Document:

Exhibit 10.1

 

 

LEASE

 

BETWEEN

 

THE GOLDMAN SACHS GROUP,
INC.

 

(LANDLORD)

 

AND

 

SILICON GRAPHICS, INC.

 

(TENANT)

 

December 29, 2000

 

(AMPHITHEATRE)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  A. BASIC LEASE INFORMATION

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B. GENERAL
  INTERPRETATIVE PROVISIONS

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  PREMISES

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Premises

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Common
  Area

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Parking

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  TERM

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Term

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Renewal
  Option

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  RENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Net Lease – Net Rent

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Base Rent

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Rent Adjustment

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Additional Rent

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Late Payment

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.6

  	
  Covenant

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.7

  	
  Credit Enhancement

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.8

  	
  Legal Requirements

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  OPERATING EXPENSES

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Operating Expenses

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Payment of Operating
  Expenses

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Proration

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Normalization

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Other Buildings

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Utility Costs

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Taxes on
  Tenant’s Property and Business

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  GROUND LEASE

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Ground Lease

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Compliance
  with Obligations; Conflicts

  	
  17

  

 

i

 

	
  7.

  	
  USE OF
  PREMISES AND CONDUCT OF BUSINESS

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Permitted Use

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Prohibited Uses

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Food and Beverage

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  REPAIRS AND MAINTENANCE

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Landlord’s Obligations

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Tenant’s Obligations

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Security

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Special Services

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  ACCEPTANCE

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  ALTERATIONS

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Alterations by Tenant

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Project Requirements

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Restoration Obligations

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Ownership of
  Improvements

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  Tenant’s Personal
  Property

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  LIENS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  COMPLIANCE
  WITH LAWS AND INSURANCE REQUIREMENTS

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Legal Requirements

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Insurance Requirements

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  HAZARDOUS MATERIALS

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Definitions

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Environmental Release

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Use of Hazardous
  Materials

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Indemnity

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  No Lien

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.6

  	
  Investigation

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Notices

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.8

  	
  Surrender

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.9

  	
  Survival

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  INDEMNITY; INSURANCE

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Indemnity

  	
  33

  

 

ii

 

	
   

  	
  14.2

  	
  Insurance

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.3

  	
  Policies

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.4

  	
  Landlord’s Rights

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.5

  	
  Waiver of Subrogation

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.6

  	
  No Liability

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT AND SUBLETTING

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  Consent Required

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.2

  	
  Notice

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.3

  	
  Terms of Approval

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.4

  	
  Certain Conditions
  Applicable to All Sublettings and Assignments

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.5

  	
  Short Term Subletting

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.6

  	
  No Release

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.7

  	
  Change in
  Control; Successor Entity

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.8

  	
  Assumption of
  Obligations

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.9

  	
  Insolvency or Bankruptcy

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.10

  	
  Recovery of Premises

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.11

  	
  Easements

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  DEFAULT

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.1

  	
  Event of Default

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.2

  	
  Remedies

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3

  	
  Cumulative Remedies

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.4

  	
  Waiver of Redemption
  by Tenant

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.5

  	
  Landlord’s Right to Cure

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.6

  	
  Landlord’s Default

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.7

  	
  Survival

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  LANDLORD’S RESERVED
  RIGHTS

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Control of Common Area

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.2

  	
  Access

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.3

  	
  Easements

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.4

  	
  Use of Additional Areas

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.5

  	
  Subordination

  	
  46

  

 

iii

 

	
  18.

  	
  LIMITATION OF
  LANDLORD’S LIABILITY

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.1

  	
  Limitation

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.2

  	
  Sale of Property

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.3

  	
  No Personal Liability

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.4

  	
  Landlord’s
  Consent or Approval; Limitation on Damages

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  DESTRUCTION

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.1

  	
  Landlord’s Obligation

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.2

  	
  Termination Option

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.3

  	
  Tenant Obligations

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.4

  	
  No Claim

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.5

  	
  No Damages

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  EMINENT DOMAIN

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.1

  	
  Taking

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.2

  	
  Award

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.3

  	
  Partial
  Taking

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.4

  	
  Temporary
  Taking

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.5

  	
  Sale
  in Lieu of Condemnation

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.6

  	
  Waiver

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  SURRENDER

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.1

  	
  Surrender

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.2

  	
  Holding
  Over

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.3

  	
  Quitclaim

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  FINANCIAL STATEMENTS

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  ESTOPPEL CERTIFICATES

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  RULES AND REGULATIONS

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.1

  	
  Rules and
  Regulations

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  24.2

  	
  Signs

  	
  55

  

 

iv

 

	
  25.

  	
  INABILITY TO PERFORM

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  NOTICES

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  QUIET ENJOYMENT

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  NO RENT ABATEMENT

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
  AUTHORITY

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  BROKERS

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
  BANKRUPTCY OR INSOLVENCY

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.1

  	
  No Transfer

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.2

  	
  Termination
  Right

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.3

  	
  No
  Cause for Appointment

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  31.4

  	
  Bankruptcy
  Filings

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
  ANTENNA
  AND ROOFTOP SPACE

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.1

  	
  Antennae

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.2

  	
  Non-Exclusive

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.3

  	
  Access

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.4

  	
  Compliance
  with Legal Requirements

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.5

  	
  Tenant
  Expense

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.6

  	
  Tenant’s
  Property

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.7

  	
  No
  Interference

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.8

  	
  Relocation

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  32.9

  	
  Indemnification

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
  MISCELLANEOUS

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.1

  	
  Entire
  Agreement

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.2

  	
  No
  Waiver

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.3

  	
  Modification

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.4

  	
  Successors
  and Assigns

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.5

  	
  Validity

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.6

  	
  Jurisdiction

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.7

  	
  Attorneys’
  Fees

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.8

  	
  Waiver
  of Jury Trial

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.9

  	
  No
  Counterclaim by Tenant

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.10

  	
  Light
  and Air

  	
  64

  

 

v

 

	
   

  	
  33.11

  	
  Lease
  Memorandum

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.12

  	
  Confidentiality

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.13

  	
  Terms

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.14

  	
  Review
  and Approval

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.15

  	
  No
  Beneficiaries

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.16

  	
  Time
  of the Essence

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.17

  	
  Modification
  of Lease

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.18

  	
  Construction

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  33.19

  	
  Survival

  	
  65

  

 

vi

 

COMMERCIAL LEASE

 

(Amphitheatre)

 

THIS LEASE is entered
into as of December 29, 2000 (the “Effective
Date”), by and between The Goldman Sachs Group, Inc.,
a Delaware corporation (“Landlord”),
and Silicon Graphics, Inc., a Delaware corporation (“SGI”).

 

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:

  	
   

  	
  Four (4) buildings including 506,317 square
  feet of Rentable Area, as more particularly described on Exhibit A-1.

  
	
   

  	
   

  	
   

  
	
  Address of Premises:

  	
   

  	
  1600 Amphitheatre Parkway

  Mountain View, California

  
	
   

  	
   

  	
   

  
	
  Rentable Area of Buildings:

  	
   

  	
  506,317 square feet of Rentable Area, located in
  four (4) separate buildings as further described on Exhibit A-1.
  [Exhibit to include Rentable Area per floor].

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  Twelve (12) years from the Commencement Date

  
	
   

  	
   

  	
   

  
	
  Commencement Date:

  	
   

  	
  December 29, 2000

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  December 31, 2012

  
	
   

  	
   

  	
   

  
	
  Initial Base Rent:

  	
   

  	
  $32.18 per sq. ft. of Rentable Area per annum

  
	
   

  	
   

  	
   

  
	
  Base Rent Adjustments:

  	
   

  	
  See attached schedule on Exhibit B

  
	
   

  	
   

  	
   

  
	
  Tenant’s Share of Operating Expenses:

  	
   

  	
  100%, subject to adjustment as provided herein

  
	
   

  	
   

  	
   

  
	
  Use:

  	
   

  	
  General office, research and development and other
  legal uses ancillary thereto

  
	
   

  	
   

  	
   

  
	
  Credit Enhancement:

  	
   

  	
  Letter of Credit in an amount equal to, as of any
  date, the sum of (a) Base Rent becoming due during

  

 

1

 

	
   

  	
   

  	
  the next eighteen (18) months of the Term after such
  date plus (b) the product of one and one-half (1 1/2) times the
  Additional Rent payable for the most recent full calendar year, as determined
  by Landlord as of January 1, 2002 and as of each January 1
  thereafter (it being agreed that until January 1, 2002, the amount
  identified in this clause (b) shall be $8,613,768). For the avoidance of
  doubt, the initial Letter of Credit shall be equal to $33,256,234.

  
	
   

  	
   

  	
   

  	
   

  
	
  Addresses for Notice:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
  The Goldman Sachs Group, Inc.

  	
   

  
	
   

  	
   

  	
  85 Broad Street

  	
   

  
	
   

  	
   

  	
  New York, NY 10014

  	
   

  
	
   

  	
   

  	
  Attention: Adam Brooks

  	
   

  
	
   

  	
   

  	
  Telecopy: 212-357-5505

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Goldman Sachs Group, Inc.

  	
   

  
	
   

  	
   

  	
  100 Crescent Court

  	
   

  
	
   

  	
   

  	
  Dallas, TX 75201

  	
   

  
	
   

  	
   

  	
  Attention: Paul Milosevich

  	
   

  
	
   

  	
   

  	
  Telecopy: 214-835-6605

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  Legacy Partners

  	
   

  
	
   

  	
   

  	
  4000 East 3rd Avenue

  	
   

  
	
   

  	
   

  	
  Foster City, CA 94404

  	
   

  
	
   

  	
   

  	
  Attention: Steve Dunn and Darleen Barnes

  	
   

  
	
   

  	
   

  	
  Telecopy: 650-571-2211

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  Sullivan & Cromwell

  	
   

  
	
   

  	
   

  	
  125 Broad Street

  	
   

  
	
   

  	
   

  	
  New York, NY 10014

  	
   

  
	
   

  	
   

  	
  Attention: Anthony J. Colletta

  	
   

  
	
   

  	
   

  	
  Telecopy: 212-558-3588

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Silicon Graphics, Inc.

  	
   

  
	
   

  	
   

  	
  1600 Amphitheatre Parkway

  	
   

  
	
   

  	
   

  	
  Mountain View, CA 94043

  	
   

  
	
   

  	
   

  	
  Attention: Real Estate

  	
   

  
	
   

  	
   

  	
  Telecopy: 650-933-6262

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  Silicon Graphics , Inc.

  	
   

  
	
   

  	
   

  	
  1600 Amphitheatre Parkway

  	
   

  
	
   

  	
   

  	
  Mountain View, CA 94043

  	
   

  
	
   

  	
   

  	
  Attention: General Counsel

  	
   

  
	
   

  	
   

  	
  Telecopy: 650-933-7096

  	
   

  

 

2

 

	
  and to:

  	
   

  	
  Berliner Cohen

  	
   

  
	
   

  	
   

  	
  10 Almaden Blvd., 11th Floor

  	
   

  
	
   

  	
   

  	
  San Jose, CA 95113

  	
   

  
	
   

  	
   

  	
  Attention: Kathy Siple

  	
   

  
	
   

  	
   

  	
  Telecopy: 408-998-5388

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Brokers:

  	
   

  	
  Cushman & Wakefield

  	
   

  
	
   

  	
   

  	
  (Tenant’s Broker),

  	
   

  
	
   

  	
   

  	
  who shall be paid by Tenant

  	
   

  
					

 

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

 

3

 

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.

 

(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.

 

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 the
premises (the “Premises”)
consisting of the buildings shown on Exhibit A-1
and identified in Article 1 (the “Buildings”).  The approximate total Rentable Area of the

 

4

 

Premises and the
Buildings are specified in Article 1. 
Together, the Buildings, any other buildings located in the vicinity of
the Buildings on the land described on Exhibit A-2
and operated as a common project with the Buildings, 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 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.  So long as Tenant leases 100% of
the Premises leased by Tenant hereunder as of the Commencement Date, all
parking areas located on the Property (if any) shall be available for Tenant’s
use, 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.  If at any time during
the Term, Tenant leases less than 100% of the Premises leased by Tenant
hereunder as of the Commencement Date such that a portion of the Buildings
shall be available to Landlord to lease to others, Tenant’s right to use
parking shall be limited to Tenant’s Share of parking.  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

 

5

 

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 such that a portion of the Buildings shall be available to Landlord to
lease to others.  Each Renewal Option
shall be void if an Event of Default by Tenant exists, either at the time of
exercise of the 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 15.5).

 

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

 

6

 

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 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.

 

4.2                               Base Rent. 
Commencing upon the Commencement Date, 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.  After
the Letter of Credit is deposited hereunder, 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 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
Buildings 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.

 

4.3                               Rent Adjustment. 
Commencing on January 1, 2002 and every January 1 thereafter
(each, an “Adjustment Date”),
the Base Rent shall be increased as stated in Article 1.

 

4.4                               Additional Rent. 
All sums due from Tenant to Landlord or to any third party under the
terms of this Lease shall be additional rent (“Additional Rent”), including without limitation
the charges for Base Rent and 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, so long as Tenant leases 100% of the Premises
leased by Tenant hereunder as of the Commencement Date, Tenant shall pay
directly to the person entitled thereto all Operating Expenses except those
identified in clauses (i), (ii) and (ix) of Section 5.1(b),
which Landlord shall pay directly and shall pass through to Tenant as
Additional Rent

 

7

 

payable
in monthly installments in advance equal to one-twelfth (1/12) 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 an amount equal to the Additional Rent then due, provided
that if Landlord delivers the notice described in Section 4.2, 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 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”).  In
addition, Tenant recognizes that late payment of any Rent will result in
administrative expense to Landlord, the extent of which expense is difficult
and economically impracticable to determine. 
Therefore, Tenant agrees that if Tenant fails to pay any Rent within
five (5) days after its due date, an additional late charge of seven
percent (7%) of the sums so overdue shall become immediately due and
payable.  Tenant agrees that the late
payment charge is a reasonable estimate of the additional administrative costs
and detriment that will be incurred by Landlord as a result of such failure by
Tenant.  In the event of nonpayment of
interest or late charges 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 before February 15,
2001, 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.  If the Letter of Credit is not timely
delivered, in accordance with Section 2.2(a) of the Purchase
Agreement, Landlord will retain a portion of the Purchase Price (as defined in
the Purchase Agreement), and Tenant shall have no further obligation to deliver
the Letter of Credit.  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

 

8

 

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 (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 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 eighty (180) 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

 

9

 

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. 
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 shall cause the Issuing Bank to
provide written notice to Landlord if such reimbursement is not timely made.  In addition, if the Base Rent or Additional
Rent increases such that the Required Amount would increase, Tenant shall
within five (5) business days after such increase cause the Letter of
Credit to be modified so that it satisfies the requirements of this Section 4.7.  In the event Tenant fails to timely reimburse
the Letter of Credit bank or increase the face amount of the Letter of Credit
as 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 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 event Landlord obtains an arbitration
award or judicial determination entitling Landlord to indemnification or
monetary damages under the Purchase Agreements or the Ground Lease Assignments,
Landlord may draw upon 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, in an amount equal to the amount which Landlord is
so entitled under the Purchase Agreements or Ground Lease
Assignments.  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. Notwithstanding the foregoing, if Tenant is not in default under this
Lease, during the last twelve (12) months of the Term (including any extension
thereof pursuant to a Renewal Option exercised by

 

10

 

Tenant),
the amount of the Letter of Credit may be decreased to the sum of the amount of
Base Rent payable over the last twelve (12) months of the Term plus the amount
of Additional Rent payable for the most recent calendar year, provided that it
shall be a condition to the exercise of any Renewal Option that Tenant cause a
Letter of Credit to be issued in the full amount of the Required Amount (or, if
Section 4.7(e) applies, the Reduced Amount).  If Tenant shall fully and punctually comply
with all of the terms of this Lease, the Letter of Credit shall be terminated,
as applicable, within one hundred eighty (180) days after the termination of
this Lease and delivery of exclusive possession of the Premises to Landlord.

 

(e)  In the event Tenant has
outstanding, unsecured, uninsured and unguaranteed indebtedness that becomes
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), at Tenant’s
request, if Tenant is not in default hereunder, Landlord will permit the face
amount of the Letter of Credit to be reduced to an amount equal to the Reduced
Amount.  If Landlord agrees to reduce the
Required Amount pursuant to this Subsection (e), Tenant shall not be
permitted to let the face amount of the Letter of Credit be reduced during the
last twelve (12) months of the Term pursuant to paragraph (f) above, it
being understand that in no event shall the face amount of the Letter of Credit
be less than the Reduced Amount.  If at
any time Tenant ceases to maintain the ratings specified in the first sentence
of this Section 4.7(e), then the face amount of the Letter of Credit shall
be increased to the Required Amount.

 

(f)  In the event of a transfer
of the Buildings 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 will cause any Letter of Credit to be modified so that it
names any Leasehold Mortgagee as a co-beneficiary under the Letter of Credit.

 

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,

 

11

 

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 100% for the period
commencing with the Commencement Date and ending on the date the Premises
leased by Tenant hereunder shall be less than 100% of the Premises leased by
Tenant hereunder as of the Commencement Date, so that a portion of the
Buildings shall be available to Landlord to lease to others.  In such event, Tenant’s Share shall be
reduced to the proportionate share of the Rentable Area then leased by Tenant
at the Buildings.  The parties hereto
acknowledge that Tenant’s Share is based upon an assumption that the entire
Buildings contain a total of 482,950 square feet of Rentable Area, and the
calculation of Tenant’s Share is based upon a fraction the denominator of which
is 482,950.

 

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

 

(i)                                     rent
and other payments (including escalations) due to the City of Mountain View
from Landlord, as tenant under that certain Ground Lease (the “Ground Lease”) dated March 7,
1995 with respect to the Property as the same may be amended from time to time;

 

(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

 

12

 

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 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 Buildings tenants;

 

(iv)                              landscaping
and gardening;

 

(v)                                 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 Buildings (other than areas occupied by tenants);

 

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

 

(ix)                                all
insurance (including earthquake coverage) carried by Landlord on the Buildings,
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 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

 

13

 

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;

 

(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 Buildings
and the Common Area.

 

The parties acknowledge
that, concurrently with the Commencement Date, Landlord acquired its interest
in the Property from SGRE, an affiliate of Tenant and that, as a result,
Landlord and Tenant agreed that Tenant shall pay Operating Expenses under this
Lease that shall include all of the foregoing amounts incurred or accruing
prior to the Commencement Date and not yet paid.

 

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 Buildings;

 

(B) Marketing costs, including without limitation, leasing
commissions, space planning costs, and other costs and expenses incurred in

 

14

 

connection
with lease, sublease and/or assignment negotiations and transactions with
Tenant or present or prospective tenants of the Buildings;

 

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

 

(E) Interest, principal, points and fees on debts or amortization
on any mortgage or mortgages or any other debt instrument encumbering the
Buildings or 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.  The parties acknowledge and
agree that, so long as the Premises leased by Tenant hereunder shall be the
Premises leased by Tenant hereunder as of the Commencement Date, Landlord shall
pay items (i), (ii) and (ix) below directly which will then be passed
through to Tenant as Operating Expenses and Tenant shall directly pay all other
Operating Expenses, and Tenant will be responsible for Landlord’s obligations
under Section 8.1.  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.  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 or the Termination Date occurs on a date other
than the first or last day, respectively, of a calendar year, Tenant’s

 

15

 

Share
of Operating Expenses for the year in which the 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
Buildings is not fully occupied and 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 Buildings had been fully occupied
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 Buildings.

 

5.5                               Other Buildings. 
In the event any facilities, services or utilities used in connection
with the Buildings 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 Buildings 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.  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 10.4).  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 C 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, the 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 of this Lease, this Lease is
subordinate and subject to the Ground Lease, and Tenant agrees to be bound by
and subject to the terms of the Ground Lease.

 

16

 

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, other than Articles 2 (Demise, Term and
Surrender), 3 (Rent), 5 (Payment of Real Property Taxes and Facility Charges),
11 (Assignment and Subletting), 12 (Transfer of Leased Premises by Landlord),
13 (Tenant Mortgages) and Article 14 (General Provisions) thereof, within
the period of time and in the manner required by the Ground Lease.  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, (a) 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) Landlord
shall have only those obligations and duties expressly set forth herein
(without regard to the incorporation by reference of the Ground Lease) and (c) except
as to Landlord’s express obligations under this Lease, in the event of any
conflict between the terms of this Lease and the Ground Lease, (x) Tenant shall
be obligated to perform and comply with those provisions that are more onerous
on Tenant and (x) Landlord shall have those rights and remedies that are more
favorable to Landlord.

 

(b)                                 Tenant
shall cooperate with Landlord in the event Landlord determines to exercise its
right to subdivide the Property and the Ground Lease into separate “Parcel
Leases” (as defined in the Ground Lease), and Tenant hereby consents to any
such subdivision and will divide this Lease into separate leases to accommodate
any such subdivision, and the parties hereto will enter into any necessary
covenants or easements to insure Tenant will have access to the Premises.

 

(c)                                  So
long as this Lease is in effect as to, and Tenant is currently occupying, more
than 25% of the Buildings 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.

 

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

 

17

 

issued
for the Premises or the Buildings, 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 Buildings, 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.

 

7.3                               Food
and Beverage.  If Tenant
engages in the cooking of food, beverages or baked goods which is not
incidental to Tenant’s permitted use under Section 7.1, Tenant shall, at
Tenant’s sole cost and expense, comply with all applicable Legal Requirements
and insurance requirements.

 

8.              REPAIRS
AND MAINTENANCE

 

8.1                               Landlord’s Obligations 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, and in an amount not less than 100% of the full
replacement cost of the Premises.

 

8.2                               Tenant’s Obligations. 
Tenant assumes full responsibility for the maintenance, repair,
replacement and restoration of the Premises and the Common Area.  Tenant shall take good care of the Premises
and the Common Area and keep the Premises and the Common Area in good working
order and in a clean, safe and sanitary condition.

 

18

 

Tenant
will repair and maintain the Building Systems, the Common Areas, and the
Structural Components in good working order and in a clean, safe and sanitary
condition. The Premises and the Common Area 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, replacements and restorations by Tenant shall be made and
performed:  (a) at Tenant’s cost and
expense (except for capital improvements which shall be funded by Landlord and
passed through to Tenant pursuant to Section 5.1(b)(xvi), (b) by
contractors or mechanics approved by Landlord, (c) so that same shall be
comparable in quality, value and utility to the original work or installation,
and (d) 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, replacements or
restorations required to be made by Tenant, including, without limitation, any
fees charged by Landlord’s contractors to review plans and specifications
prepared by Tenant.

 

8.3                               Security. 
Tenant shall be solely responsible for the security of the Premises and
Tenant’s Agents while in or about the Premises. 
Any security services provided to the Property by Landlord shall be at
Landlord’s sole discretion and 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.  If at any time during the Term, the Premises
leased by Tenant hereunder shall be less than 100% of the Premises leased by
Tenant hereunder as of the Commencement Date, so that a portion of the
Buildings shall be available to Landlord to lease to others, Landlord shall be
obligated to provide security for the Common Area.

 

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 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 Buildings, the Structural Components, Building Systems, or
the Common Area, (b) the existence, quality, adequacy or

 

19

 

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 Buildings, 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 and occupying
the Premises, 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 Buildings or
entry ways, (ii) is structural or affects the structural integrity of the
Buildings or the structural integrity of the Structural Components, (iii) affects
the usage or the proper functioning of the Building Systems (other than with
respect to the Permitted Lab Work), (iv) requires the consent of any
Leasehold Mortgagee or Prior Lessor (including the Landlord under the Ground
Lease) or (v) requires a change to the Buildings’ certificates of
occupancy.  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) (or Five Hundred Thousand Dollars ($500,000) in the
case of Permitted Lab Work per project.

 

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

 

20

 

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 (other than Permitted
Alterations), advise Tenant of Landlord’s approval or disapproval of such plans
and specifications for such an Alteration or any part thereof.  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, 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 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
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, 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 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’s
approval of plans and specifications for any Material Alteration may be given
or withheld in its sole discretion.

 

(b)  With respect to any Alterations expected to cost more than
$100,000, Tenant shall furnish to Landlord one of the following (as selected by
Tenant): (i) a cash deposit, (ii) a performance bond and a labor and
materials payment bond (issued by a corporate surety licensed to do business in
California reasonably satisfactory to Landlord) or (iii) an irrevocable,
unconditional, negotiable letter of credit, issued by a bank and in a form
satisfactory to Landlord; each to be equal to 125% of the cost of the
Alteration, estimated as set forth above. 
Any such letter of credit shall be for one year and shall be renewed by
Tenant each and every year until the Alteration 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 Alteration in accordance with the
terms of this Article 10 and (B) the submission to Landlord of
(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, 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 any Alteration, as determined by Landlord, Landlord
may, upon notice to Tenant, draw on the security deposited under this

 

21

 

Section 10.2
to the extent Landlord deems necessary in connection with said Alteration, the
restoration and/or protection of the Premises or the Property and the payment
of any costs, damages or expenses resulting therefrom.

 

(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 Tenant pursuant to Section 14.2, comprehensive “all risk”
builder’s risk insurance, including vandalism and malicious mischief, excluding
earthquake and flood, 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,
which insurance may be effected by endorsement, if obtainable, on the policy
required to be carried pursuant to Section 14.2, including insurance for
completed operations, elevators, owner’s, construction manager’s and contractor’s
protective liability, products completed operations for one (1) year after
the date of acceptance of the work by Tenant, broad form blanket contractual
liability, broad form property damage and full form personal injury (including
but not limited to bodily injury), covering the performance of all work at or
from the Premises by Tenant, its construction manager, contractors and
subcontractors, and in a liability amount not less than the amount at the time
carried by prudent owners of comparable construction projects, but in any event
not less than Three Million Dollars ($3,000,000) combined single limit, which
policy shall include thereunder for the mutual benefit of Landlord and Tenant,
bodily injury liability and property damage liability, and automobile insurance
on any non-owned, hired or leased automotive equipment used in the construction
of any work.

 

(iii)                               Workers’
Compensation Insurance approved by the State of California, in the amounts and
coverages required under workers’ compensation, disability and similar employee
benefit 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.

 

22

 

(d)  All construction and other work in connection with any
Alterations shall be done at Tenant’s sole cost and expense 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.

 

(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

 

23

 

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                        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 provided that:  (i) Landlord
notifies Tenant that Landlord shall require restoration of an Alteration within
thirty (30) days after receipt by Landlord of plans and specifications for such
Alteration and in no event later than Landlord’s approval pursuant to Section 10.1;
and (ii) solely with respect to any Permitted Alteration, Landlord
reasonably determines that the failure to effect the restoration would lessen
the value, utility or efficiency of the Premises as a multi-tenanted office and
research and development building at the end of the Term of this Lease.  For the avoidance of doubt clause (ii) and
Section 10.3(b) shall not apply to any Alteration that is not a
Permitted Alteration.  All work performed
in connection with Tenant’s restoration obligations shall constitute
Alterations and shall be subject to the provisions of this Article 10 and
all other provisions of this Lease which govern the performance of Alterations.

 

(b)  Within fifteen (15) days after receipt by Tenant of Landlord’s
notification that Landlord shall require Tenant to restore any Permitted Alteration,
Tenant

 

24

 

shall
notify Landlord as to whether Tenant accepts or rejects Landlord’s
determination.  Any failure by Tenant to
so notify Landlord shall be deemed to be Tenant’s irreversable acceptance of
the obligation to restore the applicable Alteration. Landlord and Tenant shall
endeavor to resolve any dispute as to whether Tenant has an obligation to
restore any Alteration within thirty (30) days after Tenant shall notify
Landlord that Tenant has rejected Landlord’s determination.  If Landlord and Tenant shall be unable to
resolve any such dispute within such 30-day period, then at any time thereafter
any party shall have the right to submit the matter to arbitration in
accordance with Section 18.4; provided, however, that in no event shall
Tenant be prohibited from performing the Alteration in question pending the
resolution of such dispute if Tenant elects to proceed with the applicable
Alteration in accordance with the provisions of this Article 10.  The term “restore” or “restoration”
as used in this Article 10 shall mean that Tenant shall repair, alter,
restore, replace and rebuild the Premises, or portion or component thereof,
including any Building System or portion or component thereof, affected by the
applicable Alteration at least to the extent of the value and as nearly as
reasonably practicable to the condition, quality and class existing immediately
prior to the performance of the applicable Alteration (using materials,
equipment and construction techniques which are common at the time of the
performance of the restoration); provided, however, that if in Landlord’s
reasonable judgment because of any circumstances relating to construction
methods or materials which did not exist at the time of performance of the
applicable Alteration or which no longer exist or are no longer legal or
insurable or because of other Alterations made by Tenant or other changed
circumstances restoration would not be reasonably practical with respect to the
required restoration of the applicable Alteration, then Landlord shall have the
right to require that the restoration be performed in such a manner specified
by Landlord that does not conform to the conditions, quality or class of
improvement existing immediately before the applicable Alteration. Any dispute
regarding the performance of any required restoration of any Alteration which
the parties shall be unable to resolve within fifteen (15) business days after
one party shall have notified the other party that a bona fide dispute exists
shall be resolved by arbitration in accordance with Section 18.4.

 

(c)                                  (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 a manner consistent with Section 10.2(b).

 

(ii)                                  To
the extent that Landlord shall be holding any such security, Landlord shall
have the right from time-to-time 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.

 

25

 

(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 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.

 

(d)                                 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 Buildings on
the Expiration Date, in the condition and quality that the Premises and the
Buildings (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”).  During the
period of one hundred and twenty days (120) 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.

 

(e)                                  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.

 

26

 

(f)                                    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.

 

10.4                        Ownership
of Improvements.  Except as provided in Section 10.5, 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 Buildings 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.

 

10.5                        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 Buildings (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 Buildings resulting from
such removal, and the provisions of Section 10.4 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.

 

27

 

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 Buildings 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

 

28

 

Architectural
and Transportation Barriers Compliance Board, the public accommodations 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  9.

 

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 insurance policies covering the Buildings or any property located therein
(unless Tenant pays for such increased costs), or (ii) result in a refusal
by fire insurance companies of good standing to insure the Buildings 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, (iii) subject Landlord to any liability or
responsibility for injury to any person or property by reason of any business
operation being conducted in the Premises or by Tenant or any one claiming
under Tenant elsewhere on the Property, or (iv) result in the cancellation
of or assertion of any defense by the insurer to any claim under any policy of
insurance maintained by or for the benefit of Landlord.  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 Buildings 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.

 

29

 

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 Buildings, 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 Buildings
and the Common Area.  Landlord makes no
representation or warranty with regard to the environmental condition of the
Buildings, the Common Area or the Property. 
Tenant hereby releases

 

30

 

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 Buildings or the Property
(except to the extent such 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 Buildings. 
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
Buildings, 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 Buildings
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 Buildings 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.

 

31

 

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, 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 Buildings 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 Buildings or
the Property.

 

13.6                        Investigation.  In the event Hazardous Materials are
discovered in or about the Buildings 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

 

32

 

Requirements
or pose a threat to human health or safety. 
If Tenant fails to so surrender 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 Buildings 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 Buildings
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 Buildings 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 acts or omissions or negligence of Tenant
or of Tenant’s Agents, in, on or about the Premises, the Buildings 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, 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 broad form
contractual liability insurance coverage insuring Tenant’s

 

33

 

obligations
under this Lease. Such coverage shall be written on an “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,
personal injury and other covered loss (however occasioned) occurring during
the policy term, with at least the following endorsements to the extent such
endorsements are generally available:  (i) deleting
any employee exclusion on personal injury coverage, (ii) including
employees as additional insureds, (iii) providing broad form property
damage coverage and products completed operations coverage (where applicable), (iv) 
deleting any liquor liability exclusions, and (v) providing for coverage
of owned and non-owned automobile liability, if applicable.  Such insurance shall name Landlord and any
Leasehold Mortgagee and Prior Lessor designated by Landlord as an additional
insured, shall specifically include the liability assumed hereunder by Tenant,
shall provide that it is primary insurance, shall provide for severability of
interests, shall further provide that an act or omission of one of the named
insureds which would void or otherwise reduce coverage shall not reduce or void
the coverage as to any insured, shall afford coverage for claims based on acts,
omissions, injury or damage which occurred or arose (or the onset of which
occurred or arose) in whole or in part during the policy period, and shall
provide that Landlord will receive thirty (30) days’ written notice from the
insurer prior to any cancellation;

 

(b)  commercial property insurance, including sprinkler leakages,
vandalism and malicious mischief and plate glass damage covering all the items
specified as Tenant’s Property and all other property of every description
including stock-in-trade, 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, disability and similar employee benefit
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 Buildings
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, and shall, with the exception of Workers

 

34

 

Compensation
Insurance, include as additional insureds Landlord, and such Leasehold
Mortgagees and Prior Lessors as Landlord specifies from time to time.  Such policies shall be for the mutual and joint
benefit and protection of Landlord, Tenant and others specified by
Landlord.  Certificates of insurance
shall be delivered to Landlord prior to the delivery of possession of the
Premises to Tenant and thereafter within thirty (30) days prior to the expiration
of the term of each such policy.  All
commercial general liability and property damage policies shall contain a
provision that Landlord and any other additional insured, although named as
additional insureds, shall nevertheless be entitled to recover under said
policies for a covered loss occasioned by it, its servants, agents and
employees, by reason of Tenant’s negligence. 
As often as any policy shall expire or terminate, renewal or additional
policies shall be procured and maintained by Tenant in like manner and to like
extent.  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.  All commercial general liability, property
damage and other casualty policies shall be written on an occurrence
basis.  Landlord’s coverage shall not be
contributory.  No policy shall have a
deductible in excess of $200,000 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.  In addition,
at any time, Landlord may elect to insure all or any part of the Premises under
its own policy or policies of insurance, and the cost of any such policies
shall be an Operating Expense hereunder.

 

14.5                        Waiver of Subrogation.  Notwithstanding anything to the contrary in
this Lease, the parties hereto release each other and their respective agents,
employees, successor, assignees and subtenants from all liability for injury to
any person or damage to any property that is caused by or results from a risk (i) which
is actually insured against, to the extent of receipt of payment under such
policy (unless the failure to receive payment under any such policy results
from a failure of the insured party to comply with or observe the terms and
conditions of the insurance policy covering such liability, in which event,
such release shall not be so limited), (ii) which is required to be
insured against under this Lease, or (iii) which would normally be covered
by the standard form of “all risk-extended coverage” casualty insurance,
without regard to the negligence or willful misconduct of the entity so
released.  Landlord and Tenant shall each
obtain from their respective insurers under all policies of fire, theft, and
other property insurance maintained by either of them at any time during the
Term insuring or covering the Project 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, and Landlord and
Tenant shall each indemnify the other against any loss or

 

35

 

expense,
including reasonable attorneys’ fees, resulting from the failure to obtain such
waiver.

 

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, 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”),
or 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, which Landlord may withhold in its sole and absolute
discretion.

 

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.

 

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 one hundred percent (100%) of
the Excess Rent received by Tenant shall be paid to Landlord as and when
received 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; (d) customary and reasonable external
brokers’ commissions to the extent paid and documented; (e) reasonable
attorneys’ fees; and (f) reasonable costs of advertising the space for
Sublease or Assignment (collectively,

 

36

 

“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 any 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
or Prior Lease 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 at, and of each instrument delivered in connection
therewith within five (5) business days after the execution and delivery
thereof.

 

(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

 

37

 

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                        Short Term Subletting.  Notwithstanding the provisions of Section 15.1
to the contrary, 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 (i) or more sublessees (but all of such
subleases shall cover, individually or collectively, not more than 80,000
square feet 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.

 

15.6                        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.

 

15.7                        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 15.5.  For purposes of this Section 15.7, 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 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, (i) 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 (ii) Landlord’s
consent shall not be required with respect to transfers to Successor Entities
permitted in paragraph (b) below.

 

38

 

(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, of not 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.

 

15.8                        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.

 

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

 

15.10                 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

 

39

 

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 Buildings 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.

 

15.11                 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.

 

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 (i) 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
or (ii) on the part of either or both of the SGI Parties to timely pay any
amounts due and owing or otherwise perform under the indemnity provisions of
the Purchase Agreements or the Ground Lease

 

40

 

Assignments
which failure 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 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 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 either of the
Other Leases.

 

41

 

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)  The rights and remedies described in California Civil Code Section 1951.2,
including without limitation the right to recover from Tenant all Rent due
through the date this Lease terminates (with interest at the Interest Rate
until paid), plus the present worth of the Rent payable hereunder for the
balance of the Term, plus any amount necessary to compensate Landlord for 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, (i) the unamortized
portion of any brokerage or real estate agent’s commissions paid in connection
with the execution of this Lease, (ii) any direct costs or expenses
incurred by Landlord in recovering possession of the Premises, maintaining or
preserving the Premises after such default, (iii) preparing the Premises
for reletting to a new tenant, (iv) any repairs or alterations to the Premises
for such reletting, (v) 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 (vi) 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.

 

(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

 

42

 

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 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,

 

43

 

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 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) day 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 Buildings (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

 

44

 

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 to 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.  Except as otherwise provided herein, Landlord
shall at all times during the Term have control of the Structural Components
and the Common Area, and may at any time and from time to time during the Term
restrain any 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 to
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 any of the Buildings, without
abatement of Rent, and may for that purpose erect, use and maintain necessary
structures in and through the Premises and the Buildings 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 Buildings 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

 

45

 

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 33,
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 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 referred to above, 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), 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, 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

 

46

 

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 result of 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 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.

 

(c)  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).

 

(d)  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

 

47

 

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, at Tenant’s expense,
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.

 

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 Buildings 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 Buildings, 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 Buildings 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.  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.

 

48

 

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 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

 

49

 

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 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 Obligation.  (a)  If the Premises or the Common Area
or any portion thereof (whether or not the Premises are affected) are damaged
by fire or other casualty (“Casualty”)
and Tenant shall be restoring the same in accordance with Section 19.3,
Landlord shall make available to Tenant any insurance proceeds payable on
account of such Casualty at such time and in accordance with such procedures as
are provided in any Leasehold Mortgage (or if there shall be no Leasehold
Mortgage, in accordance with such procedures as Landlord shall reasonably
determine are customary for leasehold mortgages) and in compliance with the
Ground Lease, which proceeds shall be used by Tenant only to fulfill
restoration obligations hereunder and for no other purpose.

 

(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.

 

50

 

(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,
and Landlord shall not be obligated to repair any damage thereto or replace the
same.

 

19.2                        Termination Option. 
Landlord shall notify Tenant within sixty (60) days after the date of
damage whether or not the requirements for repairs, reconstruction and
restoration by Tenant 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 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, Tenant shall have the right to terminate this Lease by
delivering fifteen (15) days’ written notice to Landlord.

 

19.3                        Tenant Obligations. 
Subject to Section 19.2, if the Premises or the Buildings or any
portion thereof (whether or not the Premises are affected) are damaged by
Casualty, Tenant shall, at Tenant’s sole cost and expense, 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 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 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.  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. 
Except as provided in Section 19.1, Tenant shall have no interest
in or claim to any portion of the proceeds of any insurance or self-insurance
maintained by Landlord.

 

19.5                        No Damages. Tenant shall not be entitled to any
damages by reason of any inconvenience or loss sustained by Tenant as a result
of any repairs,

 

51

 

reconstruction
or restoration of any damage or destruction to the Premises under any of the
provisions of this Article 19. 
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 Buildings 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

 

(b)  Upon completion of said repairs, reconstruction or
restoration, and thereafter throughout the remainder of the Term, the Base Rent
and Operating

 

52

 

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 Buildings 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 therefore
by Landlord.

 

53

 

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 Buildings, in either
case together with an amount estimated by Landlord as Tenant’s Share of
Operating Expenses payable under this Lease, and shall otherwise 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

 

54

 

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, 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 rules and
regulations and all reasonable modifications thereof and additions thereto from
time to time put into effect by Landlord (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
Premises leased by Tenant hereunder as of the Commencement Date, 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

 

55

 

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.

 

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

 

56

 

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 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 principals 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 Tenant, and Tenant shall indemnify, defend and hold Landlord 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.

 

57

 

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 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.

 

58

 

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 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 Prior Lessor; 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:

 

59

 

(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 Buildings; (B) The assumption of the Lease will not
disrupt, in Landlord’s judgment, the tenant mix of the Buildings which, in
Landlord’s judgment, would be most beneficial to all of the tenants of the
Buildings and would enhance the image, reputation, and profitability of the
Buildings; (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
portion of the rooftop of the Buildings to be designated by Landlord in its
sole and absolute discretion (the “Antenna Area”) and thereafter
maintain, repair, operate and replace one satellite antenna (the “antenna”)
provided (i) the antenna shall not exceed 3 feet in height by 3 feet in
length, by 3 feet in width or, if applicable, 3 feet in diameter; (ii) the
size and dimensions of the antenna and any 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 antennae 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.

 

60

 

32.2                        Non-Exclusive.  The parties agree that Tenant’s use of the
rooftop of the Buildings, 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
for any use including the installation of other antennas, 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.

 

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 Buildings at all reasonable times upon reasonable advance
notice, subject to Landlord’s reasonable safeguards for the security and
protection of the Buildings, the Building Systems, Structural Components, and
installations and equipment of other tenants or occupants of the Buildings as
may be located on the roof of the Buildings. 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 ad operation of the antenna, Wiring and related equipment
erected or installed by Tenant pursuant to the provisions of this Article 33.  Tenant, at Tenant’s sole cost and expense,
shall secure and thereafter 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 33 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
Buildings and to any other part of the Buildings 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.

 

61

 

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 Buildings, (iii) other tenants in the Buildings, 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
Buildings.  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 the antenna.  The
foregoing indemnification is in addition to, and not in lieu of, the
obligations of Tenant under Section 13.4 or 14.1.

 

32.10                 Exclusive.  So long as Tenant leases 100% of the Premises
leased as of the Commencement Date, Tenant shall have the exclusive right to
install and use antennae on the roof of the Buildings.

 

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 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 Buildings, 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

 

62

 

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 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.

 

63

 

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.

 

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,

 

64

 

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

 

65

 

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

 

	
  LANDLORD:

  	
  SGI:

  
	
   

  	
   

  
	
  THE GOLDMAN
  SACHS GROUP, INC.

  	
  SILICON
  GRAPHICS, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
									

 

66

 

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:

 

“Acceptable
Accounting Firm” means an independent certified
public accounting firm which shall be one of the so-called “Big Five”
accounting firms or its successor.

 

“Acceptable
Accounting Principles” means 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 4.3.

 

“Alterations”
is as defined in Section 10.1.

 

“Amphitheatre
Ground Lease Assignment” means
that certain Assignment and Assumption of Ground Lease dated of even date
herewith between SGRE and Landlord with respect to the Amphitheater Property.

 

“Assignment”
is defined in Section 15.1.

 

“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.

 

“Buildings”
means the Buildings as described in Section 2.1 and including all
Structural Components.

 

“Building
Systems” means 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).

 

67

 

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

 

“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.

 

“Common Area” means (i) the land upon which the Buildings and other
improvements comprising the Premises are erected, (ii) all Structural
Components and all staircases, landings and stairs (except for those stairways
located within any portion of the Premises), (iii) all shafts, passageways
and corridors, mechanical and other rooms, areas and spaces which are not part
of any portion of the Premises, (iv) all pump rooms, refuse rooms, storage
rooms, telephone rooms, gas meter and other utility rooms and electrical rooms and
closets that are not part of any portion of the Premises, (v) the
elevators (including their shafts, pits and machine rooms that are not part of
any portion of the Premises), (vi) the entrances to the outer public
lobbies, service entrances, loading docks, elevators lobbies and ground floor
plaza that are not part of any portion of the Premises and (vii) all other
parts of the Buildings, which are not part of the Premises.

 

“Change
in Control” is defined in Section 15.7.

 

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

 

“Crittenden
Ground Lease Assignment” means collectively those
certain Assignments and Assumption of Ground Lease dated of even date herewith
between SGRE and Landlord with respect to the Crittenden Property.

 

“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.

 

“Ground
Lease Assignments” means the Amphitheatre Ground Lease
Assignment and the Crittenden Ground Lease Assignment.

 

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

 

“Interest
Rate” is defined in Section 4.5.

 

68

 

“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.

 

“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” are defined in Section 12.1.

 

“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 Buildings
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.

 

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

 

“Net
Worth” means, 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.

 

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

 

“Ordinary
Capital Improvement” means any capital improvement which (i) is
required to be made in order to cause the Buildings 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 Buildings 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.

 

69

 

“Other
Leases” means those certain Commercial Leases between
Landlord and Tenant dated of even date herewith relating to the Crittenden
Property.

 

“Permitted
Lab Work” means the building out of laboratory or
research space which may affect the distribution of Building Systems within a
single floor of the Premises.

 

“Premises”
is defined in Section 2.1.

 

“Prevailing
Market Rent” is defined in Exhibit C.

 

“Prior
Lease” means any lease of the Property or any part 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”.

 

“Purchase
Agreements” means those three (3) certain Agreements
to Assign Ground Lease and Agreement to Lease dated of even date herewith
between the SGI Parties and one or more of and the Goldman Parties.

 

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

 

“Reduced
Amount”  means an
amount equal to the sum of Base Rent payable over the next twelve (12) months
of the Term, plus the amount of Additional Rent payable for the most recent
full calendar year, in an amount determined by Landlord and provided to Tenant
on or before January 1, 2002, and as of each January 1 thereafter
during the Term (it being agreed that until January 1, 2002, the amount
identified in this clause (b) shall be $8,613,768.

 

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

 

“Required
Amount” means the sum of (a) Base Rent
becoming due during the next eighteen (18) months of the Term plus (b) the
product of one and one-half (1.5) times the

 

70

 

amount of the Additional
Rent payable for the most recent full calendar year, in an amount determined by
Landlord and provided to Tenant on or before January 1, 2002, and as of
each January 1 thereafter during the Term (it being agreed that until January 1,
2002, the product identified in this clause (b) shall be
$12,920,652).

 

“Rules and
Regulations” are defined in Section 24.1.

 

“SGI”
means Silicon Graphics, Inc.

 

“SGI
Parties” means SGI and SGRE.

 

“SGRE”
means Silicon Graphics Real Estate, Inc.

 

“SNDA”
means a subordination, nondisturbance and attornment agreement or any other
agreement, in each case relating to the Premises, pursuant to which a Leasehold
Mortgagee or 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” means (i) the foundations, columns,
girders, beams, supports, concrete slabs and other structural members of the
Buildings, (ii) those portions of the exterior walls of the Buildings
lying outside of a plane which is the interior face of the window glass of such
walls and (c) all Building Systems.

 

“Sublease”
is defined in Section 15.1.

 

“Successor
Entity”  is defined
in Section 15.7(b).

 

“Tenant”
means SGI or any permitted Successor Entity in accordance with Section 15.7

 

“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 10.5.

 

“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.

 

“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.

 

71

 

“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.

 

72

 

EXHIBIT A

 

LOCATION OF PREMISES

 

A-1

 

EXHIBIT A-2

 

PROPERTY

 

A-2

 

EXHIBIT B

 

BASE RENT SCHEDULE

 

B-1

 

EXHIBIT B

AMPHITHEATRE BASE RENT

 

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

 

	
  Year

  	
   

  	
  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  6

  	
   

  	
  7

  	
   

  	
  8

  	
   

  	
  9

  	
   

  	
  10

  	
   

  	
  11

  	
   

  	
  12

  	
   

  
	
  Rent*

  	
   

  	
  32.18

  	
   

  	
  32.90

  	
   

  	
  33.65

  	
   

  	
  34.41

  	
   

  	
  35.19

  	
   

  	
  35.99

  	
   

  	
  36.80

  	
   

  	
  37.63

  	
   

  	
  38.49

  	
   

  	
  39.36

  	
   

  	
  40.25

  	
   

  	
  41.16

  	
   

  

 

* Per square foot of Rentable Area per annum.

 

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.

 

(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

 

C-2

 

terms of this
Lease, and (iii) take into account that Landlord will not have to incur
tenant improvements costs or leasing commissions.

 

C-3Exhibit 10.2

 

AMENDMENT

 

THIS AMENDMENT (this “Amendment”) is
made as of the 19 day of April, 2001 by the GOLDMAN SACHS GROUP, INC., a
Delaware corporation ) (“Landlord”),
SILICON GRAPHICS, INC., a Delaware corporation (“Tenant”),
and SILICON GRAPHICS REAL ESTATE, INC., a Delaware corporation (“Seller”).

 

W I T N E S S E T H:

 

WHEREAS, Tenant and Landlord entered into that certain Lease dated December 29,
2000 (the “Amphitheatre Lease”) for 1600
Amphitheatre Parkway, Mountain View, California (the “Amphitheatre
Property”);

 

WHEREAS, Seller and Landlord entered into that certain Agreement to
Assign Ground Lease and Agreement to Lease dated as of December 29, 2000
(the “Amphitheatre Purchase Agreement”) for
the Amphitheatre Property;

 

WHEREAS, Tenant and Landlord entered into that certain Lease dated December 29,
2000, as amended by First Amendment to Commercial Lease (Crittenden Parcel A)
dated as of December 29, 2000 (the “Crittenden A Lease”)
for 1200 Crittenden Lane, Mountain View, California (the “Crittenden
A Property”);

 

WHEREAS, Tenant and Landlord entered into that certain Lease dated December 29,
2000 (the “Crittenden B Lease”; together with the
Amphitheatre Lease and the Crittenden A Lease, the “Leases”)
for 1300 Crittenden Lane, Mountain View, California (the “Crittenden
B Property”);

 

WHEREAS, Seller and Landlord entered into that Agreement to Assign
Ground Lease and Agreement to Lease dated as of December 29, 2000 (the “Crittenden Purchase Agreement”; together with the
Amphitheatre Purchase Agreement, the “Purchase Agreements”)
for the Crittenden A Property and the Crittenden B Property;

 

WHEREAS, the parties hereto have agreed to enter into this Amendment as
provided 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:

 

1.             The date “February 15, 2001” appearing
in Section 4.7(a) of the Leases and in Section 2.2(a)(ii) of
the Purchase Agreements is hereby amended to the date of “February 20,
2001.”

 

 

2.             The words “The City of San Francisco”
appearing in the second sentence of Section 4.7(b) of the Leases is
hereby amended to the words “The City of San Francisco or the City of New York.”

 

3.             The following sentence shall be added after
the third sentence of Section 4.7(b) of each of the Leases:

 

“The initial Letter of Credit (but not any substitute Letter of Credit)
may provide that the effectiveness of such Letter of Credit is conditioned on
the receipt by the issuer of such Letter of Credit of the sums retained by
Landlord pursuant to Section 2.2(a)(ii) of the Purchase Agreement
relating to the Property.”

 

4.             The following sentence shall be added after
the third sentence of Section 4.7(d) of each Lease:

 

“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.”

 

5.             The following shall be added at the end of Section 4.7(e) of
each of the Leases:

 

“The 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.”

 

2

 

6.             The following paragraph (g) shall be
added to Section 4.7 of each of the Leases:

 

“(g) 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.”

 

7.             Section 16.2(c) of each of the
Leases is hereby deleted in its entirety and the following is inserted in its
place:

 

“(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 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

 

3

 

of the Federal Reserve Bank of San Francisco at the time of award plus
one percent.

 

8.             The second sentence of Section 17.5(a) of
each of the Leases is hereby deleted in its entirety and the following inserted
in its place:

 

“This Lease is and shall be subject and subordinate to each and any
Leasehold Mortgage and to all advances under any Leasehold Mortgage referred to
above, 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.”

 

9.             The second sentence of Section 18.2 of
each of the Leases is hereby deleted in its entirety and the following inserted
in its place;

 

“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.”

 

10.           The first sentence of Section 19.3 of
the Amphitheatre Lease is hereby deleted in its entirety and the following
inserted in its place:

 

“Subject to Section 19.2, if the Premises or the Buildings or any
portion thereof (whether or not the Premises are affected) are damaged by
Casualty, Tenant shall, at Tenant’s sole cost and expense, 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 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 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

 

4

 

affect more than fifty percent (50%) of the aggregate Rentable Area of
the Buildings.”

 

11.           Section 12.3 of Crittenden Purchase
Agreement is amended by inserting the phrase “in connection with the Crittenden
Guaranty, as reinstated,” following the phrase “any requirement on
the part of any SGI Indemnified Party”. The foregoing amendment shall be
effective as of the Effective Date (as defined in the Crittenden Purchase
Agreement).

 

12.           Section 12.3 of the Amphitheatre
Purchase Agreement is amended by inserting the phrase “in connection with the Amphitheatre
Guaranty, as reinstated, “following the phrase “any requirement on the part of
any SGI Indemnified Party”. The foregoing amendment shall be effective as of
the Effective Date (as defined in the Amphitheatre Purchase Agreement).

 

13.           Except as modified hereby, the terms and
conditions of the Leases and the Purchase Agreements remain unchanged and in
full force and effect.

 

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

 

15.           Unless otherwise specified, (i) singular
words include the plural and plural words include the singular; and (ii) references
to this each Lease and each Purchase Agreement include all amendments,
supplements and other modifications thereof, in whole or in part.

 

16.           Capitalized terms used herein but that are
not defined herein have the meanings assigned to such terms in the Leases.

 

5

 

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

 

	
   

  	
  THE
  GOLDMAN SACHS GROUP, INC.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Dan
  Neidich

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dan Neidich

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON
  GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON
  GRAPHICS REAL ESTATE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
								

 

 

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

 

	
   

  	
  THE
  GOLDMAN SACHS GROUP, INC.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON
  GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael
  L. Hirahara

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael L. Hirahara

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Facilities &
  Services

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON
  GRAPHICS REAL ESTATE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael
  L. Hirahara

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael L. Hirahara

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Facilities &
  Services

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