Document:

exv10w17

 

EXHIBIT 10.17

RIVERPARK TOWER

OFFICE LEASE

LEGACY PARTNERS I RIVERPARK I, LLC,

a Delaware limited liability company

as Landlord,

and

PDF SOLUTIONS, INC.,

a Delaware corporation

as Tenant

 

 

	 	 	 	 	 
	SUMMARY OF BASIC LEASE INFORMATION

	 	IV

	 
	 	 	 	 
	OFFICE LEASE
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES

	 	 	1	 
	ARTICLE 2 LEASE TERM

	 	 	2	 
	ARTICLE 3 BASE RENT

	 	 	2	 
	ARTICLE 4 ADDITIONAL RENT

	 	 	2	 
	ARTICLE 5 USE OF PREMISES

	 	 	7	 
	ARTICLE 6 SERVICES AND UTILITIES

	 	 	7	 
	ARTICLE 7 REPAIRS

	 	 	8	 
	ARTICLE 8 ADDITIONS AND ALTERATIONS

	 	 	8	 
	ARTICLE 9 COVENANT AGAINST LIENS

	 	 	10	 
	ARTICLE 10 INDEMNIFICATION AND INSURANCE

	 	 	10	 
	ARTICLE 11 DAMAGE AND DESTRUCTION

	 	 	11	 
	ARTICLE 12 CONDEMNATION

	 	 	12	 
	ARTICLE 13 COVENANT OF QUIET ENJOYMENT

	 	 	13	 
	ARTICLE 14 ASSIGNMENT AND SUBLETTING

	 	 	13	 
	ARTICLE 15 SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

	 	 	15	 
	ARTICLE 16 HOLDING OVER

	 	 	15	 
	ARTICLE 17 ESTOPPEL CERTIFICATES

	 	 	15	 
	ARTICLE 18 SUBORDINATION

	 	 	15	 
	ARTICLE 19 TENANT’S DEFAULTS; LANDLORD’S REMEDIES

	 	 	16	 
	ARTICLE 20 SECURITY DEPOSIT

	 	 	17	 
	ARTICLE 21 COMPLIANCE WITH LAW

	 	 	18	 
	ARTICLE 22 ENTRY BY LANDLORD

	 	 	18	 
	ARTICLE 23 TENANT PARKING

	 	 	18	 
	ARTICLE 24 MISCELLANEOUS PROVISIONS

	 	 	19	 
	EXHIBITS
	 	 	 	 

	 	 	 
	A
	 	OUTLINE OF PREMISES

	 
	 	 

	A-1
	 	SITE PLAN OF REAL PROPERTY

	 
	 	 

	B
	 	TENANT WORK LETTER

	 
	 	 

	C
	 	(Intentionally Omitted)

	 
	 	 

	D
	 	RULES AND REGULATIONS

	 
	 	 

	E
	 	SUPPLEMENTAL HVAC EQUIPMENT

 (i)

 

INDEX

			
	 	 	 
	Additional Rent
	 	2
	Alterations
	 	8
	Approved Working Drawings
	 	Exhibit B
	Architect
	 	Exhibit B
	Base Rent
	 	2
	Base, Shell and Core
	 	Exhibit B
	BOMA
	 	2
	Brokers
	 	21
	Calendar Year
	 	3
	Construction
	 	21
	Construction Drawings
	 	Exhibit B
	Contract
	 	Exhibit B
	Contractor
	 	Exhibit B
	Cost Pools
	 	3
	Engineers
	 	Exhibit B
	Estimate
	 	5
	Estimate Statement
	 	5
	Estimated Excess
	 	5
	Excess
	 	5
	Excluded Changes
	 	18
	Expense Base Year
	 	3
	Expense Year
	 	3
	Final Costs
	 	Exhibit B
	Final Costs Statement
	 	Exhibit B
	Final Retention
	 	Exhibit B
	Final Space Plan
	 	Exhibit B
	Final Working Drawings
	 	Exhibit B
	Force Majeure
	 	20
	Hazardous Material
	 	7
	Holidays
	 	7
	Interest Rate
	 	6
	Landlord
	 	1
	Landlord Parties
	 	10
	Lease
	 	1
	Lease Commencement Date
	 	2
	Lease Expiration Date
	 	2
	Lease Term
	 	2
	Lease Year
	 	2
	Notices
	 	20
	Operating Expenses
	 	3
	Other Buildings
	 	6
	Over-Allowance Amount
	 	Exhibit B
	Over-Allowance Cap
	 	Exhibit B
	Parking Facilities
	 	1
	Premises
	 	1
	Project
	 	1
	Proposition 13
	 	4
	Real Property
	 	1
	Reimbursement Cap
	 	9
	rent
	 	16
	Rent
	 	2
	rentable square feet
	 	2
	Specifications
	 	Exhibit B
	Statement
	 	5
	Subject Space
	 	13
	Subleasing Costs
	 	14
	Summary
	 	i
	Systems and Equipment
	 	4
	Tax Expense Base Year
	 	4
	Tax Expenses
	 	4
	Tenant
	 	1
	Tenant Improvement Allowance
	 	Exhibit B
	Tenant Improvement Allowance Items
	 	 Exhibit B
	Tenant Improvements
	 	Exhibit B
	Tenant Work Letter
	 	Exhibit B
	Tenant’s Agents
	 	Exhibit B
	Tenant’s Share
	 	5
	Transfer
	 	14
	Transfer Notice
	 	13
	Transfer Premium
	 	14
	Transfers
	 	13
	Utilities Base Year
	 	5

 (ii)

 

			
	 Utilities
Costs
	 	5
	Wi-Fi Network
	 	9

 (iii)

 

SUMMARY OF BASIC LEASE INFORMATION

     This Summary of Basic Lease Information (“Summary”) is hereby incorporated into and made a
part of the attached Office Lease. Each reference in the Office Lease to any term of this Summary
shall have the meaning as set forth in this Summary for such term. In the event of a conflict
between the terms of this Summary and the Office Lease, the terms of the Office Lease shall
prevail. Any capitalized terms used herein and not otherwise defined herein shall have the meaning
as set forth in the Office Lease.

	 	 	 
	TERMS OF LEASE	 	 
	(References are to the Office Lease)	 	DESCRIPTION
	1. Date:
	 	June 29, 2007
	 
	 	 
	2. Landlord:
	 	LEGACY PARTNERS I RIVERPARK I, LLC,
	 
	 	a Delaware limited liability company
	 
	 	 
	3. Address of Landlord (Section 24.19):
	 	Legacy Partners I Riverpark I, LLC
	 
	 	c/o Legacy Partners Commercial, Inc.
	 
	 	4000 East Third Avenue, Suite 600
	 
	 	Foster City, California  94404-4805
	 
	 	Attention:  Regional Vice President
	 
	 	 
	4. Tenant:
	 	PDF SOLUTIONS, INC., a Delaware corporation
	 
	 	 
	5. Address of Tenant (Section 24.19):
	 	PDF Solutions, Inc.
	 
	 	333 West San Carlos Street, Suite 700
	 
	 	San Jose, California  95110
	 
	 	Attention:  Chief Financial Officer
	 
	 	 
	6. Premises (Article 1):
	 	 
	 
	 	 
	6.1 Premises:
	 	A total of 49,789 rentable square feet of space consisting of the following, which are more particularly set forth in Exhibit A attached hereto:
	 
	 	 
	 
	 	     (i) 19,670 rentable square feet of space located on the fifth (5th) floor of the Building (as defined below) and designated as Suite 500;
	 
	 	 
	 
	 	     (ii) 19,670 rentable square feet of space located on the seventh (7th) floor of the Building and designated as Suite 700;
	 
	 	 
	 
	 	     (iii) 8,948 rentable square feet of space located on the tenth (10th) floor of the Building and designated as Suite 1000; and
	 
	 	 
	 
	 	     (iv) 1,501 rentable square feet of space located on the tenth (10th) floor of the Building and designated as Suite 1080.
	 
	 	 
	6.2 Building:
	 	The Premises are located in the building whose address is 333 West San Carlos Street, San Jose, California.
	 
	 	 
	7. Term (Article 2):
	 	 
	 
	 	 
	7.1 Lease Term:
	 	Sixty-eight (68) months.
	 
	 	 
	7.2 Lease Commencement Date:
	 	February 1, 2008.
	 
	 	 
	7.3 Lease Expiration Date:
	 	The last day of the sixty-eighth (68th) month following the Lease Commencement Date.
	 
	 	 
	8. Base Rent (Article 3):
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly	 	 	Monthly Rental	 
	 	 	Annual	 	 	Installment	 	 	Rate per Rentable	 
	Months	 	Base Rent	 	 	of Base Rent	 	 	Square Foot	 
	1* - 20
	 	$	1,762,530.60	 	 	$	146,877.55	 	 	$	2.95	 
	21 - 32
	 	$	1,816,302.70	 	 	$	151,358.56	 	 	$	3.04	 
	33 - 44
	 	$	1,870,074.80	 	 	$	155,839.57	 	 	$	3.13	 
	45 - 56
	 	$	1,923,846.90	 	 	$	160,320.58	 	 	$	3.22	 

 BLI-i-

 

	 	 	 
	TERMS OF LEASE	 	 
	(References are to the Office Lease)	 	DESCRIPTION

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly	 	 	Monthly Rental	 
	 	 	Annual	 	 	Installment	 	 	Rate per Rentable	 
	Months	 	Base Rent	 	 	of Base Rent	 	 	Square Foot	 
	57 - 68
	 	$	1,983.593.70	 	 	$	165,299.48	 	 	$	3.32	 

 

 
			
	*	 	Base Rent for the first (1st) eight (8) months of the initial Lease Term shall be
abated, pursuant to the terms of Article 3 of the Lease.

	 	 	 
	9. Additional Rent (Article 4):
	 	 
	 
	 	 
	9.1 Expense Base Year:
	 	Calendar year 2008.
	 
	 	 
	9.2 Tax Expense Base Year:
	 	Calendar year 2008.
	 
	 	 
	9.3 Utilities Base Year:
	 	Calendar year 2008.
	 
	 	 
	9.4 Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities
Costs:
	 	16.93% (49,789 rentable square feet within the Premises/294,097 rentable square feet within the Building).
	 
	 	 
	10. Security Deposit (Article 20):
	 	$166,391.96, pursuant to the terms of Article 20 of the Lease.
	 
	 	 
	11. Parking (Article 23):
	 	Initially, three (3) parking passes for unassigned parking spaces for every 1,000
rentable square feet of the Premises, for a total of one hundred
forty-nine (49) unassigned parking passes; provided, however, upon written notice to Tenant, Tenant's parking passes hereunder shall
be reduced to 2.4 parking passes for unassigned parking spaces for every 1,000 rentable square
feet of the Premises, for a total of one hundred nineteen (119) parking passes for unassigned
parking spaces. Landlord will deliver notice of this reduction in Tenant's parking passes as
necessary to comply with applicable regulations relating to available parking for the Building,
including in connection with the anticipated completion of an adjacent office building.

	 
	 	 
	12. Brokers (Section 24.25):
	 	None.
	 
	 	 
	13. Tenant Improvement Allowance (Exhibit B):
	 	$248,945.00 (calculated at the rate of $5.00 per rentable square foot of the Premises), pursuant to the terms of Exhibit B.

 BLI-ii-

 

OFFICE LEASE

     This Office Lease, which includes the preceding Summary and the exhibits attached hereto and
incorporated herein by this reference (the Office Lease, the Summary and the exhibits to be known
sometimes collectively hereafter as the “Lease”), dated as of the date set forth in
Section 1 of the Summary, is made by and between LEGACY PARTNERS I RIVERPARK I, LLC, a
Delaware limited liability company (“Landlord”), and PDF SOLUTIONS, INC., a Delaware corporation
(“Tenant”).

ARTICLE 1

REAL PROPERTY, BUILDING AND PREMISES

     1.1 Real Property, Building and Premises.

          1.1.1 Premises. Upon and subject to the terms, covenants and conditions hereinafter
set forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the premises set forth in Section 6.1 of the Summary (the “Premises”), which Premises are
located in the Building defined in Section 6.2 of the Summary constructed on the Real
Property. The outline of the floor plan of the Premises is set forth in Exhibit A attached
hereto.

          1.1.2 Building and Real Property/Project. The Building is part of that certain office
building project (“Project”) constructed on the Real Property (as defined below) known as
“RiverPark Tower”. The term “Real Property,” as used in this Lease, shall mean, collectively,
(i) the Building, (ii) any outside plaza areas, walkways, driveways, courtyards, public and private
streets, transportation facilitation areas and other improvements and facilities now or hereafter
constructed surrounding and/or servicing the Building, including the existing parking structure
constructed by or for Landlord within the Project and located adjacent to the Building and any
other parking structures and/or facilities now or hereafter constructed by or for Landlord within
the Project and servicing the Building and any other buildings which may be subsequently
constructed within the Project (collectively, the “Parking Facilities”), which are designated from
time to time by Landlord as common areas (or parking facilities, as the case may be) appurtenant to
or servicing the Building and any such other buildings; (iii) any additional buildings,
improvements, facilities, parking areas and structures and common areas which Landlord (and/or any
common area association formed by Landlord or Landlord’s assignee for the Project) may add thereto
from time to time within or as part of the Project; and (iv) the land upon which any of the
foregoing are situated. The site plan depicting the current configuration of the Real Property is
set forth in Exhibit A-1 attached hereto. Notwithstanding the foregoing or anything
contained in this Lease to the contrary, (1) Landlord has no obligation to expand or otherwise make
any improvements within the Project, including, without limitation, any of the outside plaza areas,
walkways, driveways, courtyards, public and private streets, transportation facilitation areas and
other improvements and facilities which may be depicted on Exhibit A-1 attached hereto (as
the same may be modified by Landlord from time to time without notice to Tenant), other than
Landlord’s obligations (if any) specifically set forth in the Tenant Work Letter, and (2) Landlord
shall have the right from time to time to include or exclude any improvements or facilities within
the Project, at Landlord’s sole election, as more particularly set forth in Section 1.1.3
below.

          1.1.3 Tenant’s and Landlord’s Rights. Tenant is hereby granted the right to the
nonexclusive use of the common corridors and hallways, stairwells, elevators, restrooms and other
public or common areas located within the Building, and the non-exclusive use of the areas located
on the Real Property designated by Landlord from time to time as common areas for the Building;
provided, however, that (i) Tenant’s use thereof shall be subject to (A) the provisions of any
covenants, conditions and restrictions regarding the use thereof now or hereafter recorded against
the Real Property, and (B) such reasonable, non-discriminatory rules, regulations and restrictions
as Landlord may make from time to time (which shall be provided in writing to Tenant), and
(ii) Tenant may not go on the roof of Building without Landlord’s prior consent (which may be
withheld in Landlord’s sole and absolute discretion) and without otherwise being accompanied by a
representative of Landlord. Landlord reserves the right from time to time to use any of the common
areas of the Real Property, and the roof, risers and conduits of the Building for
telecommunications and/or any other purposes, and to do any of the following: (1) make any
changes, additions, improvements, repairs and/or replacements in or to the Real Property or any
portion or elements thereof, including, without limitation, (x) changes in the location, size,
shape and number of driveways, entrances, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways, public and private streets, plazas, courtyards,
transportation facilitation areas and common areas, parking spaces, parking structures and parking
areas, and (y) expanding or decreasing the size of the Real Property and any common areas and other
elements thereof, including adding or deleting buildings thereon and therefrom; (2) close
temporarily any of the common areas while engaged in making repairs, improvements or alterations to
the Real Property; (3) form a common area association or associations under covenants, conditions
and restrictions to own, manage, operate, maintain, repair and/or replace all or any portion of the
landscaping, driveways, walkways, parking areas, public and private streets, plazas, courtyards,
transportation facilitation areas and/or other common areas located outside of the Building and,
subject to Article 4 below, include the common area assessments, fees and taxes charged by
the association(s) and the cost of maintaining, managing, administering and operating the
association(s), in Operating Expenses or Tax Expenses; and (4) perform such other acts and make
such other changes with respect to the Real Property as Landlord may, in the exercise of good faith
business judgment, deem to be appropriate.

     1.2 Condition of Premises. Except as expressly set forth in this Lease and in the
Tenant Work Letter attached hereto as Exhibit B, Landlord shall not be obligated to provide
or pay for any improvement, remodeling or refurbishment work or services related to the
improvement, remodeling or refurbishment of the Premises, and Tenant shall accept the Premises in
its “AS IS” condition on the Lease Commencement Date.

-1-

 

     1.3 Rentable Square Feet. The rentable square feet for the Premises are approximately
as set forth in Section 6.1 of the Summary. For purposes hereof, the “rentable square
feet” of the Premises and the Building shall be calculated by Landlord pursuant to the Standard
Method for Measuring Floor Area in Office Buildings, ANSI Z65.1-1996 (“BOMA”), as modified for the
Building pursuant to Landlord’s standard rentable area measurements for the Building, to include,
among other calculations, a portion of the common areas and service areas of the Building. The
rentable square feet of the Premises and the rentable square feet of the Building are subject to
verification from time to time by Landlord’s planner/designer and such verification shall be made
in accordance with the provisions of this Section 1.3. Tenant’s architect may consult with
Landlord’s planner/designer regarding such verification, except to the extent it relates to the
rentable square feet of the Building; provided, however, the determination of Landlord’s
planner/designer shall be conclusive and binding upon the parties. In the event that Landlord’s
planner/designer determines that the rentable square footage amounts shall be different from those
set forth in this Lease, all amounts, percentages and figures appearing or referred to in this
Lease based upon such incorrect rentable square feet (including, without limitation, the amount of
the Base Rent and Tenant’s Share) shall be modified in accordance with such determination. If such
determination is made, it will be confirmed in writing by Landlord to Tenant.

ARTICLE 2

LEASE TERM

     The terms and provisions of this Lease shall be effective as of the date of this Lease except
for the provisions of this Lease relating to the payment of Rent. The term of this Lease (the
"Lease Term”) shall be as set forth in Section 7.1 of the Summary and shall commence on the
date (the “Lease Commencement Date”) set forth in Section 7.2 of the Summary (subject,
however, to the terms of the Tenant Work Letter), and shall terminate on the date (the “Lease
Expiration Date”) set forth in Section 7.3 of the Summary, unless this Lease is sooner
terminated as hereinafter provided. For purposes of this Lease, the term “Lease Year” shall mean
each consecutive twelve (12) month period during the Lease Term, provided that the last Lease Year
shall end on the Lease Expiration Date.

ARTICLE 3

BASE RENT

     3.1 Base Rent. Tenant shall pay, without notice or demand, to Landlord or Landlord’s
agent at the management office of the Project, or at such other place as Landlord may from time to
time designate in writing, in currency or a check for currency which, at the time of payment, is
legal tender for private or public debts in the United States of America, base rent (“Base Rent”)
as set forth in Section 8 of the Summary, payable in equal monthly installments as set
forth in Section 8 of the Summary in advance on or before the first day of each and every
month during the Lease Term, without any setoff or deduction whatsoever. The Base Rent for the
first full month of the Lease Term shall be paid at the time of Tenant’s execution of this Lease.
If any rental payment date (including the Lease Commencement Date) falls on a day of the month
other than the first day of such month or if any rental payment is for a period which is shorter
than one month, then the rental for any such fractional month shall be a proportionate amount of a
full calendar month’s rental based on the proportion that the number of days in such fractional
month bears to the number of days in the calendar month during which such fractional month occurs.
All other payments or adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis.

     3.2 Rent Abatement. Notwithstanding anything to the contrary contained herein and
provided that Tenant faithfully performs all of the terms and conditions of this Lease, and no
default by Tenant occurs hereunder, Landlord hereby agrees that Tenant shall not be required to
pay monthly Base Rent for the first (1st) eight (8) months of the initial Lease Term
(the “Abatement Period”). During the Abatement Period, Tenant shall still be responsible for the
payment of all of its other monetary obligations under this Lease. In the event of a default by
Tenant under the terms of this Lease that results in termination of this Lease in accordance with
the provisions of Article 19 hereof, then as a part of the recovery set forth in
Article 19 of this Lease, Landlord shall be entitled to the recovery of the monthly Base
Rent that was abated under the provisions of this Article 3.

ARTICLE 4

ADDITIONAL RENT

     4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of this Lease, Tenant shall pay as additional rent the sum of the following:
(i) Tenant’s Share (as such term is defined below) of the annual Operating Expenses allocated to
the Building (pursuant to Section 4.3.4 below) which are in excess of the amount of
Operating Expenses allocated to the Building and applicable to the Expense Base Year; plus
(ii) Tenant’s Share of the annual Tax Expenses allocated to the Building (pursuant to Section
4.3.4 below) which are in excess of the amount of Tax Expenses allocated to the Building and
applicable to the Tax Expense Base Year; plus (iii) Tenant’s Share of the annual Utilities Costs
allocated to the Building (pursuant to Section 4.3.4 below) which are in excess of the
amount of Utilities Costs allocated to the Building and applicable to the Utilities Base Year.
Such additional rent, together with any and all other amounts payable by Tenant to Landlord
pursuant to the terms of this Lease (including, without limitation, pursuant to Article 6),
shall be hereinafter collectively referred to as the “Additional Rent.” The Base Rent and
Additional Rent are herein collectively referred to as the “Rent.” All amounts due under this
Article 4 as Additional Rent shall be payable for the same periods and in the same manner,
time and place as the Base Rent. Without limitation on other obligations of Tenant which
shall survive the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of the

-2-

 

Lease
Term for a period of three (3) years, but in no event shall Tenant be obligated to pay Additional
Rent for periods other than during the Lease Term.

     4.2 Definitions. As used in this Article 4, the following terms shall have
the meanings hereinafter set forth:

          4.2.1 “Calendar Year” shall mean each calendar year in which any portion of the Lease Term
falls, through and including the calendar year in which the Lease Term expires.

          4.2.2 “Expense Base Year” shall mean the year set forth in Section 9.1 of the Summary.

          4.2.3 “Expense Year” shall mean each Calendar Year, provided that Landlord, upon notice to
Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive-month
period, and, in the event of any such change, Tenant’s Share of Operating Expenses, Tax Expenses
and Utilities Costs shall be equitably adjusted for any Expense Year involved in any such change.

          4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts of every kind and nature
which Landlord shall pay during any Expense Year because of or in connection with the ownership,
management, maintenance, repair, replacement, restoration or operation of the Real Property,
including, without limitation, any amounts paid for: (i) the cost of operating, maintaining,
repairing, renovating and managing the utility systems, mechanical systems, sanitary and storm
drainage systems, any elevator systems and all other “Systems and Equipment” (as defined in
Section 4.2.5 of this Lease), and the cost of supplies and equipment and maintenance and
service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and
inspections, and the cost of contesting the validity or applicability of any governmental
enactments which may affect Operating Expenses, and the costs incurred in connection with
implementation and operation (by Landlord or any common area association(s) formed for the Project)
of any transportation system management program or similar program; (iii) the cost of insurance
carried by Landlord, in such amounts as Landlord may reasonably determine or as may be required by
any mortgagees or the lessor of any underlying or ground lease affecting the Real Property;
(iv) the cost of landscaping, relamping, supplies, tools, equipment and materials, and all fees,
charges and other costs (including consulting fees, legal fees and accounting fees) incurred in
connection with the management, operation, repair and maintenance of the Real Property; (v) the
cost of parking area repair, restoration, and maintenance; (vi) any equipment rental agreements or
management agreements (including the cost of any management fee and the fair rental value of any
office space provided thereunder); (vii) wages, salaries and other compensation and benefits of all
persons engaged in the operation, management, maintenance or security of the Real Property, and
employer’s Social Security taxes, unemployment taxes or insurance, and any other taxes which may be
levied on such wages, salaries, compensation and benefits; (viii) payments under any easement,
license, operating agreement, declaration, restrictive covenant, underlying or ground lease
(excluding rent), or instrument pertaining to the sharing of costs by the Real Property; (ix) the
cost of janitorial service, alarm and security service, if any, window cleaning, trash removal,
replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors,
restrooms and other common or public areas or facilities, maintenance and replacement of curbs and
walkways, repair to roofs and re-roofing; (x) amortization (including interest on the unamortized
cost) of the cost of acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Real Property; and (xi) the cost of any capital improvements or other
costs (I) which are intended as a labor-saving device or to effect other economies in the operation
or maintenance of the Real Property, (II) made to the Real Property or any portion thereof after
the Lease Commencement Date that are required under any governmental law or regulation, or
(III) which are reasonably determined by Landlord to be in the best interests of the Real Property;
provided, however, that if any such cost described in (I), (II) or (III) above, is a capital
expenditure, such cost shall be amortized (including interest on the unamortized cost) over its
useful life as Landlord shall reasonably determine. If Landlord is not furnishing any particular
work or service (the cost of which, if performed by Landlord, would be included in Operating
Expenses) to a tenant who has undertaken to perform such work or service in lieu
 of the performance
thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the
additional Operating Expenses which would reasonably have been incurred during such period by
Landlord if it had at its own expense furnished such work or service to such tenant. If the
Building (and during the period of time when any other office buildings are fully constructed and
ready for occupancy and are included by Landlord within the Project) is less than ninety-five
percent (95%) occupied during all or a portion of any Expense Year (including the Expense Base
Year), Landlord shall make an appropriate adjustment to the variable components of Operating
Expenses for such year or applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have been paid had the
Building (and during the period of time when any other office buildings are fully constructed and
ready for occupancy and are included by Landlord within the Project) been ninety-five percent (95%)
occupied; and the amount so determined shall be deemed to have been the amount of Operating
Expenses for such year, or applicable portion thereof.

     Subject to the provisions of Section 4.3.4 below, Landlord shall have the right, from
time to time, to equitably allocate some or all of the Operating Expenses (and/or Tax Expenses and
Utilities Costs) among different tenants of the Project and/or different buildings of the Real
Property as and when such different buildings are constructed and added to (and/or excluded from)
the Real Property or otherwise (the “Cost Pools”). Such Cost Pools may include, without
limitation, the office space tenants and retail space tenants of the Real Property or of a building
or buildings in the Real Property. Such Cost Pools may also include an allocation of certain
Operating Expenses (and/or Tax Expenses and Utilities Costs) within or under covenants, conditions
and restrictions affecting the Real Property. In addition, Landlord shall have the right from time
to time, in its reasonable discretion, to include or exclude existing or future buildings in the
Project for purposes of determining Operating Expenses, Tax Expenses and Utilities Costs and/or the
provision of various services and amenities
thereto, including allocation of Operating Expenses, Tax Expenses and Utilities Costs in any
such Cost Pools. With reference to the foregoing, it is acknowledged that expenses which are
generally allocated throughout the Project, shall be allocated to Tenant based

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upon Tenant’s
equitable share of the Project. Such calculations and the fair and equitable share allocated to
Tenant will be subject to adjustment in accordance with industry standards and to reflect the
current occupancy and use of the Project from time to time.

     Notwithstanding anything to the contrary set forth in this Article 4, when calculating
Operating Expenses for the Expense Base Year, Operating Expenses shall exclude market-wide
labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts
and strikes, and costs relating to capital improvements or expenditures.

     Notwithstanding the foregoing, Operating Expenses shall not, however, include: (A) costs of
leasing commissions, attorneys’ fees and other costs and expenses incurred in connection with
negotiations or disputes with present or prospective tenants or other occupants of the Real
Property; (B) costs (including permit, license and inspection costs) incurred in renovating or
otherwise improving, decorating or redecorating rentable space for other tenants or vacant rentable
space; (C) costs incurred due to the violation by Landlord of the terms and conditions of any lease
of space in the Real Property; (D) costs of overhead or profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for services in or in connection with the Real Property to
the extent the same exceeds the costs of overhead and profit increment included in the costs of
such services which could be obtained from third parties on a competitive basis; (E) except as
otherwise specifically provided in this Section 4.2.4, costs of interest on debt or
amortization on any mortgages, and rent payable under any ground lease of the Real Property;
(F) Utilities Costs; and (G) Tax Expenses.

          4.2.5 Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable,
wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air
conditioning and humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm,
security, or fire/life safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment which serve the Building and/or any other
building in the Project in whole or in part.

          4.2.6 “Tax Expense Base Year” shall mean the year set forth in Section 9.2 of the
Summary.

          4.2.7 “Tax Expenses” shall mean all federal, state, county, or local governmental or municipal
taxes, fees, assessments, charges or other impositions of every kind and nature, whether general,
special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and
special assessments, transit assessments, fees and taxes, child care subsidies, fees and/or
assessments, job training subsidies, fees and/or assessments, open space fees and/or assessments,
housing subsidies and/or housing fund fees or assessments, public art fees and/or assessments,
leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes
applicable to the receipt of rent, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property
used in connection with the Real Property), which Landlord shall pay during any Expense Year
because of or in connection with the ownership, leasing and operation of the Real Property or
Landlord’s interest therein. For purposes of this Lease, Tax Expenses shall be calculated as if
the tenant improvements in the Building were fully constructed and the Real Property, the Building
and all tenant improvements in the Building were fully assessed for real estate tax purposes.

               4.2.7.1 Tax Expenses shall include, without limitation:

                    (i) Any tax on Landlord’s rent, right to rent or other income from the Real Property or as
against Landlord’s business of leasing any of the Real Property;

                    (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or
totally, of any assessment, tax, fee, levy or charge previously included within the definition of
real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by
the voters of the State of California in the June 1978 election (“Proposition 13”) and that
assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or occupants. It is the
intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies,
and charges and all similar assessments, taxes, fees, levies and charges be included within the
definition of Tax Expenses for purposes of this Lease;

                    (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the
Premises or the rent payable hereunder, including, without limitation, any gross income tax upon or
with respect to the possession, leasing, operating, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises, or any portion thereof;

                    (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which
Tenant is a party, creating or transferring an interest or an estate in the Premises; and

                    (v) Any reasonable expenses incurred by Landlord in attempting to protest, reduce or minimize
Tax Expenses.

               4.2.7.2 In no event shall Tax Expenses for any Expense Year be less than the Tax Expenses for
the Tax Expense Base Year.

               4.2.7.3 Notwithstanding anything to the contrary contained in this Section 4.2.7,
there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift
taxes, capital stock taxes,

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inheritance and succession taxes, estate taxes, federal and state net
income taxes, and other taxes to the extent applicable to Landlord’s net income (as opposed to
rents, receipts or income attributable to operations at the Real Property), (ii) any items included
as Operating Expenses, and (iii) any items paid by Tenant under Section 4.4 of this Lease.

          4.2.8 “Tenant’s Share” shall mean the percentage set forth in Section 9.4 of the
Summary. Tenant’s Share was calculated by dividing the number of rentable square feet of the
Premises by the total rentable square feet in the Building (as set forth in Section 9.4 of
the Summary), and stating such amount as a percentage. Landlord shall have the right from time to
time to redetermine the rentable square feet of the Premises and/or Building, and Tenant’s Share
shall be appropriately adjusted to reflect any such redetermination. If Tenant’s Share is adjusted
pursuant to the foregoing, as to the Expense Year in which such adjustment occurs, Tenant’s Share
for such year shall be determined on the basis of the number of days during such Expense Year that
each such Tenant’s Share was in effect.

          4.2.9 “Utilities Base Year” shall mean the year set forth in Section 9.3 of the
Summary.

          4.2.10 “Utilities Costs” shall mean all actual charges for utilities for the Building and the
Project which Landlord shall pay during any Expense Year, including, but not limited to, the costs
of water, sewer and electricity, and the costs of HVAC and other utilities (but excluding those
charges for which tenants directly reimburse Landlord or otherwise pay directly to the utility
company) as well as related fees, assessments and surcharges. Utilities Costs shall be calculated
assuming the Building (and during the period of time when any other office buildings are fully
constructed and ready for occupancy and are included by Landlord within the Project, such other
office buildings), are at least ninety-five percent (95%) occupied. If, during all or any part of
any Expense Year, Landlord shall not provide any utilities (the cost of which, if provided by
Landlord, would be included in Utilities Costs) to a tenant (including Tenant) who has undertaken
to provide the same instead of Landlord, Utilities Costs shall be deemed to be increased by an
amount equal to the additional Utilities Costs which would reasonably have been incurred during
such period by Landlord if Landlord had at its own expense provided such utilities to such tenant.
Utilities Costs shall include any costs of utilities which are allocated to the Real Property under
any declaration, restrictive covenant, or other instrument pertaining to the sharing of costs by
the Real Property or any portion thereof, including any covenants, conditions or restrictions now
or hereafter recorded against or affecting the Real Property. For purposes of determining
Utilities Costs incurred for the Utilities Base Year, Utilities Costs for the Utilities Base Year
shall not include any one time special charges, costs or fees or extraordinary charges or costs
incurred in the Utilities Base Year only, including those attributable to boycotts, embargoes,
strikes or other shortages of services or fuel. In addition, if in any Expense Year subsequent to
the Utilities Base Year, the amount of Utilities Costs decreases due to a reduction in the cost of
providing utilities to the Real Property for any reason, including without limitation, because of
deregulation of the utility industry and/or reduction in rates achieved in contracts with utilities
providers, then for purposes of the Expense Year in which such decrease in Utilities Costs occurred
and all subsequent Expense Years, the Utilities Costs for the Utilities Base Year shall be
decreased by an amount equal to such decrease.

     4.3 Calculation and Payment of Additional Rent.

          4.3.1 Calculation of Excess. If for any Expense Year ending or commencing within the
Lease Term, (i) Tenant’s Share of Operating Expenses allocated to the Building pursuant to
Section 4.3.4 below for such Expense Year exceeds Tenant’s Share of Operating Expenses
allocated to the Building for the Expense Base Year and/or (ii) Tenant’s Share of Tax Expenses
allocated to the Building pursuant to Section 4.3.4 below for such Expense Year exceeds
Tenant’s Share of Tax Expenses allocated to the Building for the Tax Expense Base Year, and/or
(iii) Tenant’s Share of Utilities Costs allocated to the Building pursuant to Section 4.3.4
below for such Expense Year exceeds Tenant’s Share of Utilities Costs allocated to the Building for
the Utilities Base Year, then Tenant shall pay to Landlord, in the manner set forth in
Section 4.3.2, below, and as Additional Rent, an amount equal to such excess (the
“Excess”).

          4.3.2 Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs and Payment
by Tenant. Landlord shall endeavor to give to Tenant on or before the first day of May
following the end of each Expense Year, a statement (the “Statement”) which shall state the
Operating Expenses, Tax Expenses and Utilities Costs incurred or accrued for such preceding Expense
Year, and which shall indicate the amount, if any, of any Excess. Upon receipt of the Statement
for each Expense Year ending during the Lease Term, if an Excess is present, Tenant shall pay, with
its next installment of Base Rent due, the full amount of the Excess for such Expense Year, less
the amounts, if any, paid during such Expense Year as “Estimated Excess,” as that term is defined
in Section 4.3.3 of this Lease. The failure of Landlord to timely furnish the Statement
for any Expense Year shall not prejudice Landlord from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant’s Share of the Operating Expenses, Tax Expenses and
Utilities Costs for the Expense Year in which this Lease terminates, if an Excess is present,
Tenant shall immediately pay to Landlord an amount as calculated pursuant to the provisions of
Section 4.3.1 of this Lease. The provisions of this Section 4.3.2 shall survive
the expiration or earlier termination of the Lease Term.

          4.3.3 Statement of Estimated Operating Expenses, Tax Expenses and Utilities Costs. In
addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the “Estimate
Statement”) which shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the total
amount of Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building pursuant
to Section 4.3.4 below for the then-current Expense Year shall be and the estimated Excess
(the “Estimated Excess”) as calculated by comparing (i) Tenant’s Share of Operating Expenses
allocated to the Building, which shall be based upon the Estimate, to Tenant’s Share of Operating
Expenses allocated to the Building for the Expense Base Year, (ii) Tenant’s Share of Tax Expenses
allocated to the Building, which shall be based upon the Estimate, to Tenant’s Share of Tax
Expenses

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 allocated to the Building for the Tax Expense Base Year, and (iii) Tenant’s Share of
Utilities Costs allocated to the Building, which shall be based upon the Estimate, to Tenant’s
Share of Utilities Costs allocated to the Building for the Utilities Base Year. The failure of
Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord
from enforcing its rights to collect any Estimated Excess under this Article 4. If
pursuant to the Estimate Statement an Estimated Excess is calculated for the then-current Expense
Year, Tenant shall pay, with its next installment of Base Rent due, a fraction of the Estimated
Excess for the then-current Expense Year (reduced by any amounts paid pursuant to the last sentence
of this Section 4.3.3). Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year to the month of such payment, both months
inclusive, and shall have twelve (12) as its denominator. Until a new Estimate Statement is
furnished, Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth (1/12) of the total Estimated Excess set forth in the previous Estimate Statement
delivered by Landlord to Tenant.

          4.3.4 Allocation of Operating Expenses, Tax Expenses and Utilities Costs to Building.
The parties acknowledge that the Building may in the future be part of a multi-office building
project consisting of the Building and such other buildings as Landlord may elect to construct and
include as part of the Real Property from time to time (collectively, the “Other Buildings”), and
that certain of the costs and expenses incurred in connection with the Real Property (i.e., the
Operating Expenses, Tax Expenses and Utilities Costs) shall be shared among the Building and/or
such Other Buildings, while certain other costs and expenses which are solely attributable to the
Building and such Other Buildings, as applicable, shall be allocated directly to the Building and
the Other Buildings, respectively. Accordingly, as set forth in Sections  4.1 and
4.2 above, Operating Expenses, Tax Expenses and Utilities Costs are determined annually for
the Real Property as a whole, and a portion of the Operating Expenses, Tax Expenses and Utilities
Costs, which portion shall be determined by Landlord on an equitable basis, shall be allocated to
the Building (as opposed to the tenants of the Other Buildings), and such portion so allocated
shall be the amount of Operating Expenses, Tax Expenses and Utilities Costs payable with respect to
the Building upon which Tenant’s Share shall be calculated. Such portion of the Operating
Expenses, Tax Expenses and Utilities Costs allocated to the Building shall include all Operating
Expenses, Tax Expenses and Utilities Costs which are attributable solely to the Building, and an
equitable portion of the Operating Expenses, Tax Expenses and Utilities Costs attributable to the
Real Property as a whole (but not any portion of the Operating Expenses, Tax Expenses and Utilities
Costs which are attributable solely to Other Buildings or utilities of the Other Buildings that are
separately metered). As an example of such allocation with respect to Tax Expenses and Utilities
Costs, it is anticipated that Landlord may receive separate tax bills which separately assess the
improvements component of Tax Expenses for each building in the Project and/or Landlord may receive
separate utilities bills from the utilities companies identifying the Utilities Costs for certain
of the utilities costs directly incurred by each such building (as measured by separate meters
installed for each such building), and such separately assessed Tax Expenses and separately metered
Utilities Costs shall be calculated for and allocated separately to each such applicable building.
In addition, in the event Landlord elects, at its sole option, to subdivide certain common area
portions of the Real Property such as landscaping, public and private streets, driveways, walkways,
courtyards, plazas, transportation facilitation areas, accessways and/or parking areas into a
separate parcel or parcels of land (and/or separately convey all or any of such parcels to a common
area association to own, operate and/or maintain same), the Operating Expenses, Tax Expenses and
Utilities Costs for such common area parcels of land may be aggregated and then reasonably
allocated by Landlord to the Building and such Other Buildings on an equitable basis as Landlord
(and/or any applicable covenants, conditions and restrictions for any such common area association)
shall provide from time to time.

     4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall
reimburse Landlord upon demand for any and all taxes or assessments required to be paid by Landlord
(except to the extent included in Tax Expenses by Landlord), excluding state, local and federal
personal or corporate income taxes measured by the net income of Landlord from all sources and
estate and inheritance taxes, whether or not now customary or within the contemplation of the
parties hereto, when:

          4.4.1 said taxes are measured by or reasonably attributable to the cost or value of Tenant’s
equipment, furniture, fixtures and other personal property located in the Premises, or by the cost
or value of any leasehold improvements made in or to the Premises by or for Tenant, to the extent
the cost or value of such leasehold improvements exceeds the cost or value of a building standard
build-out as determined by Landlord regardless of whether title to such improvements shall be
vested in Tenant or Landlord;

          4.4.2 said taxes are assessed upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any
portion of the Real Property (including the Parking Facilities); or

          4.4.3 said taxes are assessed upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises.

     4.5 Late Charges. If any installment of Rent or any other sum due from Tenant shall
not be received by Landlord or Landlord’s designee by the due date therefor, then Tenant shall pay
to Landlord a late charge equal to
ten percent (10%) of the amount due plus reasonable attorneys’ fees incurred by Landlord by
reason of Tenant’s failure to pay Rent and/or other charges when due hereunder. The late charge
shall be deemed Additional Rent and the right to require it shall be in addition to all of
Landlord’s other rights and remedies hereunder, at law and/or in equity and shall not be construed
as liquidated damages or as limiting Landlord’s remedies in any manner. In addition to the late
charge described above, any Rent or other amounts owing hereunder which are not paid by the date
that they are due shall thereafter bear interest until paid at a rate (the “Interest Rate”) equal
to the lesser of (i) the “Prime Rate” or “Reference Rate” announced from time to time by the Bank
of America (or such reasonable comparable national banking institution as selected by Landlord in
the event Bank of America ceases to exist or publish a Prime Rate or Reference Rate), plus four
percent (4%), or (ii) the highest rate permitted by applicable law.

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ARTICLE 5

USE OF PREMISES

     Tenant shall use the Premises solely for general office purposes consistent with the character
of the Building as a first-class office building, and Tenant shall not use or permit the Premises
to be used for any other purpose or purposes whatsoever. Tenant further covenants and agrees that
it shall not use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of Exhibit D, attached hereto, or
in violation of the laws of the United States of America, the state in which the Real Property is
located, or the ordinances, regulations or requirements of the local municipal or county governing
body or other lawful authorities having jurisdiction over the Real Property. Tenant shall comply
with all recorded covenants, conditions, and restrictions, and the provisions of all ground or
underlying leases, now or hereafter affecting the Real Property. Tenant shall not use or allow
another person or entity to use any part of the Premises for the storage, use, treatment,
manufacture or sale of “Hazardous Material,” as that term is defined below. As used herein, the
term “Hazardous Material” means any hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the state in which the Real Property is
located or the United States Government.

ARTICLE 6

SERVICES AND UTILITIES

     6.1 Standard Tenant Services. Landlord shall provide the following services on all
days during the Lease Term, unless otherwise stated below.

          6.1.1 Subject to reasonable changes implemented by Landlord and to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning
when necessary for normal comfort for normal office use in the Premises, from Monday through
Friday, during the period from 7:00 a.m. to 6:00 p.m., except for the date of observation of New
Year’s Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas
Day and other locally or nationally recognized holidays as designated by Landlord (collectively,
the “Holidays`”).

          6.1.2 Landlord shall provide adequate electrical wiring and facilities and power for normal
general office use for Building standard lighting and standard office equipment, as determined by
Landlord. Landlord shall designate the electricity utility provider from time to time.

          6.1.3 As part of Operating Expenses or Utilities Costs (as determined by Landlord), Landlord
shall replace lamps, starters and ballasts for Building standard lighting fixtures within the
Premises. In addition, Tenant shall bear the cost of replacement of lamps, starters and ballasts
for non-Building standard lighting fixtures within the Premises.

          6.1.4 Landlord shall provide city water from the regular Building outlets for drinking,
lavatory and toilet purposes.

          6.1.5 Landlord shall provide janitorial services five (5) days per week, except the date of
observation of the Holidays, in and about the Premises and window washing services in a manner
consistent with other comparable buildings in the vicinity of the Project.

          6.1.6 Landlord shall provide nonexclusive automatic passenger elevator service at all times.

          6.1.7 Landlord shall provide nonexclusive freight elevator service subject to scheduling by
Landlord.

     6.2 Overstandard Tenant Use. Tenant shall not, without Landlord’s prior written
consent, use heat-generating machines, machines other than normal fractional horsepower office
machines, or equipment or lighting other than Building standard lights in the Premises, which may
affect the temperature otherwise maintained by the air conditioning system or increase the need for
water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1
of this Lease. If such consent is given, Landlord shall have the right to install supplementary
air conditioning equipment or systems in the Premises, including supplementary or additional
metering devices, and the cost thereof, including the cost of installation, operation and
maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid
by Tenant to Landlord upon billing by Landlord. If Tenant uses water or heat or air conditioning
in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, or if
Tenant’s consumption of electricity shall exceed two (2) watts connected load per
rentable square foot of the Premises, calculated on an monthly basis for the hours described
in Section 6.1.1 above, Tenant shall pay to Landlord,
within ten (10) days after billing
and as additional rent, the cost of such excess consumption, the cost of the installation,
operation, and maintenance of equipment which is installed in order to supply such excess
consumption, and the cost of the increased wear and tear on existing equipment caused by such
excess consumption; and Landlord may install devices to separately meter any increased use, and in
such event Tenant shall pay, as additional rent, the increased cost directly to Landlord, within
ten (10) days
 after demand, including the cost of such additional metering devices. If Tenant
desires to use heat, ventilation or air conditioning during hours other than those for which
Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this
Lease, (i) Tenant shall give Landlord such prior notice, as Landlord shall from time to time
establish as appropriate, of Tenant’s desired use, (ii) Landlord shall supply such utilities to
Tenant at such hourly cost to Tenant as Landlord shall from time to time establish, and
(iii) Tenant shall pay such cost within ten (10) days

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after billing, as additional rent. Landlord
confirms that after-hours heating and air-conditioning is available to the Premises at the current
cost of $35.00 per hour. The rate for after-hours heating and air-conditioning to the Premises is
subject to change based upon changes in Landlord’s cost to provide such services.

     6.3 Separate Metering. Notwithstanding the foregoing provisions of this
Section 6 to the contrary, Landlord shall have the right to cause some or all of the
electricity, water and/or other utilities to be separately metered for the Premises, and Tenant
shall pay for the cost of all such utilities so separately metered, or which are billed directly to
Tenant, within ten (10) days after invoice, in which event Utilities Costs for the Utilities Base
Year and each Expense Year shall be equitably reduced to exclude all such utilities provided to
Tenant and other tenants in the Building.

     6.4 Interruption of Use. Tenant agrees that Landlord shall not be liable for damages,
by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in the quality or
quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by
repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability
to secure electricity, gas, water, or other fuel at the Building or Real Property after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord’s reasonable control; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and
possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations
under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant’s business, including,
without limitation, loss of profits, however occurring, through or in connection with or incidental
to a failure to furnish any of the services or utilities as set forth in this Article 6.

     6.5 Additional Services. Landlord shall also have the exclusive right, but not the
obligation, to provide any additional services which may be required by Tenant, including, without
limitation, locksmithing, lamp replacement, additional janitorial service, and additional repairs
and maintenance, provided that Tenant shall pay to Landlord upon billing, the sum of all costs to
Landlord of such additional services plus an administration fee. Charges for any utilities or
service for which Tenant is required to pay from time to time hereunder, shall be deemed Additional
Rent hereunder and shall be billed on a monthly basis.

ARTICLE 7

REPAIRS

     7.1 Tenant’s Repairs. Subject to Landlord’s repair obligations in
Sections 7.2 and 11.1 below, Tenant shall, at Tenant’s own expense, keep the
Premises, including all improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term, which repair obligations shall include, without
limitation, the obligation to promptly and adequately repair all damage to the Premises and replace
or repair all damaged or broken fixtures and appurtenances; provided however, that, at Landlord’s
option, or if Tenant fails to make such repairs, Landlord may, but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost
thereof (to be uniformly established for the Building) sufficient to reimburse Landlord for all
overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement
with such repairs and replacements forthwith upon being billed for same.

     7.2 Landlord’s Repairs. Anything contained in Section 7.1 above to the
contrary notwithstanding, and subject to Articles 11 and 12 of this Lease, Landlord
shall repair and maintain the structural portions of the Building, including the basic plumbing,
heating, ventilating, air conditioning and electrical systems serving the Building and not located
in the Premises; provided, however, if such maintenance and repairs are caused in part or in whole
by the act, neglect, fault of or omission of any duty by Tenant, its agents, servants, employees or
invitees, Tenant shall pay to Landlord as additional rent, the reasonable cost of such maintenance
and repairs. Landlord shall not be liable for any failure to make any such repairs, or to perform
any maintenance. 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 any repairs,
alterations or improvements in or to any portion of the Real Property, Building or the Premises or
in or to fixtures, appurtenances and equipment therein. Tenant hereby waives and releases its
right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil
Code; or under any similar law, statute, or ordinance now or hereafter in effect.

ARTICLE 8

ADDITIONS AND ALTERATIONS

     8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises (collectively, the “Alterations”) without first
procuring the prior written consent of Landlord to such Alterations, which consent shall be
requested by Tenant not less than thirty (30) days prior to the commencement thereof, and which
consent shall not be unreasonably withheld by Landlord; provided, however, Landlord may withhold
its consent in its sole and absolute discretion with respect to any Alterations which may affect
the structural components of the Building or the Systems and Equipment or which can be seen from
outside the Premises. Tenant shall pay for all overhead, general conditions, fees and other costs
and expenses of the Alterations, and shall pay to Landlord a Landlord supervision fee of ten
percent (10%) of the cost of the Alterations. The construction of the initial improvements to the
Premises shall be governed by the terms of the Tenant Work Letter and not the terms of this
Article 8.

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     8.2 Manner of Construction. Landlord may impose, as a condition of its consent to all
Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its
reasonable discretion may deem desirable, including, but not limited to, the requirement that
Tenant utilize for such purposes only contractors, materials, mechanics and materialmen approved by
Landlord; provided, however, Landlord may impose such requirements as Landlord may determine, in
its sole and absolute discretion, with respect to any work affecting the structural components of
the Building or Systems and Equipment (including designating specific contractors to perform such
work). Tenant shall construct such Alterations and perform such repairs in conformance with any
and all applicable rules and regulations of any federal, state, county or municipal code or
ordinance and pursuant to a valid building permit, issued by the city in which the Real Property is
located, and in conformance with Landlord’s construction rules and regulations. Landlord’s
approval of the plans, specifications and working drawings for Tenant’s Alterations shall create no
responsibility or liability on the part of Landlord for their completeness, design sufficiency, or
compliance with all laws, rules and regulations of governmental agencies or authorities. All work
with respect to any Alterations must be done in a good and workmanlike manner and diligently
prosecuted to completion to the end that the Premises shall at all times be a complete unit except
during the period of work. In performing the work of any such Alterations, Tenant shall have the
work performed in such manner as not to obstruct access to the Building or Real Property or the
common areas for any other tenant of the Real Property, and as not to obstruct the business of
Landlord or other tenants of the Real Property, or interfere with the labor force working at the
Real Property. If Tenant makes any Alterations, Tenant agrees to carry “Builder’s All Risk”
insurance in an amount approved by Landlord covering the construction of such Alterations, and such
other insurance as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately
upon completion thereof. In addition, Landlord may, in its discretion, require Tenant to obtain a
lien and completion bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee. Upon completion of any Alterations, Tenant shall (i) cause a Notice of Completion to
be recorded in the office of the Recorder of the county in which the Real Property is located in
accordance with Section 3093 of the Civil Code of the State of California or any successor statute,
(ii) deliver to the management office of the Real Property a reproducible copy of the “as built”
drawings of the Alterations, and (iii) deliver to Landlord evidence of payment, contractors’
affidavits and full and final waivers of all liens for labor, services or materials.

     8.3 Landlord’s Property. All Alterations, improvements, fixtures and/or equipment
which may be installed or placed in or about the Premises, and all signs installed in, on or about
the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the
property of Landlord. Furthermore, Landlord may require that Tenant remove any improvement or
Alteration upon the expiration or early termination of the Lease Term, and repair any damage to the
Premises and Building caused by such removal. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations, Landlord may do so and may charge the
cost thereof to Tenant.

     8.4 Wi-Fi Network. Without limiting the generality of the foregoing, in the event
Tenant desires to install wireless intranet, Internet and communications network (“Wi-Fi Network”)
in the Premises for the use by Tenant and its employees, then the same shall be subject to the
provisions of this Section 8.4 (in addition to the other provisions of this
Article 8). In the event Landlord consents to Tenant’s installation of such Wi-Fi Network,
Tenant shall, in accordance with Article 15 below, remove the Wi-Fi Network from the
Premises prior to the termination of the Lease. Tenant shall use the Wi-Fi Network so as not to
cause any interference to other tenants in the Building or to other tenants at the Real Property or
with any other tenant’s communication equipment, and not to damage the Real Property or interfere
with the normal operation of the Real Property and Tenant hereby agrees to indemnify, defend and
hold Landlord harmless from and against any and all claims, costs, damages, expenses and
liabilities (including attorneys’ fees) arising out of Tenant’s failure to comply with the
provisions of this Section 8.4, except to the extent same is caused by the gross negligence
or willful misconduct of Landlord and which is not covered by the insurance carried by Tenant under
this Lease (or which would not be covered by the insurance required to be carried by Tenant under
this Lease). Should any interference occur, Tenant shall take all necessary steps as soon as
reasonably possible and no later than three (3) calendar days following such occurrence to correct
such interference. If such interference continues after such three (3) day period, Tenant shall
immediately cease operating such Wi-Fi Network until such interference is corrected or remedied to
Landlord’s satisfaction. Tenant acknowledges that Landlord has granted and/or may grant
telecommunication rights to other tenants and occupants of the Building and Real Property and to
telecommunication service providers and in no event shall Landlord be liable to Tenant for any
interference of the same with such Wi-Fi Network. Landlord makes no representation that the Wi-Fi
Network will be able to receive or transmit communication signals without interference or
disturbance. Tenant shall (i) be solely responsible for any damage caused as a result of the Wi-Fi
Network, (ii) promptly pay any tax, license or permit fees charged pursuant to any laws or
regulations in connection with the
installation, maintenance or use of the Wi-Fi Network and comply with all precautions and
safeguards recommended by all governmental authorities, (iii) pay for all necessary repairs,
replacements to or maintenance of the Wi-Fi Network, and (iv) be responsible for any modifications,
additions or repairs to the Building or Real Property, including without limitation, Building or
Real Property systems or infrastructure, which are required by reason of the installation,
operation or removal of Tenant’s Wi-Fi Network. Should Landlord be required to retain
professionals to research any interference issues that may arise and confirm Tenant’s compliance
with the terms of this Section 8.4, Tenant shall reimburse Landlord for the costs incurred
by Landlord in connection with Landlord’s retention of such professionals, the research of such
interference issues and confirmation of Tenant’s compliance with the terms of this
Section 8.4 within twenty (20) days after the date Landlord submits to Tenant an invoice
for such costs, which costs shall not exceed One Thousand Dollars ($1,000.00) in the aggregate per
year (the “Reimbursement Cap”); provided, however, that to the extent that it is determined that
Tenant has failed to perform its obligations under this Section 8.4, the Reimbursement Cap
shall not apply, and Tenant shall be responsible for reimbursing Landlord for all costs Landlord
incurs in connection with Landlord’s retention of such professionals, the research of such
interference issues and confirmation of Tenant’s compliance with the terms of this
Section 8.4. This reimbursement obligation is in addition to, and not in lieu of, any
rights or remedies Landlord may have in the event of a breach or default by Tenant under this
Lease.

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     8.5 Supplemental HVAC Equipment. Tenant shall be entitled to the continued use and
maintenance of the existing supplemental HVAC equipment located within the computer room of the
Premises, as more particularly set forth on Exhibit E attached hereto (collectively, the
“Supplemental HVAC Equipment”). Tenant’s continued use and maintenance of the Supplemental HVAC
Equipment shall continue to be at Tenant’s sole cost and expense and shall remain in the current
locations, previously approved by Landlord pursuant to the Existing Lease (defined in Section
24.31 below). The Supplemental HVAC Units shall be separately metered at Tenant’s sole cost
and expense (including condensor water and electricity, as applicable), and all costs and utility
charges relating to the operation, maintenance and repair of such Supplemental HVAC Equipment shall
be paid for by Tenant. If Tenant elects to install any additional supplemental HVAC equipment
pursuant to the terms of this Article 8, Tenant shall install and operate the additional
supplemental HVAC equipment in compliance with applicable law and shall at all times maintain the
Supplemental HVAC Equipment, including any additional supplemental HVAC equipment, in good
condition and repair. If Tenant desires to relocate the Supplemental HVAC Equipment, Tenant shall
obtain Landlord’s prior written approval of the new locations, and any costs incurred due to the
relocation shall be Tenant’s sole responsibility. Upon the expiration or earlier termination of
this Lease, Tenant shall surrender the Supplemental HVAC Equipment to Landlord in good condition,
normal wear and tear excepted, or, at Landlord’s option, Tenant shall remove the Supplemental HVAC
Equipment and repair any damage to the Premises and/or the Building caused by such removal.

ARTICLE 9

COVENANT AGAINST LIENS

     Tenant has no authority or power to cause or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation of law or otherwise, to attach to or be
placed upon the Real Property, Building or Premises, and any and all liens and encumbrances created
by Tenant shall attach to Tenant’s interest only. Landlord shall have the right at all times to
post and keep posted on the Premises any notice which it deems necessary for protection from such
liens. Tenant covenants and agrees not to suffer or permit any lien of mechanics or materialmen or
others to be placed against the Real Property, the Building or the Premises with respect to work or
services claimed to have been performed for or materials claimed to have been furnished to Tenant
or the Premises, and, in case of any such lien attaching or notice of any lien, Tenant covenants
and agrees to cause it to be immediately released and removed of record. Notwithstanding anything
to the contrary set forth in this Lease, if any such lien is not released and removed on or before
the date notice of such lien is delivered by Landlord to Tenant, Landlord, at its sole option, may
immediately take all action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses, including reasonable attorneys’
fees and costs, incurred by Landlord in connection with such lien shall be deemed Additional Rent
under this Lease and shall immediately be due and payable by Tenant.

ARTICLE 10

INDEMNIFICATION AND INSURANCE

     10.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage to property
and injury to persons, in, on, or about the Premises from any cause whatsoever and agrees that
Landlord, and its partners and subpartners, and their respective officers, agents, property
managers, servants, employees, and independent contractors (collectively, “Landlord Parties”) shall
not be liable for, and are hereby released from any responsibility for, any damage to property or
injury to persons or resulting from the loss of use thereof, which damage or injury is sustained by
Tenant or by other persons claiming through Tenant. Tenant shall indemnify, defend, protect, and
hold harmless the Landlord Parties from any and all loss, cost, damage, expense and liability
(including without limitation court costs and reasonable attorneys’ fees) incurred in connection
with or arising from any cause in, on or about the Premises (including, without limitation,
Tenant’s installation, placement and removal of Alterations, improvements, fixtures and/or
equipment in, on or about the Premises), and any acts, omissions or negligence of Tenant or of any
person claiming by, through or under Tenant, or of the contractors, agents, servants, employees,
licensees or invitees of Tenant or any such person, in, on or about the Premises, the Building and
Real Property; provided, however, that the terms of the foregoing indemnity shall not apply to the
gross negligence or willful misconduct of Landlord. The provisions of this Section 10.1
shall survive the expiration or sooner termination of this Lease.

     10.2 Tenant’s Compliance with Landlord’s Fire and Casualty Insurance. Tenant shall,
at Tenant’s expense, comply as to the Premises with all insurance company requirements pertaining
to the use of the Premises. If Tenant’s conduct or use of the Premises causes any increase in the
premium for such insurance policies, then Tenant shall reimburse Landlord for any such increase.
Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of
the American Insurance Association (formerly the National Board of Fire Underwriters) and with any
similar body.

     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in the
following amounts.

          10.3.1 Commercial General Liability Insurance covering the insured against claims of bodily
injury, personal injury and property damage arising out of Tenant’s operations, assumed liabilities
or use of the Premises, including a Broad Form Commercial General Liability endorsement covering
the insuring provisions of this Lease and the performance by Tenant of the indemnity agreements set
forth in Section 10.1 of this Lease, (and with owned and non-owned automobile liability
coverage, and liquor liability coverage in the event alcoholic beverages are served on the
Premises) for limits of liability not less than:

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Bodily Injury and 

Property Damage Liability

	 	 	
$5,000,000 each occurrence

$5,000,000 annual aggregate

	 
	 	
Personal Injury Liability

	 	 	
$5,000,000 each occurrence

$5,000,000 annual aggregate

0% Insured’s participation

	 
	 

          10.3.2 Physical Damage Insurance covering (i) all office furniture, trade fixtures, office
equipment, merchandise and all other items of Tenant’s property on the Premises installed by, for,
or at the expense of Tenant, (ii) the Tenant Improvements, including any Tenant Improvements which
Landlord permits to be installed above the ceiling of the Premises or below the floor of the
Premises, and (iii) all other improvements, alterations and additions to the Premises, including
any improvements, alterations or additions installed at Tenant’s request above the ceiling of the
Premises or below the floor of the Premises. Such insurance shall be written on a “physical loss
or damage” basis under a “special form” policy, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses
of the policies of insurance and shall include a vandalism and malicious mischief endorsement,
sprinkler leakage coverage and earthquake sprinkler leakage coverage.

          10.3.3 Workers’ compensation insurance as required by law.

          10.3.4 Loss-of-income, business interruption and extra-expense insurance in such amounts as
will reimburse Tenant for direct and indirect loss of earnings attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of loss of access to the Premises
or to the Building as a result of such perils.

          10.3.5 Tenant shall carry comprehensive automobile liability insurance having a combined
single limit of not less than Two Million Dollars ($2,000,000.00) per occurrence and insuring
Tenant against liability for claims arising out of ownership, maintenance or use of any owned,
hired or non-owned automobiles.

          10.3.6 The minimum limits of policies of insurance required of Tenant under this Lease shall
in no event limit the liability of Tenant under this Lease. Such insurance shall: (i) name
Landlord, and any other party it so specifies, as an additional insured; (ii) specifically cover
the liability assumed by Tenant under this Lease, including, but not limited to, Tenant’s
obligations under Section 10.1 of this Lease; (iii) be issued by an insurance company
having a rating of not less than A-X in Best’s Insurance Guide or which is otherwise acceptable to
Landlord and licensed to do business in the state in which the Real Property is located; (iv) be
primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is
excess and is non-contributing with any insurance requirement of Tenant; (v) provide that said
insurance shall not be canceled or coverage changed unless thirty (30) days’ prior written notice
shall have been given to Landlord and any mortgagee or ground or underlying lessor of Landlord;
(vi) contain a cross-liability endorsement or severability of interest clause acceptable to
Landlord; and (vii) with respect to the insurance required in Sections 10.3.1 and
10.3.2 above, have deductible amounts not exceeding Five Thousand Dollars ($5,000.00).
Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the
Lease Commencement Date and at least thirty (30) days before the expiration dates thereof. If
Tenant shall fail to procure such insurance, or to deliver such policies or certificate, within
such time periods, Landlord may, at its option, in addition to all of its other rights and remedies
under this Lease, and without regard to any notice and cure periods set forth in
Section 19.1, procure such policies for the account of Tenant, and the cost thereof shall
be paid to Landlord as Additional Rent within ten (10) days after delivery of bills therefor.

     10.4 Subrogation. Landlord and Tenant agree to have their respective insurance
companies issuing property damage insurance waive any rights of subrogation that such companies may
have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord
and Tenant, respectively, is not invalidated thereby. As long as such waivers of subrogation are
contained in their respective insurance policies, Landlord and Tenant hereby waive any right that
either may have against the other on account of any loss or damage to their respective property to
the extent such loss or damage is insurable under policies of insurance for fire and all risk
coverage, theft, public liability, or other similar insurance.

     10.5 Additional Insurance Obligations. Tenant shall carry and maintain during the
entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required
to be carried by Tenant pursuant to this Article 10, and such other reasonable types of
insurance coverage and in such reasonable amounts covering the Premises and Tenant’s operations
therein, as may be reasonably requested by Landlord.

ARTICLE 11

DAMAGE AND DESTRUCTION

     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord
of any damage to the Premises resulting from fire or any other casualty. If the Premises or any
common areas of the Building or Real Property serving or providing access to the Premises shall be
damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Landlord’s reasonable control, and subject
to all other terms of this Article 11, restore the base, shell, and core of the Premises
and such common areas. Such restoration shall be to substantially the same condition of the

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base,
shell, and core of the Premises and common areas prior to the casualty, except for modifications
required by zoning and building codes and other laws or by the holder of a mortgage on the Real
Property, or the lessor of a ground or underlying lease with respect to the Real Property and/or
the Building, or any other modifications to the common areas deemed desirable by Landlord, provided
access to the Premises and any common restrooms serving the Premises shall not be materially
impaired. Notwithstanding any other provision of this Lease, upon the occurrence of any damage to
the Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.3
of this Lease, and Landlord shall repair any injury or damage to the tenant improvements and
alterations installed in the Premises and shall return such tenant improvements and alterations to
their original condition; provided that if the cost of such repair by Landlord exceeds the amount
of insurance proceeds received by Landlord from Tenant’s insurance carrier, as assigned by Tenant,
the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s repair of the
damage. In connection with such repairs and replacements, Tenant shall, prior to the commencement
of construction, submit to Landlord, for Landlord’s review and approval, all plans, specifications
and working drawings relating thereto, and Landlord shall select the contractors to perform such
improvement work. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant’s business resulting in any way from such damage or the repair
thereof; provided however, that if such fire or other casualty shall have damaged the Premises or
common areas necessary to Tenant’s occupancy, and if such damage is not the result of the
negligence or willful misconduct of Tenant or Tenant’s employees, contractors, licensees, or
invitees, Landlord shall allow Tenant a proportionate abatement of Base Rent and Tenant’s Share of
Operating Expenses, Tax Expenses and Utilities Costs to the extent Landlord is reimbursed from the
proceeds of rental interruption insurance purchased by Landlord as part of Operating Expenses,
during the time and to the extent the Premises are unfit for occupancy for the purposes permitted
under this Lease, and not occupied by Tenant as a result thereof.

     11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises, the Building and/or
any other portion of the Real Property and instead terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of damage, such notice to include
a termination date giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Building shall be damaged by fire or other casualty or cause, whether or not the
Premises are affected, and one or more of the following conditions is present: (i) repairs cannot
reasonably be completed within one hundred twenty (120) days of the date of damage (when such
repairs are made without the payment of overtime or other premiums); (ii) the holder of any
mortgage on the Real Property or ground or underlying lessor with respect to the Real Property
and/or the Building shall require that the insurance proceeds or any portion thereof be used to
retire the mortgage debt, or shall terminate the ground or underlying lease, as the case may be; or
(iii) the damage is not fully covered, except for deductible amounts, by Landlord’s insurance
policies. In addition, if the Premises or the Building is destroyed or damaged to any substantial
extent during the last twelve (12) months of the Lease Term, then notwithstanding anything
contained in this Article 11, Landlord shall have the option to terminate this Lease by
giving written notice to Tenant of the exercise of such option within thirty (30) days after such
damage or destruction, in which event this Lease shall cease and terminate as of the date of such
notice. Upon any such termination of this Lease pursuant to this Section 11.2, Tenant
shall pay the Base Rent and Additional Rent, properly apportioned up to such date of termination,
and both parties hereto shall thereafter be freed and discharged of all further obligations
hereunder, except as provided for in provisions of this Lease which by their terms survive the
expiration or earlier termination of the Lease Term.

     11.3 Waiver of Statutory Provisions. The provisions of this Lease, including this
Article 11, constitute an express agreement between Landlord and Tenant with respect to any
and all damage to, or destruction of, all or any part of the Premises, the Building or any other
portion of the Real Property, and any statute or regulation of the state in which the Real Property
is located, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil
Code, with respect to any rights or obligations concerning damage or destruction in the absence of
an express agreement between the parties, and any other statute or regulation, now or hereafter in
effect, shall have no application to this Lease or any damage or destruction to all or any part of
the Premises, the Building or any other portion of the Real Property.

ARTICLE 12

CONDEMNATION

     12.1 Permanent Taking. If the whole or any part of the Premises, Building or Real
Property shall be taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or
condemned, or reconfigured or vacated by such
authority in such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Real Property, or if Landlord shall grant a deed or other instrument in
lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate
this Lease upon one hundred eighty (180) days’ notice, provided such notice is given no later than
ninety (90) days after the date of such taking, condemnation, reconfiguration, vacation, deed or
other instrument. If more than twenty-five percent (25%) of the rentable square feet of the
Premises is taken, or if access to the Premises is substantially impaired, by power of eminent
domain or condemned by any competent authority for any public or quasi-public use or purpose, then
Tenant shall have the option to terminate this Lease upon one hundred eighty (180) days’ notice,
provided such notice is given no later than ninety (90) days after the date of such taking.
Landlord shall be entitled to receive the entire award or payment in connection therewith, except
that Tenant shall have the right to file any separate claim available to Tenant for any taking of
Tenant’s personal property and fixtures belonging to Tenant and removable by Tenant upon expiration
of the Lease Term pursuant to the terms of this Lease, and for moving expenses and any other
compensatory damages, so long as such claim does not diminish the award available to Landlord, its
ground lessor with respect to the Real Property or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such termination, or the
date of such taking, whichever shall first occur. If any part of the Premises shall be

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taken by
power of eminent domain or condemned by any competent authority for any public or quasi-public use
or purpose, and this Lease is not terminated, the Base Rent and Tenant’s Share of Operating
Expenses, Tax Expenses and Utilities Costs shall be proportionately abated. Tenant hereby waives
any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of
Civil Procedure.

     12.2 Temporary Taking. Notwithstanding anything to the contrary contained in this
Article 12, in the event of a temporary taking of all or any portion of the Premises by
power of eminent domain or condemned by any competent authority for any public or quasi-public use
or purpose for a period of one hundred and eighty (180) days or less, then this Lease shall not
terminate but the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities
Costs shall be abated for the period of such taking in proportion to the ratio that the amount of
rentable square feet of the Premises taken bears to the total rentable square feet of the Premises.
Landlord shall be entitled to receive the entire award made in connection with any such temporary
taking.

ARTICLE 13

COVENANT OF QUIET ENJOYMENT

     Landlord covenants that Tenant, on paying the Rent, charges for services and other payments
herein reserved and on keeping, observing and performing all the other terms, covenants,
conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed
and performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in
lieu of any other covenant express or implied.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

     14.1 Transfers. Tenant shall not, without the prior written consent of Landlord,
assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise
transfer, this Lease or any interest hereunder, permit any assignment or other such foregoing
transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any
part thereof, or permit the use of the Premises by any persons other than Tenant and its employees
(all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any
person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a
"Transferee”). If Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify
Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the proposed effective
date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred
eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the
portion of the Premises to be transferred (the “Subject Space”), (iii) all of the terms of the
proposed Transfer, the name and address of the proposed Transferee, and a copy of all existing
and/or proposed documentation pertaining to the proposed Transfer, including all existing operative
documents to be executed to evidence such Transfer or the agreements incidental or related to such
Transfer, (iv) current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and (v) such other information as Landlord may reasonably require. Any
Transfer made without Landlord’s prior written consent shall, at Landlord’s option, be null, void
and of no effect, and shall, at Landlord’s option, constitute a default by Tenant under this Lease.
Whether or not Landlord shall grant consent, within thirty (30) days after written request by
Landlord, Tenant shall pay to Landlord Two Thousand Five Hundred Dollars ($2,500.00) to reimburse
Landlord for its review and processing fees, and Tenant shall also reimburse Landlord for any
reasonable legal fees incurred by Landlord in connection with Tenant’s proposed Transfer.

     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to any
proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer
Notice. The parties hereby agree that it shall be reasonable under this Lease and under any
applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for withholding consent:

          14.2.1 The Transferee is of a character or reputation or engaged in a business which is not
consistent with the quality of the Building or Real Property;

          14.2.2 The Transferee intends to use the Subject Space for purposes which are not permitted
under this Lease;

          14.2.3 The Transferee is either a governmental agency or instrumentality thereof;

          14.2.4 The Transfer will result in more than a reasonable and safe number of occupants per
floor within the Subject Space;

          14.2.5 The Transferee is not a party of reasonable financial worth and/or financial stability
in light of the responsibilities involved under the Lease on the date consent is requested;

          14.2.6 The proposed Transfer would cause Landlord to be in violation of another lease or
agreement to which Landlord is a party, or would give an occupant of the Real Property a right to
cancel its lease;

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          14.2.7 The terms of the proposed Transfer will allow the Transferee to exercise a right of
renewal, right of expansion, right of first offer, or other similar right held by Tenant (or will
allow the Transferee to occupy space leased by Tenant pursuant to any such right); or

          14.2.8 Either the proposed Transferee, or any person or entity which directly or indirectly,
controls, is controlled by, or is under common control with, the proposed Transferee, (i) occupies
space in the Project at the time of the request for consent, (ii) is negotiating with Landlord to
lease space in the Project at such time, or (iii) has negotiated with Landlord during the twelve
(12)-month period immediately preceding the Transfer Notice.

     If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and
does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease),
Tenant may within six (6) months after Landlord’s consent, but not later than the expiration of
said six-month period, enter into such Transfer of the Premises or portion thereof, upon
substantially the same terms and conditions as are set forth in the Transfer Notice furnished by
Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice (i) such that
Landlord would initially have been entitled to refuse its consent to such Transfer under this
Section 14.2, or (ii) which would cause the proposed Transfer to be more favorable to the
Transferee than the terms set forth in Tenant’s original Transfer Notice, Tenant shall again submit
the Transfer to Landlord for its approval and other action under this Article 14 (including
Landlord’s right of recapture, if any, under Section 14.4 of this Lease).

     14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition thereto
which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of
any “Transfer Premium,” as that term is defined in this Section 14.3, received by Tenant
from such Transferee. “Transfer Premium” shall mean all rent, additional rent or other
consideration payable by such Transferee in excess of the Rent and Additional Rent payable by
Tenant under this Lease on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i) any reasonable
changes, alterations and improvements to the Premises in connection with the Transfer (but only to
the extent approved by Landlord), and (ii) any reasonable brokerage commissions in connection with
the Transfer (collectively, the “Subleasing Costs”). “Transfer Premium” shall also include, but
not be limited to, key money and bonus money paid by Transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered by Tenant to
Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.

     14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the contrary
contained in this Article 14, Landlord shall have the option, by giving written notice to
Tenant within thirty (30) days after receipt of any Transfer Notice, to recapture the Subject
Space. Such recapture notice shall cancel and terminate this Lease with respect to the Subject
Space as of the date stated in the Transfer Notice as the effective date of the proposed Transfer
until the last day of the term of the Transfer as set forth in the Transfer Notice. If this Lease
shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be
prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises, and this Lease as so amended shall
continue thereafter in full force and effect, and upon request of either party, the parties shall
execute written confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture the Subject Space under this Section 14.4, then, provided Landlord has
consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject
Space to the proposed Transferee, subject to provisions of the last paragraph of
Section 14.2 of this Lease.

     14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee,
(iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to Landlord, and (iv) no
Transfer relating to this Lease or agreement entered into with respect thereto, whether with or
without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease from liability under
this Lease. Landlord or its authorized representatives shall have the right at all reasonable
times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the
right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the deficiency and Landlord’s
costs of such audit.

     14.6 Additional Transfers. For purposes of this Lease, the term “Transfer” shall also
include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of
fifty percent (50%) or more of the partners, or transfer of twenty-five percent or more of
partnership interests, within a twelve (12)-month period, or the dissolution of the partnership
without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation (i.e.,
whose stock is not publicly held and not traded through an exchange or over the counter), (A) the
dissolution, merger, consolidation or other reorganization of Tenant, (B) the sale or other
transfer of more than an aggregate of fifty percent (50%) of the voting shares of Tenant (other
than to immediate family members by reason of gift or death), within a twelve (12)-month period, or
(C) the sale, mortgage, hypothecation or pledge of more than an aggregate of fifty percent (50%) of
the value of the unencumbered assets of Tenant within a twelve (12) month period.

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ARTICLE 15

SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

     15.1 Surrender of Premises. No act or thing done by Landlord or any agent or employee
of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a
surrender of the Premises unless such intent is specifically acknowledged in a writing signed by
Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord
shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or
not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be
entitled to the return of such keys at any reasonable time upon request until this Lease shall have
been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the
option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies
affecting the Premises.

     15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or
upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this
Article 15, quit and surrender possession of the Premises to Landlord in as good order and
condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant,
reasonable wear and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all telephone, data, and other cabling
and wiring (including any cabling and wiring associated with the Wi-Fi Network, if any) installed
or caused to be installed by Tenant (including any cabling and wiring, installed above the ceiling
of the Premises or below the floor of the Premises), all debris and rubbish, and such items of
furniture, equipment, free-standing cabinet work, and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles
of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be
removed, and Tenant shall repair at its own expense all damage to the Premises and Building
resulting from such removal.

ARTICLE 16

HOLDING OVER

     If Tenant holds over after the expiration of the Lease Term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall
not constitute a renewal hereof or an extension for any further term, and in such case Base Rent
shall be payable at a monthly rate equal to two hundred percent (200%) of the greater of (i) the
Base Rent applicable during the last rental period of the Lease Term under this Lease, and (ii) the
fair market rental rate of the Premises as of the commencement of such holdover period. Such
month-to-month tenancy shall be subject to every other term, covenant and agreement contained
herein. Landlord hereby expressly reserves the right to require Tenant to surrender possession of
the Premises to Landlord as provided in this Lease upon the expiration or other termination of this
Lease. The provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to
surrender the Premises upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability
resulting from such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits
to Landlord resulting therefrom.

ARTICLE 17

ESTOPPEL CERTIFICATES

     Within ten (10) days following a request in writing by Landlord, Tenant shall execute and
deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be in the form
as may be required by any prospective mortgagee or purchaser of the Real Property (or any portion
thereof), indicating therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord’s mortgagee or
prospective mortgagee. Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes. Failure of Tenant to timely execute and deliver such
estoppel certificate or other instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel certificate are true and correct,
without exception. Failure by Tenant to so deliver such estoppel certificate shall be a material
default of the provisions of this Lease. In addition, Tenant shall be liable to Landlord, and
shall indemnify Landlord from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, including attorneys’ fees, arising or accruing directly or indirectly,
from any failure of Tenant to execute or deliver to Landlord any such estoppel certificate.

ARTICLE 18

SUBORDINATION

     This Lease is subject and subordinate to all present and future ground or underlying leases of
the Real Property and to the lien of any mortgages or trust deeds, now or hereafter in force
against the Real Property, if any, and to all renewals, extensions, modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon the security of
such mortgages or trust deeds, unless the holders of such mortgages or trust deeds, or the lessors
under such ground lease or underlying leases, require in writing that this Lease be superior
thereto. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure
of any such

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mortgage, or if any ground or underlying lease is terminated, to attorn, without any
deductions or set-offs whatsoever, to the purchaser upon any such foreclosure sale, or to the
lessor of such ground or underlying lease, as the case may be, if so requested to do so by such
purchaser or lessor, and to recognize such purchaser or lessor as the lessor under this Lease.
Tenant shall, within five (5) days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or underlying leases.
Tenant hereby irrevocably authorizes Landlord to execute and deliver in the name of Tenant any such
instrument or instruments if Tenant fails to do so, provided that such authorization shall in no
way relieve Tenant from the obligation of executing such instruments of subordination or
superiority. Tenant waives the provisions of any current or future statute, rule or law which may
give or purport to give Tenant any right or election to terminate or otherwise adversely affect
this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.

ARTICLE 19

TENANT’S DEFAULTS; LANDLORD’S REMEDIES

     19.1 Events of Default by Tenant. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense
and without any reduction of Rent. The occurrence of any of the following shall constitute a
default of this Lease by Tenant:

          19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be paid under
this Lease, or any part thereof, when due; or

          19.1.2 Any failure by Tenant to observe or perform any other provision, covenant or condition
of this Lease to be observed or performed by Tenant where such failure continues for fifteen (15)
days after written notice thereof from Landlord to Tenant; provided however, that any such notice
shall be in lieu of, and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; and provided further that if the nature of
such default is such that the same cannot reasonably be cured within a fifteen (15)-day period,
Tenant shall not be deemed to be in default if it diligently commences such cure within such period
and thereafter diligently proceeds to rectify and cure said default as soon as possible; or

          19.1.3 Abandonment or vacation of the Premises by Tenant. Abandonment is herein defined to
include, but is not limited to, any absence by Tenant from the Premises for three (3) business days
or longer while in default of any provision of this Lease.

     19.2 Landlord’s Remedies Upon Default. Upon the occurrence of any such default by
Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in
equity, the option to pursue any one or more of the following remedies, each and all of which shall
be cumulative and nonexclusive, without any notice or demand whatsoever.

          19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which
it may have for possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may
recover from Tenant the following:

               (i) The worth at the time of award of any unpaid rent which has been earned at the time of
such termination; plus

               (ii) The worth at the time of award of the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus

               (iii) The worth at the time of award of the amount by which the unpaid rent for the balance of
the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus

               (iv) Any other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use, and any special
concessions made to obtain a new tenant; and

               (v) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable law.

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all sums of
every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord
or to others. As used in Sections 19.2.1(i) and (ii), above, the “worth at the
time of award” shall be computed by allowing interest at the Interest Rate set forth in
Section 4.5 of this Lease. As used in Section 19.2.1(iii) above, the “worth at the
time of award” shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).

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          19.2.2 Landlord shall have the remedy described in California Civil Code Section 1951.4
(lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights
and remedies under this Lease, including the right to recover all rent as it becomes due.

          19.2.3 Landlord may, but shall not be obligated to, make any such payment or perform or
otherwise cure any such obligation, provision, covenant or condition on Tenant’s part to be
observed or performed (and may enter the Premises for such purposes). In the event of Tenant’s
failure to perform any of its obligations or covenants under this Lease, and such failure to
perform poses a material risk of injury or harm to persons or damage to or loss of property, then
Landlord shall have the right to cure or otherwise perform such covenant or obligation at any time
after such failure to perform by Tenant, whether or not any such notice or cure period set forth in
Section 19.1 above has expired. Any such actions undertaken by Landlord pursuant to the
foregoing provisions of this Section 19.2.3 shall not be deemed a waiver of Landlord’s
rights and remedies as a result of Tenant’s failure to perform and shall not release Tenant from
any of its obligations under this Lease.

     19.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen (15) days after
delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably
made and obligations incurred by Landlord in connection with Landlord’s performance or cure of any
of Tenant’s obligations pursuant to the provisions of Section 19.2.3 above; and (ii) sums
equal to all expenditures made and obligations incurred by Landlord in collecting or attempting to
collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all legal fees and other amounts so expended.
Tenant’s obligations under this Section 19.3 shall survive the expiration or sooner
termination of the Lease Term.

     19.4 Sublessees of Tenant. Whether or not Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 19, Landlord shall have the
right to terminate any and all subleases, licenses, concessions or other consensual arrangements
for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole
discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other consideration receivable
thereunder.

     19.5 Waiver of Default. No waiver by Landlord of any violation or breach by Tenant of
any of the terms, provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other or later violation or breach by Tenant of the same or any other of
the terms, provisions, and covenants herein contained. Forbearance by Landlord in enforcement of
one or more of the remedies herein provided upon a default by Tenant shall not be deemed or
construed to constitute a waiver of such default. The acceptance of any Rent hereunder by Landlord
following the occurrence of any default, whether or not known to Landlord, shall not be deemed a
waiver of any such default, except only a default in the payment of the Rent so accepted.

     19.6 Efforts to Relet. For the purposes of this Article 19, Tenant’s right to
possession shall not be deemed to have been terminated by efforts of Landlord to relet the
Premises, by its acts of maintenance or preservation with respect to the Premises, or by
appointment of a receiver to protect Landlord’s interests hereunder. The foregoing enumeration is
not exhaustive, but merely illustrative of acts which may be performed by Landlord without
terminating Tenant’s right to possession.

ARTICLE 20

SECURITY DEPOSIT

     Landlord is currently holding an existing security deposit as security under the Existing
Lease (defined in Section 24.31), which is currently in the amount of $166,391.96 (the
“Existing Security Deposit”). Tenant hereby grants to Landlord a security interest in the Existing
Security Deposit, as security for the faithful performance by Tenant of all the terms, covenants,
and conditions of this Lease to be kept and performed by Tenant during the Lease Term, as well as
the Existing Lease. Tenant hereby agrees that upon the expiration or termination of the Existing
Lease, Landlord may continue to hold any unapplied portion of the Existing Security Deposit under
this Lease, notwithstanding anything to the contrary set forth in the Existing Lease. It is
understood and agreed that, if and to the extent that the Existing Security Deposit is less than
$166,391.96, Tenant shall immediately deposit cash with Landlord, such that the security deposit
hereunder shall total $166,391.96 (the “Security Deposit”). If Tenant defaults with respect to
any provisions of this Lease, including, but not limited to, the provisions relating to the payment
of Rent, Landlord may, but shall not be required to, use, apply or retain all or any part of the
Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any
amount that Landlord
may spend or become obligated to spend by reason of Tenant’s default, or to compensate
Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If
any portion of the Security Deposit is so used or applied, Tenant shall, within five (5) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount, and Tenant’s failure to do so shall be a default under this Lease.
If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it,
the Security Deposit, or any balance thereof, shall be returned to Tenant, or, at Landlord’s
option, to the last assignee of Tenant’s interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security
Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of law, now or hereafter in force, which provide that Landlord may claim from
a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent,
to

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repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in
addition, claim those sums reasonably necessary to compensate Landlord for any other loss or
damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer,
employee, agent or invitee of Tenant.

ARTICLE 21

COMPLIANCE WITH LAW

     Tenant shall not do anything or suffer anything to be done in or about the Premises which will
in any way conflict with any law, statute, ordinance or other governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated. At its sole cost and
expense, Tenant shall promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building’s life safety system (collectively the “Excluded
Changes”) except to the extent such Excluded Changes are required due to Tenant’s alterations to or
manner of use of the Premises. In addition, Tenant shall fully comply with all present or future
programs intended to manage parking, transportation or traffic in and around the Real Property, and
in connection therewith, Tenant shall take responsible action for the transportation planning and
management of all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-related committees
or entities. The judgment of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of
said governmental measures, shall be conclusive of that fact as between Landlord and Tenant.

ARTICLE 22

ENTRY BY LANDLORD

     Landlord reserves the right at all reasonable times and upon reasonable notice to Tenant to
enter the Premises to: (i) inspect them; (ii) show the Premises to prospective purchasers,
mortgagees or tenants, or to the ground or underlying lessors; (iii) to post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the Building if necessary to
comply with current building codes or other applicable laws, or for structural alterations, repairs
or improvements to the Building, or as Landlord may otherwise reasonably desire or deem necessary.
Notwithstanding anything to the contrary contained in this Article 22, Landlord may enter
the Premises at any time, without notice to Tenant, in emergency situations and/or to perform
janitorial or other services required of Landlord pursuant to this Lease. Any such entries shall
be without the abatement of Rent and shall include the right to take such reasonable steps as
required to accomplish the stated purposes. Tenant hereby waives any claims for damages or for any
injuries or inconvenience to or interference with Tenant’s business, lost profits, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of
the above purposes, Landlord shall at all times have a key with which to unlock all the doors in
the Premises, excluding Tenant’s vaults, safes and special security areas designated in advance by
Tenant. In an emergency, Landlord shall have the right to enter without notice and use any means
that Landlord may deem proper to open the doors in and to the Premises. Any entry into the
Premises in the manner hereinbefore described shall not be deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from
any portion of the Premises.

ARTICLE 23

TENANT PARKING

     Tenant shall rent throughout the Lease Term the number of parking passes set forth in
Section 11 of the Summary, located in those portions of the Parking Facilities as may be
designated by Landlord from time to time. Tenant shall pay to Landlord for the use of such parking
passes, on a monthly basis, the prevailing rate charged from time to time by Landlord or Landlord’s
parking operator for parking passes in the Parking Facilities where such parking passes are
located, which rates are currently $120.00 per unreserved parking pass per month, and $190.00 per
reserved parking pass per month. Tenant’s continued right to use the parking passes is conditioned
upon Tenant abiding by all rules and regulations which are prescribed from time to time for the
orderly operation and use of the Parking Facilities and upon Tenant’s cooperation in seeing that
Tenant’s employees and visitors also comply with such rules and regulations. In addition, Landlord
may assign any parking spaces and/or make all or a portion of such spaces reserved or institute an
attendant-assisted tandem parking program and/or valet parking program if Landlord determines in
its sole discretion that such is necessary or desirable for orderly and efficient parking.
Landlord specifically reserves the right, from time to time, to change the size, configuration,
design, layout, location and all other aspects of the Parking Facilities, and Tenant acknowledges
and agrees that Landlord, from time to time, may, without incurring any liability to Tenant and
without any abatement of Rent under this Lease temporarily close-off or restrict access to the
Parking Facilities, or temporarily relocate Tenant’s parking spaces to other parking structures
and/or surface parking areas within a reasonable distance from the Parking Facilities, for purposes
of permitting or facilitating any such construction, alteration or improvements or to accommodate
or facilitate
renovation, alteration, construction or other modification of other improvements or structures
located on the Real Property. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of control attributed hereby
to Landlord. The parking rates charged by Landlord for Tenant’s parking passes shall be exclusive
of any parking tax or other charges imposed by governmental authorities in connection with the use
of such parking, which taxes and/or charges shall be paid directly by Tenant or the parking users,
or, if directly imposed against Landlord, Tenant shall reimburse Landlord for all such taxes and/or
charges within ten (10) days after Tenant’s receipt of the invoice from Landlord. The parking
passes provided to Tenant pursuant to this Article 23 are provided solely for use by
Tenant’s own personnel and such passes may not be transferred, assigned, subleased or otherwise
alienated by Tenant without Landlord’s prior approval.

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ARTICLE 24

MISCELLANEOUS PROVISIONS

     24.1 Terms; Captions. The necessary grammatical changes required to make the
provisions hereof apply either to corporations or partnerships or individuals, men or women, as the
case may require, shall in all cases be assumed as though in each case fully expressed. The
captions of Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.

     24.2 Binding Effect. Each of the provisions of this Lease shall extend to and shall,
as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also
of their respective successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions of Article 14 of this Lease.

     24.3 No Waiver. No waiver of any provision of this Lease shall be implied by any
failure of a party to enforce any remedy on account of the violation of such provision, even if
such violation shall continue or be repeated subsequently, any waiver by a party of any provision
of this Lease may only be in writing, and no express waiver shall affect any provision other than
the one specified in such waiver and that one only for the time and in the manner specifically
stated. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in
any way alter the length of the Lease Term or of Tenant’s right of possession hereunder or after
the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice
given Tenant prior to the receipt of such monies, it being agreed that after the service of notice
or the commencement of a suit or after final judgment for possession of the Premises, Landlord may
receive and collect any Rent due, and the payment of said Rent shall not waive or affect said
notice, suit or judgment.

     24.4 Modification of Lease; Financials. Should any current or prospective mortgagee
or ground lessor for the Real Property require a modification or modifications of this Lease, which
modification or modifications will not cause an increased cost or expense to Tenant or in any other
way materially and adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever
documents are required therefor and deliver the same to Landlord within ten (10) days following the
request therefor. Should Landlord or any such current or prospective mortgagee or ground lessor
require execution of a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the Lease Term, Tenant
agrees to execute such short form of Lease and to deliver the same to Landlord within ten (10) days
following the request therefor. In addition, upon request from time to time, Tenant agrees to
provide to Landlord, within ten (10) days of written request, current financial statements for
Tenant, dated no earlier than one (1) year prior to such request, certified as accurate by Tenant
or, if available, audited financial statements prepared by an independent certified public
accountant with copies of the auditor’s statement. If any Guaranty is executed in connection with
this Lease, Tenant also agrees to deliver to Landlord, within ten (10) days of written request,
current financial statements of the Guarantor in a form consistent with the above criteria. All
such financial statements will be delivered to Landlord and any such lender or purchaser in
confidence and shall only be used for purposes of evaluating the financial strength of Tenant or of
Guarantor, as applicable.

     24.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right
to transfer all or any portion of its interest in the Real Property, the Building and/or in this
Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be
released from all liability under this Lease and Tenant agrees to look solely to such transferee
for the performance of Landlord’s obligations hereunder after the date of transfer. The liability
of any transferee of Landlord shall be limited to the interest of such transferee in the Real
Property and such transferee shall be without personal liability under this Lease, and Tenant
hereby expressly waives and releases such personal liability on behalf of itself and all persons
claiming by, through or under Tenant. Tenant further acknowledges that Landlord may assign its
interest in this Lease to a mortgage lender as additional security and agrees that such an
assignment shall not release Landlord from its obligations hereunder and that Tenant shall continue
to look to Landlord for the performance of its obligations hereunder.

     24.6 Prohibition Against Recording. Except as provided in Section 24.4 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect
thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and
the recording thereof in violation of this provision shall make this Lease null and void at
Landlord’s election.

     24.7 Landlord’s Title; Air Rights. Landlord’s title is and always shall be paramount
to the title of Tenant. Nothing herein contained shall empower Tenant to do any act which can,
shall or may encumber the title of Landlord. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease.

     24.8 Tenant’s Signs. Landlord shall provide space on the Building directory on the
ground floor lobby of the Building for a listing identifying Tenant’s name and suite number.
Landlord shall also install near the entry door to the Leased Premises signage identifying Tenant’s
name. All such permitted signage shall use Building standard materials and lettering. Landlord
shall pay for the cost of the initial installation of such permitted signage, and Tenant shall pay
for the cost of any changes thereto. Except for such identification signs, Tenant may not install
any signs on the exterior or roof of the Building or the common areas of the Building or the Real
Property. Any signs, window coverings, or blinds (even if the same are located behind the Landlord
approved window coverings for the Building), or other items visible from the exterior of the
Premises or Building are subject to the prior approval of Landlord, in its sole and absolute
discretion.

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     24.9 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and Tenant, it being
expressly understood and agreed that neither the method of computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord and Tenant other than
the relationship of landlord and tenant.

     24.10 Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments,
to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole
discretion, may elect.

     24.11 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

     24.12 Partial Invalidity. If any term, provision or condition contained in this Lease
shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application
of such term, provision or condition to persons or circumstances other than those with respect to
which it is invalid or unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the fullest extent possible
permitted by law.

     24.13 No Warranty. In executing and delivering this Lease, Tenant has not relied on
any representation, including, but not limited to, any representation whatsoever as to the amount
of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or
that Landlord is furnishing the same services to other tenants, at all, on the same level or on the
same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or
more of the Exhibits attached hereto.

     24.14 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to
the contrary, the liability of Landlord and the Landlord Parties hereunder (including any successor
landlord) and any recourse by Tenant against Landlord or the Landlord Parties shall be limited
solely and exclusively to an amount which is equal to the interest of Landlord in the Real
Property, and neither Landlord, nor any of the Landlord Parties shall have any personal liability
therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant.

     24.15 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease supersedes and cancels
any and all previous negotiations, arrangements, brochures, agreements and understandings, if any,
between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter
thereof, and none thereof shall be used to interpret or construe this Lease. This Lease and any
side letter or separate agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions, warranties and
agreements of the parties relating in any manner to the rental, use and occupancy of the Premises,
shall be considered to be the only agreement between the parties hereto and their representatives
and agents, and none of the terms, covenants, conditions or provisions of this Lease can be
modified, deleted or added to except in writing signed by the parties hereto. All negotiations and
oral agreements acceptable to both parties have been merged into and are included herein. There
are no other representations or warranties between the parties, and all reliance with respect to
representations is based totally upon the representations and agreements contained in this Lease.

     24.16 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Building and/or in any other building and/or any other portion of the Real
Property as Landlord in the exercise of its sole business judgment shall determine to best promote
the interests of the Real Property. Tenant does not rely on the fact, nor does Landlord represent,
that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any
space in the Building or Real Property.

     24.17 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials or reasonable
substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other
causes beyond the reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this
Lease and except with respect to Tenant’s obligations under the Tenant Work Letter (collectively,
the “Force Majeure”), notwithstanding anything to the contrary contained in this Lease, shall
excuse the performance of such party for a period equal to any such prevention, delay or stoppage
and, therefore, if this Lease specifies a time period for performance of an obligation of either
party, that time period shall be extended by the period of any delay in such party’s performance
caused by a Force Majeure.

     24.18 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for all
those claiming under Tenant all right now or hereafter existing to redeem by order or judgment of
any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease.

     24.19 Notices. All notices, demands, statements or communications (collectively,
“Notices”) given or required to be given by either party to the other hereunder shall be in
writing, shall be sent by United States certified or registered mail, postage prepaid, return
receipt requested, or delivered personally (i) to Tenant at the appropriate address set forth in
Section 5 of the Summary, or to such other place as Tenant may from time to time designate
in a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section 3 of the
Summary, or to such other firm or to such other place as Landlord may from time to time designate
in a Notice to Tenant. Any Notice will be deemed given on the date it is mailed as provided in
this Section 24.19 or upon the date personal delivery is made. If Tenant is notified of
the identity and address of Landlord’s mortgagee or ground or underlying lessor, Tenant shall give
to such mortgagee or ground or underlying lessor written notice of any default by Landlord under
the terms of

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this Lease by registered or certified mail, and such mortgagee or ground or underlying
lessor shall be given a reasonable opportunity to cure such default prior to Tenant’s exercising
any remedy available to Tenant.

     24.20 Joint and Several. If there is more than one Tenant, the obligations imposed
upon Tenant under this Lease shall be joint and several.

     24.21 Authority. If Tenant is a corporation or partnership, each individual executing
this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and
existing entity qualified to do business in the state in which the Real Property is located and
that Tenant has full right and authority to execute and deliver this Lease and that each person
signing on behalf of Tenant is authorized to do so. Tenant confirms that it is not in violation of
any executive order or similar governmental regulation or law, which prohibits terrorism or
transactions with suspected or confirmed terrorists or terrorist entities or with persons or
organizations that are associated with, or that provide any form of support to, terrorists. Tenant
further confirms that it will comply throughout the Term of this Lease, with all governmental laws,
rules or regulations governing transactions or business dealings with any suspected or confirmed
terrorists or terrorist entities, as identified from time to time by the U.S. Treasury Department’s
Office of Foreign Assets Control or any other applicable governmental entity.

     24.22 Jury Trial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION AGAINST THE
OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACH HEREOF OR OTHERWISE
FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT
TO A TRIAL BY JURY. In the event of any such commencement of litigation, the prevailing party
shall be entitled to recover from the other party such costs and reasonable attorneys’ fees as may
have been incurred, including any and all costs incurred in enforcing, perfecting and executing
such judgment.

     24.23 Governing Law. This Lease shall be construed and enforced in accordance with
the laws of the state in which the Real Property is located.

     24.24 Submission of Lease. Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a
lease or otherwise until execution and delivery by both Landlord and Tenant.

     24.25 Brokers. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Lease,
excepting only the real estate brokers or agents specified in Section 12 of the Summary
(the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable
attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be
owing on account of the indemnifying party’s dealings with any real estate broker or agent other
than the Brokers.

     24.26 Independent Covenants. This Lease shall be construed as though the covenants
herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly
waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its
obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any acts
hereunder at Landlord’s expense or to any setoff of the Rent or other amounts owing hereunder
against Landlord; provided, however, that the foregoing shall in no way impair the right of Tenant
to commence a separate action against Landlord for any violation by Landlord of the provisions
hereof so long as notice is first given to Landlord and any holder of a mortgage or deed of trust
covering the Building, Real Property or any portion thereof, of whose address Tenant has
theretofore been notified, and an opportunity is granted to Landlord and such holder to correct
such violations as provided above.

     24.27 Building Name and Signage. Landlord shall have the right at any time to change
the name(s) of the Building and Real Property and to install, affix and maintain any and all signs
on the exterior and on the interior of the Building and any portion of the Real Property as
Landlord may, in Landlord’s sole discretion, desire. Tenant shall not use the names of the
Building or Real Property or use pictures or illustrations of the Building or Real Property in
advertising or other publicity, without the prior written consent of Landlord.

     24.28 Confidentiality. Tenant acknowledges that the content of this Lease and any
related documents are confidential information. Tenant shall keep such confidential information
strictly confidential and shall not disclose such confidential information to any person or entity
other than Tenant’s financial, legal, and space planning consultants.

     24.29 Landlord’s Construction. It is specifically understood and agreed that Landlord
has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate
the Premises, Building, Real
Property, or any part thereof and that no representations or warranties respecting the
condition of the Premises, the Building or the Real Property have been made by Landlord to Tenant,
except as specifically set forth in this Lease. Tenant acknowledges that prior to and during the
Lease Term, Landlord (and/or any common area association) will be completing construction and/or
demolition work pertaining to various portions of the Building, Premises, and/or Real Property,
including without limitation the Parking Facilities, landscaping and tenant improvements for
premises for other tenants and, at Landlord’s sole election, such other buildings, parking
facilities, improvements, landscaping and other facilities within or as part of the Project as
Landlord (and/or such common area association) shall from time to time desire (collectively, the
“Construction”). In connection with such Construction, Landlord may, among other things, erect
scaffolding or other necessary structures in the Building, limit or eliminate access to portions of
the Real Property, including portions of the common areas, or perform work in the Building and/or
Real

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Property, which work may create noise, dust or leave debris in the Building and/or Real
Property. Tenant hereby agrees that such Construction and Landlord’s actions in connection with
such Construction shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent. Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or interference with Tenant’s business arising from
such Construction, nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant’s personal property or
improvements resulting from such Construction or Landlord’s actions in connection with such
Construction, or for any inconvenience or annoyance occasioned by such Construction or Landlord’s
actions in connection with such Construction.

     24.30 Substitution of Other Premises. With respect only to portions of the Premises
which do not constitute a full floor of the Building (“Partial Floor Premises”), Landlord shall
have the right to move such Partial Floor Premises to other space in the Project which is (i)
contiguous to the Premises (subject to availability as determined by Landlord), and (ii) comparable
in size (subject to availability as determined by Landlord) to the Partial Floor Premises, and all
terms hereof shall apply to the new space with equal force. In such event, Landlord shall give
Tenant prior notice of Landlord’s election to so relocate Tenant, and shall move Tenant’s effects
to the new space at Landlord’s sole cost and expense at such time and in such manner as to
inconvenience Tenant as little as reasonably practicable. The new space shall be delivered to
Tenant with improvements substantially similar to those improvements existing in the Premises at
the time of Landlord’s notification to Tenant of the relocation. Simultaneously with such
relocation of the Partial Floor Premises, the parties shall immediately execute an amendment to
this Lease stating the relocation of the Partial Floor Premises. In the event Tenant is relocated
to new space pursuant to this Section 24.30, Landlord shall be responsible for all
reasonable costs associated with the relocation (i.e., re-printing costs for stationery and
business cards, and telecommunication re-wiring and connectivity in the new space), subject to
Landlord’s prior approval of such costs before they are incurred. In no event will the Partial
Floor Premises be relocated to space below the sixth (6th) floor of the Building.

     24.31 Termination of Existing Lease. Tenant currently occupies the Premises pursuant
to that certain Office Lease dated as of April 1, 1996, as amended by that certain Amendment to
Office Lease dated as of February 10, 1997, that certain Second Amendment to Office Lease dated as
of July 11, 1997, that certain Third Amendment to Office Lease dated as of August 17, 1999, that
certain Amendment to Lease dated as of August 9, 2002, that certain Fourth Amendment to Office
Lease (Amending the Seventh Floor Lease) and Second Amendment to Lease (Amending the Fifth Floor
Lease) dated as of March 19, 2003, that certain Fifth Amendment to Office Lease dated as of October
27, 2003, that certain Sixth Amendment to Office Lease dated as of November 18, 2004, and that
certain Seventh Amendment to Office Lease dated as of April ___, 2006, by and between Landlord and
Tenant (collectively, as amended, the “Existing Lease”). Prior to the Lease Commencement Date,
Tenant shall continue to occupy the Premises and perform all its obligations under each of the
terms and conditions of the Existing Lease, it being acknowledged that the term thereof expires
January 31, 2008. Upon the Lease Commencement Date, the Existing Lease shall terminate for all
purposes, except that Tenant shall be responsible for any liabilities or obligations which
specifically survive the termination of the Existing Lease in accordance with its terms. This
Lease shall govern with respect to Tenant’s occupancy of the Premises from and after the Lease
Commencement Date.

     Fitness Facility. Subject to the terms of this Section 24.32, Landlord agrees
to maintain an exercise room in the Building in a manner consistent with the exercise room
currently existing at the Building and used by tenants and occupants of the Building (such exercise
room or reasonable replacement thereof, the “Exercise Room”). The Exercise Room will be for the
non-exclusive use by Landlord, Tenant and other permitted users, including other tenants and
occupants of the Building and Tenant and its invitees may use such facility at no cost to Tenant in
accordance with this Section 24.32 and such reasonable rules and regulations as Landlord
may from time to time promulgate. Tenant agrees that (i) it will instruct all of its officers,
agents, employees, guests, and invitees that use of the Exercise Room is at their own risk; and
(ii) Landlord shall not be liable for any injuries or damages resulting from use of the Exercise
Room. Landlord reserves the right to refuse access to such Exercise Room in the event of any
breach or violation of Landlord’s rules and regulations concerning use of the Exercise Room, or any
other default under the terms of the Lease. All users of the Exercise Room shall sign a release,
waiver and indemnification in form acceptable to Landlord prior to admittance to the Exercise Room.
Notwithstanding the foregoing, Landlord shall not be required to continue to maintain the Exercise
Room if (a) the maintenance or operation of the Exercise Room in its current manner of operation
does not comply with laws, rules or regulations, (b) Landlord’s insurers or lenders prohibit the
operation of the Exercise Room, or (c) Landlord determines, using Landlord’s commercially
reasonable judgment, that maintaining the Exercise Room is cost prohibitive or results in an
unreasonable operating expense, presents an unreasonable danger or hazard to the tenants or
occupants of the Building.

(SIGNATURES ON NEXT PAGE)

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     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date
first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	“Landlord”:

LEGACY PARTNERS I RIVERPARK I, LLC,

a Delaware limited liability company,
as Owner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	 	 	Legacy Partners Commercial, L.P.,

a California limited partnership,

as Property Manager and Agent for Owner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 	 	Legacy Partners Commercial, Inc.,
General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	
Debra Smith
	 	 
	 

	 	 	 	 	 	Its: Executive Vice President	 	 

	 	 	 	 	 	 	 	 	 
	 	 	“Tenant”:

PDF SOLUTIONS, INC.,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Its:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Its:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

*** If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. The Lease must be executed by the president or
vice president and the secretary or assistant secretary, unless the bylaws or a resolution of the
board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

S-1

 

EXHIBIT A

OUTLINE OF FLOOR PLAN OF PREMISES

SUITE 500

TENANT’S INITIALS HERE:  
                
  

EXHIBIT A

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OUTLINE OF FLOOR PLAN OF PREMISES

SUITE 700

 TENANT’S INITIALS HERE:                    

EXHIBIT A

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OUTLINE OF FLOOR PLAN OF PREMISES

SUITE 1000

TENANT’S INITIALS HERE:                    

EXHIBIT A

-3-

 

OUTLINE OF FLOOR PLAN OF PREMISES

SUITE 1080

TENANT’S INITIALS HERE:                    

EXHIBIT A

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EXHIBIT A-1

SITE PLAN OF REAL PROPERTY

TENANT’S INITIALS HERE:                    

EXHIBIT A-1

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EXHIBIT B

TENANT WORK LETTER

     This Tenant Work Letter (“Tenant Work Letter”) shall set forth the terms and conditions
relating to the construction of the Premises. All references in this Tenant Work Letter to the
“Lease” shall mean the relevant portions of the Lease to which this Tenant Work Letter is attached
as Exhibit B.

SECTION 1

BASE, SHELL AND CORE

     Tenant hereby accepts the base, shell and core (i) of the Premises and (ii) of the floor(s) of
the Building on which the Premises are located (collectively, the “Base, Shell and Core”), in its
current “AS-IS” condition existing as of the date of the Lease and the Lease Commencement Date.
Except for the Tenant Improvement Allowance set forth below, Landlord shall not be obligated to
make or pay for any alterations or improvements to the Premises, the Building, the Project or the
Real Property.

SECTION 2

TENANT IMPROVEMENTS

     2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount of up to, but not
exceeding $5.00 per rentable square foot of the Premises (i.e., up to $248,945.00 based on
49,789 rentable square feet of the Premises), for the costs relating to the initial design and
construction of Tenant’s improvements which are permanently affixed to the Premises (the “Tenant
Improvements”); provided, however, that Landlord shall have no obligation to disburse all or any
portion of the Tenant Improvement Allowance to Tenant unless Tenant makes a request for
disbursement pursuant to the terms and conditions of Section 2.2 below prior to that date
which is eighteen (18) months after the Lease Commencement Date. In no event shall Landlord be
obligated to make disbursements pursuant to this Tenant Work Letter in a total amount which exceeds
the Tenant Improvement Allowance. Tenant shall not be entitled to receive any cash payment or
credit against Rent or otherwise for any unused portion of the Tenant Improvement Allowance which
is not used to pay for the Tenant Improvement Allowance Items (as such term is defined below).

     2.2 Disbursement of the Tenant Improvement Allowance.

          2.2.1 Tenant Improvement Allowance Items. Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord only for the
following items and costs (collectively, the “Tenant Improvement Allowance Items”):

               2.2.1.1 payment of the fees of the “Architect” and the “Engineers,” as those terms are defined
in Section 3.1 of this Tenant Work Letter, and payment of the fees incurred by, and the
cost of documents and materials supplied by, Landlord and Landlord’s consultants in connection with
the preparation and review of the “Construction Drawings,” as that term is defined in
Section 3.1 of this Tenant Work Letter;

               2.2.1.2 the payment of plan check, permit and license fees relating to construction of the
Tenant Improvements;

               2.2.1.3 the cost of construction of the Tenant Improvements, including, without limitation,
contractors’ fees and general conditions, testing and inspection costs, costs of utilities, trash
removal, parking and hoists, and the costs of after-hours freight elevator usage.

               2.2.1.4 the cost of any changes in the Base, Shell and Core work when such changes are
required by the Construction Drawings (including if such changes are due to the fact that such work
is prepared on an unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

               2.2.1.5 the cost of any changes to the Construction Drawings or Tenant Improvements required
by applicable laws ;

               2.2.1.6 sales and use taxes and Title 24 fees;

               2.2.1.7 amounts owed to Landlord pursuant to Section 4.2.2.2 of this Tenant Work
Letter; and

               2.2.1.8 all other costs to be expended by Landlord in connection with the construction of the
Tenant Improvements, including the costs for paint and carpet.

          2.2.2 Disbursement of Tenant Improvement Allowance. Subject to Section 2.1
above, during the construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement Allowance Items for the
benefit of Tenant and shall authorize the release of monies for the benefit of Tenant as follows:

EXHIBIT B

-1-

 

               2.2.2.1 Disbursements. In order to obtain disbursement of the Tenant Improvement
Allowance (which Tenant may request in one or more disbursements), Tenant shall deliver to Landlord
a request for disbursement, including evidence of payment of the “Contractor”, as that term is
defined in Section 4.1 below, together with a schedule of the work represented by such
payment; (ii) evidence of payment of invoices to any of “Tenant’s Agents,” as that term is defined
in Section 4.1.2 below, for labor rendered and materials delivered to the Premises;
(iii) executed mechanic’s lien releases from all of Tenant’s Agents which shall comply with the
appropriate provisions, as reasonably determined by Landlord, of California Civil Code
Section 3262(d); and (iv) all other information reasonably requested by Landlord. Tenant’s request
for payment shall be deemed Tenant’s acceptance and approval of the work furnished and/or the
materials supplied as set forth in Tenant’s payment request. Within thirty (30) days following
Tenant’s submission of the foregoing, Landlord shall disburse to Tenant by check the amount of the
Tenant Improvement Allowance expended by Tenant for Tenant Improvement Allowance Items (not to
exceed the available balance of the Tenant Improvement Allowance), provided that Landlord does not
dispute any request for payment based on non-compliance of any work with the “Approved Working
Drawings”, as that term is defined in Section 3.4 below, or due to any substandard work, or
for any other reason. Further, to the extent a ten percent (10%) retention (the aggregate amount
of such retentions to be known as the “Final Retention”) has not been taken into account in
connection with payments made by Tenant to Contractor, Landlord’s disbursement of the Tenant
Improvement Allowance shall take into account such Final Retention, which will be disbursed
pursuant to the terms of Section 2.2.2.2 below. Landlord’s payment of such amounts shall
not be deemed Landlord’s approval or acceptance of the work furnished or materials supplied as set
forth in Tenant’s payment request.

               2.2.2.2 Final Retention. Tenant confirms that it will only pay the Final Retention to
Contractor following the completion of construction of the Premises, provided that (i) Tenant has
obtained and delivered to Landlord properly executed mechanics lien releases in compliance with
both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4),
and (ii) Landlord has determined that no substandard work exists which adversely affects the
mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other
systems of the Building, the curtain wall of the Building, the structure or exterior appearance of
the Building, or any other tenant’s use of such other tenant’s leased premises in the Building.
Landlord will only disburse available funds from the Tenant Improvement Allowance for the Final
Retention once the terms of this Section 2.2.2.2 are satisfied.

               2.2.2.3 Other Terms. Landlord shall only be obligated to make disbursements from the
Tenant Improvement Allowance to the extent costs are incurred by Tenant for Tenant Improvement
Allowance Items.

          2.2.3 Specifications for Building Standard Components. Landlord has established
specifications (the “Specifications”) for the Building standard components to be used in the
construction of the Tenant Improvements in the Premises which Specifications have been received by
Tenant, and which Specifications are attached hereto as Schedule 1. Unless otherwise
agreed to by Landlord, the Tenant Improvements shall comply with the Specifications. Landlord may
make changes to the Specifications from time to time.

SECTION 3

CONSTRUCTION DRAWINGS

     3.1 Selection of Architect/Construction Drawings. Tenant shall retain the
architect/space planner (the “Architect”) approved by Landlord, which approval shall not be
unreasonably withheld, to prepare the Construction Drawings. Tenant shall retain the engineering
consultants designated by Landlord (the “Engineers”) to prepare all plans and engineering working
drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work in the Premises. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the “Construction Drawings.” All Construction
Drawings shall comply with the drawing format and specifications reasonably determined by Landlord,
and shall be subject to Landlord’s approval. Tenant and Architect shall verify, in the field, the
dimensions and conditions as shown on the relevant portions of the base building plans, and Tenant
and Architect shall be solely responsible for the same, and Landlord shall have no responsibility
in connection therewith. Landlord’s review of the Construction Drawings as set forth in this
Section 3, shall be for its sole purpose and shall not imply Landlord’s review of the same,
or obligate Landlord to review the same, for quality, design, Code compliance or other like
matters. Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or
its space planner, architect, engineers and consultants, and notwithstanding any advice or
assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and
shall not be responsible for any omissions or errors contained in the Construction Drawings.

     3.2 Final Space Plan. Tenant shall supply Landlord with four (4) copies signed by
Tenant of its final space plan for the Premises before any architectural working drawings or
engineering drawings have been commenced. The final space plan (the “Final Space Plan”) shall
include a layout and designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final
Space Plan. Landlord shall advise Tenant within five (5) business days after Landlord’s
receipt of the Final Space Plan for the Premises if the same is unsatisfactory or incomplete in any
respect. If Tenant is so advised, Tenant shall promptly (i) cause the Final Space Plan to be
revised to correct any deficiencies or other matters Landlord may reasonably require, and
(ii) deliver such revised Final Space Plan to Landlord.

EXHIBIT B

-2-

 

     3.3 Final Working Drawings. After the Final Space Plan has been approved by Landlord
and Tenant, Tenant shall promptly cause the Architect and the Engineers to complete the
architectural and engineering drawings for the Premises, and cause the Architect to compile a fully
coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings
in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable
permits for the Tenant Improvements (collectively, the “Final Working Drawings”), and shall submit
the same to Landlord for Landlord’s approval. Tenant shall supply Landlord with four (4) copies
signed by Tenant of such Final Working Drawings. Landlord shall advise Tenant within five (5)
business days after Landlord’s receipt of the Final Working Drawings for the Premises if the same
is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly
(i) revise the Final Working Drawings in accordance with such review and any disapproval of
Landlord in connection therewith, and (ii) deliver such revised Final Working Drawings to Landlord.

     3.4 Approved Working Drawings. The Final Working Drawings shall be approved by
Landlord (the “Approved Working Drawings”) prior to the commencement of construction of the
Premises by Tenant. After approval by Landlord of the Final Working Drawings, Tenant shall
promptly submit the same to the appropriate governmental authorities for all applicable building
permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be
responsible for obtaining any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord shall
cooperate with Tenant in executing permit applications and performing other ministerial acts
reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. No
changes, modifications or alterations in the Approved Working Drawings may be made without the
prior written consent of Landlord, which consent shall not be unreasonably withheld; provided that
Landlord may withhold its consent, in its sole discretion, to any change in the Approved Working
Drawings, if such change would result in an Over-Allowance Cap (as defined below).

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

     4.1 Tenant’s Selection of Contractor and Tenant’s Agents.

          4.1.4 The Contractor. A general contractor shall be retained by Tenant to construct
the Tenant Improvements. Such general contractor (“Contractor”) shall be selected by Tenant from a
list of general contractors supplied by Landlord, and Tenant shall deliver to Landlord notice of
its selection of the Contractor upon such selection.

          4.1.2 Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers used
by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be
known collectively as “Tenant’s Agents”) must be approved in writing by Landlord, which approval
shall not be unreasonably withheld or delayed; provided that, in any event, Tenant must contract
with Landlord’s base building subcontractors for any mechanical, electrical, plumbing, life safety,
structural, heating, ventilation, and air-conditioning work in the Premises. If requested by
Landlord, Tenant’s Agents shall all be union labor in compliance with the master labor agreements
existing between trade unions and the local chapter of the Associated General Contractors of
America.

     4.2 Construction of Tenant Improvements by Tenant’s Agents.

          4.2.1 Construction Contract; Cost Budget. Prior to Tenant’s execution of the
construction contract and general conditions with Contractor (the “Contract”), Tenant shall submit
the Contract to Landlord for its approval, which approval shall not be unreasonably withheld or
delayed. Prior to the commencement of the construction of the Tenant Improvements, and after
Tenant has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord with a
written detailed cost breakdown (the “Final Costs Statement”), by trade, of the final costs to be
incurred, or which have been incurred, as set forth more particularly in Section 2.2.1.1
through 2.2.1.8 above, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the Contractor (which costs form a
basis for the amount of the Contract, if any (the “Final Costs”). Prior to the commencement of
construction of the Tenant Improvements, Tenant shall supply Landlord with cash in an amount (the
"Over-Allowance Amount”) by which the Final Costs exceed the Tenant Improvement Allowance (less any
portion thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on
or before the commencement of construction of the Tenant Improvements). The Over-Allowance Amount
shall be disbursed by Landlord prior to the disbursement of any of the then remaining portion of
the Tenant Improvement Allowance, and such disbursement shall be pursuant to the same procedure as
the Tenant Improvement Allowance. In the event that, after the Final Costs have been delivered by
Landlord to Tenant, the costs relating to the design and construction of the Tenant Improvements
shall change, any additional costs necessary to such design and construction in excess of the Final
Costs shall, to the extent they exceed the remaining balance of the Tenant Improvement Allowance,
be paid by Tenant to Landlord immediately as an addition to the Over-Allowance Amount and, in any
event, prior to the commencement of the construction of such changes, or, at Landlord’s option,
Tenant shall make payments for such additional costs out of its own funds, but Tenant shall
continue to provide Landlord with the documents described in Sections 2.2.2.1(i),
(ii), (iii) and (iv) above, for Landlord’s approval, prior to Tenant
paying such costs. Notwithstanding anything above to the contrary, if upon Tenant’s delivery of
the Final Costs Statement to Landlord, the Over-Allowance Amount is determined to be greater than
an amount equal to twenty-five percent (25%) of the Tenant Improvement Allowance (the
"Over-Allowance Cap”), then Landlord, in Landlord’s sole discretion, shall have the right to
require that Tenant revise the Approved Working Drawings and/or any other Construction Drawings
(and resubmit the same to Landlord for Landlord’s approval) to reduce the Over-Allowance Amount to
an amount less than the Over-Allowance Cap and Landlord may refuse to disburse any portion of the
Tenant Improvement Allowance and/or approve any changes to the

EXHIBIT B

-3-

 

Construction Drawings, until such
revisions to the Approved Working Drawings and/or any other Construction Drawings are made by
Tenant and approved by Landlord.

          4.2.2 Tenant’s Agents.

               4.2.2.1 Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement Work.
Tenant’s and Tenant’s Agents’ construction of the Tenant Improvements shall comply with the
following: (i) the Tenant Improvements shall be constructed in strict accordance with the Approved
Working Drawings; (ii) Tenant and Tenant’s Agents shall not, in any way, interfere with, obstruct,
or delay, the work of Landlord’s base building contractor and subcontractors with respect to the
Base, Shell and Core or any other work in the Building or Real Property; (iii) Tenant’s Agents
shall submit schedules of all work relating to the Tenant’s Improvements to Contractor and
Contractor shall, within five (5) business days of receipt thereof, inform Tenant’s Agents of any
changes which are necessary thereto, and Tenant’s Agents shall adhere to such corrected schedule;
and (iv) Tenant shall abide by all rules made by Landlord’s Building contractor or Landlord’s
Building manager with respect to the use of freight, loading dock and service elevators, storage of
materials, coordination of work with the contractors of other tenants, and any other matter in
connection with this Tenant Work Letter, including, without limitation, the construction of the
Tenant Improvements.

               4.2.2.2 Construction Fee. Tenant shall not be obligated to pay a logistical
coordination or construction fee to Landlord in connection with portions of the Tenant Improvements
which do not require the issuance of a building permit by the applicable governmental agencies.
With respect to any portions of the Tenant Improvements which require the issuance of a building
permit, Tenant agrees to reimburse Landlord for its actual costs incurred in connection with
Landlord’s review and approval of plans and specifications for such portions of the Tenant
Improvements.

               4.2.2.3 Indemnity. Tenant’s indemnity of Landlord as set forth in the Lease shall
also apply with respect to any and all costs, losses, damages, injuries and liabilities related in
any way to any act or omission of Tenant or Tenant’s Agents, or anyone directly or indirectly
employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of
the Tenant Improvements and/or Tenant’s disapproval of all or any portion of any request for
payment. Such indemnity by Tenant, as set forth in the Lease, shall also apply with respect to any
and all costs, losses, damages, injuries and liabilities related in any way to Landlord’s
performance of any ministerial acts reasonably necessary (i) to permit Tenant to complete the
Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.

               4.2.2.4 Insurance Requirements.

                    4.2.2.4.1  General Coverages. All of Tenant’s Agents shall carry worker’s
compensation insurance covering all of their respective employees, and shall also carry public
liability insurance, including property damage, all with limits, in form and with companies as are
required to be carried by Tenant as set forth in the Lease.

                    4.2.2.4.2  Special Coverages. Tenant shall carry “Builder’s All Risk” insurance in an
amount approved by Landlord covering the construction of the Tenant Improvements, and such other
insurance as Landlord may require, it being understood and agreed that the Tenant Improvements
shall be insured by Tenant pursuant to the Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord, and in form and with companies as are required to be carried by
Tenant as set forth in the Lease.

                    4.2.2.4.3  General Terms. Certificates for all insurance carried pursuant to this
Section 4.2.2.4 shall be delivered to Landlord before the commencement of construction of
the Tenant Improvements and before the Contractor’s equipment is moved onto the site. All such
policies of insurance must contain a provision that the company writing said policy will give
Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date
or any reduction in the amounts of such insurance. In the event that the Tenant Improvements are
damaged by any cause during the course of the construction thereof, Tenant shall immediately repair
the same at Tenant’s sole cost and expense. All policies carried under this
Section 4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, as well as
Contractor and Tenant’s Agents, and shall name as additional insureds Landlord’s Property Manager,
Landlord’s Asset Manager, and all mortgagees and ground lessors of the Building. All insurance,
except Workers’ Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by
the insurer against anyone insured thereunder. Such insurance shall provide that it is primary
insurance as respects the owner and that any other insurance maintained by owner is excess and
noncontributing with the insurance required hereunder. The requirements for the foregoing
insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under
Section 4.2.2.3 of this Tenant Work Letter.

          4.2.3 Governmental Compliance. The Tenant Improvements shall comply in all respects
with the following: (i) the Code and other state, federal, city or quasi-governmental laws, codes,
ordinances and regulations, as each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance Association (formerly,
the National Board of Fire Underwriters) and the National Electrical Code; and (iii) building
material manufacturer’s specifications.

          4.2.4 Inspection by Landlord. Landlord shall have the right to inspect the Tenant
Improvements at all times, provided however, that Landlord’s failure to inspect the Tenant
Improvements shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall
Landlord’s inspection of the Tenant Improvements constitute Landlord’s approval of the same.
Should Landlord disapprove any portion of the Tenant

EXHIBIT B

-4-

 

Improvements, Landlord shall notify Tenant in
writing of such disapproval and shall specify the items disapproved. Any defects or deviations in,
and/or disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant at no
expense to Landlord, provided however, that in the event Landlord determines that a defect or
deviation exists or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the mechanical,
electrical, plumbing, heating, ventilating and air conditioning or life-safety systems of the
Building, the structure or exterior appearance of the Building or any other tenant’s use of such
other tenant’s leased premises, Landlord may, take such action as Landlord deems necessary, at
Tenant’s expense and without incurring any liability on Landlord’s part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the cessation of
performance of the construction of the Tenant Improvements until such time as the defect, deviation
and/or matter is corrected to Landlord’s satisfaction.

          4.2.5 Meetings. Commencing upon the execution of the Lease, Tenant shall hold weekly
meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the
preparation of Construction Drawings and the construction of the Tenant Improvements, which
meetings shall be held at a location designated by Landlord, and Landlord and/or its agents shall
receive prior notice of, and shall have the right to attend, all such meetings, and, upon
Landlord’s request, certain of Tenant’s Agents shall attend such meetings. In addition, minutes
shall be taken at all such meetings, a copy of which minutes shall be promptly delivered to
Landlord. One such meeting each month shall include the review of Contractor’s current request for
payment.

     4.3 Notice of Completion; Copy of “As Built” Plans. Within ten (10) days after
completion of construction of the Tenant Improvements, Tenant shall cause a Notice of Completion to
be recorded in the office of the Recorder of the County in which the Building is located in
accordance with Section 3093 of the Civil Code of the State of California or any successor statute,
and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so,
Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for such purpose, at
Tenant’s sole cost and expense. At the conclusion of construction, (i) Tenant shall cause the
Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all
changes made to the Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the “record-set” of as-built drawings are true and correct, which
certification shall survive the expiration or termination of the Lease, (C) to deliver to Landlord
two (2) sets of sepias of such as-built drawings within ninety (90) days following issuance of a
certificate of occupancy for the Premises, and (D) to deliver to Landlord a computer disk
containing the Approved Working Drawings in AutoCAD format, and (ii) Tenant shall deliver to
Landlord a copy of all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.

     4.4 Coordination by Tenant’s Agents with Landlord. Upon Tenant’s delivery of the
Contract to Landlord under Section 4.2.1 of this Tenant Work Letter, Tenant shall furnish
Landlord with a schedule setting forth the projected date of the completion of the Tenant
Improvements and showing the critical time deadlines for each phase, item or trade relating to the
construction of the Tenant Improvements.

SECTION 5

MISCELLANEOUS

     5.1 Tenant’s Representative. Tenant has designated Steve Melman as its sole
representative with respect to the matters set forth in this Tenant Work Letter, who shall have
full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

     5.2 Landlord’s Representative. Landlord has designated Elva Guitron as its sole
representative with respect to the matters set forth in this Tenant Work Letter, who, until further
notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as
required in this Tenant Work Letter.

     5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated, all
references herein to a “number of days” shall mean and refer to calendar days. If any item
requiring approval is timely disapproved by Landlord, the procedure for preparation of the document
and approval thereof shall be repeated until the document is approved by Landlord.

     5.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary contained
in the Lease, if an event of default by Tenant of this Tenant Work Letter or the Lease has occurred
at any time on or before the substantial completion of the Premises, then (i) in addition to all
other rights and remedies granted to Landlord pursuant to the Lease, at law and/or in equity,
Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the Premises (in which
case, Tenant shall be responsible for any delay in the substantial completion of the Premises
caused by such work stoppage), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms
of the Lease (in which case, Tenant shall be responsible for any delay in the substantial
completion of the Premises caused by such inaction by Landlord). In addition, if the Lease is
terminated prior to the Lease Commencement Date, for any reason due to a
default by Tenant as described in Section 19.1 of the Lease or under this Tenant Work
Letter, in addition to any other remedies available to Landlord under the Lease, at law and/or in
equity, Tenant shall pay to Landlord, as Additional Rent under the Lease, within five (5) days of
receipt of a statement therefor, any and all costs (if any) incurred by Landlord (including any
portion of the Tenant Improvement Allowance disbursed by Landlord) and not reimbursed or otherwise
paid by Tenant through the date of such termination in connection with the Tenant Improvements to
the extent planned, installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant Improvements and
restoration costs related thereto.

EXHIBIT B

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	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

SCHEDULE 1 TO EXHIBIT B

BUILDING STANDARD SPECIFICATIONS

PARTITIONS

	A.	 	DEMISING PARTITION AND CORRIDOR WALLS

	 	1.	 	3-5/8” (or match existing)- 20 gauge metal
studs — 24” on center maximum from floor to ceiling grid. (Provide
backing for cabinet as required)
	 
	 	2.	 	5/8” Type ‘X’ gypsum wallboard one layer each
side of studs, fire taped only.
	 
	 	3.	 	Height from floor to ceiling grid.
	 
	 	4.	 	Seismic bracing per code.
	 
	 	5.	 	Two rows of continuous acoustical sealant -
bottom tracks. R-11 batt type fiberglass insulation between studs

	 	Note:	 	
	 
	 	-	 	All partitions to be paint finished on smooth surfaces GA-214, level 5 smoothness.
	 
	 	-	 	One hour rated walls where required based on occupancy group.
	 
	 	-	 	All interior 1-hour corridors to be tunnel construction in compliance with UBC
requirements for one-hour fire rated assembly.

	B.	 	TYPICAL INTERIOR PARTITION (Non rated)

	 	1.	 	3-5/8” (or match existing) — 25 gauge metal studs — 24”
on center maximum.
(provide backing for wall mounted cabinetry or equipment as required).
	 
	 	2.	 	5/8” Type ‘X’ gypsum wallboard one layer each side of studs.
	 
	 	3.	 	Height from floor to ceiling grid — approximately 9’-0” or 10’-0” based on
structure cost at all floors; regular ceiling tiles must be scribed
	 
	 	4.	 	Seismic bracing per code.
	 
	 	5.	 	All exterior corners with corner beads. All exposed
edges finished with metal trim.
	 
	 	Note:	 	
	 
	 	-	 	All partitions to be paint finished on smooth surfaces GA-214, level 5
smoothness.
	 
	 	-	 	Partitions must connect to building mullions or walls. Mechanical fasteners to
mullions shall not be allowed.

	C.	 	PERIMETER DRYWALL (at office areas)

	 	1.	 	2-1/2” — 25 gauge metal studs 24” on center to 6” above
suspended ceiling (or as required by Title-24 for full height envelope,
refer to demising wall specification
	 
	 	2.	 	5/8” Type ‘X’ gypsum wallboard one layer on one side.
	 
	 	3.	 	Height — floor slab to 6” above ceiling grid.
	 
	 	4.	 	All exterior corners with corner beads.
	 
	 	Note:	 	
	 
	 	-	 	All partitions to be paint finished on smooth surfaces GA-214, level 5
smoothness.

	D.	 	COLUMN FURRING

	 	1.	 	5/8” Type ‘X’ gypsum wallboard, one layer on 2 1/2” – 25 gauge metal studs, UNO.
	 
	 	2.	 	Height — floor slab to 2” above ceiling grid.
	 
	 	3.	 	All exterior corners with corner beads.
	 
	 	Note:	 	
	 
	 	-	 	All partitions to be paint finished on smooth surfaces GA-214, level 5
smoothness.

	E.	 	INSULATION

	 	1.	 	Insulation at all perimeter walls and roof per specifications
	 
	 	2.	 	All common area walls including corridor, conference, copy
rooms and lunch room to receive R-11 within partition cavity and four feet on
either side of partition over ceiling at demising wall (if not full height)

	F.	 	FIRE BLOCKING

SCHEDULE 1 TO

EXHIBIT B

-1-

 

		 	 
	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

	 	1.	 	2-1/2” 20 Gauge metal studs.
	 
	 	2.	 	5/8” gypsum wallboard one layer on one side.
	 
	 	3.	 	Height-from top of suspended ceiling to structure above as
required by code.
	 
	 	4.	 	Locate as required by code for the proposed tenant space plans.

	G.	 	PAINTING

	 	1.	 	All gypsum board walls to receive a prime coat (hi-build PVA
sealer) and two (2) coats to cover of ‘carefree’ eggshell finish paint or
equal.

	 
	 	2.	 	Semi-gloss paint at all kitchens, break rooms, restrooms and
server/copy rooms.

DOORS, FRAMES AND HARDWARE

Note: all doors and hardware within existing buildings to match U.O.N.

	A.	 	INTERIOR TENANT DOOR ASSEMBLY (non-rated doors within office suites)

	 	1.	 	Interior doors: shall be 3’0” wide x full height x 1 3/4”
blind end” flush doors (unless otherwise specified), solid core,
pre-finished with plain sliced select white maple, book-match with clear
sealer. All doors shall be 20 minute fire rated.
	 
	 	2.	 	(existing condition) Doors shall be pre-finished and
match existing core doors in finish, material and appearance. Finish all
edges. 5” top blocking at doors w/closers.
	 
	 	3.	 	Interior Tenant doorframes to be prefinished rated
Western Integrated frames with factory finish; Color: Satin Aluminum
	 
	 	4.	 	Corridor doorframes to Suites to be: Satin Aluminum
	 
	 	5.	 	Hardware:

	 	(a)	 	Interior Tenant Door

	 	 	 	 	 
	QTY	 	SUBTYPE	 	ITEM DESCRIPTION
	4

	 	Butts(2 pair per door)
	 	Hager
	1

	 	Latchset
	 	Schlage “L” Series Mortise
	1

	 	Lockset
	 	Schlage “L” Series Mortise
	1

	 	Door Stop
	 	Glynn Johnson FB13, floor dome
	1

	 	Closer
	 	LCN #4111(where required)

	 	(b)	 	Suite Entry Doors-Fire rated as required
by occupancy and code requirements.

	 	 	 	 	 
	QTY	 	SUBTYPE	 	ITEM DESCRIPTION
	8

	 	Hinges (4 pair per door)
	 	Hager
	1

	 	Lockset
	 	Schlage “L” Mortise
	1

	 	Auto Flush Bolt
	 	942 626 DCI
	1

	 	Dust Proof Strike
	 	80 626 DCI
	2

	 	Door Stops
	 	Glynn Johnson FB13, floor dome
	1

	 	Closer
	 	LCN #4111(where required)

	B.	 	INTERIOR GLAZING

	 	1.	 	(a) 1/4” thick clear tempered glass in non-rated,
prefinished frames by Western Integrated frames with aluminum trim. Frame
to be factory finished; Color: Satin Aluminum

(b)1/4 thick clear tempered glass in non-rated, M-121 glass stops; Color:
Satin Aluminum
	 
	 	2.	 	1/4” thick tempered safety glass where required per code.
	 
	 	3.	 	Return gypsum board into opening at both sides, provide metal corner bead all
around opening. Finish to match wall.
	 
	 	2.	 	Provide two 20 Ga. metal studs fastened at 12” O.C.
back-to-back at jambs and head (minimum) as per detail. Provide seismic brace per code.

SCHEDULE 1 TO

EXHIBIT B

-2-

 

		 	 
	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

	 	 	 	          Note:
	 
	 		 	- All office doors to have 2’-0” wide by full height (inside window frame to
inside window frame) sidelights where possible. At areas where less than
2’-0” is available, provide maximum. Sidelight frames to be integral with
doorframes.

SUSPENDED ACOUSTICAL CEILING

Note: Tenant ceiling height at 9’-0” (installed at top of top exterior window mullion)

	 	1.	 	Grid: USG Donn Fineline DXFF Narrow 9/16” face with 1/8”
reveal. Finish: White Matte with white reveal, Suspension System with wire
suspension and seismic bracing per code. Wall angle: M9
	 
	 	2.	 	Tile: USG 2’x2’x 3/4” Millennia Tegular White.
	 
	 	3.	 	Seismic bracing per code.
	 
	 	4.	 	Seismic wires for lighting and electrical to be provided by acoustical ceiling
contractor.

WINDOW COVERINGS

	 	1.	 	Exterior Window covering – horizontal: 1” mini-blinds
as manufactured by Levelor, series: Riviera Dustguard.
	 
	 	2.	 	Blinds to be sized to fit inside window module. Fasten
to top horizontal mullions only.
	 
	 	3.	 	Vertical blinds to be installed with building shell but
costs allocated to tenant improvement allowance.

FIRE SPRINKLER SYSTEM

	 	1.	 	A pre-zoned sprinkler will be provided in all areas.
Head locations will be determined by a pre-zoned master layout.
Modification of sprinkler locations and piping, due to specific tenant
layout, will be at tenant’s cost. Semi-recessed pendent sprinkler heads
with white escutcheon. Sprinkler to be centered in tile.
	 
	 	2.	 	Fire Sprinkler coverage light hazard, .33 gpm / 3,000
SF in shell and modified per improvement.
	 
	 	4.	 	Gyp Board Ceilings: Fully recessed with cap at gypsum
board ceiling. Reliable Model F4FR Concealed automatic sprinkler with 1/2” -
1 1/2” adjustment — White

SIGNAGE

 

Refer to Landlord

CABINETRY

	 	1.	 	6’-0” linear feet of upper and lower millwork allowable by building standard.

	 
	 	6.	 	Plastic laminate horizontal and vertical surfaces.
	 
	 	7.	 	Horizontal and Verticals: See individual options under
finishes for plastic laminate specifications
	 
	 	3.	 	Cabinetry Construction: Designation, APA C-D plugged with exterior glue, 3/4” thick or
3/4” high pressure particle board. Min. density 45 PSF, U.N.O.
	 
	 	4.	 	Cabinetry: Plastic laminate finish, countertops and
splashes shall be constructed in accordance with WIC manual of Millwork,
“Custom” grade.
	 
	 	5.	 	Hardware:

	 	a.	 	Hinges: Self-closing type, fully concealed when the doors are closed.

Shall have independent vertical, horizontal and depth adjustment.

Shall be steel with nickel-plated finish. Hinges shall be one of the following products:

Brass America, Inc. Nos. 1200/1201

Julius Blum, Inc. No.91.650

Stanley Hardware Nos. 1511-2/1511-9x or equal.

	 	6.	 	Pulls: 4” X 5/16” diameter wire pulls, brushed chrome finish. U.N.O.

SCHEDULE 1 TO

EXHIBIT B

-3-

 

		 	 
	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

	 	7.	 	Adjustable Shelf Supports to be hole & pin type, Hafele 282.24.710 5MM steel pin.
	 
	 	8.	 	Drawers: Provide heavy-duty 3/4 extension drawer slides.
	 
	 	9.	 	 Mutes: Clear vinyl dot.
	 
	 	10.	 	Fasteners and Anchorages: Provide nails, screws, or other
anchoring devices of type, size material and finish suitable for intended
use and required to provide secure
	 
	 	11.	 	Casework:

	 	a.	 	Drawer Boxes: Provide sub-front and applied finish fronts securely
fastened, with square corners and self-edges. Provide drawers with

metal studs.
	 
	 	b.	 	Doors: Flush overlay type with square corners, and self edged. Do not
notch door, cabinet ends or dividers to receive hinges.
	 
	 	c.	 	Shelves: 3/4” thick for spans up to 35” and 1” thick for spans over 35”
up to 48” and adjustable to 1” centers. Do not recess metal shelf
standards into end panels; notch shelving to clear standards.

TENANT SUITE FINISH MATERIALS

	A.	 	PAINT
	 
	 	 	Field Color: Kelly Moore # 20 Western Acoustic (accent colors within open areas may be used
at designer’s discretion approved by Ownership)
	 
	B.	 	FINISH STANDARD 

	 	 	 	 	 
	 

	 	Carpet:
	 	Shaw Contract Group: ‘Java’ or ‘Ripple’

Installation: Direct Glue Down
	 
	 	 	 	 
	 

	 	Rubber Base:
	 	Johnsonite tight lock wall base #11 Canvas
2 1/2” cove base at resilient flooring, 2 1/2” straight base at carpet (rolled goods only).
Rubber transition strip between carpet and resilient flooring, Color to match base
	 
	 	 	 	 
	 

	 	VCT#1:
	 	Armstrong ‘Stonetex Vinyl Composite Tile, Color #52139 Limestone Beige or #52128 Desert Dust , 12” x 12” x 1/8”
	 
	 	 	 	 
	 

	 	Plastic Lam.:
	 	Formica #756-58 Natural Maple (base cabinet vertical surfaces)
	 
	 	 	 	 
	 

	 	Plastic Lam.:
	 	Formica #7022-58 Natural Canvas (horizontal surfaces & upper cabinets)

HEATING, VENTILATION AND AIR CONDITIONING

	 	 	Furnish and install all materials and equipment necessary to provide complete and usable air
conditioning systems in tenant spaces including, but not necessarily limited to, the
following:

	 	A.	 	Requirements shall be in accordance with title 24 and all other applicable codes.
	 
	 	B.	 	CEILING DIFFUSER SPECIFICATION

	 	a.	 	Ceiling diffusers shall have perforated face with frame style
compatible with the type of ceiling used. Surface mounted diffusers shall have
gaskets to prevent leakage. Diffuser faceplate shall have concealed hinges and
latches. Face plates shall be easily removable from the frame.
	 
	 	b.	 	Diffusers shall be modular core and shall have curved, adjustable blades
and shall be capable of delivering 1-way,2-way,3-way or 360 degree horizontal
ceiling pattern and be adjustable to obtain a down air pattern. Diffuser must have
high anti-smudge characteristics with center aspiration.
	 
	 	c.	 	Material shall be steel. Finish shall be Standard White baked enamel.
	 
	 	d.	 	Supply diffusers shall be Titus modular core PMC perforated face-size
24”x24” for lay-in ceiling tile.
	 
	 	e.	 	Return/Exhaust diffusers shall be Kruger

SCHEDULE 1 TO

EXHIBIT B

-4-

 

		 	 
	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

	 	f.	 	Perforated ceiling diffusers shall be tested in accordance with Air
Diffusion Council (ADC) code 10602R4. Sound data for diffusers shall be calculated
in accordance with International Standard ISO 3741 Comparison Method.
	 
	 	g.	 	The following manufactures shall be considered equal, providing
corresponding models meet specific requirements. Equivalent substituted equipment
named herein shall be submitted for the Architect’s review. Submit alternate
selections at a time of bid listing major equipment.
	 
	 	h.	 	Manual dampers in all drops.

	 	 	 
	ITEM	 	MANUFACTURER
	AIR FILTERS

	 	Kruger
	MIXING BOXES

	 	Kruger
	GRILLES

	 	Kruger

	C.	 	THERMOSTATS
	 
	 	 	Thermostats shall be provided for each zone. Honeywell Pneumatic, Model TP970A, 2004
	 
	 	 	Direct Acting, Range 60° to 90°, Color White
	 
	D.	 	SUBMITTALS
	 
	 	 	For Non-Standard Material Lists/Product Data: Within 5-7 days of contract award, and
prior to ordering any materials or equipment, submit for Owner’s review complete
material list including catalogue data of material and products for work in this
section.
	 
	 	 	Note: Install BTU meters for any condenser water usage at tenant cost.

ELECTRICAL

	 	1.	 	GENERAL

	 	a.	 	All work, material or equipment shall comply with the codes,
ordinance and regulations of the local government having jurisdiction, including
Title 24 and any participating government
agencies having jurisdiction.
	 
	 	b.	 	110V duplex outlet in demising or interior partitions only, as
Manufactured by Leviton or equal. Color: White
	 
	 	c.	 	Maximum eight outlets per 20 amps 3 phase 4-wire circuit, spacing
to meet code requirements. Minimum 2 per: office(1 quad with drop for voice/data
and 1 duplex on opposite wall), conference room, reception, 2 dedicated over
cabinet at break room; junction boxes above ceiling for large open area with
furniture partitions.
	 
	 	d.	 	Contractors to inspect electric room and base building Electrical
drawings to include all necessary metering, connections and additional
equipment, i.e., panels and transformers, if needed. Base building provides one
(1) power panel and one (1) lighting panel per electrical room.
	 
	 	e.	 	Note: Install electric meter for any above-standard electrical
usage at Tenant Cost.

	 	2.	 	RACEWAYS

	 	a.	 	Conduit shall be rigid galvanized steel(RGS), electrical metallic
tubing (EMT), metal clad (MC) cable, polyvinyl, chloride (PVC), and flexible or liquid tight flexible
conduit.
	 
	 	b.	 	Type ‘AC’ and ‘NM’ cable are not acceptable.
	 
	 	c.	 	Support per seismic zone 4 requirements.

	 	3.	 	WIRING DEVICES

	 	a.	 	Receptacles, toggle switches and coverplates shall be white
(dedicated- gray) – Leviton. Mount so that the center of the receptacles is no
less than 15” AFF.
	 
	 	b.	 	Maximum eight (8) outlets per 20 amp 3 phase 4-wire circuit.
Spacing to meet code requirements. Amounts to be two duplex outlets per small
and three for large private office, storage room and conference room. One
dedicated outlet per copy room; one dedicated 20-amp outlet per telephone panel
and one 20-amp circuit per 200 square foot of open area for workstations.
	 
	 	c.	 	All workstation hardwire connections to be building power to be
supplied by tenant.
	 
	 	d.	 	Transformers to be a minimum of 20% or over required capacity
shall be K-=rated dry type.

SCHEDULE 1 TO

EXHIBIT B

-5-

 

		 	 
	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

	 	e.	 	Contractors to inspect electric room and base building electrical
drawings to include all necessary metering and connections.
	 
	 	f.	 	No aluminum wiring is acceptable. AC and NM cable is not to be
used.
	 
	 	g.	 	Provide separate neutrals for each circuit. Use stranded wire for
each circuit. Use copper conductors only, no exception.
	 
	 	h.	 	Switch assembly to be Leviton.
	 
	 	i.	 	Motion sensors as required by lighting management system and by
Title 24.

	 	4.	 	TELEPHONE / DATA OUTLETS

	 	a.	 	One (1) single box to house phone/data jack with pull string from
outlet box to area above T-bar ceiling with cover plate per office; Two (2)
boxes to house phone/data jack with pull string from outlet box to area above
T-bar ceiling with cover plate per large open area. Cover plate finish required:
white, supplied by tenant’s Telcom contractor. Mount so that the center of the
receptacles is no less than 15” AFF.
	 
	 	b.	 	One (1) 6’ wide by 4’ high plywood backboard installed as
telephone backboard, brace and secure to wall. Painted to match wall color.
Provide one duplex 20 amp dedicated outlet for phone service per above
electrical specification. Provide 2” conduit from floor main phone room to six
inches (6”) below ceiling at telephone backboard.
	 
	 	c.	 	Cable service installation for phone and data outlets by tenant’s
telephone/data vendors at tenant’s cost. Additional outlets and cover plates to
be provided by tenant’s vendors at tenant’s cost. In speculative office suites,
contractor to provide and install blank cover plates.
	 
	 	d.	 	Telephone panel boards to be located within tenant space and to
be surface mounted.

	 	5.	 	TRANSFORMERS

	 	a.	 	Transformers shall be UL listed and suitable for the application- NEMA 1 or 3 R.
	 
	 	b.	 	Transformers shall be 480V (primary) – 20by/120V (secondary),
rated for 80 C rise above an ambient temperature of 40 C.
	 
	 	c.	 	Support for seismic zone 4 requirements.
	 
	 	d.	 	Acceptable manufacturers shall be General Electric,
Cutler-Hammer, Siemens, Square D, or Westinghouse.

	 	6.	 	PANEL BOARDS

	 	a.	 	Panel boards shall be UL listed and suitable for the application- NEMA 1 or 3R.
	 
	 	b.	 	All circuit breakers shall be molded case, bolt-on type.
	 
	 	c.	 	Support per seismic zone 4 requirements.
	 
	 	d.	 	Acceptable manufactures shall be General Electric, Cutler-Hammer,
Siemens, Square D, or Westinghouse.

	 	7.	 	LIGHT FIXTURES

	 	a.	 	Light fixtures shall be 24”x 48”x 3” Parabolic Diffuser with
three 32 Watt T8 lamps per fixture size, 1-electronic ballasts. Fixtures shall
be Lightolier DPA-2T18-L-S-332-UNV03-18-29187-000M 277 V with modular wiring and
(1) electronic ballast (Advance Ballast #VEL-3P32-SC). Fixtures shall match
existing in suite with modular wiring and (1) electronic ballast (verify for 2
or 3 lamp fixture requirement based on energy efficiency requirement with
approximately 50 F.C. at desk height).
	 
	 	b.	 	Support per seismic zone 4 requirements.
	 
	 	c.	 	Quantities and locations per plans.

	 	8.	 	LIGHT CONTROL/SWITCHING
	 
	 	 	 	Wall occupancy sensors – Mytec #LP-2-DC
	 
	 	9.	 	EXIT SIGNS

	 	a.	 	Edge lite with recessed ceiling mount, floating green letters on
a clear panel with LED Technology, by Dualite or equivalent.
	 
	 	b.	 	Quantities and locations per exiting and lighting plans.
	 
	 	c.	 	Single or double face and directional arrows per lighting plans.

SCHEDULE 1 TO

EXHIBIT B

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	TENANT IMPROVEMENT BUILDING STANDARDS -A 	 	10/19/06

MISCELLANEOUS

	 	1.	 	FIRE CAULKING

	 	a.	 	General Contractor is responsible for all fire caulking required
by any and all work done during the process of construction.

	 	2.	 	PLUMBING

	 	a.	 	Shall comply with all local codes and handicapped
code requirements. Fixture shall be: Manufacturer Elkay, ‘Hospitality
sin” #BPSR-2317 – stainless steel, two faucet holes, or equivalent.
Faucet: single lever post mount bar faucet by ‘Elkay’ #LK-4122 or
equivalent.
	 
	 	b.	 	Plumbing bid shall include 5 gallon minimum hot
water heater, or insta-hot with mixer valve including all connections,
located within tenant’s suite.

SCHEDULE 1 TO

EXHIBIT B

-7-

 

EXHIBIT C

(Intentionally Omitted)

EXHIBIT C

-1-

 

EXHIBIT D

RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord
shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by
or otherwise with respect to the acts or omissions of any other tenants or occupants of the
Building or Real Property.

     1. Tenant shall not alter any lock or install any new or additional locks or bolts on any
doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall
bear the cost of any lock changes or repairs required by Tenant. Two keys will be furnished by
Landlord for the Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.

     2. All doors opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises, unless electrical hold backs have been installed.

     3. Landlord reserves the right to close and keep locked all entrance and exit doors of the
Building during such hours as are customary for comparable buildings in the vicinity of the
Building. Tenant, its employees and agents must be sure that the doors to the Building are
securely closed and locked when leaving the Premises if it is after the normal hours of business
for the Building. Any tenant, its employees, agents or any other persons entering or leaving the
Building at any time when it is so locked, or any time when it is considered to be after normal
business hours for the Building, may be required to sign the Building register when so doing.
After-hours access by Tenant’s authorized employees may be provided by card-key access or other
procedures adopted by Landlord from time to time; Tenant shall pay for the costs of all access
cards provided to Tenant’s employees and all replacements thereof for lost, stolen or damaged
cards. Access to the Building and/or Real Property may be refused unless the person seeking access
has proper identification or has a previously arranged pass for such access. Landlord and its
agents shall in no case be liable for damages for any error with regard to the admission to or
exclusion from the Building and/or Real Property of any person. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent access to the
Building and/or Real Property during the continuance of same by any means it deems appropriate for
the safety and protection of life and property.

     4. Landlord shall have the right to prescribe the weight, size and position of all safes and
other heavy property brought into the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any such safe or property
in any case. All damage done to any part of the Building, its contents, occupants or visitors by
moving or maintaining any such safe or other property shall be the sole responsibility of Tenant
and any expense of said damage or injury shall be borne by Tenant.

     5. No furniture, freight, packages, supplies, equipment or merchandise will be brought into or
removed from the Building or carried up or down in the elevators, except upon prior notice to
Landlord, and in such manner, in such specific elevator, and between such hours as shall be
designated by Landlord. Tenant shall provide Landlord with not less than 24 hours prior notice of
the need to utilize an elevator for any such purpose, so as to provide Landlord with a reasonable
period to schedule such use and to install such padding or take such other actions or prescribe
such procedures as are appropriate to protect against damage to the elevators or other parts of the
Building.

     6. Landlord shall have the right to control and operate the public portions of the Building
and Real Property, the public facilities, the heating and air conditioning, and any other
facilities furnished for the common use of tenants, in such manner as is customary for comparable
buildings in the vicinity of the Building.

     7. The requirements of Tenant will be attended to only upon application at the management
office of the Real Property or at such office location designated by Landlord. Employees of
Landlord shall not perform any work or do anything outside their regular duties unless under
special instructions from Landlord.

     8. Tenant shall not disturb, solicit, or canvass any occupant of the Building or Real Property
and shall cooperate with Landlord or Landlord’s agents to prevent same.

     9. The toilet rooms, 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 therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or agents, shall have
caused it.

     10. Tenant shall not overload the floor of the Premises. Tenant shall not mark, drive nails
or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises or
any part thereof without Landlord’s consent first had and obtained; provided, however, Landlord’s
prior consent shall not be required with respect to Tenant’s placement of pictures and other normal
office wall hangings on the interior walls of the Premises (but at the end of the Term, Tenant
shall repair any holes and other damage to the Premises resulting therefrom).

     11. Except for vending machines intended for the sole use of Tenant’s employees and invitees,
no vending machine or machines of any description other than fractional horsepower office machines
shall be installed, maintained or operated upon the Premises without the written consent of
Landlord.

     12. Tenant shall not use any method of heating or air conditioning other than that
which may be supplied by Landlord, without the prior written consent of Landlord.

EXHIBIT D

1

 

     13. Tenant shall not use or keep in or on the Premises, the Building or Real Property any
kerosene, gasoline or other inflammable or combustible fluid or material. Tenant shall not use,
keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or
permit or allow the Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building or Real Property by reason of noise, odors, or
vibrations, or interfere in any way with other tenants or those having business therewith.

     14. Tenant shall not bring into or keep within the Real Property, the Building or the Premises
any animals, birds, bicycles or other vehicles.

     15. No cooking shall be done or permitted by Tenant on the Premises, nor shall the Premises be
used for the storage of merchandise, for lodging or for any improper, objectionable or immoral
purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave
ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and
similar beverages, provided that such use is in accordance with all applicable federal, state and
city laws, codes, ordinances, rules and regulations, and does not cause odors which are
objectionable to Landlord and other tenants.

     16. Landlord will approve where and how telephone and telegraph wires are to be introduced to
the Premises. No boring or cutting for wires shall be allowed without the consent of Landlord.
The location of telephone, call boxes and other office equipment affixed to the Premises shall be
subject to the approval of Landlord.

     17. Landlord reserves the right to exclude or expel from the Building and/or Real Property any
person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violation of any of these Rules and Regulations.

     18. Tenant, its employees and agents shall not loiter in the entrances or corridors, nor in
any way obstruct the sidewalks, lobby, halls, stairways or elevators, and shall use the same only
as a means of ingress and egress for the Premises.

     19. Tenant shall not waste electricity, water or air conditioning and agrees to cooperate
fully with Landlord to ensure the most effective operation of the Building’s heating and air
conditioning system, and shall refrain from attempting to adjust any controls.

     20. Tenant shall store all its trash and garbage within the interior of the Premises. No
material shall be placed in the trash boxes or receptacles if such material is of such nature that
it may not be disposed of in the ordinary and customary manner of removing and disposing of trash
and garbage in the city in which the Real Property is located 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 at such times as Landlord shall
designate.

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

     22. Tenant shall assume any and all responsibility for protecting the Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises
closed, when the Premises are not occupied.

     23. No awnings or other projection shall be attached to the outside walls of the Building
without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of the Premises without the
prior written consent of Landlord. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be
placed on the windowsills. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord.

     24. The washing and/or detailing of or, the installation of windshields, radios, telephones in
or general work on, automobiles shall not be allowed on the Real Property.

     25. Food vendors shall be allowed in the Building upon receipt of a written request from the
Tenant. The food vendor shall service only the tenants that have a written request on file in the
management office of the Real Property. Under no circumstance shall the food vendor display their
products in a public or common area including corridors and elevator lobbies. Any failure to
comply with this rule shall result in immediate permanent withdrawal of the vendor from the
Building.

     26. Tenant must comply with requests by the Landlord concerning the informing of their
employees of items of importance to the Landlord.

     27. Tenant shall comply with any non-smoking ordinance adopted by any applicable governmental
authority, and neither Tenant nor any of its contractors, agents, employees, invitees or visitors
shall smoke in the Premises, in the Building or in any other portion of the Real Property which is
not designated as an area in which smoking is permitted.

     28. 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 as a waiver of such
Rules and

EXHIBIT D

2

 

Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the Building and/or Real
Property. Landlord reserves the right at any time to change or rescind any one or more of these
Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in
Landlord’s judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Premises, Building and Real Property, and for the preservation of good order
therein, as well as for the convenience of other occupants and tenants therein. Landlord shall not
be responsible to Tenant or to any other person for the nonobservance of the Rules and Regulations
by another tenant or other person. Tenant shall be deemed to have read these Rules and Regulations
and to have agreed to abide by them as a condition of its occupancy of the Premises.

EXHIBIT D

3

 

EXHIBIT E

SUPPLEMENTAL HVAC EQUIPMENT

For purposes of this Lease, the “Supplemental HVAC Equipment” consists of the following:

The existing equipment mounted on the Building’s roof adjacent to the penthouse at column 7 between
columns D and E, and which is described as follows:

	 	•	 	one (1) Liebert Model DSC Dyrcooler and one (1) associated pump
	 
	 	•	 	one (1) Liebert Model DDC Dyrcooler and two (2) associated pumps
	 
	 	•	 	the existing associated devices, wiring and piping which extends from such roof
equipment down to the eighth (8th) floor mechanical room, and the existing
electrical connections and controls for such equipment

EXHIBIT E

1exv10w33

 

Exhibit 10.33

FY2007

Executive Incentive Plan

Stephen Ambler

 

 

OBJECTIVES 

The specific aim of the 2007 Executive Incentive Plan is to focus Immersion’s executive
management on Immersion’s revenue, operating profit, gross margin goals and business objectives,
and to reward achievement of those goals.

ELIGIBILITY 

In addition to your base salary, you are eligible to receive a payment under Immersion’s 2007
Executive Incentive Plan as set out in the attached document titled Attachment A.

Eligibility will be subject to the review and approval of the CEO and CFO of the Company. The
terms and conditions of this Executive Incentive Plan will supersede all prior Incentive or
Variable Compensation Plans with respect to the subject matter herein.

PLAN ADMINISTRATION 

The terms and conditions of this Plan are effective from the beginning to the end of the fiscal
year. Immersion may cancel, suspend or revise these terms and conditions for any reason at any
time.

Payments hereunder will be made as a payroll check and will be subject to the usual mandatory
withholding of federal and state income and employment taxes. Payments will be paid
approximately 45 days after the end of the fiscal year, and synchronized with the next payroll
period, once Immersion’s Income Statement for the year has been finalized and the Earnings for
the year have been publicly disclosed.

Nothing in this Plan shall in any way diminish or limit the Company’s right to terminate the
employment of any participant, at-will, at any time. All employees of the company are employed
on an “at-will” basis, which means that either the employee or the Company may terminate the
relationship at any time with the understanding that neither party has the obligation to base
that decision on any reason other than their intent not to continue the employment relationship.

For purposes of this Plan, if for any reason the participant’s employment with Immersion
terminates, the last day of work is defined as the last day on which work duties are actually
performed by the participant. Specifically excluded from eligibility for this Executive
Incentive Plan determination are all periods of pay in lieu of notice, severance, or any other
post-termination benefits or compensation period. To be eligible for payment, the participant
must have been employed by Immersion from January 1, 2007 through the date of payment of sums
under this Plan, i.e. from January 1, 2007 through approximately 45 days after the end of the
2007 fiscal year.

EXECUTIVE’S DISCRETION

The terms of the Executive Incentive Plan do not form part of any employee’s contract of
employment and no employee will have or become entitled to any rights or damages or other
compensation during or on the termination of their employment in respect of the loss or
alteration of any rights or expectations they may have under this Plan at any time. All
Executive Incentive Plan payments are at the discretion of the CEO, and the provisions of this
Plan can be changed at any time, for any reason, including termination of the Plan.

 

 

PLAN DEFINITIONS 

Revenue is defined as sales that are recognizable by Immersion for the period as reported in the
audited financial statements. It is not cash-in. Development contracts are usually recognized
on a percentage complete basis. Extended warranties and software maintenance contracts are
usually recognized over the life of the contract.

Cost of Goods Sold is the direct and allocated indirect production costs of producing goods and
services.

Gross Margin (GM) is determined by subtracting the Cost of Goods Sold (COGS) from the actual
sale price of the product. The net result is the GM. GM excludes non cash stock compensation
expense for the purposes of this Executive Incentive Plan.

Operating Profit (Loss) is Business Unit Operating Profit (Loss) less corporate support costs,
litigation expenses, and intangible amortization. Operating Profit (Loss) excludes non cash
stock compensation expense for the purposes of this Executive Incentive Plan.

Business Unit Operating Profit (Loss) is defined as the revenue less departmental cost of goods
sold and direct operating expenses for a business unit. Direct operating expenses are the
expenses directly charged to a business unit including all variable compensation accruals and
all allocated departmental expenses. Business Unit Operating Profit (Loss) excludes non cash
stock compensation expense for the purposes of this Executive Incentive Plan.

MBO’s can be defined as business objectives with specific milestones which must be completed, in
strict accordance with the stated terms and conditions associated with each MBO, to the
satisfaction of the CFO and CEO.

	 	 	 	 	 
	 	 	 
	/s/ Stephen Ambler  
	 	10/30/2007  

	Stephen Ambler 	 	Date 
	 	 	 
	 
	 	 	 
	/s/ Janice Passarello  
	 	10/30/2007  

	VP of Human Resources 	 	Date 
	 	 	 
	 
	 	 	 
	/s/ Victor Viegas  
	 	10/30/2007  

	CEO 	 	Date 
	 	 	 

 

 

Attachment A

EXECUTIVE INCENTIVE PLAN

STATEMENT OF GOALS

FOR YEAR 2007

Percent of Base Salary Payment at Plan: 25%

The following is a statement of financial, strategic and tactical objectives for 2007 that will
serve as a basis for overall performance evaluation and determination of year-end executive
incentive award.

CEO Discretionary Multiplier: The CEO will weight the Executive’s incentive payment calculation
based on the Executive’s overall annual performance as determined solely by the CEO. The weighting
factor will typically range from 0.80 to 1.20

A.       Corporate Goal (80%): Achieve GAAP Revenue of $33M. Achieve GAAP Operating Profit (Loss) of
$(4.5M). Sony and Microsoft litigation and license income are not to be included in calculating
these Revenue and Operating Profit (Loss) goals for 2007. Operating Profit (Loss) excludes non cash
stock compensation expense. Operating Profit (Loss) amounts are stated after taking account of
Executive Incentive Plan payment amounts for all Executives included under this Plan. Payment
amounts are not pro-rated between matrix levels.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Revenue /	 	 	$29M	 	 	$31M	 	 	$33M	 	 	$35M	 	 	$37M	 
	 	Operating	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Profit (Loss)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Targets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	$(2.5M)
	 	 	100%
	 	 	110%
	 	 	120%
	 	 	150%
	 	 	200%	 
	 	$(3.5M)
	 	 	90%
	 	 	100%
	 	 	110%
	 	 	120%
	 	 	150%	 
	 	$(4.5M)
	 	 	50%
	 	 	80%
	 	 	100%
	 	 	110%
	 	 	120%	 
	 	$(5.5M)
	 	 	0%
	 	 	50%
	 	 	80%
	 	 	90%
	 	 	90%	 
	 	$(6.5M)
	 	 	0%
	 	 	0%
	 	 	50%
	 	 	80%
	 	 	80%	 
	 

 

 

	 	 	 	 
	B.	Departmental Financial Goals (10%)
	 
	(50%) 	1. 	Manage Department budget to approved plan
	 
	 	Result:	 
	 
	(50%) 	2. 	Increase from 2 the number of sell side analysts covering Immercion.
	 
	 	Result:	 
	 
	C.	Departmental Strategic/Tactical Goals (10%)
	 
	(50%) 	1. 	Reorganize San Jose operations and achieve zero backlog caused by production
inefficiencies or capacity by December 31, 2007
	 
	 	Result:	 
	 
	(50%) 	2. 	Assist with HR management and support through time of hire of VP of HR. Ensure stock
transactions appropriately processed and recorded during this period. Manage insurance
program and oversee HR and administrative personnel.
	 
	 	Result:	 

Additional/substitute goals accomplished during year:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]