulations,
but Lessor shall use reasonable efforts to enforce any Rules

 

28

 

and Regulations the non-compliance with which
adversely affects Lessee’s use and enjoyment of the Premises.

 

28.          
[INTENTIONALLY DELETED.]

 

29.                                
DEFINITION OF
LANDLORD:  The term “Lessor,” as used in this Lease, so far as covenants
or obligations on the part of Lessor are concerned, means and includes only the
owner or owners, at the time in question, of the fee title of the Premises or
the lessees under any ground lease, if any.  In the event of any transfer,
assignment or other conveyance or transfers of any such title (other than a
transfer for security purposes only), Lessor herein named (and in case of any
subsequent transfers or conveyances, the then grantor) will be automatically
relieved from and after the date of such transfer, assignment or conveyance of
all liability as respects the performance of any covenants or obligations on
the part of Lessor contained in this Lease thereafter to be performed, so long
as the transferee assumes in writing all such covenants and obligations of
Lessor arising after the date of such transfer and Lessor provides a copy of
such written assumption to Lessee on request.  Lessor and Lessor’s
transferees and assignees have the absolute right to transfer all or any
portion of their respective title and interest in the Building, the Premises
and/or this Lease without the consent of Lessee, and such transfer or
subsequent transfer will not be deemed a violation on Lessor’s part of any of
the terms and conditions of this Lease.

 

30.                                
WAIVER:  The
waiver by either party of any breach of any term, covenant or condition herein
contained will not be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant or condition herein contained, nor will any
custom or practice which may develop between the parties in the administration
of the terms hereof be deemed a waiver of or in any way affect the right of
either party to insist upon performance in strict accordance with said
terms.  The subsequent acceptance of rent or any other payment hereunder
by Lessor will not be deemed to be a waiver of any preceding breach by Lessee
of any term, covenant or condition of this Lease, other than the failure of
Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge
of such preceding breach at the time of acceptance of such rent.  No
acceptance by Lessor of a lesser sum than the basic rent and additional rent or
other sum then due will be deemed to be other than on account of the earliest
installment if such rent or other amount due, nor will any endorsement or
statement on any check or any letter accompanying any check be deemed an accord
and satisfaction, and Lessor may accept such check or payment without prejudice
to Lessor’s right to recover the balance of such installment or other amount or
pursue any other remedy provided in this Lease.  The consent or approval
of Lessor to or of any act by Lessee requiring Lessor’s consent or approval
will not be deemed to waive or render unnecessary Lessor’s consent or approval
to or of any subsequent similar acts by Lessee.

 

31.                                
PARKING:  So
long as this Lease is in effect, Lessor grants to Lessee a license to use the
number and type of parking spaces designated in Subparagraph 1(l) subject to
the terms and conditions of this Paragraph 31 and the Rules and
Regulations.  So long as this Lease is in effect, Lessee’s visitors and
guests will be entitled to use those specific parking areas which are
designated for short-term visitor parking and which are located within the
parking area(s) that serve the Building.  Lessee will not use or allow any
of Lessee’s employees or guests to use any parking spaces which have been
specifically assigned by Lessor to other tenants or occupants or

 

29

 

for other uses such as visitor parking or which have
been designated by any governmental entity as being restricted to certain
uses.  Lessor may assign any unreserved and unassigned parking spaces
and/or make all or any portion of such spaces reserved, if Lessor reasonably
determines that it is necessary for orderly and efficient parking or for any
other reasonable reason.  Except in connection with an assignment or
sublease which is expressly permitted under this Lease, Lessee’s parking rights
and privileges described herein are personal to Lessee and may not be assigned
or transferred, or otherwise conveyed, without Lessor’s prior written consent,
which consent Lessor may withhold in its sole and absolute discretion.  In
any event, under no circumstances may Lessee’s parking rights and privileges be
transferred, assigned or otherwise conveyed separate and apart from Lessee’s
interest in this Lease.  Lessee shall comply with all rules and regulations
regarding parking set forth in this Lease and the Rules and Regulations and
Lessee agrees to cause its employees, subtenants, assignees, contractors
suppliers, customers and invitees to comply with such rules and
regulations.  Lessor reserves the right from time to time to modify and/or
adopt such other reasonable and non-discriminatory rules and regulations for
the parking facilities as it deems reasonably necessary for the operation of
the parking facilities.

 

32.                                
FORCE MAJEURE: 
If either Lessor or Lessee is delayed, hindered in or prevented from the
performance of any act required under this Lease by reason of strikes,
lock-outs, labor troubles, inability to procure standard materials, failure of
power, restrictive governmental laws, regulations or orders or governmental
action or inaction (including failure, refusal or delay in issuing permits,
approvals and/or authorizations which is not the result of the action or
inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption or any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act.  The provisions of this
Paragraph 32 will not operate to excuse Lessee from prompt payment of rent or
any other payments required under the provisions of the Lease.

 

33.                                
SIGNS:  Lessor
will designate the location on the Premises, if any; for one or more Lessee
identification sign(s).  Lessee agrees to have Lessor install and maintain
Lessee’s identification sign(s) in such designated location in accordance with
this Paragraph 33 at Lessee’s sole cost and expense.  Lessee has no right
to install Lessee identification signs in any other location in, on or about
the Premises or the Project and will not display or erect any other signs,
displays or other advertising materials that are visible from the exterior of
the Building or from within the Building in any interior or exterior common
areas.  The size, design, color and other physical aspects or any and all
permitted sign(s) will be subject to (i) Lessor’s written approval prior to
installation, which approval may be withheld in Lessor’s discretion, (ii) any
covenants, conditions or restrictions governing the Premises, and (iii) any
applicable municipal or governmental permits and approvals.  Lessee will
be solely responsible for all costs for installation, maintenance, repair and
removal of any Lessee identification sign(s).  If Lessee fails to remove
Lessee’s sign(s) upon termination of this Lease and repair any damage caused by
such removal, Lessor may do so at Lessee’s sole cost and expense.  Lessee
agrees to reimburse Lessor for all costs incurred by Lessor to effect any
installation, maintenance or removal on Lessee’s account, which amount will be
deemed additional rent, and may include, without limitation, all sums
disbursed, incurred or deposited by Lessor including Lessor’s costs, expenses
and actual

 

30

 

attorneys’ fees with interest thereon at the Interest
Rate from the date of Lessor’s demand until paid by Lessee.  Except in
connection with any Transfer that does not require Lessor’s consent under
Paragraph 24(a), any sign rights granted to Lessee under this Lease are
personal to Lessee and may not be assigned, transferred or otherwise conveyed
to any assignee or subtenant of Lessee without Lessor’s prior written consent,
which consent Lessor may withhold in its sole and absolute discretion.

 

34.                                
LIMITATION ON
LIABILITY:  In consideration of the benefits accruing hereunder, Lessee on
behalf of itself and all successors and assigns of Lessee covenants and agrees
that, in the event of any actual or alleged failure, breach or default
hereunder by Lessor:  (a) Lessee’s recourse against Lessor for monetary
damages will be limited to Lessor’s interest in the Building including, subject
to the prior rights of any Mortgagee, Lessor’s interest in the rents of the
Building and any insurance proceeds payable to Lessor; (b) except as may be
necessary to secure jurisdiction, no partner of Lessor shall be sued or named
as a party in any suit or action and no service of process shall be made
against any partner of Lessor, (c) no partner of Lessor shall be required to
answer or otherwise plead to any service of process; (d) no judgment will be
taken against any partner of Lessor and any judgment taken against any partner
of Lessor may be vacated and set aside at any time after the fact; (e) no writ
of execution will be levied against the assets of any partner of Lessor; (f)
the obligations under this Lease do not constitute personal obligations of the individual
partners, directors, officers or shareholders of Lessor, and Lessee shall no
seek recourse against the individual partners, directors, officers of
shareholders of Lessor or any of their personal assets for satisfaction of any
liability in respect to this Lease; and (g) these covenants and agreements are
enforceable both by Lessor and also any partner of Lessor.

 

35.                                
FINANCIAL
STATEMENTS:  Prior to the execution of this Lease by Lessor and at any
time during the Term of this Lease in connection with the sale or refinancing
of the Project, upon ten (10) days prior written notice from Lessor, Lessee
agrees to provide Lessor with a current financial statement for Lessee and any
guarantors of Lessee and financial statement for the two (2) years prior to the
current financial statement year for Lessee and any guarantors of Lessee. 
Such statements are to be prepared in accordance with generally accepted
accounting principles and, if such is the normal practice of Lessee, audited by
an independent certified public accountant.

 

36.                                
QUIET
ENJOYMENT:  Lessor covenants and agrees with Lessee that upon Lessee
paying the rent required under this Lease and paying all other charges and
performing all of the covenants and provisions on Lessee’s part to be observed
and performed under this Lease, Lessee may peaceably and quietly have, hold and
enjoy the Premises in accordance with this Lease.

 

37.                                
MISCELLANEOUS:

 

(a)                                 
Governing Laws: 
This Lease shall be governed by and construed solely pursuant to the laws of
the State of California.

 

(b)                                
Successors and
Assigns:  Except as otherwise provided in this Lease, all of the
covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to

 

31

 

the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.

 

(c)                                 
Professional Fees and
Costs:  If either Lessor or Lessee should bring suit against the other
with respect to this Lease, then all cost and expenses, including without
limitation, actual professional fees and costs such as appraiser, accountants’
and attorneys’ fees and costs, incurred by the party which prevails in such
action, whether by final judgment or out of court settlement, shall be paid by
the other party, which obligation on the part of the other party shall be
deemed to have accrued on the date of the commencement of such action and shall
be enforceable whether or not the action is prosecuted to judgment.  As
used herein, attorneys’ fees and costs shall include, without limitation,
attorneys’ fees, costs and expenses incurred in connection with any (i) post
judgment motions; (ii) contempt proceeding; (iii) garnishment, levy, and debtor
and third party examination; (iv) discovery, and (v) bankruptcy litigation.

 

(d)                                
Terms and
Headings:  The words “Lessor” and “Lessee” as used herein shall include
the plural as well as the singular.  Words used in any gender include
other genders.  The paragraph headings of this Lease are not a part of
this Lease and shall have no effect upon the construction or interpretation of
any part hereof.

 

(e)                                 
Time:  Time is
of the essence with respect to the performance of every provision of this Lease
in which time of performance is a factor.

 

(f)                                   
Prior Agreement;
Amendments:  This Lease constitutes and is intended by the parties to
be a final, complete and exclusive statement of their entire agreement with
respect to the subject matter of this Lease.  This Lease supersedes any
and all prior and contemporaneous agreements and understandings of any kind
relating to the subject matter of this Lease.  There are no other
agreements, understandings, representations, warranties, or statements, either
oral or in written form, concerning the subject matter of this Lease.  No
alteration, modification, amendment or interpretation of this Lease shall be
binding on the parties unless contained in a writing which is signed by both
parties.

 

(g)                                
Separability: 
The Provisions of this Lease shall be considered separable such that if any
provision or part of this Lease is ever held to be invalid, void or illegal
under any law or ruling, all remaining provisions of this Lease shall remain in
full force and effect to the maximum extent permitted by law.

 

(h)                                
Recording: 
Neither Lessor nor Lessee shall record this Lease nor a short form memorandum
thereof without the consent of the other.

 

(i)                                    
Counterparts: 
This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement.

 

(j)                                    
Nondisclosure of
Lease Terms:  Lessee acknowledges and agrees that the terms of this Lease
are confidential and constitute proprietary information of Lessor. 
Disclosure of the terms could adversely affect the ability of Lessor to
negotiate other leases and impair Lessor’s relationship with other tenants. 
Accordingly, Lessee agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper of other
publication or any

 

32

 

other tenant or apparent prospective tenant of the
Building or other portion of the Project, or real estate agent, either directly
or indirectly, without the prior written consent of Lessor, provided, however,
that Lessee may disclose the terms to prospective subtenants or assignees under
this Lease.

 

38.                                
EXECUTION OF LEASE:

 

(a)                                 
Joint and Several
Obligations:  If more than one person or entity executes this Lease as
Lessee, their execution of the Lease will constitute their covenant and
agreement that (i) each of them is jointly and severally liable for the
keeping, observing and performing of all of the terms, covenants, conditions,
provisions and agreements of this Lease to be kept, observed and performed by
Lessee, and (ii) the term “Lessee” as used in this Lease means and includes
each of them jointly and severally.  The act of or notice from, or notice
or refund to, or the signature of any one or more of them, with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
expiration, termination or modification of this Lease as Lessee with the same
force and effect as if each and all of them had so acted or so given or
received which notice or refund of so signed.

 

(b)                                
Lessee as Corporation
or Partnership:  If Lessee executes this Lease as a corporation or
partnership, then Lessee represents and warrants that such entity is duly qualified
and in good standing to do business in California and that the individuals
executing this Lease on Lessee’s behalf are duly authorized to execute and
deliver this Lease on its behalf, and in the case of a corporation, in
accordance with a duly adopted resolution of the board of directors of Lessee,
a copy of which is to be delivered to Lessor on execution hereof, if requested
by Lessor, and in accordance with the by-laws of Lessee, and, in the case of a
partnership, in accordance with the partnership agreement and the most current
amendments thereto, if any, copies of which are to be delivered to Lessor on
execution hereof, if requested by Lessor, and that this Lease is binding upon
Lessee in accordance with its terms.

 

(c)                                 
Examination of
Lease:  Submission of this instrument by Lessor to Lessee for examination
or signature by Lessee does not constitute a reservation of or option for
lease, and it is not effective as a lease or otherwise until execution by and
delivery to both Lessor and Lessee.

 

39.                                
Option
to Extend. 
Lessor hereby grants to Lessee an option (the “Option”) to extend the term of
the Lease, for an additional period of three (3) years (the “Option
Term”).  The Option must be exercised, if at all, by written notice (an
“Option Notice”) delivered by Lessee to Lessor not later than six (6) months
prior to the end of the term then in effect.  Further, the Option shall
not be deemed to be properly exercised if, as of the date of the Option Notice
or at the end of the term then in effect, Lessee (i) is in default under the
Lease, which default has not been cured as of the date in question, (ii) has
assigned all or any portion of this Lease or its interest therein except in a transaction
that does not require Lessors consent, or (iii) has sublet fifty percent (50%)
or more of the Premises except in a transaction that does not require Lessor’s
consent.  Provided Lessee has properly and timely exercised the Option,
the term of the Lease shall be extended by the Option Term, and all terms,
covenants and conditions of the Lease shall remain unmodified and in full force
and effect, except that (y) Lessee shall pay initial base rent determined as
set forth below in this paragraph, and (z) after the exercise of the Option,
Lessee

 

33

 

shall have no options remaining.  Lessor shall
have no obligation whatsoever in connection with any extension of the term of
this Lease to remodel, alter or improve the Premises for use by Lessee, to
provide any improvement or construction allowance to Lessee, or to pay or
reimburse Lessee for any remodeling, alterations or improvements to the
Premises.  The initial base rent during the Option Term shall be ninety-five
percent (95%) of the fair market rental value of the Premises as of the
commencement of the Option Term, determined as provided below.  As used
herein, “fair market rental value” shall mean the projected prevailing rental
rate as of the first day of the Option Term for similar commercial space
improved or presumed to be improved with Lessee improvements of substantially
similar age, quality and layout as then existing in the Premises and situated
in similar office buildings in the Sierra Point area of San Mateo County,
including without limitation annual increases in the base rent, taking into
account all relevant factors, including term, the presence or absence of
leasing commissions, and the presence or absence of tenant concessions. 
Promptly after delivery of the Option Notice, Lessor and Lessee shall meet and
confer and attempt to agree upon the fair market rental value of the
Premises.  If they are notable to agree, either party may give written
notice to the other that the fair market rental value is to be determined by
appraisal as provided herein.  Within twenty (20) days following such
notice, each party shall by written notice to the other appoint an independent
and qualified appraiser.  Each of such appraisers shall, within thirty
(30) days, following appointment, give written notice to both parties of the
appraiser’s determination of fair market rental value.  If the
determinations of such appraisers are in agreement, the initial base rent for
the Option Term shall be ninety-five percent (95%) of the fair market rental
value so determined.  If the difference between such determinations is
five percent (5%) of the higher appraisal or less, the average of the two
determinations shall be the fair market rental value.  If the difference
is more than such percentage, then during the ten-day period following the
appraisers’ determinations, Lessor and Lessee shall again meet and confer and
attempt to agree upon the fair market rental value of the Premises.  If
they are not able to agree, the two appraisers shall appoint an independent
M.A.I. appraiser with not less than five (5) years experience with office
leases in the area in which the building is located.  Within thirty (30)
days following appointment, the third appraiser shall on written notice to the
parties determine the fair market rental value, which determination shall be
binding upon the parties.  Each party shall pay the fees and expenses of
the appraiser appointed by it and one-half of the fees and expenses of the
third appraiser.  If base rent has not been determined as of the
commencement of the Option Term, Lessee shall pay the Base Rent in the amount
specified by Lessor until base rent is finally determined.  Upon such
determination any overpayment or underpayment of base rent shall be reconciled.

 

40.                                
Right of First
Offer.  Lessor shall notify Lessee in the event any space in the building
becomes available for lease during the term hereof.  Subject to any prior
existing rights of other tenants in the building, Lessee shall have the first
opportunity to negotiate with Lessor to lease such available space.  If
(a) Lessee does not respond to Lessor’s notice of availability within five (5)
days of its receipt thereof, (b) Lessor and Lessee do not sign a letter of
intent as to the basic economic terms for the lease of the available space
within ten (10) days of Lessee’s receipt of the notice of availability, or (c)
Lessor and Lessee do not sign a lease for the available space within thirty
(30) days of Lessee’s receipt of the notice of availability, then in any such
event Lessor shall be free to market and lease the available space to any other
prospective tenant without Lessee having any further rights with respect
thereto until the space again becomes

 

34

 

available for lease.  Space that is currently
available within the building as of the Commencement Date shall not be subject
to the terms of this paragraph.

 

IN WITNESS WHEREOF, the
parties have caused this Lease to be duly executed by their duly authorized
representatives as of the date first above written.

 

	
  LESSOR:

  	
   

  
	
   

  	
   

  
	
  SIERRA POINT INVESTORS,
  LLC

  	
   

  
	
   

  	
   

  
	
  By.

  	
  Sierra Point
  Management, Inc.

  	
   

  
	
   

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Jim
  Blake

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
    EVP

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LESSEE:

  	
   

  
	
   

  	
   

  
	
  IGN ENTERTAINMENT, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Mark
  Jung

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
      CEO

  	
   

  	
   

  

 

35

 

EXHIBIT A

 

FLOOR PLAN OF
PREMISES

 

[Graphic showing
“Second Floor Plan”]

 

 

 

EXHIBIT B

 

RULES AND
REGULATIONS

 

A.                                  
General
Rules and Regulations.  The following rules and regulations govern the use of the
Building and the Project Common Areas.  Lessee will be bound by such rules
and regulations and agrees to cause Lessee s authorized users, its employees,
sublessees, assignees, contractors, suppliers, customers and invitees to
observe the same.

 

1.                                      
Except as
specifically provided in the Lease to which these Rules and Regulations are
attached, no sign, placard, picture, advertisement, name or notice may be
installed or displayed on any part of the outside or inside of the Building or
the Project without the prior written consent of Lessor.  Lessor will have
the right to remove, at Lessee’s expense and without notice, any sign installed
or displayed in violation of this rule.  All approved signs or lettering
on doors and walls are to be printed, painted, affixed or inscribed at the
expense of Lessee and under the direction of Lessor by a person or company
designated or approved by Lessor.

 

2.                                      
If Lessor objects in
writing to any curtains, blinds, shades, screens or hanging plants or other
similar objects attached to or used in connection with any window or door of
the Premises, or placed on any windowsill, which is visible from the exterior
of the Premises, Lessee will immediately discontinue such use.  Lessee
agrees not to place anything against or near glass partitions or doors or
windows that may appear unsightly from outside the Premises including from
within any interior common areas.

 

3.                                      
Lessee will not
obstruct any sidewalks, halls, passages, exits, entrances, or stairways of the
Project.  The halls, passages, exits, entrances and stairways are not open
to the general public, but are open, subject to reasonable regulation, to
Lessee’s business invitees.  Lessor will in all cases retain the right to
control and prevent access thereto of all persons whose presence in the
reasonable judgment of Lessor would be prejudicial to the safety, character,
reputation and interest of the Project and its Lessees, provided that nothing
herein contained will be construed to prevent such access to persons with whom
any Lessee normally deals in the ordinary course of its business, unless such
persons are engaged in illegal or unlawful activities.  No Lessee and no
employee or invitee of any Lessee will go on the roof of the Building.

 

4.                                      
Lessee will not
obtain for use on the Premises ice, drinking water, food, food vendors,
beverage, towel or other similar services or accept barbering or bootblacking
service upon the Premises, except at such reasonable hours and under such
reasonable regulations as may be fixed by Lessor.  Lessor expressly
reserves the right to absolutely prohibit solicitation, canvassing,
distribution of handbills or any other written material, peddling, sales and
displays of products, goods and wares in all portions of the Project except as
may be expressly permitted under the Lease.  Lessor reserves the right to
restrict and regulate the use of the common areas of the Project and Building
by invitees of Lessees providing services to Lessees on a periodic or daily
basis including food and beverage vendors.  Such restrictions may include
limitations on time, place, manner and duration of access to a Lessee’s
premises for such purposes.

 

1

 

 

5.                                      
Lessor reserves the
right to require Lessee to periodically provide Lessor with a written list of
any and all business invitees which periodically or regularly provide goods and
services to Lessees at the Premises.  Lessor reserves the right to
preclude all vendors from entering or conducting business within the Building
and the Project if such vendors are not listed on a Lessee’s list of requested
vendors.

 

6.                                      
Lessor reserves the right
to exclude from the Building between the hours of 6:00 p.m., and 8:00 a.m.
the following business day, or such other hours as may be established from time
to time by Lessor, and on Saturdays, Sundays and legal holidays, any person
unless that person is known to the person or employee in charge of the Building
or has a pass or is properly identified.  Lessee will be responsible for
all persons for whom it requests passes and will be liable to Lessor for all
acts of such persons.  Lessor will not be liable for damages for any error
with regard to the admission to or exclusion from the Building of any
person.  Lessor 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.

 

7.                                      
The directory of the
Building or the Project will be provided exclusively for the display of the
name and location of Lessees only and Lessor reserves the right to exclude any
other names therefrom.

 

8.                                      
All cleaning and
janitorial services for the Project and the Premises will be provided
exclusively through Lessor, and except with the written consent of Lessor, no
person or persons other than those approved by Lessor will be employed by
Lessee or permitted to enter the Building for the purpose of cleaning the
same.  Lessee will not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises.

 

9.                                      
Lessor will furnish
Lessee, free of charge, with two keys to each door lock in the Premises. 
Lessor may make a reasonable charge for any additional keys.  Lessee shall
not make or have made additional keys, and Lessee shall not alter any lock or
install any new additional lock or bolt on any door of the Premises. 
Lessee, upon the termination of its tenancy, will deliver to Lessor the keys to
all doors which have been furnished to Lessee, and in the event of loss of any
keys so furnished, will pay Lessor therefor.

 

10.                                
If Lessee requires
telegraphic, telephonic, burglar alarm, satellite dishes, antennae or similar
services, it will first obtain Lessor’s approval, and comply with, Lessor’s
reasonable rules and requirements applicable to such services, which may
include separate licensing by, and fees paid to, Lessor.

 

11.                                
No equipment,
materials, furniture, packages, supplies, merchandise or other property will be
received in the Building except between such hours as may be designated by
Lessor.  Lessee’s initial move in and subsequent deliveries of bulky
times, such as furniture, safes and similar items will, unless others agreed in
writing by Lessor, be made during the hours of 6:00 p.m. to 6:00 a.m. or on
Saturday or Sunday.  Deliveries during normal office hours shall be
limited to normal office supplies and other small items.  No deliveries
will be made which impede or interfere with other Lessees or the operation of
the Building.

 

2

 

12.                                
Lessee will 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. 
Lessor will have the right to reasonably prescribe the weight, size and
position of all safes, heavy equipment, files, materials, furniture or other
property brought into the Building.  Heavy objects will, if considered necessary
by Lessor, stand on such platforms as determined by Lessor to be necessary to
properly distribute the weight, which platforms will be provided at Lessee’s
expense.  Business machines and mechanical equipment belonging to Lessee,
which cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to any
Lessees in the Building or Lessor, are to be placed and maintained by Lessee,
at Lessee’s expense, on vibration eliminators or other devises sufficient to
eliminate noise or vibration.  Lessee will be responsible for all
structural engineering required to determine structural load, as well as the
expense thereof.  The person employed to move such equipment in or out of the
Building must be reasonably acceptable to Lessor.  Lessor 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 will repaired at the expense of Lessee.

 

13.                                
Lessee will 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.  Lessee will 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
Lessor or other occupants of the Building by reason of noise, odors or
vibrations, nor will Lessee bring into or keep in or about the Premises any
birds or animals.

 

14.                                
Lessee will not use
any method of heating or air conditioning other than that supplied by Lessor
without Lessors prior written consent.

 

15.                                
Lessee will not waste
electricity, water or air conditioning and agrees to cooperate fully with
Lessor to assure the most effective operation of the Building’s heating and air
conditioning and to comply with any governmental energy-saving rules, laws or
regulations of which Lessee has actual notice, and will refrain from attempting
to adjust controls.

 

16.                                
Lessor reserves the right,
exercisable without notice and without liability to Lessee, to change the name
and street address of the Building.  Without the written consent of
Lessor, Lessee will not use the name of the Building or the Project in
connection with or in promoting or advertising the business of Lessee except as
Lessee’s address.

 

17.                                
Lessee will close and
lock the doors of its Premises and entirely shut off all water faucets or other
water apparatus, and lighting or gas before Lessee and its employees leave the
Premises.  Lessee will be responsible for any damage or injuries sustained
by other Lessees or occupants of the Building or by Lessor for noncompliance
with this rule.

 

18.                                
The toilet rooms, toilets,
urinals, wash bowls and other apparatus will not be used for any purpose other
than that for which they were constructed and no foreign substance of any kind
whatsoever shall be thrown therein.  The expense of any breakage, stoppage
or damage

 

3

 

resulting from any violation of this rule will be
borne by the Lessee who, or whose employees or invitees, break this rule. 
Cleaning of equipment of any type is prohibited.

 

19.                                
Lessee will not sell,
or permit the sale at retail of newspapers, magazines, periodicals, theater
tickets or any other good or merchandise to the general public in or on the
Premises.  Lessee will not use the Premises for any business or activity
other than that specifically provided for in this Lease.  Lessee will not
conduct, nor permit to be conducted, either voluntarily or Involuntarily, any
auction upon the Premises without first having obtained Lessor’s prior written
consent, which Lessor may withhold in its sole and absolute discretion.

 

20.                                
Lessee will not
install any radio or television antenna, loudspeaker, satellite dishes or other
devices on the roof(s) or exterior walls of the Building or the Project without
Lessor’s consent, and subject to approval of Lessee’s plans, which approval
shall not be unreasonably withheld, Lessor hereby consents to Lessee’s
installation of a dish antenna on the roof of the Building, and the
installation of cabling in the a vertical riser connecting the antenna signal
to the Premises.  Lessee will not interfere with radio or television
broadcasting or reception from or in the Project or elsewhere.

 

21.                                
Except for the
ordinary hanging of pictures and wall decorations, Lessee will not mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof, except in accordance with the
provisions of the Lease pertaining to alterations.  Lessor reserves the
right to direct electricians as to where and how telephone and telegraph wires
are to be introduced to the Premises.  Lessee will not cut or bore holes
for wires.  Lessee will not affix any floor covering to the floor of the
Premises in any manner except as approved by Lessor.  Lessee shall repair
any damage resulting from noncompliance with this rule.

 

22.                                
Lessee will not
install, maintain or operate upon the Premises any vending machines without the
written consent of Lessor.

 

23.                                
Lessor reserves the
right to exclude or expel from the Project any person who, in Lessor’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 Building.

 

24.                                
Lessee will store all
its trash and garbage within its Premises or in other facilities provided by
Lessor.  Lessee will 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 is to be made on
accordance with directions issued from time to time by Lessor.

 

25.                                
The Premises will not
be used for lodging or for the storage of merchandise held for sale to the
general public, or for lodging or for manufacturing of any kind, nor shall the
Premises be used for any improper, immoral or objectionable purpose.  No
cooking will be done or permitted on the Premises without Lessor’s consent,
except the use by Lessee of Underwriters’ Laboratory approved equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted,
and the use of a microwave oven for employees use will be

 

4

 

permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.

 

26.                                
Neither Lessee nor
any of Its employees, agents, customers and invitees may use in any space or in
the public halls of the Building or the Project any hand truck except those
equipped with rubber tires and side guards or such other material-handling equipment
as Lessor may approve.  Lessee will not bring any other vehicles of any
kind into the Building.

 

27.                                
Lessee agrees to
comply with all safety, fire protection and evacuation procedures and
regulations established by Lessor or any governmental agency.

 

28.                                
Lessee assume any and
all responsibility for protecting its Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed.

 

29.                                
To the extent Lessor
reasonably deems it necessary to exercise exclusive control over any portions
of the Common Areas for the mutual benefit of the Lessees in the Building or
the Project, Lessor may do so subject to reasonable, non-discriminatory
additional rules and regulations.

 

30.                                
Lessor prohibits
smoking in the Building.

 

31.                                
These Rules and
Regulations are in addition to, and will not be construed to in any way modify
or amend, in whole or in part, the terms, covenants, agreements and conditions
of the Lease.  Lessor may waive any one or more of these Rules and
Regulations for the benefit of Lessee of any other Lessee, but no such waiver
by Lessor will be construed as a waiver of such Rules and Regulations in favor
of Lessee or any other Lessee, nor prevent Lessor from thereafter enforcing any
such Rules and Regulations against any or all of the Lessees of the Project.

 

32.                                
Lessor reserves the
right to make such other and reasonable and non-discriminatory Rules and
Regulations as, in its judgment, may from time to time be needed for safety and
security, for care and cleanliness of the Project and for the preservation of
good order therein.  Lessee agrees to abide by all such Rules and
Regulations herein above stated and any additional reasonable and
non-discriminatory rules and regulations which are adopted.  Lessee is
responsible for the observance of all the foregoing rules by Lessee’s
employees, agents, clients, customers, invitees and guests.

 

B.                                    
Parking
Rules and Regulations.  The following rules and regulations govern the use of the
parking facilities which serve the Building.  Lessee will be bound by such
rules and regulations and agrees to cause its employees, sublessees, assignees,
contractors, suppliers, customers and invitees to observe the same:

 

1.                                      
Lessee will not
permit or allow any vehicles that belong to or are controlled by Lessee or
Lessee’s employees, sublessees, customers or invitees to be loaded, unloaded or
parked in areas other than those designated by Lessor for such
activities.  Lessee will strictly observe, and cause its employees to
observe, the limitations on number of parking spaces assigned to Lessee. 
No vehicles are to be left in the parking areas overnight and no vehicles are

 

5

 

to be parked in the parking areas other than normally
sized passenger automobiles, motorcycle and pick-up trucks.  No extended
term storage of vehicles is permitted.

 

2.                                      
Vehicles must be
parked entirely within painted stall lines of a single parking stall.

 

3.                                      
All directional signs
and arrows must be observed.

 

4.                                      
The speed limit
within all parking areas shall be five (5) miles per hour.

 

5.                                      
Parking is
prohibited:  (a) in areas not striped for parking; (b) in aisles or on
ramps; (c) where “no parking” signs are posted; (d) in cross-hatched areas; and
(e) in such other areas as may be designated from time to time by Lessor.

 

6.                                      
Lessor reserves the
right, without cost or liability to Lessor, to tow any vehicle if such
vehicle’s audio theft alarm system remains engaged for an unreasonable period
of time.

 

7.                                      
Washing, waxing,
cleaning or servicing of any vehicle in any area not specifically reserved for
such purpose is prohibited.

 

8.                                      
Lessor may refuse to
permit any person to park in the parking facilities who violates these rules with
unreasonable frequency, and any violation of these rules shall subject the
violator’s car to removal, at such car owner’s expense.  Lessee agrees to
use its best efforts to acquaint its employees, sublessees, assignees,
contractors, suppliers, customers and invitees with these parking provisions,
rules and regulations.

 

9.                                      
Lessor reserves the
right, without cost or liability to Lessor, to tow any vehicles which are used
or parked in violation of these rules and regulations.

 

10.                                
Lessor reserves the
right from time to time to modify and/or adopt such other reasonable and
nondiscriminatory rules and regulations for the parking facilities as it deems
reasonably necessary for the operation of the parking facilities.

 

6

 

EXHIBIT C

 

APPROVED TENANT
IMPROVEMENTS

 

[Graphic showing
approved tenant improvements on “Second Floor Plan”]

 

 

 

FIRST
AMENDMENT TO OFFICE LEASE

 

This First Amendment to
Office Lease (this “Amendment”), dated as of the 16th day of June, 2004, is
made by and between SIERRA POINT INVESTORS, LLC, a California limited liability
company (“Landlord”), and IGN ENTERTAINMENT, INC. (“Tenant”).

 

RECITALS:

 

This Amendment is entered
into upon the basis of and with respect to the following facts, understandings
and intentions of the parties:

 

A.                                  
Under a certain
Office Lease (the “Lease”), dated October 20, 2003, Landlord leased to
Tenant certain premises comprising the entire second floor of the building
located at 8000 Marina Boulevard, Brisbane, California (the “Building”).

 

B.                                    
Landlord and Tenant
now desire to modify the Lease to provide for an expansion of the leased
Premises to include the Additional Premises (as defined below), and to provide
for certain other modifications to the Lease, all upon the terms and conditions
more particularly set forth in this Amendment.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree to modify the Lease, as follows:

 

1.                                      
Effective Date.  This Amendment shall be effective
as of August 1, 2004 (the “Effective Date”).

 

2.                                      
Defined Terms.  Terms which are defined in the
Lease shall have the same meaning when used in this Amendment unless otherwise
expressly provided herein.

 

3.                                      
Expansion Premises.  Upon and as of the Effective
Date, the “Premises” as defined in the Lease shall mean the original Premises
and the Additional Premises for all purposes except as otherwise set forth
herein.  The “Additional Premises” shall mean and refer to the entire
fourth (4th) floor of the Building, comprised of approximately
25,028 rentable square feet of area.

 

4.                                      
Rent for
Additional Premises. 
The Base Rent due under the Lease with respect to the Additional Premises will
be as follows:

 

	
  Date

  	
   

  	
  Base
  Monthly Rent

  	
   

  
	
  August 1, 2004 - November 30, 2004

  	
   

  	
  $

  	
  0

  	
   

  
	
  December 1, 2004 - July 31, 2005

  	
   

  	
  $

  	
  43,799

  	
   

  
	
  August 1, 2005 - July 31, 2006

  	
   

  	
  $

  	
  45,050

  	
   

  
	
  August 1, 2006 - July 31, 2007

  	
   

  	
  $

  	
  46,302

  	
   

  
	
  August 1, 2007 - July 31, 2008

  	
   

  	
  $

  	
  47,553

  	
   

  
	
  August 1, 2008 - July 31, 2009

  	
   

  	
  $

  	
  50,056

  	
   

  
	
  August 1, 2009 - December 31, 2009

  	
   

  	
  $

  	
  53,810

  	
   

  

 

 

 

1

 

 

5.                                      
Lessee’s
Percentage. 
Lessee’s Percentage shall be 25.75%.

 

6.                                      
Furniture.  Tenant shall have use of the
existing furniture owned by Landlord and located within the Additional Premises
during the Term, as outlined in Schedule 1 hereto.  Provided Tenant
remains in possession of the Additional Premises and occupies for its own use
not less than 15,000 s.f. of the Additional Premises throughout the term hereof
with no uncured default under the Lease, Landlord shall provide Tenant the
option to purchase such furniture at Lease expiration for the sum of Ten
Dollars ($10.00).

 

7.                                      
Tenant
Improvements. 
Landlord shall provide the Additional Premises to Tenant in their existing AS
IS condition.  Landlord acknowledges that Tenant and the prior occupant of
the floor desire to install a demising wall to permit a sublease arrangement
for sharing of the floor.  Subject to Landlord’s prior approval of the
plans therefore, Landlord shall permit such demising wall to be installed at
the sole cost of Tenant and/or its sublessee, and at the election of Tenant the
demising wall may be installed prior to the Effective Date subject to Tenant’s
receipt of necessary governmental permits for the construction.  Tenant
shall not be obligated to remove the demising wall at the expiration or earlier
termination of the Lease.  Any alterations or improvements to the
Additional Premises shall require Landlord’s prior approval, not to be
unreasonably withheld, and shall be subject to the terms and conditions of the
Lease.

 

8.                                      
Parking.  Tenant shall have the right to
use an additional eighty-three (83) unassigned parking spaces at the Project,
for a total of one hundred sixty-six (166) spaces, subject to and upon the
terms and conditions of the Lease.

 

9.                                      
Security Deposit.  Upon Tenant’s execution hereof,
Tenant shall tender to Landlord payment of the first month’s rent (for
December, 2004) and an additional security deposit in the amount of $53,810,
for a total security deposit of $111,372.

 

10.                                
Signage.  Landlord shall provide Tenant
with building standard identification on the Building multi-tenant directory on
the ground floor lobby.  Notwithstanding anything to the contrary
contained in Paragraph 33 of the Lease, Landlord will permit Tenant to install
not more than two (2) exterior parapet level Building signs, so long as (i)
there is no uncured default in respect of the monetary obligations under the
Lease, and (ii) Lessee leases at least two (2) full floors of the building and
occupies for its own use not less than 40,000 square feet of space within the
Premises.  Said signage shall be subject to the prior approval of all governmental
agencies and Landlord’s review of design criteria and the placement of such
sign(s).  The signage rights provided herein shall be subject to existing
rights of existing tenants in the Building as of the date hereof. 
Tenant’s ability to obtain approval for such signage is not a condition to the
effectiveness of this Amendment.

 

11.                                
Sublease.  Landlord acknowledges that Tenant
intends to sublet to Harcourt, Inc. the portion of the Additional Premises
shown on Exhibit A attached hereto, the rentable area of which is approximately
7,989 s.f.  Landlord hereby consents to such sublease, subject to its
review of a copy of the fully executed sublease instrument, and waives the
administrative fee otherwise due under Paragraph 24(d) of the Lease with
respect to such sublease.

 

2

 

12.                                
Conditions to this
Amendment. 
This Amendment is expressly made subject to satisfaction of the following
conditions precedent: (i) termination of the existing lease with Classroom
Connect on terms and conditions acceptable to Landlord, (ii) Wiley Technology
waiving their first right of refusal to negotiate a lease for the Additional
Premises, and (iii) Lender approval of the final terms of this
Amendment.  Landlord shall use its best efforts to cause the foregoing
conditions to be satisfied by July 30, 2004, but if they are not so
satisfied by such date, Tenant may terminate this Amendment by notice of
termination given to Landlord at any time thereafter but prior to the
satisfaction of such conditions.

 

13.                                
Interpretation of
Amendment. 
This Amendment and the Lease shall be construed as a whole in order to
effectuate the intent of the parties to amend the Lease in the manner specified
in this Amendment.  All provisions of the Lease that are affected by this
Amendment shall be deemed amended regardless of whether or not specified in
this Amendment.  Accordingly, if any provision of the Lease conflicts with
any provision of this Amendment, the provision of this Amendment shall control.

 

14.                                
No Agent or Broker.  Landlord and Tenant each
represents and warrants to the other that it has not dealt with any agent or broker
representing them in this transaction.  Landlord agrees to indemnify,
defend and hold Tenant harmless from and against any claim for commission,
finder’s fee, or advisory fee from CB Richard Ellis in connection with this
transaction.  Tenant agrees to indemnify, defend and hold Landlord
harmless from and against any claim for commission, finder’s fee, or advisory
fee from BT Commercial in connection with this transaction.

 

15.                                
Multiple
Counterparts. 
This Amendment may be executed in two or more counterparts, which when taken
together shall constitute one and the same instrument.  The parties
contemplate that they maybe executing counterparts of this Amendment
transmitted by facsimile and agree and intend that a signature by facsimile
machine shall bind the party so signing with the same effect as though the
signature were an original signature.

 

16.                                
Entire Agreement.  This Amendment constitutes the
entire agreement of Landlord and Tenant with respect to the subject matter and
supersedes any and all oral and written agreements and understandings by and
between the parties prior to the date hereof.

 

17.                                
Ratification.  The Lease, as amended by this
Amendment, shall continue in full force and effect in accordance with its
terms.

 

3

 

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

 

 

	
   

  	
   

  	
  “Landlord”:

  
	
   

  	
   

  	
  SIERRA POINT INVESTORS,
  LLC,

  
	
   

  	
   

  	
  a California limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Sierra Point
  Management, Inc. Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James A. Blake

  
	
   

  	
   

  	
   

  	
  Name:

  	
  James A. Blake

  
	
   

  	
   

  	
   

  	
  Its:

  	
  EVP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Tenant”:

  
	
   

  	
   

  	
  IGN ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mike Sheridan

  
	
   

  	
   

  	
  Name:

  	
  Mike Sheridan

  
	
   

  	
   

  	
  Its:

  	
  CFO

  
	
   

  	
   

  	
  Date:

  	
  7-1-04

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4

 

EXHIBIT
A

 

[ILLUSTRATION OF
RENTABLE AREA]

 

 

SCHEDULE 1

 

[ILLUSTRATION –
8000 MARINA BLVD., 4TH FLOOR]

 

 

INVENTORY
TO BE TURNED OVER

 

	
  Reception Area:

  	
   

  	
  4 Green chairs

  
	
   

  	
   

  	
  1 20 x 48 Blond Table

  
	
   

  	
   

  	
  1 20 x 42 Blond Table

  
	
   

  	
   

  	
  1 18 x 18 Blond Table

  
	
   

  	
   

  	
   

  
	
  Ikea Lounge Chairs:

  	
   

  	
  6 Red

  
	
   

  	
   

  	
  5 Yellow

  
	
   

  	
   

  	
   

  
	
  Book Cases:

  	
   

  	
  (4) 72 x 36 x 12 Brown

  
	
   

  	
   

  	
  (4) 72 x 36 x 12 Blonde

  
	
   

  	
   

  	
  (10) 72 x 33 x 13
  Blonde

  
	
   

  	
   

  	
   

  
	
  Conference Rooms:

  	
   

  	
  (1) 54 x 167 Oval
  Blonde Table

  
	
   

  	
   

  	
  (1) 46 x 118 Oval
  Blonde Table

  
	
   

  	
   

  	
  (1) 48 x 98 Rectangular
  Dark Table

  
	
   

  	
   

  	
  (1) Small Blond Rolling
  Table \

  
	
   

  	
   

  	
  (1) 72 x 18 Dark Table

  
	
   

  	
   

  	
  (16) Black Conference
  Room Chairs

  
	
   

  	
   

  	
  (20) Mauve Conference
  Room Chairs

  
	
   

  	
   

  	
  (13) Stackable Black
  Chairs w/Arms

  
	
   

  	
   

  	
  (1) Smartboard

  
	
   

  	
   

  	
  (1) Ceiling Mounted
  Projector

  
	
   

  	
   

  	
   

  
	
  File Cabinets:

  	
   

  	
  (6) 52 x 15 x 25
  4-Drawer

  
	
   

  	
   

  	
  (2) 29 x 15 x 27
  2-Drawer

  
	
   

  	
   

  	
  (4) 54 1⁄2 x 36 x 18
  4-Drawer Lateral Beige

  
	
   

  	
   

  	
  (4) 66 1⁄2 x 42 x 19
  4-Drawer Lateral Gray

  
	
   

  	
   

  	
  (1) 3-Drawer Rolling
  Beige

  
	
   

  	
   

  	
  (1) 3-Drawer Lateral
  Beige

  
	
   

  	
   

  	
  (5) 39 x 18 x 36
  3-Drawer Lateral Gray

  
	
   

  	
   

  	
  (1) 2-Drawer Rolling
  Beige

  
	
   

  	
   

  	
  (1) 2-Drawer Lateral

  
	
   

  	
   

  	
  (1) 56 1⁄2 x 21 x 32
  Fireproof Safe

  
	
   

  	
   

  	
   

  
	
  Miscellaneous Items:

  	
   

  	
   

  
	
   

  	
   

  	
  (137) Black Office
  Chairs

  
	
   

  	
   

  	
  (3) 46 Inch Square
  Rolling Table

  
	
   

  	
   

  	
  (1) 60 x 30 Rectangular
  Rolling Table

  
	
   

  	
   

  	
  (2) 42 x 18 x 39
  Inscape 2 Door Gray Cabinet

  
	
   

  	
   

  	
  (2) 48 x 18 x 84 Gray
  Shelving Storage Unit

  
	
   

  	
   

  	
  (3) 34 1⁄2 x 13 1⁄2 x 78
  Black Shelving Storage Unit

  
	
   

  	
   

  	
   

  
	
  Cubes:

  	
   

  	
  148) 7’ X 7’ Inscape
  Platform Workstations

  

 

 

SUBLEASE

 

THIS SUBLEASE
(“Sublease”) dated as of June 16, 2004, is made between IGN ENTERTAINMENT,
INC. (“Sublandlord”), and HARCOURT, INC. (“Subtenant”).

 

RECITALS

 

A.                                  
Sierra Point
Investors, LLC as lessor (“Master Lessor”), and Sublandlord as lessee, executed
that certain Office Lease dated October 20, 2003, as amended by that
certain First Amendment to Office Lease (the “Master Lease’”) (a copy of which
is attached hereto as Exhibit A and incorporated herein by this reference)
pursuant to which Master Lessor leased to Sublandlord and Sublandlord leased
from Master Lessor certain premises consisting of the 2nd and 4th floors of
8000 Marina Boulevard, Brisbane, California (the “Premises”).  Terms which
are defined in the Master Lease shall have the same meaning when used in this
Sublease, unless otherwise provided herein.

 

B.                                    
Sublandlord desires
to sublease to Subtenant and Subtenant desires to sublease from Sublandlord,
that portion of the Premises consisting of approximately 7,989 rentable square
feet, which for all purposes shall be conclusively deemed to be 7,989 rentable
square feet, of the Premises, including Subtenant’s share of common area, which
portion is identified as Classroom.com on Exhibit B (“Subleased Premises”).

 

NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, the
parties hereto agree as follows:

 

1.                                      
Sublease.  Sublandlord subleases to
Subtenant on the terms and conditions contained in this Sublease the Subleased
Premises.

 

2.                                      
Warranty
by Sublandlord. 
Sublandlord warrants to Subtenant that the Master Lease has not been amended or
modified except as expressly set forth in this Sublease; that Sublandlord is
not now, nor as of the commencement of the “Term” (defined below); nor during
the Term, will be, in default or breach of any of the provisions of the Master
Lease.  To Sublandlord’s knowledge, there is no other agreement that would
affect Subtenant’s use of the Subleased Premises.

 

3.                                      
Term.  The term of this Sublease
(“Term’’) shall commence on August 1, 2004, and shall end on May 31, 2005,
unless terminated sooner in accordance with the provisions of this
Sublease.  Prior to the commencement of the Term, Sublandlord shall cause
to be installed partitions demising the Subleased Premises and a one-hour
fire-rated vestibule as shown on Exhibit B (subject to any modifications that
may be required to obtain regulatory approval) (the “Demising Wall”), the cost
of which work shall be borne equally by Sublandlord and Subtenant.  If for
any reason Sublandlord has not installed the Demising Wall on or before the
commencement of the Term, Sublandlord shall not thereby be subject to any
liability, the Term shall not be extended by the delay, and the validity of
this Sublease shall not be impaired, but rent shall be abated until tender of
possession, and Sublandlord shall not take possession of the remaining portions
of the Premises located on the 4th floor of the subject office
building.  The parties recognize and agree Subtenant is already in
possession of the Subleased Premises pursuant to another lease with the Master
Landlord which will be terminating, and Subtenant’s

 

1

 

possession of the Subleased Premises shall not be
disturbed due to any failure or delay in Sublandlord installing the Demising
Wall.

 

4..                                   
Rent.

 

(a)                                 
Base Rent. 
Subtenant shall pay to Sublandlord as base rent (“Base Rent”), without
deduction, setoff, notice, or demand, at 8000 Marina Boulevard, Brisbane,
California or at any other place Sublandlord designates by notice to Subtenant,
the sum of $13,981 per month for each month of the Term.  If Subtenant
elects to extend the Term pursuant to Section 11, Base Rent for the
extended Term shall be $13,981 per month for June and July 2005, and
$14,380 per month for August through November 2005.  Base Rent
shall be paid in advance of the first day of each month of the Term. 
Subtenant shall pay to Sublandlord on execution of this Sublease the sum of
$13,981 as Base Rent for the first month.  If the Term begins or ends on a
day other than the first or last day of a month, the Base Rent for the partial
months shall be prorated on a per diem basis.

 

(b)                                 
Operating Expenses.  Subtenant shall pay to Sublandlord as additional rent 15.96% of
all amounts that Sublandlord is obligated under Paragraph 6 (b) of the Master
Lease to pay to Landlord with respect to Operating Expenses, which shall be
billed monthly to Subtenant.  The reconciliation of estimated to actual
Operating Expenses shall be effected once the Actual Statement, as defined in
Paragraph 6(c) of the Master Lease, is delivered to Sublandlord by Master
Lessor, and the reconciliation obligation shall survive the expiration of the
Term.  Subtenant shall not be obligated for any increase in Operating
Expenses resulting from a modification or amendment of the Master Lease
subsequent to the date hereof.

 

5.                                      
Security
Deposit. 
Subtenant shall deposit with Sublandlord on execution of this Sublease the sum
of $13,981 in cash as security for Subtenant’s faithful performance of
Subtenant’s obligations under this Sublease (“Security Deposit’).  The
amount of the Security Deposit, upon Sublandlord’s written request shall be
increased at any time that the Base Rent is increased so that the amount of the
Security Deposit shall at all times bear the same ratio to the current Base
Rent that the initial Security Deposit bears to the initial Base Rent.  If
Subtenant fails to pay rent or other charges when due under this Sublease, or
fails to perform any obligations under this Sublease, Sublandlord may use any
portion of the Security Deposit for the payment of any rent or other amount
then due and unpaid, within ten (10) days after written demand by Sublandlord,
for the payment of any other sum for which Sublandlord may become obligated
because of Subtenant’s default or breach, or for any loss sustained by
Sublandlord as a result of Subtenant’s default or breach.  If Sublandlord
uses any portion of the Security Deposit, Subtenant shall, within ten (10) days
after written demand by Sublandlord, restore the Security Deposit to the full
amount originally deposited.  Subtenant’s failure to do so shall
constitute a default under this Sublease.  Sublandlord shall not be
required to keep the Security Deposit separate from its general accounts, and
shall have no obligation or liability for payment of interest on the Security
Deposit.  If Sublandlord assigns its interest in this Sublease,
Sublandlord shall deliver to its assignee as much of the Security Deposit as
Sublandlord then holds.  Within ten (10) days after the Term has expired
or Subtenant has vacated the Subleased Premises, whichever occurs last,
Sublandlord shall pay to Subtenant the Security Deposit, or as much as remains
that has not been applied by Sublandlord, less any amount required to cover
incurred Subtenant defaults.

 

2

 

6.                                      
Use
of Subleased Premises.  The Subleased Premises shall be used and occupied only for the
uses permitted by the Master Lease, which shall be deemed to include software
research and development, and marketing.

 

7.                                      
Assignment
and Subletting. 
Subtenant shall not assign this Sublease or further sublet, transfer or allow
any third party to use or occupy all or any part of the Subleased Premises
without the prior written consent of Sublandlord and Master Landlord, which
consent shall not be unreasonable withheld or delayed.  Notwithstanding
the foregoing, Subtenant shall have the right, with notice to Sublandlord, but
without necessity of, Sublandlord’s consent, to sublease or assign Subtenant’s
interest in the Sublease to any person, corporation or other entity which (a)
is a parent, subsidiary or commonly controlled affiliate of Subtenant; (b)
merges or enters into any similar business combination with Subtenant; (c)
acquires control (i.e., 50% or more of the stock) of Subtenant; (d) acquires
substantially all of the assets of Subtenant; or (e) results from any
corporate reorganization, including a so-called spin-off, of Subtenant or any
parent of Subtenant.  In the event of such assignment or sublease, the
assignee or sublessee shall assume all of Subtenant’s obligations (except, in
the case of a sublease, the obligation to pay rent) under the Sublease,
including with respect to use of the Sublet Premises; provided, however, that
no such assumption shall release Subtenant from, and Subtenant shall remain
fully liable for, performance of the Subtenant’s obligations under the
Sublease.  Subtenant shall provide Sublandlord with a copy of any such
assignment or sublease within a reasonable period after execution thereof..

 

8.                                      
Incorporation
of Master Lease Provisions.  This Sublease is subject and subordinate to
all of the terms and conditions of the Master Lease.  Except as provided
to the contrary herein, Subtenant shall perform the obligations of Sublandlord
as lessee under the Master Lease which accrue on or after the commencement of
the Term to the extent such obligations are applicable to the Subleased
Premises.  Subtenant shall not commit or permit to be committed on the
Subleased Premises any act or omission which shall violate any of the terms or
conditions of the Master Lease.

 

Except as contrary to the
express terms of this Sublease, all the terms and conditions contained in the
Master Lease are hereby incorporated as terms and conditions of this Sublease
(with each reference in the Master Lease to “Lessor” or “Landlord” and to
“Lessee” or “Tenant” to be deemed to refer to Sublandlord and Subtenant,
respectively, hereunder, all references to the term “Lease” to be deemed to
refer to this Sublease and all references to “Premises,” to be deemed to refer
to “Subleased Premises”), and along with all of the provisions set forth
herein, shall be the complete terms and conditions of this Sublease. 
Notwithstanding the foregoing, (a) the following provisions of the Master
Lease expressly are not incorporated except as otherwise provided herein: 
Paragraphs 1, 3, 4, 5 (a) and (b), 6, 7, 9, 10, 33, 39 and 40,
(b) Subtenant’s general liability policy of insurance shall name as
additional insureds those specified in subparagraph 19(b) of the Master Lease
as well as Sublandlord, (c) Subtenant’s waiver of subrogation, as incorporated
through subparagraph 19(g) of the Master Lease, shall be in favor of Master
Lessor as well as Sublandlord, (d) Sublandlord’s waiver of subrogation, as
incorporated through subparagraph 19(g) of the Master Lease, shall be in favor
of Master Lessor as well as Subtenant, and (e) the number of parking spaces to
which Subtenant shall be entitled pursuant to Paragraph 31 of the Master Lease
shall be 25.

 

3

 

Sublandlord shall not be
responsible for the performance or the furnishing of any repair, replacement or
other obligations or services regarding the Subleased Premises which are
required to be performed or provided by Master Lessor under the Master Lease
and Subtenant agrees to look solely to Master Lessor for the performance of
such obligations.  Sublandlord shall have no liability to Subtenant for
any failure by Master Lessor to perform its obligations under the Master Lease,
nor shall such failure by Master Lessor excuse performance by Subtenant of its
obligations under this Sublease; provided, however, Sublandlord shall use
commercially reasonable efforts to cause Master Lessor under the Master Lease
to perform all of the obligations of Master Lessor thereunder to the extent
said obligations apply to the Subleased Premises.

 

Sublandlord shall not
voluntarily terminate or amend the Master Lease to Subtenant’s detriment
without Subtenant’s prior written consent which shall not be unreasonably
withheld.  If the Master Lease terminates as a result of a default or
breach by Sublandlord or Subtenant under this Sublease, the defaulting party
will be liable to the nondefaulting party for the damage suffered as a result
of the termination.  In the event Master Lessor provides to Subtenant a
written notice of default by Sublandlord and demands payment of Base Rent and
Operating Expenses, or any other amounts which may be owing by Subtenant
pursuant to the terms and conditions of this Sublease, Subtenant shall
thereafter make payment directly to Master Lessor until written notice is
received otherwise from Mater Lessor.

 

In the event of a
conflict between any term actually written into this Sublease and any term
hereof resulting from incorporation of Master Lease terms pursuant to this
Section 8, the term actually written into this Sublease shall take
precedence and govern.

 

9.                                      
Attorney
Fees.  If
either party commences an action against the other in connection with this
Sublease, the prevailing party will be entitled to recover costs of suit
including reasonable attorney fees.

 

10.                                
Brokers.  Sublandlord and Subtenant each
warrants that it has not dealt with any real estate broker in connection with
this transaction.  Sublandlord and Subtenant, as the case may be, shall
indemnify, defend, and hold the other harmless against any damages incurred as
a result of a breach of the warranty contained in this Section 10 by such
breaching party.

 

11.                                
Option
to Extend. 
Provided that there is no uncured default hereunder by Subtenant and Subtenant
has not assigned this Sublease or sublet the Subleased Premises, Subtenant
shall have the option to extend the Term to November 30, 2005, exercisable
by notice given to Sublandlord on or before December 1, 2004.

 

12.                                
Use
of Furniture. 
Subtenant shall have the right to use the furniture located within the
Subleased Premises during the Term without charge, and shall return such
furniture on the expiration or sooner termination of the Term in the same
condition as received, reasonable wear and tear excepted.

 

13.                                
Notices.  All notices, demands, requests or
consents (collectively referred to as “notices”) that may be required or
permitted by either party to the other shall be in writing, addressed to the
party at the address specified below or to any other place the party may from

 

4

 

time to time designate in a notice to the other. 
All notices shall be sent by United States Mail, postage prepaid, or by
reputable overnight courier service such as DHL or Federal Express, or may be
delivered in person.  Notices shall be deem given when received or when
delivery is refused by or on behalf of the intended recipient.

 

	
  To Sublandlord:

  	
   

  	
  8000 Marina Boulevard,
  Suite 200

  Brisbane, CA  94005

  Attn:  President

  
	
   

  	
   

  	
   

  
	
  To Subtenant:

  	
   

  	
  6277 Sea Harbor Drive

  Orlando, FL  32887

  Attention:  V.P. - Corporate Services and Real Estate

  

 

14.                                
Attornment.  If the Master Lease terminates,
Subtenant will, if requested, attorn to Master Landlord and recognize Master
Landlord as Sublandlord under this Sublease, subject to the terms and
conditions of this Sublease.

 

15.                                
Entire
Agreement. 
This Sublease sets forth all the agreements between Sublandlord and Subtenant
concerning the Subleased Premises, and there are no other agreements either
oral or written other than as set forth in this Sublease.

 

16.                                
Time
of Essence. 
Time is of the essence in this Sublease.

 

17.                                
Contingencies.  This Sublease is contingent upon
(a) the lease between Classroom.com for the 4th floor of the Building being
terminated, (b) the First Amendment to Office Lease between Master Lessor and
Sublandlord being executed, and (c) Master Lessor’s consent to this Sublease.

 

18.                                
Governing
Law.  This
Sublease will be governed by and construed in accordance with California law.

 

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

 

	
   

  	
  SUBTENANT:

  
	
   

  	
  HARCOURT,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Varkey Chacko

  	
   

  
	
   

  	
  Its:

  	
  Sr. V.P., Finance and Operations

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBLANDLORD:

  
	
   

  	
  IGN
  ENTERTAINMENT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Sheridan

  	
   

  
	
   

  	
  Its:

  	
  CFO

  	
   

  

 

5

 

Master
Landlord’s Consent To Sublease

 

The undersigned lessor
under the Master Lease, consents to this Sublease without waiver of any
restriction in the Master Lease concerning further assignment or subletting.

 

	
  Date:

  	
  7/14/04

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MASTER
  LANDLORD:

  
	
   

  	
  SIERRA
  POINT INVESTORS, LLC

  
	
   

  	
   

  
	
   

  	
  By Sierra Point
  Management, Inc., Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim Blake

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  EVP

  	
   

  
	
   

  	
   

  

 

 

6

 

Exhibit A

 

Master Lease, as
amended

 

[See this Exhibit
10.04 to this Form S-1, supra]

 

 

Exhibit B

 

Subleased Premises

 

[See Exhibit A to
First Amendment to Office Lease in this Exhibit 10.04 to this Form S-1, supra]

 

 

 

[Harcourt letterhead]

 

November 15, 2004

 

 

OVERNIGHT DELIVERY—NEXT DAY

 

Mr. Jim Merryman, President

IGN Entertainment, Inc.

8000 Marina Boulevard, Suite 200

Brisbane, CA 94005

                RE: Classroom Connect/Brisbane, CA

Dear Jim:

Pursuant to Paragraph 11 of
the Sublease Agreement dated June 16, 2004, please be advised that Harcourt,
Inc. will be exercising its Option to Extend the Term to November 30, 2005.

Sincerely,

/s/ Sue Rudy

Sue Rudy

Manager — Real Estate and Administration

cc: Dave Samuels

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