Document:

Exhibit 10.14

 

AGREEMENT
OF SUBLEASE

 

THIS AGREEMENT OF SUBLEASE (this
“Sublease”), is dated as of the     day of January, 2004,
between Lightbridgc, Inc., a Delaware corporation (“Sublandlord”), and Primal
Solutions, Inc., a Delaware corporation having an office at 18881 Von Karman
Avenue, Suite 500, Irvine, CA 92612, as subtenant (“Subtenant”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, pursuant to
a certain Indenture of Office Building Lease dated as of October 31, 2000,
as amended by the First Amendment to Lease, dated March 26, 2001
(collectively, the “Lease”) between CA-Tower 17 Limited Partnership, a Delaware
limited partnership (as successor in interest to Spieker Properties, L.P), (the
“Landlord”), and Sublandlord, as tenant, a redacted copy of which Lease is annexed
hereto as Exhibit A and made a part hereof and which Subtenant
represents having received and reviewed prior to the execution of this
Sublease, Sublandlord does presently lease certain premises (the “Premises”)
located on the seventh floor in the building (the “Building”) located at 18881
Von Karman Avenue, Irvine, California, for the term, at the rentals and upon
the other terms, covenants and conditions more fully described in the Lease;

 

WHEREAS, Subtenant
desires to sublease from Sublandlord and Sublandlord desires to sublease to
Subtenant the portion of the Premises on the seventh floor of the Building
known as suite 750, consisting of 6,851 rental square feet (the “Sublet
Premises”) upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in
consideration of the sum of One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Sublandlord and Subtenant hereby covenant and agree as follows:

 

A  G  R  E  E
M  E  N  T:

 

Article 1.                                            Term

 

A.                                   Sublandlord hereby
subleases to Subtenant, and Subtenant hereby hires from Sublandlord, the Sublet
Premises for a term (the “Sublease Term”) commencing on the Sublease
Commencement Date (as hereinafter defined) and expiring at 11:00 p.m. on May
31, 2006 (the “Sublease Expiration Date”), or on such earlier date upon which
the Sublease Term shall be cancelled or terminated pursuant to any of the
provisions, conditions or covenants of this Sublease. Subtenant hereby
acknowledges and agrees Sublet Premises shall be deemed to contain
approximately 6,851 rentable square feet. The “Sublease Commencement Date”
shall mean February 1, 2004 or the date of final Landlord consent, subject
to receipt of Landlord’s consent to this Sublease. Subtenant agrees to execute
any consent reasonably proposed by Landlord and to otherwise fully cooperate
with any reasonable requests of Landlord in connection with obtaining its
consent; provided however, Subtenant shall not be required to

 

 

amend the terms and conditions of this Sublease as a requirement to
obtain such consent. Sublandlord shall give Subtenant prompt notice of the
Sublease Commencement Date.

 

B.                                     Promptly after
execution and delivery of the Sublease by both parties, Sublandlord shall
submit a copy of the Sublease to Landlord in order to obtain its consent but
Sublandlord shall not be obligated to incur any costs in seeking said consent
(except to pay reasonable attorneys’ fees incurred by Landlord in connection
therewith) nor be obligated to incur any obligations not set forth in the
Lease. If Landlord does not give its consent to this Sublease prior to Sublease
Commencement Data, this Sublease shall terminate without further obligation of
either party to the other except for Sublandlord’s obligation to refund any
prepaid Base Rental and the Deposit (both as hereinafter defined). If such
consent is obtained within such period, this Sublease shall remain in full
force and effect.

 

Article 2.                                            Base
Rental; Additional Rental

 

A.                                   Subtenant covenants
and agrees to pay to Sublandlord rent (“Base Rental”) in equal monthly
installments of $8,563.75 on the first day of every calendar month during the
Sublease Term (except that Sublandlord waives Base Rental due for the second
calendar month during the Sublease Term) at an annual rate of $102,765.00 from
the Sublease Commencement Date through and including the Sublease Expiration
Date. Base Rental shall be payable in advance, without notice, set-off,
deduction, counterclaim or abatement. 
In the event the Sublease Commencement Date occurs on any day other than
the first day of a month and insofar as the Sublease Expiration Date does occur
on a day that is not the last day of a month, the Base Rental due for such
partial months shall be prorated. Subtenant agrees to pay the Base Rental
together with all other sums payable hereunder to Sublandlord in U.S. legal
tender in good funds at the office of Sublandlord above stated or at such other
place or to such other person(s) or party as Sublandlord may designate in
writing.

 

B.                                     Any amounts other
than Base Rental payable by Subtenant to or on behalf of Sublandlord are herein
referred to as “Additional Rental.”  Any
Additional Rental shall be due and payable by Subtenant to Sublandlord within
twenty (20) days following invoice.

 

C.                                     Any installment of
Base Rental, Additional Rental or other charge not paid within ten (10) days
after it is due and payable shall be subject to a late charge equal to five
percent (5%) of the overdue amount, and if not received within ten (10) days
after the due date the amount due shall bear interest at the rate of nine
percent (9%) per annum from the date it originally became due until it is paid
and such amount(s) shall be deemed to be Additional Rental payable hereunder.
Nothing contained in this Section is intended to grant Subtenant any
extension of time in respect of the due dates for any payments under this
Sublease, nor shall same be construed to be in limitation of or in substitution
for any other rights, remedies and privileges of Sublandlord under this
Sublease or otherwise.

 

Article 3.                                            Condition
of Sublet Premises; Use

 

Subtenant hereby represents, warrants, confirms and agrees that it has
inspected the Sublet Premises, knows the condition thereof, and agrees to
accept the same on the Sublease

 

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Commencement
Date “as is” subject to any and all defects therein, latent or otherwise.
Notwithstanding the foregoing, to Sublandlord’s knowledge, Sublandlord
represents and warrants to Subtenant that the Sublet Premises comply with all
applicable laws as of the Sublease Commencement Date. Subtenant acknowledges
that Sublandlord has made no warranties or representations whatsoever with
respect to the Building, the Premises, the Sublet Premises or the fixtures
therein contained or therein to be contained on the Sublease Commencement Date.
Subtenant agrees that except as otherwise expressly provided herein to the
contrary, Sublandlord has no obligation to alter or repair the Building, the
Premises, the Sublet Premises or any fixtures therein contained or therein to
be contained on the Sublease Commencement Date or to prepare the same in any
way for Subtenant’s occupancy or use other than to deliver the Sublet Premises
to Subtenant in a “broom-clean” condition. In addition, Sublandlord agrees that
as of the Sublease Commencement Date, there will remain in the Sublet Premises
without representation or warranty of any kind by Sublandlord, Sublandlord’s
existing furniture and data room, all as more particularly described on the
inventory list attached hereto and made a part hereof as Exhibit B
(“Sublandlord’s Property”). Sublandlord’s Property shall remain the property of
Sublandlord throughout the Sublease Term but shall be used, maintained and
repaired by Subtenant, as Subtenant’s sole cost, expense and risk, throughout
the Sublease Term. Upon Request by Subtenant and during the term of the
Sublease, Sublandlord shall provide written authorization to any service
provider required to maintain Sublandlord’s Property.  Upon the Sublease Expiration Date and to the extent permitted
under the Lease, ownership of said Property shall be transferred to Subtenant
at Subtenant’s cost. As of the Sublease Expiration Date, Sublandlord represents
that the Sublandlord Property detailed in Exhibit B is not encumbered by any
party and it is “free and clear” from any lease, lien and UCC filing.

 

A.                                   The Sublet Premises shall be used solely as
permitted under the Lease and for no other use or purpose.

 

Article 4.                                            Incorporation of Lease
Provisions; Matters Affecting Sublandlord and Landlord

 

A.                                   Subtenant hereby assumes performance of and
agrees to perform all of the terms, obligations, covenants and conditions on
the part of Sublandlord, as tenant, to be kept, observed and performed under
the Lease with respect to the Sublet Premises during the Sublease Term. The
terms of the Lease are hereby incorporated herein by this reference thereto so
that, except to the extent that they are modified by the provisions of this
Sublease, each and every term, covenant and condition of the Lease binding
Sublandlord, as tenant, and inuring to the benefit of Landlord, shall, in
respect of this Sublease, bind Subtenant and inure to the benefit of
Sublandlord, with the same force and effect as if such terms, covenants and
conditions were completely set forth in this Sublease, and as if the word(s):
(i) “Landlord” appearing in the Lease was construed to mean “Sublandlord”; (ii)
“Tenant” appearing in the Lease was construed to mean “Subtenant”; (iii) “this
Lease” or words of similar import appearing in the Lease were construed to mean
“this Sublease”; and (iv) Fixed Rent appearing in the Lease was construed to
mean “Base Rental”. It is the intention of the parties hereto that, except as
otherwise provided by the specific provisions of this Sublease, the respective
obligations of Sublandlord and Subtenant hereunder shall be governed by the
provisions of the Lease as incorporated herein by this reference thereto.

 

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B.                                     For the purposes of this Sublease, the
following portions of the Lease, as incorporated herein pursuant to
Section A of this Article, are subject to the following modifications:

 

(1)                                  All provisions containing time limitations
shall be deemed amended so that for each and every provision in the Lease
pursuant to the terms of which Sublandlord, as tenant under the Lease, has a
time limitation for the giving of notice, the making of demand, the keeping,
observance or performance of any act, obligation, condition or covenant, or the
exercise of any right, remedy or option, the corresponding provision of this
Sublease (as incorporated herein and modified) in regard to Subtenant’s time
limitation shall be further modified such that Subtenant shall give such notice,
make such demand, keep, observe and perform any such act, obligation, condition
or covenant to be kept, observed and performed by Sublandlord, or exercise any
such right, remedy or option, within a time period which: (i) in the event the
time period set forth in the Lease to do the same is less than or equal to five
(5) days, then within a time period which is one (1) days shorter than the time
period set forth in the Lease, but in no event shall Subtenant be afforded less
than two (2) business days to comply; (ii) in the event the time period set
forth in the Lease to do the same is more than five (5) days but less than or
equal to fifteen (15) days, then within a time period which is two (2) days
shorter than the time period set forth in the Lease (but in no event less than
5 days); and (iii) otherwise, within a time period which is five (5) days
shorter than the time period set forth in the Lease for Sublandlord, as tenant
thereunder, to do the same; provided, however, that in no event shall Subtenant
permit a default to occur under the Lease (other than a default caused by
Sublandlord not arising out of Subtenant’s acts or failures to act).

 

(2)                                  Subtenant hereby expressly acknowledges and
confirms that all rights of Landlord under the Lease may also be exercised by
Sublandlord, and that in any circumstance in which Landlord’s consent is
required, Landlord’s and Sublandlord’s consent shall be required and that such
consent may be withheld, but not unreasonably withheld, in the sole and
absolute discretion of either or both of Landlord or Sublandlord. If this
Sublease is assigned, or if the Sublet Premises or any part thereof be underlet
or occupied by anybody other than Subtenant, Sublandlord may, after default by
Subtenant, collect rent from the assignee, undertenant or occupant, and apply
the net amount collected to the rent herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of this
covenant, or the acceptance of the assignee, undertenant or occupant as tenant,
or a release of Subtenant from the further performance by Subtenant of any of
the covenants on the part of Subtenant herein contained.  The consent by Sublandlord to an assignment
or underletting shall not in any wise be construed to relieve Subtenant from
obtaining the express consent in writing of Sublandlord to any further
assignment or underletting.

 

(3)                                  In the event that the whole of the Sublet
Premises shall be lawfully condemned or taken in any manner for any public or
quasi-public use, this Sublease and the term and estate hereby granted shall
forthwith cease and terminate as of the date of vesting of title. In the event
that only a part of the Sublet Premises shall be so condemned or taken and
neither Landlord or Sublandlord, as tenant under the Lease, terminates the
Lease, as of the date of termination of the Lease, the Base Rental and
Additional Rental payable under Article 2 hereof shall be abated
proportionately according to the reduction in rentable area of the Sublet
Premises resulting from such condemnation or taking.

 

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C.                                     Subtenant shall be
entitled to receive the services, repairs and utilities, if any, to be supplied
to the Sublet Premises under the Lease by Landlord.  The foregoing notwithstanding, and notwithstanding the
incorporation by reference herein of any of the terms and provisions of the
Lease, Sublandlord shall have absolutely no obligation whatsoever to supply any
services or utilities or make any repairs in or to the Sublet Premises or
otherwise, and Subtenant shall not look to Sublandlord to provide same.
Subtenant agrees to look solely to Landlord for any services, repairs,
utilities, and/or work of any kind whatsoever to be furnished in or to the
Sublet Premises and to seek such services, repairs, utilities, and/or work
exclusively by requesting from Sublandlord that Sublandlord request same from
Landlord on Subtenant’s behalf. 
Sublandlord shall have no responsibility of any kind whatsoever for any
default of or by Landlord under the Lease or for the furnishing or failing to
furnish to Subtenant or to the Sublet Premises any services of any kind
whatsoever which Landlord is required to furnish to Sublandlord or to the
Sublet Premises under the Lease.  In
furtherance (and without limitation) of the foregoing, Subtenant agrees that
Sublandlord shall have no obligation to furnish heat, air conditioning,
electricity, water, elevator service, cleaning service and/or any other
services of any kind whatsoever, and that Sublandlord shall not be obligated to
make any repairs or restorations of any kind whatsoever in or to the Sublet
Premises, whether as a result of a casualty, condemnation or otherwise. If
Landlord fails or refuses to comply with any of the provisions of the Lease
insofar as they affect Subtenant’s occupancy of the Sublet Premises during the
Sublease Term, Sublandlord, upon the request of Subtenant, shall exercise
reasonable efforts (without thereby being required to expend any monies or
incur any expense or liability or commence any action or proceeding) to cause
Landlord to so comply.  If,
notwithstanding Sublandlord’s reasonable efforts, however, Subtenant’s use of
the Sublet Premises is substantially impaired due to Landlord’s failure to
perform any obligations under the Lease, Subtenant may, after ten (10)
days’  written Notice to Sublandlord, at
Subtenant’s sole expense, attempt to enforce Landlord’s performance of such
obligations (provided Subtenant in each instance contemporaneously copies
Sublandlord on any and all correspondence and other communications to Landlord
and its counsel, if applicable). 
Nothing herein shall permit Subtenant to take any action which could
reasonably jeopardize the status of the Lease. However, Sublandlord shall not
be liable to Subtenant, and Subtenant’s obligations hereunder shall not be
impaired nor the performance thereof be excused, because of any failure or
delay by Landlord in performing its obligations under the Lease (or because
Sublandlord fails in any way to enforce such obligations). To the extent
permitted by law and contract, Subtenant shall be subrogated to Sublandlord’s
rights against Landlord for Landlord’s failure to perform its terms and
conditions under the Lease.  Subtenant
agrees to indemnify and hold Sublandlord harmless from and against any claim,
liability, cost and expense (including reasonable attorneys’ fees) incurred in
connection with or resulting from any action of Subtenant pursuant to this
Article.

 

D.                                    If Sublandlord is
unable to deliver possession of the Sublet Premises to Subtenant on the
Sublease Commencement Date, except for reason of Sublandlord wrongful delay,
Sublandlord shall not be subject to any liability for failure to give
possession on said date and the validity of this Sublease shall not be impaired
under such circumstances, nor shall the same be construed in any wise to extend
the Sublease Term, nor shall there be any abatement of the Base Rental or
Additional Rental payable hereunder except that the

 

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obligation to pay the same shall not commence until possession of the
Sublet Premises is delivered.

 

E.                                      Notwithstanding
any of the provisions of the Lease (as incorporated herein) including, without
limitation Paragraph 12 thereof, Subtenant hereby agrees that Subtenant shall
not perform and/or make any alterations, additions, improvements or
installations of any kind or nature in or to the Sublet Premises (whether
structural, nonstructural or otherwise) without in each instance obtaining the
prior written consent of Sublandlord and, to the extent required under the
Lease, the prior consent of Landlord. 
Any alterations to the Sublet Premises shall be undertaken by Subtenant
strictly in accordance with the terms of Article 12 of the Lease, as
modified hereby.

 

F.                                      The following
provisions of the Lease shall not be applicable to this Sublease or the Sublet
Premises: 2B, 3, 6, 7A-7C and 12A (but only with respect to any restoration
obligation for existing alterations on the date hereof), 19 and Exhibit C.

 

Article 5.                                            Sublandlord’s
Right to Cure

 

It is expressly noted, acknowledged and
confirmed by Subtenant that a breach, default or failure to observe, perform or
otherwise comply with all or any of the terms, obligations, covenants,
conditions, rules and regulations in this Sublease on Subtenant’s part to be
observed, performed or complied with shall be and be deemed to be a violation
by Subtenant of a substantial and material obligation of the tenancy created by
this Sublease entitling Sublandlord to pursue any and all rights, remedies and
privileges provided under this Sublease, at law, in equity or otherwise,
including, without limitation, the right to immediately terminate said tenancy
and recover possession of the Sublet Premises and/or to seek injunctive relief.
Further, Sublandlord, as landlord, shall have all of the rights, privileges and
remedies with respect to a default under this Sublease by Subtenant as
Landlord, as landlord, has with respect to a default by Sublandlord, as tenant,
under the Lease, with the same force and effect as if such rights, privileges
and remedies were fully set forth herein at length, and Sublandlord shall have,
with respect to Subtenant, this Sublease and the Sublet Premises, all of the
rights, powers, privileges, immunities and remedies as are reserved by or
granted to Landlord under the Lease as if the same were fully set forth herein
at length; such rights, powers, privileges, immunities and remedies shall be in
addition to all of those available to Sublandlord at law, in equity and
otherwise. Subtenant hereby waives each and every right waived by Sublandlord,
as tenant, under the Lease. Sublandlord shall not be responsible for any breach
of the Lease by Landlord nor for any nonperformance or noncompliance with any
provision thereof by Landlord regardless of the alleged cause thereof. In the
event of any inconsistencies between or among provisions of this Sublease and
the Lease, the terms of this Sublease shall govern.

 

Article 6.                                            Compliance
with Lease: Indemnification

 

A.                                   Subtenant agrees not
to do or permit to be done any act or thing or neglect to take any action
which: (i) will constitute a default under, or breach or violation of any of
the terms, covenants, conditions or provisions of, the Lease; or (ii) will make
Sublandlord liable for any damages, claims, fines, costs or penalties under the
Lease; or (iii)

 

6

 

cause Sublandlord to lose any rights or remedies it may otherwise have
under the Lease. Subtenant agrees to indemnify Sublandlord and hold Sublandlord
harmless from and against all loss, liability, obligation, damage, penalty,
cost, charge and expense of any kind whatsoever (including, but not limited to,
reasonable attorneys’ fees), whensoever asserted or occurring, which
Sublandlord may incur or pay out, or which may be asserted against Sublandlord
by reason of: (a) any breach or violation by Subtenant of the terms, covenants,
conditions and provisions of this Sublease; (b) any breach or violation by (or
caused by) Subtenant of the terms, covenants, conditions and provisions of the
Lease; (c) any work or thing of whatsoever kind done or not done in, on, or
about the Building or the Sublet Premises (including, but not limited to,
construction, alterations, repairs or acts of any kind whatsoever, and whether
or not authorized by this Sublease) by Subtenant or Subtenant’s employees,
contractors, agents, or any party under control or acting at its direction or
on its behalf, except to the extent caused by the gross negligence or willful
misconduct of Sublandlord, its employees or agents; (d) any negligence, act or
omission of Subtenant or Subtenant’s employees, contractors, agents or any
party under Subtenant’s control or acting at Subtenant’s direction or on
Subtenant’s behalf; or (e) any injuries to persons or property occurring in the
Sublet Premises, except to the extent caused by the gross negligence or willful
misconduct of Sublandlord, its employees or agents.

 

B.                                     In case
Sublandlord shall be made a party to any litigation commenced against Subtenant
with respect to this Sublease (other than any litigation resulting from any
wrongful act or omission by Sublandlord), Subtenant shall protect and hold
Sublandlord forever harmless and shall pay all reasonable costs and expenses,
including reasonable attorneys’ fees, incurred or paid by Sublandlord in
connection with such litigation.  In
furtherance of Subtenant’s obligations under this Article and this
Sublease (and not in limitation thereof) Subtenant covenants and agrees, at its
sole cost and expense, to carry and maintain in force throughout the Sublease
Term all insurance policies required to be maintained pursuant to Paragraph 8
of the Lease, with limits of not less than those required of Sublandlord, as tenant,
is required to obtain by Landlord, and otherwise upon all the terms of said
Paragraph 8, with respect to the Sublet Premises.  In addition, Subtenant shall also maintain in force throughout
the Sublease Term casualty insurance in an amount not less than the total
replacement value of Sublandlord’s Property. 
Without limiting Subtenant’s responsibilities hereunder or under the
Lease (as incorporated herein), each of Sublandlord, Landlord and any other
parties required under the Lease shall be named as additional insureds under
all insurance policies and certificates required to be obtained by Subtenant
hereunder (including the insurance required to be obtained by Subtenant on
behalf of Sublandlord as tenant under the Lease); and such policies and certificates,
if applicable, shall be delivered to Sublandlord prior to the Sublease
Commencement Date and at least thirty (30) days prior to the expiration date of
any such policies, evidencing the renewal thereof.

 

C.                                     Without in any way
limiting any of Subtenant’s covenants, obligations and agreements contained in
this Sublease (including, but not limited to, Sections A and B of this
Article 6), the parties hereto, including but not limited to their
respective employees, agents, partners, officers, shareholders and directors,
release each other from all liability, whether for negligence or otherwise, in
connection with all losses covered by any insurance policies which are carried
by Sublandlord and Subtenant, as the case may be, or that Subtenant is required
under this Sublease to carry with respect to the Sublet Premises.

 

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Article 7.                                            Subordination

 

This Sublease and all rights of Subtenant
hereunder are and shall be subject and subordinate to the Lease and to all
mortgages, ground leases, leasehold mortgages, encumbrances, condominium
declarations, covenants, restrictions and other rights, if any, to which the
Lease and Sublandlord’s interest therein are subject and to all subsequent
amendments and modifications thereof, provided, however, such subsequent
amendments and modifications with respect to the Lease which reduce Subtenant’s
rights or increase Subtenant’s obligations under this Sublease (in each case
other than in an immaterial manner) shall be subject to Subtenant’s prior
written approval, which approval will not be unreasonably withheld or delayed.
The provisions of the preceding sentence shall be self-operative, but Subtenant
shall execute and deliver such confirmatory instruments of subordination as
Sublandlord, Landlord or any mortgagee or ground lessor of the Building or any
part thereof may require, as well as any instrument of attornment providing for
the continued efficacy of the Lease or of this Sublease in the event of the
foreclosure of any mortgage or the termination of the Lease, or any ground or
other underlying lease.

 

Article 8.                                            Quiet Enjoyment

 

Upon observing the terms, covenants,
conditions and provisions of this Sublease, Subtenant shall and may lawfully
and quietly hold and enjoy the Sublet Premises during the Sublease Term without
hindrance, ejection, molestation or interruption by Sublandlord, subject to the
terms and conditions of the Lease and this Sublease and all things and matters
to which the Lease and this Sublease are subject or subordinate. The foregoing
notwithstanding, if the Lease terminates or is terminated or forfeited for any
reason whatsoever (other than as a result of Sublandlord’s surrender, wrongful
acts or omissions) prior to the date on which this Sublease is scheduled to
expire, this Sublease shall thereupon terminate. Sublandlord shall not be
liable to Subtenant by reason of any such termination and thereafter shall have
no further obligations to Subtenant hereunder. Notwithstanding the foregoing,
Sublandlord agrees that, as long as Subtenant is not in default hereunder
beyond any applicable notice and cure period, Sublandlord shall not voluntarily
surrender or cancel the Lease (other than in accordance with the terms of the
Lease) without the prior written consent of Subtenant, which may be granted or
denied in Subtenant’s sole discretion, unless such surrender of cancellation is
subordinate to or preserves Subtenant’s rights under this Sublease.

 

Article 9.                                            Surrender of Sublet Space;
Holdover

 

A.                                   Upon the scheduled
expiration or termination of this Sublease, or upon any earlier termination of
this Sublease, Subtenant shall peaceably and quietly leave and surrender to
Sublandlord the Sublet Premises together with Sublandlord’s Property, broom
clean and in the condition and state of repair in which the Sublet Premises
must be surrendered to Landlord under the Lease, provided, however, Subtenant
shall not have any responsibility to remove any permanent Alterations made by
Sublandlord which were existing in the Sublet Premises as of the Sublease
Commencement Date.

 

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B.                                     Subtenant agrees
and acknowledges that if the Sublet Premises are not surrendered and vacated as
and at the time required by this Sublease (time being of the essence),
Subtenant shall be liable to Sublandlord for: (i) all losses and damages which
Sublandlord may incur or sustain by reason thereof, including, without
limitation, all amounts due from Sublandlord to Landlord as well as reasonable
attorneys’ fees and disbursements, and Subtenant shall indemnify Sublandlord
against all claims made by Landlord and/or any succeeding tenants against
Sublandlord or otherwise arising out of or resulting from the failure of
Subtenant timely to surrender and vacate the Sublet Premises in accordance with
the provisions of this Sublease; and (ii) per diem use and occupancy in respect
of the Sublet Premises equal to two (2) times the Base Rental and Additional
Rental payable hereunder (which amount Sublandlord and Subtenant presently
agree is the minimum to which Sublandlord would be entitled and is presently
contemplated by them as being fair and reasonable under such circumstances and
not a penalty). In no event shall any provision hereof be construed as
permitting Subtenant to hold over in possession of the Sublet Premises after
the expiration or termination of the Sublease Term or to acquire any right or
interest in the Sublet Premises by any such holding over beyond the Sublease
Term.

 

Article 10.                                     Broker

 

Subtenant and Sublandlord each represents,
warrants and confirms to the other that it has not dealt with any real estate
broker other than Travers Realty and Grubb & Ellis (collectively, the
“Broker”) in connection with this Sublease or any matter pertaining hereto. Subtenant
and Sublandlord agree to indemnify and hold each other harmless from and
against any and all loss, cost, damage or expense which the indemnitee may
incur by reason of or in connection with any claim made by any party (other
than the Broker) claiming to act for or on behalf of the indemnitor or to have
dealt with the indemnitor or its employees, agents or representatives in
connection with this Sublease or any matter pertaining hereto. This indemnity
shall cover also any and all expenses which either party incurs to defend
against any such claim, including, but not limited to reasonable attorneys’
fees.  Sublandlord agrees to pay the
Broker such commission as may be due to it pursuant to a separate agreement between
Sublandlord and the Broker.

 

Article 11.                                     Notices

 

All notices, requests, demands, elections,
consents, approvals and other communications hereunder (“Notices”) must be in
writing and delivered to the following address (or at any other address which
either party may designate by Notice):

 

If to Subtenant:

Prior to the Sublease Commencement Date:

 

Primal Solutions, Inc.

18881 Von Karman Avenue

Irvine, CA 92612

 

After the Sublease Commencement Date:

 

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Primal Solutions, Inc.

18881 Von Karman Avenue

Irvine, CA 92612

 

If to Sublandlord: 

Lightbridge, Inc.

67 South Bedford Street

Burlington, MA 01803

Attention: General Counsel

 

With a copy to:

 

Kathy Juliano

Lightbridge, Inc.

67 South Bedford Street

Burlington, MA 01803

 

Any Notice required by this Sublease to be given or made within a
specified period of time, or on or before a date certain, shall be deemed duly
given or made only if delivered by hand, or sent by prepaid nationally
recognized air courier service, or sent by registered or certified mail, return
receipt requested, with postage and fees prepaid. A notice sent by registered
or certified mail shall be deemed given three (3) business days following the
date of mailing. All other Notices shall be deemed given upon the earlier of
receipt or when delivery is refused.

 

Article 12.                                     Security

 

A.                                   Simultaneously with the execution and
delivery of this Sublease, Subtenant shall deposit $8,563,75 in cash (the
“Deposit”) with Sublandlord as security for the full and faithful performance
by Subtenant of each and every term, covenant, condition and agreement of this
Sublease or any renewals or extensions thereof on Subtenant’s part to be
performed.

 

B.                                     If Subtenant is in default in the performance
or observance of any of the conditions on its part to be performed or observed
under this Sublease or any other obligation of Subtenant to Sublandlord and
such default shall continue beyond the applicable cure period, if any,
Sublandlord may use, apply or retain the whole or any part of the Deposit to
the extent required for the payment of Base Rental or any Additional Rental or
any other sum as to which Subtenant is in default to Sublandlord or for any sum
which Sublandlord may expend or may be required to expend by reason of
Subtenant’s non-performance, non-observance, breach or violation of any of the
terms, covenants, conditions or agreements of this Sublease or other agreements
between Subtenant and Sublandlord, including but not limited to, any damages or
deficiency in the re-letting of the Sublet Premises, whether such damages or
deficiency accrues before or after summary proceedings or other re-entry by the
Sublandlord.

 

10

 

C.                                     Sublandlord shall not be required so to use,
apply or retain the whole or any part of the Deposit, but if the whole or any
part thereof is so used, applied or retained, Subtenant shall within ten (10)
days after demand immediately deposit with Sublandlord a sum equal to the
amount so used, applied or retained.  If
Subtenant shall fully and faithfully comply with all the terms, covenants,
conditions and agreements of this Sublease and other agreements between
Subtenant and Sublandlord prior to the expiration of any applicable cure
period, the Deposit or any balance thereof remaining shall be returned to
Subtenant after the date fixed as the end of this Sublease and after delivery
to Sublandlord of possession of the Sublet Premises in the condition required
hereunder and under the Lease.

 

D.                                    Subtenant shall not assign or encumber or
attempt to assign or encumber the Deposit and neither Sublandlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

 

Article 13.                                     Miscellaneous

 

A.                                   This Sublease shall be construed and enforced
in accordance with and governed by the laws of the State of California.  All prior understandings and agreements
between the parties hereto are merged in this Sublease, which alone fully and
completely sets forth and embodies the entire agreement and understanding
between Sublandlord and Subtenant relating to the subject matter hereof.  This Sublease may not be modified or amended
or any term or provision hereof waived or discharged except in a writing, signed
by the party against whom such amendment, modification, waiver or discharge is
sought to be enforced.  All of the terms
of this Sublease, whether so expressed or not, shall be binding upon the
respective permitted successors and assigns of the parties hereto and shall
inure to the benefit of and be enforceable by Sublandlord and Subtenant and
their respective permitted successors and assigns. Subtenant represents and
warrants that it has the full right, power and authority to execute and deliver
this Sublease and to perform the terms and conditions hereof. Sublandlord
represents and warrants that it has the full right, power and authority to
execute and deliver this Sublease and to perform the terms and conditions
hereof to be performed by Sublandlord, subject to receipt of Landlord’s consent
to this Sublease.  The headings of this
Sublease are for purposes of reference only and shall not limit or otherwise
affect the meaning thereof.  This
Sublease may be executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.

 

B.                                     Subtenant shall pay as Additional Rental any
and all costs associated with the proper operation and maintenance of the “data
center” located within the Sublet Premises (i.e., supplemental cooling costs,
electricity, maintenance, etc.).

 

C.                                     Sublandlord agrees that Subtenant shall be
permitted access to the Sublet Premises, subject to the terms and provisions of
the Lease and force majeure, on a twenty four (24) hour, seven (7) day a week
basis throughout the Sublet Term.

 

D.                                    Subtenant may at its sole cost and expense,
subject to the terms and conditions of the Lease and Sublandlord’s prior
written approval, not to be unreasonably withheld, conditioned, or delayed,
install directory signage within the Sublet Premises.

 

11

 

E.                                      Subject to Sublandlord’s receipt of
Landlord’s prior written consent of the terms and provisions of the Sublease,
provided Subtenant Has executed this Sublease and is not in default hereunder
and has delivered to Sublandlord evidence of all insurance required of it to be
maintained hereunder, Subtenant, at its sole cost, expense and risk, may access
the Sublet Premises during the five day period immediately prior to the
Sublease Commencement Date in order to begin moving into the same.

 

F.                                      Neither the submission of this Sublease to
Subtenant nor the execution of this Sublease by Subtenant shall constitute an
offer by Sublandlord to Subtenant to lease the space herein described as the
Sublet Premises or otherwise. This Sublease shall not be or become binding upon
Sublandlord or Subtenant to any extent or for any purpose unless and until it
is executed by Sublandlord, consented to by Landlord and a fully executed copy
thereof is delivered to Subtenant or Subtenant’s counsel.

 

Article 14.                                     Landlord’s Consent

 

This Sublease and the obligations of the parties hereunder are
expressly conditioned upon Sublandlord’s obtaining prior written consent hereto
by Landlord. Subtenant shall promptly deliver to Sublandlord any information
reasonably requested by Landlord (in connection with their approval of this
Sublease) with respect to the nature and operation of Subtenant’s business
and/or the financial condition of Subtenant. 
Sublandlord and Subtenant hereby agree, for the benefit of Landlord,
that this Sublease and Landlord’s consent hereto shall not (a) create privity
of contract between Landlord and Subtenant, except to the extent expressly
provided herein; (b) be deemed to have amended the Lease in any regard (unless
Landlord shall have expressly agreed in writing to such amendment); or (c) be
construed as a waiver of Landlord’s right to consent to any assignment of the
Lease by Sublandlord or any further subletting of premises leased pursuant to
the Lease, or as a waiver of Landlord’s right to consent to any assignment by
Subtenant of this Sublease or any sub-letting of the Premises or any part
thereof. Landlord’s consent shall, however, be deemed to evidence Landlord’s
agreement that Subtenant may use the Premises for the purpose set forth in the
Lease. If Landlord fails to consent to this Sublease within thirty (30) days
after the execution and delivery of this Sublease, either party shall have the
right to terminate this Sublease by giving written notice thereof to the other
at any time thereafter, but before Landlord grants such consent.

 

12

 

IN WITNESS WHEREOF, this Sublease has been duly executed as of
the day and year first hereinabove written.

 

 

	
   

  	
  Sublandlord: 
  LIGHTBRIDGE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harlan Plumley

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  2/4/04

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Subtenant:  PRIMAL
  SOLUTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph R. Simrell

  	
   

  
	
   

  	
   

  	
  Title:  CEO

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  1-30-04

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd R. Taylor

  	
   

  
	
   

  	
   

  	
  Title:    CFO

  
	
   

  	
   

  
	
   

  	
  Date:

  	
       1  30  04

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Taxpayer ID of Subtenant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

13

 

FIRST
AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this “First
Amendment”) is made this 26th day of March 2001 between Spieker Properties, L.P., a California
limited partnership, (“Landlord”),
and Lightbridge, Inc., a Delaware corporation (“Tenant”).

 

WHEREAS, Landlord and Tenant entered into a Lease dated October 31, 2000,
between Spieker Properties, L.P., a California limited partnership, (“Landlord”), and Corsair Communications,
Inc., a Delaware corporation, as assigned on February 7, 2001 to
Lightbridge, Inc., a Delaware corporation (“Tenant”),
(as amended, the “Lease”), for
those certain premises located at 18881 Von Karman Avenue, Suites 1000 and
1050, Irvine, California (the “Premises”),
as more fully described in the Lease. Capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Lease; and

 

WHEREAS, Landlord and Tenant desire to modify the Lease as provided herein.

 

NOW, THEREFORE, in consideration of the covenants and
agreements contained herein, the parties hereby mutually agree as follows:

 

1.               Basic Lease Provisions – “PREMISES” shall be
modified to include Suite 750 which is the expansion area shown on the attached
“Exhibit A” to the First Amendment to Lease. Total rentable area of Suite 750
is 6,851 rentable square feet, for a new total of 20,531 rentable square feet.

 

2.               Basic Lease Provisions – “BASE RENT” for
Suite 750, the expansion area, shall be as follows:

 

$16,099.85 per month for the period of 4/01/01 – 4/30/02

$16,716.44 per month for the period of 5/01/02 – 4/30/03

$17,401.54 per month for the period of 5/01/03 – 4/30/04

$18,086.64 per month for the period of 5/01/04 – 4/30/05

$18,840.25 per month for the period of 5/01/05 – 5/31/06

 

3.               Basic Lease Provisions – “TENANT’S
PROPORTIONATE SHARE” shall be increased by 2.99% for Suite 750, for a new total
of 8.96%.

 

4.               Basic Lease Provisions – “BASE YEAR” shall
read as 2001 for Suite 750.

 

5.               Basic Lease Provisions – “TERM” the expansion
area, Suite 750, term shall be sixty-two (62) months and shall commence on
April 1, 2001 and terminate on May 31, 2006.

 

6.               Basic Lease Provisions – “OCCUPANCY DENSITY”
for the expansion area, Suite 750, shall be twenty-eight (28) individuals.

 

7.               Basic Lease Provisions – “PARKING AND PARKING
CHARGE” for the expansion area, Suite 750, Tenant shall lease at least twenty
(20) and up to twenty seven (27) unreserved parking spaces as follows:

 

$50.00 per space per month for the period of 4/01/01 – 4/30/02

$55.00 per space per month for the period of 5/01/02 – 4/30/03

$60.00 per space per month for the period of 5/01/03 – 4/30/04

$65.00 per space per month for the period of 5/01/04 – 4/30/05

$70.00 per space per month for the period of 5/01/05 – 5/31/06

 

8.               Basic Lease Provisions – “SECURITY DEPOSIT”
shall be increased by $20,724.28 for the expansion area, Suite 750, for a new
total of $62,106.28.

 

9.               Basic Lease Provisions – “TENANT
IMPROVEMENTS” Tenant shall accept the expansion area, Suite 750, in its “As Is”
condition.  Tenant shall have the right
to utilize the tenant improvement allowance granted for Suite 1000 and Suite
1050, which shall be used prior to December 31, 2001.

 

10.         Additional Roof Rental – Tenant shall pay $750.00 per month for roof
use for HVAC Equipment located on the roof of the Building.

 

 

Examination
of First Amendment to Lease.  Submission of this First
Amendment to Lease to Tenant does not constitute an option or offer to lease
and this First Amendment to Lease is not effective otherwise until execution
and delivery by both Landlord and Tenant.

 

Except
as expressly modified above, all terms and conditions of the Lease remain in
full force and effect and are hereby ratified and confirmed.

 

IN WITNESS WHEREOF, the parties hereto have entered into this
First Amendment as of the date first written above.

 

	
  LANDLORD:

  	
  TENANT:

  
	
  Spieker
  Properties, L.P.,

  	
  Lightbridge, Inc.,

  
	
  a
  California limited partnership

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
  By:

  	
  Spieker
  Properties, Inc.,

  	
  By:

  	
  /s/
  Harlan Plumley

  	
   

  
	
   

  	
  a
  Maryland corporation

  	
   

  	
  Harlan
  Plumley

  	
   

  
	
  Its:

  	
  General
  Partner

  	
  Its:

  	
  /s/
  Harlan Plumley

  	
   

  
	
   

  	
   

  	
   

  	
    Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  James R. Wood, Jr.  4/4/2001

  	
   

  
	
   

  	
    James R. Wood, Jr.

  	
   

  
	
  Its:

  	
  V.P.

  	
   

  
	
   

  	
    Vice President

  	
   

  
							

 

 

OFFICE
BUILDING LEASE

 

 

BETWEEN

 

 

SPIEKER PROPERTIES, L.P.,

a California limited
partnership

(Landlord)

 

 

AND

 

 

PRIMAL SOLUTIONS, INC.,

a Delaware corporation

(Tenant)

 

 

BASIC LEASE
INFORMATION

OFFICE
GROSS

 

	
  LEASE DATE:

  	
   

  	
  October 26,
  2000

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
  Primal
  Solutions, Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  TENANT’S NOTICE ADDRESS:

  	
   

  	
  18881
  Von Karman Avenue, Suite 500, Irvine, California 92612

  
	
   

  	
   

  	
   

  
	
  TENANT’S BILLING ADDRESS:

  	
   

  	
  18881
  Von Karman Avenue, Suite 500, Irvine, California 92612

  
	
   

  	
   

  	
   

  
	
  TENANT CONTACT:

  	
  Mr.
  Lance Carter

  	
   

  	
  PHONE NUMBER:

  	
  (949)
  260-1500 

  
	
   

  	
   

  	
   

  	
  FAX NUMBER:

  	
  (949)
  260-1515

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
  Spieker
  Properties, L.P., a California limited partnership

  
	
   

  	
   

  	
   

  
	
  LANDLORD’S NOTICE ADDRESS:

  	
   

  	
  18881
  Von Karman Avenue, Suite 370

  Irvine, California 92612

  
	
   

  	
   

  	
   

  
	
  LANDLORD’S REMITTANCE ADDRESS:

  	
   

  	
  SPIEKER PROPERTIES, L.P.

  Department #11791

  P.O. Box 6077

  Los Angeles, California 90060-0077

  
	
   

  	
   

  	
   

  
	
  Project Description:

  	
   

  	
  A
  project commonly known as Tower 17 consisting of one seventeen story office
  building and one, five story parking structure, located in the City of
  Irvine, (“City”), County of Orange (“County”), as shown on the site plan
  attached as Exhibit “B”.

  
	
   

  	
   

  	
   

  
	
  Building Description:

  	
   

  	
  The
  seventeen story office building located at 18881 Von Karman Avenue in Irvine,
  California.

  
	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  Approximately
  27,632 rentable square feet, Suites 400, 450 and 460 located on the 4th
  floor and Suite 500 located on the 5th floor.

  
	
   

  	
   

  	
   

  
	
  Permitted Use:

  	
   

  	
  General
  office use for a computer software/hardware research development and testing
  related company in compliance with applicable laws, and no other use without
  the express written consent of Landlord, which consent Landlord may withhold
  in its sole and absolute discretion.

  
	
   

  	
   

  	
   

  
	
  Occupancy Density:

  	
   

  	
  One
  Hundred Twenty Seven (127) individuals

  
	
   

  	
   

  	
   

  
	
  Parking Density:

  	
   

  	
  Four
  (4) spaces per 1,000 rentable square feet of the Premises

  
	
   

  	
   

  	
   

  
	
  Parking and Parking Charge:

  	
   

  	
  Tenant
  shall lease at least seventy-five (75) and up to one hundred twenty two (122)
  non-exclusive spaces at the following monthly rates:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $40.00
  per space per month for months 1 – 12

  $45.00 per space per month for months 13 – 24

  $50.00 per space per month for months 25 – 36

  $55.00 per space per month for months 37 – 48

  $60.00 per space per month for months 49 – 60

  $65.00 per space per month for months 61 - 72

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tenant
  may rent up to five (5) reserved spaces at the following monthly rates:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $110.00
  per space per month for months 1 – 12

  $120.00 per space per month for months 13 - 24

  $130.00 per space per month for months 25 – 36

  $140.00 per space per month for months 37 – 48

  $150.00 per space per month for months 49 – 60

  $160.00 per space per month for months 61 - 72

  
	
   

  	
   

  	
   

  
	
  Scheduled Term Commencement Date:

  	
   

  	
  May
  1, 2001

  
	
   

  	
   

  	
   

  
	
  Scheduled Length of Term:

  	
   

  	
  Seventy
  Two (72) months

  
	
   

  	
   

  	
   

  
	
  Scheduled Term Expiration Date:

  	
   

  	
  April 30,
  2007

  

 

1

 

	
  Rent:

  	
   

  	
   

  
	
  Base Rent:

  	
   

  	
  $59,408.80
  for the period 5/1/01 – 4/30/02

  $61,895.68 for the period 5/1/02 – 4/30/03

  $64,382.56 for the period 5/1/03 – 4/30/04

  $66,869.44 for the period 5/1/04 – 4/30/05

  $69,632.64 for the period 5/1/05 – 4/30/06

  $72,395.84 for the period 5/1/06 – 4/30/07

  
	
   

  	
   

  	
   

  
	
  Base Year for Operating Expenses:

  	
   

  	
  2001

  
	
   

  	
   

  	
   

  
	
  Security Deposit:

  	
   

  	
  $79,635.42

  
	
   

  	
   

  	
   

  
	
  Tenant’s NAICS Code:

  	
   

  	
  541511

  
	
   

  	
   

  	
   

  
	
  Tenant’s Proportionate Share:

  	
   

  	
   

  
	
  Of Building:

  	
   

  	
  12.06%

  
	
   

  	
   

  	
   

  
	
  Of Project:

  	
   

  	
  12.06%

  

 

The
foregoing Basic Lease Information is incorporated into and made a part of this
Lease. Each reference in this Lease to any of the Basic Lease Information shall
mean the respective information above and shall be construed to incorporate all
of the terms provided under the particular Lease paragraph pertaining to such
information. In the event of any conflict between the Basic Lease Information
and the Lease, the latter shall control.

 

 

	
  LANDLORD

  	
  TENANT

  
	
   

  	
   

  
	
  Spieker
  Properties, L.P.,

  a California limited partnership [ILLEGIBLE]

  	
  Primal
  Solutions, Inc.

  a Delaware corporation

  
	
   

  	
   

  
	
  By:

  	
  Spieker
  Properties, Inc.,

  	
  By:

  	
  /s/ William Salway

  	
   

  
	
   

  	
  a
  Maryland corporation,

  	
   

  	
  William
  Salway

  
	
   

  	
  its
  general partner

  	
   

  	
  Its:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  10/30/00

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Wood, Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James
  R. Wood, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
  Its:
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  11-1-00

  	
   

  	
   

  	
   

  
										

 

2

 

TABLE OF
CONTENTS

 

	
   

  	
  Basic
  Lease Information

  	
   

  
	
   

  	
  Table
  of Contents

  	
   

  
	
  1.

  	
  Premises

  	
   

  
	
  2.

  	
  Possession and Lease
  Commencement

  	
   

  
	
  3.

  	
  Term

  	
   

  
	
  4.

  	
  Use

  	
   

  
	
  5.

  	
  Rules
  and Regulations

  	
   

  
	
  6.

  	
  Rent

  	
   

  
	
  7.

  	
  Operating
  Expenses

  	
   

  
	
  8.

  	
  Insurance and Indemnification

  	
   

  
	
  9.

  	
  Waiver
  of Subrogation

  	
   

  
	
  10.

  	
  Landlord’s Repairs
  and Maintenance

  	
   

  
	
  11.

  	
  Tenant’s Repairs and
  Maintenance

  	
   

  
	
  12.

  	
  Alterations

  	
   

  
	
  13.

  	
  Signs

  	
   

  
	
  14.

  	
  Inspection/Posting Notices

  	
   

  
	
  15.

  	
  Services
  and Utilities

  	
   

  
	
  16.

  	
  Subordination

  	
   

  
	
  17.

  	
  Financial
  Statements

  	
   

  
	
  18.

  	
  Estoppel
  Certificate

  	
   

  
	
  19.

  	
  Security
  Deposit

  	
   

  
	
  20.

  	
  Limitation of Tenant’s
  Remedies

  	
   

  
	
  21.

  	
  Assignment and Subletting

  	
   

  
	
  22.

  	
  Authority of Tenant

  	
   

  
	
  23.

  	
  Condemnation

  	
   

  
	
  24.

  	
  Casualty Damage

  	
   

  
	
  25.

  	
  Holding Over

  	
   

  
	
  26.

  	
  Default

  	
   

  
	
  27.

  	
  Liens

  	
   

  
	
  28.

  	
  Substitution

  	
   

  
	
  29.

  	
  Transfers
  by Landlord

  	
   

  
	
  30.

  	
  Right of
  Landlord to Perform Tenant’s Covenants

  	
   

  
	
  31.

  	
  Waiver

  	
   

  
	
  32.

  	
  Notices

  	
   

  
	
  33.

  	
  Attorney’s Fees

  	
   

  
	
  34.

  	
  Successors
  and Assigns

  	
   

  
	
  35.

  	
  Force Majeure

  	
   

  
	
  36.

  	
  Surrender
  of Premises

  	
   

  
	
  37.

  	
  Parking

  	
   

  
	
  38.

  	
  Miscellaneous

  	
   

  
	
  39.

  	
  Additional
  Provisions

  	
   

  
	
  40.

  	
  Jury Trail
  Waiver

  	
   

  
	
   

  	
  Signatures

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits:

  
	
   

  	
  Exhibit
  A

  	
  Rules and Regulations

  
	
   

  	
  Exhibit B

  	
  Site Plan,
  Property Description

  
	
   

  	
  Exhibit C

  	
  Lease Improvement
  Agreement

  
	
   

  	
  Exhibit D

  	
  Tenant’s Exterior
  Signage

  
				

 

3

 

LEASE

 

THIS
LEASE is made as of the 26th day of October, 2000, by and between Spieker
Properties, L.P., a California limited partnership (hereinafter called “Landlord”), and Primal Solutions, Inc., a
Delaware corporation (hereinafter called “Tenant”).

 

1.                                      PREMISES

 

Landlord leases to Tenant and Tenant leases from Landlord, upon the
terms and conditions hereinafter set forth, those premises (the “Premises”) outlined in red on Exhibit B and described in the Basic
Lease Information. The Premises shall be all or part of a building (the “Building”) and of a project (the “Project”), which may consist of more than
one building and additional facilities, as described in the Basic Lease
Information. The Building and Project are outlined in blue and green
respectively on Exhibit B.  Landlord and Tenant acknowledge that physical
changes may occur from time to time in the Premises, Building or Project, and
that the number of buildings and additional facilities which constitute the
Project may change from time to time, which may result in an adjustment in
Tenant’s Proportionate Share, as defined in the Basic Lease Information, as
provided in Paragraph 7.A.

 

2.                                      POSSESSION AND LEASE COMMENCEMENT

 

A.                                    Existing Improvements.  A
subsidiary of Tenant is currently in possession of the Premises pursuant to the
terms and conditions of that certain sublease dated February 3, 1999 by
and between Corsair Communications, Inc., as sublandlord and Wireless Billing
Systems as subtenant (the “Sublease”). The subtenant shall be bound by the
terms and conditions of the Sublease through April 30, 2001. The term
commencement date (“Term Commencement Date”) of this Lease shall be May 1,
2001. Tenant acknowledges that Tenant has inspected and accepts the Premises in
their present condition, “as is,” and as suitable for, the Permitted Use (as
defined below), and for Tenant’s intended operations in the Premises subject to
Tenant’s right to make the Tenant Improvements as further outlined in Exhibit
C. Tenant may, subject to the terms set forth in Exhibit C, commence
construction of the Tenant Improvements at any time after the date of this
Lease; however, in no event must be completed no later than December 31,
2001. Tenant agrees that the Premises and other improvements are in good and
satisfactory condition as of when possession was taken.  Tenant further acknowledges that no
representations as to the condition or repair of the Premises nor promises to
alter, remodel or improve the Premises have been made by Landlord or any agents
of Landlord unless such are expressly set forth in this Lease. Upon Landlord’s
request, Tenant shall promptly execute and return to Landlord a “Start-Up Letter”
in which Tenant shall agree, among other things, to acceptance of the Premises
and to the determination of the Term Commencement Date, in accordance with the
terms of this Lease, but Tenant’s failure or refusal to do so shall not negate
Tenant’s acceptance of the Premises or affect determination of the Term
Commencement Date.

 

3.                                      TERM

 

The term of this Lease (the “Term”)
shall commence on the Term Commencement Date and continue in full force and
effect for the number of months specified as the Length of Term in the Basic
Lease Information or until this Lease is terminated as otherwise provided
herein. If the Term Commencement Date is a date other than the first day of the
calendar month, the Term shall be the number of months of the Length of Term in
addition to the remainder of the calendar month following the Term Commencement
Date.

 

4.                                      USE

 

A.                                    General.  Tenant
shall use the Premises for the permitted use specified in the Basic Lease
Information (“Permitted Use”) and
for no other use or purpose. Tenant shall control Tenant’s employees, agents,
customers, visitors, invitees, licensees, contractors, assignees and subtenants
(collectively, “Tenant’s Parties”)
in such a manner that Tenant and Tenant’s Parties cumulatively do not exceed
the occupant density (the “Occupancy Density”)
or the parking density (the “Parking Density”)
specified in the Basic Lease Information at any time.  Tenant shall pay the Parking Charge specified
in the Basic Lease Information as Additional Rent (as hereinafter defined)
hereunder. So long as Tenant is occupying the Premises, Tenant and Tenant’s
Parties shall have the nonexclusive right to use, in common with other parties
occupying the Building, or Project, the parking areas, driveways and other
common areas of the Building and Project, subject to the terms of this Lease
and such rules and regulations as Landlord may from time to time prescribe.
Landlord reserves the right, without notice or liability to Tenant, and without
the same constituting an actual or constructive eviction, to alter or modify
the common areas from time to time, including the location and configuration
thereof, and the amenities and facilities which Landlord may determine to
provide from time to time so long as such; alterations or modifications of the
common areas do not materially and adversely interfere with

 

4

 

Tenant’s use or occupancy of Premises. 
Landlord shall maintain the common areas of the Building and the Project
in a first class condition and shall provide adequate lighting consistent with
that found throughout the Building, in the parking areas and Building lobby,
corridors and hallways
for ingress and egress.

 

B.                                    Limitations.  Tenant
shall not permit any odors, smoke, dust, gas, substances, noise or vibrations
to emanate from the Premises or from any portion of the common areas as a
result of Tenant’s or any Tenant’s Party’s use thereof, nor take any action
which would constitute a nuisance or would disturb, obstruct or endanger any
other tenants or occupants of the Building or Project or elsewhere, or
interfere with their use of their respective premises or common areas.  Storage outside the Premises of materials,
vehicles or any other items is prohibited. Tenant shall not use or allow the
Premises to be used for any immoral, improper or unlawful purpose, nor shall
Tenant cause or maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer the commission of any waste in, on or about
the Premises.  Tenant shall not allow any
sale by auction upon the Premises, or place any loads upon the floors, walls or
ceilings which could endanger the structure, or place any harmful substances in
the drainage system of the Building or Project. 
No waste, materials or refuse shall be dumped upon or permitted to
remain outside the Premises. Landlord shall not be responsible to Tenant for
the non-compliance by any other tenant or occupant of the Building or Project
with any of the above-referenced rules or any other terms or provisions of such
tenant’s or occupant’s lease or other contract.

 

C.                                    Compliance with Regulations.  By
taking possession of the Premises, Tenant accepts the Premises in the condition
existing as of the date of such entry. Tenant shall at its sole cost and
expense strictly comply with all existing or future applicable municipal, state
and federal and other governmental statutes, rules, requirements, regulations,
laws and ordinances, including zoning ordinances and regulations, and
covenants, casements and restrictions of record governing and relating to the
use, occupancy or possession of the Premises, to Tenant’s use of the common
areas, or to the use, storage, generation or disposal of Hazardous Materials
(hereinafter defined) (collectively “Regulations”)
subject to Tenant’s right to make the Tenant improvements outlined in Exhibit
C. Tenant shall at its sole cost and expense obtain any and all licenses or
permits necessary for Tenant’s use of the Premises.  Tenant shall at its sole cost and expense
promptly comply with the requirements of any board of fire underwriters or
other similar body now or hereafter constituted. Tenant shall not do or permit
anything to be done in, on, under or about the Project or bring or keep
anything which will in any way increase the rate of any insurance upon the
Premises, Building or Project or upon any contents therein or cause a
cancellation of said insurance or otherwise affect said insurance in any
manner.  Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any loss, cost, expense, damage, attorneys’ fees or
liability arising out of the failure of Tenant to comply with any Regulation.
Tenant’s obligations pursuant to the foregoing indemnity shall survive the
expiration or earlier termination of this Lease.

 

D.                                    Hazardous Materials.  As
used in this Lease, “Hazardous Materials”
shall include, but not be limited to, hazardous, toxic and radioactive
materials and those substances defined as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or other similar
designations in any Regulation.  Tenant
shall not cause, or allow any of Tenant’s Parties to cause, any Hazardous
Materials to be handled, used, generated, stored, released or disposed of in,
on, under or about the Premises, the Building or the Project or surrounding
land or environment in violation of any Regulations.  Tenant must obtain Landlord’s written consent
prior to the introduction of any Hazardous Materials onto the Project.
Notwithstanding the foregoing, Tenant may handle, store, use and dispose of
products containing small quantities of Hazardous Materials for “general office
purposes” (such as toner for copiers to the extent customary and necessary for
the Permitted Use of the Premises; provided that Tenant shall always handle,
store, use and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building, or Project or surrounding land or environment.  Tenant shall immediately notify Landlord in
writing of any Hazardous Materials’ contamination of any portion of the Project
of which Tenant becomes aware, whether or not caused by Tenant.  Landlord shall have the right at all reasonable
times and if Landlord determines in good faith that Tenant may not be in
compliance with this Paragraph 4.D to inspect the Premises and to conduct tests
and investigations to determine whether Tenant is in compliance with the
foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. 
Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord), protect and hold Landlord harmless from and against any and all
claims, liabilities, losses, costs, loss of rents, liens, damages, injuries or
expenses (including attorneys’ and consultants’ fees and court costs), demands,
causes of action, or judgments directly or indirectly rising out of or related
to the use, generation, storage, release, or disposal of Hazardous Materials by
Tenant or any of Tenant’s Parties in, on, under or about the Premises, the
Building or the Project or surrounding land or environment, which indemnity
shall include, without limitation, damages for personal or bodily injury, property
damage, damage to the environment or natural resources occurring on or off the
Premises, losses attributable to diminution in value or adverse effects on
marketability, the cost of any investigation, monitoring, government oversight,
repair, removal, remediation, restoration, abatement, and disposal, and the
preparation of any closure or other required plans, whether such action is
required or necessary prior to or following the expiration or earlier
termination of this Lease.  Neither the
consent by Landlord to the use, generation, storage, release or disposal of
Hazardous Materials nor the strict compliance by Tenant with all laws
pertaining to Hazardous Materials shall excuse Tenant from Tenant’s obligation
of indemnification pursuant to this Paragraph 4.D.  Tenant’s obligations pursuant to the
foregoing indemnity shall survive the expiration or earlier termination of this
Lease.

 

5.                                      RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as Exhibit A
and any other rules and regulations and any modifications or additions thereto
which Landlord may from time to time prescribe in writing for the purpose of
maintaining the proper care, cleanliness, safety, traffic flow and general
order of the Premises or the Building or Project.  Tenant shall cause Tenant’s Parties to comply
with such rules and regulations. Landlord shall not be responsible to Tenant
for the non-compliance by any other tenant or occupant of the Building or
Project with any of such rules and regulations, any other tenant’s or
occupant’s lease or any Regulations.

 

6.                                      RENT

 

A.                                    Base Rent.  Tenant
shall pay to Landlord and Landlord shall receive, without notice or demand
throughout the Term, Base Rent as specified in the Basic Lease Information,
payable in monthly installments in advance on or before the fifth day of each
calendar month, in lawful money of the United States, without deduction or
offset whatsoever, at the Remittance Address specified in the Basic Lease
Information or to such other place as Landlord may from time to time designate
in writing.  Base Rent for the first full
month of the Term shall be paid by Tenant on or before the regularly scheduled
due date therefor.  If the obligation for
payment of Base Rent commences on a day other than the first day of a month,
then Base Rent shall be prorated and the prorated installment shall be paid on
the first day of the calendar month next succeeding the Term Commencement Date.
The Base Rent payable by Tenant hereunder is subject to adjustment as provided
elsewhere in this Lease, as applicable. 
As used herein, the term “Base Rent” shall mean the Base Rent specified
in the Basic Lease Information as it may be so adjusted from time to time.

 

B.                                    Additional Rent.  All
monies other than Base Rent required to be paid by Tenant hereunder, including,
but not limited to, Tenant’s Proportionate Share of Operating Expenses, as
specified in Paragraph 7 of this Lease, charges to be paid by Tenant under
Paragraph 15, the interest and late charge described in Paragraphs 26.D and E,
and any monies spent by Landlord pursuant to Paragraph 30, shall be considered
additional rent (“Additional Rent”).  “Rent”
shall mean Base Rent and Additional Rent.

 

5

 

7.                                      OPERATING EXPENSES

 

A.                                    Operating Expenses.  In
addition to the Base Rent required to be paid hereunder, beginning with the
expiration of the Base Year specified in the Basic Lease Information (the “Base Year”), Tenant shall pay as Additional
Rent, Tenant’s Proportionate Share of the Building and/or Project (as
applicable), as defined in the Basic Lease Information, of increases in
Operating Expenses (defined below) over the Operating Expenses incurred by
Landlord during the Base Year (the “Base Year
Operating Expenses”), in the manner set forth below. Tenant shall
pay the applicable Tenant’s Proportionate Share of each such Operating
Expenses. Landlord and Tenant acknowledge that if the number of buildings which
constitute the Project increases or decreases, or if physical changes are made
to the Premises, Building or Project or the configuration of any thereof,
Landlord may at its discretion reasonably adjust Tenant’s Proportionate Share
of the Building or Project to reflect the change. Landlord’s determination of
Tenant’s Proportionate Share of the Building and of the Project shall be
conclusive so long as it is reasonably and consistently applied. “Operating Expenses” shall mean all expenses
and costs of every kind and nature which Landlord shall pay or become obligated
to pay, because of or in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building or
Project and its supporting facilities and such additional facilities now and in
subsequent years as may be determined by Landlord to be necessary or desirable
to the Building and/or Project (as determined in a reasonable manner) other
than those expenses and costs which are specifically attributable to Tenant or
which are expressly made the financial responsibility of Landlord or specific
tenants of the Building or Project pursuant to this Lease. Operating Expenses
shall include, but are not limited to, the following:

 

(1)                                 Taxes.  All
real property taxes and assessments, possessory interest taxes, sales taxes,
personal property taxes, business or license taxes or fees, gross receipts
taxes, service payments in lieu of such taxes or fees, annual or periodic
license or use fees, excises, transit charges, and other impositions, general
and special, ordinary and extraordinary, unforeseen as well as foreseen, of any
kind (including fees “in-lieu” of any such tax or assessment) which are now or
hereafter assessed, levied, charged, confirmed, or imposed by any public
authority upon the Building or Project, its operations or the Rent (or any
portion or component thereof), or any tax, assessment or fee imposed in
substitution, partially or totally, of any of the above.  Operating Expenses shall also include any
taxes, assessments, reassessments, or other fees or impositions with respect to
the development, leasing, management, maintenance, alteration, repair, use or
occupancy of the Premises, Building or Project or any portion thereof,
including, without limitation, by or for Tenant, and all increases therein or
reassessments thereof whether the increases or reassessments result from
increased rate and/or valuation (whether upon a transfer of the Building or
Project or any portion thereof or any interest therein or for any other
reason). Operating Expenses shall not include inheritance or estate taxes
imposed upon or assessed against the interest of any person in the Project, or
taxes computed upon the basis of the net income of any owners of any interest
in the Project. If it shall not be lawful for Tenant to reimburse Landlord for
all or any part of such taxes, the monthly rental payable to Landlord under
this Lease shall be revised to net Landlord the same net rental after
imposition of any such taxes by Landlord as would have been payable to Landlord
prior to the payment of any such taxes.

 

(2)                                 Insurance.  All
insurance premiums and costs, including, but not limited to, any deductible
amounts, premiums and other costs of insurance incurred by Landlord, including
for the insurance coverage set forth in Paragraph 8.A herein.

 

(3)                                 Common Area Maintenance.

 

(a)                                  Repairs, replacements, and general maintenance
of and for the Building and Project and public and common areas and facilities
of and comprising the Building and Project, including, but not limited to, the
roof and roof membrane, windows, elevators, restrooms, conference rooms, health
club facilities, lobbies, mezzanines, balconies, mechanical rooms, building
exteriors, alarm systems, pest extermination, landscaped areas, parking and
service areas, driveways, sidewalks, loading areas, fire sprinkler systems,
sanitary and storm sewer lines, utility services, heating/ventilation/air
conditioning systems, electrical, mechanical or other systems, telephone
equipment and wiring servicing, plumbing, lighting, and any other items or
areas which affect the operation or appearance of the Building or Project,
which determination shall be at Landlord’s reasonable discretion, except for:
those items to the extent paid for by the proceeds of insurance; and those items
attributable solely or jointly to specific tenants of the Building or Project.

 

(b)                                  Repairs, replacements, and general maintenance
shall include the cost of any improvements made to or assets acquired for the
Project or Building that in Landlord’s discretion may reduce any other
Operating Expenses, including present or future repair work, are reasonably
necessary for the health and safety of the occupants of the Building or
Project, or for the operation of the Building systems, services and equipment, or
are required to comply with any Regulation, such costs or allocable portions
thereof to be amortized over such reasonable period as Landlord shall
determine, together with interest on the unamortized balance at the publicly
announced “prime rate” charged by Wells Fargo Bank, N.A. (San Francisco) or its
successor at the time such improvements or capital assets are constructed or
acquired, plus two (2) percentage points, or in the absence of such prime rate,
then at the U.S. Treasury six-month market note (or bond, if so designated)
rate as published by any national financial publication selected by Landlord,
plus four (4) percentage points, but in no event more than the maximum rate
permitted by law, plus reasonable financing charges.

 

(c)                                  Payment under or for any easement, license,
permit, operating agreement, declaration, restrictive covenant or instrument
relating to the Building or Project.

 

(d)                                  All expenses and rental related to services
and costs of supplies, materials and equipment used in operating, managing and
maintaining the Premises, Building and Project, the equipment therein and the
adjacent sidewalks, driveways, parking and service areas, including, without
limitation, expenses related to service agreements regarding security, fire and
other alarm systems, janitorial services, window cleaning, elevator
maintenance, Building exterior maintenance, landscaping and expenses related to
the administration, management and operation of the Project, including without
limitation salaries, wages and benefits and management office rent.

 

(e)                                  The cost of supplying any services and
utilities which benefit all or a portion of the Premises, Building or Project,
including without limitation services and utilities provided pursuant to
Paragraph 15 hereof.

 

(f)                                    Legal expenses and the cost of audits by
certified public accountants; provided, however, that legal expenses chargeable
as Operating Expenses shall not include the cost of negotiating leases,
collecting rents, evicting tenants nor shall it include costs incurred in legal
proceedings with or against any tenant or to enforce the provisions of any
lease.

 

(g)                                 A management and accounting cost recovery fee
equal to five percent (5%) of the sum of the Project’s revenues.

 

If
the rentable area of the Building and/or Project is not fully occupied during
the Base Year or any fiscal year of the Term as determined by Landlord, an
adjustment shall be made in computing the Operating Expenses for such year so
that Tenant pays an equitable portion of

 

6

 

all
variable items (e.g., utilities, janitorial services and other component
expenses that are affected by variations in occupancy levels) of Operating
Expenses, as reasonably determined by Landlord; provided, however, that in no
event shall Landlord be entitled to collect in excess of one hundred percent
(100%) of the total Operating Expenses from all of the tenants in the Building
or Project, as the case may be.

 

Operating
Expenses shall not include the cost of providing tenant improvements or other
specific costs incurred for the account of, separately billed to and paid by
specific tenants of the Building or Project, the initial construction cost of
the Building, or debt service on any mortgage or deed of trust recorded with
respect to the Project other than pursuant to Paragraph 7.A(3)(b) above.  Notwithstanding anything herein to the
contrary, in any instance wherein Landlord, in Landlord’s discretion, deems
Tenant to be responsible for any amounts greater than Tenant’s Proportionate
Share, Landlord shall have the right to allocate costs in any manner Landlord
deems appropriate.  Operating expenses
shall also by way of example, but not limitation, not include (i) depreciation,
amortization and interest payments by Landlord, (ii) brokerage commissions, finder’s fees, attorneys’ fees,
space planning costs and other costs incurred by Landlord in leasing or
attempting to lease space in the Building, (iii) Landlord’s general corporate
overhead (other than fee provided for in Section 7(3)(g) above.

 

The
above enumeration of services and facilities shall not be deemed to impose an
obligation on Landlord to make available or provide such services or facilities
except to the extent if any that Landlord has specifically agreed elsewhere in
this Lease to make the same available or provide the same. Without limiting the
generality of the foregoing, Tenant acknowledges and agrees that it shall be
responsible for providing adequate security for its use of the Premises, the
Building and the Project and that Landlord shall have no obligation or
liability with respect thereto, except to the extent if any that Landlord has
specifically agreed elsewhere in this Lease to provide the same.

 

B.                                    Payment of Estimated
Operating Expenses.  “Estimated
Operating Expenses” for any particular year shall mean Landlord’s
estimate of the Operating Expenses for such fiscal year made with respect to
such fiscal year as hereinafter provided. Landlord shall have the right from
time to time to revise its fiscal year and interim accounting periods so long
as the periods as so revised are reconciled with prior periods in a reasonable
manner. During the last month of each fiscal year during the Term, or as soon
thereafter as practicable, Landlord shall give Tenant written notice of the
Estimated Operating Expenses for the ensuing fiscal year. Tenant shall pay
Tenant’s Proportionate Share of the difference between Estimated Operating
Expenses and Base Year Operating Expenses with installments of Base Rent for
the fiscal year to which the Estimated Operating Expenses applies in monthly
installments on the first day of each calendar month during such year, in
advance. Such payment shall be construed to be Additional Rent for all purposes
hereunder. If at any time during the course of the fiscal year, Landlord
determines that Operating Expenses are projected to vary from the then
Estimated Operating Expenses by more than five percent (5%), Landlord may, by
written notice to Tenant, revise the Estimated Operating Expenses for the
balance of such fiscal year, and Tenant’s monthly installments for the
remainder of such year shall be adjusted so that by the end of such fiscal year
Tenant has paid to Landlord Tenant’s Proportionate Share of the revised
difference between Estimated Operating Expenses and Base Year Operating
Expenses for such year, such revised installment amounts to be Additional Rent
for all purposes hereunder.

 

C.                                    Computation of Operating
Expense Adjustment.  “Operating
Expense Adjustment” shall mean the difference between Estimated
Operating Expenses and actual Operating Expenses for any fiscal year, over Base
Year Operating Expenses, determined as hereinafter provided.  Within one hundred twenty (120) days after
the end of each fiscal year, or as soon thereafter as practicable, Landlord
shall deliver to Tenant a statement of actual Operating Expenses for the fiscal
year just ended, accompanied by a computation of Operating Expense
Adjustment.  If such statement shows that
Tenant’s payment based upon Estimated Operating Expenses is less than Tenant’s
Proportionate Share of actual increases in Operating Expenses over the Base
Year Operating Expenses, then Tenant shall pay to Landlord the difference
within twenty (20) days after receipt of such statement, such payment to
constitute Additional Rent for all purposes hereunder.  If such statement shows that Tenant’s
payments of Estimated Operating Expenses exceed Tenant’s Proportionate Share of
actual increases in Operating Expenses over the Base Year Operating Expenses,
then (provided that Tenant is not in default under this Lease) Landlord shall
pay to Tenant the difference within twenty (20) days after delivery of such
statement to Tenant.  If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within twenty (20) days after the date of delivery of the
statement. Tenant’s obligation to pay increases in Operating Expenses over the
Base Year Operating Expenses shall commence on January 1 of the year
succeeding the Base Year.  Should this
Lease terminate at any time other than the last day of the fiscal year,
Tenant’s Proportionate Share of the Operating Expense Adjustment shall be
prorated based on a month of 30 days and the number of calendar months during
such fiscal year that this Lease is in effect. Tenant shall in no event be
entitled to any credit if Operating Expenses in any year are less than Base
Year Operating Expenses. Notwithstanding anything to the contrary contained in
Paragraph 7.A or 7.B, Landlord’s failure to provide any notices or statements
within the time periods specified in those paragraphs shall in no way excuse
Tenant from its obligation to pay Tenant’s Proportionate Share of increases in
Operating Expenses.

 

D.                                    Gross Lease.  This
shall be a gross Lease; however, it is intended that Base Rent shall be paid to
Landlord absolutely net of all costs and expenses other than Operating Expenses
each year equal to Tenant’s Proportionate Share of Base Year Operating
Expenses, except as otherwise specifically provided to the contrary in this
Lease. The provisions for payment of increases in Operating Expenses and the
Operating Expense Adjustment are intended to pass on to Tenant and reimburse Landlord
for all costs and expenses of the nature described in Paragraph 7.A incurred in
connection with the ownership, management, maintenance, repair, preservation,
replacement and operation of the Building and/or Project and its supporting
facilities and such additional facilities, in excess of the Base Year Operating
Expenses, now and in subsequent years as may be determined by Landlord to be
necessary or desirable to the Building and/or Project.

 

E.                                      Tenant Audit.  If
Tenant, shall dispute the amount set forth in any statement provided by
Landlord under Paragraph 7.B or 7.C above, Tenant shall have the right, not
later then thirty (30) days following receipt of such statement and upon the
condition that Tenant shall first deposit with Landlord the full amount in
dispute, to cause Landlord’s books and records with respect to Operating
Expenses for such fiscal year to be audited by certified public accountants
selected by Tenant and subject to Landlord’s reasonable right of approval. The
Operating Expense Adjustment shall be appropriately adjusted on the basis of
such audit. If such audit discloses a liability for a refund in excess of ten
percent (10%) of Tenant’s Proportionate Share of the Operating Expenses
previously reported, the cost of such audit shall be borne by Landlord;
otherwise the cost of such audit shall be paid by Tenant. If Tenant shall not
request an audit in accordance with the provisions of this Paragraph 7.E within
thirty (30) days after receipt of Landlord’s statement provided pursuant to Paragraph
7.B or 7.C, such statement shall be final and binding for all purposes hereof.
Tenant shall not in any manner disclose, provide or make available any
information revealed by the audit to any person or entity other than Tenant’s
accountants and legal advisors which shall be used for sole purpose of advising
Tenant only without Landlord’s prior written consent, which consent may be
withheld by Landlord in its sole and absolute discretion. The information
disclosed by the audit will be used by Tenant solely for the purpose of
evaluating Landlord’s books and records in connection with this Paragraph 7.E.

 

8.                                      INSURANCE AND INDEMNIFICATION

 

A.                                    Landlord’s Insurance.  All
insurance maintained by Landlord shall be for the sole benefit of Landlord and
under Landlord’s sole control.

 

7

 

(1)                                 Property Insurance. 
Landlord agrees to maintain property insurance insuring the Building
against damage or destruction due to risk including fire, vandalism, and
malicious mischief in an amount not less than the replacement cost thereof, in
the form and with deductibles and endorsements as selected by Landlord.  At its election, Landlord may instead (but
shall have no obligation to) obtain “All Risk” coverage, and may also obtain
earthquake, pollution, and/or flood insurance in amounts selected by Landlord.

 

(2)                                 Optional Insurance. 
Landlord, at Landlord’s option, may also (but shall have no obligation
to) carry (i) insurance against loss of rent, in an amount equal to the amount
of Base Rent and Additional Rent that Landlord could be required to abate to
all Building tenants in the event of condemnation or casualty damage for a
period of twelve (12) months; and (ii) liability insurance and such other
insurance as Landlord may deem prudent or advisable, in such amounts and on
such terms as Landlord shall determine. Landlord shall not be obligated to
insure, and shall have no responsibility whatsoever for any damage to, any
furniture, machinery, goods, inventory or supplies, or other personal property
or fixtures which Tenant may keep or maintain in the Premises, or any leasehold
improvements, additions or alterations within the Premises.

 

B.                                    Tenant’s Insurance.  Tenant
shall procure at Tenant’s sole cost and expense and keep in effect from the
date of this Lease and at all times until the end of the Term the following:

 

(1)                                 Property Insurance. 
Insurance on all personal property and fixtures of Tenant and all
improvements, additions or alterations made by or for Tenant to the Premises on
an “All Risk” basis, insuring such property for the full replacement value of
such property.

 

(2)                                 Liability Insurance. 
Commercial General Liability insurance covering bodily injury and
property damage liability occurring in or about the Premises or arising out of
the use and occupancy of the Premises and the Project, and any part of either,
and any areas adjacent thereto, and the business operated by Tenant or by any
other occupant of the Premises.  Such
insurance shall include contractual liability insurance coverage insuring all
of Tenant’s indemnity obligations under this Lease.  Such coverage shall have a minimum combined
single limit of liability of at least Two Million Dollars ($2,000,000.00), and
a minimum general aggregate limit of Three Million Dollars ($3,000,000.00),
with an “Additional Insured—Managers or Lessors of Premises Endorsement.” All
such policies shall be written to apply to all bodily injury (including death),
property damage or loss, personal and advertising injury and other covered
loss, however occasioned, occurring during the policy term, shall be endorsed
to add Landlord and any party holding an interest to which this Lease may be
subordinated as an additional insured, and shall provide that such coverage
shall be “primary” and
non-contributing with any insurance maintained by Landlord, which shall be
excess insurance only. Such coverage shall also contain endorsements including
employees as additional insureds if not covered by Tenant’s Commercial General
Liability Insurance.  All such insurance
shall provide for the severability of interests of insureds; and shall be
written on an “occurrence” basis,
which shall afford coverage for all claims based on acts, omissions, injury and
damage, which occurred or arose (or the onset of which occurred or arose) in
whole or in part during the policy period.

 

(3)                                 Workers’ Compensation and
Employers’ Liability Insurance.  Workers’ Compensation Insurance as required
by any Regulation, and Employers’ Liability Insurance in amounts not less than
One Million Dollars ($1,000,000) each accident for bodily injury by accident;
One Million Dollars ($1,000,000) policy limit for bodily injury by disease; and
One Million Dollars ($1,000,000) each employee for bodily injury by disease.

 

(4)                                 Commercial Auto Liability
Insurance.  Commercial auto liability insurance with a
combined limit of not less than One Million Dollars ($1,000,000) for bodily
injury and property damage for each accident. 
Such insurance shall cover liability relating to any auto (including
owned, hired and non-owned autos).

 

(5)                                 Alterations Requirements.  In the
event Tenant shall desire to perform any Alterations, Tenant shall deliver to
Landlord, prior to commencing such Alterations (i) evidence satisfactory to
Landlord that Tenant carries “Builder’s Risk” insurance covering construction
of such Alterations in an amount and form approved by Landlord, (ii) such other
insurance as Landlord shall nondiscriminatorily require, and (iii) a lien and
completion bond or other security in form and amount satisfactory to Landlord.

 

(6)                                 General Insurance
Requirements.  All coverages described in this Paragraph 8.B
shall be endorsed to (i) provide Landlord with thirty (30) days’ notice of
cancellation or change in terms; and (ii) waive all rights of subrogation by
the insurance carrier against Landlord. If at any time during the Term the
amount or coverage of insurance which Tenant is required to carry under this
Paragraph 8.B is, in Landlord’s reasonable judgment, materially less than the
amount or type of insurance coverage typically carried by owners or tenants of
properties located in the general area in which the Premises are located which
are similar to and operated for similar purposes as the Premises or if Tenant’s
use of the Premises should change with or without Landlord’s consent, Landlord
shall have the right to require Tenant to increase the amount or change the
types of insurance coverage required under this Paragraph 8.B. All insurance
policies required to be carried by Tenant under this Lease shall be written by
companies rated A X or better in “Best’s Insurance Guide” and authorized to do
business in the State of California. In any event deductible amounts under all
insurance policies required to be carried by Tenant under this Lease shall not
exceed Five Thousand Dollars ($5,000.00) per occurrence. Tenant shall deliver
to Landlord on or before the Term Commencement Date, and thereafter at least
thirty (30) days before the expiration dates of the expired policies, certified
copies of Tenant’s insurance policies, or a certificate evidencing the same
issued by the insurer thereunder; and, if Tenant shall fail to procure such
insurance, or to deliver such policies or certificates, Landlord may, at
Landlord’s option and in addition to Landlord’s other remedies in the event of
a default by Tenant hereunder, procure the same for the account of Tenant, and
the cost thereof shall be paid to Landlord as Additional Rent.

 

Indemnification.  Tenant
shall indemnify, defend by counsel reasonably acceptable to Landlord, protect
and hold Landlord, Spieker Properties, Inc., and each of their respective
directors, shareholders, partners, lenders, members, managers, contractors,
affiliates and employees (collectively, “Landlord
Indemnitees”) harmless from and against any and all claims,
liabilities, losses, costs, loss of rents, liens, damages, injuries or
expenses, including reasonable attorneys’ and consultants’ fees and court
costs, demands, causes of action, or judgments, directly or indirectly arising out
of or related to: (1) claims of injury to or death of persons or damage to
property or business loss occurring or resulting directly or indirectly from
the use or occupancy of the Premises, Building or Project by Tenant or Tenant’s
Parties, or from activities or failures to act of Tenant or Tenant’s Parties;
(2) claims arising from work or labor performed, or for materials or supplies
furnished to or at the request or for the account of Tenant in connection with
performance of any work done for the account of Tenant within the Premises or
Project; (3) claims arising from any breach or default on the part of Tenant in
the performance of any covenant contained in this Lease; and (4) claims arising
from the negligence or intentional acts or omissions of Tenant or Tenant’s
Parties. The foregoing indemnity by Tenant shall not be applicable to claims to
the extent arising from the gross negligence or willful misconduct of Landlord.
Landlord shall not be liable to Tenant and Tenant hereby waives all claims
against Landlord for any injury to or death of, or damage to any person or
property or business loss in or about the Premises, Building or Project by or
from any cause whatsoever (other than Landlord’s gross negligence or willful
misconduct) and, without limiting the generality of the foregoing, whether

 

8

 

caused by water leakage of any character from
the roof, walls, basement or other portion of the Premises, Building or
Project, or caused by gas, fire, oil or electricity in, on or about the
Premises, Building or Project, acts of God or of third parties, or any matter
outside of the reasonable control of Landlord. 
Landlord shall indemnify, defend by counsel reasonably acceptable to
Tenant, protect and hold Tenant lenders, members, managers, contractors,
affiliates, and employees (collectively, tenant indemnitees), harmless from and against any
and all claims, liabilities, losses, costs, damages, injuries or expenses,
including reasonable attorneys’ and consultants’ fees and court costs, demands,
causes of action, or judgments arising out of or relating to the gross
negligence or willful misconduct of Landlord or Landlord’s agents, employees or
invitees.  Notwithstanding, the foregoing
or anything to the contrary contained in this Lease.  Landlord shall in no event be liable to
Tenant and Tenant hereby waives all claims against Landlord for any injury or
damage to the person or property in or about the Premises, Building or Project,
including without limitation the common areas, whether caused by theft, the
rain or water leakage of any character from the roof, walls, plumbing,
sprinklers, pipes, basement or any other portion of the Premises, Building or
Project, or caused by gas, fire, oil or electricity in, on, or about the
Premises, Building or Project, or from any other systems except in each case to
the extent caused by the gross negligence or willful misconduct of Landlord or
by acts of God (including without limitation flood or earthquake), acts of a
public enemy, riot, strike, insurrection, war, court order, requisition or
order of governmental body or authority or from any cause whatsoever, or for
any damage or inconvenience which may arise through repair subject to and
except as expressly otherwise provided in Paragraph 9 or 10 of this Lease
[except to the extent caused directly by the gross negligence or willful
misconduct of Landlord].  In addition,
Landlord shall in no event be liable for (i) injury to Tenant’s business or any
loss of income or profit therefrom or from consequential damages, or (ii) sums
up to the amount of insurance proceeds received by Tenant, the foregoing
indemnity by Landlord shall not be applicable to claims to the extent arising
from the negligence or willful misconduct of Tenant or Tenant’s Parties.  The foregoing indemnity by Landlord shall
survive the expiration or earlier termination of this Lease.  The provisions of this Paragraph shall
survive the expiration or earlier termination of this Lease.

 

9.                                      WAIVER OF SUBROGATION

 

Landlord and Tenant each waives any claim,
loss or cost it might have against the other for any injury to or death of any
person or persons, or damage to or theft, destruction, loss, or loss of use of
any property (a “Loss”), to the
extent the same is insured against (or is required to be insured against under
the terms hereof) under any property damage insurance policy covering the
Building, the Premises, Landlord’s or Tenant’s fixtures, personal property,
leasehold improvements, or business, regardless of whether the negligence of
the other party caused such Loss.

 

10.                               LANDLORD’S REPAIRS AND MAINTENANCE

 

Landlord shall maintain in good repair,
reasonable wear and tear excepted, the structural soundness of the roof,
foundations, and exterior walls of the Building. The term “exterior walls” as
used herein shall not include windows, glass or plate glass, doors, special
store fronts or office entries. Any damage caused by or repairs necessitated by
any negligence or act of Tenant or Tenant’s Parties may be repaired by Landlord
at Landlord’s option and Tenant’s expense. Tenant shall immediately give
Landlord written notice of any defect or need of repairs in such components of
the Building for which Landlord is responsible, after which Landlord shall have
a reasonable opportunity and the right to enter the Premises at all reasonable
times to repair same. Landlord’s liability with respect to any defects,
repairs, or maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant’s business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises, the Building or the Project or to fixtures,
appurtenances or equipment in the Building, except as provided in Paragraph 24.
By taking possession of the Premises, Tenant accepts them “as is,” as being in
good order, condition and repair and the condition in which Landlord is
obligated to deliver them and suitable for the Permitted Use and Tenant’s
intended operations in the Premises, whether or not any notice of acceptance is
given.

 

11.                               TENANT’S REPAIRS AND MAINTENANCE

 

Tenant shall at all times during the Term at
Tenant’s expense maintain all parts of the Premises and such portions of the
Building as are within the exclusive control of Tenant in a first-class, good,
clean and secure condition and promptly make all necessary repairs and replacements,
as reasonably determined by Landlord, with materials and workmanship of the
same character, kind and quality as the original. Notwithstanding anything to
the contrary contained herein, Tenant shall, at its expense, promptly repair
any damage to the Premises or the Building or Project resulting from or caused
by any negligence or act of Tenant or Tenant’s Parties.

 

12.                               ALTERATIONS

 

A.                                    Tenant shall not
make, or allow to be made, any alterations, physical additions, improvements or
partitions, including without limitation the attachment of any fixtures or
equipment, in, about or to the Premises (“Alterations”)
in excess of $2,500 without obtaining the prior written consent of Landlord,
which consent shall not be unreasonably withheld with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord’s reasonable opinion, compatible with the Building or the Project and
its mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems, and will not cause the Building or Project or such systems to be
required to be modified to comply with any Regulations (including, without
limitation, the Americans With Disabilities Act); and (c) will not interfere
with the use and occupancy of any other portion of the Building or Project by
any other tenant or its invitees. Specifically, but without limiting the
generality of the foregoing, except as provided above, Landlord shall have the
right of written consent for all plans and specifications for the proposed
Alterations, construction means and methods, all appropriate permits and
licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose rules
and regulations for contractors and subcontractors performing such work. Tenant
shall also supply to Landlord any documents and information reasonably
requested by Landlord in connection with Landlord’s consideration of a request
for approval hereunder. Tenant shall cause all Alterations to be accomplished
in a first-class, good and workmanlike manner, and to comply with all
applicable Regulations and Paragraph 27 hereof. Tenant shall atTenant’s sole expense, perform any
additional work required under applicable Regulations due to Alterations
hereunder. No review or consent by Landlord of or to any proposed Alteration or
additional work shall constitute a waiver of Tenant’s obligations under this
Paragraph 12, nor constitute any warranty or representation that the same
complies with all applicable Regulations, for which Tenant shall at all times
be solely responsible. Tenant shall reimburse Landlord for all costs which
Landlord may incur in connection with granting approval to Tenant for any such
Alterations, including any costs or expenses which Landlord may incur in
electing to have outside architects and engineers review said plans and
specifications, and shall pay Landlord an administration fee of fifteen percent
(15%) if under $500 and eight percent (8%) if over $500of the cost of the Alterations as
Additional Rent hereunder. All such Alterations shall remain the property of
Tenant until the expiration or earlier termination of this Lease, at which time
they shall be and become the property of Landlord; provided, however, that
Landlord may, at Landlord’s option, require that Tenant, at Tenant’s expense,
remove any or all Landlord non-authorized Alterations made by Tenant and
restore the Premises by the expiration or earlier termination of this Lease, to
their condition existing prior to the construction of any such Landlord
non-authorized Alterations. All such removals and restoration shall be
accomplished in a first-class and good and workmanlike manner so as not to
cause any damage to the Premises or Project whatsoever. If Tenant fails to
remove such Alterations or Tenant’s trade fixtures or furniture or other
personal

 

9

 

property,
Landlord may keep and use them or remove any of them and cause them to be
stored or sold in accordance with applicable law, at Tenant’s sole expense. In
addition to and wholly apart from Tenant’s obligation to pay Tenant’s
Proportionate Share of Operating Expenses, Tenant shall be responsible for and
shall pay prior to delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to or assessed
against its fixtures or personal property, on the value of Alterations within
the Premises, and on Tenant’s interest pursuant to this Lease, or any increase
in any of the foregoing based on such Alterations. To the extent that any such
taxes are not separately assessed or billed to Tenant, Tenant shall pay the
amount thereof as invoiced to Tenant by Landlord.

 

Notwithstanding
the foregoing, at Landlord’s option (but without obligation), all or any
portion of the Alterations shall be performed by Landlord for Tenant’s account
and Tenant shall pay Landlord’s estimate of the cost thereof (including a charge
for Landlord’s overhead and profit) prior to commencement of the work. In
addition, at Landlord’s election and notwithstanding the foregoing, however,
Tenant shall pay to Landlord the cost of removing any such Alterations and
restoring the Premises to their original condition such cost to include a
reasonable charge for Landlord’s overhead and profit as provided above, and
such amount may be deducted from the Security Deposit or any other sums or
amounts held by Landlord under this Lease.

 

B.                                    In compliance with Paragraph 27 hereof, at
least ten (10) business days before beginning construction of any Alteration,
Tenant shall give Landlord written notice of the expected commencement date of
that construction to permit Landlord to post and record a notice of
non-responsibility. Upon substantial completion of construction, if the law so
provides, Tenant shall cause a timely notice of completion to be recorded in
the office of the recorder of the county in which the Building is located.
Within thirty (30) days following substantial completion of any Alteration,
Tenant shall deliver two (2) complete sets of as-built drawings certified by
Tenant and Tenant’s contractor as being true and correct, which certification
shall survive the expiration or termination of this Lease.

 

13.                               SIGNS

 

Tenant
shall not place, install, affix, paint or maintain any signs, notices, graphics
or banners whatsoever or any window decor which is visible in or from public
view or corridors, the common areas or the exterior of the Premises or the
Building, in or on any exterior window or window fronting upon any common areas
or service area without Landlord’s prior written approval which Landlord shall
have the right to withhold in its absolute and sole discretion; provided that
Tenant’s name shall be included in any Building-standard door and directory
signage, if any, in accordance with Landlord’s Building signage program,
including without limitation, payment by Tenant of any fee charged by Landlord
for maintaining such signage, which fee shall constitute Additional Rent
hereunder. Any installation of signs, notices, graphics or banners on or about
the Premises or Project approved by Landlord shall be subject to any
Regulations and to any other requirements imposed by Landlord. Tenant shall
remove all such signs or graphics by the expiration or any earlier termination
of this Lease. Such installations and removals shall be made in such manner as
to avoid injury to or defacement of the Premises, Building or Project and any
other improvements contained therein, and Tenant shall repair any injury or
defacement including without limitation discoloration caused by such
installation or removal.

 

14.                               INSPECTION/POSTING NOTICES

 

After
giving twenty-four (24) hours written notice, except in emergencies where no
such notice shall be required, Landlord and Landlord’s agents and
representatives, shall have the right to enter the Premises to inspect the
same, to clean, to perform such work as may be permitted or required hereunder,
to make repairs, improvements or alterations to the Premises, Building or
Project or to other tenant spaces therein, to deal with emergencies, to post
such notices as may be permitted or required by law to prevent the perfection
of liens against Landlord’s interest in the Project or to exhibit the Premises
to prospective tenants, purchasers, encumbrances or to others, or for any other
purpose as Landlord may reasonably deem necessary or desirable; provided,
however, that Landlord shall use reasonable efforts not to unreasonably interfere
with Tenant’s business operations. Except as may be provided in Section 24
Tenant shall not be entitled to any abatement of Rent by reason of the exercise
of any such right of entry. Tenant waives any claim for damages for any injury
or inconvenience to or interference with Tenant’s business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby.  Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about
the Premises, excluding Tenant’s vaults and safes or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means which 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 be construed 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 portions thereof. At any time within six (6)
months prior to the expiration of the Term or following any earlier termination
of this Lease or agreement to terminate this Lease, Landlord shall have the
right to erect on the Premises, Building and/or Project a suitable sign
indicating that the Premises are available for lease.

 

15.                               SERVICES AND UTILITIES

 

A.                                    There currently exists
within or serving the Premises separate meters to determine the amount of
electricity supplied to the Premises, and Tenant shall pay to the appropriate
utility company the cost of all such electricity as shown by such meters IF any such
charges are not paid to the appropriate utility company when due, Landlord may
(but shall not be obligated to) pay the same, and any amount so paid by
Landlord shall thereupon become due to Landlord from Tenant, as additional
rent.  In addition, Tenant agrees to pay
directly to Landlord, in addition to Monthly Base Rent and Tenant’s Percentage
of Operating Expenses, any costs incurred by Landlord to maintain the HVAC
system serving the Building which are solely attributable to Tenant’s after
hour usage, as equitably determined by Landlord based on appropriate
engineering data.

 

B.                                    Provided Tenant shall not be in default
hereunder, and subject to the provisions elsewhere herein contained and to the
rules and regulations of the Building, Landlord shall furnish to the Premises
during ordinary business hours of generally recognized business days, to be
determined by Landlord (but exclusive, in any event, of Saturdays, Sundays and
legal holidays), heat and air conditioning as usually furnished or supplied for
use of the Premises for reasonable and normal office use as of the date Tenant
takes possession of the Premises (but not including above-standard or
continuous cooling for excessive heat-generating machines, excess lighting or
equipment), janitorial services during the times and in the manner that such
services are, in Landlord’s judgment, customarily furnished in comparable
office buildings in the immediate market area, Landlord shall provide water for
lavatory and drinking purposes, electricity and elevator service which shall
mean service either by nonattended
automatic elevators or elevators with attendants, or both, at the option of
Landlord, twenty-four (24) hours per day seven (7) days per week.  Elevator service and access to the Building
after normal business hours shall be provided by access controlled security
cards.  Tenant acknowledges that Tenant has
inspected and accepts the water, electricity, heat and air conditioning and
other utilities and services being supplied or furnished to the Premises as of
the date Tenant takes possession of the Premises, as being sufficient for use
of the Premises for reasonable and normal office use in their present
condition, “as is,” and suitable for the Permitted Use, and for Tenant’s
intended operations in the Premises. Landlord shall have no obligation to
provide additional or after-hours heating or air conditioning in addition to
the heating and air conditioning being provided on the date of this Lease, but
if Landlord elects to provide such services at Tenant’s request, Tenant shall
pay upon demand to Landlord a reasonable charge for such services as determined
by Landlord. Tenant agrees to keep and cause to be kept closed all window
covering when necessary because of the sun’s position, and

 

10

 

Tenant
also agrees at all times to cooperate fully with Landlord and to abide by all
of the regulations and requirements which Landlord may reasonably prescribe for
the proper functioning and protection of electrical, heating, ventilating and
air conditioning systems.  Wherever
heat-generating machines, excess lighting or equipment are used in the Premises
which affect the temperature otherwise maintained by the air conditioning
system, Landlord reserves the right to install supplementary air conditioning
units in the Premises and the cost thereof, including the cost of installation
and the cost of operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.

 

C.                                    Tenant shall not without written consent of
Landlord use any apparatus, equipment or device in the Premises, using excess
lighting or using electric current, water, or any other resource in excess of
or which will in any way increase the amount of electricity, water, or any
other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, in each case as of the date Tenant takes
possession of the Premises and as reasonably determined by Landlord, or which
will require additions or alterations to or interfere with the Building power
distribution systems; nor connect with electric current, except through
existing electrical outlets in the Premises or water pipes, any apparatus,
equipment or device for the purpose of using electrical current, water, or any
other resource. If Tenant shall require water or electric current or any other
resource in excess of that being furnished or supplied for the use of the
Premises as of the date Tenant takes possession of the Premises as determined
by Landlord, Tenant shall first procure the written consent of Landlord which
Landlord may refuse, to the use thereof, and Landlord may cause a special meter
to be installed in the Premises so as to measure the amount of water, electric
current or other resource consumed for any such other use. Tenant shall pay
directly to Landlord upon demand as an addition to and separate from payment of
Operating Expenses the cost of all such additional resources, energy, utility
service and meters (and of installation, maintenance and repair thereof and of
any additional circuits or other equipment necessary to furnish such additional
resources, energy, utility or service). Landlord may add to the separate of
metered charge a recovery of additional expense incurred in keeping account of
the excess water, electric current or other resource so consumed Landlord
agrees that Tenant’s use of the Premises prior to the date of this Lease has
not been such as to warrant the installation of a water meter to measure
Tenant’s water consumption and that so long as Tenant’s use of the Premises
remains reasonably consistent with such prior use.  Landlord will not install any water meter to
measure Tenant’s water consumption unless requested to do so by Tenant.  Following receipt of Tenant’s request to do
so, Landlord shall use good faith efforts to restore any service specifically
to beprovided under Paragraph
15 that becomes unavailable and which is in Landlord’s reasonable control to
restore; provided, however, that except to the extent caused by of gross
negligence or willful misconduct Landlord shall in no case be liable for any
damages directly or indirectly resulting from nor shall the Rent or any monies
owed Landlord under this Lease herein reserved be abated by reason of: (a) the
installation, use or interruption of use of any equipment used in connection
with the furnishing of any such utilities or services, or any change in the
character or means of supplying or providing any such utilities or services or
any supplier thereof; (b) the failure to furnish or delay in furnishing any
such utilities or services when such failure or delay is caused by acts of God
or the elements, labor disturbances of any character, or otherwise or because
of any interruption of service due to Tenant’s use of water, electric current
or other resource in excess of that being supplied or furnished for the use of
the Premises as of the date Tenant takes possession of the Premises; (c) the
inadequacy, limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or Project, whether by Regulation or otherwise;
or (d) the partial or total unavailability of any such utilities or services to
the Premises or the Building or the diminution in the quality or quantity
thereof, whether by Regulation or otherwise; or (c) any interruption in
Tenant’s business operations as a result of any such occurrence; nor shall any
such occurrence constitute an actual or constructive eviction of Tenant or a
breach of an implied warranty by Landlord. 
Landlord shall further have no obligation to protect or preserve any
apparatus, equipment or device installed by Tenant in the Premises, including
without limitation by providing additional or after-hours heating or air
conditioning. Landlord shall be entitled to cooperate voluntarily and in a
reasonable manner with the efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or other resource consumption.
The obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program. In addition, Landlord
reserves the right to change the supplier or provider of any such utility or
service from time to time. Tenant shall have no right to contract with or
otherwise obtain any electrical or other such service for or with respect to
the Premises or Tenant’s operations therein from any supplier or provider of
any such service. Tenant shall cooperate with Landlord and any supplier or
provider of such services designated by Landlord from time to time to
facilitate the delivery of such services to Tenant at the Premises and to the
Building and Project, including without limitation allowing Landlord and
Landlord’s suppliers or providers, and their respective agents and contractors,
reasonable access to the Premises for the purpose of installing, maintaining,
repairing, replacing or upgrading such service or any equipment or machinery
associated therewith.

 

D.                                    Tenant shall pay, upon demand, for all
utilities furnished to the Premises, or if not separately billed to or metered
to Tenant, Tenant’s Proportionate Share of all charges jointly serving the
Project in accordance with Paragraph 7. All sums payable under this Paragraph
15shall constitute Additional
Rent hereunder.

 

E.                                      Tenant may contract separately with providers
of telecommunications or cellular products, systems or services for the
Premises.  Even though such products,
systems or services may be installed or provided by such providers in the
Building, in consideration for Landlord’s permitting such providers to provide
such services to Tenant, Tenant agrees that Landlord and the Landlord
Indemnitees shall in no event be liable to Tenant or any Tenant Party for any
damages of any nature whatsoever arising out of or relating to the products,
systems or services provided by such providers (or any failure, interruption,
defect in or loss of the same) or any acts or omissions of such providers in
connection with the same or any interference in Tenant’s business caused
thereby. Tenant waives and releases all rights and remedies against Landlord
and the Landlord Indemnitees that are inconsistent with the foregoing.

 

16.                               SUBORDINATION

 

Without
the necessity of any additional document being executed by Tenant for the
purpose of effecting a subordination, this Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases
or underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord’s
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates
for any reason or any mortgage or deed of trust is foreclosed or a conveyance
in lieu of foreclosure is made for any reason, Tenant shall, notwithstanding
any subordination, attorn to and become the Tenant of the successor in interest
to Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant’s attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, reasonably requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed
of trust, subject to such nondisturbance requirement. If requested in writing
by Tenant, Landlord shall use commercially reasonable efforts to obtain a
subordination, nondisturbance and attornment agreement for the benefit of
Tenant reflecting the foregoing from any ground landlord, mortgagee or
beneficiary, at Tenant’s expense, subject to such other reasonabe terms and
conditions as the ground landlord, mortgagee or beneficiary may require.

 

11

 

17.                               FINANCIAL STATEMENTS

 

At
the request of Landlord, Tenant shall provide to Landlord Tenant’s and any
guarantor’s current financial statements or other information discussing
financial worth of Tenant and any guarantor, which Landlord shall use solely
for purposes of this Lease and in connection with the ownership, management,
financing and disposition of the Project.

 

18.                               ESTOPPEL CERTIFICATE

 

Tenant
agrees from time to time, within ten (10) days after request of Landlord, to
deliver to Landlord, or Landlord’s designee, an estoppel certificate stating
that this Lease is in full force and effect, that this Lease has not been
modified (or stating all modifications, written or oral, to this Lease), the
date to which Rent has been paid, the unexpired portion of this Lease, that
there are no current defaults by Landlord or Tenant under this Lease (or
specifying any such defaults), that the leasehold estate granted by this Lease
is the sole interest of Tenant in the Premises and/or the land at which the
Premises are situated, and such other matters pertaining to this Lease as may
be reasonably requested by Landlord or any mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or Project or any interest therein.
Failure by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day period,
Landlord may execute and deliver such certificate on Tenant’s behalf and that
such certificate shall be binding on Tenant. 
Landlord and Tenant intend that any statement delivered pursuant to this
Paragraph may be relied upon by any mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or Project or any interest therein. The
parties agree that Tenant’s obligation to furnish such estoppel certificates in
a timely fashion is a material inducement for Landlord’s execution of this
Lease, and shall be an event of default (without any cure period that might be
provided under Paragraph 26.A(3) of this Lease) if Tenant fails to fully comply
or makes any material misstatement in any such certificate.

 

19.                               SECURITY DEPOSIT

 

Tenant
agrees to deposit with Landlord on or prior to February 1 2001, a security
deposit as stated in the Basic Lease Information (the “Security Deposit”), which sum shall be
held and owned by Landlord, without obligation to pay interest, as security for
the performance of Tenant’s covenants and obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of damages
incurred by Landlord in case of Tenant’s default. Upon the occurrence of any
event of default by Tenant, Landlord may from time to time, without prejudice
to any other remedy provided herein or by law, use such fund as a credit to the
extent necessary to credit against any arrears of Rent or other payments due to
Landlord hereunder, and any other damage, injury, expense or liability caused
by such event of default, and Tenant shall pay to Landlord, on demand, the
amount so applied in order to restore the Security Deposit to itsoriginal amount. Although the
Security Deposit shall be deemed the property of Landlord, any remaining
balance of such deposit shall be returned by Landlord to Tenant at such time
after termination of this Lease that all of Tenant’s obligations under this
Lease have been fulfilled, reduced by such amounts as may be required by
Landlord to remedy defaults on the part of Tenant in the payment of Rent or
other obligations of Tenant under this Lease, to repair damage to the Premises,
Building or Project caused by Tenant or any Tenant’s Parties and to clean the
Premises. Landlord is hereby granted a security interest in the Security
Deposit in accordance with applicable provisions of the California Commercial
Code.  Landlord may use and commingle the
Security Deposit with other funds of Landlord. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of any Regulations, now or hereinafter in force, which restricts the
amount or types of claim that a landlord may make upon a security deposit or
imposes upon a landlord (or its successors) any obligation with respect to the
handling or return of security deposits.

 

20.                               LIMITATION OF TENANT’S REMEDIES

 

The
obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of Landlord or of
the individual or other partners of Landlord or its or their partners,
directors, officers, or shareholders, and Tenant agrees to look solely to
Landlord’s interest in the Project for the recovery of any amount from
Landlord, and shall not look to other assets of Landlord nor seek recourse
against the assets of the individual or other partners of Landlord or its or
their partners, directors, officers or shareholders. Any lien obtained to
enforce any such judgment and any levy of execution thereon shall be subject
and subordinate to any lien, mortgage or deed of trust on the Project. Under no
circumstances shall Tenant have the right to offset against or recoup Rent or
other payments due and to become due to Landlord hereunder except as expressly
provided in this Lease, which Rent and other payments shall be absolutely due
and payable hereunder in accordance with the terms hereof. In no case shall
Landlord be liable to Tenant for any lost profits, damage to business, or any
form of special, indirect or consequential damage on account of any breach of
this Lease or otherwise, notwithstanding anything to the contrary contained in
this Lease.

 

21.                               ASSIGNMENT AND SUBLETTING

 

A.                                    (1)                                 General.  This
Lease has been negotiated to be and is granted as an accommodation to
Tenant.  Accordingly, this Lease is
personal to Tenant, and Tenant’s rights granted hereunder do not include the
right to assign this Lease or sublease the Premises, or to receive any excess,
either in installments or lump sum, over the Rent which is expressly reserved
by Landlord as hereinafter provided, except as otherwise expressly hereinafter
provided. Tenant shall not assign or pledge this Lease or sublet the Premises
or any part thereof, whether voluntarily or by operation of law, or permit the
use or occupancy of the Premises or any part thereof by anyone other than
Tenant, or suffer or permit any such assignment, pledge, subleasing or
occupancy, without Landlord’s prior written consent except as provided herein.
If Tenant desires to assign this Lease or sublet any or all of the Premises,
Tenant shall give Landlord written notice (the “Transfer Notice”) at least sixty (60) days prior to the
anticipated effective date of the proposed assignment or sublease, which shall
contain all of the information reasonably requested by Landlord to address
Landlord’s decision criteria specified hereinafter. Landlord shall then have a
period of thirty (30) days following receipt of the Transfer Notice to notify
Tenant in writing that Landlord elects either: (i) to terminate this Lease as
to the space so affected as of the date so requested by Tenant; or (ii) to
consent to the proposed assignment or sublease, subject, however, to Landlord’s
prior written consent of the proposed assignee or subtenant and of any related
documents or agreements associated with the assignment or sublease. If Landlord
should fail to notify Tenant in writing of such election within said period,
Landlord shall be deemed to have waived option (i) above, but written consent
by Landlord of the proposed assignee or subtenant shall still be required. If
Landlord does not exercise option (i) above, Landlord’s consent to a proposed
assignment or sublease shall not be unreasonably withheld. Consent to any
assignment or subletting shall not constitute consent to any subsequent
transaction to which this Paragraph 21 applies.

 

	
  (2)

  	
   

  	
  Conditions of Landlord’s Consent. 
  Without limiting the other instances in which it may be reasonable for
  Landlord to withhold Landlord’s consent to an assignment or subletting,
  Landlord and Tenant acknowledge that it shall be reasonable for Landlord to
  withhold Landlord’s consent in the following instances: if the proposed
  assignee does not agree to be bound by and assume the obligations of Tenant
  under this Lease in form and substance satisfactory to Landlord; the use of
  the Premises by such proposed assignee or subtenant would not be a Permitted
  Use or would violate any exclusivity or other arrangement which Landlord has
  with any other tenant or occupant or any Regulation or would increase the
  Occupancy Density or Parking Density of the Building or Project, or would
  otherwise result in an undesirable tenant mix for the Project as determined
  by Landlord; the proposed assignee or subtenant is not of sound financial
  condition as determined by Landlord in Landlord’s sole discretion; the

  

 

12

 

proposed assignee or subtenant is a governmental agency; the proposed
assignee or subtenant does not have a good reputation as a tenant of property
or a good business reputation; the proposed assignee or subtenant is a person
with whom Landlord is negotiating to lease space in the Project or is a present
tenant of the Project; the assignment or subletting would entail any
Alterations which would lessen the value of the leasehold improvements in the
Premises or use of any Hazardous Materials or other noxious use or use which
may disturb other tenants of the Project; or Tenant is in default of any obligation
of Tenant under this Lease, or Tenant has defaulted under this Lease on three
(3) or more occasions during any twelve (12) months preceding the date that
Tenant shall request consent. Failure by or refusal of Landlord to consent to a
proposed assignee or subtenant shall not cause a termination of this Lease.
Upon a termination under Paragraph 21.A(1)(i), Landlord may lease the Premises
to any party, including parties with whom Tenant has negotiated an assignment
or sublease, without incurring any liability to Tenant. At the option of
Landlord, a surrender and termination of this Lease shall operate as an
assignment to Landlord of some or all subleases or subtenancies. Landlord shall
exercise this option by giving notice of that assignment to such subtenants on
or before the effective date of the surrender and termination. In connection
with each request for assignment or subletting, Tenant shall pay to Landlord
Landlord’s standard fee, for approving such requests, as well as all costs
incurred by Landlord or any mortgagee or ground lessor in approving each such
request and effecting any such transfer, including, without limitation,
reasonable attorneys’ fees. Landlord’s standard fee as of the date of this
Lease is seven hundred fifty dollars ($750.00).

 

(3)                                  Permitted
Transfers.  An “Affiliate” means any
entity that (i) controls, is controlled by, or is under common control with Tenant, (ii) results from the transfer of
all or substantially all of Tenant’s assets or stock, or (iii) results from the
merger or consolidation of Tenant with another entity.  “Control” means the direct or indirect
ownership of more than fifty percent (50%) of the voting securities of an
entity or possession of the right to vote more than fifty percent (50%) of the
voting interest in the ordinary direction of the entity’s affairs.  Notwithstanding anything to the contrary
contained in this Lease, Landlord’s consent is not required for any assignment
of this Lease or sublease of all or a portion of the Premises to an Affiliate
so long as the following conditions are met: (a) at least ten (10) business
days before any such assignment or sublease, Landlord receives written notice
of such assignment or sublease (as well as any documents or information
reasonably requested by Landlord regarding the proposed intended transfer and
the transferee): (b) Tenant is not then and has not been in default under this
Lease; (c) if the transfer is an assignment or any other transfer to an
Affiliate other than a sublease, the intended assignee assumes in writing all
of Tenant’s obligations under this Lease relating to the Premises in form
satisfactory to Landlord or, if the transfer is a sublease, the intended
sublessee accepts the sublease in form satisfactory to Landlord; (d) the
intended transferee has a tangible net worth, as evidenced by financial
statements delivered to Landlord and certified by an independent certified
public accountant in accordance with generally accepted accounting principles
that are consistently applied, at least equal to thirteen million
($13,000,000.00) dollars; (e) the Premises shall continue to be operated solely
for the use specified in the Basic Lease
Information; and (f) Tenant shall pay to Landlord Landlord’s standard fee for
approving assignments and
sublease and all costs reasonably incurred by Landlord or any mortgagee or
ground lessor for such assignment or subletting, including, without limitation,
reasonable attorneys’ fees.  No transfer
to an Affiliate in accordance with this subparagraph shall relieve Tenant named
herein of any obligation under this Lease or alter the primary liability of
Tenant named herein for the payment of Rent or for the performance of any other
obligation to be performed by Tenant, including the obligations contained in
Paragraph 25 with respect to any Affiliate.

 

B.                                    Bonus Rent.  Any
Rent or other consideration realized by Tenant under any such sublease or
assignment in excess of the Rent payable hereunder, after amortization of a
reasonable brokerage commission incurred by Tenant, shall be divided and paid,
fifty percent (50%) to Tenant, fifty percent (50%) to Landlord. In any
subletting or assignment undertaken by Tenant, Tenant shall diligently seek to
obtain the maximum rental amount available in the marketplace for comparable
space available for primary leasing.

 

C.                                    Corporation.  If
Tenant is a corporation, a transfer of corporate shares by sale, assignment,
bequest, inheritance, operation of law or other disposition (including such a
transfer to or by a receiver or trustee in federal or state bankruptcy,
insolvency or other proceedings) resulting in a change in the present control
of such corporation or any of its parent corporations by the person or persons
owning a majority of said corporate shares, shall constitute an assignment for purposes
of this Lease.  Notwithstanding anything
to the contrary in this Lease, the transfer of outstanding capital stock or
other listed equity interests, or the purchase of outstanding capital stock or
other listed equity interests, or
the purchase of equity interests issued in an initial public offering of stock,
by persons or parties other than “insiders” within the meaning of the
Securities Exchange Act of 1934, as amended, through the “over-the-counter”
market or any recognized national or international securities exchange shall
not be included in determining whether control has been transferred.  Notwithstanding the foregoing, Landlord
acknowledges that Tenant will be spun off from its parent corporation and that  such spin-off will result in a change of
control of Tenant.  Landlord agrees that
such spin-off shall be an acceptable assignment under this Lease. 

 

D.                                    Unincorporated Entity.  If
Tenant is a partnership, joint venture, unincorporated limited liability
company or other unincorporated business form, a transfer of the interest of
persons, firms or entities responsible for managerial control of Tenant by
sale, assignment, bequest, inheritance, operation of law or other disposition,
so as to result in a change in the present control of said entity and/or of the
underlying beneficial interests of said entity and/or a change in the identity
of the persons responsible for the general credit obligations of said entity
shall constitute an assignment for all purposes of this Lease.

 

E.                                      Liability.  No
assignment or subletting by Tenant, permitted or otherwise, shall relieve
Tenant of any obligation under this Lease or any guarantor of this Lease of any
liability under its guaranty or alter the primary liability of the Tenant named
herein for the payment of Rent or for the performance of any other obligations
to be performed by Tenant, including obligations contained in Paragraph 25with respect to any assignee or
subtenant.  Landlord may collect rent or
other amounts or any portion thereof from any assignee, subtenant, or other
occupant of the Premises, permitted or otherwise, and apply the net rent
collected to the Rent payable hereunder, but no such collection shall be deemed
to be a waiver of this Paragraph 21, or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the further
performance by Tenant of the obligations of Tenant under this Lease or any
guarantor of this Lease of any liability under its guaranty. Any assignment or
subletting which conflicts with the provisions hereof shall be void.

 

22.                               AUTHORITY

 

Landlord
represents and warrants that it has full right and authority to enter into this
Lease and to perform all of Landlord’s obligations hereunder and that all
persons signing this Lease on its behalf are authorized to do. Tenant
represents and warrants that Tenant has full right and authority and the person
or persons, if any, signing on behalf of Tenant, jointly and severally
represent and warrant that Tenant has full right and authority to enter into
this Lease, and to perform all of Tenant’s obligations hereunder, and that all
persons signing this Lease on its behalf are authorized to do so.

 

13

 

23.                               CONDEMNATION

 

A.                                    Condemnation Resulting in
Termination.  If the whole or any substantial part of the
Premises Building or Project should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking would prevent or materially interfere with the
Permitted Use of the Premises, either party shall have the right to terminate
this Lease at its option. If any material portion of the Building or Project is
taken or condemned for any public use under any Regulation, or by right of eminent
domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.

 

B.                                    Condemnation Not Resulting in
Termination.  If a portion of the Project of which the
Premises are a part should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu thereof,
and the taking prevents or materially interferes with the Permitted Use of the
Premises, and this Lease is not terminated as provided in Paragraph 23.A above,
the Rent payable hereunder during the unexpired portion of this Lease shall be
reduced, beginning on the date when the physical taking shall have occurred, to
such amount as may be fair and reasonable under all of the circumstances, but
only after giving Landlord credit for all sums received or to be received by
Tenant by the condemning authority. Notwithstanding anything to the contrary
contained in this Paragraph, if the temporary use or occupancy of any part of
the Premises shall be taken or appropriated under power of eminent domain
during the Term, this Lease shall be and remain unaffected by such taking or
appropriation and Tenant shall continue to pay in full all Rent payable
hereunder by Tenant during the Term; in the event of any such temporary
appropriation or taking, Tenant shall be entitled to receive that portion of
any award which represents compensation for the use of or occupancy of the
Premises during the Term. If the taking or appropriation is anticipated to last
for one hundred eighty (180) days or longer, then such taking or appropriation
shall not be deemed temporary and the other provisions of this Section 23 shall
apply.

 

C.                                    Award. 
Landlord shall be entitled to (and Tenant shall assign to Landlord) any
and all payment, income, rent, award or any interest therein whatsoever which
may be paid or made in connection with such taking or conveyance and Tenant
shall have no claim against Landlord or otherwise for any sums paid by virtue
of such proceedings, whether or not attributable to the value of any unexpired
portion of this Lease, except as expressly provided in this Lease.  Notwithstanding the foregoing, any
compensation specifically and separately awarded Tenant for Tenant’s personal
property and moving costs Tenant’s loss of good will or other damage to
Tenant’s business, shall be and remain the property of Tenant.

 

D.                                    Waiver of CCP§1265.130.  Each party waives the provisions of California Civil Code Procedure
Section 1265.130 allowing either party to petition the superior court to
terminate this Lease as a result of a partial taking.

 

24.                               CASUALTY DAMAGE

 

A.                                    General.  If the
Premises or Building should be damaged or destroyed by fire, tornado, or other
casualty (collectively, “Casualty”),Tenant shall give immediate written
notice thereof to Landlord. Within thirty (30) days after Landlord’s receipt of
such notice, Landlord shall notify Tenant whether in Landlord’s reasonable
estimation of the Premises can reasonably be restored to at least substantially
the condition that existed prior to the Casualty within one hundred eighty
(180) days from the date of such notice and receipt of required permits for
such restoration. Landlord’s determination shall be binding on Tenant.

 

B.                                    Within 180 Days.  If the Premises or Building should be damaged by Casualty to such extent
that restoration of the Premises to be at least substantially the condition
that existed prior to the Casualty can in Landlord’s estimation be reasonably
completed within one hundred eighty (180) days after the date of such notice
and receipt of required permits for such restoration, this Lease shall not
terminate. Provided that insurance proceeds are received by Landlord to fully
repair the damage, Landlord shall proceed to rebuild and repair the Premises
diligently to at least substantially its condition immediately prior to such
Casualty and in the manner determined by Landlord, except that Landlord shall
not be required to rebuild, repair or replace any part of any Alterations which
may have been placed on or about the Premises or paid for by Tenant unless
Landlord receives insurance proceeds specifically therefor.  If the Premises are untenantable in whole or
in part following such damage, the Rent payable hereunder during the period in
which they are untenantable shall be abated proportionately, but only to the
extent of rental abatement insurance proceeds received by Landlord during the
time and to the extent the Premises are unfit for occupancy.

 

C.                                    Greater than 180 Days.  If the
Premises or Building should be damaged by Casualty to such extent that
rebuilding or repairs cannot in Landlord’s estimation be reasonably completed
within one hundred eighty (180) days after receipt of required permits for
rebuilding or repair, and such damage materially and adversely interferes with
the conduct of Tenant’s business in the Premises, then either party shall have
the right to cancel this Lease by giving the other party written notice within
[ten (10)] days from the date of Landlord’s notice that material restoration of
the Premises cannot be made within such one hundred eighty (180) day period or
notice that Landlord has elected not to rebuild or repair the Premises.  Said cancellation shall be effective [thirty
(30)] days from the first day that either party gives its notice to
cancel.  If either party elects to so
cancel this Lease, Landlord shall proceed to rebuild and repair the Premises
diligently and in the manner determined by Landlord, except  that Landlord shall not be required to
rebuild, repair or replace any part of any Alterations which may have been
placed on or about the Premises by Tenant. 
If the Premises are untenantable in whole or in part following such
damage, the Rent payable hereunder during the period in which they are
untenantable shall be abated proportionately, but only to the extent of rent
abatement proceeds received by Landlord during the time and to the extent the
Premises are unfit for occupancy.

 

D.                                    Tenant’s Fault. 
Notwithstanding anything herein to the contrary, if the Premises or any
other portion of the Building are damaged by Casualty resulting from the fault,
negligence, or breach of this Lease by Tenant or any of Tenant’s Parties, Base
Rent and Additional Rent shall not be diminished during the repair of such
damage and Tenant shall be liable to Landlord for the cost and expense of the
repair and restoration of the Building caused thereby to the extent such cost
and expense is not covered by insurance proceeds.

 

E.                                      Insurance Proceeds. 
Notwithstanding anything herein to the contrary, if the Premises or
Building are damaged or destroyed and are not fully covered by the insurance
proceeds received by Landlord or if the holder of any indebtedness secured by a
mortgage or deed of trust covering the Premises requires that the insurance
proceeds be applied to such indebtedness, then in either case Landlord shall
have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to

 

14

 

Landlord
that said damage or destruction is not fully covered by insurance or such
requirement is made by any such holder, as the case may be, whereupon this
Lease shall terminate.

 

F.                                      Waiver.  This
Paragraph 24 shall be Tenant’s sole and exclusive remedy in the event of damage
or destruction to the Premises or the Building. As a material inducement to
Landlord entering into this Lease, Tenant hereby waives any rights it may have
under Sections 1932, 1933(4), 1941 or 1942 of the Civil Code of California with
respect to any destruction of the Premises, Landlord’s obligation for
tenantability of the Premises and Tenant’s right to make repairs and deduct the
expenses of such repairs, or under any similar law, statute or ordinance now or
hereafter in effect.

 

G.                                    Tenant’s Personal Property.  In the
event of any damage or destruction of the Premises or the Building, under no
circumstances shall Landlord be required to repair any injury or damage to, or
make any repairs to or replacements of, Tenant’s personal property unless
caused by the gross negligence or willful misconduct of Landlord.

 

H.                                    Damage Near End of Term. 
Landlord and Tenant shall each have the right to terminate this Lease if
there is a casualty affecting the Premises
or the Building and Tenant is unable to and does not use the Premises as a
result of such casualty, occurs during the last twelve (12) months of the term
of this Lease where Landlord reasonably estimates that the repair or
restoration of such casualty cannot be completed within ninety (90) days after
the date of such casualty.  Landlord and
Tenant shall each have the right to terminate this Lease if the Casualty
affecting the Premises or the Building and Tenant is unable to and does not use
the Premises as a result of such casualty, occurs during the last six months of
the term of this Lease where Landlord reasonably estimates that the repair of
restoration of such casualty cannot be completed within (60) days after the
date of such casualty.

 

25.                               HOLDING
OVER

 

Unless
Landlord expressly consents in writing to Tenant’s holding over, Tenant shall
be unlawfully and illegally in possession of the Premises, whether or not
Landlord accepts any rent from Tenant or any other person while Tenant remains
in possession of the Premises without Landlord’s written consent. If Tenant
shall retain possession of the Premises or any portion thereof without
Landlord’s consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such
retention one hundred twenty five percent (125%) of daily rental as of the last
month prior to the date expiration or earlier termination for the first thirty
(30) days, two hundred percent (200%) of daily rental as of the last month
prior to the date of expiration or earlier termination for the next thirty (30)
days and then triple the amount of daily rental as of the last month prior to
the date of expiration or earlier termination. Tenant shall also indemnify,
defend, protect and hold Landlord harmless from any loss, liability or cost,
including consequential and incidental damages and reasonable attorneys’ fees,
incurred by Landlord resulting from delay by Tenant in surrendering the
Premises, including, without limitation, any claims made by the succeeding
tenant founded on such delay. Acceptance of Rent by Landlord following
expiration or earlier termination of this Lease, or following demand by
Landlord for possession of the Premises, shall not constitute a renewal of this
Lease, and nothing contained in this Paragraph 25 shall waive Landlord’s right
of reentry or any other right. Additionally, if upon expiration or earlier
termination of this Lease, or following demand by Landlord for possession of
the Premises, Tenant has not fulfilled its obligation with respect to repairs
and cleanup of the Premises or any other Tenant obligations as set forth in
this Lease, then Landlord shall have the right to perform any such obligations
as it deems necessary at Tenant’s sole cost and expense, and any time required
by Landlord to complete such obligations shall be considered a period of
holding over and the terms of this Paragraph 25 shall apply. The provisions of
this Paragraph 25 shall survive any expiration or earlier termination of this
Lease.

 

26.                               DEFAULT BY TENANT

 

A.                                    Events of Default.  The
occurrence of any of the following shall constitute an event of default on the
part of Tenant:

 

(1)                                 Abandonment. 
Abandonment or vacation of the Premises for a continuous period in
excess of five (5) consecutive days. Tenant waives any right to notice Tenant
may have under Section 1951.3 of the Civil Code of the State of
California, the terms of this Paragraph 26.A being deemed such notice to Tenant
as required by said Section 1951.3.

 

(2)                                 Nonpayment of Rent. 
Failure to pay any installment of Rent or any other amount due and
payable hereunder within five (5) business days after written notice thereof
from Landlord of the date when said payment is due, as to which time is of the
essence.

 

(3)                                 Other Obligations. 
Failure to perform any obligation, agreement or covenant under this
Lease other than those matters specified in subparagraphs (1) and (2) of this
Paragraph 26.A, and in Paragraphs 8, 16, 18 and 25, such failure continuing for
thirty (30) days after written notice of such failure, as to which time is of
the essence.

 

(4)                                 General Assignment.  A
general assignment by Tenant for the benefit of creditors.

 

(5)                                 Bankruptcy.  The
filing of any voluntary petition in bankruptcy by Tenant, or the filing of an
involuntary petition by Tenant’s creditors, which involuntary petition remains
undischarged for a period of forty five (45) days.  If under applicable law, the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to perform
the obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure
all defaults of Tenant hereunder outstanding as of the date of the affirmance
of this Lease and provide to Landlord such adequate assurances as may be
necessary to ensure Landlord of the continued performance of Tenant’s obligations
under this Lease.

 

(6)                                 Receivership.  The
employment of a receiver to take possession of substantially all of Tenant’s
assets or Tenant’s leasehold of the Premises, if such appointment remains
undismissed or undischarged for a period of thirty (30) days after the order
therefor.

 

(7)                                 Attachment.  The
attachment, execution or other judicial seizure of all or substantially all of
Tenant’s assets or Tenant’s leasehold of the Premises, if such attachment or
other seizure remains undismissed or undischarged for a period of thirty (30)
days after the levy thereof.

 

(8)                                 Insolvency.  The
admission by Tenant in writing of its inability to pay its debts as they become
due.

 

B.                                    Remedies Upon Default.

 

(1)                                 Termination.  In the
event of the occurrence of any event of default, Landlord shall have the right
to give a written termination notice to Tenant, and on the date specified in
such notice, Tenant’s right to possession shall terminate, and this Lease shall
terminate unless on or before such date all Rent in arrears and all costs and
expenses incurred by or on behalf of Landlord hereunder shall have been paid by
Tenant and all other events of default of this Lease by Tenant at the time
existing shall have been fully remedied to the satisfaction of Landlord. At any
time after such termination, Landlord may recover possession of the

 

15

 

Premises or any part thereof and expel and remove therefrom Tenant and
any other person occupying the same, including any subtenant or subtenants
notwithstanding Landlord’s consent to any sublease, by any lawful means, and
again repossess and enjoy the Premises without prejudice to any of the remedies
that Landlord may have under this Lease, or at law or equity by any reason of
Tenant’s default or of such termination. Landlord hereby reserves the right,
but shall not have the obligation, to recognize the continued possession of any
subtenant. The delivery or surrender to Landlord by or on behalf of Tenant of
keys, entry codes, or other means to bypass security at the Premises shall not
terminate this Lease.

 

(2)                                 Continuation After Default.  Even
though an event of default may have occurred, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant’s right to possession
under Paragraph 26.B(1) hereof. Landlord shall have the remedy described in
California Civil Code Section 1951.4 (“Landlord may continue this Lease in
effect after Tenant’s breach and abandonment and recover Rent as it becomes
due, if Tenant has the right to sublet or assign, subject only to reasonable
limitations”), or any successor code section. 
Accordingly, if Landlord does not elect to terminate this Lease on
account of any event of default by Tenant, Landlord may enforce all of
Landlord’s rights and remedies under this Lease, including the right to recover
Rent as it becomes due.  Acts of
maintenance, preservation or efforts to lease the Premises or the appointment
of a receiver under application of Landlord to protect Landlord’s interest under
this Lease or other entry by Landlord upon the Premises shall not constitute an
election to terminate Tenant’s right to possession.

 

(3)                                 Increased Security Deposit.  If
Tenant is in default under Paragraph 26.A(2) hereof and such default remains
uncured for ten (10) days after such occurrence and such default occurs more
than three times in any twelve (12) month period, Landlord may require that
Tenant increase the Security Deposit to the amount of three times the current
month’s Rent at the time of the most recent default.

 

C.                                    Damages After Default.  Should
Landlord terminate this Lease pursuant to the provisions of Paragraph 26.B(1)
hereof, Landlord shall have the rights and remedies of a Landlord provided by
Section 1951.2 of the Civil Code of the State of California, or any
successor code sections. Upon such termination, in addition to any other rights
and remedies to which Landlord may be entitled under applicable law or at
equity, Landlord shall be entitled to recover from Tenant: (1) the worth at the
time of award of the unpaid Rent and other amounts which had been earned at the
time of termination, (2) the worth at the time of award of the amount by which
the unpaid Rent and other amounts that would have been earned after the date of
termination until the time of award exceeds the amount of such Rent loss that
Tenant proves could have been reasonably avoided; (3) the worth at the time of
award of the amount by which the unpaid Rent and other amounts for the balance
of the Term after the time of award exceeds the amount of such Rent loss that
the Tenant proves could be reasonably avoided; and (4) any other amount and
court costs necessary to compensate Landlord for all detriment proximately
caused by Tenant’s failure to perform Tenant’s obligations under this Lease or
which, in the ordinary course of things, would be likely to result
therefrom.  The “worth at the time of
award” as used in (1) and (2) above shall be computed at the Applicable
Interest Rate (defined below). The “worth at the time of award” as used in (3)
above shall be computed by discounting such amount at the Federal Discount Rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). If this Lease provides for any periods during the Term during
which Tenant is not required to pay Base Rent or if Tenant otherwise receives a
Rent concession, then upon the occurrence of an event of default, Tenant shall
owe to Landlord the full amount of such Base Rent or value of such Rent
concession, plus interest at the Applicable Interest Rate, calculated from the
date that such Base Rent or Rent concession would have been payable.

 

D.                                    Late Charge.  In
addition to its other remedies, Landlord shall have the right without notice or
demand to add to the amount of any payment required to be made by Tenant
hereunder, and which is not paid and received by Landlord on or before the
fifth day of each calendar month, an amount equal to five percent (5%) of the
delinquent amount, or $150.00, whichever amount is greater, for each month or
portion thereof that the delinquency remains outstanding to compensate Landlord
for the loss of the use of the amount not paid and the administrative costs
caused by the delinquency, the parties agreeing that Landlord’s damage by
virtue of such delinquencies would be extremely difficult and impracticable to
compute and the amount stated herein represents a reasonable estimate thereof.
Any waiver by Landlord of any late charges or failure to claim the same shall
not constitute a waiver of other late charges or any other remedies available
to Landlord.

 

E.                                      Interest. 
Interest shall accrue on all sums not paid when due hereunder at the
lesser of eighteen percent (18%) per annum or the maximum interest rate allowed
by law (“Applicable Interest Rate”)
from the due date until paid.

 

F.                                      Remedies Cumulative.  All
rights, privileges and elections or remedies of the parties are cumulative and
not alternative, to the extent permitted by law and except as otherwise
provided herein.

 

G.                                    Replacement of Statutory Notice
Requirements.  When this Lease requires service of a notice,
that notice shall replace rather than supplement any equivalent or similar
statutory notice, including any notice required by California Code of Civil
Procedure Section 1161 or any similar or successor statute.  When a statute requires service of a notice
in a particular manner, service of that notice (or a similar notice required by
this Lease) in the manner required by this Paragraph 26 shall replace and
satisfy the statutory service-of-notice procedures, including those required by
California Code of Civil Procedure Section 1162 or any similar or
successor statute.

 

27.                               LIENS

 

Tenant
shall at all times keep the Premises and the Project free from liens arising
out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the
Premises or Project.  If Tenant shall
not, within ten (10) days following the imposition of any such lien, cause the
same to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but not the obligation, to cause the same to be released by such means
as Landlord shall deem proper, including payment of the claim giving rise to
such lien. All sums paid by Landlord on behalf of Tenant and all expenses
incurred by Landlord in connection therefor shall be payable to Landlord by
Tenant on demand with interest at the Applicable Interest Rate as Additional
Rent. Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or which Landlord shall deem
proper, for the protection of Landlord, the Premises, the Project and any other
party having an interest therein, from mechanics’ and materialmen’s liens, and
Tenant shall give Landlord not less than ten (10) business days prior written
notice of the commencement of any work in the Premises or Project which could
lawfully give rise to a claim for mechanics’ or materialmen’s liens to permit
Landlord to post and record a timely notice of non-responsibility, as Landlord
may elect to proceed or as the law may from time to time provide, for which
purpose, if Landlord shall so determine, Landlord may enter the Premises.
Tenant shall not remove any such notice posted by Landlord without Landlord’s
consent, and in any event not before completion of the work which could
lawfully give rise to a claim for mechanics’ or materialmen’s liens.

 

28.                               SUBSTITUTION

 

 

16

 

29.                               TRANSFERS BY LANDLORD

 

In
the event of a sale or conveyance by Landlord of the Building or a foreclosure
by any creditor of Landlord, the same shall operate to release Landlord from
any liability upon any of the covenants or conditions, express or implied,
herein contained in favor of Tenant, to the extent required to be performed
after the passing of title to Landlord’s successor-in-interest. In such event,
Tenant agrees to look solely to the responsibility of the successor-in-interest
of Landlord under this Lease with respect to the performance of the covenants
and duties of “Landlord” to be performed after the passing of title to
Landlord’s successor-in-interest. This Lease shall not be affected by any such
sale and Tenant agrees to attorn to the purchaser or assignee. Landlord’s
successor(s)-in-interest shall not have liability to Tenant with respect to the
failure to perform any of the obligations of “Landlord,” to the extent required
to be performed prior to the date such successor(s)-in-interest became the
owner of the Building.

 

30.                               RIGHT OF LANDLORD
TO PERFORM TENANT’S COVENANTS

 

All
covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant’s sole cost and expense and
without any abatement of Rent. If Tenant shall fail to pay any sum of money,
other than Base Rent, required to be paid by Tenant hereunder or shall fail to
perform any other act on Tenant’s part to be performed hereunder, including
Tenant’s obligations under Paragraph 11 hereof, and such failure shall continue
for thirty (30) days after notice thereof by Landlord, in addition to the other
rights and remedies of Landlord, Landlord may make any such payment and perform
any such act on Tenant’s part. Notwithstanding the foregoing, if the nature of
Tenant’s obligation is such that more than thirty (30) days are required for
performance, then Landlord
shall not have the right to perform Tenant’s obligations so long as Tenant
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.  In the case of an emergency, no
priornotification by Landlord
shall be required. Landlord may take such actions without any obligation and
without releasing Tenant from any of Tenant’s obligations. All sums so paid by
Landlord and all incidental costs incurred by Landlord and interest thereon at
the Applicable Interest Rate, from the date of payment by Landlord, shall be
paid to Landlord on demand as Additional Rent.

 

31.                               WAIVER

 

If
either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease.  The
acceptance of Rent by Landlord (including, without limitation, through any
“lockbox”) shall not constitute a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, regardless of Landlord’s
knowledge of such preceding breach at the time Landlord accepted such Rent. Failure
by Landlord to enforce any of the terms, covenants or conditions of this Lease
for any length of time shall not be deemed to waive or decrease the right of
Landlord to insist thereafter upon strict performance by Tenant.  Waiver by Landlord of any term, covenant or
condition contained in this Lease may only be made by a written document signed
by Landlord, based upon full knowledge of the circumstances.

 

32.                               NOTICES

 

Each
provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to
the other shall be deemed to be complied with when and if the following steps
are taken:

 

A.                                    Rent.  All
Rent and other payments required to be made by Tenant to Landlord hereunder
shall be payable to Landlord at Landlord’s Remittance Address set forth in the
Basic Lease Information, or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith.  Tenant’s obligation to pay Rent and any other
amounts to Landlord under the terms of this Lease shall not be deemed satisfied
until such Rent and other amounts have been actually received by Landlord.

 

B.                                    Other.  All notices,
demands, consents and approvals which may or are required to be given by either
party to the other hereunder shall be in writing and either personally
delivered, sent by commercial overnight courier, mailed, certified or
registered, postage prepaid or sent by facsimile with confirmed receipt (and
with an original sent by commercial overnight courier), and in each case
addressed to the party to be notified at the Notice Address for such party as
specified in the Basic Lease Information or to such other place as the party to
be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party.  Notices
shall be deemed served upon receipt or refusal to accept delivery.  Tenant appoints as its agent to receive the
service of all default notices and notice of commencement of unlawful detainer
proceedings the person in charge of or apparently in charge of occupying the
Premises at the time, and, if there is no such person, then such service may be
made by attaching the same on the main entrance of the Premises.

 

C.                                    Required Notices.  Tenant
shall immediately notify Landlord in writing of any notice of a violation or a
potential or alleged violation of any Regulation that relates to the Premises
or the Project, or of any inquiry, investigation, enforcement or other action
that is instituted or threatened by any governmental or regulatory agency
against Tenant or any other occupant of the Premises, or any claim that is
instituted or threatened by any third party that relates to the Premises or the
Project.

 

33.                               ATTORNEYS’
FEES

 

If
Landlord places the enforcement of this Lease, or any part thereof, or the
collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord’s reasonable attorneys’ fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Tenant brings to enforce its respective rights hereunder, the unsuccessful
party shall pay all costs incurred by the prevailing party including reasonable
attorneys’ fees, to be fixed by the court, and said costs and attorneys’ fees
shall be a part of the judgment in said action.

 

34.                               SUCCESSORS AND ASSIGNS

 

This
Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant’s assigns.

 

17

 

35.                               FORCE
MAJEURE

 

If
performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes,
acts of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions, fire or
other casualty, or other causes beyond the reasonable control of the party
obligated to perform, performance by that party for a period equal to the
period of that prevention, delay, or stoppage is excused. Tenant’s obligation
to pay Rent, however, is not excused by this Paragraph 35.

 

36.                               SURRENDER OF PREMISES

 

Tenant
shall, upon expiration or sooner termination of this Lease, surrender the
Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, including, but not limited to, all interior
walls cleaned, all holes in walls repaired, and all floors cleaned, and free of
any Tenant-introduced marking or painting, all to the reasonable satisfaction
of Landlord. Tenant shall remove all of its debris from the Project. At or
before the time of surrender, Tenant shall comply with the terms of Paragraph
12.A hereof with respect to Alterations to the Premises and all other matters
addressed in such Paragraph. If the Premises are not so surrendered at the
expiration or sooner termination of this Lease, the provisions of Paragraph 25
hereof shall apply. All keys to the Premises or any part thereof shall be
surrendered to Landlord upon expiration or sooner termination of the Term.
Tenant shall give written notice to Landlord at least thirty (30) days prior to
vacating the Premises and shall meet with Landlord for a joint inspection of
the Premises at the time of vacating, but nothing contained herein shall be
construed as an extension of the Term or as a consent by Landlord to any
holding over by Tenant. In the event of Tenant’s failure to give such notice or
participate in such joint inspection, Landlord’s inspection at or after
Tenant’s vacating the Premises shall conclusively be deemed correct for
purposes of determining Tenant’s responsibility for repairs and restoration.
Any delay caused by Tenant’s failure to carry out its obligations under this
Paragraph 36 beyond the term hereof, shall constitute unlawful and illegal
possession of Premises under Paragraph 25 hereof.

 

37.                               PARKING

 

So long as Tenant is occupying the Premises, Tenant and Tenant’s Parties
shall have the right to use up to the number of parking spaces, if any,
specified in the Basic Lease Information on an unreserved, nonexclusive, first
come, first served basis, for passenger-size automobiles, in the parking areas
in the Project designated from time to time by Landlord for use in common by
tenants of the Building. The parking rights granted under this Paragraph 37 are
personal to Tenant and are not transferable except upon the express written
consent of Landlord.

 

Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
subject to such parking charges as Landlord shall determine, and shall
otherwise be subject to such terms and conditions as Landlord may require.

 

Tenant shall at all times comply and shall cause all Tenant’s Parties
and visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.

 

Landlord shall have no liability for any damage to property or other
items located in the parking areas of the Project, nor for any personal
injuries or death arising out of the use of parking areas in the Project by
Tenant or any Tenant’s Parties. Without limiting the foregoing, if Landlord arranges
for the parking areas to be operated by an independent contractor not
affiliated with Landlord, Tenant acknowledges that Landlord shall have no
liability for claims arising through acts or omissions of such independent
contractor. In all events, Tenant agrees to look first to its insurance carrier
and to require that Tenant’s Parties look first to their respective insurance
carriers for payment of any losses sustained in connection with any use of the
parking areas.

 

Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant’s Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking. Landlord also reserves the right to
alter, modify, relocate or close all or any portion of the parking areas in
order to make repairs or perform maintenance service, or to restripe or
renovate the parking areas, or if required by casualty, condemnation, act of
God, Regulations or for any other reason deemed reasonable by Landlord.

 

Tenant shall pay to Landlord (or Landlord’s parking contractor, if so
directed in writing by Landlord), as Additional Rent hereunder, the monthly
charges established from time to time by Landlord for parking in such parking
areas (which shall initially be the charge specified in the Basic Lease Information,
as applicable).  Such parking charges
shall be payable in advance with Tenant’s payment of Basic Rent. No deductions
from the monthly parking charge shall be made for days on which the Tenant does
not use any of the parking spaces entitled to be used by Tenant.

 

38.                               MISCELLANEOUS

 

A.                                    General.  The
term “Tenant” or any pronoun used in place thereof shall indicate and include
the masculine or feminine, the singular or plural number, individuals, firms or
corporations, and their respective successors, executors, administrators and
permitted assigns, according to the context hereof.

 

B.                                    Time.  Time
is of the essence regarding this Lease and all of its provisions.

 

C.                                    Choice of Law.  This
Lease shall in all respects be governed by the laws of the State of California.

 

D.                                    Entire Agreement.  This
Lease, together with its Exhibits, addenda and attachments and the Basic Lease
Information, contains all the agreements of the parties hereto and supersedes
any previous negotiations.  There have
been no representations made by the Landlord or understandings made between the
parties other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.

 

E.                                      Modification.  This
Lease may not be modified except by a written instrument signed by the parties
hereto. Tenant accepts the area of the Premises as specified in the Basic Lease
Information as the approximate area of the Premises for all purposes under this
Lease, and acknowledges and agrees that no other definition of the area
(rentable, usable or otherwise) of the Premises shall apply. Tenant shall in no
event be entitled to a recalculation of the square footage of the Premises,
rentable, usable or otherwise, and no recalculation, if made, irrespective of
its purpose, shall reduce Tenant’s obligations under this Lease in any manner,
including without limitation the amount of Base Rent payable by Tenant or
Tenant’s Proportionate Share of the Building and of the Project.

 

18

 

F.                                      Severability.  If,
for any reason whatsoever, any of the provisions hereof shall be unenforceable
or ineffective, all of the other provisions shall be and remain in full force
and effect.

 

G.                                    Recordation.  Tenant
shall not record this Lease or a short form memorandum hereof.

 

H.                                    Examination of Lease. 
Submission ofthis Lease
to Tenant does not constitute an option or offer to lease and this Lease is not
effective otherwise until execution and delivery by both Landlord and Tenant.

 

I.                                         Accord and Satisfaction.  No
payment by Tenant of a lesser amount than the total Rent due nor any
endorsement on any check or letter accompanying any check or payment of Rent
shall be deemed an accord and satisfaction of full payment of Rent, and
Landlord may accept such payment without prejudice to Landlord’s right to
recover the balance of such Rent or to pursue other remedies. All offers by or
on behalf of Tenant of accord and satisfaction are hereby rejected in advance.

 

J.                                      Easements. 
Landlord may grant casements on the Project and dedicate for public use
portions of the Project without Tenant’s consent; provided that no such grant
or dedication shall materially interfere with Tenant’s Permitted Use of the
Premises. Upon Landlord’s request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant’s covenants hereunder.

 

K.                                    Drafting and Determination
Presumption.  The parties acknowledge that this Lease has
been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in
this Lease or requested of Landlord, Landlord’s consent, determination or
estimation shall be given or made solely by Landlord in Landlord’s good faith
opinion, whether or not objectively reasonable. If Landlord fails to respond to
any request for its consent within the time period, if any, specified in this
Lease, Landlord shall be deemed to have disapproved such request.

 

L.                                     Exhibits.  The
Basic Lease Information, and the Exhibits, addenda and attachments attached
hereto are hereby incorporated herein by this reference and made a part of this
Lease as though fully set forth herein.

 

M.                                  No Light, Air or View
Easement.  Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.

 

N.                                    No Third Party Benefit.  This
Lease is a contract between Landlord and Tenant and nothing herein is intended
to create any third party benefit.

 

O.                                   Quiet Enjoyment.  Upon
payment by Tenant of the Rent, and upon the observance and performance of all
of the other covenants, terms and conditions on Tenant’s part to be observed
and performed, Tenant shall peaceably and quietly hold and enjoy the Premises
for the term hereby demised without hindrance or interruption by Landlord or
any other person or persons lawfully or equitably claiming by, through or under
Landlord, subject, nevertheless, to all of the other terms and conditions of
this Lease. Landlord shall not be liable for any hindrance, interruption,
interference or disturbance by other tenants or third persons, nor shall Tenant
be released from any obligations under this Lease because of such hindrance,
interruption, interference or disturbance.

 

P.                                     Counterparts.  This
Lease may be executed in any number of counterparts, each of which shall be
deemed an original.

 

Q.                                   Multiple Parties.  If
more than one person or entity is named herein as Tenant, such multiple parties
shall have joint and several responsibility to comply with the terms of this
Lease.

 

R.                                    Prorations.  Any
Rent or other amounts payable to Landlord by Tenant hereunder for any
fractional month shall be prorated based on a month of 30 days. As used herein,
the term “fiscal year” shall mean the calendar year or such other fiscal year
as Landlord may deem appropriate.

 

39.                               ADDITIONAL PROVISIONS

 

A.                                    Signage Rights

 

Tenant shall be entitled to Building Corner Monument Signage
located at the corner of Von Karman Avenue and Martin Street and any additional
signage located at the entrance to the parking structure that has been
previously granted to Primal by Landlord under separate agreement based on the
following conditions:

 

•                  Tenant is not in default beyond any applicable
cure periods

•                  Tenant
directly leases and occupies in excess of 13,000 square feet

•                  Tenant
shall be responsible for all costs associated with the installation,
maintenance and removal of the sign

 

The location, name, style, color, size, material and method of
attachment of such sign shall be subject to the prior written approval of
Landlord and must, in addition, comply with all applicable requirements of all
governmental authorities and private associations having jurisdictions. Tenant
shall be solely responsible, both as to performance and payment therefore, to
purchase, install, maintain and repair all of said signage. Upon expiration or
earlier termination of this Lease, Tenant shall remove such signs and repair
all damage to the building or property of Landlord occasioned thereby. In the
event Tenant fails to do so within thirty (30) days after the expiration or
earlier termination of this Lease, Landlord may remove such signs and effect
such repairs, and the cost thereof shall be additional rent by Tenant pursuant
to this Lease payable by Tenant to Landlord upon demand.

 

All of the signage rights shall be personal to the original Tenant,
Primal Solutions, and may not be assigned or sublet to any other party without
Landlord’s prior consent (which may be withheld in Landlord’s sole and absolute
discretion).

 

Tenant agrees to furthermore comply with all the terms and conditions
set forth by Landlord on Exhibit D attached hereto with respect to the
foregoing signage.

 

19

 

40.                               JURY
TRIAL WAIVER

 

EACH
PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF
THE COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED ON THIS
LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40.  THE PROVISIONS OF THIS PARAGRAPH 40 SHALL
SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE.

 

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

 

 

	
   

  	
  LANDLORD

  
	
   

  	
   

  
	
   

  	
  Spieker
  Properties, L.P.,

  a California limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Spieker
  Properties, Inc.,

  a Maryland corporation,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James R.Wodd

  	
   

  
	
   

  	
   

  	
   

  	
  James R.Wodd, Jr.

  
	
   

  	
   

  	
   

  	
  Its: Vice President

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  11-1-00

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
  Primal
  Solutions, Inc.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Salway

  	
   

  
	
   

  	
   

  	
  William Salway

  
	
   

  	
   

  	
  Its: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  10/30/00

  	
   

  
								

 

20

 

EXHIBIT
A

Rules
and Regulations

 

1.               Driveways,
sidewalks, halls, passages, exits, entrances, elevators, escalators and
stairways shall not be obstructed by tenants or used by tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways are not for the use of the general public
and Landlord shall in all cases retain the right to control and prevent access
thereto by all persons whose presence, in the judgment of Landlord, shall be
prejudicial to the safety, character, reputation and interests of the Building,
the Project and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom any tenant normally deals
in the ordinary course of such tenant’s business unless such persons are
engaged in illegal activities. No tenant, and no employees or invitees of any
tenant, shall go upon the roof of any Building, except as authorized by
Landlord. No tenant, and no employees or invitees of any tenant shall move any
common area furniture without Landlord’s consent.

 

2.               No
sign, placard, banner, picture, name, advertisement or notice, visible from the
exterior of the Premises or the Building or the common areas of the Building
shall be inscribed, painted, affixed, installed or otherwise displayed by
Tenant either on its Premises or any part of the Building or Project without
the prior written consent of Landlord in Landlord’s sole and absolute
discretion. Landlord shall have the right to remove any such sign, placard,
banner, picture, name, advertisement, or notice without notice to and at the
expense of Tenant, which were installed or displayed in violation of this rule.
If Landlord shall have given such consent to Tenant at any time, whether before
or after the execution of Tenant’s Lease, such consent shall in no way operate
as a waiver or release of any of the provisions hereof or of the Lease, and
shall be deemed to relate only to the particular sign, placard, banner,
picture, name, advertisement or notice so consented to by Landlord and shall
not be construed as dispensing with the necessity of obtaining the specific
written consent of Landlord with respect to any other such sign, placard,
banner, picture, name, advertisement or notice.

 

All approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person or vendor approved by
Landlord and shall be removed by Tenant at the time of vacancy at Tenant’s
expense.

 

3.               The
directory of the Building or Project will be provided exclusively for the display
of the name and location of tenants only and Landlord reserves the right to
charge for the use thereof and to exclude any other names therefrom.

 

4.               No
curtains, draperies, blinds, shutters, shades, screens or other coverings,
awnings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with, any window or door on the Premises without prior
written consent of Landlord. In any event with the prior written consent of
Landlord, all such items shall be installed inboard of Landlord’s standard
window covering and shall in no way be visible from the exterior of the
Building. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent or of a quality, type, design,
and bulb color approved by Landlord. No articles shall be placed or kept on the
window sills so as to be visible from the exterior of the Building. No articles
shall be placed against glass partitions or doors which Landlord considers
unsightly from outside Tenant’s Premises.

 

5.               Landlord
reserves the right to exclude from the Building and the Project, between the
hours of 6 p.m. and 8 a.m. and at all hours on Saturdays, Sundays and legal
holidays, all persons who are not tenants or their accompanied guests in the
Building. Each tenant shall be responsible for all persons for whom it allows
to enter the Building or the Project and shall be liable to Landlord for all
acts of such persons.

 

Landlord and its agents shall not be liable for damages
for any error concerning the admission to, or exclusion from, the Building or
the Project of any person.

 

During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord’s opinion,
Landlord reserves the right (but shall not be obligated) to prevent access to
the Building and the Project during the continuance of that event by any means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.

 

6.               All
cleaning and janitorial services for the Building and the Premises shall be
provided exclusively through Landlord. Except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall be
permitted to enter the Building for the purpose of cleaning the same. Tenant
shall not cause any unnecessary labor by reason of Tenant’s carelessness or
indifference in the preservation of good order and cleanliness of its Premises.
Landlord shall in no way be responsible to Tenant for any loss of property on
the Premises, however occurring, or for any damage done to Tenant’s property by
the janitor or any other employees or any other person.

 

7.               Tenant
shall see that all doors of its Premises are closed and securely locked and
must observe strict care and caution that all water faucets or water apparatus,
coffee pots or other heat-generating devices are entirely shut off before
Tenant or its employees leave the Premises, and that all utilities shall
likewise be carefully shut off, so as to prevent waste or damage. Tenant shall
be responsible for any damage or injuries sustained by other tenants or
occupants of the Building or Project or by Landlord for noncompliance with this
rule. On multiple-tenancy floors, all tenants shall keep the door or doors to
the Building corridors closed at all times except for ingress and egress.

 

8.               Tenant
shall not use any method of heating or air-conditioning other than that
supplied by Landlord. As more specifically provided in Tenant’s lease of the
Premises, Tenant shall not waste electricity, water or air-conditioning and
agrees to cooperate fully with Landlord to assure the most effective operation
of the Building’s heating and air-conditioning, and shall refrain from
attempting to adjust any controls other than room thermostats installed for
Tenant’s use.

 

9.               Landlord
will furnish Tenant free of charge with two keys to each door in the Premises.
Landlord may make a reasonable charge for any additional keys, and Tenant shall
not make or have made additional keys. Tenant shall not alter any lock or
access device or install a new or additional lock or access device or bolt on
any door of its Premises, without the prior written consent of Landlord. If
Landlord shall give its consent, Tenant shall in each case furnish Landlord
with a key for any such lock. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys for all doors which have been furnished to
Tenant, and in the event of loss of any keys so furnished, shall pay Landlord
therefor.

 

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

 

11.         Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.

 

21

 

12.         Tenant shall not use, keep or permit to be used or kept in its Premises
any foul or noxious gas or substance. Tenant shall not allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought or kept in or about the Premises, the
Building, or the Project.

 

13.         No cooking shall be done or permitted by any tenant on the Premises,
except that use by the tenant of Underwriters’ Laboratory (UL) approved
equipment, refrigerators and microwave ovens may be used in the Premises for
the preparation of coffee, tea, hot chocolate and similar beverages, storing
and heating food for tenants and their employees shall be permitted. All uses
must be in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations and the Lease.

 

14.         Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, typewriting or any similar business in or from
the Premises for the service or accommodation of occupants of any other portion
of the Building, nor shall the Premises be used for the storage of merchandise
or for manufacturing of any kind, or the business of a public barber shop,
beauty parlor, nor shall the Premises be used for any illegal, improper,
immoral or objectionable purpose, or any business or activity other than that
specifically provided for in such Tenant’s Lease.  Tenant shall not accept hairstyling,
barbering, shoeshine, nail, massage or similar services in the Premises or
common areas except as authorized by Landlord.

 

15.         If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain, and
comply with, Landlord’s instructions in their installation. The cost of
purchasing, installation and maintenance of such services shall be borne solely
by Tenant.

 

16.         Landlord with direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of
Landlord. The location of burglar alarms, telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the prior written
approval of Landlord.

 

17.         Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord’s consent. 
Tenant shall not interfere with radio or television broadcasting or
reception from or in the Building, the Project or elsewhere.

 

18.         Tenant shall not mark, or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or any part
thereof without Landlord’s consent. Tenant may install nails and screws in
areas of the Premises that have been identified for those purposes to Landlord
by Tenant at the time those walls or partitions were installed in the Premises.
Tenant shall not lay linoleum, tile, carpet or any other floor covering so that
the same shall be affixed to the floor of its Premises in any manner except as
approved in writing by Landlord. The expense of repairing any damage resulting
from a violation of this rule or the removal of any floor covering shall be
borne by the tenant by whom, or by whose contractors, employees or invitees,
the damage shall have been caused.

 

19.         No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or carried up or
down the elevators except between such hours and in such elevators as shall be
designated by Landlord.

 

Tenant shall not place a load upon any floor of its Premises which
exceeds the load per square foot which such floor was designed to carry or which
is allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all safes, furniture or other heavy equipment brought into the
Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on wood strips of such thickness as determined by Landlord to
be necessary to properly distribute the weight thereof. Landlord will not be
responsible for loss of or damage to any such safe, equipment or property from
any cause, and all damage done to the Building by moving or maintaining any
such safe, equipment or other property shall be repaired at the expense of
Tenant.

 

Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building shall be placed and maintained by
Tenant, at Tenant’s expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.

 

20.         Tenant may install, maintain and operate upon the Premises vending
machines to the employee break areas(s) so long as such vending machines are
intended solely for the use of Tenant and Tenant’s Parties.

 

21.         There shall not be used in any space, or in the public areas of the
Project either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using hand trucks shall be required to use the
freight elevator, or such elevator as Landlord shall designate. No other
vehicles of any kind shall be brought by Tenant into or kept in or about its
Premises.

 

22.         Each tenant shall store all its trash and garbage within the interior of
the Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that may not or cannot be disposed of in the
ordinary and customary manner of removing and disposing of trash and garbage in
the city, without violation of any law or ordinance governing such disposal.
All trash, garbage and refuse disposal shall be made only through entry-ways
and elevators provided for such purposes and at such times as Landlord shall
designate. If the Building has implemented a building-wide recycling program
for tenants, Tenant shall use good faith efforts to participate in said
program.

 

23.         Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited and each
tenant shall cooperate to prevent the same. No tenant shall make room-to-room
solicitation of business from other tenants in the Building or the Project,
without the written consent of Landlord.

 

24.         Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building and the
Project.

 

25.         Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord’s judgment, is under the influence of alcohol or drugs
or who commits any act in violation of any of these Rules and Regulations.

 

26.         Without the prior written consent of Landlord, Tenant shall not use the name
of the Building or the Project or any photograph or other likeness of the
Building or the Project in connection with, or in promoting or advertising,
Tenant’s business except that Tenant may include the Building’s or Project’s
name in Tenant’s address.

 

22

 

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

 

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

 

29.         The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and no
employees of Landlord will admit any person (tenant or otherwise) to any office
without specific instructions from Landlord.

 

30.         Landlord reserves the right to designate the use of the parking spaces
on the Project.  Tenant or Tenant’s
guests shall park between designated parking lines only, and shall not occupy
two parking spaces with one car. Parking spaces shall be for passenger vehicles
only; no boats, trucks, trailers, recreational vehicles or other types of
vehicles may be parked in the parking areas (except that trucks may be loaded
and unloaded in designated loading areas). 
Vehicles in violation of the above shall be subject to tow-away, at
vehicle owner’s expense.  Vehicles parked
on the Project [ILLEGIBLE] forty eight (48) hourswithout prior written consent of the Landlord shall be deemed
abandoned and shall be subject to tow-away at vehicle owner’s expense.  No tenant of the Building shall park in
visitor or reserved parking areas.  Any
tenant found parking in such designated visitor or reserved parking areas or
unauthorized areas shall be subject to tow-away at vehicle owner’s
expense.  The parking areas shall not be
used to provide car wash, oil changes, detailing, automotive repair or other
services unless otherwise approved or furnished by Landlord. Tenant will from time
to time, upon the request of Landlord, supply Landlord with a list of license
plate numbers of vehicles owned or operated by its employees or agents.

 

31.         No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects.  Smoking in the Project
is only permitted in smoking areas identified by Landlord, which may be
relocated from timeto time.

 

32.         If the Building furnishes common area conferences rooms for tenant
usage, Landlord shall have the right to control each tenant’s usage of the
conference rooms, including limiting tenant usage so that the rooms are equally
available to all tenants in the Building. Any common area amenities or
facilities shall be provided from time to time at Landlord’s discretion.

 

33.         Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.

 

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

 

35.         These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project.

 

36.         Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed asa waiver
of such Rules and Regulations in favor of any other tenant or tenants, nor
prevent Landlord from thereafter enforcing any such Rules and Regulations
against any or all tenants of the Building.

 

37.         Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building and the Project and for the
preservation of good order therein. Tenant agrees to abide by all such Rules
and Regulations herein stated and any additional rules and regulations which
are adopted.

 

23

 

EXHIBIT B

 

SITE
PLAN

 

 

FLOOR PLAN

 

 

24

 

SITE
PLAN

 

 

FLOOR
PLAN

 

 

25

 

EXHIBIT C

 

LEASE IMPROVEMENT AGREEMENT

 

This Lease Improvement Agreement (“Improvement
Agreement”) sets forth the terms and conditions relating to
construction of the initial tenant improvements described in the Plans to be
prepared and approved as provided below (the “Tenant
Improvements”) in the Premises. Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Lease (the “Lease”) to which this Improvement
Agreement is attached and forms a part.

 

1.                                       Base Building Work. Not Applicable.

 

2.                                       Plans and Specifications.

 

2.1.                              Tenant shall retain the services of the space
planner/architect of it’s choice and approved by Landlord (the “Space Planner”) to prepare a detailed
space plan (the “Space Plan”)-mutually
satisfactory to Landlord and Tenant for the construction of the Tenant
Improvements in the Premises. Tenant shall approve or disapprove the Space Plan
and any proposed revisions thereto in writing within three (3) business days
after receipt thereof, which approval shall not be unreasonably withheld.

 

2.2.                              Based on the approved Space Plan, Tenant shall
cause the Space Planner to prepare detailed plans, specifications and working drawings
for the construction of the Tenant Improvements (the “Plans”).  Landlord and
Tenant shall diligently pursue the preparation of the Plans.  Tenant shall approve or disapprove the Plans
and any proposed revisions thereto, including the estimated cost of the Tenant
Improvements, in writing within three (3) business days after receipt
thereof.  If Tenant fails to approve or
disapprove the Space Plan or Plans or any revisions thereto within the time
limits specified herein, Tenant shall be deemed to have approved the same.

 

2.3.                              Notwithstanding Landlord’s preparation, review
and approval of the Space Plan and the Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any errors or
omissions contained in the Space Plan or Plans, or to verify dimensions or
conditions, or for the quality, design or compliance with applicable Regulation
of any improvements described therein or constructed in accordance therewith.
Landlord hereby assigns to Tenant all warranties and guarantees by the Space
Planner or the contractor who constructs the Tenant Improvements relating to
the Tenant Improvements, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the design or construction of, the Tenant Improvements.

 

3.                                       Specifications for Standard Tenant
Improvements.

 

3.1.                              Specifications and quantities of standard
building components which will comprise and be used in the construction of the
Tenant Improvements (“Standards”)
are set forth in Schedule 2
to this Exhibit C. As used herein, “Standards” or “Building Standards” shall mean the standards for aparticular item selected from time
to time by Landlord for the Building, including those set forth on Schedule 2 of this Exhibit C, or such other standards of equal
or better quality as may be mutually agreed between Landlord and Tenant in
writing.

 

3.2.                              No deviations from the Standards are permitted
without Landlord prior written consent.

 

4.                                       Tenant Improvement Cost.

 

4.1.                              The cost of the Tenant Improvements beyond the
Tenant Improvement Allowance shall be paid for by Tenant, including, without
limitation, the cost of: Standards; space plans and studies; architectural and
engineering fees; permits, approvals and other governmental fees; labor,
material, equipment and supplies; construction fees and other amounts payable
to contractors or subcontractors; taxes; off-site improvements; remediation and
preparation of the Premises for construction of the Tenant Improvements; taxes;
filing and recording fees; premiums for insurance and bonds; attorneys’ fees;
financing costs; and all other costs expended or to be expended in the
construction of the Tenant Improvements, including those costs incurred for
construction of elements of the Tenant Improvements in the Premises, which
construction was performed by Landlord prior to the execution of the Lease or
for materials comprising the Tenant Improvements which were purchased by
Landlord prior to the execution of the Lease; and an administration fee of
[ILLEGIBLE] of the total cost of the Tenant Improvements.

 

4.2.                              Provided Tenant is not in default under the
Lease, including this Improvement Agreement, Landlord shall contribute a
one-time tenant improvement allowance not to exceed $7.50 per square foot of
premises (“Tenant Improvement Allowance”)
to be credited by Landlord toward the cost of the initial Tenant Improvements,
such Landlord approved Tenant Improvement must be completed during the 2001
calendar year.  If the cost of the Tenant
Improvements exceeds the Tenant Improvement Allowance, Tenant shall pay
Landlord such excess cost within three (3) business days after Landlord’s
notice to Tenant of such excess cost. No credit shall be given to Tenant if the
cost of the Tenant Improvements is less than the Tenant Improvement Allowance.

 

4.3.                              If the cost of the Tenant Improvements
increases beyond the Tenant Improvement Allowance after the Tenant’s approval
of the Plans due to the requirements of any governmental agency or applicable
Regulation or any other reason, Tenant shall pay Landlord the amount of such
increase within three (3) business days after notice from Landlord of such
increase.

 

4.4.                              If Tenant requests any change(s) in the Plans
after approval of the estimate of the cost of the Tenant Improvements and any
such requested changes are approved by Landlord in writing in Landlord’s sole
discretion, Landlord shall advise Tenant promptly of any cost increases and/or
delays such approved change(s) will cause in the construction of the Tenant
Improvements.  Tenant shall approve or
disapprove any or all such change(s) within three (3) business days after
notice from Landlord of such cost increases and/or delays.  To the extent Tenant disapproves any such
cost increase and/or delay attributable thereto, Landlord shall have the right,
in its sole discretion, to disapprove Tenant’s request for any changes to the
approved Plans. If the cost of the Tenant Improvements beyond the Tenant
Improvement Allowance increases due to any changes in the Plan(s) requested by
Tenant, Tenant shall pay Landlord the amount of such increase within three (3)
business days after notice from Landlord of such increase and Tenant’s approval
thereof in accordance with this Paragraph 4.4.

 

5.                                       Construction of Tenant Improvements.

 

5.1.                              Upon Tenant’s approval of the Plans including
the estimate of the cost of the Tenant Improvements and Landlord’s receipt of
payment of any such estimated cost exceeding the amount of the Tenant
Improvement Allowance, Landlord shall cause its contractor to proceed to secure
a building permit and commence construction of the Tenant Improvements provided
that Tenant shall cooperate with Landlord in executing permit applications and
performing other actions reasonably necessary to enable Landlord to obtain any
required permits or certificates of occupancy; and provided further that the
Building has in Landlord’s

 

26

 

discretion reached the stage of construction where it is appropriate to
commence construction of the Tenant Improvements in the Premises.

 

5.2.                              Without limiting the provisions of Paragraph
35 of the Lease, Landlord shall not be liable for any direct or indirect
damages suffered by Tenant as a result of delays in construction beyond
Landlord’s reasonable control, including, but not limited to, delays due to
strikes or unavailability of materials or labor, or delays caused by Tenant
(including delays by the Space Planner, the contractor or anyone else
performing services on behalf of Landlord or Tenant).

 

5.3.                              If any work is to be performed on the Premises
by Tenant or Tenant’s contractor or agents:

 

(a)          Such work shall proceed upon Landlord’s written approval of Tenant’s
contractor, public liability and property damage insurance carried by Tenant’s
contractor, and detailed plans and specifications for such work, shall be at
Tenant’s sole cost and expense and shall further be subject to the provisions
of Paragraphs 12 and 27 of the Lease.

 

(b)         All work shall be done in conformity with a valid building permit when
required, a copy of which shall be furnished to Landlord before such work is
commenced, and in any case, all such work shall be performed in accordance with
all applicable Regulations. 
Notwithstanding any failure by Landlord to object to any such work,
Landlord shall have no responsibility for Tenant’s failure to comply with all
applicable Regulations.

 

(c)          If required by Landlord or any lender of Landlord, all work by Tenant or
Tenant’s contractor or agents shall be done with union labor in accordance with
all union labor agreements applicable to the trades being employed.

 

(d)         All work by Tenant or Tenant’s contractor or agents shall be scheduled
through Landlord.

 

(e)          Tenant or Tenant’s contractor or agents shall arrange for necessary
utility, hoisting and elevator service with Landlord’s conductor and shall pay
such reasonable charges for such services as may be charged by Tenant’s or
Landlord’s contractor.

 

(f)            Tenant’s entry to the Premises for any
purpose, including, without limitation, inspection or performance of Tenant
construction by Tenant’s agents, prior to the date Tenant’s obligation to pay
rent commences shall be subject to all the terms and conditions of the Lease
except the payment of Rent. Tenant’s entry shall mean entry by Tenant, its
officers, contractors, licensees, agents, servants, employees, guests,
invitees, or visitors.

 

(g)         Tenant shall promptly reimburse Landlord upon demand for any reasonable
expense actually incurred by the Landlord by reason of faulty work done by
Tenant or its contractors or by reason of any delays caused by such work, or by
reason of inadequate clean-up.

 

6.                                       Completion and Rental Commencement Date.

 

6.1.                              Tenant’s obligation to pay Rent under the
Lease shall commence on the applicable date described in Paragraph 2 of the Lease.
However:

 

6.2.                              Promptly after substantial completion of the
Tenant Improvements, Landlord shall give notice to Tenant and Tenant shall
conduct an inspection of the Premises with a representative of Landlord and
develop with such representative of Landlord a punchlist of items of the Tenant
Improvements that are not complete or that require corrections. Upon receipt of
such punchlist, Landlord shall proceed diligently to remedy such items at
Landlord’s cost and expense provided such items are part of the Tenant
Improvements to be constructed by Landlord hereunder and are otherwise
consistent with Landlord’s obligations under this Improvement Agreement and
provided Tenant has fully paid Landlord for the cost of the Tenant Improvements
exceeding the Tenant Improvement Allowance (with any dispute between Landlord
and Tenant pertaining thereto to be resolved by the Space Planner or Landlord’s
general contractor). Substantial completion shall not be delayed
notwithstanding delivery of any such punchlist.

 

6.3.                              A default under
this Improvement Agreement shall constitute a default under the Lease, and the
parties shall be entitled to all
rights and remedies under the Lease in the event of a default hereunder by the
other party (notwithstanding that the Term thereof has not commenced).

 

6.4.                              Without limiting the “as-is” provisions of the
Lease, except for the Tenant Improvements, if any, to be constructed by
Landlord pursuant to this Improvement Agreement, Tenant accepts the Premises in
its “as-is” condition and acknowledges that it has had an opportunity to
inspect the Premises prior to signing the Lease.

 

27

 

SCHEDULE 1

TO EXHIBIT C

 

 

BUILDING
STANDARDS

 

 

The
following constitutes the Building Standard tenant improvements (“Standards”) for the building located at
18881Von Karman Avenue in Irvine,
California in the quantities specified:

 

I.                                         PARTITIONS:

 

Demising Partitions:

 

1.1                                 3
5/8” – 256A gauge metal studs – 24” on center.

1.2                                 5/8”
drywall one layer each side of studs. Height from floor slab to underside of
structure above. Partition taped smooth to receive paint or wall covering.
Seismic bracing per code.

1.3                                 Ball
insulation in cavity (RII)

 

Interior Partition:

 

1.1                                 3 5/8” – 25 gauge metal studs – 24” on center.

1.2                                 5/8” drywall one layer each side of studs.
Height from floor slab to ceiling grid + 8.5”.
Partition taped smooth to receive paint. Seismic bracing per code. Attach to
ceiling with 1/4” tee bolt as
required.

1.3                                 Western integrated extended aluminum top track,
bronze finish.

1.4                                 Sound
insulation over top of wall.

 

II.                                   DOOR ASSEMBLIES:

 

Corridor Door Assembly – Tenant

 

1.1                                 Door
– 3’0” x 8’0”, 20 minute label, stain grade mahogany faced veneer solid core.

1.2                                 Frame
– 3’0” x 8’0” Western Integrated extruded aluminum, 20 minute rated ICI whisper
white 939 with snap-in section @ head – 1 each.

1.3                                 Hardware
– Schlage Rhodes L9453 F20 I/L73 trim, hinges 2 PR Hager 1279 w/ 625 finish,
lever, latch, strike, floor stop and closer, 625 finish.

1.4                                 Finish
– stain and lacquer.

 

Interior Door – Assembly

 

1.1                                 Door
– 3’0” x 8’0” solid core stain grade mahogany faced veneer.

1.2                                 Frame
– 3’0” x8’0” Western
Integrated extruded aluminum with snap-in section at head- 1 each.

1.3                                 Hardware
– Schlage Rhodes L9010 F01 w/ L73 trim, hinges 2PR Hager 1279 w/ 625 finish,
level, strike, latch and floor stop, 625 finish.

1.4                                 Finish
– Stain and lacquer.

 

III.                                 ACOUSTICAL
CEILINGS:

 

1.1                                 2’
x 2’ Donn Fine Line Medium Duty, ceiling grid 8’-5” A.F.F. wire suspension per
code.

1.2                                 2’
x 2’ Armstrong use Acoustone 708 white glacier tile pattern with factory
Tengual edge with 5/16” shoulder flush with face of grid.

1.3                                 Hanger
Rods.

 

2’ x 4’ Fluorescent Light Fixture:

 

1.1                                 5
1/4”Recessed 2’x 4’ fluorescent fixture
3” deep 18 cell parabolic louver double door. Fixture uses Sylvania lamps (3)
F40 CW/RS/TI2.

1.2                                 Night
light same as type as 1.1 except has (I) 2 lamp ballast.

1.3                                 5
1/4”
deep 2’ x 2’ fluorescent fixture with 3” deep cell parabolic louver. Fixture
uses Sylvania lamps (2) F40CW/RS/T12.

1.4                                 Recessed
2’ x 4’ fluorescent fixture with 3” deep 9 cell parabolic louver. Boxed with
fire rated enclosure (1 1/2” minimum air space all
around the fixture and above the fixture housing).

1.5                                 Exit
sign white finish with red letters.

 

Down Lights and wall Washers for 120 volt
units:

 

1.1                                 Fluorescent
down light with Specular clear, or matte white reflector, Lightolier #1102DH
I/1113. Fixture uses (2) 13 watt quad tube lamps.

1.2                                 Fluorescent
wall washer with white reflector, Lightolier #1102DHI/1185. Fixture uses (2) 13
watt quad tube lamps.

 

28

 

Down Lights and wall Washers for 277 volt
units:

 

1.1                                 Fluorescent down light
with Specularclear, or matte
white reflector, Lightolier #1102DH2/1113. Fixture uses (2) 13 watt quad tube
lamps.

1.2                                 Fluorescent wall
washer with white reflector, Lightolier #1102DH2/1185. Fixture uses (2) 13 watt
quad tube lamps.

 

Data Wall Outlet:

 

1.1                                 Single gang box in
wall – mounted vertically.  3/4”
metal conduit up to plenum and stubbed out.

1.2                                 Cable and cover plate
by tenant’s installer.

 

IV.                                 HVAC:

 

Heating and Air Conditioning Distribution:  Design and engineering of system by
Landlord’s licensed mechanical contractor in accordance with Title XXIV
requirements.

 

1.1.                              Consist of approx. 20
water source heat pumps controlled via time clock for each floor; Paragon
EC74/50S.

1.2.                              Units are Manufactured by
McQuay, EnerCon, or Liebert; Ranging from 3/4
to 3 tons in size mounted horizontally in the Plenum.

1.3.                              Water source heat pumps
are 277v, 1, w/filters connected to the water loop riser piping with circuit
setters, flow switches, and copper condensate drain lines.

1.4.                              Installations consists of
electrical control panel interface wiring and relays supporting after hours
usage. Manual override timers allow operation of the system during off-hours.

1.5.                              Perimeter and interior
zones can be manually adjusted and the temperatures can be reset by whoever has
access to these thermostats (Operates in conjunction with Paragon system):
Honeywell #T874.

1.6.                              Distribution ductwork
conforms to NFPA 90A, air conditioning and ventilating systems. All supply
diffusers (4-way) and return grilles are similar through out the building.

1.7.                              Units installed for above
standard 24 hour air conditions are water source heat pumps or Liebert devices.

 

V.                                     PLUMBING:

 

1.1                                 Insta Hot – Chronomite
S-90-1, 277V single phase, 9KW.

1.2                                 Hot water heater –
Lochinvar #EJW-020-G, 277V, single phase, 2.5KW.

1.3                                 Sink – Jost
#DBW-2133-A-GR, 18 gauge stainless steel, self rimming, 17 gauge tubular brass
P-trap.

D.                                    Faucct – Moen
#7305, angle stope and supplied.

 

VI.                                 FIRE
SPRINKLERS:

 

A.                                   Fully-recessed heat
with chrome finish with chrome escutcheon cover plate.

 

VII.                             FIRE
LIFE SAFETY (PLANS PREPARED BY BUILDING ELECTRICAL ENGINEER):

 

A.                                   Ceiling mounted
recessed edge-lit illuminated exit signs Lithonia #F2RP-1-RW-277V (single
face).

B.                                     Fire sprinkler main.

 

1.1                                 Visual
Strobe – Edwards / 202 series, #7125-1388:208

1.2                                 Life Safety Speaker –
Wheelock / E-90-W, #7320-0785:134

1.3                                 Smoke Detector –System Sensor / 2451 (TII),
#7272-1209:131

1.4                                 Smoke Detector Base –
System Sensor / B401B, #7300-1209:128

1.5                                 Smoke Detector Base –
System Sensor / B406B, #7300-1209:128

1.6                                 Magnetic Door Holder –
Edwards / 1504-AQ, #3550-1388:100

 

VIII.                         WINDOW
COVERINGS:

 

A.                                   4” vertical blinds
eggshell satin (vinyl)

 

IX.                                FLOOR
COVERING:

 

A.                                   Carpet – Design
weave – Tempest Classic 32% over 5/16 Nova pad. 32 oz. office, 42 oz. Common
areas.

B.                                     V.C.T. –
Armstrong, standard Exce?on, 12 x 12.

 

X.                                    RUBBER
BASE:

 

A.                                   Sectioned (non-rolled)
4” straight (over carpet) or covered over V.C.T. by Burke or equal.

 

XI.                                PAINTING:

 

A.                                   Frazee two coats
flat interior latex paint.

B.                                     Painting completed
during non-business hours.

 

Note: the above “Building Standards” are outlined for conformity
purposes only and are not provided by Landlord. In addition, Landlord reserves
the right to revise these “Building Standards” at any time.

 

29

 

EXHIBIT D

 

Tenant’s
Exterior Signage

 

1.                                       In addition to any conditions or requirements
set forth in the Lease, Tenant shall not install the Tenant Exterior Signage or
thereafter replace or make alterations to Tenant’s Exterior Signage,
until:  (a) Landlord has approved in
writing the sign planner, engineer and installation company and professionally
prepared sign plans submitted by Tenant showing the design, size, content,
color, illumination and quality of materials and placement of the sign and all
required engineering, and (b) Tenant has obtained and submitted to Landlord
evidence of the insurance required hereunder and any permits or approvals
required by law. The original installation work for the Building Signage shall
be performed in a manner so as to avoid damage to the Building or unreasonable
interference with the operation of the Building or any of its occupants.
Without limiting the generality of the foregoing, Landlord shall have the right
to reasonably approve all staging and other construction procedures.  All installation or other work hereunder
shall be performed in a good and workmanlike manner, in accordance with all
governmental requirements, and at Tenant’s sole cost and expense.  If Tenant is required to remove any glass or
other material from the Building, Tenant will obtain Landlord’s prior written
consent to such removal (unless such removal is shown on the plans previously
approved by Landlord) and shall store all such material with appropriate care
and replace it when Tenant’s Exterior Signage is removed. If the window washing
equipment for the Building or any other Building equipment requires
modification to accommodate installation or repair of Tenant’s Exterior
Signage, Tenant shall perform such modification at its sole cost and expense,
subject to Landlord’s approval of the nature and scope of such modification.

 

2.                                       Once installation of any of Tenant’s Exterior
Signage hereunder has commenced, it shall be completed as soon as possible, and
(subject to force majeure delays and delays caused by Landlord) in no event
later than two (2) months thereafter.

 

3.                                       In the event Tenant elects to illuminate the
Building Sign, any illumination shall be at Tenant’s sole cost and expense,
based on separate meters (to be installed at Tenant’s sole cost and expense),
and Tenant shall pay any meter-reading charges in connection therewith.  Illumination shall be subject to government
conservation requirements or guidelines and utility service interruption.

 

4.                                       Tenant shall maintain Tenant’s Exterior
Signage in good, slightly and first-class appearance, condition and repair, and
so as not to detract form the appearance of the Project.  Landlord shall have the right to approve the
maintenance personnel.  If Tenant shall
fail to maintain, repair, or illuminate Tenant’s Exterior Signage in the
condition required hereunder within seven (7) days after written notice by
Landlord, Landlord may so repair, maintain and illuminate Tenant’s Exterior
Signage, at Tenant’s sole cost and expense (which Tenant shall pay to Landlord
as additional rent when billed by Landlord), without limiting Landlord’s other
rights and remedies.

 

5.                                       Landlord shall permit Tenant reasonable access
to the Building areas for the purposes permitted hereunder, upon reasonable
advance notice (except in cases of emergency, in which case only such notice as
is feasible under the circumstances shall be given) scheduling through
Landlord’s management and security personnel. Access after normal business
hours may be granted or required by Landlord in its reasonable discretion, and
for such reasonable charges as Landlord shall impose to cover any out-of-pocket
costs incurred by Landlord in connection therewith.

 

6.                                       Landlord does not represent or warrant that
installation of Tenant’s Exterior Signage hereunder will comply with any
applicable federal, state, country or local law or ordinances or the
regulations of any of their agencies or any quasi-governmental requirements or
any other applicable agreements; however, Landlord has no actual knowledge
(with no duty to investigate) that Tenant’s Exterior Signage will violate any
such laws, ordinances, regulations or other agreements. Landlord shall use its
best efforts (without the expenditure of any money unless paid by Tenant in
advance of the required expenditure) to assist Tenant in obtaining such
approvals.  Tenant shall at all times
comply with any applicable laws, ordinances, regulations and requirements
pertaining to Tenant’s Exterior Signage.

 

7.                                       Except to the extent arising out of the
negligence or intentional acts of Landlord, its agents or employees, Tenant shall
defend, indemnify and hold Landlord harmless from and against any and all loss,
cost, claim, damage, liability or expense which Landlord may incur as a direct
or indirect result of Tenant’s Exterior Signage or Tenant’s installation,
maintenance or other activities in connection therewith including but not
limited to Tenant’s use of Landlord’s scaffolding or other equipment, and
including but not limited to attorneys’ fees, whether or not any legal action
is instituted. This indemnity obligation shall include Landlord’s partners,
officers, directors, employees, trustees, beneficiaries, affiliated in
connection therewith, including, but not limited to Tenant’s use of the roof or
scaffolding or other equipment, in the amount of at least $3,000,000 combined
single limit per occurrence with a responsible insurance company reasonably
satisfactory to Landlord having a rating of not less than A-X Best’s Insurance
Guide and licensed to do business in the State of California, which policy
shall include a contractual liability endorsement and shall include Landlord
and the other Indemnities (as defined above) as additional insured.  Tenant shall provide a certificate of such
insurance to Landlord prior to commencing the installation work for Tenant’s
Exterior Signage, and such insurance policy shall not be cancelable without at
least fifteen (15) days written notice to Landlord. Except to the extent
arising out of the negligence or intentional acts of loss or damage thereto
from any cause whatsoever. Tenant, on behalf of its insurers, hereby waives any
rights of subrogation against Landlord (or the “Indemnities” defined above).

 

8.                                       Tenant shall have the right to continue the
use of its monument sign during the term of this Lease.  Any modification to Tenant’s current monument
sign shall be at Tenant’s sole cost and expense and modifications must be
approved by Landlord in writing and shall be subject to all applicable
conditions and requirements of this Exhibit D.

 

30

 

EXHIBIT
B

Sublandlord’s
Property

 

 

Kitchen:

1 First aid box

1 Sears Galaxy refrigerator s/n: BA12004697

1 metal chair (red/black)

 

Security room:

1 NexSentry 4100 series controller and Micro
16/8

 

Cubes outside kitchen:

6 cubes with table tops

8 under desk file cabinets

2 desk chairs

6 – 2’ overhead cabinets in cubes

1 – 4’ x 3’ metal book shelf (black)

 

Large Executive Office:

1 wood desk (cherry wood)

2 – 6’ wood credenzas (cherry wood)

4 – Blue chairs

1 – Desk chair

1 – wood end table

3 – white boards

 

Office:

2 file cabinets (Black)

1 – modular wall mounted table/desk

1 – old chair

 

Office:

1 – Modular wall mounted table/desk

1 – file cabinet

1 – 4’ 2 drawer file cabinet (black)

1 – 5’ wood book shelf

2 – chairs

 

Office:

1 – Modular wall mounted table/desk

1 – 4’ file cabinet (black)

1 – 2’ file cabinet (black)

1 – desk chair

2 – chairs (cherry wood & fabric)

1 – metal chair

 

14

 

Office:

2 – wood desks (cherry wood)

1 – wood book shelf

3 – desk chairs

1 – white board

 

Office:

1 – Modular wall mounted table/desk

2 – under desk file cabinets

1 – 2’ file cabinet (black metal)

1 – book shelf (wood)

1 – printer table on wheels (wood)

2 – chairs

 

Cubes:

1 – 4’ 4 drawer file cabinet (beige)

5 cubes

10 – under desk file cabinets

5 – desk chairs

5
– 3’ overhead cabinets

1
– white board

 

Office:

1 – Modular wall mounted table/desk

1 – under desk file cabinet

1 – 4’ file cabinet

1 – desk chair

2 – chairs (cherry wood & fabric)

 

Office/Storage
room:

3 – 4’ 4 drawer file cabinets (gray)

1 – 3’ 4 drawer file cabinet

1 – 3’ 2 drawer wood file cabinet

1 – under desk file cabinet

1 – AV cart

 

Cube:

2 cubes

4 – under desk file cabinets

5 – desk chairs

5 – overhead cabinets

 

Office:

1 – Modular wall mounted table/desk

1 – wood desk

 

15

 

1 – wood credenza

1 – under desk file cabinet

1 – desk chair

2 – chairs (cherry wood/fabric)

 

Cube:

1 cube

1 – 3’ overhead file cabinet

 

Office:

1 – Modular wall mounted table/desk

3 – metal book shelves (black)

1 – 4’ 2 draw file cabinet (black)

2 – under desk file cabinets

1 – desk chair

1 – chair

1 – small computer table (wood)

 

Small
Computer Room:

2 – 6’ folding tables

1 – 3’ folding table

2 – 19” telco racks

2 – 21” telco racks

1 – desk chair

 

Computer
Room:

1 – Liebert HVAC

1 – Liebert 50KVA UPS s/n:P18471

2 – metal chairs

6 – 21” telco racks

6 – 19” telco racks

30 – 19” telco rack shelf

6 – server switch kvm

15 – 19” two sided shelves

5 – 19” keyboard shelves

2 – 4 post 19” telco racks

1 – under desk file cabinet

18 – spare floor tiles (2’x2’)

15 – extra telco shelves

1 – wooden computer/printer table

 

Lobby
area:

1 cube

1 – 4’ 2 drawer file cabinet

1 – 8’ folding table

1 – 6’ folding table

 

16

 

1 – 8’ wood credenza

2 – 5’ computer tables

11 – desk chairs

2 – chairs

1 – VCR dual deck

 

17Exhibit 10.15

 

LANDLORD CONSENT TO SUBLEASE

 

THIS LANDLORD CONSENT TO SUBLEASE (“Consent Agreement”) is entered into as of
the 27th day of February, 2004, by and among CA-TOWER 17 LIMITED PARTNERSHIP, a Delaware limited
partnership (“Landlord”), LIGHTBRIDGE,
INC., a Delaware corporation (“Sublandlord”), and PRIMAL SOLUTIONS, INC., a Delaware corporation
(“Subtenant”).

 

RECITALS:

 

A.                                   Landlord (as successor in interest to Spieker
Properties, L.P., a California limited partnership), as landlord, and
Sublandlord (as successor in interest to Corsair Communications, Inc., a
Delaware corporation), as tenant, are parties to that certain lease agreement
dated October 31, 2000, as amended by instrument(s) dated February 7, 2001, and
March 26, 2001, (collectively, the “Lease”) pursuant to which Landlord has
leased to Sublandlord certain premises containing approximately 6,851 rentable square feet (the “Premises”)
described as Suite No. 750 on the 7th floor of the building commonly known as
Tower 17 located at 18881 Von Karman, Irvine, California (the “Building”).

 

B.                                     Sublandlord and Subtenant have entered into
(or are about to enter into) that certain sublease agreement dated January 30,
2004 attached hereto as Exhibit A
(the “Sublease”) pursuant to which Sublandlord has agreed to sublease to
Subtenant certain premises described as follows: approximately 6,851 rentable
square feet (the “Sublet Premises”) constituting all or a part of the Premises.

 

C.                                     Sublandlord and Subtenant have requested
Landlord’s consent to the Sublease.

 

D.                                    Landlord has agreed to give such consent upon
the terms and conditions contained in this Agreement.

 

NOW THEREFORE, in consideration of the foregoing preambles
which by this reference are incorporated herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby consents to the Sublease subject to the following terms and
conditions, all of which are hereby acknowledged and agreed to by Sublandlord
and Subtenant:

 

1.                                       Sublease
Agreement.  Sublandlord and
Subtenant hereby represent that a true and complete copy of the Sublease is
attached hereto and made a part hereof as Exhibit
A, and Sublandlord and Subtenant agree that the Sublease shall not
be modified without Landlord’s prior written consent, which consent shall not
be unreasonably withheld.

 

2.                                       Representations.  Sublandlord hereby represents and warrants
that Sublandlord (i) has full power and authority to sublease the Sublet
Premises to Subtenant, (ii) has not transferred or conveyed its interest in the
Lease to any person or entity collaterally or otherwise, and (iii) has full
power and authority to enter into the Sublease and this Consent Agreement.
Subtenant hereby represents and warrants that Subtenant has full power and authority
to enter into the Sublease and this Consent Agreement.

 

3.                                       Indemnity and
Insurance.  Subtenant hereby
assumes, with respect to Landlord, all of the indemnity and insurance
obligations of the Sublandlord under the Lease with respect to the Sublet
Premises, provided that the foregoing shall not be construed as relieving or
releasing Sublandlord from any such obligations.

 

4.                                       No Release.  Nothing contained in the Sublease or this
Consent Agreement shall be construed as relieving or releasing Sublandlord from
any of its obligations under the Lease, it being expressly understood and
agreed that Sublandlord shall remain liable for such obligations
notwithstanding anything contained in the Sublease or this Consent Agreement or
any subsequent assignment(s), sublease(s) or transfer(s) of the interest of the
tenant under the Lease. Sublandlord shall be responsible for the collection of
all rent due it from Subtenant, and for the performance of all the other terms
and conditions of the Sublease, it being understood that Landlord is not a
party to the Sublease and, notwithstanding anything to the contrary contained
in the Sublease, is not bound by any terms, provisions, representations or
warranties contained in the Sublease and is not obligated to Sublandlord or Subtenant
for any of the duties and obligations contained therein.

 

1

 

5.                                       Administrative
Fee.  Upon Sublandlord’s
execution and delivery of this Consent Agreement, Sublandlord shall pay to
Landlord the sum of $500.00 in consideration for Landlord’s review of the
Sublease and the preparation and delivery of this Consent Agreement.

 

6.                                       No Transfer.  Subtenant shall not further sublease the
Sublet Premises, assign its interest as the Subtenant under the Sublease or
otherwise transfer its interest in the Sublet Premises or the Sublease to any
person or entity without the written consent of Landlord, which Landlord may
withhold in its sole discretion.

 

7.                                       Lease.  The parties agree that the Sublease is
subject and subordinate to the terms of the Lease, and all terms of the
Lease.  In no event shall the Sublease
or this Consent Agreement be construed as granting or conferring upon the
Sublandlord or the Subtenant any greater rights than those contained in the
Lease nor shall there be any diminution of the rights and privileges of the
Landlord under the Lease, nor shall the Lease be deemed modified in any
respect. Without limiting the scope of the preceding sentence, any construction
or alterations performed in or to the Sublet Premises shall be performed with
Landlord’s prior written approval and in accordance with the terms and
conditions of the Lease. It is hereby acknowledged and agreed that any
provisions in the Sublease which limit the manner in which Sublandlord may
amend the Lease are binding only upon Sublandlord and Subtenant as between such
parties. Landlord shall not be bound in any manner by such provisions and may
rely upon Sublandlord’s execution of any agreements amending or terminating the
Lease subsequent to the date hereof notwithstanding any contrary provisions in
the Sublease.

 

8.                                       Parking and
Services.  Any parking
rights granted to Subtenant pursuant to the Sublease shall be satisfied out of
the parking rights, if any, granted to Sublandlord under the Lease. Sublandlord
hereby authorizes Subtenant, as agent for Sublandlord, to obtain services and
materials for or related to the Sublet Premises, and Sublandlord agrees to pay
for such services and materials as additional Rent under the Lease upon written
demand from Landlord. However, as a convenience to Sublandlord, Landlord may
bill Subtenant directly for such services and materials, or any portion
thereof, in which event Subtenant shall pay for the services and materials so
billed upon written demand, provided that such billing shall not relieve
Sublandlord from its primary obligation to pay for such services and materials.

 

9.                                       Attornment.  If the Lease or Sublandlord’s right to
possession thereunder terminates for any reason prior to expiration of the Sublease,
Subtenant agrees, at the written election of Landlord, to attorn to Landlord
upon the then executory terms and conditions of the Sublease for the remainder
of the term of the Sublease. In the event of any such election by Landlord,
Landlord will not be (a) liable for any rent paid by Subtenant to Sublandlord
more than one month in advance, or any security deposit paid by Subtenant to
Sublandlord, unless same has been transferred to Landlord by Sublandlord; (b)
liable for any act or omission of Sublandlord under the Lease, Sublease or any
other agreement between Sublandlord and Subtenant or for any default of
Sublandlord under any such documents which occurred prior to the effective date
of the attornment; (c) subject to any defenses or offsets that Subtenant may
have against Sublandlord which arose prior to the effective date of the
attornment; (d) bound by any changes or modifications made to the Sublease
without the written consent of Landlord, (e) obligated in any manner with
respect to the transfer, delivery, use or condition of any furniture, equipment
or other personal property in the Sublet Premises which Sublandlord agreed
would be transferred to Subtenant or which Sublandlord agreed could be used by
the Subtenant during the term of the Sublease, or (f) liable for the payment of
any improvement allowance, or any other payment, credit, offset or amount due
from Sublandlord to Subtenant under the Sublease. If Landlord does not elect to
have Subtenant attorn to Landlord as described above, the Sublease and all
rights of Subtenant in the Sublet Premises shall terminate upon the date of
termination of the Lease or Sublandlord’s right to possession thereunder. The
terms of this Section 9 supercede any contrary provisions in the Sublease.

 

10.                                 Payments Under
the Sublease.  If at any time
Sublandlord is in default under the terms of the Lease, Landlord shall have the
right to contact Subtenant and require Subtenant to pay all rent due under the
Sublease directly to Landlord until such time as Sublandlord has cured such
default. Subtenant agrees to pay such sums directly to Landlord if requested by
Landlord, and Sublandlord agrees that any such sums paid by Subtenant shall be
deemed applied against any sums owed by Subtenant under the Sublease. Any such sums
received by Landlord from Subtenant shall be received by Landlord on behalf of
Sublandlord and shall be applied by Landlord to any sums past due under the
Lease, in

 

2

 

such order of priority as required under the Lease or, if the Lease is
silent in such regard, then in such order of priority as Landlord deems
appropriate. The receipt of such funds by Landlord shall in no manner be deemed
to create a direct lease or sublease between Landlord and Subtenant. If
Subtenant fails to deliver its Sublease payments directly to Landlord as
required herein following receipt of written notice from Landlord as described
above, then Landlord shall have the right to remove any signage of Subtenant,
at Subtenant’s cost, located outside the Premises or in the Building lobby or
elsewhere in the Building and to pursue any other rights or remedies available
to Landlord at law or in equity.

 

11.                                 Excess Rent.  If Landlord is entitled to
any excess rent (defined below) from Sublandlord pursuant to the terms of the
Lease, then, in addition to all rent otherwise payable by Sublandlord to
Landlord under the Lease, Sublandlord shall also pay to Landlord the portion of
the excess rent to which Landlord is entitled under the Lease, in the manner
described in the Lease. As used herein, the “excess rent” shall be deemed to
mean any payments from Subtenant under the Sublease which exceed the payments
payable by Sublandlord to Landlord under the Lease for the Sublet Premises.
Landlord’s failure to bill Sublandlord for, or to otherwise collect, such sums
shall in no manner be deemed a waiver by Landlord of its right to collect such
sums in accordance with the Lease.

 

12.                                 Sublandlord Notice Address.  If
Sublandlord is subleasing the entire Premises or otherwise vacating the
Premises, Sublandlord’s new address for notices to Sublandlord under the Lease
shall be as follows: Lightbridge, Inc., 67 South Bedford Street, Suite 100,
Burlington, MA 01803 with Attention to General Counsel and a copy to 67 South
Bedford Street, Suite 100, Burlington, MA 01803 with Attention to Kathy
Giuliano; and if no address is filled in at the preceding blank (or if a post
office box address is used for the preceding blank), then Landlord may continue
to send notices to Sublandlord at the address(es) provided in, and in
accordance with the terms of, the Lease.

 

13.                                 Authority.  Each signatory of this
Consent Agreement represents hereby that he or she has the authority to execute
and deliver the same on behalf of the party hereto for which such signatory is
acting.

 

14.                                 Counterparts. 
This Consent Agreement may be executed in counterparts and shall
constitute an agreement binding on all parties notwithstanding that all parties
are not signatories to the original or the same counterpart provided that all
parties are furnished a copy or copies thereof reflecting the signature of all
parties.

 

(SIGNATURES ARE ON FOLLOWING PAGE)

 

3

 

IN WITNESS WHEREOF, Landlord, Sublandlord and Subtenant have executed this Consent
Agreement as of the date set forth above.

 

 

	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CA-TOWER 17 LIMITED PARTNERSHIP, a Delaware

  limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  EOM GP,
  L.L.C., a Delaware limited liability

  company, its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Equity
  Office Management, L.L.C., a

  Delaware limited liability company, its non-

  member manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Frank R. Campbell

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Frank R. Campbell

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBLANDLORD:

  
	
   

  	
   

  
	
   

  	
  LIGHTBRIDGE, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harlan Plumley

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Harlan Plumley

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBTENANT:

  
	
   

  	
   

  
	
   

  	
  PRIMAL SOLUTIONS, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd
  R Taylor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  TODD
  R TAYLOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
									

 

4

 

EXHIBIT A

 

SUBLEASE AGREEMENT

 

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]