Document:

Exhibit 10.3

 

SECOND AMENDMENT TO

COMMERCIAL LEASE (AMPHITHEATRE)

 

THIS SECOND AMENDMENT TO
COMMERCIAL LEASE (AMPHITHEATRE) (this “Amendment”)
is made as of the 9th day of July, 2003, by WXIII/AMPHITHEATRE REALTY, L.L.C.,
a Delaware limited liability company (“Landlord”),
GOOGLE TECHNOLOGY INC., a California corporation (“Subtenant”) and SILICON GRAPHICS, INC., a Delaware
corporation (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, The Goldman Sachs Group, Inc., a
Delaware corporation (“GS”), and Tenant, entered into
that certain Commercial Lease, dated December 29, 2000, as
amended as of April 18, 2001 (as so amended, the “Lease”), which was assigned by GS to Landlord by an
Assignment and Assumption, dated as of May 22, 2001, for certain premises
located at 1600 Amphitheatre Parkway, Mountain View, California (the “Premises”), said
property being more particularly described in the Lease.  Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings assigned to them in the
Lease;

 

WHEREAS, concurrently herewith,
Tenant and Subtenant are entering into that certain Sublease Agreement, dated
as of the date hereof (the “Google Sublease”), whereby Tenant will
sublease to Subtenant, and Subtenant will sublease from Tenant, the Premises;

 

WHEREAS, concurrently herewith, Landlord, Tenant and
Subtenant are entering into that certain Landlord-Subtenant Agreement
(Amphitheatre), dated as of the date hereof
(the “Landlord-Subtenant
Agreement”), and Landlord and Subtenant are entering into that
certain Nondisturbance and Attornment Agreement, dated as of the date hereof (the “Nondisturbance Agreement”);

 

WHEREAS, in connection with the execution of the
Google Sublease, Landlord is willing to modify certain terms of the Lease as
the same would apply to Subtenant, and, in certain respects, to amend the
Lease, in each case all as more particularly set forth herein;

 

NOW, THEREFORE, in consideration of the premises, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

 

Article I.

 

Amphitheatre Lease
Amendments

 

Subject to Article II hereof:

 

1.1.          Parking.  With respect to the seventh (7th)
sentence of Section 2.3 of the Lease, the following shall be added after the
initial occurrence of the word “Tenant” therein: “or Subtenant, or Subtenant’s
subtenants or assignees.”

 

1.2.          Tenant’s
Relinquishment of its Renewal Rights. 
Tenant hereby relinquishes the renewal options set forth in Section 3.2
of the Lease, such that said Section 3.2 is deemed deleted from the Lease
from and after the date hereof as if it were never included in the Lease.  At Landlord’s request, Tenant will promptly
execute, acknowledge and deliver to Landlord an instrument in recordable form
confirming such termination of Tenant’s renewal options in Section 3.2 of
the Lease.

 

1.3.          Operating
Expenses.

 

(a)  With respect to Section 5.2 of the
Lease,

 

(i)                                     Landlord
will, concurrently with its delivery to Tenant of any Landlord’s Expense
Statement, deliver a duplicate of Landlord’s Expense Statement to Subtenant.

 

(ii)                                  Following
the Substantial Occupancy Date (as defined in the Google Sublease), Subtenant
may pay Operating Expenses directly to parties entitled thereto to the extent
that Tenant is entitled to do so under the Lease.

 

(b)  With regard to Section 5.1(b)(xi) of the Lease, it is
agreed that (i) as of the date hereof, 1.00% per annum of the annual Base
Rent and Tenant’s Share of Operating Expenses payable under the Lease by Tenant
to Landlord (and expressly excluding those Operating Expenses payable directly
by Tenant to third parties) constitutes a “commercially reasonable rate” as
contemplated in said Section 5.1(b)(xi) and (ii) the same shall not
be subject to increase or decrease to reflect changing market conditions until
after the first anniversary of the date hereof.

 

1.4.          Ground
Lease.  Section 6.2(a) of
the Lease is hereby deleted in its entirety and replaced with the following:

 

“(a)  Tenant, Subtenant and/or Subtenant’s
subtenants or assignees shall, at Tenant’s sole cost and expense, throughout
the Term, comply with, satisfy and cause the Premises to comply with and
satisfy, each of the provisions of the Ground Lease within the period of time
and in the manner required by the

 

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Ground Lease, excluding, however the following
provisions of the Ground Lease: Article 1 (Definitions) (unless such
definitions are used in the incorporated sections), Article 2 (Demise,
Term and Surrender), Article 3 (Rent), Sections 4.4, 4.5.1, 4.5.3,
4.5.9.1, 4.5.9.2, and 4.5.9.3 of Article 4 (Use), Article 5 (Payment
of Real Property Taxes and Facility Charges), Sections 6.1, 6.2, and 6.3 of Article 6
(Construction of Improvements and Mechanic’s Liens), Sections 7.1.1, 7.4 and
7.5 of Article 7 (Insurance and Indemnity), Article 9 (Condemnation),
Article 10 (Default and Remedies), Article 11 (Assignment and
Subletting), Article 12 (Transfer of Leased Premises by Landlord), Article 13 (Tenant
Mortgages) and Article 14 (General Provisions, except to the extent
relevant to the incorporated sections). 
Tenant shall not do, permit, suffer or refrain from doing anything which
is Tenant’s obligation under this Lease to do, as a result of which there could
be a default under the Ground Lease. 
Notwithstanding anything to the contrary contained in this Lease, in the
event the time given to Landlord as tenant under the Ground Lease is shorter
than the time given to Tenant by this Lease to perform or do the same act or
thing, then Tenant shall perform or do said thing within the time specified in
the Ground Lease.”

 

1.5.          Prohibited
Uses.  With respect to the last
sentence of Section 7.2 of the Lease (prohibiting firearms on the
Premises), no explosives or firearms shall be brought into the Premises, except
that firearms may be carried by personnel of security firms retained by
Landlord, Tenant or Subtenant for the provision of security services to the
Premises.  Any security firm hired by
Tenant will be a Tenant Agent and any security firm hired by Subtenant shall be
a Subtenant Representative (as such term is defined in the Google Sublease) for
purposes of indemnification obligations of Tenant and Subtenant under the Lease
and the Google Sublease.

 

1.6.          Alterations.

 

(a)  With
respect to Article 10 of the Lease, Landlord and Tenant agree that
Subtenant may make requests for consents or approvals or other submissions in
respect of proposed Alterations directly to Landlord and, in such case, will
concurrently with its delivery to Landlord, deliver a duplicate to Tenant.  Landlord shall respond directly to Subtenant
in connection with such requests or other submissions and, in such case, if
such response is in writing, will concurrently with the delivery of such
response to Subtenant, deliver a duplicate to Tenant.  Any Alteration with respect to which
Subtenant has procured Landlord’s approval shall not require the approval of
Tenant.

 

(b)  In
requesting Landlord’s approval for an Alteration (or at any time thereafter),
Subtenant shall separately identify which Alterations it wishes Landlord to
designate as Non-Severable Material Alterations for purposes of insuring the
same under the property insurance for the Building to be procured by Landlord
pursuant to the Lease; without affecting Landlord’s approval right pursuant to Section 1.6(c)(ii) hereof,
Landlord shall have no responsibility to

 

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regard any Alteration as a
Non-Severable Material Alteration or to so insure the same unless so proposed
by Tenant or Subtenant (as applicable).

 

(c)  With
respect
to Section 10.1 of the Lease:

 

(i)                                     Landlord
shall not unreasonably withhold its approval to any Alteration proposed to be
made by Subtenant (or Subtenant’s subtenants or assignees) (regardless whether
the same is a Material Alteration), and

 

(ii)                                  If
Tenant or Subtenant proposes that Landlord designate a Material Alteration as a
Non-Severable Material Alteration pursuant to Section 1.6(b) above,
Landlord, in its reasonable discretion, will make its determination in respect
of such proposal (and deliver to Tenant or Subtenant, as applicable, notice of
such determination) concurrently with Landlord’s approval of the Material
Alteration in question; if Landlord fails to timely make such determination,
then the Alterations proposed by Tenant or Subtenant, as applicable, shall be
deemed to be Non-Severable Material Alterations; if an Alteration is not
designated (and not deemed to be designated) a Non-Severable Material
Alteration, then Landlord shall nevertheless have the right at any time
subsequent to so designate it, provided
that, if Tenant’s or Subtenant’s property insurance policy is then covering
such Non-Severable Material Alteration, then until the expiration of such
policy, Operating Expenses shall be adjusted so as to exclude therefrom the
cost of insuring such Non-Severable Material Alteration under Landlord’s
property insurance policy.

 

(d)  With
respect to Section 10.2(a) of the Lease, Landlord shall not
unreasonably withhold its approval of plans and specifications for any Material
Alteration, and the procedure set forth in said Section 10.2(a) for
Landlord’s review and approval or deemed approval of Alterations shall apply to
Material Alterations; provided that
the 10 business day periods and 5 business day periods referred to therein
shall in each instance be deemed to be, respectively, 20 business day periods
and 10 business day periods in respect of Material Alterations.

 

(e)  With
respect to Section 10.2(b) of the Lease, Alterations by Tenant or
Subtenant shall not require either Tenant or Subtenant to provide Landlord with
the letter of credit or other security prescribed in said 10.2(b), provided, upon the completion of the
Alterations in accordance with Article 10 of the Lease, Landlord shall
nevertheless be entitled to the items described in clauses (B)(x), (y) and (z)
of the third sentence of said Section 10.2(b).

 

(f)  With
respect to Section 10.2(c) of the Lease, Tenant’s obligation to
procure the insurance coverage described therein may be satisfied, in the event
of Alterations to be constructed by Subtenant, by Subtenant’s procurement of
such coverage.

 

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(g)  With
respect to Section 10.3 of the Lease:

 

(i)                                     Clause
(ii) of Section 10.3(a) of the Lease is hereby amended and
restated as follows: “(ii) Landlord reasonably determines that the
Alteration in question is not consistent with or typical for general
multi-tenanted office, technology, research and development facilities in the
vicinity of the Premises (including, without limitation, by reason of where in
the Premises the Alteration is to be located or the style or materials in which
the Alteration is to be executed) or that the Alteration in question is unique
to the occupant, such as signage identifying the occupant.”  The sentence in the Lease following said
clause (ii) is hereby deleted.

 

(ii)                                  The
following are examples, but without limitation, of Alterations to the interior
of the Building that the Landlord may require Tenant or Subtenant to restore
pursuant to Section 10.3(a)(ii) of the Lease, as amended by Section 1.6(g)(i) above:
(1) a theatre, (2) an oversized computer room with raised flooring
(e.g., as of the date hereof, a computer room in excess of 300 square feet of
Rentable Area), and (3) a “call center” with a capacity in excess of what
is customary for typical office usage. The following are examples, but without
limitation, of Alterations to the interior of the Building that Landlord may
not require Subtenant to restore pursuant to Section 10.3(a)(ii) of
the Lease, as amended by Section 1.6(g)(i) above: (w) the upgrade of
existing facilities within the Building which have not previously been
designated by Landlord for restoration if such upgrade does not materially
change the character of the facilities in question, (x) the construction of
individual offices that are of a type not materially inconsistent with the type
of offices typically found in general multi-tenanted office, technology,
research and development facilities in the vicinity of the Premises, (y) the
installation of reasonably typical cubicles to house Subtenant’s employees, and
(z) the construction of a reasonable quantity of conference or meeting rooms
that are of a size reasonably consistent with the range of conference room
sizes typically found in general multi-tenanted office, technology, research
and development facilities in the vicinity of the Premises.  Further, Landlord agrees that it shall not require
Subtenant to restore pursuant to Section 10.3(a)(ii) of the Lease, as
amended by Section 1.6(g)(i) above, Alterations to the exterior of
the Building if the same is an upgrade or improvement upon existing exterior
improvements consistent with the design and use of such existing exterior improvement
(for example, an upgrade of the volleyball court) or is an improvement that is
a typical amenity in multi-tenanted general office, technology, research and
development facilities in the vicinity of the Premises.

 

(iii)                               The
dispute resolution procedure described in Section 10.3(b) of the
Lease shall apply to all Alterations (as opposed to only Permitted
Alterations).

 

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(iv)                              Landlord
acknowledges that, as of the date hereof, except as set forth in Exhibit A
attached hereto, Tenant has not performed any Alterations which Landlord has,
pursuant to the provisions of Section 10.3 of the Lease, required to be
restored at the expiration or termination of the Lease.

 

(v)                                 Landlord
agrees that if Subtenant restores the existing laboratory and research space
identified on Exhibit A
to standard multi-tenant office space, as determined in Landlord’s reasonable
discretion, Landlord will return to Tenant the security deposited by Tenant in
connection with its construction of such laboratory and research space (except
to the extent that Landlord has the right to utilize such deposit in connection
with other obligations owed to Landlord by Tenant).

 

(vi)                              Regardless
whether Landlord shall require Subtenant under Section 10.3(a) of the
Lease to restore an Alteration made by Subtenant, Landlord agrees that it shall
not require Tenant to effect such restoration of an Alteration approved by
Landlord and made by Subtenant.

 

(h)  Further,
with respect to Section 10.3(c) of the Lease:

 

(i)                                     Reference
is hereby made to that certain letter agreement, dated as of the date hereof,
between Landlord and Subtenant, which sets forth certain financial tests in
respect of Subtenant’s financial condition (such letter agreement, the “Financial Tests Letter Agreement”).

 

(ii)                                  Landlord
agrees, for the benefit of Subtenant, that so long as, but only for so long as,
(x) Subtenant satisfies each of the financial tests set forth in the Financial
Tests Letter Agreement, and (y) Subtenant complies with its obligations under
Sections 1.12(a) and 1.12(b), Landlord will not require the deposit of
security pursuant to Section 10.3(c) of the Lease to secure the
obligation to restore Alterations undertaken by Subtenant.

 

(iii)                               Within
thirty (30) days after delivery of any financial statement or certificate to be
delivered under Section 1.12(a) or 1.12(b) that shows that
Subtenant is not satisfying each of the financial tests set forth in the
Financial Tests Letter Agreement, or within fifteen (15) days after notice from
Landlord to Subtenant of Subtenant’s default in its obligation under Sections
1.12(a) and 1.12(b) and Subtenant’s failure to cure such default
within such fifteen (15) day period, Subtenant shall either (x) deliver to
Landlord a letter of credit as required under Section 10.3(c)(i) of
the Lease or (y) grant to Landlord a perfected, first priority security
interest in a banking account that holds cash in the amount of

 

6

 

security required under Section 10.3(c),
pursuant to a security agreement in form and substance reasonably satisfactory
to Landlord.

 

1.7.          Insurance.

 

(a)  With
respect to the insurance coverage required to be maintained pursuant to Section 14.2(b) of
the Lease, so long as Subtenant (or Tenant and Subtenant together) procures
coverage in compliance with the requirements of Section 14.2(b) and Section 14.3
of the Lease, Tenant will not be required to maintain such insurance coverage.

 

(b)  The
provisions of Section 14.5 of the Lease are deemed revised so that
references therein to “the parties” shall be deemed to refer to Landlord,
Tenant and Subtenant, and references to “Landlord and Tenant” shall be deemed
to refer to “Landlord, Tenant and Subtenant.”

 

1.8.          Assignment
and Subletting.

 

(a)  With
respect to Section 15.1 of the Lease:

 

(i)                                     Section 15.1
of the Lease shall be applicable to Subtenant, and references therein to Tenant
shall also mean Subtenant, references therein to Lease shall also mean the
Google Sublease and references therein to “Sublease” shall also mean a
sub-sublease by Google.

 

(ii)                                  The
phrase “which Landlord may withhold in its sole and absolute discretion” in the
final sentence of Section 15.1 of the Lease is deleted and replaced with
the phrase “which Landlord shall not unreasonably withhold.”

 

(iii)                               Landlord
and Tenant agree that, without the necessity of obtaining the further consent
of Landlord or Tenant, Subtenant shall be permitted from time to time to permit
its clients and/or venture partners (each, an “Approved User”) to temporarily
occupy space concurrently with Subtenant within the Premises in order to make
such Approved User more accessible to Subtenant, provided that the Approved
Users shall not occupy, in the aggregate, more than fifteen percent (15%) of
the rentable area of the Premises. 
Subtenant shall notify Landlord and Tenant of the name of each Approved
User within 10 business days of such Approved User’s initial occupancy of space
within the Premises, as well as the approximate square footage occupied by such
Approved User and rent to be paid by such Approved User, and shall, on January 2
of each year, furnish Landlord and Tenant with a list of all Approved Users,
square footage occupied by each and the rent payable by each.  If any Approved User occupies any portion of
the Premises as described herein, it is agreed that (i) the Approved User
must comply with all provisions of

 

7

 

this Amendment and the Google Sublease, and a
default hereunder or thereunder by any Approved User shall be deemed a default
by Subtenant under this Amendment and the Google Sublease; (ii) in no
event shall any use or occupancy of any portion of the Premises by any Approved
User release or relieve Subtenant from any of its obligations under this
Amendment and the Google Sublease; and (iii) in no event shall the
occupancy of any portion of the Premises by any Approved User be deemed to
create a landlord/tenant relationship between Landlord and such Approved User,
and, in all instances, Subtenant shall be considered the sole tenant under this
Amendment and the Google Sublease notwithstanding the occupancy of any portion
of the Premises by an Approved User.

 

(iv)                              Subtenant
(failing which Tenant) shall perform the obligations and cure the defaults of
any subtenant of Subtenant or any Person in the Premises claiming by, through
or under Subtenant (including any Approved User).

 

(b)  Subject
to the following terms, Sections 15.2, 15.3 and 15.4 of the Lease shall be
applicable to Subtenant and the Google Sublease, and references therein to
Tenant shall also mean Subtenant, references therein to Lease shall also mean
the Google Sublease and references therein to “Sublease” shall also mean a
sub-sublease by Google:

 

(i)                                     Subtenant
may make requests for consents or approvals or other submissions directly to
Landlord and, in such case, will concurrently with its delivery to Landlord,
deliver a duplicate to Tenant.  Landlord
may respond directly to Subtenant in connection with such requests and, in such
case, if a written response is required, will concurrently with its delivery to
Subtenant, deliver a duplicate to Tenant. 
Tenant and Subtenant hereby agree as between themselves, with respect to
any Assignment or Sublease proposed by Subtenant, Landlord’s determination to
grant or withhold consent shall be binding upon Tenant and any consent granted
or withheld by Tenant in contradiction thereof shall be invalid and without
effect; provided, however, that any proposed Sublease or Assignment by Subtenant
which would otherwise require the consent of Landlord in addition to the
consent of Sublandlord (x) that results from a “Change in Control” or (y) with
respect to which Landlord shall have consented but has waived a material
requirement set forth in the Lease applicable to all Assignments and/or
Subleases (as applicable), such as those set forth in Section 15.4(h),
15.6 and 15.8 of the Lease, shall nonetheless be subject to the consent (or
deemed consent) of Tenant. The provisions of the foregoing sentence are
intended to be and shall be construed as an agreement between Tenant and
Subtenant and shall not impose any obligation on Landlord in favor of Tenant or
Subtenant or permit any defense or offset or other right on the part of Tenant
in respect of Landlord.

 

8

 

(ii)                                  Tenant
agrees to deliver simultaneously to Landlord and Subtenant any notice in which
Tenant’s consent to a proposed Sublease or Assignment by Subtenant is granted
or denied.  If Tenant fails to respond to
any request for consent to a proposed Assignment or Sublease (and to provide a
concurrent copy to Landlord) within seven (7) business days following
Subtenant’s delivery of such request, Subtenant shall have the right to provide
Tenant with a second request for consent. 
Subtenant’s second request for consent must specifically state that
Tenant’s failure to respond (and to concurrently deliver a copy of such
response to Landlord) within a period of three (3) business days shall be
deemed to be an approval of the second request for consent.  If Tenant shall fail to so respond to such
second notice (and to provide a concurrent copy of the Lease to Landlord)
within such three (3) business day period the Assignment or Sublease for
which Subtenant has requested consent shall be deemed to have been approved by
Tenant.

 

(iii)                               Subtenant
shall not be obligated under Section 15.3 of the Lease to pay Excess
Rents, it being agreed that the provision of Section 9 of the Sublease
shall govern with respect to the amount of Excess Rent to be paid by Subtenant
to Sublandlord under the Google Sublease. 
Further, for the avoidance of doubt, rent received from Approved Users
shall be subject to Section 9 of the Google Sublease.

 

(c)  Subject
to the following terms, Sections 15.7(a), 15.7(b), 15.8 and 15.9 of the Lease
shall be applicable to Subtenant and the Google Sublease, and references
therein to Tenant shall also mean Subtenant, references therein to Lease shall
also mean the Google Sublease and references therein to “Sublease” shall also
mean a sub-sublease by Google:

 

(i)                                     A
Change in Control shall not be deemed to have occurred in respect of Subtenant
by reason of the consummation of an initial public equity offering of
Subtenant, provided that, following the consummation of an initial public
offering of Subtenant, a Change in Control will be deemed to have occurred if
there shall be (x) a transfer of the ultimate beneficial ownership of fifty
percent (50%), or more of the equity interests in Subtenant or of any class of
equity interests in Subtenant, including, without limitation, by the issuance
of additional shares or other equity interests in Subtenant, (y) a transfer of
the right to receive fifty percent (50%) or more of any category of
distributions made by Subtenant, or (z) a transfer of the right to direct the
management of Subtenant, by contract or otherwise.

 

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(ii)                                  Notwithstanding
any of the provisions of Section 15.7(a) to the contrary, the consent
of Landlord or Tenant shall not be required with respect to:

 

(y)                                 an
assignment of Subtenant’s interest under the Google Sublease if the sole
purpose and effect of such assignment is to change Subtenant’s name and/or
domicile, (e.g., a reincorporation in another jurisdiction) (such transaction
being referred to herein as a “Reincorporation”); provided that Subtenant will
provide notice of such Reincorporation to Landlord and Tenant within ten (10) days
following the effective date of such Reincorporation; and

 

(z)                                   if
Subtenant is a Public Company, transfers of the capital stock of Subtenant on a
national securities exchange, unless such transfers constitute a Change in
Control effected through concerted actions (and are otherwise not permitted
under Section 15.7(b) below with respect to an Assignment to a
Successor Entity).

 

(iii)                               The
reference in Section 15.7(a) of the Lease to Section 15.5 shall
be disregarded.

 

1.9.          Landlord’s
Reserved Rights — Use of Additional Areas.

 

(a)  Section 17.1
of the Lease is hereby deleted in its entirety and replaced with the
following:  “[Reserved.]”

 

(b)  Section 17.4
of the Lease is hereby deleted in its entirety and replaced with the following:

 

“17.4                  Use of
Additional Areas.  Subject to the
provisions of Article 32, Landlord reserves the exclusive right to use any
air space above the Buildings and the Property, the roof and exterior walls of
the Buildings and the land beneath the Buildings; provided that such use shall
not impede Tenant’s use of and access to the Premises other than to a de minimis extent.”

 

1.10.        Destruction
and Casualty — Termination Option.

 

(a)  Section 19.2
of the Lease is hereby deleted in its entirety and replaced with the following:

 

“19.2                  Termination
Option.  Landlord shall notify Tenant
(with a copy to Subtenant) within sixty (60) days after the date of damage
whether or not the requirements for repairs, reconstruction and restoration by
Tenant

 

10

 

described in Section 19.3
are met.  If such requirements are not
met, Landlord shall have the option, exercisable within sixty (60) days
after the date of such damage either to: 
(a) notify Tenant of Landlord’s election to repair such damage, in
which event this Lease shall continue in full force and effect (unless
terminated by Tenant as provided below), or (b) notify Tenant, and the
subtenant under the Google Sublease, of Landlord’s election to terminate this
Lease as of the date of the damage.  If
such notice to terminate is given by Landlord, this Lease, and the Google
Sublease (regardless of the Nondisturbance Agreement), shall terminate as of
the date of such damage.  If Landlord
notifies Tenant of its intention to repair Casualty damages and Landlord
reasonably estimates that such repairs cannot be completed within eighteen
(18) months (plus any incremental time as may be required to restore any
Non-Severable Material Alterations), Tenant shall have the right to terminate
this Lease by delivering fifteen (15) days’ written notice to Landlord, in
which event the Lease, and the Google Sublease (regardless of the
Nondisturbance Agreement), shall terminate. 
If pursuant to the above terms of this Section 19.2, Landlord
notifies Tenant of Landlord’s intention to repair Casualty damages and this
Lease and the Google Sublease are not terminated pursuant to the above terms of
this Section 19.2, then Landlord shall repair, reconstruct and restore the
Premises, including Non-Severable Material Alterations but excluding other
Alterations and Tenant’s Property, with reasonable diligence, to the extent of
available insurance proceeds, so that the same shall be reasonably comparable
in quality, value and utility to the Premises immediately prior to such
Casualty damage.”

 

(b)  With
respect to Section 19.2, Section 20.1 and Section 20.4 of the
Lease, in the event Tenant has the right to terminate the Lease:

 

(i)                                     Tenant
(x) shall not exercise such right without the express written consent of
Subtenant, and (y) shall promptly exercise such right upon the written
direction of Subtenant to do so.

 

(ii)                                  Subtenant
may notify Landlord directly of its intent to exercise or refrain from
exercising the right to terminate the Lease, and, in such case, will
concurrently with its delivery to Landlord, deliver a duplicate to Tenant.  Subtenant’s determination to exercise or
refrain from exercising shall govern, and any determination notified to
Landlord by Tenant in contradiction thereof shall be invalid and without
effect.

 

1.11.        Destruction
– Tenant Obligations.

 

(a)  With
respect to Section 19.1(c) of the Lease, (i) the reference to “Alterations”
shall not be construed to include Alterations designated as Non-Severable
Material Alterations in accordance with Section 1.6(c)(ii) hereof;
and (ii) Landlord shall not be obligated to repair any damage thereto or
to replace the same other than as specifically set forth in Section 19.2.

 

11

 

(b)  Section 19.3
of the Lease is hereby deleted in its entirety and replaced with the following:

 

“19.3.  Tenant Obligations.  Subject to Section 19.2, if the Premises
or the Buildings or any portion thereof are damaged by Casualty, Tenant shall,
at Tenant’s sole cost and expense (subject to Landlord’s provision of proceeds
from insurance it is required to maintain hereunder to the extent Landlord is
required to make such proceeds available under Section 19.1), repair,
reconstruct and restore the same promptly, with diligence and continuity and in
accordance with the requirements of Section 8.2 and the requirements of Article 10
for Alterations; provided that (i) such repairs can be made under the laws
and regulations of the federal, state and local governmental authorities having
jurisdiction within twelve (12) months 
(plus any incremental time as may be required to restore any
Non-Severable Material Alterations) after the date of such damage (or in the
case of damage occurring during the last twelve (12) months of the Term,
provided that such repairs can be made within ninety (90) days  (plus any incremental time as may be required
to restore any Non-Severable Material Alterations) after the date of such
damage), (ii) such repairs are fully covered (except for any deductible)
by the proceeds of insurance maintained by Landlord or Tenant, and (iii) the
damage does not affect more than fifty percent (50%) of the assessed value of
the Buildings.  If Tenant is required to
repair, reconstruct or restore the Premises after any damage or destruction,
Tenant shall be responsible at its own expense for the repair and replacement
of Tenant’s Property and any Alterations which Tenant elects to replace (provided that if any of such Alterations
are designated as Non-Severable Material Alterations in accordance with Section 1.6(c)(ii) of
the Second Amendment, then Landlord shall make available to Tenant property
insurance proceeds received in respect thereof). Tenant hereby waives the
provisions of any statute or law that may be in effect at the time of the
occurrence of any such damage or destruction, under which a lease is automatically
terminated or a tenant is given the right to terminate a lease upon such an
occurrence.”

 

1.12.        Financial
Statements.

 

(a) Subtenant
hereby agrees that:

 

(i)                                     within
forty-five (45) days after the end of each of Subtenant’s first three (3) fiscal
quarters, Subtenant will deliver to Landlord and Tenant, Subtenant’s unaudited
quarterly financial statements (balance sheet, profit & loss statement
and cash flow statement),

 

(ii)                                  within
forty-five (45) days after the end of each Subtenant’s fiscal year, Subtenant
will deliver to Landlord and Tenant, Subtenant’s audited annual financial
statements (balance sheet, profit & loss statement and cash flow
statement), accompanied by the auditor’s report in respect of such statements.

 

12

 

(b) Each
delivery described in Section 1.12(a) shall be certified by the chief
financial officer of Subtenant as reflecting the financial condition having
been prepared in accordance with generally accepted accounting principles,
together with a statement by such officer whether Subtenant has satisfied each
of the financial tests set forth in the Financial Tests Letter Agreement and a schedule substantially
in the form of Exhibit A thereto showing the computations used by Subtenant
in determining whether Subtenant has satisfied such financial tests.

 

(c) Subtenant
hereby agrees that, on reasonable advance notice, during regular hours of
operation and at any reasonable time from time to time, but in no event (absent
an Event of Default under the Google Sublease) more than two times per fiscal
year, Subtenant will make available to Landlord’s representatives the chief
financial officer of the Subtenant for the purpose of discussing the financial
statements delivered pursuant to this Section 1.12.

 

(d) Each
of Subtenant and Landlord agrees that information delivered to Landlord by
Subtenant in accordance with the terms of this Section 1.12 shall be
subject to the Confidentiality Agreement, dated as of July 9, 2003,
between Landlord and Subtenant.

 

(e) Each
of Subtenant and Tenant agrees that information delivered to Tenant by
Subtenant in accordance with the terms of this Section 1.12 shall be
subject to the Confidentiality Agreement, dated as of July 9, 2003,
between Tenant and Subtenant

 

(f) The
provisions of this Section 1.12 shall be applicable both prior and
subsequent to a Lease Termination (as defined in the Nondisturbance Agreement).

 

1.13.        Estoppel
Certificates.  With respect to Article 23
of the Lease, Subtenant hereby agrees to deliver to Landlord, and Landlord
hereby agrees to deliver to Subtenant, estoppel certificates similar to the
certificates that Landlord has agreed to deliver to Tenant and Tenant has
agreed to deliver to Landlord pursuant to Article 23 of the Lease.

 

1.14.        Rules and
Regulations.  With respect to Section 24.1
of the Lease,

 

(a) Landlord
acknowledges that, as of the date of this Amendment, there do not exist any Rules and
Regulations and agrees that any Rules and Regulations subsequently
established by Landlord shall be reasonable.

 

(b) With
respect to the fourth (4th) sentence of Section 24.1
of the Lease, the following shall be added after the initial occurrence of the
word “Tenant” therein: “or Subtenant, or Subtenant’s subtenants or assignees.”

 

1.15.        Notices.  Landlord agrees to deliver to Subtenant, at
Subtenant’s address for notices set forth below (or such other address as
Subtenant

 

13

 

subsequently provides to Landlord) with a correct duplicate copy of any
notice delivered by Landlord to Tenant regarding the status of (i) the
Lease or (ii) the Premises or Property. 
Subtenant’s address for notices is as follows:

 

If such notice shall be addressed to Subtenant the
address of Subtenant is:

 

2400 Bayshore Parkway

Mountain View, CA  94043

Attn:  Director of Facilities

 

With a copy to:

 

2400 Bayshore Parkway

Mountain View, CA  94043

Attn:  Legal Department

 

1.16.        Signage.  With respect to Section 24.2 of the
Lease,

 

(a)  Subtenant
may make requests for consents or approvals or other submissions directly to
Landlord and, in such case, will concurrently with its delivery to Landlord,
deliver a duplicate to Tenant.  Landlord
may, if a written response is required, respond directly to Subtenant in
connection with such requests and, in such case, will concurrently with its
delivery to Subtenant, deliver a duplicate to Tenant.  Any sign with respect to which Subtenant has
procured Landlord’s approval shall not require the approval of Tenant.

 

(b)  Landlord
shall not require Tenant to remove, or restore the Premises as a result of the
installation of, any sign approved by Landlord under Section 1.16(a) above.

 

(c)  Landlord
shall not place or allow to be placed on the Premises or Property any signage
identifying or otherwise advertising any direct competitor of Subtenant in such
line(s) of business as constitute Subtenant’s primary line(s) of business as of
the date of such proposed installation, other than any signs currently on the
Premises.

 

1.17.        Antenna
and Roofspace.  Article 32 is
hereby amended as follows:

 

(a)  With
respect to Section 32.1 of the Lease, Landlord agrees that, subject to all
Legal Requirements, insurance requirements, the terms of the Lease and the
conditions and limitations hereinafter stipulated, during the term of the
Google Sublease, Subtenant, at its sole cost and expense, pursuant to the
license granted to Tenant under said Section 32.1, may install in the
Antenna Area (which shall be in the maximum amount of 70 percent of each
rooftop), and thereafter maintain, repair, operate and replace therein, one or
more satellite antennae (collectively, the “antennae”), provided that Subtenant shall comply with
the size,

 

14

 

work, installation, legal and
insurance requirements and with the payment obligations to be complied with
pursuant to said Section 32.1, and shall obtain Landlord’s consent in
respect of the antennae to the extent required pursuant to said Section 32.1,
which consent shall not be unreasonably withheld, conditioned or delayed.

 

(b)  With
respect to Section 32.10 of the Lease, subject to Section 32.1 of the
Lease and Section 32.2 of the Lease, as modified herein, so long as
Tenant, Subtenant, or their respective subtenants or assignees leases 100% of
the Premises, Tenant shall have the exclusive right to install and use antennae
on the roof of the Buildings.

 

(c)  Subtenant
may make requests for consents or approvals or other submissions directly to
Landlord and, in such case, will concurrently with its delivery to Landlord,
deliver a duplicate to Tenant.  Landlord
may respond directly to Subtenant in connection with such requests and, if a
written response is required, will concurrently with its delivery to Subtenant,
deliver a duplicate to Tenant.  Any
antenna or roof usage with respect to which Subtenant has procured Landlord’s
approval shall not require the approval of Tenant.

 

1.18.        Default
Notice.

 

(a)  Any
period of ten (10) days or more provided for in the Lease for giving
notice of default by Tenant to Landlord is hereby increased by five (5) days.
Any period of less than ten (10) days provided for in the Lease for giving
notice of default by Tenant to Landlord is hereby increased by one half (1/2)
of such period, rounded up to the nearest whole day, if necessary.

 

(b)  Any
period of ten (10) days or more provided for in the Lease following notice
from Landlord to Tenant for Tenant to cure a default under the Lease, where
such default is in respect of an obligation under the Lease that in turn is
Subtenant’s obligation under the Google Sublease (such Lease default, a “Subtenant Default”),
is hereby increased by five (5) days; provided
that, with respect to a Subtenant Default described in Section 16.1(c) of
the Lease, if Tenant shall have diligently and continuously prosecuted the cure
of such Subtenant Default from and after the expiration of the cure period
provided by Tenant to Subtenant under the Sublease, the additional five (5) days
granted in this Section 1.18(b) above shall be increased to thirty
(30) days.  Any period of less than ten (10) days
provided for in the Lease for Tenant’s cure of a Subtenant Default following
notice from Landlord to Tenant for Tenant to cure a Subtenant Default is hereby
increased by one half (1/2) of such period, rounded up to the nearest whole
day, if necessary.

 

(c)  Notwithstanding
Section 1.18(b), in no event will any cure period provided for under Section 1.18(b) extend
beyond the second (2nd) business day prior to the day on which the event or circumstance
in question

 

15

 

would result in a default under
the Ground Lease that would permit the Ground Lessor to terminate the Ground
Lease.

 

(d)  In
the event that Landlord delivers a written notice of default under the Lease or
this Amendment, Landlord shall concurrently deliver to Subtenant a duplicate
notice.

 

1.19.        Google
Letter of Credit/Cash Collateral Account. 
Landlord is expressly made a third-party beneficiary of the terms of Section 7
of the Google Sublease.  Landlord shall
be entitled to draw on the “Letter of Credit” (as defined in the Google
Sublease and hereinafter the “Google Letter of Credit”), as co-beneficiary thereunder,
or on any amount in the Cash Collateral Account (as such term is defined in the
Google Sublease) or to exercise any remedy under the documents creating the
security interests referred to in the following sentence, in lieu of Tenant in
the manner provided for in and subject to the Google Sublease.  Tenant hereby grants and conveys to Landlord
a first priority security interest in the Google Letter of Credit and Cash
Collateral Account, and in all proceeds thereof from time to time, to secure
Tenant’s performance of its obligations under the Lease and agrees that it
shall take such further steps as may be necessary or appropriate so as to
ensure the perfection and continued perfection, and first lien position, of
such security interest in favor of Landlord, including in the Cash Collateral
Account.  Landlord shall be accorded all
of the rights of a secured party under the Uniform Commercial Code as in effect
in the State of California.  At such time
as Landlord, pursuant to Section 7.D. of the Google Sublease, is entitled
to have (to the exclusion of Tenant) all of the rights of Tenant under the
Google Sublease in respect of the Google Letter of Credit and Cash Collateral
Account, Landlord shall have the right to have “Lender” (as defined in the Loan
and Security Agreement, dated as of July 2, 2002, between
WXIII/Amphitheatre Realty, L.L.C. and German American Capital Corporation)
designated as co-beneficiary of such rights.

 

1.20.        Contrary
Directions.  In any instance herein
in which Subtenant and Tenant have agreed that Subtenant may make requests or
give notices directly to Landlord, in the event Landlord receives contrary
directions from Tenant and Subtenant, and Landlord is in good faith uncertain
which of such directions should govern, Landlord shall have the right to await
joint instructions from Tenant and Subtenant or a final order from a court of
competent jurisdiction (or at Landlord’s election, the right to request such an
order), and Tenant and Subtenant shall be jointly and severally liable to
Landlord for all costs and expenses (including reasonable attorneys’ fees)
incurred by Landlord in connection therewith.

 

1.21.        Copies
of Agreements; Etc.  Each of
Subtenant and Tenant agrees to deliver to Landlord a copy of the letter
agreement referred to in Section 2.B. of the Google Sublease; the releases
referred to in Section 6.D of the Sublease; and the punchlist referred to
in Section 19.E of the Google Sublease. The delivery of the foregoing to
Landlord is for informational purposes only and, except as may

 

16

 

result under the Nondisturbance Agreement if the Google Sublease
becomes a direct lease between Landlord and Subtenant, shall in no way create
any obligation or duty on the part of Landlord.

 

1.22.        Tenant’s
Obligations to Landlord in respect of the Google Sublease.  Tenant agrees for the benefit of Landlord to
perform and observe its obligations and duties owed to Subtenant under the
Google Sublease, and Tenant agrees that it shall not amend or waive any
material provision of, or terminate or accept the surrender of, the Google
Sublease without the prior written consent of Landlord.  Further, Tenant agrees that (i) its
obligations to Landlord pursuant to the immediately preceding sentence shall be
deemed, for purposes of Section 16.1 and the other applicable provisions
of the Lease, to be an obligation owed by Tenant to Landlord under the Lease, (ii) any
default in such obligations shall constitute a default under the Lease and (iii) any
such default, after applicable notice and cure periods provided for in Section 16.1(c) of
the Lease, shall be an “Event of Default” (as defined in the Lease).

 

1.23.        Tenant’s
Obligation to Landlord in respect of the Letter of Credit.  Tenant agrees and acknowledges that if its
Letter of Credit (as contemplated by Section 4.7 of the Lease) expires at
any time without the proceeds being drawn down and deposited in the Cash
Collateral Account (as such term is defined in the Lease), Tenant shall be
obligated to deliver a new Letter of Credit to Landlord complying with the
terms of Section 4.7 of the Lease.

 

1.24.        NDA
from Ground Lessor.  All costs
incurred in connection with obtaining a nondisturbance and attornment agreement
from Ground Lessor on behalf of each of Tenant and Subtenant shall be split
equally among Landlord, Tenant and Subtenant (i.e., each shall
bear one-third (1/3) of the total costs).

 

1.25.        Glossary.  The following new definitions are added to
the Glossary:

 

“Google
Sublease” shall mean that certain sublease agreement dated as of
July 9, 2003, between Tenant and Google Technology Inc., a California
corporation, as subtenant (“Subtenant”).”

 

“Second Amendment”  shall
mean that certain Second Amendment to Commercial Lease (Amphitheatre), made as
of the 9th day of July, 2003 by Landlord, Subtenant and Tenant.”

 

17

 

Article II.

Miscellaneous

 

2.1.          Termination;
Survival.  The following provision(s)
of this Amendment shall terminate and not survive the expiration or termination
of the Google Sublease, whether such termination is the result of a default on
the part of Subtenant or otherwise: Section 1.18; and the remaining
sections of this Agreement, to the extent applicable by their terms, shall
survive expiry or termination of the Google Sublease.

 

2.2.          Effect
of Amendment.  Except as modified
hereby, the terms and provisions of the Lease are hereby ratified and shall
remain unchanged and in full force and effect.

 

2.3.          Counterparts.  This Amendment may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

 

2.4.          Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of
California with respect to contracts executed and delivered, and to be
performed wholly, within the State of California.

 

2.5.          Modifications.  Neither this Amendment nor any term or
provisions hereof may be changed, waived, discharged or terminated orally, and
no breach thereof shall be waived, altered or modified, except by a written
instrument signed by the parties hereto.

 

2.6.          Successors
and Assigns.  This Amendment shall be
binding upon and inure to the benefit of the undersigned and their legal
representatives, transferees, successors and assigns.

 

2.7.          Brokers.
Each party hereby acknowledges and agrees for the benefit of each other party
the representations, warranties and agreements made by such party in the Google
Sublease and the Landlord-Subtenant Agreement (as applicable) in respect of any
brokers, finders or similar parties relating to the transactions contemplated
in the Google Sublease, the Landlord-Subtenant Agreement and the other
agreements being executed concurrently herewith and agrees to indemnify each
other party for any misrepresentation or breach of warranty or agreement on the
part of such party.

 

 

[Signature pages follow.]

 

18

 

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

 

	
   

  	
  WXIII/AMPHITHEATRE
  REALTY, L.L.C.,

  
	
   

  	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Whitehall
  Parallel Real Estate Limited

  
	
   

  	
   

  	
  Partnership
  XIII, its managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  WH Parallel Advisors, L.L.C. XIII,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GOOGLE
  TECHNOLOGY INC., a California

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON
  GRAPHICS, INC., a Delaware

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

 

EXISTING
ALTERATIONS TO BE RESTORED

 

A-1

Exhibit 10.7

 

AMENDMENT
No. 2 TO SUBLEASE

 

AMENDMENT No. 2 to Sublease dated as of December 17,
2003 (this “Amendment”) by and between SILICON GRAPHICS, INC., a Delaware
corporation, as Sublandlord, and GOOGLE INC., a Delaware corporation (successor
to Google Technology Inc., a California corporation), as Subtenant.

 

WHEREAS, Sublandlord and Subtenant have entered
into that certain Sublease dated as of July 9, 2003 (the “Original
Sublease”), amended by Amendment No. 1 to Sublease dated as of November 18,
2003 (the “First Amendment”; the Original Sublease, as amended by the First
Amendment, is referred to herein as the “Sublease”) for premises located at
1600 Amphitheatre Parkway, Mountain View, California 94043;

 

WHEREAS, the parties have agreed to certain changes
relating to the use of the space in Building 43 housing the communications
infrastructure.

 

NOW, THEREFORE, in accordance with the terms and
conditions of the above-referenced Sublease, Sublandlord and Subtenant agree as
follows (capitalized terms used but not defined herein shall have the meanings
given to such terms in the Sublease):

 

1.                                       Paragraph 22
of the Original Sublease is amended to read in full as follows:

 

22. INITIAL CONSTRUCTION IN AND COOPERATION
REGARDING BUILDING 43.

 

A.                                   Giving
effect to the First Amendment, the new anticipated delivery dates for the
Sublease Premises Portions in Building 43 are December 15, 2003 for the
Building 43 West-1 Premises, the Building 43 West-2 Premises, and the Building
43 East-2 Premises, and March 1, 2004 for the Building 43 East-1
Premises.  Thus, Sublandlord and
Subtenant will be jointly occupying Building 43 between the Actual Delivery
Date of the first Sublease Premises Portion located in Building 43 to be
delivered and the Actual Delivery Date of the last Sublease Premises Portion
located in Building 43 to be delivered.

 

B.                                     Each party
agrees to cooperate and coordinate with the other party any construction
activities in Building 43 so as to prevent interruption of the business
activities of such other party, including without limitation (i) controlling
noise during business hours, (ii) avoiding blocking stairwell and/or
elevator access and (iii) preventing damage to electrical, mechanical and
information technology infrastructure.

 

C.                                     The parties
acknowledge that Sublandlord currently houses and maintains in Building 43 in
the location depicted on Schedule 22.B
(the “IT Area”) certain information
technology and other connectivity equipment (including, without limitation, Sublandlord’s
voice services, network services, outside plant fiber infrastructure, internal
cabling infrastructure connecting the Building 40 Premises with the Building 43
East-1 Premises, and all fiber and copper physical connections) (collectively, “Sublandlord’s IT Equipment”).  Until the Total Occupancy Date, the demise by
Sublandlord to Subtenant of the Sublease Premises shall be subject to the
following:

 

 

(i)                                     the Sublease
Premises shall exclude the IT Area;

 

(ii)                                  Sublandlord
reserves a nonexclusive easement over and through the Sublease Premises in
order to access the IT Area (but no other portion of the Sublease Premises) at
all times and with no notice required; and

 

(iii)                               no
construction by Subtenant shall be conducted prior to January 31, 2004 in
and around the MDF/MPOE vault identified in Schedule 22.B,
and, further all construction work conducted by Subtenant in and around the IT
Area shall be approved by and coordinated with Sublandlord (Sublandlord’s approval
shall not be unreasonably withheld, conditional or delayed) to prevent any
interruption in Sublandlord’s systems, utilities and information technology
network.

 

D.                                    Notwithstanding
Paragraph 22.C(i) above, (i) Sublandlord hereby grants to Subtenant a
nonexclusive license to use certain portions of the IT Area as [shall be
designated in writing by Sublandlord] [described on Schedule 22.D
hereto] (“Subtenant’s IT Area”) to house
Subtenant’s equipment of the type described in the parenthetical appearing in
Paragraph 22.C (collectively, “Subtenant’s IT Equipment”),
(ii) Subtenant shall have unrestricted access (twenty-four hours a day,
seven days a week) to the IT Area through the Total Occupancy Date in order to
maintain, service and otherwise access Subtenant’s IT Equipment located in the
Subtenant’s IT Area, and (iii) Sublandlord shall have unrestricted access
(twenty-four hours a day, seven days a week) to the IT Area through the end of
the Removal Period (defined in Paragraph 22.F below) in order to maintain,
service, otherwise access and remove, in accordance with Paragraph 22.F, Sublandlord’s
IT Equipment.

 

E.                                      In
connection with the shared use of the IT Area by Sublandlord and Subtenant
through the Total Occupancy Date, the Sublandlord and Subtenant agree from the
date hereof through the Total Occupancy Date, as follows:

 

(i)                                     Sublandlord and Subtenant shall share the environmental
infrastructure (such as HVAC, power, lighting, and other building systems) (“IT Area Environmental Systems”) inside the IT Area. Neither
Sublandlord nor Subtenant shall make any changes or upgrades to the IT Area
Environmental Systems without prior written approval from the other party
hereto;

 

(ii)                                  Sublandlord and Subtenant each agree that
it shall not perform or permit to be performed any construction that could reasonably
be expected to impact the other’s IT Equipment and infrastructure. In addition,
prior to commencing any construction work in the IT Area, each of Subtenant and
Sublandlord agree to cooperate with each other in reaching a  mutual written agreement to govern such
construction;

 

(iii)                               Sublandlord agrees to continue to use the
existing service and equipment provided by SBC.  Sublandlord and 

 

2

 

Subtenant agree to share such existing SBC fiber, SBC equipment, existing
cabling, fiber, and copper infrastructure inside the IT Area.  Sublandlord agrees to control and support all
fiber and copper infrastructure inside the IT Area for Subtenant;

 

(iv)                              Sublandlord shall continue to have the
sole and exclusive right to run all fiber and copper physical connections
inside the IT Area for both parties. Subtenant will provide Sublandlord at
least 48 hours’ advance written notice of all fiber and copper physical
connections it proposes to make;

 

(v)                                 Neither Sublandlord nor Subtenant shall (or
shall permit their contractors to) tap in or monitor the other’s communications
traffic in any way or otherwise violate or breach the security systems the
other has installed on their respective equipment; and

 

(vi)                              In the event either Sublandlord or
Subtenant obtains knowledge that an emergency implicating health or safety
issues has occurred, such party shall notify the other party hereto.

 

F.                                      Sublandlord may remove from the Sublease
Premises, within sixty (60) days after the Total Occupancy Date (the “Removal Period”), all outside plant fiber, associated patch
panels, and Sublandlord’s IT Equipment that terminates in the IT Area,
including Sublandlord’s network and voice equipment. Any such property not so
removed by the end of the Removal Period shall automatically and without
further act become the property of Subtenant.  Sublandlord shall repair any damage to
Sublease Premises resulting from such removal.

 

2.                                       This
Amendment may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument. 

 

3

 

IN WITNESS WHEREOF, this
Amendment is executed as of the date first written above.

 

 

	
  SUBLANDLORD:

  	
   

  	
  SUBTENANT:

  
	
   

  	
   

  	
   

  
	
  SILICON GRAPHICS, INC.

  	
   

  	
  GOOGLE INC. (successor to Google 

  Technology Inc.)

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
   

  	
  Printed

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  

 

 

CONSENT
OF LANDLORD TO AMENDMENT OF SUBLEASE

 

Reference
is hereby made to: (i) that certain Commercial Lease (Amphitheatre) dated December 29,
2000 (as amended by that certain Amendment dated April 18, 2001, by the
Second Amendment dated as of July 9, 2003 and as further amended from time
to time, the “Lease”), by and between WXIII/AMPHITHEATRE REALTY,
L.L.C., a Delaware limited liability company (“Landlord”), and SILICON GRAPHICS, INC., a Delaware corporation (“Tenant”),
covering certain leased Premises more particularly defined in the Lease,
located at 1600 Amphitheatre Parkway, Mountain View, CA 94043 (the “Premises”);
(ii) that certain Sublease, dated July 9, 2003 (as amended by that
certain Amendment No. 1 to Sublease dated as of November 18, 2003, the
“Sublease”), by and between Tenant (sometimes referred to as “Sublandlord”),
and GOOGLE TECHNOLOGY INC., a California
corporation (“Subtenant”), relating to the entirety of the Premises, and (iii) Amendment
No. 2 to Sublease, dated as of December 17, 2003 (the “Amendment”),
between Sublandlord and GOOGLE INC., a
Delaware corporation (successor to Subtenant). A copy of the Amendment is
attached as Exhibit “A” hereto and is incorporated herein for all
purposes.

 

Tenant
has requested Landlord to consent to the Amendment.

 

Landlord
has reviewed, and hereby consents to, the Amendment.

 

IN
WITNESS WHEREOF, Landlord has executed and delivered
these presents to Sublandlord and Subtenant this      day
of                        ,
2004.

 

 

	
   

  	
  WXIII/AMPHITHEATRE REALTY,
  L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Whitehall Parallel
  Real Estate Limited

  
	
   

  	
   

  	
  Partnership XIII, its
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WH Parallel Advisors,
  L.L.C. XIII,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:Exhibit
10.4

 

LEASE

 

BETWEEN

 

WXIII/CRITTENDEN REALTY
C, L.L.C.

 

AND

 

WXIII/CRITTENDEN REALTY
D, L.L.C.

 

(LANDLORD)

 

AND

 

SILICON GRAPHICS, INC.

 

(TENANT)

 

 

July 9, 2003

 

(Crittenden C
and Crittenden D)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.A.

  	
  BASIC
  LEASE INFORMATION

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  GENERAL INTERPRETIVE PROVISIONS

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  PREMISES.

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Premises

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Common Area

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Parking

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  TERM.

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Term

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Renewal Option

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  RENT.

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Net Lease – Net Rent

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Base Rent

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Tenant Future
  Payments

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Additional
  Rent

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Late Payment

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.6

  	
  Covenant

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.7

  	
  Credit
  Enhancement

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.8

  	
  Legal Requirements

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  OPERATING EXPENSES.

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Operating
  Expenses

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Payment of
  Operating Expenses

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Proration

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Normalization

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Other Buildings

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Utility Costs

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Taxes on
  Tenant’s Property and Business

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  GROUND
  LEASE.

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Ground Lease

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Compliance
  with Obligations; Conflicts

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Landlord
  Ground Rent Obligation

  	
  19

  

 

i

 

	
  7.

  	
  USE
  OF PREMISES AND CONDUCT OF BUSINESS.

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Permitted
  Use

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Prohibited
  Uses

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Food and
  Beverage

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  REPAIRS
  AND MAINTENANCE; SERVICES.

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Landlord’s
  Obligations

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Tenant’s
  Obligations

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Security

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Special
  Services

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  ACCEPTANCE.

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  ALTERATIONS.

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Alterations
  by Tenant

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Project
  Requirements

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Tenant Improvement Allowance

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Restoration Obligations

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  Ownership of Improvements

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.6

  	
  Tenant’s Personal Property

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  LIENS.

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  COMPLIANCE WITH LAWS AND INSURANCE
  REQUIREMENTS.

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Legal
  Requirements

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Insurance Requirements

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  HAZARDOUS MATERIALS.

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Definitions

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Environmental Release

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Use of Hazardous Materials

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Indemnity

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  No
  Lien

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Investigation

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Notices

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.8

  	
  Surrender

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.9

  	
  Survival

  	
  36

  

 

ii

 

	
  14.

  	
  INDEMNITY; INSURANCE.

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Indemnity

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.2

  	
  Insurance

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.3

  	
  Policies

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.4

  	
  Landlord’s Rights

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.5

  	
  Waiver of Subrogation

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.6

  	
  No
  Liability

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT AND SUBLETTING.

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  Consent Required

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.2

  	
  Notice

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.3

  	
  Terms of Approval

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.4

  	
  Certain Conditions Applicable
  to All Sublettings and Assignments

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.5

  	
  No
  Release

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.6

  	
  Change in Control; Successor Entity

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.7

  	
  Assumption of Obligations

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.8

  	
  Insolvency or Bankruptcy

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.9

  	
  Recovery of Premises

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.10

  	
  Easements

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.11

  	
  Short Term Subletting

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  DEFAULT.

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.1

  	
  Event of Default

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.2

  	
  Remedies

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3

  	
  Cumulative Remedies

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.4

  	
  Waiver of Redemption by Tenant

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.5

  	
  Landlord’s Right to Cure

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.6

  	
  Landlord’s Default

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.7

  	
  Survival

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  LANDLORD’S RESERVED RIGHTS.

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Control of Common Area

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.2

  	
  Access

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.3

  	
  Easements

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.4

  	
  Use
  of Additional Areas

  	
  48

  

 

iii

 

	
   

  	
  17.5

  	
  Subordination

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  LIMITATION OF LANDLORD’S LIABILITY.

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.1

  	
  Limitation

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.2

  	
  Sale of Property

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.3

  	
  No Personal Liability

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.4

  	
  Landlord’s Consent or
  Approval; Limitation on Damages

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  DESTRUCTION.

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.1

  	
  Landlord’s Repair Obligation

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.2

  	
  Termination Option

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.3

  	
  Tenant
  Obligations

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.4

  	
  No
  Claim

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.5

  	
  No
  Damages

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  EMINENT
  DOMAIN.

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.1

  	
  Taking

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.2

  	
  Award

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.3

  	
  Partial Taking

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.4

  	
  Temporary Taking

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.5

  	
  Sale in Lieu of Condemnation

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.6

  	
  Waiver

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  SURRENDER.

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.1

  	
  Surrender

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.2

  	
  Holding Over

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.3

  	
  Quitclaim

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  FINANCIAL STATEMENTS.

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  ESTOPPEL CERTIFICATES.

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  RULES AND REGULATIONS.

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.1

  	
  Rules and Regulations

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.2

  	
  Signs

  	
  58

  

 

iv

 

	
  25.

  	
  INABILITY TO PERFORM.

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  NOTICES.

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  QUIET ENJOYMENT.

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  NO RENT ABATEMENT.

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
  AUTHORITY.

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  BROKERS.

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  BANKRUPTCY OR INSOLVENCY.

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.1

  	
  No Transfer

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.2

  	
  Termination
  Right

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.3

  	
  No Cause for
  Appointment

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.4

  	
  Bankruptcy
  Filings

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  ANTENNA AND ROOFTOP
  SPACE.

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.1

  	
  Antennae

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.2

  	
  Non-Exclusive

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.3

  	
  Access

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.4

  	
  Compliance
  with Legal Requirements

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.5

  	
  Tenant
  Expense

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.6

  	
  Tenant’s
  Property

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.7

  	
  No
  Interference

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.8

  	
  Relocation

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.9

  	
  Indemnification

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  MISCELLANEOUS.

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.1

  	
  Entire
  Agreement

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.2

  	
  No Waiver

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.3

  	
  Modification

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.4

  	
  Successors
  and Assigns

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.5

  	
  Validity

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.6

  	
  Jurisdiction

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.7

  	
  Attorneys’
  Fees

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.8

  	
  Waiver of
  Jury Trial

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.9

  	
  No
  Counterclaim by Tenant

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.10

  	
  Light and
  Air

  	
  66

  

 

v

 

	
   

  	
  33.11

  	
  Lease
  Memorandum

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.12

  	
  Confidentiality

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.13

  	
  Terms

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.14

  	
  Review and
  Approval

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.15

  	
  No
  Beneficiaries

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.16

  	
  Time of
  the Essence

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.17

  	
  Modification
  of Lease

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.18

  	
  Construction

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.19

  	
  Survival

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.20

  	
  Termination

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.21

  	
  Separate
  Leases

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.22

  	
  Effectiveness

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.23

  	
  Certain
  Costs

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.24

  	
  Counterparts

  	
  71

  

 

vi

 

COMMERCIAL LEASE

(Crittenden
Parcel C and Crittenden Parcel D)

 

THIS LEASE is entered
into as of July 9, 2003, by and between each of WXIII/Crittenden
Realty C, L.L.C., a Delaware limited liability company (the “C Landlord”)
and WXIII/Crittenden Realty D, L.L.C., a Delaware limited liability company
(the “D Landlord”
and together with the C Landlord, the “Landlord”),
and Silicon Graphics, Inc., a Delaware corporation (“SGI,” or
the “Tenant”).

 

1.                                      A.  BASIC LEASE INFORMATION.  The
following is a summary of basic lease information.  Each item in this Article 1 incorporates
all of the terms set forth in this Lease pertaining to such item and to the
extent there is any conflict between the provisions of this Article 1 and
any more specific provisions of this Lease, the more specific provisions shall
control.  Any capitalized term not
defined in this Lease shall have the meaning set forth in the Glossary which
appears at the end of this Lease.

 

	
  Description of Premises:

  	
   

  	
  Two (2) buildings, one including 114,122 square
  feet of Rentable Area (the “C Premises”) and one
  including 124,389 square feet of Rentable Area (the “D Premises”,
  and together with the C Premises, the “Premises”), as more
  particularly described on Exhibit A-1.

  
	
   

  	
   

  	
   

  
	
  Address of Premises:

  	
   

  	
  C Premises: 1400 Crittenden Lane 

  Mountain View, California and 

   

  D Premises: 1500 Crittenden Lane 

  Mountain View, California

  
	
   

  	
   

  	
   

  
	
  Rentable Area of Building:

  	
   

  	
  114,122 square feet of Rentable Area, located in one
  (1) separate building and 124,389 square feet of Rentable Area, located
  in one (1) separate building, each as further described on Exhibit A-1.
  [Exhibit to include Rentable Area per floor].

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  120 months from the Commencement Date

  
	
   

  	
   

  	
   

  
	
  Commencement Date:

  	
   

  	
  December 1, 2003

  
	
   

  	
   

  	
   

  
	
  Top Floor Payment Commencement Date:

  	
   

  	
  January 1, 2005

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  November 30, 2013

  
	
   

  	
   

  	
   

  
	
  Initial Base Rent:

  	
   

  	
  $25.34 per sq. ft. of Rentable Area per annum

  

 

 

	
  Base Rent Adjustments:

  	
   

  	
  See attached schedule on Exhibit B

  
	
   

  	
   

  	
   

  
	
  Base Rent Commencement Date:

  	
   

  	
  December 1, 2004

  
	
   

  	
   

  	
   

  
	
  Tenant’s Share of Operating Expenses:

  	
   

  	
  (1) In connection with the D Premises, from the
  Commencement Date until the Top Floor Payment Commencement Date, 50%, and
  100% thereafter, and (2) in connection with the C Premises, from the
  Commencement Date and thereafter, 100%, in each case subject to adjustment as
  provided herein

  
	
   

  	
   

  	
   

  
	
  Use:

  	
   

  	
  General office, research and development and
  engineering, and for no other purposes without Landlord’s prior written
  consent

  
	
   

  	
   

  	
   

  
	
  Tenant Future Payments:

  	
   

  	
  $750,000 (the “2004 Payment”) to Landlord on
  October 1, 2004 (the “2004 Payment Date”) and $1,250,000 (the “2005 Payment”) to Landlord on October 1, 2005 (the
  “2005
  Payment Date”)

  
	
   

  	
   

  	
   

  
	
  Credit Enhancement:

  	
   

  	
  Letter of Credit in an amount (the “Required Amount”) determined as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)   $10,000,000 during the period from the
  Commencement Date to the later of the 2005 Payment Date and the date that the
  2005 Payment is paid to Landlord,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)   $8,000,000 during the period from the later
  of the two dates described in (a) above, to January 5, 2006,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)   beginning on January 5, 2006 and on
  each anniversary thereof (together with the Initial Determination Date, a “Determination Date”),
  the Letter of Credit shall be reduced by $250,000 until the Letter of Credit
  amount equals an amount no less than $6,000,000, and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)   $6,000,000 thereafter during the Term and
  any Renewal Term.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If an Event of Default shall exist on any date on
  which the amount of the Letter of Credit is to be reduced in accordance with
  the above 

  

 

2

 

	
   

  	
   

  	
  provisions, then the amount of the Letter of Credit
  shall not be so reduced and shall instead be reduced in accordance with the
  above schedule only on the next scheduled reduction date upon which an
  Event of Default is not existing.

  
	
  Addresses for Notice:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
  WXIII/Crittenden Realty C, L.L.C. 

  c/o Whitehall Parallel Real Estate Limited 

  Partnership XIII 

  85 Broad Street 

  New York, NY 10004 

  Attention: Adam Brooks 

  Telecopy: 212-357-5505

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WXIII/Crittenden Realty D, L.L.C. 

  c/o Whitehall Parallel Real Estate Limited 

  Partnership XIII 

  85 Broad Street 

  New York, NY 10004 

  Attention: Adam Brooks 

  Telecopy: 212-357-5505

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
   

  
	
   

  	
   

  	
  WXIII/Crittenden Realty C, L.L.C. 

  c/o Whitehall Parallel Real Estate Limited 

  Partnership XIII 

  Goldman Sachs Group, Inc. 

  100 Crescent Court 

  Dallas, TX 75201 

  Attention: Aaron Wetherill 

  Telecopy: 214-855-6305

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WXIII/Crittenden Realty D, L.L.C. 

  c/o Whitehall Parallel Real Estate Limited 

  Partnership XIII 

  Goldman Sachs Group, Inc. 

  100 Crescent Court 

  Dallas, TX 75201 

  Attention: Aaron Wetherill 

  Telecopy: 214-855-6305

  
	
   

  	
   

  	
   

  
	
  and to:

  	
   

  	
   

  
	
   

  	
   

  	
  Legacy Partners 

  4000 East 3rd Avenue 

  

 

3

 

	
   

  	
   

  	
  Foster City, CA 94404 

  Attention: Steve Dunn and Hanna Eyal 

  Telecopy: 650-571-2211

  
	
  and to:

  	
   

  	
   

  
	
   

  	
   

  	
  Sullivan & Cromwell LLP 

  125 Broad Street 

  New York, NY 10004 

  Attention: Arthur S. Adler 

  Telecopy: 212-558-3588

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Silicon Graphics, Inc. 

  1400 Crittenden Lane 

  Mountain View, CA 94043 

  Attention: Michael L. Hirahara 

  Telecopy: 650-932-0504

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Silicon Graphics , Inc. 

  1500 Crittenden Lane 

  Mountain View, CA 94043 

  Attention: Sandra Escher 

  Telecopy: 650-933-0298

  
	
   

  	
   

  	
   

  
	
  and to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Berliner Cohen 

  10 Almaden Blvd., 

  11th Floor San Jose, CA 95113 

  Attention: Kathy Siple 

  Telecopy: 408-998-5388

  
	
   

  	
   

  	
   

  
	
  Brokers:

  	
   

  	
  Liberty Greenfield 

  717 17th St., Suite 2700 

  Denver, CO 80202 

  Attention: Kenneth Gilbert 

  Telecopy: 817-599-3333

  

 

4

 

B.                                    GENERAL
INTERPRETIVE PROVISIONS.

 

(a)                                  The
terms “herein”, “hereto”, “hereunder” and all terms of
similar import shall be deemed to refer to this Lease as a whole rather than to
any Article, Section or Exhibit to this Lease.

 

(b)                                 Unless
otherwise specified, references in this Lease to the “Section    ”,
“Subsection    ” or “Article    ” shall
be deemed to refer to the Section, Subsection or Article of this
Lease bearing the number so specified. 
References in this Lease to “Exhibit    ” shall be
deemed to refer to the Exhibit or Schedule of this Lease bearing the
letter or number so specified.

 

(c)                                  Unless
otherwise specified or unless inappropriate in any specific context, all references
in this Lease to any singular noun shall be deemed equally applicable to the
plural of such noun, and all references to the plural of any noun shall be
deemed equally applicable to the singular of such noun.

 

(d)                                 Captions used for or in Sections, Articles,
Schedules and Exhibits of this Lease are for convenience of reference only and
shall not affect the construction of this Lease.

 

(e)                                  The term “mortgage” shall include a
mortgage, deed of trust or similar instrument, and shall include any such instrument
to a trustee to secure an issue of bonds, and the term “mortgagee” shall
include the secured party thereunder, including, such a trustee.

 

(f)                                    The terms “include”, “including”
and “such as” shall each be construed as if followed by the phrase “without
being limited to”.

 

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

 

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

 

(i)                                     Reference to Tenant being “in default
hereunder”, or words of like import, shall mean that Tenant is in default
in the performance of one or more of Tenant’s obligations hereunder, and
reference to Tenant not being “in default hereunder” shall mean that Tenant is
not in default in the performance of any of Tenant’s obligations.

 

5

 

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

 

(k)                                  Reference to “termination of this Lease”
includes expiration or earlier termination of the Term or cancellation of this
Lease pursuant to any of the provisions of this Lease or of any Legal
Requirement.  Upon a termination of this
Lease, the Term and estate granted by this Lease shall end at 11:59 p.m.
of the date of termination as if such date were the Expiration Date and neither
party shall have any further obligation or liability to the other after such
termination (i) except as shall be expressly provided for in this Lease,
or (ii) except for such obligations as by their nature or under the
circumstances can only be, or by the express provisions of this Lease, may be,
performed after such termination, and, in any event, unless expressly otherwise
provided in this Lease, any liability for payment which shall have accrued to
or with respect to any period ending at the time of termination shall survive
the termination of this Lease.

 

(l)                                     The term “Tenant” shall mean Tenant herein named
or any immediate or remote assignee of or other successor to the Tenant’s
estate and interest under this Lease, provided that the foregoing shall not
modify the provisions of Article 15.

 

(m)                               Whenever this Lease provides that Tenant shall
indemnify the Landlord, such provision shall be deemed to mean that Tenant
shall indemnify, defend and hold harmless Landlord in accordance with Article 14.

 

(n)                                 Except as the context may otherwise require,
references to this “Lease” means this Lease and the Tenant Work Letter and any
other exhibits and attachments hereto.

 

2.                                      PREMISES.

 

2.1                               Premises.  Subject to the
terms, covenants and conditions set forth in this Lease, Landlord hereby leases
to Tenant and Tenant hereby leases from Landlord those premises (the “Premises”)
consisting of the buildings shown on Exhibit A-1
and identified in Article 1 (collectively, the “Building”).  The approximate total Rentable Area of the
Premises and the Building are specified in Article 1.  Together, the Building, any other buildings
located in the vicinity of the Building on the land described on Exhibit A-2 and operated as a
common project with the Building, and the Common Area for the joint operation
of the Building and such other buildings, are referred to as the “Property”.

 

2.2                               Common Area.  Landlord hereby
grants to Tenant and its employees, agents, contractors and invitees
(collectively, “Tenant’s Agents”) a non-exclusive license in
common with other tenants of the Property to use the Common Area during the
Term.  Tenant’s rights to the Common Area
shall be subject to the Rules and 

 

6

 

Regulations
described in Section 24.1 and to Landlord’s reserved rights described in Article 17.

 

2.3                               Parking.  Landlord hereby
grants to Tenant and Tenant’s Agents a non-exclusive license in common with
other tenants of the Property to use parking areas located on the Property for
parking and for ingress to and egress from the Property. Tenant’s license shall
not be assigned, sublet or otherwise transferred separately from the
Premises.  Tenant agrees that neither
Tenant nor Tenant’s Agents shall use parking spaces in areas not designated for
Tenant’s use.  Landlord shall have the
right, at Landlord’s sole discretion (but subject to any covenants or
restrictions encumbering the Property), to specifically designate the location
of Tenant’s parking spaces (if any) within the parking areas of the Common
Area.  Tenant’s parking spaces (if any)
may be relocated by Landlord from time to time upon written notice.  Tenant shall not, at any time, park, or
permit the parking of the trucks or vehicles of Tenant or Tenant’s Agents in
any portion of the Common Area not designated by Landlord for such use by
Tenant.  Provided that Landlord and its
agents may also use the parking areas in connection with the performance of its
obligations or exercise of its rights under this Lease, Tenant’s right to use
parking shall be equal to Tenant’s Share of parking (where the denominator used
to determine such share shall equal the sum of the square footages of all of the
Rentable Area of the Property).  Tenant
shall not park nor permit to be parked any inoperative vehicles or store any
materials or equipment on any portion of the parking area or other areas of the
Common Area.  Tenant agrees to assume
responsibility for compliance by Tenant’s Agents with the parking provisions
contained in this Section.  Tenant hereby
authorizes Landlord at Tenant’s expense to attach violation stickers or notices
to such vehicles not parked in compliance with this Section and to tow
away any such vehicles.  In addition, a
specific section of the parking area may be set aside by Landlord for
visitor parking for the Property.

 

3.                                      TERM.

 

3.1                               Term.  The Premises are
leased for a term (the “Term”) commencing on the
Commencement Date and expiring on the Expiration Date.  The Term shall end on the Expiration Date, or
such earlier date on which this Lease terminates pursuant to its terms.  The date upon which this Lease actually
terminates, whether by expiration of the Term or in the event of default or
surrender of the Premises is sometimes referred to in this Lease as the “Termination Date”.

 

3.2                               Renewal
Option.  Tenant shall have two (2) options (the “Renewal Options”)
to extend the Term for a period of five (5) years (each, a “Renewal Term”,
and respectively the “First
Renewal Term” and the “Second Renewal Term”).  Each Renewal Term (i) must be exercised,
if at all, as to the entire Premises subject to this Lease as of the
Commencement Date (unless reduced pursuant to condemnation) and (ii) will be
void if this Lease has previously expired or terminated with respect to any
part of the Premises leased by Tenant hereunder as of the Commencement Date
(other than as a result of condemnation), or if the Premises then leased by
Tenant hereunder shall be less than 100% of the Premises as of the Commencement
Date.  Each Renewal Option shall be void
if an Event of Default by Tenant exists, either at the time of exercise of the 

 

7

 

applicable Renewal
Option or the time of commencement of the applicable Renewal Term.  Each Renewal Option must be exercised, if at
all, by written notice from Tenant to Landlord given not less than twelve (12)
months prior to the expiration of the Term (in the case of the First Renewal
Term), and not less than twelve (12) months prior to the expiration of the
First Renewal Term (in the case of the Second Renewal Term).  For the avoidance of doubt, the Second
Renewal Term shall be void unless the First Renewal Option shall be timely exercised
by Tenant.  Each Renewal Term shall be
upon the same terms and conditions as the original Term, except that the Base
Rent applicable to the relevant Renewal Term shall be equal to the greater of (i) Base
Rent payable under this Lease for the full year immediately preceding the
effectiveness of that Renewal Term or (ii) Prevailing Market Rent as of
the commencement of that Renewal Term, as determined pursuant to Exhibit C.  As a condition to the exercise and the
effectiveness of the Renewal Option, Tenant shall be required to modify the
Letter of Credit so that the Letter of Credit will have a face amount equal to
the Required Amount and otherwise meet the requirements of Section 4.7
with respect to the Term as extended by Tenant’s exercise of the Renewal
Option.  The Renewal Option is personal
to Tenant and shall be inapplicable and null and void if Tenant assigns its
interest under this Lease (including an “Assignment” as defined in Section 15.1
but excluding short-term Subleases contemplated by Section 15.11).

 

4.                                      RENT.

 

4.1                               Net Lease – Net Rent.  It
is the purpose and intent of Landlord and Tenant that, except as expressly
provided otherwise herein, this Lease shall be deemed and construed to be a
so-called “triple net lease” and that the Base Rent and Additional Rent shall
be absolutely net to Landlord throughout the Term, so that this Lease shall
yield, absolutely net to Landlord, the Base Rent and Additional Rent throughout
the Term, free of any charges, assessments, impositions, Real Estate Taxes or
deductions of any kind charged, assessed or imposed on or against the Premises
and without abatement, deduction, deferment, reduction, defense, credit,
set-off or counterclaim (except as may otherwise be expressly provided herein)
whatsoever by Tenant, and Landlord shall not under any circumstances or
conditions, whether now existing or hereafter arising, or whether beyond the
present contemplation of the parties, be expected or required to pay any such
charge, assessment, imposition, Real Estate Tax or deduction, or be under any
obligation or liability hereunder except as expressly otherwise provided
herein. It is agreed that except as expressly otherwise provided herein all
costs, expenses and charges of every kind and nature whatsoever relating to the
Premises, or the use, operation or maintenance thereof, which may arise or
become due during the Term of this Lease, including, without limitation, those
relating to the maintenance, preservation, care, repair and operation of the
Premises (including, without limitation, all costs, expenses and charges for
water, sewer, natural gas, electricity, telephone and any other utility used
upon or furnished to the Premises) and all restorations, replacements,
Alterations and additions in and to the Premises as herein provided, but
specifically excluding Monthly Rent under the Ground Lease, shall be paid
and/or performed by Tenant, at Tenant’s sole cost and expense, and Landlord
shall be indemnified and saved harmless by Tenant from and against the same.

 

8

 

4.2                               Base Rent.  (a) Commencing
upon the Base Rent Commencement Date in respect of all portions of the Premises
except the Top Floors, and commencing upon the Top Floor Payment Commencement
Date in respect of the Top Floors, and thereafter during the Term, Base Rent
will be payable in monthly installments in advance on or before the first day
of each month at the rate of one-twelfth (1/12) of the annual Base Rent
specified in Article 1.  Landlord
will, on or after the first day of each calendar month or the immediately
preceding business day if the first day of a month is not a business day, draw
upon the Letter of Credit each month for payment of monthly Base Rent then
due.  If Landlord notifies Tenant that
Landlord does not intend or is unable to draw on the Letter of Credit, Tenant
shall pay the Base Rent due to Landlord by wire transfer of immediately
available funds, to Landlord’s account specified in writing to Tenant, without
any prior notice or demand and without any deductions or setoff whatsoever,
other than as expressly provided herein. 
If the Commencement Date or the Top Floor Payment Commencement Date
occurs on a day other than the first day of a calendar month, or the
Termination Date occurs on a day other than the last day of a calendar month,
then the Base Rent for such fractional month will be prorated on the basis of
the actual number of days in such month. 
The Rentable Area of the Premises and the Building shall be conclusively
presumed to be as stated in Article 1, and shall not be subject to
adjustment by either Landlord or Tenant during the Term, other than as
described herein.

 

(b)                                 Commencing
on December 1, 2004 and every December 1 thereafter (each, an “Adjustment Date”), the Base Rent shall be increased as
stated in Article 1.

 

4.3                               Tenant Future Payments.  Tenant
shall pay to Landlord the 2004 Payment
on the 2004 Payment Date, and the 2005 Payment on
the 2005 Payment Date.

 

4.4                               Additional Rent.  All sums due
from Tenant to Landlord (other than the Base Rent) or to any third party under
the terms of this Lease shall be additional rent (“Additional Rent”),
including, without limitation, the 2004 Payment and the 2005 Payment, the
charges for Operating Expenses (described in Article 5) and all sums incurred
by Landlord due to Tenant’s failure to perform its obligations under this
Lease. In accordance with Section 5.1, (a) Tenant shall pay directly
to the person entitled thereto all Operating Expenses identified in clauses
(iii), (vii) and (viii) of Section 5.1(b), and (b) Landlord
shall pay directly Operating Expenses identified in Section 5.1(b) (other
than in clauses (iii), (vii) and (viii)), for which Tenant shall reimburse
Landlord as Additional Rent payable in monthly installments in advance equal to
one-twelfth (1/12) of Tenant’s Share of the annual amount thereof.  All Additional Rent which is payable to
Landlord shall be paid at the time and place that Base Rent is paid.  For the avoidance of doubt, Landlord will
draw upon the Letter of Credit each month on the same day that Base Rent is
drawn in an amount equal to the Additional Rent then due (including, if
applicable, the 2004 Payment and the 2005 Payment), provided that if Landlord
delivers the notice described in Section 4.2(a), Tenant shall pay the
Additional Rent to Landlord in the same manner as Base Rent.  Landlord will have the same remedies for a
default in the payment of any Additional Rent as for a default in the payment
of Base Rent.  Together, Base Rent and
Additional Rent are sometimes referred to in this Lease as “Rent”.  There shall be no 

 

9

 

abatement of,
deduction from, counterclaim or setoff against Rent except as otherwise
specifically provided in this Lease.

 

4.5                               Late Payment.  Any unpaid
Rent shall bear interest from the date due until paid at the lesser of (i) fifteen
percent (15%) per annum or (ii) the maximum interest rate allowed by law
(the “Interest
Rate”).  Tenant
agrees that the interest charge provided for herein is equal to or less than a
reasonable estimate of the additional administrative costs and detriment that
will be incurred by Landlord as a result of the failure by Tenant to pay Rent
in a timely manner.  In the event of nonpayment
of interest on overdue Rent, Landlord shall have, in addition to all other
rights and remedies, the rights and remedies provided in this Lease and by law
for nonpayment of rent.

 

4.6                               Covenant.  Tenant covenants to
pay (a) Rent when due and (b) observe and perform and not to suffer
or permit any violation of Tenant’s obligations under this Lease.

 

4.7                               Credit Enhancement.  (a)  On
or prior to the Commencement Date, Tenant shall deliver to Landlord a Letter of
Credit as security for the full and punctual performance by Tenant of all of
the terms of this Lease.  For so long as
the Letter of Credit is in effect and sufficient funds thereunder shall be
available for draw, Landlord shall be entitled to draw such Letter of Credit
each month for payment of Base Rent and Additional Rent.  In addition, if Landlord shall be entitled to
draw the Letter of Credit in whole or in part pursuant to the other provisions
of this Lease, Landlord shall have the right, at its option, either to deposit
the cash proceeds of any such draw upon the Letter of Credit into a cash
collateral account (the “Cash Collateral Account”) established in Landlord’s name
and maintained by Landlord or to apply the proceeds to the obligations of
Tenant due or to become due hereunder. 
The Cash Collateral Account shall be under the sole dominion and control
of Landlord and Landlord shall have the sole right to make withdrawals from the
Cash Collateral Account and to exercise all rights with respect to the amounts
deposited in the Cash Collateral Account.

 

(b)                                 The
initial letter of credit and any replacement letter of credit issued to
Landlord shall satisfy the requirements set forth in this Section 4.7
(each, a “Letter of Credit”).  Each Letter of Credit shall be a clean,
irrevocable, non-documentary and unconditional letter of credit issued by and
drawable upon any commercial bank, trust company, national banking association
or savings and loan association with offices for banking and drawing purposes
in The City of San Francisco or the City of New York (the “Issuing Bank”),
which has outstanding, unsecured, uninsured and unguaranteed indebtedness, or
shall have issued a letter of credit or other credit facility that constitutes
the primary security for an outstanding indebtedness (which is otherwise
uninsured and unguaranteed), that is then rated, without regard to
qualification of such rating by symbols such as “+” or “-” or numerical
notation, “A” or better by Moody’s Investment Service and “A” or better by
Standard & Poor’s Ratings Service (and is not on credit-watch or
similar credit review with negative implication), and has combined capital,
surplus and undivided profits of not less than $1,000,000,000.  Each Letter of Credit shall (i) name
Landlord as beneficiary, (ii) be in the amount of the Required Amount, (iii) have
a term of not less than one (1) year, (iv) permit multiple drawings, (v) be
fully 

 

10

 

transferable by
Landlord without payment of any fees or charges, (vi) at Landlord’s
request, name any Leasehold Mortgagee as a co-beneficiary and (vii) otherwise
be in form and content satisfactory to Landlord in its sole discretion.  If upon the transfer of any Letter of Credit,
any fees or charges shall so be imposed, then such fees or charges shall be
payable solely by Tenant and the Letter of Credit shall so specify.  Regardless of the initial expiration date of
any Letter of Credit, each Letter of Credit shall expressly provide that
(unless notice of non-renewal is delivered in accordance with the following
sentence) it shall be deemed automatically renewed, without amendment, for
consecutive periods after such expiration date of one year each during the Term
through the date that is at least one hundred twenty (120) days after the
Expiration Date.  If the Issuing Bank
desires not to renew a Letter of Credit, it shall deliver a notice (the “Non-Renewal Notice”)
to Landlord by certified mail, return receipt requested, not less than sixty
(60) days prior to the then-current expiration date of the Letter of
Credit, stating that the Issuing Bank has elected not to renew the Letter of
Credit.  In such event or if (a) for
any other reason the Letter of Credit would expire by its terms in sixty
(60) days or less from such date or (b) the Issuing Bank is
downgraded so that it no longer satisfies the rating requirements set forth in
this Section 4.7, Landlord shall have the right, at its option, either
(x) to draw the full amount of the Letter of Credit, by sight draft on the
Issuing Bank, and thereafter hold the proceeds in the Cash Collateral Account
and apply them pursuant to the terms of this Article 4, or (y) to
require Tenant to procure, or Landlord to procure on Tenant’s behalf at Tenant’s
cost and utilizing if necessary the cash proceeds so drawn, a replacement
Letter of Credit that satisfies the requirements of this Section 4.7;
provided that Landlord shall provide Tenant with notice of any such event at
least ten (10) business days before exercising such rights and Tenant may,
within ten (10) business days after such notice is provided, deliver a
replacement Letter of Credit that satisfies the requirements of this Section 4.7,
and provided further that such notice shall not be required in the event
Landlord determines in good faith that the delay caused by providing such
notice presents a risk that Landlord will not be able to exercise its rights to
draw upon the Letter of Credit following such delay.  In the event that Tenant’s Letter of Credit
expires at any time without the proceeds being drawn down and deposited in the
Cash Collateral Account, Tenant shall be obligated to deliver a new Letter of
Credit to Landlord complying with the terms of this Section 4.7.  Each Letter of Credit shall be governed by
the International Standby Practices-ISP98 or any standard set of practices
replacing ISP98.  Each Letter of Credit
shall be substantially in the form attached hereto as Exhibit D.

 

(c)                                  Within
three (3) business days following any draw under the Letter of Credit or
such shorter period as may be required under the Tenant’s reimbursement agreement
with the Issuing Bank, Tenant shall reimburse the Issuing Bank for each such
draw in an amount sufficient to insure that the face value of the Letter of
Credit is an amount at least equal to the Required Amount and will cause the
Issuing Bank to provide written notice to Landlord if such reimbursement is not
timely made.  In the event Tenant fails
to timely reimburse the Letter of Credit bank or increase the face amount of
the Letter of Credit required, such failure shall constitute an Event of Default
hereunder, and, in addition to all other rights and remedies available to
Landlord for Tenant’s default, Landlord shall have the right to draw the full
amount of the Letter of Credit, by sight 

 

11

 

draft on the
Issuing Bank, and shall thereafter hold in the Cash Collateral Account or apply
the cash proceeds of the Letter of Credit pursuant to the terms of this Article 4.

 

(d)                                 In
addition to the foregoing, if an Event of Default occurs under this Lease, Landlord
may draw the full amount of the Letter of Credit, by sight draft on the Issuing
Bank, and thereupon receive all or a portion of the face amount of the Letter
of Credit, and use, apply or retain the whole or any part of such proceeds, as
the case may be, to the extent required for the payment of any Base Rent,
Additional Rent or other amounts due or to become due hereunder or for any
reasonable sum which Landlord may expend or may be required to expend by reason
of Tenant’s default in respect of any of the terms of this Lease, including any
damages or deficiency in the re-letting of the Premises, whether accruing
before or after summary proceedings or other re-entry by Landlord.  In the case of every such use, application or
retention, Tenant shall, within three (3) business days following any such
use, application or retention or such shorter period as may be required under
the Tenant’s reimbursement agreement with the Issuing Bank, cause the face
value of the Letter of Credit to be restored to the Required Amount, and Tenant
shall cause the Issuing Bank to acknowledge to Landlord that such restoration
of the Required Amount occurred in a timely manner.  In
the event the Landlord draws upon the Letter of Credit as provided in this Section 4.7
and retains excess proceeds of such draw in the Cash Collateral Account,  Tenant shall only be required to cause the
face value of the Letter of Credit to be restored to an amount equal to the
Required Amount less the amount of excess proceeds which Landlord has
deposited in the Cash Collateral Account. 
In the event Landlord withdraws funds in the Cash Collateral Account for
amounts secured by the Letter of Credit as set forth in this Section 4.7,
Tenant shall within three (3) days following Landlord’s notice to Tenant
of such withdrawal, cause the face value of the Letter of Credit to be
increased by the amount of funds withdrawn from the Cash Collateral
Account.  Subject to Section 33.20,
if Tenant shall fully and punctually comply with all of the terms of
this Lease, the Letter of Credit shall be terminated on the one hundred
twentieth (120th) day after the termination of this Lease and delivery of
exclusive possession of the Premises to Landlord.

 

(e)                                  In
the event of a transfer of Landlord’s interest in the Building or the Property,
Landlord shall have the right to transfer the Letter of Credit or Cash
Collateral to the transferee and upon such transfer to such transferee,
Landlord shall ipso facto be released by Tenant
from all liability for the return of the Letter of Credit or Cash Collateral;
provided the transferee agrees to assume Landlord’s obligation to return the
Letter of Credit or Cash Collateral; and Tenant agrees to look solely to the
new landlord for the return of said Letter of Credit or Cash Collateral; and it
is agreed that the provisions hereof shall apply to every transfer or
assignment made of the Letter of Credit or Cash Collateral to a new
landlord.  Tenant shall promptly execute
such documents reasonably requested by Landlord as may be necessary to
accomplish any such transfer or assignment of the Letter of Credit or Cash
Collateral.  Tenant shall not assign or
encumber or attempt to assign or encumber the Letter of Credit or Cash
Collateral and neither Landlord nor its successors or assigns shall be bound by
any such assignment, encumbrance or attempted assignment or encumbrance.  Upon ten (10) days prior written notice
from Landlord, Tenant shall cause any Letter of Credit to be modified so that
it names any Leasehold Mortgagee as the co-beneficiary under the Letter of
Credit.  The 

 

12

 

Letter of Credit shall provide that sight drafts presented for payment
of monthly Base Rent shall identify the monthly Base Rent payment to which they
relate.  In the event the Issuing Bank is
presented with multiple sight drafts from the beneficiary and co-beneficiary
for payment of the same monthly Base Rent, the Issuing Bank shall honor the
first sight draft received by the Issuing Bank for such monthly Base Rent
payment.  If at any time the Issuing Bank
is presented with multiple sight drafts from the beneficiary and co-beneficiary
for draw of amounts other than the same monthly Base Rent payment, and such
requested amounts in the aggregate exceed the face value of the Letter of
Credit, the Issuing Bank shall honor the sight draft presented by the
co-beneficiary and not the sight draft presented by the beneficiary.

 

(f)                                    From time to time, Tenant may substitute the
letter of credit then in effect with a substitute letter of credit meeting the
requirements of this Section 4.7 and otherwise in substantially the form
of the letter of credit then in effect.

 

4.8                               Legal Requirements.  If any
of the Rent payable under the terms of this Lease shall be or become
uncollectible, reduced or required to be refunded because of any Legal
Requirement, Tenant shall enter into such agreements and take such other steps
as Landlord may reasonably request and as may be legally permissible, to permit
Landlord to collect the maximum rents which from time to time during the
continuance of such legal rent restriction may be legally permissible.  Upon the termination of such legal rent
restriction, (a) the rents shall become and thereafter be payable in
accordance with the amounts reserved herein for the periods following such
termination and (b) Tenant shall pay to Landlord, to the maximum amount
legally permissible, an amount equal to, (i) the rents which would have
been paid pursuant to this Lease but for such legal restriction, less (ii) the
rents and payments in lieu of rents paid by Tenant during the period such legal
restriction was in effect.

 

5.                                      OPERATING EXPENSES.

 

5.1                               Operating Expenses.  For
purposes of this Article 5, the following terms shall have the meanings
described below:

 

(a)                                  “Tenant’s Share” means (i) 50% with respect to
D Premises and 100% with respect to C Premises for the period commencing with the
Commencement Date and ending with the Top Floor Payment Commencement Date,
provided that if Tenant shall occupy all or any portion of the Top Floors prior
to the Top Floor Payment Commencement Date, then Tenant’s Share shall be
increased in respect of such period of occupancy by increasing the numerator
used in calculating Tenant’s Share by the square footage of Rentable Area so occupied
by Tenant; and (ii) 100% for both the C Premises and the D Premises for
the period commencing with the Top Floor Payment Commencement Date and ending
on the date the Premises leased by Tenant hereunder shall be less than 100% of
the Premises.  In such event, Tenant’s
Share shall be reduced to the proportionate share of the Rentable Area then
leased by Tenant at the Building. 
Notwithstanding the foregoing, to the extent incurred by Landlord in
connection with the ownership, management, operation, maintenance, repair and
replacement 

 

13

 

of the Common Area, Tenant’s Share
with respect to (b)(iv), (b)(v), (b)(vi), (b)(x), (b)(xii), (b)(xiii),
(b)(xiv), (b)(xv), (b)(xvii), (b)(xviii) and (b)(xix) shall be the percentage
determined by dividing the Rentable Area then leased by Tenant at the Building
by the total Rentable Area at the Property (except to the extent that any of
the foregoing are dependent or based on usage, in which case, Tenant’s Share
shall be determined by reference to Tenant’s usage relative to the usage of
other occupants of the Property).  The
parties hereto acknowledge that Tenant’s Share is based upon an assumption that
the C Premises contain a total of 114,122 square feet of Rentable Area, the D
Premises contain a total of 124,389 square feet of Rentable Area, the Premises
in its entirety contains a total of 238,511 square feet of Rentable Area and
the Property contains a total of 471,749 square feet (of which 115,023 is
attributable to Crittenden B), and that the calculation of Tenant’s Share is
based upon a fraction, the denominator of which is, as applicable, 114,122 (for
the C Premises), 124,389 (for the D Premises), 238,511 (for the Premises), or
471,749 (for the Property), in accordance with the terms of this section.

 

(b)                                 “Operating Expenses” means the total costs and expenses
paid or incurred by Landlord in connection with the ownership, management,
operation, maintenance, repair and replacement of the Building and the Common
Area in connection with its obligations hereunder, including, without
limitation, all costs of:

 

(i)                                     amounts
payable under the Ground Lease other than Monthly Rent (including escalations);

 

(ii)                                  taxes,
assessments and charges levied upon or with respect to the Property or any
personal property of Landlord used in the operation of the Property, or on
Landlord’s interest in the Property or such personal property (“Real Estate Taxes”).  Real Estate Taxes shall include, without
limitation, all general real property taxes and general and special
assessments, charges, fees, or assessments for transit, housing, police, fire,
or other governmental services or purported benefits to the Property or the
occupants thereof, service payments in lieu of taxes that are now or hereafter
levied or assessed against Landlord by the United States of America, the State
of California or any political subdivision thereof, or any other political or
public entity, and shall also include any other tax, assessment or fee, however
described, that may be levied or assessed as a substitute for, or as an
addition to, in whole or in part, any other Real Estate Taxes, whether or not
now customary or in the contemplation of the parties as of the Commencement
Date.  Real Estate Taxes shall not include
franchise, transfer, succession, gift, inheritance, gross receipts or capital
stock taxes or income taxes measured by the net income of Landlord unless, due
to a change in the method of taxation, any of such taxes is levied or assessed
against Landlord as a substitute for, or as an addition to, in whole or in
part, any other tax that would otherwise constitute a Real Estate Tax.  Real Estate Taxes shall also include 

 

14

 

reasonable legal fees, costs, and disbursements
incurred in connection with proceedings to contest, determine, or reduce Real
Estate Taxes;

 

(iii)                               repair,
maintenance, replacement and supply of air conditioning, electricity, steam,
water, heating, ventilating, mechanical, escalator and elevator systems,
sanitary and storm drainage systems and all other utilities and mechanical
systems which are commonly used by all Building tenants;

 

(iv)                              landscaping
and gardening;

 

(v)                                 security,
repaving, repairing, maintaining and restriping of parking areas;

 

(vi)                              repairs
and maintenance to the Common Area, and all labor and material costs related
thereto;

 

(vii)                           security
and fire protection to the Building (other than areas occupied by tenants);

 

(viii)                        general
maintenance, janitorial services, trash removal, cleaning and service contracts
for the Building and the cost of all supplies, tools and equipment required in
connection therewith;

 

(ix)                                all
insurance (including earthquake coverage) carried by Landlord on the Building,
the Common Area and the Property, or in connection with the use or occupancy
thereof, including fire and extended coverage, vandalism and malicious
mischief, public liability and property damage, worker’s compensation
insurance, rental income insurance, terrorism insurance and any other insurance
commonly carried by prudent owners of comparable buildings;

 

(x)                                   wages,
salaries, payroll taxes and other labor costs and employee benefits for all
persons engaged in the operation, management, maintenance and security of the
Property and not otherwise on the general payroll of Landlord or an affiliate
of Landlord or any property manager other than a person located on site at the
Property based on the proportionate amount of time such person devotes to the
management of the Property relative to other properties;

 

(xi)                                management
fees at commercially reasonable rates, provided that, so long as Tenant leases
hereunder 100% of the Premises leased by Tenant hereunder as of the
Commencement Date Tenant shall have the right to approve the Property manager,
such approval not to be unreasonably withheld or delayed, and Tenant hereby
agrees that Legacy Property Management, L.P. is an acceptable manager; provided
further, it is agreed
that (x) as of the date hereof, 1.25% per annum of the annual Base Rent and Operating
Expenses payable by Tenant to Landlord (and 

 

15

 

not directly to third parties as permitted by Section 5.2)
hereunder constitutes
a commercially reasonable rate and (y) the same shall not be subject to
increase or decrease to reflect changing market conditions until after the
first anniversary of the date hereof;

 

(xii)          fees,
charges and other costs of all independent contractors engaged by Landlord;

 

(xiii)         license,
permit and inspection fees;

 

(xiv)        charges
on or surcharges imposed by any governmental agencies on or with respect to
transit or automobile usage or parking facilities;

 

(xv)         the
cost of supplies, tools, machines and equipment used in operation and
maintenance of the Common Area;

 

(xvi)        any
Ordinary Capital Improvements; provided that the cost of any such Ordinary
Capital Improvements shall be amortized over the useful life of the improvement
in question, together with interest on the unamortized balance at the Interest
Rate;

 

(xvii)       the
cost of contesting the validity or applicability of any governmental enactments
including taxes which may affect operating expenses;

 

(xviii)      audit
and bookkeeping fees, and legal fees and expenses; and

 

(xix)         any
other expenses of any kind whatsoever reasonably incurred in connection with
the management, operation, maintenance, repair and replacement of the Building
and the Common Area.

 

Notwithstanding anything
in the definition of Operating Expenses to the contrary, Operating Expenses
shall not include the following, except to the extent specifically permitted by
a specific exception to the following:

 

(A)                              Costs
actually reimbursed to Landlord by insurance proceeds for the repair of damage
to the Building;

 

(B)                                Marketing
costs, including without limitation, leasing commissions, space planning costs,
and other costs and expenses incurred in connection with lease, sublease and/or
assignment negotiations and transactions with Tenant or present or prospective
tenants of the Building;

 

(C)                                Overhead
and profit increment paid to Landlord or to subsidiaries or affiliates of
Landlord for goods and/or services in or to 

 

16

 

the Building to the extent the same exceeds the costs
of such goods and/or services generally available to unaffiliated third
parties;

 

(D)                               Costs
of capital improvements that do not constitute Ordinary Capital Improvements
unless Tenant shall request or approve any such capital improvements;

 

(E)                                 Interest,
principal, points and fees on debts or amortization on any mortgage or
mortgages or any other debt instrument encumbering the Building or the
Property; and

 

(F)                                 Monthly
Rent (including escalations) due during the Term from C Landlord under the C Ground Lease and
from D Landlord under the D Ground Lease (the C Ground Lease and the
D Ground Lease collectively, the “Ground Lease”) in each case
with respect to the Property.

 

5.2                               Payment of Operating Expenses. 
Commencing on the Commencement Date, Tenant shall pay to Landlord as
Additional Rent one twelfth (1/12) of Tenant’s Share of Operating Expenses paid
or incurred by Landlord for each calendar year or portion thereof during the
Term, in advance, on or before the first day of each month in an amount
estimated by Landlord as stated in a written notice to Tenant. Landlord shall
pay Operating Expenses and be reimbursed for the same in accordance herewith
(except that Tenant shall pay directly to the parties entitled thereto, as
Additional Rent, items (iii), (vii) and (viii) of Section 5.1(b) above).  Landlord may by written notice to Tenant
revise such estimates from time to time and Tenant shall thereafter make
payments on the basis of such revised estimates, commencing on the date
immediately following the receipt of such revised estimates that is the earlier
of January 1 and August 1. 
With reasonable promptness after the expiration of each calendar year,
Landlord will furnish Tenant with a statement (“Landlord’s Expense Statement”)
setting forth in reasonable detail the actual Operating Expenses for such year
and Tenant’s Share.  If Tenant’s Share of
the actual Operating Expenses for such year exceeds the estimated Operating
Expenses paid by Tenant for such year, Tenant shall pay to Landlord (whether or
not this Lease has terminated) the difference between the amount of estimated
Operating Expenses paid by Tenant and Tenant’s Share of the actual Operating
Expenses within fifteen (15) days after the receipt of Landlord’s Expense
Statement.  If the total amount paid by
Tenant for any year exceeds Tenant’s Share of the actual Operating Expenses for
that year, the excess shall be credited against the next installments of Base
Rent due from Tenant to Landlord, or, if after the Termination Date, the excess
shall first be credited against any unpaid Base Rent or Additional Rent due and
remaining any excess shall be refunded to Tenant concurrently with the
furnishing of Landlord’s Expense Statement.

 

5.3                               Proration.  If either the
Commencement Date, the Top Floor Payment Commencement Date or the Termination
Date occurs on a date other than the first or last day, respectively, of a
calendar year, Tenant’s Share of Operating Expenses 

 

17

 

for the year in
which the Commencement Date, Top Floor Payment Commencement Date or Termination
Date occurs shall be prorated based on a 365-day year.

 

5.4                               Normalization.  For the purpose of
determining Operating Expenses for any partial year, Operating Expenses shall
be deemed to accrue uniformly during the entire calendar year.  If any part of the Building or (with respect
to those Operating Expenses for which Tenant’s Share is determined by the
Rentable Area of the Property) other rentable areas of the Property is not
fully leased during a calendar year, Operating Expenses shall be adjusted to
add amounts and items of Operating Expenses which would normally have been
incurred if the Building or other rentable areas of the Property (as
applicable) had been fully leased during such calendar year and Tenant’s Share
of Operating Expenses (both for the purposes of the initial estimate and
year-end reconciliation) shall be based on an assumed full occupancy of the
Building or the Property (as applicable).

 

5.5                               Other Buildings.  In the
event any facilities, services or utilities used in connection with the
Building are provided from another building owned or operated by Landlord or
vice versa, the costs incurred by Landlord in connection with the operation of
the Building shall be allocated to Operating Expenses by Landlord on a
reasonably equitable basis, subject to the terms of existing covenants and
restrictions encumbering the Property.

 

5.6                               Utility Costs.  Subject to the provisions of Section 8.1(c),
Tenant shall be solely responsible for and shall make all arrangements for all
utilities and services exclusively furnished to or used at the Premises,
including, without limitation, all water, gas, electricity, sewer service,
waste pick-up and any other utilities, materials or services.

 

5.7                               Taxes on Tenant’s Property and Business.  At least ten (10) days
prior to delinquency, Tenant shall pay all taxes levied or assessed by any
local, state or federal authority upon the conduct of Tenant’s business in the
Premises or upon Tenant’s Property (as defined in Section 10.6).  Upon Landlord’s request, Tenant shall deliver
satisfactory evidence of payment of all such taxes.  If the assessed value of the Property is
increased by the inclusion of a value placed upon Tenant’s Property, Tenant
shall pay to Landlord, upon written demand, the taxes so levied against
Landlord, or the portion of Landlord’s taxes resulting from said increase in
assessment, as determined from time to time by Landlord.

 

6.                                      GROUND LEASE.

 

6.1                               Ground Lease.  A copy of the
Ground Lease is attached hereto as Exhibit E
and the obligations of “Tenant” thereunder (which Tenant hereby agrees it will
perform) (except only those excluded provisions identified in Section 6.2
of this Lease) are hereby incorporated herein by this reference.  In addition, to the extent practicable,
Landlord shall have all of the rights and remedies granted to the “Landlord”
under the Ground Lease, which rights and remedies are incorporated herein by
this reference.  In accordance with Section 17.5(b) of
this Lease, this Lease is subordinate and subject to the 

 

18

 

Ground Lease, and
Tenant agrees to be bound by and subject to the terms of the Ground Lease.

 

6.2                               Compliance with Obligations; Conflicts. 
(a)   Tenant shall, at Tenant’s sole cost and expense,
throughout the Term, comply with, satisfy and cause the Premises to comply with
and satisfy, each of the provisions of the Ground Lease within the period of
time and in the manner required by the Ground Lease, excluding, however the
following provisions of the Ground Lease: Article 1 (Definitions) (unless
such definitions are used in the incorporated sections), Article 2
(Demise, Term and Surrender) (other than Section 2.9), Article 3 (Rent),
Sections 4.4, 4.5.1, 4.5.3, 4.5.9.1, 4.5.9.2, 4.5.9.3, 4.5.12 and 4.6 of Article 4
(Use), Article 5  (Payment of Real Property Taxes and Facility
Charges), Sections 6.1, 6.2, and 6.3 of Article 6 (Construction of
Improvements and Mechanic’s Liens), Sections 7.1.1 and 7.4 of Article 7
(Insurance and Indemnity), Article 9 (Condemnation), Article 10
(Default and Remedies), Article 11 (Assignment and Subletting), Article 12 (Transfer
of Leased Premises by Landlord), Article 13 (Tenant Mortgages) and Article 14
(General Provisions, except to the extent relevant to the incorporated sections).  Tenant shall not do, permit, suffer or
refrain from doing anything which is Tenant’s obligation under this Lease to
do, as a result of which there could be a default under the Ground Lease.  Notwithstanding anything to the contrary
contained in this Lease, in the event the time given to Landlord as tenant
under the Ground Lease is shorter than the time given to Tenant by this Lease
to perform or do the same act or thing, then Tenant shall perform or do said
thing within the time specified in the Ground Lease.

 

(b)                                 So
long as this Lease is in effect as to, and Tenant is currently occupying, more
than 25% of the Building and no Event of Default has occurred, Landlord shall
not, without Tenant’s prior consent, exercise any right to terminate the Ground
Lease pursuant to the terms thereof. 
Tenant shall respond to any request for consent to such termination
within five (5) business days following receipt thereof, and, if Tenant
does not respond within such five (5) business day period, Tenant shall be
deemed to have consented.  If Landlord
terminates the Ground Lease in accordance with the foregoing, this Lease shall
terminate.

 

6.3                               Landlord
Ground Rent Obligation.  Landlord covenants and agrees that
(except as may otherwise be waived or modified) Landlord shall pay to Ground
Lessor Monthly Rent (including escalations) and any late charge and interest
due in connection with the payment thereof under Article 3 of the Ground
Lease.

 

7.                                      USE OF PREMISES AND CONDUCT OF BUSINESS.

 

7.1                               Permitted Use.  (a)  Tenant
(and any permitted successor, assign or subtenant of Tenant, whether by
Landlord’s consent or by operation of law) may use and occupy the Premises
during the Term solely for the uses specified and permitted in Article 1
and for no other purpose without the prior written consent of Landlord, such
consent to be granted or withheld in Landlord’s sole discretion.  The foregoing statement shall not constitute
a representation or guaranty by Landlord that such business may be conducted in
the Premises or is lawful or permissible under any certificates of occupancy 

 

19

 

issued for the
Premises or the Building, or is otherwise permitted by law.  Tenant’s use of the Premises shall in all
respects comply with all Legal Requirements.

 

(b)                                 If
any governmental license or permit shall be required for the proper and lawful
conduct of Tenant’s business in the Premises or any part thereof, then Tenant,
at its expense, shall duly procure and thereafter maintain such license or permit
and shall submit same to Landlord for inspection.  Tenant shall at all times comply with the
terms and conditions of such license and permit, but in no event shall failure
to procure or maintain such license or permit affect Tenant’s obligations hereunder.

 

7.2                               Prohibited Uses.  Tenant shall
not use the Premises or allow the Premises to be used for any illegal or
immoral purpose, or so as to create waste, constitute a private or public
nuisance, or disturb other occupants of the Property.  Tenant shall not place any loads upon the
floors, walls, or ceiling which endanger the structure, or place any harmful
fluids or other materials in the drainage system of the Building, or overload
existing electrical or other mechanical systems.  Tenant shall not use any machinery or
equipment which causes any substantial noise or vibration.  No waste materials or refuse shall be dumped
upon or permitted to remain upon any part of the Premises or outside of the
Premises except in trash containers placed inside exterior enclosures
designated by Landlord for that purpose or inside of the Premises where
approved by Landlord.  No materials,
supplies, equipment, finished products or semi-finished products, raw materials
or articles of any nature shall be stored upon or permitted to remain outside
the Premises or on any portion of the Common Area unless otherwise approved by
Landlord in its sole discretion.  No
loudspeaker or other device, system or apparatus which can be heard outside the
Premises shall be used in or at the Premises without the prior written consent
of Landlord.  No explosives or firearms
shall be brought into the Premises, except that firearms may be carried by
personnel of security firms retained by Landlord or Tenant for the provision of
security services to the Premises.

 

7.3                               Food and Beverage.  If Tenant
engages in the cooking of food, beverages or baked goods, Tenant shall, at
Tenant’s sole cost and expense, comply with all applicable Legal Requirements
and insurance requirements.

 

8.                                      REPAIRS AND MAINTENANCE; SERVICES.

 

8.1                               Landlord’s Obligations.  (a) Except
as specifically provided in this Lease, Landlord shall not be required to
furnish any services, facilities or utilities to the Premises or to Tenant, and
Tenant assumes full responsibility for obtaining and paying for all services,
facilities and utilities to the Premises. 
Landlord will maintain casualty insurance as required by Section 7.2
of the Ground Lease.  Landlord will
repair and maintain the Common Area and the Structural Components in good working
order and in a clean, safe and sanitary condition.  All repairs and maintenance performed by
Landlord shall be made and performed so that the same shall be comparable in
quality, value and utility to the original work or installation and in a manner
and using equipment and materials that will not interfere with or impair the
operations, use or occupancy of the Premises by Tenant.  Tenant shall notify Landlord in writing of
the need for any repair or 

 

20

 

maintenance which
is Landlord’s responsibility under this Section.  The costs of such repair and maintenance
shall be included in Operating Expenses to the extent provided in Article 5;
provided that Tenant shall reimburse Landlord upon written demand for the cost
of any repair to the Structural Components or the Common Area which is
attributable to the conduct or misuse of Tenant or its Agents.  The reimbursement shall be Additional Rent.  Tenant hereby waives and releases any right
it may have under any law, statute or ordinance now or hereafter in effect to
make any repairs which are Landlord’s obligation under this Section.

 

(b)                                 Tenant
recognizes and acknowledges that the operation of the Building Systems may
cause vibration, noise, heat or cold which may be transmitted throughout the
Premises.  Landlord shall have no
obligation to endeavor to reduce such vibration, noise, heat or cold.

 

(c)                                  Tenant
shall contract directly with utility companies for the provision of water,
electricity and (except as provided for herein) such other services and
utilities as Tenant may require for the use and occupancy of the Premises, and
Tenant shall timely pay all charges incurred in connection therewith. Landlord
shall have no responsibility or liability in connection with the provision (or
failure to provide) such services or utilities or any obligation to modify,
supplement or replace the Building Systems, Structural Components or any other
portion of the Building or Property to the extent required for Tenant to obtain
such services or utilities.

 

(i)                                     Landlord
does not warrant that any services or utilities that Tenant may obtain in
respect of the Premises (whether from Landlord, a utility company, municipality
or otherwise, and regardless whether the same are available at the Premises as
of the date hereof or hereafter) will be free from shortages, failures,
variations, or interruptions caused by strikes, lockouts, labor controversies,
accidents, inability to obtain services, fuel, steam, water or supplies or
reasonable substitutes therefor, governmental requirements or restrictions,
acts of war or acts of God or other causes beyond Landlord’s reasonable
control.  None of the same shall be
deemed an eviction or disturbance of Tenant’s use and possession of the
Premises or any part thereof, or, render Landlord liable to Tenant for
abatement of Rent, or relieve Tenant from performance of Tenant’s obligations
under this Lease.  Landlord in no event
shall be liable for damages by reason of loss of profits, business interruption
or other consequential damages.

 

(ii)                                  Landlord
shall have the right to use electricity, water and other utilities and services
available in the Building, at no cost or charge, to the extent necessary or
reasonable for the performance of its obligations or the enforcement of its
rights hereunder.

 

(iii)                               If
Tenant requires electrical service in excess of the service currently
capable of being provided to and within the Building or in excess of the
Property-wide electrical capacity allocated to the Building (as 

 

21

 

determined by reference to the maximum capacity of the
Building’s meter for electrical service), then Tenant shall pay any
equipment, installation and other costs required to obtain such service.

 

8.2                               Tenant’s Obligations.  Except
as provided in Section 8.1, Tenant assumes full responsibility for the
repair and maintenance of the Premises and the Building Systems.  Tenant shall take good care of the Premises
and the Building Systems and keep the Premises and the Building Systems (and
not the Common Area and Structural Components, which are the responsibility of
Landlord) in good working order and in a clean, safe and sanitary
condition.  The Premises and the Building
Systems shall continue throughout the Term to be in as good condition as at the
Commencement Date, reasonable wear and tear excepted; and Tenant shall prevent
waste.  All repairs and replacements by
Tenant shall be made and performed:  (a) at
Tenant’s cost and expense, (b) by contractors or mechanics approved by
Landlord, such approval not to be unreasonably withheld or delayed, provided
that, absent reasonable grounds to object to the same arising subsequent to the
date hereof, the contractors listed in Exhibit G
are deemed approved, (c) so that same shall be comparable in quality,
value and utility to the original work or installation, (d) in a manner
and using equipment and materials that will not interfere with or impair the
operations, use or occupation of the Building, the Building Systems, or the
activities of other tenants of the Building, and (e) in accordance with Article 10
(if applicable), the Rules and Regulations, and all Legal
Requirements.  Tenant shall reimburse
Landlord upon demand for any out-of-pocket expenses incurred by Landlord in
connection with any repairs or replacements required to be made by Tenant,
including, without limitation, any fees charged by Landlord’s contractors to
review plans and specifications prepared by Tenant.  Within ten (10) business days following
Landlord’s request therefor, Tenant shall deliver to Landlord copies of all
service and maintenance contracts and reports for Building Systems in the
possession or control of Tenant with respect to the Property, including but not
limited to HVAC maintenance, elevator and fire records.

 

8.3                               Security.  Tenant shall
provide and be solely responsible for the security of the Premises and Tenant’s
Agents while in or about the Premises. 
Landlord in its discretion may engage its own security service for the
Property.  To the extent, and only to the
extent, that security services provided to the Property by Landlord are of a
supplemental or different scope from those provided by Tenant as of the date
hereof, or otherwise as to which Tenant shall have given Landlord reasonable
notice, Landlord’s cost for such security services shall be an Operating
Expense.  In addition, if Landlord is
providing security services pursuant to Section 16.5, Tenant shall be
liable to reimburse Landlord’s cost for such services.  Landlord shall not be liable to Tenant or
Tenant’s Agents for any failure to provide security services or any loss,
injury or damage suffered as a result of a failure to provide security
services.

 

8.4                               Special Services.  If Tenant
requests any services from Landlord other than those for which Landlord is
obligated under this Lease, Tenant shall make its request in writing and
Landlord may elect in its sole discretion whether to provide the requested
services.  If Landlord provides any
special services to Tenant, Landlord shall charge Tenant for such services at
the prevailing rate being charged for such services by 

 

22

 

other property
owners and property managers of comparable buildings in the area of the
Property, and Tenant shall pay the cost of such services as Additional Rent
within fifteen (15) business days after receipt of Landlord’s invoice.

 

9.                                      ACCEPTANCE.

 

The Premises as furnished
by Landlord consist of the improvements as they exist as of the Commencement
Date and Landlord shall have no obligation for construction work or
improvements on or to the Premises. 
Prior to entering into this Lease, Tenant has made a thorough and
independent examination of the Premises and all matters related to Tenant’s
decision to enter into this Lease. 
Tenant is thoroughly familiar with all aspects of the Premises and is
satisfied that they are in an acceptable condition and meet Tenant’s
needs.  Tenant does not rely on, and
Landlord does not make, any express or implied representations or warranties as
to any matters including, without limitation, (a) the physical condition
of the Premises, the Building, the Structural Components, Building Systems, or
the Common Area, (b) the existence, quality, adequacy or availability of
utilities serving the Premises, (c) the use, habitability,
merchantability, fitness or suitability of the Premises for Tenant’s intended
use, (d) the likelihood of deriving business from Tenant’s location or the
economic feasibility of Tenant’s business, (e) Hazardous Materials in the
Premises, the Building, or on, in under or around the Property, (f) zoning,
entitlements or any laws, ordinances or regulations which may apply to Tenant’s
use of the Premises or business operations, or (g) any other matter relating
to the Premises.  Tenant has satisfied
itself as to such suitability and other pertinent matters by Tenant’s own
inquiries and tests into all matters relevant in determining whether to enter
into this Lease.  Tenant accepts the
Premises in their existing “as-is” condition. 
Tenant shall, by entering into this Lease, be deemed to have accepted
the Premises and to have acknowledged that the same are in good order,
condition and repair.

 

10.                               ALTERATIONS.

 

10.1                        Alterations by Tenant.  Tenant
shall make no improvements, changes or alterations in or to the Premises (“Alterations”) without
Landlord’s prior approval.  Landlord
shall not unreasonably withhold approval to any Alteration that is not a
Material Alteration.  “Material Alteration”
means an Alteration that (i) is not limited to the interior of the
Premises or affects the exterior (including the appearance) of the Building or
entry ways, (ii) is structural or affects the structural integrity of the
Building or the structural integrity of the Structural Components, (iii) affects
the usage or the proper functioning of the Building Systems other than to a de minimis extent, (iv) requires the consent of any
Leasehold Mortgagee or the Landlord under the Ground Lease or (v) requires
a change to the Building’s certificate of occupancy.  In its sole discretion, Landlord may
designate certain Material Alterations non-severable Material Alterations (“Non-Severable Material Alterations”).
Notwithstanding the foregoing, Landlord’s consent shall not be required in the
case of Alterations (“Permitted
Alterations”) that are not Material Alterations and that do not
exceed a total cost of Two Hundred Fifty Thousand Dollars ($250,000) per
project.

 

23

 

Any determination to be made
pursuant to this Section 10.1 as to the cost or price of an Alteration
shall be made on a “job-by-job basis” and all work that is part of the same
Alteration or integrated or related, whether or not performed in phases or
stages, shall be treated as a single Alteration for the purposes of such
determination.

 

10.2                        Project Requirements.  The
following provisions of this Section 10.2 shall apply to all Alterations,
whether or not requiring Landlord’s approval (unless otherwise noted):

 

(a)                                  Tenant,
in connection with any Alteration, shall comply with any rules and
regulations as may be from time to time established by Landlord and
communicated in writing to Tenant. Tenant shall not proceed with any Alteration
(other than Permitted Alterations) unless and until Landlord approves Tenant’s
plans and specifications therefor. Any review or approval by Landlord of plans
and specifications with respect to any Alteration is solely for Landlord’
benefit, and without any representation or warranty to Tenant with respect to
the adequacy, correctness or efficiency thereof, its compliance with Legal
Requirements or otherwise.  Landlord
shall, within ten (10) business days following receipt of Tenant’s plans
and specifications for the performance of any Alteration that is not a Material
Alteration (and within twenty (20) business days following receipt of Tenant’s
plans and specifications for the performance of any Alteration that is a
Material Alteration)  advise Tenant of
Landlord’s approval or disapproval of such plans and specifications for such an
Alteration or any part thereof
and, if approved, shall advise Tenant, contemporaneously with such approval,
whether, upon completion of any Material Alteration, such Material Alteration
shall be deemed a Non-Severable Material Alteration.  If Landlord shall fail to approve or
disapprove Tenant’s plans and specifications for such an Alteration or any part
thereof within such ten (10) business day period (or such twenty (20)
business day period in the case of Material Alterations), Tenant shall have the
right to give a reminder notice (as described further below) to Landlord and if
Landlord fails to approve or disapprove Tenant’s plans and specifications or
any part thereof within such two (2) business days after receipt of such reminder
notice, Landlord shall be deemed to have approved such plans and specifications
for such an Alteration or the applicable part thereof.  If Landlord shall disapprove such plans and
specifications for such an Alteration (or any part thereof), Landlord shall set
forth in reasonable detail its reasons for such disapproval in writing.  Landlord shall advise Tenant within five (5) business
days (or ten (10) business days in the case of Material Alterations)
following receipt of Tenant’s revised plans and specifications, or portions
thereof, of Landlord’s approval or disapproval of the revised plans and
specifications or any portion thereof, and shall set forth in reasonable detail
Landlord’s reasons for any such further disapproval in writing and in reasonable
detail.  If Landlord fails to approve or
disapprove the revised plans and specifications for such an Alteration or any
portion thereof within such five (5) business day period (or such ten (10) business
day period in the case of Material Alterations), Tenant shall have the right to
give a reminder notice to Landlord and if Landlord fails to approve or
disapprove Tenant’s plans and specifications for such an Alteration or any part

 

24

 

thereof within two (2) business
days after receipt of such reminder notice, Landlord shall be deemed to have
approved the revised plans and specifications or such portions thereof.  For the avoidance of doubt, Landlord shall
not unreasonably withhold its approval of plans and specifications for any
Material Alteration.  As used herein, a “reminder
notice” shall include a conspicuous statement that Landlord’s failure to
respond within the specified time shall result in Landlord being deemed to have
approved the Alteration in question.

 

(b)                                 Upon the completion of the
Alteration in accordance with the terms of this Article 10 Tenant
shall submit to Landlord (x) proof evidencing the payment in full for said
Alteration, (y) written unconditional lien waivers of mechanics’ liens and
other liens on the Property from all contractors performing said Alteration and
(z) all other submissions as may be, from time to time reasonably required
by Landlord.

 

(c)                                  Before commencing the construction
of any Alterations, Tenant shall procure or cause to be procured the insurance
coverage described below and provide Landlord with certificates of such
insurance in form reasonably satisfactory to Landlord.  All such insurance shall comply with the
following requirements of this Section and of Section 14.2.

 

(i)                                     During
the course of construction, to the extent not covered by property insurance
maintained by Landlord or Tenant pursuant to Article 14, covering all
improvements in place on the Premises, all materials and equipment stored at
the site and furnished under contract, and all materials and equipment that are
in the process of fabrication at the premises of any third party or that have
been placed in transit to the Premises when such fabrication or transit is at
the risk of, or when title to or an insurable interest in such materials or
equipment has passed to, Tenant or its construction manager, contractors or
subcontractors (excluding any contractors’, subcontractors’ and construction
managers’ tools and equipment, and property owned by the employees of the
construction manager, any contractor or any subcontractor), such insurance to
be written on a completed value basis in an amount not less than the full
estimated replacement value of Alterations.

 

(ii)                                  Commercial
general liability insurance covering Tenant, Landlord and each construction
manager, contractor and subcontractor engaged in any work on the Premises.

 

(iii)                               Workers’
Compensation Insurance approved by the State of California, in the amounts and
coverages required under workers’ compensation laws applicable to the Premises,
and Employer’s Liability Insurance with limits not less than One Million
Dollars ($1,000,000) or such higher amounts as may be required by law.

 

25

 

(d)                                 All construction and other work in
connection with any Alterations shall be done at Tenant’s sole cost and expense
(except as provided in Section 10.3) and in a prudent and first class
manner.  Tenant shall construct the
Alterations in accordance with all Legal Requirements, and with plans and
specifications that are in accordance with the provisions of this
Article 10 and all other provisions of this Lease.

 

(e)                                  Prior to the commencement of any
construction, alteration, addition, improvements, repair or landscaping in
excess of Fifty Thousand Dollars ($50,000), Landlord shall have the right to
post in a conspicuous location on the Premises and to record in the public
records a notice of Landlord’s nonresponsibility.  Tenant covenants and agrees to give Landlord
at least ten (10) days prior written notice (or concurrent notice in
the event of an emergency repair required to protect human health or safety) of
the commencement of any such construction, alteration, addition, improvement,
repair or landscaping in order that Landlord shall have sufficient time to post
such notice.

 

(f)                                    Tenant shall take all necessary
safety precautions during any construction.

 

(g)                                 Tenant shall prepare and maintain
(i) on a current basis during construction, annotated plans and
specifications showing clearly all changes, revisions and substitutions during
construction, and (ii) upon completion of construction, as-built drawings
showing clearly all changes, revisions and substitutions during construction,
including, without limitation, field changes and the final location of all
mechanical equipment, utility lines, ducts, outlets, structural members, walls,
partitions and other significant features. 
These as-built drawings and annotated plans and specifications shall be
kept at the Premises and Tenant shall update them as often as necessary to keep
them current.  The as-built drawings and
annotated plans and specifications shall be made available for copying and
inspection by Landlord at all reasonable times, and are subject to Landlord’s
approval as provided in subsection  (a) above.

 

(h)                                 Upon completion of the construction
of any Alterations in excess of Fifty Thousand Dollars ($50,000) during the
Term, Tenant shall file for recordation, or cause to be filed for recordation,
a notice of completion and shall deliver to Landlord evidence satisfactory to
Landlord of payment of all costs, expenses, liabilities and Liens arising out
of or in any way connected with such construction (except for Liens that are
contested in the manner provided herein).

 

(i)                                     Tenant shall reimburse Landlord
within five (5) days following demand for any out-of-pocket expenses
incurred by Landlord in the review of any Alterations proposed to be made by
Tenant, including fees charged by Landlord’s contractors or consultants to
review plans and specifications, and such reimbursement obligation shall
constitute Additional Rent hereunder.

 

26

 

(j)                                     Should any Liens be filed against
any portion of the Property by reason of the acts or omissions of, or because
of a claim against, Tenant or anyone claiming under or through Tenant, Tenant
shall cause the same to be canceled or discharged of record by bond or
otherwise within twenty (20) business days after notice from Landlord.  If Tenant shall fail to cancel or discharge
said lien or liens within said twenty (20) business day period, Landlord
may cancel or discharge the same and, upon Landlord=s demand, Tenant shall
reimburse Landlord for all costs incurred in canceling or discharging such
liens, together with interest thereon at the Interest Rate from the date
incurred by Landlord to the date of payment by Tenant, such reimbursement to be
made within twenty (20) days after receipt by Tenant of a written statement
from Landlord as to the amount of such costs. Tenant shall indemnify and hold
Landlord harmless from and against all costs (including, without limitation,
attorneys= fees and disbursements and costs of suit), losses, liabilities or
causes of action arising out of or relating to any Alteration, including,
without limitation, any mechanics= or other liens asserted in connection with
such Alteration.

 

(k)                                  Tenant shall deliver to Landlord,
within sixty (60) days after the completion of an Alteration costing in
excess of $50,000, “as-built” drawings thereof. 
During the Term, Tenant shall keep records of Alterations costing in
excess of $50,000 including plans and specifications, copies of contracts,
invoices, evidence of payment and all other records customarily maintained in
the real estate business relating to Alterations and the cost thereof and
shall, within thirty (30) days after demand by Landlord, furnish to
Landlord copies of such records.

 

(l)                                     All Alterations to and fixtures
installed by Tenant in the Premises (other than Tenant’s Property) shall be
fully paid for by Tenant in cash and not be subject to conditional bills of
sale, chattel mortgages, or other title retention agreements.

 

10.3                        Tenant
Improvement Allowance.  Landlord agrees to pay to Tenant in connection
with Tenant’s initial build-out of the Premises (“Tenant
Improvements”) an aggregate amount of $15,000,000 (which amount
shall include any Tenant Improvement Allowance under the Other Lease for
Crittenden A), hereinafter referred to as the “Tenant
Improvement Allowance”. 
The Tenant Improvement Allowance shall represent Landlord’s sole and
total contribution to Tenant Improvements. 
The Tenant Improvements shall be made and the Tenant Improvement
Allowance shall be applied in accordance with the terms of the Tenant Work
Letter attached hereto as Exhibit F.

 

10.4                        Restoration Obligations. 
(a)  Landlord shall have the right to require Tenant to
restore the Premises or any portion or component thereof, including any
Building System or any portion or component thereof, affected by any Alteration
to its condition prior to the commencement of such Alteration, which
restoration Tenant shall have the obligation to complete by no later than the
Expiration Date.  Landlord shall notify
Tenant in writing at the time of Landlord’s approval of the Alterations, as 

 

27

 

applicable,
whether or not the proposed Alterations will be required to be removed by
Tenant at the end of the Term.  Tenant
shall have no obligation to remove any Alterations that Landlord has not
designated in writing for removal. 
Tenant shall repair or pay the cost of repairing any damage to the
Premises or to the Buildings caused by the removal of Alterations.

 

(b)                                 (i)  Tenant
shall be required to deposit security with Landlord to secure Tenant’s
obligation to restore any Alteration in an amount sufficient to secure the
restoration of the Alteration in the manner discussed below.  For the elimination of doubt, all such
restoration shall be subject to the provisions hereof relating to the
performance of Alterations.  Prior to
undertaking the Alteration, Tenant shall furnish to Landlord one of the
following (as selected by Tenant): (i) a cash deposit or (ii) an
irrevocable, unconditional, negotiable letter of credit, issued by a bank and
in a form satisfactory to Landlord, each to be equal to 100% of the cost of the
restoration, as reasonably estimated by Landlord, in an amount not to exceed an
aggregate of $1 million during the Term. 
Any such letter of credit shall be for one year and shall be renewed by
Tenant each and every year until the restoration in question is completed and
shall be delivered to Landlord not less than 30 days prior to the expiration of
the then current letter of credit, failing which Landlord may present the then
current letter of credit for payment. 
Upon (A) the completion of the restoration in accordance with the
terms of this Article 10 and (B) the submission to Landlord of the
items described in clauses (x), (y) and (z) of Section 10.2(b), the
security deposited with Landlord (or the balance of the proceeds thereof, if
Landlord has drawn on the same) shall be returned to Tenant.  Upon Tenant’s failure properly to perform,
complete and fully pay for the restoration, as reasonably determined by
Landlord, Landlord may, upon notice to Tenant, draw on the security deposited
under this Section 10.4(b) to the extent Landlord deems reasonably
necessary in connection with the restoration and/or protection of the Premises
or the Property and the payment of any costs, damages or expenses resulting
therefrom.

 

(ii)                                  To
the extent that Landlord shall be holding any such security, Landlord shall
have the right from time-to-time, subject to the $1 million limit of
Section 10.4(b)(i) above, to require Tenant to deposit additional
security as it pertains to any and all Alterations made by Tenant which Tenant
shall be obligated to restore under this Article 10, if Landlord shall
reasonably establish that the security then held by Landlord with respect to
any and all such Alterations will be inadequate for their intended
purposes.  Any dispute regarding the
sufficiency of any security deposited with Landlord which the parties shall be
unable to resolve within fifteen (15) days after one party shall have
notified the other party that such a bona fide dispute exists and shall be
resolved by arbitration in accordance with Section 18.4.

 

(iii)                               To
the extent that Landlord shall be holding any such security, Landlord shall be
permitted to use such security to complete Tenant’s obligation to restore the
Alteration with respect to which such security has been deposited by Tenant if
Tenant shall default in Tenant’s obligation to restore the applicable
Alteration.  If at any time Landlord
shall notify Tenant that Landlord or its consultants shall have concluded that
there is a substantial likelihood that any Alteration that Tenant is obligated
to restore or any Turnover Alteration will not be completed by the date by
which it shall be 

 

28

 

required to be completed hereunder, then for the period of thirty
(30) days following such notification by Landlord to Tenant, Landlord and
Tenant and their respective architects and/or engineers shall endeavor to
resolve the matter.  If the parties shall
be unable to resolve the matter, then at any time after the expiration of such
thirty (30) day period, either party may submit the matter to arbitration
under Section 18.4 hereof, with the sole question to be determined by such
arbitration being whether or not there is a substantial likelihood that any
such Alteration will not be completed by the date by which it shall be required
to be completed hereunder. If the arbitration is determined in favor of
Landlord, then Landlord shall have the right (but shall not be obligated) to
use any security then on deposit with Landlord to complete the same. In the
event that Landlord shall complete such Alteration for a cost that is less than
the then available balance of any security deposited to secure Tenant’s
obligation to perform the Alteration in question, then any excess unused
portion of such security being held by Landlord after the restoration of the
applicable Alteration with respect to which it was deposited with Landlord
shall belong to and promptly be refunded by Landlord to Tenant.

 

(c)                                  Notwithstanding
anything to the contrary contained in this Article 10 or elsewhere in this
Lease, Tenant shall be obligated to surrender the Premises and the Building on
the Expiration Date in the condition and quality that the Premises and the
Building (including, without limitation, the Building Systems) would have been
in at the time of such surrender had Tenant complied with the terms of this
Lease (any such Alteration required to be performed by Tenant to satisfy the
foregoing requirement being herein referred to as a “Turnover Alteration”).  At least one hundred and twenty days
(120) days prior to, but no earlier than one hundred and eighty (180) days
prior to, the Expiration Date, Landlord shall notify Tenant, and Landlord and
Tenant shall endeavor to agree upon any Turnover Alteration remaining to be
performed by Tenant.  If the parties
shall be unable to resolve any dispute regarding whether Tenant has an obligation
to perform any Turnover Alteration or regarding the manner in which the same
shall be required to be performed within such one hundred and twenty (120) day
period, then either party may submit the matter to arbitration in accordance
with Section 18.4.  All Turnover
Alterations shall be performed in accordance with the provisions of this
Article 10 and other portions of this Lease applicable to Alterations.

 

(d)                                 Notwithstanding
anything to the contrary contained in this Article 10 or elsewhere in this
Lease, Tenant shall not perform any Alteration which Tenant shall be obligated
to restore under this Article 10 unless the restoration of such Alteration
can be completed as and when required under Article 10.

 

(e)                                  Without
limiting the generality of any other provision of this Lease, in the event that
Tenant shall fail to restore any Alteration that it is obligated hereunder to
restore or shall fail to perform any Turnover Alteration, and the failure to
perform same shall interfere with the use and occupancy of the Premises or any
portion thereof, then Tenant shall be liable to Landlord for failure to make
such Turnover Alterations.

 

(f)                                    Tenant
acknowledges and agrees that it shall have restoration obligations for the
Tenant Improvements known as the “customer briefing area” planned 

 

29

 

for forty percent
(40%) of the square footage of the first (1st) floor of the D Premises (a
drawing of which is attached hereto as Exhibit H),
such obligations to include demolition of such improvements, restoration of any
floor penetration, and restoration of the area to shell condition.  Prior to the commencement of any Tenant
Improvement, Tenant shall furnish to Landlord a letter of credit in the amount
of $150,000 as security for the restoration obligations outlined in this
Section 10.4(f).  For the avoidance
of doubt, such letter of credit shall be subject to the terms and requirements
of Section 10.4(b), and shall count toward the $1 million limit of Section 10.4(b)(i).

 

10.5                        Ownership of Improvements.  Except
as provided in Section 10.6, all Alterations, and any other appurtenances,
fixtures, improvements, equipment, additions and property permanently attached
to or installed in the Premises at the commencement of or during the Term,
shall at the end of the Term become Landlord’s property without compensation to
Tenant, or be removed in accordance with this Section.  Landlord shall notify Tenant in writing at
the time of Landlord’s approval of the Alterations, as applicable, whether or
not the proposed Alterations will be required to be removed by Tenant at the
end of the Term.  Tenant shall have no
obligation to remove any Alterations that Landlord has not designated in
writing for removal.  Tenant shall repair
or pay the cost of repairing any damage to the Premises or to the Building
caused by the removal of Alterations.  If
Tenant fails to perform its repair obligations, without limiting any other
right or remedy, Landlord may on five (5) business days’ prior written
notice to Tenant perform such obligations at Tenant’s expense and Tenant shall
promptly reimburse Landlord upon demand for all out-of-pocket costs and
expenses incurred by Landlord in connection with such repair.  In addition, any such reimbursement shall include
a fifteen percent (15%) administrative fee to cover Landlord’s overhead in
undertaking such repair.  The
reimbursement and administrative fee shall be Additional Rent. Tenant’s
obligations under this Section shall survive the termination of this
Lease.

 

10.6                        Tenant’s
Personal Property.  All furniture, trade fixtures, furnishings,
equipment and articles of movable personal property installed in the Premises
by or for the account of Tenant (except for ceiling and related fixtures, HVAC
equipment and floor coverings), and which can be removed without structural or
other material damage to the Building (collectively, “Tenant’s Property”) shall be and remain the property of Tenant and may be
removed by it at any time during the Term and Tenant may grant a Lien on such
personal property.  Tenant shall remove
from the Premises all Tenant’s Property on or before the Termination Date,
except such items as the parties have agreed pursuant to the provisions of this
Lease or by separate agreement are to remain and to become the property of
Landlord.  Tenant shall repair or pay the
cost of repairing any damage to the Premises or to the Building resulting from
such removal, and the provisions of Section 10.5 above shall apply in the
event Tenant fails to do so.  Any items
of Tenant’s Property which remain in the Premises after the Termination Date
may, on five (5) business days’ prior written notice to Tenant, at the
option of Landlord, be deemed abandoned and in such case may either be retained
by Landlord as its property or be disposed of, without accountability, at
Tenant’s expense in such manner as Landlord may see fit.

 

30

 

11.                               LIENS.

 

Tenant shall promptly
pay, in cash, the cost of all Alterations, repairs, restorations or
replacements made by or on behalf of Tenant. 
Tenant shall keep the Premises free from any Liens arising out of any
work performed, material furnished or obligations incurred by or for
Tenant.  Tenant hereby indemnifies
Landlord against liability for any and all Liens arising out of work performed,
material furnish or obligations incurred by or for Tenant.  If Tenant shall not, within ten
(10) days following notice of the imposition of any such Lien, cause the
Lien to be released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided in this Lease and by law, the
right but not the obligation to cause any such Lien to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such Lien.  All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, reasonable counsel fees) shall be payable to Landlord by
Tenant within five (5) days of Landlord’s demand with interest from the
date incurred at the Interest Rate. 
Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises, and the Building from
Liens.

 

Landlord shall at its own
cost and expense, take such action as may be necessary (by bonding or other
appropriate action) to duly discharge and satisfy in full promptly any Lessor
Lien, provided, however, Landlord need not discharge or satisfy any Lessor Lien
being contested by Landlord in good faith and by appropriate proceedings so
long as such proceedings do not involve any material danger of sale, forfeiture
or loss of any part of Tenant’s leasehold interest in the Property.  In addition, Landlord shall use commercially
reasonable efforts to cause persons claiming by, through or under Landlord
(excluding Tenant) to promptly discharge and satisfy in full any Lien against
Tenant’s leasehold interest in the Property. 
“Lessor
Liens” means
Liens against the Property or the Ground Lease that result from (i) claims
against the Landlord or (ii) Real Estate Taxes payable by Landlord which
are not required to be paid by Tenant. 
For the avoidance of doubt, the foregoing shall not apply to any
Leasehold Mortgage or Lien related thereto, any Prior Lease, any Lien in effect
as of the Commencement Date or any other Lien permitted by the terms of this
Lease.

 

12.                               COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS.

 

12.1                        Legal Requirements.  Tenant,
at Tenant’s cost and expense, shall comply with all Legal Requirements relating
to its use or occupancy of the Premises or any Alterations and Landlord shall
comply with all Legal Requirements applicable with respect to Landlord’s
obligations under this Lease.  Without
limiting the foregoing, Tenant shall be solely responsible for compliance with
and shall make or cause to be made all such improvements and alterations to the
Premises (including, without limitation, removing barriers and providing
alternative services) as shall be required to comply with all applicable
building codes, laws and ordinances relating to public accommodations,
including the Americans with Disabilities Act of 1990, 42 U.S.C.
§§ 12111 et seq. (the “ADA”), and the ADA
Accessibility Guidelines promulgated by the Architectural and Transportation
Barriers Compliance Board, the public accommodations 

 

31

 

title of the Civil
Rights Act of 1964, 42 U.S.C. §§ 2000a et seq., the Architectural
Barriers Act of 1968, 42 U.S.C. §§ 4151 et seq., as amended,
Title V of the Rehabilitation Act of 1973, 29 U.S.C. §§ 790
et seq., the Minimum Guidelines and Requirements for Accessible Design,
36 C.F.R. Part 1190, the Uniform Federal Accessibility Standards, and
applicable State law, as the same may be amended from time to time, or any
similar or successor laws, ordinances and regulations, now or hereafter
adopted.  Tenant’s liability shall be
primary and Tenant shall indemnify Landlord in accordance with
Section 14.1 in the event of any failure or alleged failure of Tenant to
comply with Legal Requirements.  Any work
or installations made or performed by or on behalf of Tenant or any person or
entity claiming through or under Tenant pursuant to the provisions of this
Section shall be made in conformity with and subject to the provisions of
Article  10.

 

12.2                        Insurance Requirements.  (a)  Tenant shall not do anything,
or permit anything to be done, in or about the Premises that would:  (i) invalidate or be in conflict with
the provisions of or cause any increase in the applicable rates for any fire or
other property insurance policies covering the Building or any property located
therein (unless Tenant pays for such increased costs and the basis for such
increased costs can be eliminated by Landlord without any material expense or
delay upon Landlord’s repossession of the Premises at the expiration or earlier
termination of the Term), or (ii) result in a refusal by fire insurance
companies of good standing to insure the Building or any such property in
amounts reasonably satisfactory to Landlord (which amounts shall be comparable
to the amounts required by comparable landlords of comparable buildings or
(iii)  result in the cancellation of any fire or other property insurance
policy maintained by or for the benefit of Landlord (subject to the same
parenthetical contained in clause (i) above).  Tenant, at Tenant’s expense, shall comply
with all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any
similar body that shall hereafter perform the function of such Association.

 

(b)                                 If,
by reason of any act or omission on the part of Tenant which is inconsistent
with the use permitted hereunder, whether or not Landlord has consented to the
same, the rate of “all risk” or other type of insurance maintained by Landlord
on the Property or the Building or other property of Landlord shall be higher
than it otherwise would be, but for such act or omission, Tenant shall
reimburse Landlord for that part of the premiums for such insurance paid by
Landlord because of such act or omission on the part of Tenant, which sum shall
be Additional Rent and payable within five (5) days of demand.  If, due to the occupancy or abandonment of,
or Tenant’s failure to occupy, the Premises as herein provided, any such
insurance shall be canceled by the insurance carrier, then, in any of such
events, Tenant hereby indemnifies Landlord against liability which would have
been covered by such insurance.  Landlord
shall give Tenant notice of any such cancellation promptly after Landlord shall
have received written notice thereof. 
Tenant shall also pay any increase in premiums on any rent insurance
carried by Landlord for its protection against rent loss through fire or
casualty if such increase shall result from any of the foregoing events.

 

32

 

13.                               HAZARDOUS MATERIALS.

 

13.1                        Definitions.  As used in this
Lease, the following terms shall have the following meanings:

 

(a)                                  “Environmental Activity” means any use, storage, holding,
release, emission, discharge, manufacturing, generation, processing, abatement,
removal, disposition, handling, transportation, discharge or release of any
Hazardous Materials from, into, on or under the Building, the Common Area or
the Property.

 

(b)                                 “Environmental
Laws”
mean all Legal Requirements, now or hereafter in effect, relating to
environmental conditions, industrial hygiene or Hazardous Materials on, under
or about the Property, including without limitation the comprehensive
environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Solid
Waste Disposal Act, 42 U.S.C. Section 6901, et seq., the Clean Water
Act, 33 U.S.C. Section 1251, et seq., the Clean Air Act,
42 U.S.C. Section 7401, et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 through 2629, the Safe Drinking Water
Act, 42 U.S.C. Sections 300f through 300j, and any similar state and local
laws and ordinances and the regulations now or hereafter adopted and published
and/or promulgated pursuant thereto.

 

(c)                                  “Hazardous
Material” means any chemical, substance, medical or other waste or
combination thereof which is or may be hazardous to the environment or human or
animal health or safety due to its radioactivity, ignitability, corrosivity,
reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity
or other harmful or potentially harmful properties or effects.  Hazardous Materials shall include, without
limitation, petroleum hydrocarbons, including crude oil or any fraction
thereof, asbestos, radon, polychlorinated biphenyls (PCBs), methane and all
substances which now or in the future may be defined as “hazardous substances,”
“hazardous wastes,” “extremely hazardous wastes,” “hazardous materials,” “toxic
substances,” “infectious wastes,” “biohazardous wastes,” “medical wastes,”
“radioactive wastes” or which are otherwise listed, defined or regulated in any
manner pursuant to any Environmental Laws.

 

(d)                                 “Tenant’s
Hazardous Materials” means any Hazardous Materials resulting from the
Environmental Activity by Tenant or any of Tenant’s Agents.

 

13.2                        Environmental
Release.  Tenant represents to Landlord that Tenant is
aware that detectable amounts of Hazardous Materials have come to be located
on, beneath and/or in the vicinity of the Premises.  Tenant has made such investigations and
inquiries as it deems appropriate to ascertain the effects, if any, of such
substances and contaminants on its operations and persons using the Building
and the Common Area.  Landlord makes no
representation or warranty with regard to the environmental 

 

33

 

condition of the
Building, the Common Area or the Property. 
Tenant hereby releases Landlord and Landlord’s officers, directors,
trustees, agents and employees from any and all claims, demands, debts,
liabilities, and causes of action of whatever kind or nature, whether known or
unknown or suspected or unsuspected which Tenant or any of Tenant’s Agents may
have, claim to have, or which may hereafter accrue against the released parties
or any of them, arising out of or relating to or in any way connected with
Hazardous Materials presently in, on or under, or now or hereafter emanating
from or migrating onto the Building or the Property (except to the extent such
existence, emanation or migration is caused by Landlord or Landlord’s
Agents).  In connection with such
release, Tenant hereby waives any and all rights conferred upon it by the
provisions of Section 1542 of the California Civil Code, which reads as
follows:

 

A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.

 

13.3                        Use of
Hazardous Materials.  Tenant shall not cause or permit any
Hazardous Materials to be used, stored, discharged, released or disposed of in
the Premises or cause any Hazardous Materials to be used, stored, discharged,
released or disposed of in, from, under or about, the Property, or any other
land or improvements in the vicinity of the Property, excepting only the types
and minor quantities of Hazardous Materials which are normally used in
connection with Tenant’s permitted use, operation and maintenance of the
Premises and then only in strict accordance with all Legal Requirements,
including all Environmental Laws (“Permitted Substances”).  Tenant shall, at its own expense, procure,
maintain in effect and comply with all conditions of any and all permits,
licenses, and other governmental and regulatory approvals required for Tenant’s
use of Hazardous Materials at the Premises, including, without limitation,
discharge of appropriately treated materials or wastes into or through any
sanitary sewer serving the Building. 
Tenant shall in all respects handle, treat, deal with and manage any and
all Tenant’s Hazardous Materials in total conformity with all Environmental
Laws and prudent industry practices regarding management of such Hazardous
Materials.  Without limiting the
foregoing, if any Tenant’s Hazardous Materials result in contamination of the
Building, or any soil or groundwater in, under or about the Property in each
case to the extent the presence of same amounts to a violation of any Legal
Requirement or poses a threat to human health or safety, Tenant, at its
expense, shall promptly take all actions necessary to return the Building
and/or the Property, to the condition existing prior to the appearance of the
Tenant’s Hazardous Material, subject to Landlord’s right to approve Tenant’s
proposed remediation method.  On or prior
to the Termination Date, Tenant shall cause all Tenant’s Hazardous Materials
in, on, under or about the Building to be removed in accordance with and in
compliance with all Legal Requirements. 
Tenant shall promptly notify Landlord and obtain Landlord’s written
approval before taking any remedial action in response to the presence of any
Tenant’s Hazardous Materials or entering into any settlement agreement, consent
decree or other compromise with respect to any claims relating to Tenant’s
Hazardous Materials.

 

34

 

13.4                        Indemnity.  Tenant shall
indemnify, defend (by counsel reasonably acceptable to Landlord), protect and
hold Landlord and Landlord’s trustees, directors, officers, agents,
shareholders, direct or indirect beneficial owners and employees, any Leasehold
Mortgagees, and any Prior Lessors, and their respective successors and assigns
(collectively, “Landlord’s Agents”), free and harmless from and
against any and all claims, liabilities, penalties, forfeitures, losses or
expenses (including reasonable attorneys’ and consultants’ fees and oversight
and response costs) to the extent arising from (a) Environmental Activity
by Tenant or Tenant’s Agents; or (b) failure of Tenant or Tenant’s Agents
to comply with any Environmental Law with respect to Tenant’s Environmental
Activity; or (c) Tenant’s failure to remove Tenant’s Hazardous Materials
as required in Section 13.3.

 

13.5                        No Lien.  Tenant shall
not suffer any Lien to be recorded against the Building or the Property as a
consequence of any Tenant’s Hazardous Materials, including any so called state,
federal or local “super fund” Lien related to the remediation of any Tenant’s
Hazardous Materials in or about the Building or the Property.

 

13.6                        Investigation.  In
the event Hazardous Materials are discovered in or about the Building or the
Property, and Landlord reasonably believes that such Hazardous Materials are
Tenant’s Hazardous Materials, then Landlord shall have the right to appoint a
consultant to conduct an investigation to determine the nature and extent of
such Hazardous Materials, whether such Hazardous Materials are Tenant’s
Hazardous Materials, and the corrective measures, if any, required to remove
such Hazardous Materials.  If such
Hazardous Materials are determined to be Tenant’s Hazardous Materials, Tenant,
at its expense, shall comply with all investigation, remediation or other
actions required by any applicable governmental authority and reasonably
approved by Landlord and shall promptly reimburse Landlord for all costs
incurred by Landlord in connection with such investigation, along with a
fifteen percent (15%) administrative fee to cover Landlord’s costs and overhead
in undertaking or supervising such work. 
The reimbursement and administrative fee shall be Additional Rent.

 

13.7                        Notices.  Tenant shall notify
Landlord of any inquiry, test, claim, investigation or enforcement proceeding
by or against Tenant or the Premises or the Property known to Tenant within
five (5) business days of obtaining knowledge thereof concerning any
Hazardous Materials.  Tenant shall
immediately notify Landlord of any release or discharge of Hazardous Materials
on, in under or about the Property. 
Tenant acknowledges that Landlord, as the owner of the Property, shall
have the sole right at its election and at Tenant’s expense, to negotiate,
defend, approve and appeal any action taken or order issued with regard to
Tenant’s Hazardous Materials by any applicable governmental authority.

 

13.8                        Surrender.  Tenant shall
surrender the Premises to Landlord, upon the expiration or earlier termination
of the Lease, free of Tenant’s Hazardous Materials except for Permitted
Substances and other Hazardous Materials the presence of which would not and
could not reasonably be expected to result in a violation of any Legal
Requirements or pose a threat to human health or safety.  If Tenant fails to so surrender 

 

35

 

the Premises,
Tenant shall indemnify and hold Landlord harmless from all losses, costs,
claims, damages and liabilities resulting from Tenant’s failure to surrender
the Premises as required by this Section 13.8, including, without
limitation, (a) any claims or damages arising in connection with the
condition of the Premises, and (b) damages occasioned by Landlord’s
inability to relet the Premises or a reduction in the fair market and/or rental
value of the Building or any portion thereof, by reason of the existence of any
Tenant’s Hazardous Materials.

 

13.9                        Survival.  The provisions of
this Article 13 shall survive the expiration or earlier termination of
this Lease.

 

14.                               INDEMNITY;
INSURANCE.

 

14.1                        Indemnity.  Tenant shall
indemnify, protect, defend and save and hold Landlord, Landlord’s Agents (the “Indemnified Parties”) harmless from
and against any and all losses, costs, liabilities, claims, judgments, liens,
damages (including consequential damages) and expenses, including, without
limitation, reasonable attorneys’ fees and costs, and reasonable investigation
costs, incurred in connection with or arising from:  (a) any default by Tenant in the
observance or performance of any of the terms, covenants or conditions of this
Lease on Tenant’s part to be observed or performed, including Tenants
obligations under Article 6 with respect to the Ground Lease, (b) the
use or occupancy or manner of use or occupancy of the Premises, the Building
and the Property by Tenant and Tenant’s Agents or any person claiming under
Tenant, (c) the condition of the Premises, and any occurrence on the
Premises, the Building or the Property from any cause whatsoever, except to the
extent caused by the gross negligence or willful misconduct of the Indemnified
Parties, and (d) any negligence of Tenant or of Tenant’s Agents, in, on or
about the Premises, the Building or the Common Area.  In case any action or proceeding be brought,
made or initiated against the Indemnified Parties relating to any matter
covered by Tenant’s indemnification obligations under this Section or
under Section 13.4, Tenant, upon notice from the Landlord, shall at its
sole cost and expense, resist or defend such claim, action or proceeding by
counsel approved by the Indemnified Parties. 
Notwithstanding the foregoing, to the extent any Indemnified Party
reasonably believes a conflict of interest exists between such Indemnified
Party and any other Indemnified Party, each of the Indemnified Parties may
retain its own counsel to defend or assist in defending any claim, action or
proceeding, and Tenant shall pay the reasonable fees and disbursements of such
counsel.  Tenant’s obligations under this
Section shall survive the expiration or earlier termination of this
Lease.  Each of the Indemnified Parties
is an intended third-party beneficiary of this Section 14.1 and shall be
entitled to enforce the provisions hereof.

 

14.2                        Insurance.  Tenant shall
procure at its sole cost and expense and keep in effect during the Term:

 

(a)                                  commercial general liability
insurance covering Tenant’s operations in the Premises and the use and
occupancy of the Premises.  Such
insurance shall include contractual liability. Such coverage shall be written
on an 

 

36

 

“occurrence” form and shall have a
minimum combined single limit of liability of not less than Ten Million Dollars
($10,000,000).  Tenant’s policy shall be
written to apply to all bodily injury, property damage and personal injury and
provide for coverage of owned and non-owned automobile liability, if applicable.  Such insurance shall name Landlord and
Indemnified Parties as an Additional Insured, and shall provide that Landlord
will receive thirty (30) days’ written notice from the insurer prior to any
cancellation and shall provide that it is primary insurance;

 

(b)                                 “All Risk” commercial property insurance
with respect to Tenant’s Property, including furniture, fittings,
installations, alterations, additions, partitions and fixtures or anything in
the nature of a leasehold improvement made or installed by or on behalf of the
Tenant in an amount of not less than one hundred percent (100%) of the full
replacement cost thereof as shall from time to time be determined by Tenant in
form satisfactory to Landlord;

 

(c)                                  Worker’s Compensation Insurance in
the amounts and coverages required under worker’s compensation laws applicable
to Tenant and/or the Premises from time to time, and Employer’s Liability
Insurance, with limits of not less than one million dollars ($1,000,000) such
higher amounts as may be required by law; and

 

(d)                                 any other form or forms of insurance
as Landlord may reasonably require from time to time (other than insurance that
Landlord is required to maintain) in amounts and for insurable risks (on
commercially reasonable terms) against which a prudent tenant would protect
itself to the extent landlords of comparable buildings in the vicinity of the
Building require their tenants to carry such other form(s) of insurance.

 

14.3                        Policies.  All policies of
insurance provided for herein shall be issued by insurance companies with
general policyholders’ rating of not less than A, as rated in the most current
available “Best’s Insurance Reports,” and not prohibited from doing business in
the State of California.  Certificates of
insurance shall be delivered to Landlord prior to the delivery of possession of
the Premises to Tenant and thereafter prior to the expiration of the term of
each such policy.  All such policies of
insurance shall provide that the company writing said policy will give to
Landlord thirty (30) days notice in writing in advance of any
cancellation.  No policy shall have a
deductible in excess of $500,000 for any one occurrence.

 

14.4                        Landlord’s Rights.  Should Tenant
fail to take out and keep in force each insurance policy required under this
Article 14, or should such insurance not be approved by Landlord and
should the Tenant not rectify the situation within two (2) business days
after written notice from Landlord to Tenant, Landlord shall have the right,
without assuming any obligation in connection therewith, to purchase such insurance
at the sole cost of Tenant, and all costs incurred by Landlord shall be payable
within five (5) days of demand to Landlord by Tenant as Additional Rent
and without prejudice to any other rights and remedies of Landlord under this
Lease.  Notwithstanding anything to the
contrary set forth herein, at any time and from time to 

 

37

 

time, upon
reasonable notice to Tenant, Landlord may elect to insure all or any part of
the Premises under its own policy or policies of insurance, in which event,
during the period of such coverage the cost of any such policies shall be an
Operating Expense hereunder and Tenant may elect to discontinue insurance
coverage it is otherwise required to carry hereunder to the extent of such
insurance provided by Landlord.

 

14.5                        Waiver of Subrogation. 
Notwithstanding anything to the contrary in this Lease, the parties
hereto (and their respective agents, employees, successor, assignees and, as to
Tenant, its subtenants) release each other and their respective agents,
employees, successor, assignees and, as to Tenant, its subtenants from damage
to any property that is caused by or results from a risk (i) which is
actually insured against, to the extent of receipt of payment under such policy,
(ii) which is required to be insured against under this Lease, or
(iii) which would normally be covered by the standard “all risk” property
insurance.  Landlord and Tenant (and each
of Tenant’s subtenants) shall each obtain from their respective Commercial
Property insurers at any time during the Term insuring or covering the Property
or any portion thereof of its contents therein, a waiver of all rights of
subrogation which the insurer of one party might otherwise, if at all, have
against the other party.

 

14.6                        No Liability.  No
approval by Landlord of any Tenant insurer, or the terms or conditions of any
policy, or any coverage or amount of insurance, or any deductible amount shall
be construed as a representation by Landlord of the solvency of the insurer or
the sufficiency of any policy or any coverage or amount of insurance or
deductible and Tenant assumes full risk and responsibility for any inadequacy
of insurance coverage or any failure of insurers.

 

15.                               ASSIGNMENT AND SUBLETTING.

 

15.1                        Consent Required.  Except as
otherwise explicitly provided herein, Tenant shall not directly or indirectly,
voluntarily or by operation of law, (i) sell, assign, encumber, pledge or
otherwise transfer or hypothecate all or any part of its interest in or rights
with respect to the Premises or its leasehold estate (collectively, “Assignment”),
without Landlord’s written consent, which consent Landlord may withhold in its
sole and absolute discretion, or (ii) permit all or any portion of the
Premises to be occupied by anyone other than itself or sublet all or any
portion of the Premises (collectively, “Sublease”) without Landlord’s
prior written consent, such consent not to be unreasonably withheld.

 

15.2                        Notice.  If Tenant desires to enter into a Sublease of
the Premises or Assignment of this Lease, it shall give written notice (the “Transfer Notice”)
to Landlord of its intention to do so, which notice shall contain (a) the
name and address of the proposed assignee, subtenant or occupant (the “Transferee”),
(b) the nature of the proposed Transferee’s business to be carried on in
the Premises, (c) the terms and provisions of the proposed Assignment or
Sublease, and (d) such financial information as Landlord may reasonably
request concerning the proposed Transferee.

 

38

 

15.3                        Terms of Approval.  Landlord
shall respond to Tenant’s request for approval within fifteen
(15) business days after receipt of the Transfer Notice, and if Landlord
fails to respond within such fifteen (15) day period, Landlord shall be
deemed to have disapproved such proposed Assignment or Sublease.  If Landlord approves the proposed Assignment
or Sublease, or if an Assignment or Sublease is permitted by operation of law,
Tenant may, not later than thirty (30) days thereafter, enter into the
Assignment or Sublease with the proposed Transferee upon the terms and
conditions set forth in the Transfer Notice, and sixty percent (60%) of the
Excess Rent received by Tenant shall be paid to Landlord as and when received
by Tenant and forty percent (40%) of the Excess Rent received by Tenant shall
be retained by Tenant. “Excess Rent” means the gross
revenue received from the Transferee during the Sublease term or with respect
to the Assignment, less (a) the gross revenue paid to Landlord by Tenant
during the period of the Sublease term or during the Assignment; (b) any
reasonably documented tenant improvement allowance or other economic concession
(planning allowance, moving expenses, etc.), paid by Tenant to the Transferee
or to a third party in connection with the transfer; (c) customary and
reasonable external brokers’ commissions to the extent paid and documented;
(d) reasonable attorneys’ fees; and (e) reasonable costs of
advertising the space for Sublease or Assignment (collectively, “Transfer Costs”).  Tenant shall not have to pay to Landlord any
Excess Rent until Tenant has recovered its Transfer Costs.

 

15.4                        Certain
Conditions Applicable to All
Sublettings and Assignments. 
Any assignment or subletting will also be subject to the following
conditions:

 

(a)                                  At least thirty (30) days prior
to the date on which such subletting or assignment shall become effective,
Tenant shall furnish to Landlord all of the documents and information required
under this Section 15.4 together with the Transfer Notice.

 

(b)                                 At both the time of Tenant’s
furnishing to Landlord the information and documents required under this
Section 15.4 and the time at which the subletting or assignment becomes
effective, an Event of Default shall not have occurred.

 

(c)                                  If required, the consent of the
Leasehold Mortgagee under such Leasehold Mortgage shall have been obtained and
Tenant shall have paid to Landlord, or at Landlord’s election reimbursed
Landlord for, any charges or payments which are the responsibility of Landlord
under the Leasehold Mortgage in connection with such subletting or assignment.

 

(d)                                 Tenant shall furnish to Landlord a
copy of the final executed copy of the Sublease or Assignment documents used in
connection with the Sublease or Assignment, and of each instrument delivered in
connection therewith within five (5) business days after the execution and
delivery thereof.

 

39

 

(e)                                  Such Sublease or Assignment shall be
for the actual use and physical occupancy of the Premises, in the case of an
Assignment, and the portion of the Premises sublet, in the case of a Sublease,
by the assignee or subtenant, as applicable.

 

(f)                                    No assignee or subtenant shall be a
person having, directly or indirectly, sovereign or diplomatic immunity or
having immunity from (or otherwise not being subject to) the service of process
in and the jurisdiction of the courts of California.

 

(g)                                 Following the proposed Assignment or
Sublease, the assignee or subtenant shall use the Premises only for the
specific use permitted under Article 7.

 

(h)                                 The instrument of Sublease or
Assignment shall not purport to grant to the subtenant or assignee thereunder
any rights greater than or inconsistent with those granted to Tenant under this
Lease, including for this purpose any term in the instrument of assignment or
sublease for which there is no corresponding term in this Lease resulting in
such greater rights or inconsistency.

 

(i)                                     In the case of any subletting, the
term thereof (including any extension options) shall in all respects be
consistent with Article 10 and shall not prevent Tenant from delivering
vacant possession, free and clear of any subtenancies, of the Premises or the
applicable portion thereof, on the Expiration Date.

 

15.5                        No Release.  No Sublease
or Assignment by Tenant nor any consent by Landlord thereto shall relieve
Tenant of any obligation to be performed by Tenant under this Lease.  Any Sublease or Assignment that is not in
compliance with this Article shall be null and void and, at the option of
Landlord, shall constitute an Event of Default by Tenant under this Lease, and
Landlord shall be entitled to pursue any right or remedy available to Landlord
under the terms of this Lease or under the laws of the State of
California.  The acceptance of any Rent
or other payments by Landlord from a proposed Transferee shall not constitute
consent to such Sublease or Assignment by Landlord or a recognition of any
Transferee, or a waiver by Landlord of any failure of Tenant or other
Transferor to comply with this Article.

 

15.6                        Change in Control; Successor Entity. 
(a)  For the purposes of this Lease, any transfer of control
of Tenant, by operation of law or otherwise, whether pursuant to one
transaction or a series of transactions and whether at one time or over a
period of time (a “Change in Control”), shall
be deemed an Assignment and shall be subject to all of the provisions of this
Article 15, including, without limitation, the requirement that Tenant
obtain Landlord’s prior written consent thereto, except as provided in
Section 15.11.  For purposes of this
Section 15.6, a transfer of control of Tenant shall be deemed to have
occurred if there shall be any of the following:  (i) a transfer of the ultimate
beneficial ownership of fifty percent (50%) or more of the equity 

 

40

 

interests in
Tenant or of any class of equity interests in Tenant, including, without
limitation, by the issuance of additional shares or other equity interests in
Tenant, (ii) a transfer of the right to receive fifty percent (50%) or
more of any category of distributions made by Tenant, or (iii) a transfer
of the right to direct the management of Tenant, by contract or otherwise.  Notwithstanding the foregoing, (A) if
Tenant is a Public Company, Landlord’s consent shall not be required with
respect to transfers of the capital stock of such Tenant on a national
securities exchange, unless such transfers constitute a Change of Control and
(B) Landlord’s consent shall not be required with respect to transfers to
Successor Entities permitted in paragraph (b) below.

 

(b)                                 Tenant
shall have the right, subject to Tenant’s complying with Section 15.4,
upon not less than fifteen (15) days’ prior written notice to Landlord, to
assign its entire interest in this Lease and the leasehold estate hereby
created to a Successor Entity (as such term is
hereinafter defined) of Tenant, provided that the Successor Entity shall not be
entitled, either directly or indirectly, to diplomatic or sovereign immunity
and shall be subject to the service of process in and the jurisdiction of the
courts of the State of California.  A “Successor Entity”,
as used in this Section shall mean a corporation or other business entity
(i) into which or with which Tenant, its corporate or other successors or
permitted assigns, is merged or consolidated, in accordance with applicable
statutory provisions for the merger or consolidation of a corporation or other
business entity or (ii) which acquires all or substantially all of the
Tenant’s assets, provided that by operation of law or by effective provisions
contained in the instruments of merger or consolidation or acquisition, the
liabilities of the entities participating in such merger or consolidation or
acquisition are assumed by the corporation or other business entity surviving
such merger or consolidation or acquisition, above, provided that,
(x) immediately after giving effect to any such merger or consolidation or
acquisition, as the case may be, the corporation or other business entity
surviving such merger or acquisition shall have a Net Worth no less than the
Minimum Net Worth and (y) proof of such assets, capitalization and Net
Worth, as evidenced by a statement from an Acceptable Accounting Firm, shall
have been delivered to Landlord at least ten (10) days prior to the
effective date of any such merger or consolidation, or acquisition and
assumption, as the case may be.

 

15.7                        Assumption of Obligations.  Any
Transferee shall, from and after the effective date of the Assignment, assume
all obligations of Tenant under this Lease with respect to the transferred
space and shall be and remain liable jointly and severally with Tenant for the
payment of Base Rent and Additional Rent, and for the performance of all of the
terms, covenants, conditions and agreements herein contained on Tenant’s part
to be performed for the Term as it relates to the transferred space.  No Assignment shall be binding on Landlord
unless Tenant complies with the provisions of this Article 15 and delivers
to Landlord a counterpart of the Assignment and an instrument that contains a
covenant of assumption reasonably satisfactory in substance and form to
Landlord, and consistent with the requirements of this Section.

 

15.8                        Insolvency or Bankruptcy.  In no
event shall this Lease be assigned or assignable by operation of law or by
voluntary or involuntary bankruptcy proceedings or otherwise and in no event
shall this Lease or any rights or privileges 

 

41

 

hereunder be an
asset of Tenant under any bankruptcy, insolvency, reorganization or other
debtor relief proceedings.

 

15.9                        Recovery of Premises.  If
Landlord shall recover or come into possession of the Premises before the date
herein fixed for the termination of this Lease, Landlord shall have the right,
at its option, to take over any and all Subleases of the Premises or any part
thereof made by Tenant and to succeed to all the rights of said Subleases or
such of them as it may elect to take over. 
Tenant hereby expressly assigns and transfers to Landlord such of the
Subleases as Landlord may elect to take over at the time of such recovery of
possession, such assignment and transfer not to be effective until the
termination of this Lease or re-entry by Landlord hereunder or if Landlord
shall otherwise succeed to Tenant’s interest in the Premises, at which time
Tenant shall upon request of Landlord, execute acknowledge and deliver to
Landlord such further assignments and transfers as may be necessary to vest in
Landlord the then existing Subleases. 
Each subletting hereunder is subject to the condition and by its
acceptance of and entry into a Sublease, each subtenant thereunder shall be deemed
conclusively to have thereby agreed from and after the termination of this
Lease or re-entry by Landlord hereunder or if Landlord shall otherwise succeed
to Tenant’s interest in the Premises, that such subtenant shall waive any right
to surrender possession or terminate the Sublease and, at Landlord’s election,
such subtenant shall be bound to Landlord for the balance of the term of such
Sublease and shall attorn to and recognize Landlord as its landlord under all
of the then executory terms of such Sublease, except that Landlord shall not (i) be
liable for any previous act, omission or negligence of Tenant under such
Sublease, (ii) be subject to any counterclaim, defense or offset not
expressly provided for in such Sublease, (iii) be bound by any previous
modification or amendment of such Sublease or by any previous payment of more
than one month’s rent and additional rent which shall be payable as provided in
the Sublease, (iv) be obligated to repair the subleased space or the
Building or any part thereof in the event of casualty or condemnation except as
otherwise required herein, or (v) be obligated to perform any work in the
subleased space beyond the requirements of this Lease.

 

15.10                 Easements.  Tenant shall not,
without the prior written consent of Landlord (in Landlord’s sole and absolute
discretion), impose any easements or similar encumbrances upon the Premises or
any part thereof.

 

15.11                 Short Term Subletting.  With
Landlord’s prior consent which consent shall not be unreasonably withheld or
delayed, Tenant can enter into a Sublease of one floor or less of Rentable Area
with one (1) or more sublessees (but all of such subleases shall cover,
individually or collectively, not greater than fifteen percent (15%) of
Rentable Area in the aggregate at any given time) for a term of less than the
lesser of (i) twenty-four (24) months or (ii) the remainder of the
Term, provided that fifty percent (50%) of the Excess Rent received by Tenant
shall be paid to Landlord as and when received by Tenant and Tenant shall be
entitled to keep the remaining fifty percent (50%).  If Landlord does not respond to Tenant’s
written request to a proposed short term Sublease meeting the requirements set
forth above, within ten (10) business days following receipt thereof,
Landlord shall be deemed to have approved such short term Sublease. Except as
expressly set forth in this Section 15.11 with respect to Tenant’s 

 

42

 

entitlement to 50%
of the Excess Rent and the ten business day period within which Landlord is to
approve or disapprove the proposed short-term Sublease, all of the other terms
and conditions of this Article 15 shall be applicable to such short-term
Sublease.

 

16.                               DEFAULT.

 

16.1                        Event of Default.  The
occurrence of any of the following shall be an “Event of Default”:

 

(a)                                  Failure on the part of Tenant to pay
any part of the Base Rent or Additional Rent, or any other sums of money that
Tenant is required to pay under this Lease where such failure continues for a
period of five (5) business days after written notice of default from
Landlord to Tenant; provided, however, that Landlord shall not be required to
provide such notice more than three (3) times during any twenty-four
(24) month period during the Term with respect to non-payment of Base Rent
or Additional Rent payable to Landlord, the third such non-payment constituting
default without requirement of notice. 
Landlord’s notice to Tenant pursuant to this subsection shall be
deemed to be the notice required under California Code of Civil Procedure
Section 1161.

 

(b)                                 Failure on the part of Tenant
to comply with the obligations under Section 4.7 which failure, unless
otherwise provided in Section 4.7, continues for a period of ten
(10) days after written notice from Landlord.

 

(c)                                  Failure of Tenant to perform any
other covenant, condition or requirement of this Lease (including the Tenant
Work Letter) when such failure shall continue for a period of thirty (30) days;
provided that if the nature of the default is such that more than thirty (30)
days are reasonably required for its cure, then an Event of Default shall not
be deemed to have occurred if Tenant shall commence such cure within said
thirty (30) day period and thereafter diligently and continuously prosecute
such cure to completion and shall complete such cure within one hundred twenty
(120) days after such failure shall first occur.  Landlord’s notice to Tenant pursuant to this
subsection shall be deemed to be the notice required under California Code
of Civil Procedure Section 1161.

 

(d)                                 The abandonment of the entire
Premises by Tenant.

 

(e)                                  Tenant shall admit in writing its
inability to pay its debts generally as they become due, file a petition in
bankruptcy, insolvency, reorganization, dissolution or liquidation under any
law or statute of any government or any subdivision thereof either now or
hereafter in effect, make an assignment for the benefit of its creditors,
consent to or acquiesce in the appointment of a receiver of itself or of the
whole or any substantial part of the Premises.

 

(f)                                    A court of competent jurisdiction
shall enter an order, judgment or decree appointing a receiver of Tenant or of
the whole or any substantial part of the Premises and such order, judgment or
decree shall not be vacated, set aside or 

 

43

 

stayed within thirty (30) days after
the date of entry of such order, judgment, or decree, or a stay thereof shall
be thereafter set aside.

 

(g)                                 A court of competent jurisdiction
shall enter an order, judgment or decree approving a petition filed against
Tenant under any bankruptcy, insolvency, reorganization, dissolution or
liquidation law or statute of the federal or state government or any
subdivision of either now or hereafter in effect, and such order, judgment or
decree shall not be vacated, set aside or stayed within thirty (30) days
from the date of entry of such order, judgment or decree, or a stay thereof
shall be thereafter set aside.

 

(h)                                 The occurrence of (i) the
acceleration of the obligations of Tenant under any Indebtedness or other
obligations under which it is liable for more than $20,000,000 or (ii) the
maturity of $20,000,000 or more of Indebtedness of Tenant by its terms which
has not been paid or (iii) the entry of any judgment against Tenant for $20,000,000
or more which has not been vacated or appealed and stayed; provided that for
the purposes of clauses (i) and (ii), the term indebtedness shall not
include indebtedness for the deferred purchase price of property or services.

 

(i)                                     The occurrence of an Event of
Default under any of the Other Leases.

 

16.2                        Remedies.  Upon the occurrence
of an Event of Default, Landlord shall have the following rights and remedies:

 

(a)                                  The right to terminate this Lease
upon written notice to Tenant, in which event Tenant shall immediately
surrender possession of the Premises in accordance with Article 20.

 

(b)                                 The right to bring a summary action
for possession of the Premises.

 

(c)                                  Upon termination of the Lease by
Landlord pursuant to Section 16.2(a), 
the right to recover from Tenant the following:  (i) the worth at the time of award of
any unpaid Rent which has 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 rental loss that Tenant 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 rental loss that Tenant proves could be
reasonably avoided; plus, (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom which includes, without limitation,
(A) the unamortized portion of any brokerage or real estate agent’s
commissions paid by or on behalf of Landlord in 

 

44

 

connection with the execution of this
Lease, (B) any direct costs or expenses incurred by Landlord in recovering
possession of the Premises, maintaining or preserving the Premises after such
default, (C) preparing the Premises for reletting to a new tenant,
(D) any repairs or alterations to the Premises for such reletting,
(E) leasing commissions, architect’s fees and any other costs necessary or
appropriate either to relet the Premises or, if reasonably necessary in order
to relet the Premises, to adapt them to another beneficial use by Landlord and
(F) such amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by Applicable Law to the extent that such payment
would not result in a duplicative recovery. 
The term “Rent” as used in this Section 16.2(c) shall be
deemed to be and to mean all sums of every nature required to be paid by Tenant
pursuant to the terms of this Lease, whether to Landlord or to others.  As used in Sections 16.2(c)(i) and
(ii), above, the “worth at the time of award” shall be computed by allowing
interest at the Interest Rate, but in no case greater than the maximum amount
of such interest permitted by Applicable Law. 
As used in Section 16.2(c)(iii) above, the “worth at the time
of award” shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one
percent.

 

(d)                                 The rights and remedies described in
California Civil Code Section 1951.4 which allow Landlord to continue this
Lease in effect and to enforce all of Landlord’s rights and remedies under this
Lease, including the right to recover Base Rent, Additional Rent and other
charges payable hereunder as they become due. 
Acts of maintenance or preservation, efforts to relet the Premises or
the appointment of a receiver upon Landlord’s initiative to protect its
interest under this Lease shall not constitute a termination of Tenant’s right
to possession.

 

(e)                                  The right and power, as
attorney-in-fact for Tenant, to sublet the Premises, to collect rents from all
subtenants and to provide or arrange for the provision of all services and
fulfill all obligations of Tenant under any permitted subleases.  Landlord is hereby authorized on behalf of
Tenant, but shall have absolutely no obligation, to provide such services and
fulfill such obligations and to incur all such expenses and costs as Landlord
deems necessary.  Landlord is hereby
authorized, but not obligated, to relet the Premises or any part thereof on behalf
of Tenant, to incur such expenses as may be necessary to effect a relet and
make said relet for such term or terms, upon such conditions and at such rental
as Landlord in its reasonable discretion may deem proper.  Tenant shall be liable immediately to
Landlord for all costs and expenses Landlord incurs in reletting the Premises
including, without limitation, brokers’ commissions, expenses of remodeling the
Premises required by the reletting, and the cost of collecting rents and
fulfilling the obligations of Tenant to any subtenant.  If Landlord relets the Premises or any
portion thereof, such reletting shall not relieve Tenant of any obligation
hereunder, except that Landlord shall apply the rent or other proceeds actually
collected by it as a result of such reletting against any amounts due from
Tenant hereunder to the extent that such rent or other proceeds compensate
Landlord for the nonperformance of any obligation of Tenant hereunder.  Such 

 

45

 

payments by Tenant shall be due at
such times as are provided elsewhere in this Lease, and Landlord need not wait
until the termination of this Lease, by expiration of the Term or otherwise, to
recover them by legal action or in any other manner.  Landlord may execute any sublease made
pursuant to this Section in its own name, and the tenant thereunder shall
be under no obligation to see to the application by Landlord of any rent or
other proceeds, nor shall Tenant have any right to collect any such rent or other
proceeds.  Landlord shall not by any
reentry or other act be deemed to have accepted any surrender by Tenant of the
Premises or Tenant’s interest therein, or be deemed to have otherwise
terminated this Lease, or to have relieved Tenant of any obligation hereunder,
unless Landlord shall have given Tenant express written notice of Landlord’s
election to do so as set forth herein.

 

(f)                                    The right to enjoin, and any other
remedy or right now or hereafter available to a Landlord against a defaulting
tenant under the laws of the State of California or the equitable powers of its
courts, and not otherwise specifically reserved herein.

 

(g)                                 If this Lease provides for a
postponement of deferral of any Rent, or for commencement of payment of Rent to
a date later than the Commencement Date, or for a period of “free” Rent or any
other Rent concession (collectively, “Abated Rent”), the right upon
an Event of Default to demand immediate payment of the value of the Abated
Rent.

 

16.3                        Cumulative Remedies.  The various
rights and remedies reserved to Landlord, including those not specifically
described herein, shall, to the extent that the exercise of such right and/or
remedy does not result in a duplicative recovery,  be cumulative and shall be in addition to
every other right or remedy provided for in this Lease or now or hereafter
existing at law or in equity and the exercise of the rights or remedies
provided for in this Lease or now or hereafter existing at law or in equity
shall not preclude the simultaneous or later exercise by Landlord of any or all
other rights and remedies.

 

16.4                        Waiver of Redemption by Tenant. 
Tenant hereby waives any right to redeem, by order or judgment of any
court or by any legal process or writ, Tenant’s right of occupancy of the
Premises after any termination of this Lease.

 

16.5                        Landlord’s Right to Cure.  If
Tenant shall fail or neglect to do or perform any covenant or condition
required under this Lease and such failure shall not be cured within any
applicable grace period, Landlord may, without waiving such default, on five
(5) business days notice to Tenant, but shall not be required to, make any
payment payable by Tenant hereunder, discharge any lien, take out, pay for and
maintain any insurance required hereunder, or do or perform or cause to be done
or performed any such other act or thing (entering upon the Premises for such
purposes, if Landlord shall so elect), and Landlord shall not be or be held
liable or in any way responsible for any loss, disturbance, inconvenience,
annoyance or damage resulting to Tenant on account thereof.  Tenant shall repay to Landlord within five
(5) business days following demand the entire 

 

46

 

out-of-pocket cost
and expense incurred by Landlord in connection with the cure, including,
without limitation, compensation to the agents, consultants and contractors of
Landlord and reasonable attorneys’ fees and expenses.  Landlord shall also impose a thirty percent
(30%) administrative fee to compensate Landlord for the cost of performing on
behalf of Tenant.  Landlord may act upon
shorter notice or no notice at all if necessary in Landlord’s reasonable
judgment to meet an emergency situation to protect Landlord’s interest in the
Premises.  Landlord shall not be required
to inquire into the correctness of the amount of validity or any tax or lien
that may be paid by Landlord and Landlord shall be duly protected in paying the
amount of any such tax or lien claimed and in such event Landlord also shall
have the full authority, in Landlord’s sole judgment and discretion and without
prior notice to or approval by Tenant, to settle or compromise any such lien or
tax.  Any act or thing done by Landlord
pursuant to the provisions of this Section shall not be or be construed as
a waiver of any such failure by Tenant, or as a waiver of any term, covenant,
agreement or condition herein contained or of the performance thereof.

 

16.6                        Landlord’s Default.  Landlord
shall be in default under this Lease if Landlord fails to perform obligations
required of Landlord within thirty (30) days after written notice by
Tenant to Landlord and to any Leasehold Mortgagee or Prior Lessor whose name
and address shall have heretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord’s obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be
in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.  Tenant shall be entitled to actual (but not
consequential) damages in the event of an uncured default by Landlord, but the
provisions of Article 18 shall apply to any Landlord default and Tenant
shall not have the right to terminate this Lease as a result of a Landlord
default.

 

16.7                        Survival.  The provisions of
this Article 16 shall survive termination of this Lease.

 

17.                               LANDLORD’S
RESERVED RIGHTS.

 

17.1                        Control of Common Area.  Landlord
reserves the right, at any time and from time to time, to make alterations,
additions, repairs or improvements to all or any part of the Building
(including the Structural Components and Building Systems), the Common Area and
the Property; provided, however, that Landlord shall not materially and
adversely affect Tenant’s use of the Premises or its rights of access and
parking and not unreasonably interfere with Tenant’s business or
properties.  Landlord may make changes at
any time and from time to time in the size, shape, location, use and extent of
the Common Area, and no such change shall entitle Tenant to any abatement of
rent or damages; provided, however, that Landlord shall not materially and
adversely affect Tenant’s use of the Premises or its rights of access and
parking and not unreasonably interfere with Tenant’s business or
properties.  Landlord shall at all times
during the Term have the sole and exclusive control of the Structural Components
and the Common Area, and may at any time and from time to time during the Term
restrain any 

 

47

 

use or occupancy
of the Common Area except as authorized by the Rules and Regulations.  Landlord may temporarily close any portion of
the Common Area for repairs or alterations, to prevent a dedication or the
accrual of prescriptive rights, or for any other reason deemed sufficient by
Landlord; provided, however, that Landlord shall not materially and adversely
affect Tenant’s use of the Premises or its rights of access and parking and not
unreasonably interfere with Tenant’s business or properties.  Tenant’s rights in and to the Common Area
shall at all times be subject to the rights of Landlord and Tenant shall keep
the Common Area free and clear of any obstructions created or permitted by
Tenant or resulting from Tenant’s operations.

 

17.2                        Access.  Landlord reserves
(for itself and its agents, consultants, contractors and employees) the right
to enter the Premises at all reasonable times and, except in cases of
emergency, after giving Tenant reasonable notice, to inspect the Premises, to
supply any service to be provided by Landlord hereunder, to show the Premises
to prospective purchasers, mortgagees or tenants (during the last year of the
Term), to post notices of nonresponsibility, and to alter, improve or repair
the Premises and any portion of the Building, without abatement of Rent, and
may for that purpose erect, use and maintain necessary structures in and
through the Premises and the Building where reasonably required by the
character of the work to be performed. 
Landlord will comply with legal access restrictions applicable to
special security areas in the Premises. 
Landlord shall use reasonable efforts not to unreasonably interfere with
Tenant’s use of the Premises.  Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment
of the Premises or any other loss occasioned thereby.  All locks for all of the doors in, upon and
about the Premises, excluding Tenant’s vaults and safes or special security
areas (designated in advance in writing by Tenant) shall at all times be keyed
to the Building master system and Landlord shall at all times have and retain a
key with which to unlock all of said doors. 
Landlord shall have the right to use any and all means that Landlord may
deem necessary or proper to open said doors in an emergency in order to obtain
entry to any portion of the Premises, and any entry to the Premises or portions
thereof obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction, actual or constructive,
of Tenant from the Premises or any portion thereof.

 

17.3                        Easements.  Subject to the term
of covenants and restrictions encumbering the premises, Landlord reserves the
right to grant or relocate all easements and rights of way which Landlord in its
sole discretion may deem necessary or appropriate, provided that the grant or
relocation of easements shall not materially and adversely affect Tenant’s use
of the Premises or its rights of access and parking and not unreasonably
interfere with Tenant’s business or properties. If any such grant or relocation
will incur costs or expenses which are Operating Expenses hereunder, Landlord’s
rights under this Section 17.3 shall be exercised in its reasonable
discretion.

 

17.4                        Use of Additional Areas. 
Subject to the provisions of Articles 32, Landlord reserves the
exclusive right to use any air space above the Building and the Property, the
roof and exterior walls of the Building and the land beneath the Building; 

 

48

 

provided that such
use shall not materially impede Tenant’s use of and access to the Premises.

 

17.5                        Subordination.  (a)  Leasehold Mortgages.  Landlord shall have the right to enter into
such Leasehold Mortgages as Landlord shall elect in its sole discretion.  This Lease is and shall be subject and subordinate
to each and any Leasehold Mortgage and to all advances under any Leasehold
Mortgage, and any restatements, renewals, increases, supplements,
modifications, consolidations, spreaders, replacements, substitutions, or
extensions of any Leasehold Mortgage, provided that (i) the Leasehold
Mortgagee thereunder shall have entered into an SNDA in favor of Tenant in such
Leasehold Mortgagee’s customary form and (ii) the Leasehold Mortgage shall
provide that, subject to compliance with procedures and conditions customary
for                                            construction
loan disbursements (including obtaining lien waivers and title insurance
endorsements), the proceeds of any casualty insurance policy shall be made
available to Landlord for purposes of a restoration to the extent that Landlord
would under Section 19.3 be required to make such proceeds available to
Tenant.

 

(b)                                 Prior Leases.  Landlord shall have the right to enter into
such Prior Leases and any modifications, amendments, supplements, replacements,
extensions, renewals or substitutions thereto or thereof as Landlord shall
elect in its sole discretion, provided the same does not result in the
imposition on Tenant of any obligations that are materially more onerous than
those imposed under this Lease or that otherwise materially adversely affect
Tenant. This Lease is and shall be subject and subordinate to each and any
Prior Lease provided that the Prior Lessor thereunder shall have entered into
an SNDA in favor of Tenant, modified as appropriate, and to any modifications,
amendments, supplements, replacements, extensions, renewals or substitutions
thereto or thereof.

 

(c)                                  Attornment.  Tenant
agrees that this Lease shall not be terminable by Tenant by reason of any
foreclosure of a Leasehold Mortgage or any other mortgage affecting the
Premises, nor by reason of the institution of any suit, action, summary or
other proceeding against Landlord or any foreclosure proceeding brought by the
holder of any Leasehold Mortgage or other mortgage affecting the Premises to
recover possession of the Premises by operation of law or otherwise or by
reason of the termination of any Prior Lease and that the same shall not result
in the cancellation or termination of this Lease by Tenant or of the
obligations of Tenant hereunder.  If at
any time prior to the expiration of the Term, any Prior Lessor or Leasehold
Mortgagee comes into possession of the Premises or a receiver shall be
appointed for Landlord’s interest in the Premises, Tenant agrees, at the
election and upon demand of any such Prior Lessor or Leasehold Mortgagee in
possession, to attorn, from time to time, to any such Prior Lessor or Leasehold
Mortgagee or any person acquiring the interest of Landlord as a result of any
such Prior Lease termination or as a foreclosure of a Leasehold Mortgage or the
granting of a deed or assignment in lieu of foreclosure, upon the then
executory terms and conditions of this Lease for the remainder of the
Term.  The provisions of this
Section 17.5 shall inure to the benefit of any such successor Landlord,
shall apply notwithstanding that, as a matter of law, this Lease may terminate
upon the termination of a Prior Lease or foreclosure of a Leasehold Mortgage,
and shall be self-operative upon 

 

49

 

any such demand,
and no further instrument shall be required to give effect to said
provisions.  Tenant, however, upon demand
of any such successor Landlord, shall execute, from time to time, instruments
in confirmation of the forgoing provisions of this Section 17.5 reasonably
satisfactory to any such successor Landlord and Tenant, acknowledging such
attornment and setting forth in the terms and conditions of its tenancy.  Nothing contained in this Section shall
be construed to impair any right otherwise exercisable by any such successor
Landlord.

 

(d)                                 Leasehold Mortgagee Cure Rights.  In the event of any act or omission by
Landlord which would give Tenant the right to terminate this Lease or to claim
a partial or total eviction, pursuant to the terms of this Lease, if any,
Tenant will not exercise any such right until (i) it has given written
notice of such act or omission to the holder(s) of any Leasehold Mortgages to
which this Lease shall be subordinate, whose name and address shall previously
have been furnished to Tenant, by delivering such notice of such act or
omission addressed to such holders at the last address so furnished, and
(ii)  in the case of any such act, omission or default that can be cured
by the payment of money, until thirty (30) days shall have elapsed
following the giving of such notice, or (ii) in the case of any other such
act, omission or default, until a reasonable period for remedying such act,
omission or default shall have elapsed following the giving of such notice and
following the time when any such holder shall have become entitled under its
Leasehold Mortgage to remedy the same, including such time as may be necessary
to acquire possession of the Premises if possession is necessary to effect such
cure, provided any such holder with reasonable diligence, shall (x) pursue
such remedies as are available to it under its Leasehold Mortgage so as to be
able to remedy the act, omission or default, and (y) thereafter shall have
commenced and continued to remedy such act, omission or default or cause the
same to be remedied; provided, however, that the agreements of Tenant contained
in this Section 17.5 shall be subject to the terms of any SNDA between
Tenant and any such holder(s).

 

(e)                                  Amendments Requested by Leasehold Mortgagee.  If, in connection with obtaining any
financing or refinancing or any increases, restatements, renewals, supplements,
modifications, consolidations, replacements, substitutions or extensions
thereof, a prospective or existing Leasehold Mortgagee and/or holder of an
interest in any loan secured by a Leasehold Mortgage, as the case may be, shall
request amendments to or modifications of this Lease as a condition to the
same, Tenant shall promptly execute such amendments or modifications upon
demand as long as (i) the modifications do not affect the Rent or the Term
or the Letter of Credit and (ii) such amendments or modifications do not
otherwise materially increase Tenant’s obligations or materially diminish Tenant’s
rights hereunder.  In addition, Tenant
shall deliver any financial statements or other information requested by
Landlord (or any prospective or existing lender) in order to obtain such
financing or refinancing, provided that Tenant shall not be required to disclose
any non-public information relating to Tenant. 
Furthermore, Tenant shall cause counsel reasonably acceptable to a
prospective Leasehold Mortgagee to deliver legal opinions reasonably required
by such prospective Leasehold Mortgagee relating to the due authorization,
execution and delivery of this Lease and any amendments thereto, the validity
and enforceability of such agreements, and other customary matters. Landlord
agrees to pay reasonable out-of-pocket costs and 

 

50

 

expenses of
Tenant, including reasonable attorneys’ fees and expenses, in excess of $15,000
incurred solely in connection with amendments to or modifications of this
Lease, or the delivery of legal opinions, requested by Leasehold Mortgagee, and
Tenant shall be responsible for the balance of such costs and expenses.

 

18.                               LIMITATION OF LANDLORD’S LIABILITY.

 

18.1                        Limitation.  Landlord shall not
be responsible for or liable to Tenant and Tenant hereby releases Landlord,
waives all claims against Landlord and assumes the risk for any injury, loss or
damage to any person or property in or about the Premises, the Building or the
Property by or from any cause whatsoever (other than Landlord’s gross
negligence or willful misconduct) including, without limitation, (a) acts
or omissions of persons occupying adjoining premises, (b) theft or
vandalism, (c) burst, stopped or leaking water, gas, sewer or steam pipes,
(d) loss of utility service, (e) accident, fire or casualty, (f) nuisance,
and (g) work done by Landlord in the Property, the Building, the Common
Area or the Premises; notwithstanding the foregoing, Landlord shall remain
liable for compliance with its express obligations hereunder.  Even if due to the gross negligence or
willful misconduct of Landlord, Tenant hereby waives any claim for
consequential damages in connection therewith. 
There shall be no abatement of Rent and no liability of Landlord by
reason of any injury to or interference with Tenant’s business or inconvenience
or annoyance to Tenant arising from the making of any repairs, alterations or
improvements to any portion of the Building or to fixtures, appurtenances and
equipment therein, other than such liability as may be imposed upon Landlord by
law or for Landlord’s negligence or willful misconduct.  No interference with Tenant’s operations in
the Premises shall constitute a constructive or other eviction of Tenant.  Tenant hereby waives and releases any right
it may have to make repairs at Landlord’s expense under Sections 1941 and
1942 of the California Civil Code, or under any similar law, statute or
ordinance now or hereafter in effect other than as expressly provided in this
Lease.

 

18.2                        Sale of Property.  It is
agreed that Landlord may at any time sell, assign or transfer its interest as
landlord in and to this Lease, and may at any time sell, assign or transfer its
interest in and to the Property.  In the event of any transfer of Landlord’s
interest in the Property, the transferor shall be automatically relieved of any
and all of Landlord’s               obligations and liabilities accruing from and
after the date of such transfer; provided that the transferee assumes all of
Landlord’s obligations under this Lease from and after the date of such
transfer.  Tenant hereby agrees to
attorn to Landlord’s assignee, transferee, or purchaser from and after the date
of notice to Tenant of such assignment, transfer or sale, in the same manner
and with the same force and effect as though this Lease were made in the first
instance by and between Tenant and the assignee, transferee or purchaser.

 

18.3                        No Personal Liability.  In the
event of any default by Landlord hereunder, Tenant shall look only to
Landlord’s interest in the Property and rents therefrom and any available
insurance proceeds for the satisfaction of Tenant’s remedies, and no other
property or assets of Landlord or any trustee, partner, member, officer or
director thereof, disclosed or undisclosed, shall be subject to levy, execution
or other 

 

51

 

enforcement
procedure for the satisfaction of Tenant’s remedies under or with respect to
this Lease.

 

18.4                        Landlord’s
Consent or Approval; Limitation on
Damages.  (a)  In the event that Tenant shall
claim or assert that Landlord has violated or failed to perform a covenant of
Landlord not to unreasonably withhold, delay or condition Landlord’s consent or
approval, or in any case where Landlord’s reasonableness in exercising its
judgment is in issue, Tenant’s sole remedy shall be an action for specific
performance, declaratory judgment or injunction, and in no event shall Tenant
be entitled to any money damages for a breach of such covenant, and in no event
shall Tenant claim or assert any claims for money damages in any action or by
way of set-off, defense or counterclaim, and Tenant hereby specifically waives
the right to any money damages, set-off, defense, counterclaim or other
remedies; provided, however, that Tenant shall have the right to determine any
dispute between Landlord and Tenant as to whether Landlord has violated or
failed to perform a covenant of Landlord not unreasonably to withhold, delay or
condition Landlord’s consent or where Landlord’s reasonableness in exercising
its judgment is in issue, or any other dispute which by the express terms of
this Lease provides that it shall be resolved by arbitration, in each case by
arbitration in the County of Santa Clara, California in accordance with the
provisions of this Section 18.4. 
Within ten (10) days next following the giving of any notice by
Tenant to Landlord stating that it wishes such dispute to be so determined,
Landlord and Tenant shall each give notice to each other setting forth the name
and address of an arbitrator designated by the party giving notice. If either
party shall fail to give notice of such designation within said ten
(10) days, then the arbitrator chosen by the other side shall make the
determination alone.  The two arbitrators
shall designate a third arbitrator.  If
the two arbitrators shall fail to agree upon the designation of a third
arbitrator within five (5) days after the designation of the second
arbitrator, then either party may apply to any court having jurisdiction,
requesting the designation of such arbitrator. 
Notwithstanding the foregoing, in the event of disputes relating to less
than $100,000, one (1) arbitrator shall be selected in accordance with the
then prevailing Commercial Rules of the American Arbitration
Association.  All arbitrators shall be persons
who shall have had at least ten (10)years experience arbitrating or mediating
disputes relating to California office leases or who shall otherwise be
approved by the parties, and shall not be financially or contractually related
to Landlord or Tenant.  The three
arbitrators shall conduct such hearings as they deem appropriate, making their
determination in writing and give notice to Landlord and Tenant; the
concurrence of any two of said arbitrators shall be binding upon Landlord and
Tenant.  The sole question to be
determined shall be whether or not Landlord has unreasonably withheld or
delayed its consent or approval, and the sole remedy shall be the determination
that such consent or approval must be granted. 
The determination in any arbitration held pursuant to this
Section shall be final and binding upon Landlord and Tenant.  Each party shall pay its own counsel fees and
expenses, if any, in connection with any arbitration under this
Section 18.4, including the expenses and fees of any arbitrator selected
by it in accordance with provisions of this Section, and the parties shall
share all other expenses and fees of any such arbitration, provided that the
foregoing shall not prohibit the arbitrators from determining that the
prevailing party shall be entitled to recover all costs and expenses from the
non-prevailing party.  The 

 

52

 

arbitrators shall
be bound by the provisions of this Lease, and shall not add to, subtract from
or otherwise modify such provisions.

 

(b)                                 In
no event shall Tenant have the right to seek or recover from Landlord any
consequential damages on account of any claim or matter arising out of or
relating to this Lease of the Premises, and Tenant hereby irrevocably waives
any right which it might otherwise have to seek or receive any such
consequential damages.

 

19.                               DESTRUCTION.

 

19.1                        Landlord’s
Repair Obligation.  (a)  If the Premises or the
Building or any portion thereof (whether or not the Premises are affected) are
damaged by fire or other casualty (“Casualty”), Landlord
shall repair the same (including Non-Severable Material Alterations but not
including any Tenant’s Property or other Alterations); provided that
(i) such repairs can be made under the laws and regulations of the
federal, state and local governmental authorities having jurisdiction within
twelve (12) months (plus any incremental time as may be required to
restore any Non-Severable Material Alterations) after the date of such damage
(or in the case of damage occurring during the last twelve (12) months of
the Term, provided that such repairs can be made within ninety (90) days
(plus any incremental time as may be required to restore any Non-Severable
Material Alterations) after the date of such damage), (ii) such repairs
are fully covered (except for any deductible) by the proceeds of insurance
maintained by Landlord or Tenant and (iii) the damage does not affect more
than fifty percent (50%) of the assessed value of the Building. The repairs to
be made by Landlord under this Article shall not include, and Landlord shall
not be required to repair, any Casualty damage to Tenant’s Property or any
Alterations (other than Non-Severable Material Alterations).

 

(b)                                 If
all or any part of the Premises shall be rendered Untenantable by reason of a
Casualty, the Base Rent and the Additional Rent shall be abated in the
proportion that the Untenantable area of the Premises bears to the total area
of the Premises, for the period from the date of the Casualty to the earlier of
(i) the date the Premises is no longer Untenantable (provided that, if the
Premises would no longer have been Untenantable at an earlier date but for
Tenant having failed diligently to prosecute repairs or restoration required of
Tenant under this Lease, then the Premises shall be deemed to no longer be
Untenantable on such earlier date and the abatement shall cease) or
(ii) the date Tenant or any subtenant reoccupies any Untenantable portion
of the Premises for the ordinary conduct of business (in which case the Base
Rent and the Additional Rent allocable to such reoccupied portion shall be
payable by Tenant from the date of such occupancy).  Pending resolution of any dispute with
respect to the period or amount of such abatement, Tenant shall pay Rent in
accordance with Landlord’s determination. 
Notwithstanding the foregoing, if by reason of any act or omission by
Tenant, any subtenant or any of their respective partners, directors, officers,
servants, employees, agents or contractors, Landlord or any Leasehold Mortgagee
shall be unable to collect all of the insurance proceeds (including, without
limitation, rent insurance proceeds) applicable to the Casualty, then, without
prejudice to any other remedies which may be available against Tenant, there
shall be no abatement of Rent.

 

53

 

(c)                                  Landlord
shall not be liable for any inconvenience or annoyance to Tenant or injury to
the business of Tenant resulting in any way from such damage by Casualty or the
repair thereof.  Landlord shall not be
obligated to carry insurance of any kind on Tenant’s Property or any
Alterations or any other improvements made at Tenant’s sole cost and expense
(other than Non-Severable Material Alterations), and Landlord shall not be
obligated to repair any damage thereto or replace the same, other than as
specifically set forth in Section 19.2.

 

19.2                        Termination Option.  Landlord
shall notify Tenant within sixty (60) days after the date of damage
whether or not the requirements for reconstruction and repair described in
Section 19.1 are met.  If such
requirements are not met, Landlord shall have the option, exercisable within
sixty (60) days after the date of such damage either to:  (a) notify Tenant of Landlord’s
intention to repair such damage, in which event this Lease shall continue in
full force and effect (unless terminated by Tenant and whether in Landlord’s
reasonable judgment, such repairs can be completed in eighteen (18) months
(plus any incremental time as may be required to restore any Non-Severable
Material Alterations) or less as provided below), or (b) notify Tenant of
Landlord’s election to terminate this Lease as of the date of the damage.  If such notice to terminate is given by
Landlord, this Lease shall terminate as of the date of such damage.  If Landlord notifies Tenant of its intention
to repair Casualty damages and Landlord reasonably estimates that such repairs
cannot be completed within eighteen (18) months (plus any incremental time
as may be required to restore any Non-Severable Material Alterations), Tenant
shall have the right to terminate this Lease upon fifteen (15) days
written notice to Landlord.  If pursuant
to the above terms of this Section 19.2, Landlord notifies Tenant of
Landlord’s intention to repair Casualty damages and this Lease is not
terminated pursuant to the above terms of this Section 19.2, then Landlord
shall repair, reconstruct and restore the Premises, including Non-Severable
Material Alterations but excluding other Alterations and Tenant’s Property,
with reasonable diligence, so that the same shall be reasonably comparable in
quality, value and utility to the Premises immediately prior to such Casualty
damage.

 

19.3                        Tenant Obligations.  If
Landlord elects or is required to repair, reconstruct or restore the Premises
after any damage or destruction, Tenant shall be responsible at its own expense
for the repair and replacement of Tenant’s Property and any Alterations (other
than Non-Severable Material Alterations) which Tenant elects to replace.  Tenant hereby waives the provisions of any
statute or law that may be in effect at the time of the occurrence of any such
damage or destruction, under which a lease is automatically terminated or a
tenant is given the right to terminate a lease upon such an occurrence.

 

19.4                        No Claim.  Tenant shall
have no interest in or claim to any portion of the proceeds of any insurance or
self-insurance maintained by Landlord. 
If Landlord is entitled and elects not to rebuild the Premises, Landlord
shall relinquish to Tenant such claim as Landlord may have for any part of the
proceeds of any insurance maintained by Tenant under Section 14.2 of this
Lease.

 

54

 

19.5                        No Damages.  If Landlord
is required or elects to make any repairs, reconstruction or restoration of any
damage or destruction to the Premises under any of the provisions of this
Article 19, Tenant shall not be entitled to any damages by reason of any
inconvenience or loss sustained by Tenant as a result thereof.  Except as expressly provided in
Section 19.1 or 19.4, there shall be no reduction, change or abatement of
any rental or other charge payable by Tenant to Landlord hereunder, or in the
method of computing, accounting for or paying the same. Each party hereby
waives the provisions of Section 1932(2) and Section 1933(4) of
the California Civil Code, or any other statute or law that may be in effect at
the time of a casualty under which a lease is automatically terminated or a
tenant is given the right to terminate a lease due to a casualty other than as
provided in Section 19.1.

 

20.                               EMINENT DOMAIN.

 

20.1                        Taking.  If all or any part
of the Premises shall be taken as a result of the exercise of the power of
eminent domain or any transfer in lieu thereof, this Lease shall terminate as
to the part so taken as of the date of taking or as of the date of final
judgment, whichever is earlier, and, in the case of a material partial taking
of the Premises, Landlord shall have the right to terminate this Lease as to
the balance of the Premises by written notice to Tenant within thirty
(30) days after such date.  If any
material part of the Common Area, the Building or the Property shall be taken
as a result of the exercise of the power of eminent domain or any transfer in
lieu thereof, whether or not the Premises are affected, Landlord shall have the
right to terminate this Lease by written notice to Tenant within thirty
(30) days of the date of taking.  If
there shall be a taking of the Property of such scope that the untaken part of
the Property would in Tenant’s reasonable judgment be uneconomic to operate,
then Tenant may terminate this Lease and the term and estate granted hereby by
giving notice to Landlord within thirty (30) days after the date of taking
of possession by the condemning authority.

 

20.2                        Award.  In the event of any
taking, Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection therewith, and Tenant shall assign to Landlord any right to
compensation or damages for the condemnation of its leasehold interest;
provided that Tenant may file a claim for (a) Tenant’s relocation
expenses, (b) the taking of Tenant’s Property, and (c) the loss of
Tenant’s goodwill.

 

20.3                        Partial Taking.  In the event
of a partial taking of the Premises which does not result in a termination of
this Lease (other than with respect to the taken portion of the Premises), the
Base Rent and Operating Expenses shall be adjusted as follows:

 

(a)                                  During the period between the date
of the partial taking and the completion of any necessary repairs,
reconstruction or restoration, Tenant shall be entitled to a reduction of Base
Rent and Operating Expenses by a proportionate amount based on Rentable Area
taken; and

 

55

 

(b)                                 Upon completion of said repairs,
reconstruction or restoration, and thereafter throughout the remainder of the
Term, the Base Rent and Operating Expenses shall be recalculated based on the
remaining total number of square feet of Rentable Area of the Premises.

 

20.4                        Temporary Taking. 
Notwithstanding any other provision of this Article, if a taking occurs
with respect to all or any portion of the Premises for a period of twelve
(12) months or less, this Lease shall remain unaffected thereby and Tenant
shall continue to pay Base Rent and Additional Rent and to perform all of the
terms, conditions and covenants of this Lease, provided that Tenant shall have
the right to terminate this Lease if the taking continues beyond twelve (12) months.  In the event of any such temporary taking,
and if this Lease is not terminated, Tenant shall be entitled to receive that
portion of any award which represents compensation for the use or occupancy of the
Premises during the Term up to the total Base Rent and Additional Rent owing by
Tenant for the period of the taking, and Landlord shall be entitled to receive
the balance of any award.

 

20.5                        Sale in Lieu
of Condemnation.  A voluntary sale by Landlord of all or any
part of the Building or the Common Area to any public or quasi-public body,
agency or person, corporate or otherwise, having the power of eminent domain,
either under threat of condemnation or while condemnation proceedings are
pending, shall be deemed to be a taking under the power of eminent domain for
the purposes of this Article.

 

20.6                        Waiver.  Except as provided
in this Article, each party hereto hereby waives and releases any right it may
have under any Applicable Law to terminate this Lease as a result of a taking,
including without limitation Sections 1265.120 and 1265.130 of the
California Code of Civil Procedure, or any similar law, statute or ordinance
now or hereafter in effect other than as expressly provided in this Lease.

 

21.                               SURRENDER.

 

21.1                        Surrender.  Upon the Termination
Date, Tenant shall surrender the Premises to Landlord in good order and repair,
reasonable wear and tear and damage by casualty excepted, free and clear of all
letting and occupancies.  Subject to
Article 10, upon any termination of this Lease, all improvements, except
for Tenant’s Property, shall automatically and without further act by Landlord
or Tenant, become the property of Landlord, free and clear of any claim or
interest therein by Tenant, and without payment therefor by Landlord.

 

21.2                        Holding Over.  Any holding
over after the expiration of the Term with the consent of Landlord shall be
construed to automatically extend the Term on a month-to-month basis at a Base
Rent equal to the greater of (a) two (2) times the then-current Base
Rent, and (b) one and one-half (1-1/2) times the prevailing rate at which
Landlord is then offering space in buildings reasonably determined by Landlord
to be comparable to the Building, in either case together with an amount
estimated by Landlord as Tenant’s Share of Operating Expenses payable under
this Lease, and shall otherwise 

 

56

 

be on the terms
and conditions of this Lease to the extent applicable.  Any holding over without Landlord’s consent
shall entitle Landlord to exercise any or all of its remedies provided in
Article 16, notwithstanding that Landlord may elect to accept one or more
payments of Base Rent and Operating Expenses from Tenant.

 

21.3                        Quitclaim.  At the expiration
or earlier termination of this Lease, Tenant shall execute, acknowledge and
deliver to Landlord, within ten (10) days after written demand from
Landlord to Tenant, any quitclaim deed or other document required by any
reputable title company, licensed to operate in the State of California, to remove
the cloud or encumbrance created by this Lease from the Property.

 

22.                               FINANCIAL STATEMENTS.

 

Tenant shall tender to
Landlord within ten (10) business days after receipt of a written request
any information reasonably requested by Landlord regarding the financial
stability, credit worthiness or ability of Tenant to pay the Rent due under
this Lease. Notwithstanding the foregoing, if the Tenant is a Public Company
subject to the reporting requirements of the Securities Exchange Act of 1934
(the “Exchange Act”), Tenant shall,
in lieu of the foregoing requirements, promptly deliver to Landlord all filings
made by or on behalf of Tenant with the Securities Exchange Commission or with
any securities exchange.  Landlord shall
be entitled to rely upon the information provided in determining whether or not
to enter into this Lease or for the purpose of any financing or other
transaction subsequently undertaken by Landlord.  Tenant hereby represents and warrants to
Landlord the following:  (a) that
all documents provided by Tenant to Landlord in connection with the negotiation
of this Lease are true and correct copies of the originals, (b) Tenant has
not withheld any information from Landlord that is material to Tenant’s credit
worthiness, financial condition or ability to perform its obligations
hereunder, (c) all information supplied by Tenant to Landlord is true,
correct and accurate, and (d) no part of the information supplied by
Tenant to Landlord contains any misleading or fraudulent statements.

 

23.                               ESTOPPEL CERTIFICATES.

 

Tenant, at any time and
from time to time within five (5) business days after receipt of written
notice from Landlord, shall execute, acknowledge and deliver to Landlord or to
any party designated by Landlord, a certificate of Tenant stating:  (a) that Tenant has accepted the
Premises, (b) the Commencement Date and Expiration Date of this Lease,
(c) that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that same is in full force and effect as modified
and stating the modifications), (d) whether or not there are then existing
any defenses against the enforcement of any of the obligations of Tenant under
this Lease (and, if so, specifying same), (e) whether or not there are
then existing any defaults by Landlord in the performance of its obligations
under this Lease (and, if so, specifying same), (f) the dates, if any, to
which the Base Rent and Operating Expenses have been paid, and (g) any
other factual information relating to the rights and obligations under this
Lease that may reasonably be required by any of such persons.  Failure to deliver such certificate shall
constitute an Event of Default.  At the
request of Tenant, Landlord shall execute, 

 

57

 

acknowledge and deliver to Tenant a certificate with
similar types of information and in the time period set forth above.  Failure by Tenant to execute, acknowledge and
deliver such certificate within such five (5) business day period shall be
conclusive evidence that this Lease is in full force and effect and has not
been modified except as may be represented by the requesting party.

 

24.                               RULES AND REGULATIONS.

 

24.1                        Rules and Regulations.  Tenant
shall faithfully observe and comply with any reasonable rules and
regulations and all reasonable modifications thereof and additions thereto from
time to time put into effect by Landlord and communicated in writing to Tenant
(the “Rules and
Regulations”). 
Landlord shall not enforce such Rules and Regulations in an
unreasonable or discriminatory manner. 
In the event of any conflict between the terms of this Lease and the
terms, covenants, agreements and conditions of the Rules and Regulations,
this Lease shall control. Notwithstanding the foregoing, so long as Tenant
leases 100% of the Building, Landlord shall not impose any Rules and
Regulations.

 

24.2                        Signs.  Without Landlord’s
written consent, which may be given or withheld in Landlord’s sole discretion,
Tenant shall not place or permit to be placed on the front of the Premises any
sign, picture, advertisement, name, notice, marquee or awning; provided that
upon Landlord’s reasonable approval, Tenant shall have the right to place a
sign on or adjacent to the entrance doors to Tenant’s Premises identifying Tenant.  Landlord hereby consents to the location,
size and appearance of Tenant’s signage existing as of the Commencement
Date.  Landlord hereby reserves the
exclusive right to the exterior side walls, rear walls and roof of the
Premises.

 

25.                               INABILITY TO PERFORM.

 

If Landlord is unable to
fulfill or is delayed in fulfilling any of Landlord’s obligations under this
Lease, by reason of acts of God, strikes, lockouts, other labor disputes,
inability to obtain utilities or materials or by any other reason beyond
Landlord’s reasonable control, then no such inability or delay by Landlord
shall constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of Base Rent or Additional Rent,
or relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord, or Landlord’s Agents by reason of inconvenience,
annoyance, interruption, injury or loss to or interference with Tenant’s
business or use and occupancy or quiet enjoyment of the Premises or any loss or
damage occasioned thereby.  If Tenant is
unable to fulfill or is delayed in fulfilling any of Tenant’s obligations under
this Lease (other than the payment of Rent), by reason of acts of God, strikes,
lockouts, other labor disputes, inability to obtain utilities or materials or
by any other reason beyond Tenant’s reasonable control, then such inability or
delay by Tenant shall excuse the performance of Tenant for a period equal to
the duration of such prevention, delay or stoppage.  Tenant hereby waives and releases any right to
terminate this Lease under Section 1932(1) of the California Civil
Code, or any similar law, statute or ordinance now or hereafter in effect.

 

58

 

26.                               NOTICES.

 

Notices or other
communications given or required to be given under this Lease shall be
effective only if rendered or given in writing, sent by certified mail with a
return receipt requested, or delivered in person or by reputable overnight courier
(e.g., Federal Express, DHL, etc.) or by telecopier or facsimile (with
confirmation by one of the other methods specified herein):  (a) to Tenant (i) at the Premises
and at the address specified in Article 1, or (ii) at the place where
Tenant designates subsequent to Tenant’s vacating, deserting, abandoning or
surrendering the Premises; or (b) to Landlord at Landlord’s address set
forth in Article 1; or (c) to such other address as either Landlord
or Tenant may designate as its new address for such purpose by notice given to
the other in accordance with the provisions of this Article.  Any such notice or other communication shall
be deemed to have been rendered or given five (5) days after the date
mailed, if sent by certified mail, or upon the date of delivery in person or by
courier, or when delivery is attempted but refused.

 

27.                               QUIET ENJOYMENT.

 

Landlord covenants that
so long as an Event of Default by Tenant is not in existence, upon paying the
Base Rent and Additional Rent, Tenant shall peaceably and quietly enjoy the
Premises, subject to the terms and provisions of this Lease.

 

28.                               NO RENT ABATEMENT.

 

No abatement, diminution
or reduction of rent, charges or other compensation shall be claimed by or
allowed to Tenant, or any persons claiming under Tenant, under any
circumstances, whether for inconvenience, discomfort, interruption of business
or otherwise, arising from the making of Alterations or repairs to any
improvements now on or which may hereafter be erected on the Premises, by
virtue or because of any present or future Legal Requirements or by virtue or
arising from, and during, the restoration of the Premises after the destruction
or damage thereof by Casualty or other cause or the taking or condemnation of
the Premises (except as otherwise expressly provided for in Article 19 or
20) or arising from any other cause or reason.

 

29.                               AUTHORITY.

 

If Tenant is a
corporation or a partnership, Tenant represents and warrants as follows:  Tenant is an entity as identified in Article 1,
duly formed and validly existing and in good standing under the laws of the
state of organization specified in Article 1 and qualified to do business
in the State of California.  Tenant has
the power, legal capacity and authority to enter into and perform its obligations
under this Lease and no approval or consent of any person is required in
connection with the execution and performance hereof.  The execution and performance of Tenant’s
obligations under this Lease will not result in or constitute any default or
event that would be, or with notice or the lapse of time would be, a default,
breach or violation of the organizational instruments governing Tenant or any
agreement or any order or decree of any court or other governmental authority
to which Tenant is a party or to which it is subject.  Tenant has taken all 

 

59

 

necessary action
to authorize the execution, delivery and performance of this Lease and this
Lease constitutes the legal, valid and binding obligation of Tenant subject to
general principles of equity and to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect affecting the
rights of creditors generally.  Upon Landlord’s
request, Tenant shall provide Landlord with evidence reasonably satisfactory to
Landlord confirming the foregoing representations and warranties.

 

30.                               BROKERS.

 

Tenant and Landlord
warrant that they have had dealings with only the real estate brokers or agents
listed in Article 1 in connection with the negotiation of this Lease and
that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. 
The brokerage commission earned in connection with this transaction
shall be paid by Landlord, and Landlord shall indemnify, defend and hold Tenant
harmless from and against all liabilities arising from any claims by or under
the broker listed in Article 1. 
Tenant and Landlord shall indemnify, defend and hold the other harmless
from and against all liabilities arising from any other claims of brokerage
commissions or finder’s fees based on Tenant’s or Landlord’s dealings or
contacts with brokers or agents other than those listed in Article 1.

 

31.                               BANKRUPTCY OR INSOLVENCY.

 

31.1        No Transfer.  Neither
Tenant’s interest in this Lease, nor any estate hereby created in Tenant nor
any interest herein or therein, shall pass to any debtor-in-possession,
trustee, or receiver or assignee for the benefit of creditors or otherwise by
operation of law except as may specifically be provided pursuant to the
Bankruptcy Code.

 

31.2        Termination Right.  If
(a) Tenant shall file a voluntary petition in bankruptcy or insolvency, or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future
federal bankruptcy act or any other present or future applicable federal, state
or other statute or law (foreign or domestic), or shall make an assignment for
the benefit of creditors or shall seek or consent or acquiesce in the
appointment of any trustee, receiver or liquidator of Tenant or of all or any
part of Tenant’s Property; or (b) within sixty (60) days after the
commencement of any proceeding against Tenant, whether by the filing of a
petition or otherwise, seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future federal bankruptcy law or any other present or future applicable
federal, state or other statute or law (foreign or domestic), such proceeding
shall not have been dismissed, or if, within sixty (60) days after the
appointment of any trustee, receiver or liquidator of Tenant or of all or any
part of Tenant’s Property, without the consent or acquiescence of Tenant, such
appointment shall not have been vacated or otherwise discharged, or if any
execution or attachment shall be issued against Tenant or any of Tenant’s
Property pursuant to which the Premises shall be taken or occupied or attempted
to be taken or occupied; or (c) in a bankruptcy proceeding or a proceeding
described in clause (a) or (b) above, the interest or estate 

 

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created in Tenant hereby shall be taken in execution
or by other process of law, or (d) any assignment shall be made of the
property of Tenant for the benefit of creditors, then and in any such events,
notwithstanding any automatic stay applicable in bankruptcy or any other
law(s), Landlord may give to Tenant notice of intention to terminate this Lease
to end the Term and the estate hereby granted at the expiration of three (3) days
from the date of the giving of such notice, and, in the event such notice is
given, this Lease and the Term and estate hereby granted (whether or not the
Term shall have commenced) shall terminate upon the expiration of said three (3) days
with the same effect as if that day were the Expiration Date, but Tenant shall
remain liable for damages as provided in Article 16 and Tenant shall
remain liable as herein provided.

 

31.3        No Cause for Appointment. 
Tenant shall not cause or give cause for the appointment of a trustee or
receiver of the assets of Tenant and shall not make any assignment for the
benefit of creditors, or become or be adjudicated insolvent. The allowance of
any petition under any insolvency law except under the Bankruptcy Code or the
appointment of a trustee or receiver of Tenant or of the assets of either of them,
shall be conclusive evidence that Tenant caused, or gave cause therefor, unless
such allowance of the petition, or the appointment of a trustee or receiver, is
vacated within thirty (30) days after such allowance or appointment. Any act
described in this Section 31.3 shall be deemed a material breach of Tenant’s
obligations hereunder, and this Lease shall thereupon automatically terminate.
Landlord does, in addition, reserve any and all other remedies provided in this
Lease or in law.

 

31.4        Bankruptcy Filings.  (a)  Upon the filing of
a petition by or against Tenant under any chapter of the Bankruptcy Code,
Tenant, as debtor and as debtor in possession, and any trustee who may be
appointed agree as follows: (i) to perform each and every obligation of
Tenant under this Lease including, without limitation, the continuous and
uninterrupted occupancy of the Premises as is required under Article 16
until such time as this Lease is either rejected or assumed by order of the
United States Bankruptcy Court; (ii) to pay monthly in advance on the
first day of each month as reasonable compensation for use and occupancy of the
Premises an amount equal to all Rent and other charges otherwise due pursuant
to this Lease; (iii) to reject or assume this Lease within sixty (60) days
of the filing of such petition under Chapter 7 of the Bankruptcy Code or
within one hundred twenty (120) days (or such shorter term as Landlord, in
its sole discretion, may deem reasonable so long as notice of such period is
given) of the filing of a petition under any other chapter of the Bankruptcy
Code, Tenant hereby knowingly and voluntarily waiving any right to seek time
additional to the minimum period set forth in 11 U.S.C. § 365(d)(4) or
any similar statute to assume or reject this Lease and hereby acknowledging
that there does not exist, nor could there exist, cause to seek such extension;
(iv) to give Landlord at least forty-five (45) days prior written
notice of any proceeding relating to any assumption of this Lease; (v) to
give Landlord at least thirty (30) days’ prior written notice of any
abandonment of the Premises; any such abandonment to be deemed a rejection of
this Lease; (vi) to do all other things of benefit to Landlord otherwise
required under the Bankruptcy Code; (vii) to be deemed to have rejected
this Lease in the event of the failure to comply with any of the above; and (viii) to
have consented to the entry of an order by an appropriate 

 

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United State Bankruptcy Court providing all of the
above, waiving notice and hearing of the entry of same.

 

(b)           No
default of this Lease by Tenant, either prior to or subsequent to the filing of
such a petition, shall be deemed to have been waived unless expressly done so
in writing by Landlord.

 

(c)           Included
within and in addition to any other conditions or obligations imposed upon
Tenant, any Trustee, or any successor of Tenant as adequate assurance of future
performance in the event of assumption and/or assignment pursuant to the
Bankruptcy Code are the following:  (i) the
cure of any monetary defaults and the reimbursement of pecuniary loss within
not more than thirty (30) days of assumption and/or assignment; (ii) the
deposit of a Letter of Credit pursuant to the terms of this Lease; (iii) the
use of the Premises as set forth herein is unchanged; (iv) the prior
written consent of each Leasehold Mortgagee; and (v) no physical changes
of any kind may be made to the Premises unless in compliance with the
applicable provisions of this Lease.  Tenant
also expressly acknowledges and agrees that neither Tenant nor any successor in
interest (including but not limited to a trustee in bankruptcy appointed to
serve as trustee for Tenant) may assume or assign Tenant’s rights under this
Lease pursuant to 11 U.S.C. § 365 (or any similar statute) unless, in
addition to the provisions of 11 U.S.C. § 365(b)(3), each of the
following conditions, which Landlord and Tenant acknowledge are commercially
reasonable in the context of a bankruptcy proceeding, have been fully satisfied
and Landlord has so acknowledged in writing that:  (A) The assumption of the Lease will not
breach any provision in any other lease, mortgage, financing agreement or other
agreement by which Landlord is bound relating to the Building; (B) The
assumption of the Lease will not disrupt, in Landlord’s judgment, the tenant
mix of the Building which, in Landlord’s judgment, would be most beneficial to
all of the tenants of the Building and would enhance the image, reputation, and
profitability of the Building; (C) The assumption of the Lease will not
result in alteration of the Premises or the making of physical changes of any
kind to the Premises unless in compliance with the applicable provisions of
this Lease.

 

(d)           For
purposes of this Section 31.4, the word “Tenant” shall mean any one or
more persons primarily or secondarily liable for Tenant’s obligations under the
Lease.

 

32.                               ANTENNA AND ROOFTOP SPACE.

 

32.1        Antennae.  Landlord
agrees that, subject to all Legal Requirements, insurance requirements, this
Lease and the conditions and limitations hereinafter stipulated, during the
Term, Tenant, at its sole cost and expense, shall have a non-exclusive license
to install in a location on a 30% portion of the rooftop of the Building to be
designated by Landlord in its sole and absolute discretion (the “Antenna
Area”) and thereafter maintain, repair, operate and replace
satellite antenna(e) (the “antenna”) provided that, with respect to each antenna, (i) the
antenna shall not exceed three (3) feet in height by three (3) feet
in length, by three (3) feet in width or, if applicable, three (3) feet
in diameter; (ii) the size and dimensions of the antenna and any 

 

62

 

reasonably required support structures and associated
maintenance access structures shall be subject to Landlord’s prior written
consent in Landlord’s sole discretion; (iii) such antenna installation and
position of such antenna and reasonably required support structures and
associated maintenance access structures shall comply with all Legal
Requirements; (iv) the installation of any electrical or communications
lines (“Wiring”) and related equipment in connection with the installation
and operation of the antenna, (including, without limitation, the location and
the routing of all Wiring and related equipment in connection therewith) shall (A) be
at Tenant’s sole cost and expense, (B) be subject to Landlord’s prior
written consent, in Landlord’s sole discretion and in accordance with the provisions
of Article 10 (and Landlord hereby consents to Tenant’s antenna(e) existing
as of the Commencement Date), and (C) comply with Legal Requirements and
insurance requirements; and (v) the antenna, reasonably required support
structures, maintenance access structures, Wiring and related equipment shall
be installed, maintained and kept in repair by Tenant, at Tenant’s sole cost
and expense. Tenant shall be responsible for the payments of any fees and taxes
which may be imposed by any governmental agency in connection with the
installation and use of such antenna. 
Landlord acknowledges that Landlord has consented to Tenant’s antennae
existing as of the Commencement Date for purposes of this Section 32.1.

 

32.2        Non-Exclusive.  The
parties agree that Tenant’s use of the rooftop of the Building, is a
non-exclusive use and Landlord may permit the use of any other portion of the
roof to any other person, firm or corporation (“Permitted
User”) for any use including the installation of other antennae,
rooftop equipment, wiring and support equipment provided the same do not
unreasonably interfere with Tenant’s installations on the roof or reception or
transmission of signals or Tenant’s use or occupancy of the Premises in
accordance with the terms hereof. 
Landlord, at its sole cost and expense, shall be responsible for the
repair and maintenance of any damage to the rooftop caused by a Permitted User’s
use of the rooftop and shall not be allowed to request reimbursement therefore
from Tenant as an Operating Expense, provided that
Landlord shall have the right first to prosecute its claims against such
Permitted User.

 

32.3        Access.  For the
purpose of installing, servicing or repairing the antennae, Wiring and related
equipment, Tenant shall have access to the rooftop of the Building at all
reasonable times upon reasonable advance notice, subject to Landlord’s
reasonable safeguards for the security and protection of the Building, the
Building Systems, Structural Components, and installations and equipment of
other tenants or occupants of the Building as may be located on the roof of the
Building. Landlord shall have the right, at Tenant’s expense, to assign a
representative to be present during the duration of Tenant’s access to the
rooftop.

 

32.4        Compliance with Legal Requirements.  Without limiting Landlord’s obligations under
this Lease, Tenant, at Tenant’s sole cost and expense, agrees to promptly and
faithfully obey, observe and comply with all Legal Requirements, insurance
requirements and this Lease in any manner affecting or relating to Tenant’s use
of said roof, and the installation, repair, maintenance and operation of the
antenna, Wiring and related equipment erected or installed by Tenant pursuant
to the provisions of this Article 32. 
Tenant, at Tenant’s sole cost and expense, shall secure and thereafter 

 

63

 

maintain all permits and licenses required for the
installation and operation of the antenna, and any support structures and
related equipment erected or installed by Tenant, including, without
limitation, any approval, license or permit required from the Federal
Communications Commission or otherwise pursuant to Legal Requirements.  Landlord shall, at no cost to it, reasonably
cooperate (which shall include executing and delivering all necessary and
proper filings with governmental or quasi-governmental entities) with Tenant in
obtaining such approvals, licenses and permits.

 

32.5        Tenant Expense. 
Tenant agrees that Tenant will pay for all electrical service required
for Tenant’s use of the antennae, and related equipment erected or installed by
Tenant and Tenant further agrees that such electric service shall feed off the
supply of electrical energy furnished to the Premises as provided in this
Lease.

 

32.6        Tenant’s Property. 
The antennae, support structures, Wiring and related equipment installed
by Tenant, pursuant to the provisions of Article 32 shall be Tenant’s
personal property, and, upon the expiration of the Term of this Lease, or upon
its earlier termination in any manner, shall be removable by Tenant at Tenant’s
sole cost and expense.  Tenant, at Tenant’s
sole cost and expense, shall promptly repair any and all damage to the rooftop
of the Building and to any other part of the Building caused by or resulting
from the installation, maintenance and repair, operation or removal of the
antenna, support structures, Wiring and related equipment erected or installed
by Tenant and restore said affected areas to their condition as existed prior
to the installation of the antenna, and related equipment, ordinary wear and
tear and casualty excepted.

 

32.7        No Interference. 
Tenant’s antennae, Wiring and related equipment shall not interfere with
(i) Building Equipment or other installations located on the roof, (ii) other
portions of the Building, (iii) other tenants in the Building, and/or (iv) the
reception and transmission of communications signals by other tenants; provided
that Tenant’s antennae existing as of the Commencement Date shall not have to
be modified to comply with the foregoing.

 

32.8        Relocation.  Landlord
shall have the right at its sole and absolute discretion, upon not less than
fifteen (15) days prior written notice to Tenant, to relocate the antenna
(and all Wiring and other equipment related thereto), to any reasonably
comparable space on the rooftop of the Building.  Landlord shall reimburse Tenant for all
actual, reasonable costs and expenses incurred by Tenant in connection with any
such relocation.

 

32.9        Indemnification. 
Tenant hereby indemnifies Landlord against liability in connection with
or arising from the installation, maintenance, use and operation of any antenna
installed by Tenant. The foregoing indemnification is in addition to, and not
in lieu of, the obligations of Tenant under Section 13.4 or 14.1.

 

33.                               MISCELLANEOUS.

 

33.1        Entire Agreement. 
This Lease, including the exhibits which are incorporated herein and
made a part of this Lease, contains the entire agreement between 

 

64

 

the parties and all prior negotiations and agreements
are merged herein. Tenant hereby acknowledges that neither Landlord nor
Landlord’s Agents have made any representations or warranties with respect to
the Premises, the Building, the Property, or this Lease except as expressly set
forth herein, and no rights, easements or licenses are or shall be acquired by
Tenant by implication or otherwise unless expressly set forth herein.

 

33.2        No Waiver.  No failure
by Landlord or Tenant to insist upon the strict performance of any obligation
of Tenant or Landlord under this Lease or to exercise any right, power or
remedy consequent upon a breach thereof, no acceptance of full or partial Base
Rent or Additional Rent during the continuance of any such breach by Landlord,
or payment of Base Rent or Additional Rent by Tenant to Landlord, and no
acceptance of the keys to or possession of the Premises prior to the expiration
of the Term by any employee or agent of Landlord shall constitute a waiver of
any such breach or of such term, covenant or condition or operate as a
surrender of this Lease.  No waiver of
any breach shall affect or alter this Lease, but each and every term, covenant
and condition of this Lease shall continue in full force and effect with
respect to any other then-existing or subsequent breach thereof.  The consent of Landlord or Tenant given in
any instance under the terms of this Lease shall not relieve Tenant or
Landlord, as applicable, of any obligation to secure the consent of the other
in any other or future instance under the terms of this Lease.

 

33.3        Modification.  Neither
this Lease nor any term or provisions hereof may be changed, waived, discharged
or terminated orally, and no breach thereof shall be waived, altered or
modified, except by a written instrument signed by the party against which the
enforcement of the change, waiver, discharge or termination is sought.

 

33.4        Successors and Assigns. 
The terms, covenants and conditions contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and, except as otherwise
provided or limited herein, their respective personal representatives and
successors and assigns.

 

33.5        Validity.  If any
provision of this Lease or the application thereof to any person, entity or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such provision to persons, entities or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and be enforced to the full extent permitted by law.

 

33.6        Jurisdiction.  This
Lease shall be construed and enforced in accordance with the laws of the State
of California.  Any action that in any
way involves the rights, duties and obligations of the parties under this Lease
may (and if against Landlord, shall) be brought in the courts of the State of
California in the County of Santa Clara or the United States District Court for
the Northern District of California, and the parties hereto hereby submit to
the personal jurisdiction of said courts.

 

33.7        Attorneys’ Fees.  In
the event that either Landlord or Tenant fails to perform any of its
obligations under this Lease or in the event a dispute arises 

 

65

 

concerning the meaning or interpretation of any
provision of this Lease, the defaulting party or the party not prevailing in
such dispute, as the case may be, shall pay any and all costs and expenses
incurred by the other party in enforcing or establishing its rights hereunder,
including, without limitation, court costs, costs of arbitration and reasonable
attorneys’ fees.  Should Landlord be
named as a defendant in any suit brought against Tenant in connection with or arising
out of Tenant’s occupancy hereunder Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including reasonable attorneys’ fees.

 

33.8        Waiver of Jury Trial. 
Landlord and Tenant each hereby voluntarily and knowingly waive and relinquish
their right to a trial by jury in any action, proceeding or counterclaim
brought by either against the other on any matter whatsoever arising out of or
in any way connected with this Lease, the relationship of Landlord with Tenant,
or Tenant’s use or occupancy of the Premises, including any claim of injury or
damage, and any emergency and other statutory remedy with respect thereto.

 

33.9        No Counterclaim by Tenant. 
In the event Landlord commence any proceedings for nonpayment of rent or
other charges payable by Tenant under this Lease, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceedings.  This shall not, however, be construed as a
waiver of the Tenant’s right to assert such claims in any separate action or
actions brought by the Tenant.

 

33.10      Light and Air.  Tenant
covenants and agrees that no diminution of light, air or view by any structure
that may hereafter be erected (whether or not by Landlord) shall entitle Tenant
to any reduction of the Base Rent or Additional Rent under this Lease, result
in any liability of Landlord to Tenant, or in any other way affect this Lease
or Tenant’s obligations hereunder.

 

33.11      Lease Memorandum. 
Neither Landlord or Tenant shall record this Lease or a short form memorandum
hereof without the consent of the other.

 

33.12      Confidentiality. 
Except as required by law or regulation, the parties agree that neither
of them shall make public the terms and conditions of this Lease or the fact
that they have entered into this Lease without first obtaining the written
permission from the other party; provided, however, that either party can,
without the other’s permission, share this Lease and information relating
thereto with such party’s attorneys, accountants and other professional
advisors and with existing or potential lenders or investors with respect to
the Property, and provided that this Lease will be submitted to the City of
Mountain View and may therefore be a public document.

 

33.13      Terms.  The term “Premises”
includes the space leased hereby and any improvements now or hereafter
installed therein or attached thereto. 
The words “Landlord” and “Tenant” as used herein shall include the
plural as well as the singular.  If there
is more than one Tenant or Landlord, the obligations under this Lease imposed
on Tenant or Landlord shall be joint and several.  The captions preceding the articles of this
Lease have been inserted solely as a matter of convenience and such captions in
no way define or limit the scope or intent of any provision of this Lease.

 

66

 

33.14      Review and Approval. 
The review, approval, inspection or examination by Landlord of any item
to be reviewed, approved, inspected or examined by Landlord under the terms of
this Lease or the exhibits attached hereto shall not constitute the assumption
of any responsibility by Landlord for either the accuracy or sufficiency of any
such item or the quality of suitability of such item for its intended use.  Any such review, approval, inspection or
examination by Landlord is for the sole purpose of protecting Landlord’s
interests in the and under this Lease, and no third parties, including, without
limitation, Tenant or any person or entity claiming through or under Tenant, or
the contractors, agents, servants, employees, visitors or licensees of Tenant
or any such person or entity, shall have any rights hereunder with respect to
such review, approval, inspection or examination by Landlord.

 

33.15      No Beneficiaries. 
This Lease shall not confer or be deemed to confer upon any person or
entity other than the parties hereto, any right or interest, including without
limitation, any third party status or any right to enforce any provision of
this Lease.

 

33.16      Time of the Essence.  Time is of the essence in respect of all
provisions of this Lease in which a definite time for performance is specified.

 

33.17      Modification of Lease. 
In the event of any ruling or threat by the Internal Revenue Service, or
opinion of counsel, that all or part of the Rent paid or to be paid to Landlord
under this Lease will be subject to the income tax on unrelated business
taxable income, Tenant agrees to make reasonable modifications to this Lease to
minimize such tax; provided that such modifications will not result in any
increase in Rent, change the Term or impose any additional liability or
obligation on Tenant or diminish Tenant’s rights hereby under.  Landlord will pay all Tenant’s reasonable
costs incurred in reviewing and negotiating any such lease modification,
including reasonable attorneys’ and accountants’ fees.

 

33.18      Construction.  This
Lease has been negotiated extensively by Landlord and Tenant with and upon the
advice of their respective legal counsel, all of whom have participated in the
drafting hereof.  Consequently, Landlord
and Tenant agree that no party shall be deemed to be the drafter of this Lease
and in the event this Lease is ever construed by a court of law, such court
shall not construe this Lease or any provision of this Lease against any party
as the drafter of the Lease.

 

33.19      Survival.  The
obligations of this Lease shall survive the expiration of the Term to the
extent necessary to implement any requirement for the performance of
obligations or forbearance of an act by either party hereto which has not been
completed prior to the termination of this Lease.  Such survival shall be to the extent
reasonably necessary to fulfill the intent thereof, or if specified, to the
extent of such specification, as same is reasonably necessary to perform the
obligations and/or forbearance of an act set forth in such term, covenant or
condition.  Notwithstanding the
foregoing, in the event a specific term, covenant or condition is expressly
provided for in such a clear fashion as to indicate that such performance of an
obligation or forbearance 

 

67

 

of an act is no longer required, then the specific
shall govern over this general provisions of this Lease.

 

33.20      Termination.  (a) 
Upon (i) the commencement by or against Google Technology, Inc.
(hereinafter referred to as the “Amphitheatre Subtenant”)
pursuant to the Amphitheatre Sublease (the “Google
Lease”) of any state or federal proceedings in respect of
bankruptcy, insolvency or dissolution, or the appointment of any trustee,
liquidator, receiver, or similar officer for Google (each, a “Google Insolvency”) and the entry or
issuance of an order or decree in any Google Insolvency rejecting, avoiding,
disaffirming or otherwise terminating the Google Lease (pursuant to the 11
U.S.C § 365 or otherwise) and such order or decree not having been stayed,
and (ii) Google having surrendered substantially all of the Premises
leased under the Google Lease, Tenant may, at Tenant’s sole and exclusive option,
elect to terminate this Lease and the Other Lease for Crittenden A (the “Termination Option”), during the
Option Period.  The Termination Option
and its exercise shall be void if an Event of Default by Tenant exists, either
at the time of exercise of the Termination Option or on the Option Termination
Date (which shall mean the Option Termination Date applicable to this Lease, if
there shall be more than one Option Termination Date by reason of the operation
of the second proviso of Section 33.20(b) of the Other Lease for
Crittenden A), or if, at either of such times, the Tenant named herein has
assigned its interest hereunder or has subleased all or substantially all of
the premises demised hereunder for all or substantially all of the remainder of
the term of this Lease.  The “Option Period” shall mean the period
commencing one (1) business day after the later of the occurrence of the
both (i) and (ii) above and ending on the thirtieth (30th) business
day thereafter.  Tenant may exercise the
Termination Option at any time during the Option Period by serving written
notice of that exercise to Landlord in the manner set forth in Section 33.20(b) (a
“Notice of Exercise”).

 

(b)           Notice
of Exercise.  The Notice of Exercise
shall set forth the date (the “Option Termination Date”) for the termination by Tenant
of this Lease and (subject to the provisions of the second proviso of Section 33.20(b) of
the Other Lease for Crittenden A) the Other Lease for Crittenden A, which
Option Termination Date shall not be less than 90 days, and not more than 180
days, after the date of service of the Notice of Exercise, provided that
Landlord in its reasonable discretion may consent to a schedule for the
release of portions of the Premises and the premises under the Other Lease for
Crittenden A at different times between the 90th day and 180th
day referred to above (each portion of which shall not be less than an entire
building).

 

(c)           Termination
Payment.  If Tenant shall exercise
the Termination Option, then on the Option Termination Date, as consideration
for Tenant’s exercise of its option to terminate this Lease and the Other Lease
for Crittenden A, Landlord shall be entitled to draw upon the Letter of Credit
(as well as the “Letter of Credit” delivered under the Other Lease for
Crittenden A) by sight draft on the Issuing Bank in an aggregate amount as set
forth below, or at Landlord’s election shall have the right to receive directly
from Tenant a payment (in either case, the “Termination Payment”) determined as
follows: (i) $11,000,000 if the Option Termination Date occurs during the
period from the Commencement Date through and including December 31, 2005
(or, if 

 

68

 

there shall be more than one Option Termination Date
by operation of the second proviso of Section 33.20(b) of the Other
Lease for Crittenden A, any Option Termination Date occurs during the period
from the Commencement Date through and including December 31, 2005), (ii) $10,000,000
if the Option Termination Date occurs during the period from January 1,
2006 through and including December 31, 2006, (iii) $9,000,000 if the
Option Termination Date occurs during the period from January 1, 2007
through and including December 31, 2007, (iv) $8,250,000 if the
Option Termination Date occurs during the period from January 1, 2008
through and including December 31, 2008, (v) $7,500,000 if the Option
Termination Date occurs during the period from January 1, 2009 through and
including December 31, 2009, (vi) $7,000,000 if the Option
Termination Date occurs during the period from January 1, 2010 through and
including December 31, 2010, (vii) $6,500,000 if the Option
Termination Date occurs during the period from January 1, 2011 through and
including December 31, 2011, (viii) $6,000,000 if the Option
Termination Date occurs during the period from January 1, 2012 through and
including the last day of the Term. 
Notwithstanding the foregoing, if there shall be more than one Option
Termination Date by reason of the operation of the second proviso of Section 33.20(b) of
the Other Lease for Crittenden A, then the $11,000,000 Termination Payment
shall be payable as follows:  (A) $7,354,600
(attributable to the termination of this Lease) shall be payable on the first
Option Termination Date to occur, (B) $1,827,100 shall be payable on the
Option Termination Date for the Top Floors (as defined in the Other Lease for
Crittenden A), and (C) $1,818,300 shall be payable on the Option
Termination Date for the Lower Floors (as defined in the Other Lease for
Crittenden A).  The Termination Payment
is an aggregate amount, of which 66.86% is attributable to the termination of
this Lease and 33.14% is attributable to the termination of the Other Lease for
Crittenden A.  Upon Landlord’s receipt of
the Termination Payment in its entirety (including any portion attributable to
the Other Lease for Crittenden A), subject to the other terms and conditions of
this Section 33.20, this Lease and the Other Lease for Crittenden A shall
terminate and the respective terms and provisions of this Lease and the Other
Lease for Crittenden A regarding the parties’ conduct upon the expiration of
the Term hereof and the term thereof shall govern and control, including with
respect to any amounts that remain drawable under the Letter of Credit;
provided that, if there shall be more than one Option Termination Date by
reason of the operation of the second proviso of Section 33.20(b) of
the Other Lease for Crittenden A, then this Lease shall terminate as provided
above in this sentence on the first Option Termination Date to occur, and the
Other Lease for Crittenden A shall terminate as provided therein.  Notwithstanding anything herein to the
contrary, Tenant hereby acknowledges and agrees that the entire Termination
Payment (including any amount attributable to the Other Lease for Crittenden A)
must be paid in full, and that, in the case of multiple Option Termination
Dates (as discussed in the previous sentence), any failure by Tenant to fully
pay the balance of the Termination Payment as it becomes payable shall, at the
election of Landlord, render any previous termination void and thereupon cause
this Lease and the Other Lease for Crittenden A to be reinstated in their
entirety and continued in existence and effectiveness, as though such previous
termination had never occurred; provided that if Landlord elects to reinstate
the leases pursuant to this sentence and Landlord has received a letter of
credit as required by the last sentence of this Section 33.20(c) that
satisfies all of the terms and provisions of Section 4.7 and Tenant has
restored the Letter of Credit under the Other Lease for 

 

69

 

Crittenden A to the Required Amount (as defined
therein) as if no termination had occurred, then Landlord shall return to
Tenant the portion of the Termination Payment received minus all rent
obligations that would have been incurred by Tenant during the period of any
termination of this Lease and any part of the Other Lease for Crittenden A and
any other reasonable costs and expenses (including attorneys’ fees) incurred by
Landlord as a result of Tenant’s termination and subsequent non-payment of the
balance of the Termination Payment. 
Tenant agrees that, notwithstanding anything herein to the contrary, if
at any time all or any part of the Termination Payment paid to Landlord is or
must be rescinded or returned by the Landlord for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
Tenant), then this Lease and the Other Lease for Crittenden A, and Tenant’s
obligations hereunder and thereunder, shall be deemed to have been reinstated
and continued in existence and effectiveness, as though such previous payment
had never been made.  In the event of any
reinstatement of this Lease (whether pursuant to the immediately preceding
sentence or otherwise), Tenant shall thereupon deliver to Landlord a letter of
credit that satisfies all of the terms and provisions of Section 4.7.

 

33.21      Separate Leases. 
Tenant agrees to divide this Lease into two leases, one for C Premises
and one for D Premises at anytime Landlord so requests.  Landlord agrees to pay the reasonable
out-of-pocket costs and expenses of Tenant, including reasonable attorneys’
fees and expenses, in excess of $15,000 incurred solely in connection with
dividing the Lease, and Tenant shall pay the balance of such costs and
expenses.

 

33.22      Effectiveness. (a) This Agreement shall come into full
force and effect upon (i) the delivery of a written approval of the Other
Lease for Crittenden A by the current holder of the loan made pursuant to that
certain Leasehold Deed of Trust and Security Agreement, dated as of August 7,
2001 (the “Security  Agreement”),
by WXIII/Crittenden Realty A/B, L.L.C. to Fidelity National Title Insurance
Company for the benefit of GMAC Commercial Mortgage Corporation pursuant to Section 3.8
of the Security Agreement, (ii) the delivery of a written approval of that
certain Second Amendment to Commercial Lease (Amphitheatre), dated as of July 9,
2003, between WXIII/Amphitheatre Realty, L.L.C. (the “Amphitheatre
Landlord”), Tenant and Amphitheatre Subtenant by the current
holder of the loan (the “Amphitheatre Lender”)
made pursuant to that certain Loan Agreement, dated as of July 2, 2002
(the “Loan Agreement”), by and
between Landlord and German American Capital Corporation pursuant to Sections
8.7 and 20.2.2 of the Loan Agreement, and (iii) the delivery by
Amphitheatre Lender to Amphitheatre Subtenant of a nondisturbance and
attornment agreement in form and substance reasonably satisfactory to
Amphitheatre Subtenant (the latter of such three deliveries, the “Effective Date”).

 

(b)           If
the Effective Date, as defined in Section 33.22(a)(iii) above, shall
have not occurred on or before July 31, 2003, then this Lease (except for Section 33.23
below) as well as the Other Lease for Crittenden A shall terminate, in which
case the Original Lease (as defined in the Other Lease for Crittenden A) shall
be reinstated.

 

70

 

33.23      Certain Costs.  All
costs incurred in connection with obtaining a subordination, nondisturbance and
attornment agreement from Ground Lessor shall be split equally between Landlord
and Tenant.  This section shall
survive termination of this Lease under Section 33.22(b) above.

 

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

 

71

 

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

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  WXIII/CRITTENDEN
  REALTY C, L.L.C., 

  a Delaware limited liability company

  	
  SILICON
  GRAPHICS, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Whitehall
  Parallel Real Estate Limited

  	
  Its:

  	
   

  	
   

  
	
   

  	
  Partnership
  XIII, its managing member

  	
   

  
	
   

  	
   

  
	
  By:

  	
  WH Parallel
  Advisors, L.L.C. XIII, 

  its general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  WXIII/CRITTENDEN
  REALTY D, L.L.C., 

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:     Whitehall
  Parallel Real Estate Limited 

  Partnership XIII, its managing member

  	
   

  
	
   

  	
   

  
	
  By:

  	
  WH Parallel
  Advisors, L.L.C. XIII,

  its general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
									

 

72

 

GLOSSARY

 

DEFINITIONS

 

As used in this Lease,
the following terms shall have the following meanings, applicable, as
appropriate, to both the singular and plural form of the terms defined below:

 

“2004 Payment” is defined in Article 1.

 

“2005 Payment” is defined in Article 1.

 

“2004 Payment Date” is defined in Article 1.

 

“2005 Payment Date” is defined in Article 1.

 

“Acceptable
Accounting Firm” shall mean an independent
certified public accounting firm which shall be a nationally recognized
accounting firm in the United States or its successor.

 

“Acceptable
Accounting Principles” shall mean generally
accepted accounting principles consistently applied (i.e., GAAP).

 

“ADA”
is defined in Section 12.1.

 

“Additional
Rent” is defined in Section 4.4.

 

“Adjustment
Date” is defined in Section 4.2(b).

 

“Alterations”
is as defined in Section 10.1.

 

“Amphitheatre
Landlord” is
defined in Section 33.22(a).

 

“Amphitheatre
Lender” is
defined in Section 33.22(a).

 

“Amphitheatre
Property” means the
property commonly known as 1600 Amphitheatre Parkway, Mountain View,
California.

 

“Amphitheatre
Subtenant”
is defined in Section 33.20(a).

 

“Assignment”
is defined in Section 15.1.

 

“Assumed Lease” is
defined in Section 33.20(a).

 

“Bankruptcy Code” means Title 11 of the United States
Code, as amended.

 

“Base Rent”
means the amount stated in Article 1, to be adjusted and payable in
accordance with Article 4.

 

73

 

“Base Rent
Commencement Date” is defined in Article 1.

 

“Building”
is defined in Section 2.1.

 

“Building
Systems” shall mean the mechanical, electrical,
heating, ventilating, air conditioning, elevator, plumbing, sanitary,
life-safety and related communications apparatus, Common Area lighting and
other utility and service systems of the Premises and all components thereof,
as the same shall exist from time to time, and all Alterations, renewals and
replacements thereof, additions thereto and substitutions therefor,  excluding, however, the sprinklers and the
horizontal distribution systems within and servicing the Premises and by which
mechanical, electrical, communications, and other utility and service systems
are distributed from the base risers, feeders, panelboards, etc. for provision
of such services (it being agreed, however, that any such horizontal
distribution systems and sprinklers that service more than one floor of the
Premises shall constitute Building Systems).

 

“business
days” means Monday through Friday, excluding
Saturdays, Sundays and federal or state legal holidays.

 

“C Ground Lease” means
the certain Amended and Restated Ground Lease (Parcel C) by and between
the City of Mountain View, a municipal corporation, as ground lessor, and
C Landlord, as ground lessee and successor-in-interest to SGRE and
Goldman, dated as of November 8, 2000, as assigned to C Landlord
pursuant to an Assignment and Assumption of Ground Lease Agreement (Crittenden
Parcel C), dated as of May 22, 2001, as amended by First Amendment to
Parcel C Ground Lease, dated May 22, 2001, by and among the City of
Mountain View, Goldman, and C Landlord.

 

“C Premises”
is defined in Article 1.

 

“Cash
Collateral” 
means the cash proceeds of any draw upon the Letter of Credit that are
held in the Cash Collateral Account.

 

“Cash
Collateral Account”  is defined in Section 4.7.

 

“Change in
Control”
is defined in Section 15.6.

 

“Commencement
Date” means the date specified in Article 1.

 

“Common Area” shall mean the land upon which the Building and other
improvements comprising the Premises are erected, including appurtenant
easement rights and exterior areas surrounding the Building that are part of
the land.

 

“Credit
Enhancement”
is defined in Article 1.

 

“Crittenden A”
means the property commonly known as 1200 Crittenden Lane,
Mountain View, California.

 

“Crittenden
A Lender” is defined in Section 33.22(a).

 

74

 

“Crittenden B”
means the property commonly known as 1300 Crittenden Lane,
Mountain View, California.

 

“Crittenden C”
means the property commonly known as 1400 Crittenden Lane,
Mountain View, California.

 

“Crittenden D”
means the property commonly known as 1500 Crittenden Lane,
Mountain View, California.

 

“Crittenden Property” means, collectively, Crittenden
A, Crittenden B, Crittenden C and Crittenden D.

 

“D Ground Lease” means
the certain Amended and Restated Ground Lease (Parcel D) by and between
the City of Mountain View, a municipal corporation, as ground lessor, and
D Landlord, as ground lessee and successor-in-interest to SGRE and
Goldman, dated as of November 8, 2000, as assigned to D Landlord
pursuant to an Assignment and Assumption of Ground Lease Agreement (Crittenden
Parcel D), dated as of May 22, 2001, as amended by First Amendment to
Ground Lease (Parcel D), dated as of September 21, 2001, between the City
of Mountain View and D Landlord.

 

“D Premises” 
is defined in Article 1.

 

“Determination Date” is defined in Article 1.

 

“Effective
Date” is
defined in Section 33.22(a).

 

“Environmental
Activity” is defined in Section 13.1(a).

 

“Environmental
Laws” are defined in Section 13.1(b).

 

“Event of
Default” is defined in Section 16.1.

 

“Excess Rent”
is defined in Section 15.3.

 

“Expiration
Date” means the date specified in Article 1.

 

“Goldman” means The Goldman Sachs Group, Inc.

 

“Google” is defined in Section 33.20(a).

 

“Google
Landlord”
is defined in Section 33.20(a).

 

“Google Lease” means that certain sublease agreement
entered into on July 9, 2003 between Tenant and Amphitheatre Subtenant.

 

“Ground Lease” is defined in Section 5.1(b)(F).

 

“Hazardous
Material” is defined in Section 13.1(c).

 

75

 

“Indebtedness”
means indebtedness for borrowed money (whether by loan or the
issuance and sale of debt securities) or for the deferred purchase price of
property or services or any other indebtedness which is evidenced by a note,
bond, debenture or similar instrument.

 

“Interest
Rate” is defined in Section 4.5.

 

“Landlord’s
Agents” is defined in Section 13.4.

 

“Landlord’s
Expense Statement” is defined in Section 5.2.

 

“Leasehold
Mortgage”
means any mortgage or deed of trust or security agreement or collateral
assignment now or at any time encumbering all or any part of the Property or
Landlord’s interest therein.

 

“Leasehold
Mortgagee”
means the holder of a Leasehold Mortgage.

 

“Legal
Requirements” means applicable laws, statutes,
codes, ordinances, orders, rules, regulations, conditions of approval, and
requirements, of all federal, state, county, municipal and other governmental
authorities and the departments, commissions, boards, bureaus,
instrumentalities, and officers thereof, and all administrative or judicial
orders or decrees and all permits, licenses, approvals, and other entitlements
issued by governmental entities, and rules of common law, relating to or
affecting the Building or the use, operation or occupancy of the Premises,
whether now existing or hereafter enacted.

 

“Lien” means any lien, mortgage, deed of trust,
encumbrance, chattel mortgage, security agreement, or order for the payment of
money filed against the Premises or the Property, whether or not enforceable as
such.

 

“Loan
Agreement”
is defined in Section 33.22(a).

 

“Minimum Net
Worth”
shall mean a Net Worth of not less than $500,000,000.

 

“Monthly Rent” shall have
the meaning ascribed to such term under the Ground Lease.

 

“Net Worth” shall mean, at the time in question, a net
worth (exclusive of goodwill) determined in accordance with Acceptable
Accounting Principles, and in order for Tenant to establish the Net Worth of
Tenant, Tenant shall have provided Landlord with financial statements audited
by an Acceptable Accounting Firm, which shall express its unqualified opinion
thereon, and provided to Landlord.

 

“Notice of
Exercise”
is defined in Section 33.20(a).

 

“Operating
Expenses”
are defined in Section 5.1(b).

 

“Option
Period” is
defined in Section 33.20(a).

 

76

 

“Option
Termination Date” is defined in Section 33.20(b).

 

“Ordinary
Capital Improvement” means any capital improvement which (i) is required to be made in
order to cause the Building to comply with Legal Requirements, or (ii) is
a replacement or repair of existing Structures, systems, improvements or
equipments or (iii) is necessary to keep the Building in good repair and
working order or (iv) will reduce the amount of repair or operating
expenses and is approved by Tenant, such approval not to be unreasonably
withheld or delayed.

 

“Other Leases” means each of the following Commercial
Leases: (i) that certain Amended and Restated Commercial Lease between
WXIII/Crittenden Realty A/B, L.L.C., as Landlord, and Tenant, dated as of the
date hereof, relating to the Crittenden A Property and (ii) that certain
Commercial Lease between WXIII/Amphitheatre Realty L.L.C., as Landlord, and
Tenant, dated December 29, 2000, relating to the Amphitheatre Property.

 

“Premises”
is defined in Section 2.1.

 

“Prior Lease”
means any lease of the Property or any portion thereof that is prior in estate
to this Lease.

 

“Prior Lessor”
means any lessor under a Prior Lease.

 

“Property”  is defined in Section 2.1.

 

“Public
Company” means an entity, the shares, units or
other equity interest of which are traded on a recognized stock exchange or “over
the counter market”.

 

“Real Estate
Taxes” is defined in Section 5.1(b)(ii).

 

“Renewal
Option” is defined in Section 3.2.

 

“Renewal Term”
is defined in Section 3.2.

 

“Rent”
means Base Rent, Additional Rent, and all other sums due from Tenant under this
Lease.

 

“Rentable
Area” means the enclosed areas of the Building
measured to the inside face of the exterior wall or glassline, but excluding
outside balconies, seating areas, arcades, penetrations, covered entrances &
docks, elevator and ventilation shafts and stairwells.  Rentable Area shall include Tenant’s Share of
all Common Area.

 

“Required
Amount”
is defined in Section 1.A.

 

“Rules and
Regulations” are defined in Section 24.1.

 

“Security
Agreement” is defined in Section 33.22(a).

 

77

 

“SGI”
means Silicon Graphics, Inc.

 

“SNDA”
shall mean a subordination, nondisturbance and attornment agreement or any
other agreement, in each case relating to the Premises, pursuant to which a
Leasehold Mortgagee or a Prior Lessor grants Tenant the right not to be
disturbed in its possession of the Premises provided and for so long as no
Event of Default has occurred hereunder.

 

“Structural Components”
shall mean (i) the foundations, columns, girders, beams, supports,
concrete slabs, roofs and other structural members of the Building, and (ii) those
portions of the exterior walls of the Building lying outside of a plane which
is the interior face of the window glass of such walls.

 

“Sublease” is defined in Section 15.1.

 

“Successor Entity” 
is defined in Section 15.6(b).

 

“Tenant”
means SGI or any permitted Successor Entity in accordance with Section 15.6

 

“Tenant Improvement Allowance”
is defined in Section 10.3.

 

“Tenant Improvements” is defined in Section 10.3.

 

“Tenant’s Agents” is defined in Section 2.2.

 

“Tenant’s Hazardous Materials” is
defined in Section 13.1(d).

 

“Tenant’s Property” is defined in Section 10.6.

 

“Tenant’s Share” is defined in Article 1.

 

“Term” is defined in Article 1 and Section 3.1.

 

“Termination Date” is defined in Section 3.1.

 

“Termination Option” is
defined in Section 33.20(a).

 

“Termination Payment” is
defined in Section 33.20(c).

 

“Top Floors” means the third (3rd) and
fourth (4th) floors of the D Premises.

 

“Top Floor Payment Commencement Date”
is defined in Article 1.

 

“Transfer Costs” is defined in Section 15.3.

 

“Transfer Notice” is defined in Section 15.2.

 

“Transferee” is defined in Section 15.2.

 

“Turnover Alteration”
is defined in Section 10.4(c).

 

78

 

“Untenantable” means that Tenant shall be unable
to occupy, and shall not be occupying, the Premises or the applicable portion
thereof for the ordinary conduct of Tenant’s business.

 

79

 

EXHIBIT A-1

PREMISES

 

A-1-1

 

EXHIBIT A-2

 

PROPERTY

 

A-2-1

 

EXHIBIT B

CRITTENDEN C and D BASE RENT

 

Annual Base Rent for the
initial Term of the Lease will be as follows:

 

	
  Base Rate

  	
   

  
	
  Year

  	
   

  	
  Dates

  	
   

  	
  Base Rent

  (per Rentable square foot

  per annum)

  	
   

  
	
  1

  	
   

  	
  12/1/03
  - 11/30/04

  	
   

  	
  0

  	
   

  
	
  2

  	
   

  	
  12/1/04
  - 11/30/05

  	
   

  	
  25.34

  	
   

  
	
  3

  	
   

  	
  12/1/05
  - 11/30/06

  	
   

  	
  26.10

  	
   

  
	
  4

  	
   

  	
  12/1/06
  - 11/30/07

  	
   

  	
  26.88

  	
   

  
	
  5

  	
   

  	
  12/1/07
  - 11/30/08

  	
   

  	
  27.69

  	
   

  
	
  6

  	
   

  	
  12/1/08
  - 11/30/09

  	
   

  	
  28.52

  	
   

  
	
  7

  	
   

  	
  12/1/09
  - 11/30/10

  	
   

  	
  29.37

  	
   

  
	
  8

  	
   

  	
  12/1/10
  - 11/30/11

  	
   

  	
  30.25

  	
   

  
	
  9

  	
   

  	
  12/1/11
  - 11/30/12

  	
   

  	
  31.16

  	
   

  
	
  10

  	
   

  	
  12/1/12
  - 11/30/13

  	
   

  	
  32.10

  	
   

  

 

B-1

 

EXHIBIT C

 

DETERMINATION OF PREVAILING
MARKET RENT

 

C-1

 

EXHIBIT C

DETERMINATION OF PREVAILING MARKET RENT

 

The term “Prevailing Market Rent” means the
base monthly rent (net of all expenses) for space of comparable size and
location to the Premises and in buildings similar in age and quality to the
Buildings, taking into account any additional rent and all other payments or
escalations then being charged (including charging rent for parking) and
allowances and economic concessions being given in the market area for such
comparable space over a comparable term. 
The Prevailing Market Rent shall be determined by Landlord and Landlord
shall give Tenant written notice of such determination not later than thirty
(30) days after delivery by Tenant of Tenant’s notice of exercise of the
Option.  If Tenant disputes Landlord’s
determination of the Prevailing Market Rent, Tenant shall so notify Landlord
within ten (10) days following Landlord’s notice to Tenant of Landlord’s
determination and, in such case, the Prevailing Market Rent shall be determined
as follows:

 

(a)           Within
thirty (30) days following Landlord’s notice to Tenant of the Prevailing Market
Rent, Landlord and Tenant shall meet no less than two (2) times, at a
mutually agreeable time and place, to attempt to agree upon the Prevailing
Market Rent.

 

(b)           If
within this 30-day period Landlord and Tenant cannot reach agreement as to the
Prevailing Market Rent, they shall each select one appraiser to determine the
Prevailing Market Rent.  Each such
appraiser shall arrive at a determination of the Prevailing Market Rent and
submit his or her conclusions to Landlord and Tenant within thirty (30) days
after the expiration of the 30-day consultation period described in (a) above.

 

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

 

(d)           All
appraisers specified pursuant hereto shall be members of the Appraisal Institute
with not less than five (5) years experience appraising office, research
and development and industrial properties in the San Francisco Bay Area of
California.  Each party shall pay the
cost of the appraiser selected by such party and one-half of the cost of the
third appraiser plus one-half of any other costs incurred in the determination.

 

C-2

 

(e)           The
appraisers will be instructed to (i) assume permitted use as specified in
this Lease, (ii) exclude Alterations that Tenant can remove in accordance
with the terms of this Lease, and (iii) take into account that Landlord
will not have to incur tenant improvements costs or leasing commissions.

 

C-3

 

EXHIBIT D

 

FORM OF LETTER OF CREDIT

 

D-1

 

EXHIBIT E

 

GROUND
LEASE

 

E-1

 

EXHIBIT F

 

TENANT
WORK LETTER

 

F-1

 

EXHIBIT G

 

LIST OF
APPROVED CONTRACTORS

 

	
  Trade / Type of Service

  	
   

  	
  Company / Service Provider

  
	
  Architect

  	
   

  	
  Studios

  
	
  Construction

  	
   

  	
  Devcon Construction

  
	
  Electrical

  	
   

  	
  Frank Electric

  
	
  Elevators

  	
   

  	
  ThyssenKrupp

  
	
  Fire suppression

  	
   

  	
  LPM

  RTS

  
	
  Fountain maintenance

  	
   

  	
  Water Works Ind.

  
	
  General maintenance

  	
   

  	
  Devcon Construction

  
	
  HVAC

  	
   

  	
  ACCO

  
	
  Landscaping

  	
   

  	
  TruGreen

  
	
  Lighting

  	
   

  	
  Sylvania

  
	
  Locksmith

  	
   

  	
  Mountain View Lock

  
	
  Painting

  	
   

  	
  SW Painting

  
	
  Plumbing

  	
   

  	
  Rescue Rooter

  
	
  Roll-up doors/Gates

  	
   

  	
  Statcomm

  

 

G-1

 

EXHIBIT H

 

DRAWING
OF PLANNED CUSTOMER BRIEFING AREA

 

H-1

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