Document:

Exhibit
10.8

WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE
SHARES ISSUABLE HEREUNDER HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT FOR
DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  NEITHER THE WARRANT NOR THE
SHARES MAY BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

Issuer: National Storm
Management, Inc.

Class of Stock: Common

Issue Date: May 19, 2006

Expiration Date: May 18, 2009

National Storm Management, Inc., a Nevada corporation
(the “Company”) hereby grants to La Jolla Cove Investors, Inc. (“Holder”) the
right to purchase up to 20,000,000 shares of the Company’s Common Stock (the “Warrant
Shares”).  On the Issue Date, $500,000
shall be wired to the Company by Holder, representing the premium to be paid
for the warrants (the “Premium”). This Warrant shall expire and Holder shall no
longer be able to purchase the Warrant Shares on the Expiration Date.

ARTICLE 1

EXERCISE

1.1                                 Method of Exercise.  Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company, along
with a check payable to the Company for the aggregate Exercise Price for the
Warrant Shares being purchased and the surrender of this Warrant.

1.2                                 Delivery of
Certificate and New Warrant Delivery. 
As promptly as practicable after the receipt of the Notice of Exercise,
but in any event not more than three (3) Business Days  after the Company’s receipt of the Notice of
Exercise, the Company shall issue the Shares and cause to be mailed for
delivery by overnight courier, or if a Registration Statement covering the
Shares has been declared effective by the SEC, cause to be electronically
transferred, to Holder a certificate representing the Warrant Shares acquired
and, if this Warrant has not been fully exercised and has not expired, a new
Warrant substantially in the form of this Warrant representing the right to
acquire the portion of the Warrant Shares not so acquired.

1.3                                 Replacement of
Warrants.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation, or surrender and cancellation of
this warrant, the Company at its expense shall execute and deliver, in lieu of
this warrant, a new warrant of like tenor.

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1.4                                 Exercise Price.  The Exercise Price for the Warrant Shares
shall be the greater of: (a) $0.0001 per share, or (b) 80% of the average of
the five lowest volume weighted average prices of the Company’s Common Stock
during the twenty trading days prior to the date of exercise, as quoted by the
Pink Sheets quotation service or on the Nasdaq National Market or on any exchange
on which the Common Stock is listed, whichever is applicable, as published in The Wall Street Journal, or, if there is no public market
for the Company’s Common Stock, as determined in good faith by the Company’s
board of directors Upon the exercise of the Warrant Shares, the Exercise Price
shall be reduced pro rata to permit the Holder to recapture the Premium.

1.5                                 Cashless
Exercise.  Notwithstanding anything
to the contrary contained in this Warrant, upon the expiration of one year from
the Issue Date, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of Holder’s intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof ( a “Cashless Exercise”). In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash,
Holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it otherwise
would be entitled by a fraction, the numerator of which shall be the difference
between the then current market price per share of the Common Stock and the
Exercise Price, and the denominator or which shall be the then current market
price per share of Common Stock.

ARTICLE 2

ADJUSTMENT TO THE WARRANT SHARES

The number of Warrant Shares purchasable upon the
exercise of this Warrant and the Exercise Price shall be subject to adjustment
form time to time upon the occurrence of certain events, as follows:

2.1                                 Reclassification.  In case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant
then, and in any such case, the Holder, upon the exercise hereof at any time
after the consummation of such reclassification or change, shall be entitled to
receive in lieu of each Warrant Share theretofore issuable upon exercise of
this Warrant, the kind and amount of shares of stock, other securities, money
and/or property received upon such reclassification or change by a holder of
one share.  The provisions of this
Section 2.1 shall similarly apply to successive reclassifications or changes.

2.2                                 Subdivision or
Combination of Shares.  If the
Company at any time while this Warrant remains outstanding and unexpired shall
subdivide or combine its shares, the Exercise Price shall be proportionately
decreased in the case of a subdivision or increased in the case of a
combination.

2.3                                 Stock Dividends.  If the Company, at any time while this
Warrant is outstanding shall pay a dividend with respect to its shares payable
in shares, or make any other distribution of shares with respect to shares
(except any distribution provided for in Section 2.1 and Section 2.2 above),
then the Exercise Price shall be adjusted, effective from and after the date of
determination of shareholders entitled to received such dividend or
distribution, to that price determined by multiplying the Exercise Price in effect

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immediately prior to such date of determination by a fraction, (a) the
numerator of which shall be the total number of shares outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares outstanding immediately after such dividend or
distribution.

2.4                                 Non-Cash Dividends.  If the Company at any time while this Warrant
is outstanding shall pay a dividend with respect to shares payable in
securities other than shares or other non-cash property, or make any other
distribution of such securities or property with respect to shares (except any
distribution specifically provided for in Section 2.1 and Section 2.2 above),
then this Warrant shall represent the right to acquire upon exercise of this
Warrant such securities or property which a holder of shares would have been
entitled to receive upon such dividend or distribution, without the payment by
Holder of any additional consideration for such securities or property.

2.5                                 Effect of Reorganization
and Asset Sales.  If any (i)
reorganization or reclassification of the Common Stock, (ii) consolidation or
merger of the Company with or into another corporation, or (iii) sale of all or
substantially all of the Company’s operating assets to another corporation
followed by a liquidation of the Company (any such transaction shall be
referred to herein as an “Event”), is effected in such a way that holders of
Common Stock are entitled to receive securities and/or assets as a result of
their Common Stock ownership, Holder, upon exercise of this Warrant, shall be
entitled to receive such shares of stock, securities or assets which Holder
would have received had it fully exercised this Warrant on or prior the record
date for such Event.  The Company shall
not merge into or consolidate with another corporation or sell all of its
assets to another corporation for a consideration consisting primarily of
securities of such corporation, unless the successor or acquiring corporation,
as the case may be, shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this warrant to be
performed or observed by the Company and all of the obligations and liabilities
hereunder, subject to such modification as shall be necessary to provide for
adjustments which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 2. 
The foregoing provisions shall similarly apply to successive mergers, consolidations
or sales of assets.

2.6                                 Adjustment of
Number of Shares.  Upon each
adjustment in the Exercise Price, the number of Shares shall be adjusted, to
the nearest whole share, to the product obtained by multiplying the number of
Shares purchasable immediately prior to such adjustment by a fraction (a) the
numerator of which shall be the Exercise Price prior to the adjustment and (b)
the denominator of which shall be the Exercise Price immediately thereafter.

2.7                                 No Impairment.  The Company shall not, by amendment of its
charter documents or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out all of the provisions
of this Warrant and in taking all such action as may be reasonably necessary or
appropriate to protect Holder’s rights hereunder against impairment.  If the Company takes any action affecting its
Common Stock other than as described above that adversely affects Holder’s
rights under this Warrant, the Exercise Price shall be adjusted downward and
the number of Warrant Shares issuable upon exercise of this Warrant shall be
adjusted upward in such a manner that the aggregate Exercise Price of this
Warrant is unchanged.

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2.8                                 Fractional Shares.  No fractional Warrant Shares shall be
issuable upon the exercise of this Warrant, and the number of Warrant Shares to
be issued shall be rounded down to the nearest whole Share.

2.9                                 Certificate as to
Adjustments.  Upon any adjustment of
the Exercise Price, the Company, at its expense, shall compute such adjustment
and furnish Holder with a certificate of its Chief Financial Officer setting
forth such adjustment and the facts upon which such adjustment is based.  The Company shall, upon written request,
furnish Holder a certificate setting forth the Exercise Price in effect upon
the date thereof and the series of adjustments leading to such Exercise Price.

2.10                           No Rights of Shareholders.  This Warrant does not entitle Holder to any
voting rights or any other rights as a shareholder of the Company prior to the
exercise of Holder’s right to purchase Warrant Shares as provided herein.

ARTICLE 3

REPRESENTATIONS AND COVENANTS OF THE COMPANY

3.1                                 Representations and
Warranties.  The Company hereby
represents and warrants to Holder that all Warrant Shares which may be issued
upon the exercise of the purchase right represented by this Warrant, shall,
upon issuance, be duly authorized, validly issued, fully paid and nonasessable,
and free of any liens and encumbrances except for restrictions on transfer
provided for herein or under applicable federal and state securities laws.

3.2                                 Notice of Certain
Events.  If the Company proposes at
any time (a) to declare any dividend or distribution upon its Common Stock,
whether in cash, property, stock, or other securities and whether or not a
regular cash dividend; (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or
series or other fights; (c) to effect any reclassification or recapitalization
of Common Stock; (d) to merge or consolidate with or into any other corporation,
or sell, lease, license, or convey all or substantially all of its assets, or
to liquidate, dissolve or wind up; or (e) offer holders of registration rights
the opportunity to participate in an underwritten public offering of the
Company’s securities for cash, then, in connection with each such event, the
Company shall give Holder (1) at least 20 days prior written notice of the date
on which a record will be taken for such dividend, distribution, or
subscription rights (and specifying the date on which the holders of Common
Stock will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (c) and (d) above; (2) in the case of the
matters referred to in (c) and (d) above at least 20 days prior written notice
of the date when the same will take place (and specifying the date on which the
holders of Common Stock will be entitled to exchange their Common Stock for
securities or other property deliverable upon the occurrence of such event);
and (3) in the case of the matter referred to in (e) above, the same notice as
is given to the holders of such registration rights.

3.3                                 Information Rights.  So long as Holder holds this Warrant, the
Company shall deliver to Holder (a) promptly after mailing, copies of all
notices or other written communications to the shareholders of the Company, and
(b) promptly upon their availability, all publicly available filings made by
the Company with the Securities Exchange Commission.

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3.4                                 Reservation of
Warrant Shares.  The Company has
reserved and will keep available, out of the authorized and unissued shares of
Common Stock, the full number of shares sufficient to provide for the exercise
of the rights of purchase represented by this Warrant.

ARTICLE 4

REPRESENTATIONS AND COVENANTS OF THE HOLDER

4.1                                 Private Issue.  Holder understands (i) that the Shares
issuable upon exercise of Holder’s rights contained in the Warrant are not
registered under the Act or qualified under applicable state securities laws on
the ground that the issuance contemplated by the Warrant will be exempt from
the registration and qualifications requirements thereof, and (ii) that the
Company’s reliance on such exemption is predicated on Holder’s representations
set forth in this Article 4.

4.2                                 Financial Risk.  Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.

4.3                                 Accredited Investor.  Holder is an “accredited investor,” as such
term is defined in Regulation D promulgated pursuant to the Securities Act of
1933, as amended.

4.4                                 No
View to Distribution.  The Shares
issuable upon exercise of Holder’s rights contained in the Warrant will be acquired
by Holder for its own account with the present intention of holding such
securities for investment purposes and not with a view to or for sale in
connection with any public distribution of such securities in violation of any
federal or state securities laws.

ARTICLE 5

MISCELLANEOUS

5.1                                 Transfer Procedure.  Holder shall have the right without the
consent of the Company to transfer or assign in whole or in part this Warrant
and the Shares issuable upon exercise of this Warrant. Holder agrees that
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer of all or part of this Warrant, prior to any
such proposed transfer the Holder shall give written notice thereof to the
Company (a “Transfer Notice”).  Each
Transfer Notice shall describe the manner and circumstances of the proposed
transfer in reasonable detail and, if the company so requests, shall be
accompanied by an opinion of legal counsel, in a form reasonably satisfactory
to the Company, to the effect that the proposed transfer may be effected
without registration under the Act; provided that the Company will not require
opinions of counsel for transactions involving transfers to affiliates or
pursuant to Rule 144 promulgated by the Securities and Exchange Commission
under the act, except in unusual circumstances.

5.2                                 Notices, etc.  All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered personally,
or sent by telecopier machine or by a nationally recognized overnight courier
service, and shall be deemed given when so delivered personally, or by
telecopier machine or overnight courier service as follows:

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To the Company:

National Storm Management, Inc.

999 N. Main Street, Suite 202

Glen Ellyn, Illinois 60137

Telephone: 630-469-7683

Facsimile: 630-446-4400

To the Holder:

La Jolla Cove Investors, Inc.

7817 Herschel Avenue, Suite 200

La Jolla, CA 92037

Telephone: 858-551-8789

Facsimile: 858-551-8779

The Company or the Holder
may change the foregoing address by notice given pursuant to this Section.

5.3                                 Waiver.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.

5.4                                 Attorneys Fees.  In the event of any dispute between the
parties concerning the terms and provisions of this warrant, the party
prevailing in such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable attorneys fees.

5.5                                 Governing Law;
Jurisdiction.  This warrant shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law.
Each of the parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the City of San Diego or the state courts of
the State of California sitting in the City of San Diego in connection with any
dispute arising under this Warrant and hereby waives, to the maximum extent
permitted by law, any objection including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.

5.6                                 Remedies.  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Holder, by
vitiating the intent and purpose of the transactions hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.

5.7                                 Legend.     Each certificate for shares
of Common Stock issued upon exercise of this Warrant, unless at the time of
exercise such shares are registered under the Acts, shall bear substantially
the following legend (and any additional legend required under said Acts or
otherwise):

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144 PROMULGATED UNDER THE
ACT.  THE SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE ACT, (ii) IN COMPLIANCE WITH RULE 144 OR (iii) PURSUANT
TO AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION
OR COMPLIANCE IS NOT REQUIRED.

Any certificate issued at
any time in exchange or substitution for any certificate bearing such legend
(except a new certificate issued upon completion of a public distribution
pursuant to a registration statement under the Act of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the Company, the securities represented thereby need no longer be
subject to the transfer restrictions contained in this Warrant.  The exercise and transfer restriction
provisions of this Warrant shall be binding upon all subsequent Holders of the
Warrant.

	
  National Storm Management, Inc.

  	
   

  	
  La Jolla Cove Investors, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Terry Kiefer

  	
   

  	
  By:

  	
   

  	
  /s/ Travis W. Huff

  
	
   

  	
   

  	
   

  
	
  Title: President

  	
   

  	
  Title: Portfolio Manager

  
							

 

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APPENDIX 1

NOTICE OF EXERCISE

1.                                       The
undersigned hereby elects to purchase           
shares of the Common Stock of National Storm Management, Inc. pursuant to the
terms of the Warrant to Purchase Common Stock issued on May      ,
2006 in favor of La Jolla Cove Investors, Inc., and tenders herewith payment of
the purchase price of such shares in full.

2.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(Name and Address)

3.                                       The
undersigned makes the representations and covenants set forth in Article 4 of
the Warrant to Purchase Common Stock.

	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  
			

 

 8Exhibit 10.1

SUBLEASE

This Sublease (the “Sublease”) is made as of the 9th day of November, 2006, by and between Nuance
Communications, Inc., a Delaware corporation (“Landlord”), and SupportSoft,
Inc., a Delaware corporation (“Subtenant”).

W  I
T  N  E  S  S  E  T  H:

WHEREAS, by Lease dated as of May 5, 2000, by and
between Pacific Shores Development, LLC, a Delaware limited liability company (“Overlandlord”),
as lessor thereunder, and Landlord, as lessee thereunder (the “Overlease”) (a
redacted copy of which Overlease is attached as Exhibit A hereto),
Overlandlord leased to Landlord certain space (the “Premises”) consisting of
the four-story building (the “Building”) containing approximately 140,941
rentable square feet located at 1900 Seaport Boulevard, Redwood City,
California (described in the Overlease as Building 3 – Pacific Shores Center,
Redwood City, California), and its appurtenances, all as more particularly
described in the Overlease; and

WHEREAS, Subtenant desires to sublease from Landlord
and Landlord desires to sublease to Subtenant, a portion of the Premises
consisting of the third (3rd) floor of the Building and containing approximately
37,449 rentable square feet (hereinafter referred to as the “Subleased Premises”),
a plan of which Subleased Premises is attached hereto as Exhibit B.

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

1.  DEMISE OF
SUBLEASED PREMISES.

(a)  Landlord
hereby demises and subleases to Subtenant, and Subtenant hereby hires and takes
from Landlord, exclusive possession of the Subleased Premises for the term and
upon the conditions hereinafter set forth.

(b)  Subtenant
shall have, as appurtenant to the Subleased Premises, the non-exclusive right
to use, in common with others, (i) the Building Common Area (as defined
below) and (ii) the “Project Common Area” (the latter term shall refer to
the “Common Area” defined in Section 2.02 of the Overlease).  “Building Common Area” shall mean the areas
of the Building devoted to non-exclusive uses (such as the main lobby of the
Building, fire vestibules, restrooms, mechanical areas, tenant and ground floor
corridors, elevator foyers, electrical and janitorial closets, telephone and
equipment rooms and other similar facilities maintained for the benefit of
tenants and invitees) and necessary for the reasonable use and enjoyment of the
Subleased Premises.  A plan of first
floor delineating the approximate location of the public lobby therein is
attached hereto as Exhibit C to this Sublease.  Landlord shall, at Landlord’s cost and
expense, maintain the Building Common Areas in a similar condition and manner
as of the date hereof.

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2.  TERM.

(a)  Subject to the provisions of
Section 11 herein, the term of this Sublease (the “Term”) shall commence the
date (the “Commencement Date”) that is the latest to occur of
(i) January 1, 2007 and (ii) the date on which Landlord delivers
possession of the Subleased Premises to Subtenant in the condition required
under this Sublease, including, without limitation, the Landlord’s Work
Substantially Completed (as such terms are defined in Section 20 below).

(b)  The Term shall end on July 31, 2012 (the “Expiration
Date”) or shall end on such earlier date upon which such term may be terminated
pursuant to the provisions hereof or pursuant to law.

(c)  Provided there is no then uncured default
hereunder, Subtenant shall have access to the Subleased Premises prior to the
Commencement Date beginning on the date (the “Early Access Date”) that the
Conditions Precedent (as defined in Section 10 below) are satisfied for the
purpose of constructing any Alterations (as defined in Section 6.03 of the Overlease)
as may be approved in accordance with the terms of the Overlease and this
Sublease and to operate  Subtenant’s
business, provided that such early
access shall be subject to all of the terms and conditions of this Sublease and
the Overlease, other than the payment of Fixed Rent (as defined in Section 4(a)
below) and Direct Expenses (as defined in Section 4(b) below).  Landlord shall use commercially
reasonable efforts to cause the Early Access Date to occur on or before
November 1, 2006.  Subtenant’s early access shall be subject to
reasonable scheduling and other requirements of Landlord and Landlord’s
contractors, and Subtenant shall deliver to Landlord certificates of liability,
casualty and workmen’s compensation insurance (all in accordance with the terms
and provisions of the Overlease) prior to having any such early access.  Subtenant’s early access is also conditioned upon
Subtenant and Subtenant’s Contractors working in harmony and not interfering
with or delaying Landlord’s or Landlord’s contractors’ work in the Building,
whether for Landlord or any other tenant, subtenant or occupant of the
Building; and if at any time Subtenant’s early access shall in the reasonable
judgment of Landlord cause or threaten to cause such disharmony, interference
or delay, Landlord shall have the right to deliver written notice to Subtenant
temporarily suspending Subtenant’s right to such early access until such
disharmony, interference or delay can be reasonably avoided.

(d) 
Notwithstanding anything to the contrary in this Sublease: (i) if
the Early Access Date has not occurred for any reason whatsoever on or before
December 31, 2006, then Subtenant may terminate this Sublease by written notice
to Landlord, and, so long as Subtenant is not in default hereunder and further
provided that Subtenant surrenders the Subleased Premises as and in the
condition required hereunder (including, without limitation, the removal of any
improvements constructed or partially constructed by Subtenant) the Security
Deposit and any advance payments of Fixed Rent previously paid by Subtenant to
Landlord shall be returned immediately to Subtenant, and (ii) if the
Commencement Date has not occurred for any reason whatsoever on or before April
1, 2007, then Subtenant may terminate this Sublease by written notice to
Landlord, and, so long as Subtenant is not in default hereunder and further
provided that Subtenant surrenders the Subleased Premises as and in the
condition required hereunder (including, without limitation, the removal of any
improvements constructed or partially

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constructed by Subtenant) the Security Deposit and any advance payments
of Fixed Rent previously paid by Subtenant to Landlord shall be returned
immediately to Subtenant; provided, however, that the failure of the Landlord
to have completed, as of April 1, 2007, certain aspects of the Landlord’s Work
that do not materially interfere or materially impair Subtenant’s use of the
Subleased Premises for Subtenant’s business shall not give Subtenant the right
to terminate this Sublease as otherwise set forth in subsection (ii)
above.  Landlord shall diligently
complete those aspects of the Landlord’s Work set forth in the foregoing
proviso.  From and after the Commencement
Date, Subtenant shall have access to the Premises twenty-four (24) hours a day,
seven (7) days a week.

3.  SUBORDINATION TO AND
INCORPORATION OF THE OVERLEASE.

(a)  This Sublease is in all
respects subject and subordinate to the terms and conditions of the Overlease
and to the matters to which the Overlease, including any amendments thereto
entered into with the consent of Subtenant (which consent shall not be
unreasonably withheld, delayed or conditioned), is or shall be
subordinate.  Subtenant agrees that
Subtenant has reviewed and is familiar with the Overlease, and will not do or
suffer or permit anything to be done which would result in a default or breach
(whether or not subject to notice or grace periods) on the part of Landlord
under the Overlease or cause the Overlease to be terminated.  If, however, the Overlease is terminated
prior to its scheduled expiration, this Sublease shall likewise terminate.  Notwithstanding anything to the contrary in
this Sublease, Subtenant shall not be bound by, and this Sublease shall not be
subject and subordinate to any portion of the Overlease that has been redacted.

(b)  Except as
otherwise expressly provided in this Sublease, the terms, covenants,
conditions, rights, obligations, remedies and agreements of the Overlease are
incorpo­rated into this Sublease by reference and made a part hereof as if
fully set forth herein and shall constitute the terms of this Sublease, mutatis
mutandis, Landlord being substituted
for “Lessor” thereunder, Subtenant being substituted for “Lessee” thereunder,
and “Subleased Premises” being substituted for “Premises” thereunder, except
to the extent that such terms do not relate to the Subleased Premises or are
inapplicable to, or specifically inconsistent with the terms of this
Sublease.  For the purposes of
incorporation by reference, the term “Commencement Date”, as used in the
Overlease, shall mean the Commencement Date under this Sublease, the term “Lease
Term”, as used in the Overlease, shall mean the Term under this Sublease, and
the term “Expiration Date”, as used in the Overlease, shall mean the Expiration
Date under this Sublease.  If there is
any inconsistency between the provisions of this Sublease and the provisions of
the Overlease, the provisions of this Sublease shall prevail as between
Subtenant and Landlord.

(c)  The following provisions of the Overlease
shall not be incorporated herein by reference and are expressly excluded from
the terms of this Sublease: Articles I through III, and Sections 4.01
through 4.07 (provided that the provisions of Section 4.07 shall be the source
for determining what costs may be passed through to Subtenant as Landlord’s
Operating Expenses Payment, as such term is defined in Section 4.(b) of this
Sublease), 5.02(a), 5.03 through 5.05, 6.01, 6.02, 6.05, 7.01, 7.03,
Article VIII, Sections 9.01 (provided that the provisions of Section 9.01
shall be the source for determining what costs may be passed through to
Subtenant as Landlord’s Real Property Tax Payment, as such term is defined in
Section 4.(b) of this Sublease),

 3
 

 

9.02, 9.04, the first sentence of Section 10.01,
Sections 11.06, 12.03 (but only the requirement to notify the holder of any
first mortgage or deed of trust and the last two sentences of Section 12.03),
16.01, 17.08, 17.15, 17.19, 17.22(b), 17.22(g), 17.24 and Exhibits A through
H and Exhibits J, K, L and M; provided; however, that
notwithstanding such non-incorporation, this Sublease remains subject and
subordinate to all of the foregoing provisions as provided in Section 3(a)
above.

(d)  Subtenant shall have the right to use Subtenant’s
Proportionate Share of licenses/memberships or usage rights to the
Amenities/Athletic Facility, subject to the terms and conditions of the
Overlease.

4.  RENT.

(a)  From and after the Commencement Date,
Subtenant shall pay to Landlord annual fixed rent (the “Fixed Rent”) in the
amounts set forth on Schedule 4 attached hereto.  Fixed Rent shall be payable in advance in the
monthly installments forth on Schedule 4, pro-rated on a per diem basis
in the case of any partial months during the Term.  Except as otherwise set forth herein, each
monthly installment of Fixed Rent shall be payable on or before the first day
of each month, without notice or demand and without abatement, set-off or
deduction.

Throughout the term of
this Sublease, so long as Subtenant is not then in monetary default under this
Sublease (beyond any applicable notice and cure period), Subtenant shall be
entitled to a credit in the amount of $13,414.57 per month to be applied
against Fixed Rent otherwise due hereunder as set forth above.  Landlord acknowledges that Subtenant will,
when entitle to the aforementioned credit, pay the Fixed Rent less the amount
of the credit.

(b)  Commencing
on the first anniversary of the Commencement Date, Subtenant agrees to pay to
Landlord, as additional rent hereunder, an amount equal to “Subtenant’s
Proportionate Share” of (i) the amount payable by Landlord pursuant to
Section 4.05 of the Overlease (“Landlord’s Operating Expenses Payment”),
but only to the extent that Landlord’s Operating Expense Payment for any
calendar year during the Term exceeds Landlord’s Operating Expense Payment for
calendar year 2007, and (ii) the amount payable by Landlord on account of real
property tax (as defined in Section 9.01 of the Overlease) pursuant to
Section 9.01 of the Overlease (“Landlord’s Real Property Tax Payment”), but
only to the extent that Landlord’s Real Property Tax Payment for any fiscal
year during the Term exceeds Landlord’s Real Property Tax Payment for fiscal
year 2007, and (iii) all costs and expenses of every kind and nature paid
or incurred by Landlord in the operation, maintenance, repair and replacement
of the Building and the Building Common Area, including, without limitation,
the utility costs described in Section 21 below (“Landlord’s Building Expenses”),
but only to the extent Landlord’s Building Expenses for any calendar year
during the Term exceed Landlord’s Building Expenses for calendar year 2007
(all such additional rent payable by Subtenant collectively referred to herein
as “Direct Expenses”).  In the event the
Building is not at least 95% occupied during calendar year 2007, then that
portion of Landlord’s Building Expenses that vary based on occupancy shall be
grossed up as if the Building were 95% occupied.  For purposes of this Sublease, “Subtenant’s
Proportionate Share” shall be calculated by dividing the rentable square
footage of the Subleased

 4
 

 

Premises subject to this Sublease (at the time in
question) divided by the total rentable square footage of the Building.  Initially, the Subtenant’s Proportionate
Share is twenty-seven percent (27%).

For purposes of this Sublease, there shall be excluded
from Landlord’s Building Expenses the items described in Section 4.07(d) of the
Overlease as if such provision was incorporated by reference herein, except (1)
the term “Common Area” shall mean Building Common Area, (2) the term “Lessor”
shall mean Landlord, (3) the term “Lessee” shall mean Subtenant, (4) the term “Operating
Expenses” shall mean Landlord’s Building Expenses.  Further, Landlord’s Building Expenses shall
not include (A) the cost of “Rent” payable by Landlord to Overlandlord under
the Overlease since Landlord is recovering such costs from Subtenant through
Fixed Rent, Direct Expenses, Subtenant Surcharges and other amounts payable under
this Sublease, if any, (as it is the intent of the parties to avoid
any “double charging” for such amounts), (B) the cost of damage or repairs
attributable to condemnation, fire or other casualty to the extent of insurance
proceeds actually received on account of such condemnation, fire or other
casualty, and (C) capital expenditures except as provided in Section 6.05
of the Overlease as if such provision was incorporated by reference herein.

Subtenant shall pay Direct Expenses in monthly
installments on the first day of each month in an amount set forth in a written
estimate by Landlord.  Landlord shall
deliver to Subtenant a written estimate of the payments for Direct Expenses for
the upcoming calendar year promptly upon receipt of such similar statements
from Overlandlord.  Promptly upon
Landlord’s receipt of any year-end statement from Overlandlord, Landlord shall
furnish to Subtenant a similar statement (“Landlord’s Statement”) of the actual
amount of Direct Expenses for the year. 
Within fifteen (15) days thereafter, Subtenant shall pay to Landlord, as
Direct Expenses, or Landlord shall remit to Subtenant, as the case may be, the
difference between the estimated amounts paid by Subtenant and the actual
amount of Subtenant’s Proportionate Share of Direct Expenses for such period.

(c)  In addition
to the Fixed Rent and Direct Expenses, Subtenant agrees to pay to Landlord all
Subtenant Surcharges (as hereinafter defined) as additional rent hereunder as
hereinafter provided.  As used herein,
the term “Subtenant Surcharges” shall mean any and all amounts which become due
and payable by Landlord to the Overlandlord under the Overlease (without
additional charge or profit to Landlord) as “Additional Rent” (as such term is
defined in the Overlease) which would not have become due and payable but for
the acts and/or failures to act of Subtenant under this Sublease or which are
otherwise attributable to the Subleased Premises, including, but not limited
to: (i) any increases in the Overlandlord’s fire, rent or other insurance
premiums resulting from any act or omission of Subtenant, and (ii) any
additional rent or charges under the Overlease payable by Landlord on account
of any other additional service as may be provided under the Overlease, or with
the consent of the Overlandlord. 
Subtenant shall pay any Subtenant Surcharge within fifteen (15) days
after the presentation of the Overlandlord’s statements therefor by the
Landlord to Subtenant.

(d)  Any failure
or delay by Landlord in billing any sum set forth in this Section 4 shall not
constitute a waiver of Subtenant’s obligation to pay the same in accordance
with the terms of this Sublease.

 5
 

 

(e)  Landlord
shall promptly furnish to Subtenant a copy of each notice or statement from the
Overlandlord affecting the Subleased Premises with respect to Subtenant’s
obligations hereunder, including, without limitation, notices of default
against Landlord.  If Landlord, whether
at its discretion or on behalf of Subtenant (pursuant to the prior written
request of Subtenant under such rights as incorporated herein from Section 4.08
of the Overlease), disputes the correctness of any such notice or statement and
if such dispute is resolved in Landlord’s favor, or if Landlord shall receive
any refund of Direct Expenses or Subtenant Surcharges with or without a
dispute, Landlord shall promptly pay to Subtenant any refund (after deducting
from the amount of any such refund an equitable portion of all reasonable
expenses, including court costs and reasonable attorneys’ fees, incurred by
Landlord in resolving such dispute) received by Landlord in respect (but only
to the extent) of any related payments of Direct Expenses, Subtenant Surcharges
or other amounts made by Subtenant less any amounts theretofore received by
Subtenant directly from the Overlandlord and relating to such refund; provided,
however, that, if Landlord is required under the terms of the Overlease
to pay such amounts pending the determination of any such dispute (by agreement
or otherwise), Subtenant shall pay the full amount of the Fixed Rent, Direct
Expenses and Subtenant Surcharges in accordance with this Sublease and the
applicable Overlandlord’s statement or notice. 
Landlord shall also remit to Subtenant, Subtenant’s Proportionate Share
of any refunds, if any, paid by Overlandlord to Landlord pursuant to Section
4.07(b) of the Overlease to the extent that such refund is not otherwise
exclusively attributable to rentable space (other than the Subleased Premises)
in the Building.  The provisions of this
Section 4(e) shall survive the expiration or sooner termination of this
Sublease.

(f)  The Fixed
Rent, Direct Expenses, Subtenant Surcharges and any other amounts payable
pursuant to this Sublease shall be paid by Subtenant to Landlord at the address
set forth for notices below, or at such other place as Landlord may hereafter
designate from time to time in writing, in lawful money of the United States of
America, by a good unendorsed check, subject to collection, as and when
the same become due and payable, without demand therefor and without any
deduction, set-off or abatement whatsoever. 
Any other amounts of additional rents and other charges herein reserved
and payable shall be paid by Subtenant in the manner and to the persons set
forth in the statement from Landlord describing the amounts due as
applicable.  All Subtenant Surcharges and
all other costs, charges and expenses which Subtenant assumes, agrees or is
obligated to pay to Landlord pursuant to this Sublease shall be additional rent
and in the event of nonpayment thereof Landlord shall have all the rights and
remedies with respect thereto as are herein provided for in case of nonpayment
of the Fixed Rent reserved hereunder.

(g)  Subtenant
shall, within two (2) business days after the satisfaction of the Conditions
Precedent, pay to Landlord the sum of $61,483.43 to be applied to the first
full monthly installment of Fixed Rent due hereunder.

5. 
SECURITY DEPOSIT.

(a)  Within five
(5) business days after the satisfaction of the Conditions Precedent, Subtenant
shall deliver to Landlord a security deposit (the “Security Deposit”) in the
amount of Four Hundred Thousand Dollars ($400,000) in the form of an
unconditional, irrevocable standby

 6
 

 

letter of credit without documents, i.e., no obligation on Landlord’s
part to present anything but a sight draft, with Landlord as beneficiary,
drawable in whole or in part, providing for payment in Santa Clara County,
California or San Francisco, California, on presentation of Landlord’s drafts
on sight, providing for multiple draws and multiple successors and otherwise
both from a bank and in a form acceptable to Landlord.  Landlord hereby approves of Silicon Valley
Bank as the issuing bank.  The Security
Deposit shall be held by Landlord as security for the faithful performance by
Subtenant of all the terms, covenants, and conditions of this Sublease
applicable to Subtenant.  If Subtenant
defaults with respect to any provision of this Sublease, including but not
limited to the provisions relating to the condition of the Subleased Premises
upon the Expiration Date, 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
amount which Landlord may spend by reason of Subtenant’s default or to
compensate Landlord for any loss or damage which Landlord may suffer by reason
of Subtenant’s default and Landlord may draw on all or any part of the Security
Deposit and thereafter retain any unapplied portion as a cash Security
Deposit.  If any portion of the Security
Deposit is so used or applied, Subtenant shall, within ten days after written
demand therefor, deposit cash or a replacement letter of credit (in form and
substance subject to the same requirements as the original letter of credit)
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount.  Subtenant’s failure to
do so shall be a material default and breach of this Sublease by
Subtenant.  The rights of Landlord
pursuant to this Section are in addition to any rights which Landlord may have
pursuant to Section 11 below.  If
Subtenant fully and faithfully performs every provision of this Sublease to be
performed by it, the Security Deposit or any balance thereof shall be returned
(without interest) to Subtenant at Sublease termination and after Subtenant has
vacated the Subleased Premises.  Failure
of Subtenant to deliver a replacement letter of credit to Landlord at least
forty-five (45) business days prior to the expiration date of any current
letter of credit shall constitute a separate default entitling Landlord to draw
down immediately and entirely on the current letter of credit and the proceeds
shall constitute a cash Security Deposit.

(b)  If, as of February 1, 2009, Subtenant is not
then currently in default under this Sublease, then the amount of the Security
Deposit shall be reduced to Three Hundred Thousand Dollars ($300,000), and on
or after such date Subtenant may tender to Landlord a replacement letter of
credit (in form and substance subject to the same requirements as the original
letter of credit) in such reduced amount (in which case Landlord shall promptly
upon such receipt return the existing letter of credit) or a certificate of
amendment to the existing letter of credit amending the amount of the original
letter of credit to such reduced amount.

(c)  If the Security Deposit has been reduced as
provided in subsection (b) above, and if, as of February 1, 2010, Subtenant is
not then currently in default under this Sublease, then the amount of the
Security Deposit shall be further reduced to Two Hundred Thousand Dollars
($200,000), and on or after such date Subtenant may tender to Landlord a
replacement letter of credit (in form and substance subject to the same
requirements as the original letter of credit) in such further reduced amount
(in which case Landlord shall promptly upon such receipt return the existing
letter of credit) or a certificate of amendment to the existing letter of
credit amending the amount of the then-current letter of credit to such further
reduced amount.

(d)  If the
Security Deposit has been reduced as provided in subsection (c) above, and if,
as of February 1, 2011, Subtenant is not then currently in default under this
Sublease, then the

 7
 

 

amount of the Security Deposit shall be further reduced to One Hundred
Thousand Dollars ($100,000), and on or after such date Subtenant may tender to
Landlord a replacement letter of credit (in form and substance subject to the
same requirements as the original letter of credit) in such further reduced
amount (in which case Landlord shall promptly upon such receipt return the
existing letter of credit)or a certificate of amendment to the existing letter
of credit amending the amount of the then-current letter of credit to such
further reduced amount.

6.  CONDITION
OF SUBLEASED PREMISES.  Landlord
represents and warrants that the Subleased Premises shall be delivered on the
Early Access Date to the Subtenant in the Delivery Condition (defined below),
broom clean and free of all tenancies. 
Landlord shall deliver the Subleased Premises on the Early Access Date
with all building systems and subsystems (including but not limited to the
HVAC, electrical, plumbing, lighting, and ceiling), the roof, windows and
structural elements of the building and the foundation in good working
condition and repair (the “Delivery Condition”).  Subtenant’s acceptance of the Subleased
Premises shall not be deemed a waiver of Subtenant’s right to have defects in
the Landlord’s Work repaired at no cost to Subtenant.  For a period of ninety (90) days following
the completion of the Landlord’s Work Tenant shall have the right to give
notice to Landlord whenever any such defect becomes reasonably apparent, and
Landlord shall repair such defect as soon as practicable and at Landlord’s sole
cost and expense.  Subtenant represents
and warrants that it has made a thorough examination of the Subleased Premises
and it is familiar with the condition thereof. 
Subtenant acknowledges that it enters into this Sublease without any
representation or warranties by Landlord or anyone acting or purporting to act
on behalf of Landlord, as to present or future condition of the Subleased
Premises or the appurtenances thereto or any improvements therein or of the
Building, except as otherwise expressly set forth herein.  Subject to the foregoing, it is further
agreed that Subtenant does and will accept the Subleased Premises “as is” in
its present condition and Landlord has no obligation to perform any work
therein (except for Landlord’s Work as set forth in Section 20 below), or
contribute to the cost of any work.

7.  FAILURE
OF OVERLANDLORD TO PERFORM OBLIGATIONS. 
Subtenant acknowledges and agrees that Landlord shall have no obligation
to provide any services to the Subleased Premises or to perform the terms, covenants,
conditions or obligations contained in the Overlease on the part of
Overlandlord to be performed, except as otherwise set forth in this
Sublease.  Subtenant agrees to look
solely to Overlandlord for the furnishing of such services and the performance
of such terms, covenants, conditions or obligations.  In the event that Overlandlord shall fail to
furnish such services or to perform any of the terms, covenants, conditions or
obligations contained in the Overlease on its part to be performed, Landlord
shall be under no obligation or liability whatsoever to Subtenant for such
failure (except to the extent such failure was caused by Landlord’s gross
negligence), but Landlord shall, upon the request of Subtenant, use
commercially reasonable efforts to compel Overlandlord’s performance and
otherwise reasonably cooperate with Subtenant to enforce Overlandlord’s
obligations.  In any event, Subtenant
shall not be allowed any abatement or diminution of rent under this Sublease
because of Overlandlord’s failure to perform any of its obligations under the
Overlease unless abatement is available under the Overlease.

8.  CASUALTY AND CONDEMNATION.  Notwithstanding
anything to the contrary contained in this Sublease or in the Overlease,
Subtenant shall not have the right to terminate this

 8
 

 

Sublease as to all or any part of the Subleased Premises, or be
entitled to an abatement of Fixed Rent, Direct Expenses or any other item of
rental, by reason of a casualty or condemnation affecting the Subleased
Premises unless Landlord is entitled to terminate the Overlease or is entitled
to a corresponding abatement with respect to its corresponding obligation under
the Overlease.  If Landlord is entitled to terminate the
Overlease for all or any portion of the Subleased Premises by reason of
casualty or condemnation, Subtenant may terminate this Sublease as to any
corresponding part of the Subleased Premises by written notice to Landlord
given at least five (5) business days prior to the date(s) Landlord is required
to give notice to Overlandlord of such termination under the terms of the
Overlease (provided Subtenant has received reasonable advance notice of such
date(s)).

9.  CONSENTS.
In all provisions of the Overlease requiring the approval or consent of the “Lessor,”
Subtenant shall be required to obtain the approval or consent of both
Overlandlord and Landlord (which consent of Landlord shall not be unreasonably
withheld, delayed or conditioned so long as the consent of Overlandlord has
been obtained).  In no event shall Landlord
be liable for failure to give its consent or approval in any situation where
consent or approval has been withheld or refused by Overlandlord, whether or
not such withholding or refusal was proper. 
Notwithstanding the foregoing, Landlord and Subtenant shall cooperate in
good faith to obtain any such consent of Overlandlord and Landlord shall use
commercially reasonable efforts to obtain Overlandlord’s consent.  Landlord agrees to use commercially
reasonable efforts to minimize any costs incurred in providing consent to any
request by Subtenant for consent, and, in that regard, Landlord agrees to rely
on the review of any engineers, architects or other consultants that
Overlandlord retains or utilizes in considering a request for consent to any
alterations, additions or improvements Subtenant wishes to undertake.

10.  CONDITIONS PRECEDENT; CONSENT
OF OVERLANDLORD TO THIS SUBLEASE.  Landlord and Subtenant agree that this
Sublease is subject to the following conditions precedent (the “Conditions
Precedent”): (i) the execution and delivery of this Sublease by Landlord and
Subtenant and (ii) Landlord obtaining the written consent (the “Consent”) of
Overlandlord as provided in the Overlease and otherwise in a form reasonably
acceptable to Landlord and Subtenant.  It
is expressly understood and agreed that notwithstanding anything to the
contrary contained herein, the Term shall not commence, nor shall Subtenant
take possession of the Subleased Premises or any part thereof, until the
Consent has been obtained.  Subtenant
hereby agrees that it shall reasonably cooperate in good faith with Landlord
and shall comply with any reasonable requests made of Subtenant by Landlord or
Overlandlord in the procurement of the Consent. 
In no event shall Landlord or Subtenant be obligated to make any payment
to Overlandlord in order to obtain the Consent or the consent to any provision
hereof, except as expressly provided in Article XI of the Overlease.  Landlord shall be responsible for paying any
costs associated with obtaining the Consent.  Notwithstanding anything to the
contrary in this Sublease, if the Consent is not obtained within thirty (30)
days after the date of this Sublease for any reason whatsoever, then each of
Landlord and Subtenant shall have the right to terminate this Sublease
effective upon written notice to the other whereupon Landlord shall immediately
return to Subtenant the Security Deposit and any advance payment of Fixed Rent.

 9
 

 

11.  DEFAULTS.  Subtenant covenants and agrees that in the
event that it shall default in the performance of any of the terms, covenants
and conditions of this Sublease or of the Overlease, Landlord shall be entitled
to exercise any and all of the rights and remedies to which it is entitled by
law, including, without limitation, the remedy of summary proceeding, and also
any and all of the rights and remedies specifically provided for in the
Overlease, which are incorporated herein and made a part hereof, with the same
force and effect as if herein specifically set forth in full, and that wherever
in the Overlease rights and remedies are given to Overlandlord therein named,
the same shall be deemed to refer to Landlord herein.

12.  NOTICE.  Whenever, by the terms of this Sublease, any
notice, demand, request, approval, consent or other communication (each of
which shall be referred to as a “notice”) shall or may be given either to
Landlord or to Subtenant, such notice shall be in writing and shall be sent by
hand delivery, reputable overnight courier, or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows (or to such
other address or addresses as may from time to time hereafter be designated by
Landlord or Subtenant, as the case may be, by like notice):

	
  (a)

  	
  If intended for Landlord, to:

  	
  Nuance Communications, Inc.

  
	
   

  	
   

  	
  One Wayside Road

  
	
   

  	
   

  	
  Burlington, MA 01803

  
	
   

  	
   

  	
  Attn: Director Global Ops/Real Estate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nuance Communications, Inc.

  
	
   

  	
   

  	
  One Wayside Road

  
	
   

  	
   

  	
  Burlington, MA 01803

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Langer & McLaughlin, LLP

  
	
   

  	
   

  	
  137 Newbury Street, Suite 700

  
	
   

  	
   

  	
  Boston, MA 02116

  
	
   

  	
   

  	
  Attn: Doug McLaughlin, Esq.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  If intended for Subtenant, to:

  	
  (prior to the Commencement Date)

  
	
   

  	
   

  	
  SupportSoft, Inc.

  
	
   

  	
   

  	
  575 Broadway

  
	
   

  	
   

  	
  Redwood City, CA 94063

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  

 

 10

SupportSoft,
Inc.

575 Broadway

Redwood City, CA 94063

Attn:  CFO

(after the Commencement Date)

SupportSoft, Inc.

1900 Seaport Boulevard

Redwood City, CA 94063

Attn:  General Counsel

and

SupportSoft, Inc.

1900 Seaport Boulevard

Redwood City, CA 94063

Attn:  CFO

with a copy to:                                                                 Pillsbury Winthrop Shaw Pittman LLP

2475 Hanover Street

Palo Alto, CA 94304-1114

Attn:  James Masetti

All such notices shall be deemed to have been served
on the date of actual receipt or rejection thereof (in the case of hand
delivery), or one (1) business day after such notice shall have been deposited
with a reputable overnight courier, or three (3) business days after such
notice shall have been deposited in the United States mails within the
continental United States (in the case of mailing by registered or certified
mail as aforesaid).

13.  BROKER.  Each of Landlord and Subtenant represents and
warrants to the other that it has not dealt, either directly or indirectly,
with any broker in connection with this Sublease other than Newmark Knight
Frank and Colliers International (collectively, the “Broker”) and Landlord
shall be solely responsible for all fees of the Broker pursuant to a separate
written agreement.  Each of Landlord and
Subtenant shall indemnify the other from and against any and all loss, costs
and expenses, including reasonable attorney’s fees, incurred as a result of a
breach of such representation and warranty.

14.  COUNTERPARTS.  This Sublease may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

15.  QUIET
ENJOYMENT.  Landlord agrees that,
upon Subtenant’s paying the Fixed Rent, Direct Expenses, Subtenant Surcharges,
additional rent and other charges herein reserved, and provided Subtenant is
not in default hereunder (beyond any applicable notice and cure period),
Subtenant shall and may peaceably hold and enjoy the Subleased Premises during
the term of this Sublease, without interruption or disturbance from Landlord or
persons claiming through or under Landlord, subject, however, to the terms of
this Sublease and to the terms and conditions of the Overlease and all matters
to which the Overlease is or may be subject.

 11
 

16.  PARKING.  Subtenant shall have the right to use a
number of parking spaces equal to Subtenant’s Proportionate Share of the total
parking spaces allocated to Landlord under the Overlease.  Said parking spaces shall be on a
non-designated basis.

17.  SIGNAGE.  Subtenant shall have the right, at no cost to
Landlord, to Subtenant’s Proportionate Share of any building-standard exterior
monument and Building directory signage afforded to Landlord under the
Overlease.

18.  SUBTENANT’S INITIAL IMPROVEMENTS.

(a)  Landlord shall use commercially reasonable efforts to diligently pursue
Overlandlord’s approval to the Alterations sought by Subtenant in readying the
space for Subtenant’s use prior to the Commencement Date (“Subtenant’s Initial
Improvements”).  Subtenant’s Initial Improvements shall be
subject to the consent and approval of Landlord, provided that Landlord shall
not unreasonably withhold, condition or delay its consent or approval to
Subtenant’s Initial Improvements.  Subtenant’s
Initial Alterations include: (i) construction of a “CEO” office and other
offices, (ii) installation of dedicated server room HVAC system including HVAC
components on the roof of the Building in a location designated by Landlord and
HVAC components in the Subleased Premises, connection of Subtenant’s roof
installed HVAC components with Subtenant’s HVAC components in the Subleased
Premises, connection of the necessary Subtenant installed HVAC components on
the roof to the electrical connections on the roof, and performance of  related work for Subtenant’s server room(s);
provided, however, that Subtenant shall not be entitled to more than Subtenant’s
Proportionate Share of any usable Building Common Area necessary for such
installation/connection, including the roof of the Building (except that
Subtenant shall have a area on the roof to install its server HVAC components
that measures at least eight feet by eight feet), and further provided,
however, that Subtenant shall use only then-existing conduits for any such facilities
and equipment and no core drilling shall be allowed in connection therewith,
(iii) enlarging the server room, (iv) installation of a telephone in the
Building’s lobby for use by Subtenant’s visitors, (v) construction of a large
conference room; and (vi) reconfiguring the third floor elevator area in
order to construct a reception area. 
Subject to all of the terms and conditions of this Sublease and the
Overlease, such HVAC unit(s) shall remain the property of Subtenant and may be
removed at any time by Subtenant provided Subtenant repairs any damage caused
by such removal.

(b)  As of the Early Access Date, and thereafter
from time to time during the Term, Subtenant may install, or cause a carrier,
vendor or other operator selected by Subtenant to install, maintain, and
operate electrical wire, cable, conduit, antenna, satellite dish, and other
facilities and equipment for use in connection with any telephone, television,
telecommunications, computer, Internet, or other communications or electronic systems,
services, or equipment (which systems, services, and equipment are referred to
collectively as “Telecommunications Equipment”) in, on, under, above or about
the Subleased Premises and the Building Common Areas, including the roof of the
Building; provided, however, that Subtenant shall not be entitled to more than
Subtenant’s Proportionate Share of any usable Building Common Area necessary
for the installation of the Telecommunications Equipment, including the roof of
the Building, and further provided, however, that Subtenant shall use only
then- 

 12
 

existing conduits
for any such facilities and equipment and no core drilling shall be allowed in
connection therewith.  In furtherance of
Subtenant’s rights in the preceding sentence, 
Subtenant may access and utilize
the electrical wiring and floor monuments existing as of the Early Access
Date.  Subtenant’s installation of
the Telecommunications Equipment is subject to the following: (i) Landlord
shall approve the location and the plans and specifications for the
installation of such Telecommunications Equipment, such approval shall not to
be unreasonably withheld, (ii) the installation shall be subject to (a)
the approval of Overlandlord and the terms of the Overlease, and (b) all
applicable governmental regulations, (iii) Subtenant shall be responsible
for all costs of repairs and improvements, including, without limitation, any
patching or strengthening of the roof of the Building, which may be necessary
on account of, or be necessary for, the installation or, upon the expiration or
earlier termination of this Sublease, the removal of the Telecommunications
Equipment, and (iv) Subtenant shall indemnify and hold harmless Landlord and its
officers, directors, shareholders, employees and their respective successors
and assigns from and against any and all third party claims, actions,
liabilities, losses, damages, costs and expenses (including, but not limited
to, court costs and reasonable attorneys’ fees and disbursements) arising from
or in connection with Subtenant’s Telecommunications Equipment.  The provisions of the preceding subsection
(iv) shall survive the expiration or earlier termination of this Sublease.  Subtenant shall not be required to pay any
additional Fixed Rent hereunder for the installation or use of any
Telecommunications Equipment.

Landlord and
Subtenant agree that (i) Subtenant shall have access to the Building Common
Areas (including the roof of the
Building) to install, service, maintain, repair and replace its HVAC and
Telecommunications Equipment as set forth above upon not less than five (5)
business days prior notice (which notice may be by electronic mail if it is
given to Landlord’s then-acting building/facilities person), (ii) Landlord
shall have the right to have a representative present during the performance of
any such work, provided, however, that Landlord’s inability to provide a
representative shall not allow Landlord to delay Subtenant’s access.

19.  REPRESENTATIONS
AND WARRANTIES OF LANDLORD.  Landlord
represents and warrants that as of the date of this Sublease (a) the copy
of the Overlease attached hereto as Exhibit A is a true and
complete copy of the Overlease and except as set forth therein or herein, there
are no additional agreements between Landlord and the Overlandlord with respect
to the Subleased Premises, (b) the Overlease is in full force and effect,
(c) Landlord has not received written notice from Overlandlord that
Landlord is in default of the Lease, except for any default which has
heretofore been cured, (d) to the best of Landlord’s knowledge there are
no defaults on the part of either the Overlandlord or Landlord under the
Overlease and no event has occurred which, with the giving of notice and the
passage of time, would constitute a default under the Overlease,
(e) Landlord is in full and complete possession of the Subleased Premises
and has not assigned or sublet any portion of the Subleased Premises,
(f) Landlord has not previously sold, transferred, assigned or encumbered
the Landlord’s interest in the Subleased Premises, and (g) to the best of
Landlord’s knowledge neither Landlord nor Landlord’s employees, agents or
contractors have released any Hazardous Materials on the Subleased Premises in
violation of law.

20.  LANDLORD’S
BUILDING IMPROVEMENT WORK.  Upon the
satisfaction of the Conditions Precedent, Landlord shall, at Landlord’s sole
cost and expense, diligently pursue the 

 13
 

approval
and “Substantial Completion” of the improvements to the Premises described on Schedule 20
(“Landlord’s Work”), provided, however, that Landlord’s Work remains subject to
all of the terms and conditions of the Overlease.  If Landlord’s Work is not substantially
completed on or before the Commencement Date, as such date may be extended
day-for-day for any delays caused by reasons beyond the reasonable control of
Landlord, Subtenant may terminate this Sublease upon thirty (30) days written
notice to Landlord, and so long as Subtenant is not in default hereunder and
further provided that Subtenant surrenders the Subleased Premises as and in the
condition required hereunder (including, without limitation, the removal of any
improvements constructed or partially constructed by Subtenant), Landlord shall
return the Security Deposit and any rent advanced hereunder to Subtenant within
five (5) days after the expiration of said 30-day period; provided,
however, that if following Subtenant’s notice to terminate Landlord shall cause
the Landlord’s Work to be substantially completed on or prior to the expiration
of said 30-day period, Tenant’s notice shall be null and void and this Sublease
shall continue in full force and effect. 
“Substantial Completion” shall mean that the Landlord’s Work has been
completed such that Subtenant shall have reasonable access to and occupancy and
enjoyment of the Subleased Premises for the conduct of Subtenant’s business,
and such occupancy shall be permitted under by all applicable governmental
authorities having jurisdiction thereof.

21.  LANDLORD’S
BASIC SERVICES TO SUBTENANT. 
Landlord shall, during Subtenant’s occupancy of the Subleased Premises,
furnish:

(a)  hot and
cold water at those existing points of supply provided for drinking, lavatory
and toilet purposes;

(b)  during the
hours of 8:00 a.m. to 6:00 p.m. Monday through Friday and from
8:00 a.m. to 1:00 p.m. on Saturdays, central heat and air
conditioning at such temperatures and in such amounts as are considered by
Landlord to be standard for similar situated buildings in the Greater-Redwood
City area or as may be permitted or controlled by law and rules and regulations
at such times as Landlord normally furnishes these services to other tenants of
the Building;

(c)  routine maintenance, repairs, and exterior
maintenance (including both the exterior side and the interior side of the
curtain wall’s glass and glazing), painting and electric lighting service for
all public areas of the Building in the manner and to the extent deemed by
Landlord to be standard for a first-class office building;

(d)  janitorial service on a five (5) day week
basis, excluding holidays.  Landlord
shall not be required to provide janitorial services to above standard
improvements installed in the Subleased Premises;

(e)  an electrical system to convey power
delivered by public utility providers selected by Landlord in amounts
sufficient for normal office operations during normal office hours; and

(f)  public elevator service serving the floors on
which the Subleased Premises are situated, 8:00 a.m. to 6:00 p.m. Monday
through Friday, except for national holidays. 
(Elevators operate via card
readers in the elevators which can be programmed by floor, date and time to
require card keys for access twenty four
hours a day, seven days a week.)

 14
 

Landlord
shall ensure that the front doors of the Building are unlocked and open to visitors
without card key access during the hours of 8:00 a.m. to 6:00 p.m. Monday
through Friday, except for national holidays. 
Landlord agrees to promptly respond to Subtenant’s requests for changes
to the card key access system.

Because
utility consumption within the Subleased Premises is monitored by master meters
for the Building, Landlord shall have the right (but not the obligation), to
conduct a survey of electrical use by all of the tenants in the Building.  If, in Landlord’s reasonable judgment, Subtenant’s
use of electricity and/or air conditioning is in excess of normal office use or
outside of normal office hours, Subtenant shall pay to Landlord, as a Subtenant
Surcharge within fifteen (15) days after billing, Landlord’s reasonable
estimation of the additional costs of such usage (without profit or overhead to
Landlord).  Subtenant agrees to reply to
Landlord’s request for a survey of electrical and air conditioning uses in the
Subleased Premises.

22.  MAINTENANCE
AND REPAIR BY LANDLORD.  Except as
provided in Section 23 below, Landlord shall comply in all respects with
its maintenance and repair obligations under Section 6.01 of the Overlease.

23.  MAINTENANCE
AND REPAIR BY SUBTENANT.  Subtenant
shall maintain and repair the interior of the Subleased Premises and keep the
same in good condition, except for (i) ordinary wear and tear,
(ii) damage to the Subleased Premises by fire, earthquake, act of God or
the elements, (iii) damage caused by Landlord or Overlandlord,
(iv) latent defects of improvements in the Subleased Premises constructed
by Landlord or Overlandlord, (v) structural portions of the Premises and
(vi) the items to be provided or maintained by Landlord under this
Sublease.  Subtenant’s obligation shall
include, without limitation, the obligation to maintain and repair all interior
walls, floors, ceilings and fixtures within the Subleased Premises, and to
repair all damage caused by Subtenant, its agents, employees, invitees and
licensees to the utility outlets and other improvements within the Subleased
Premises.  Subtenant shall repair all
damage caused by removal of Subtenant’s movable equipment or furniture or the
removal of any Alterations permitted or required by Landlord, all as provided
in this Sublease.  Notwithstanding
anything to the contrary in this Sublease or the Overlease, as incorporated
herein, in no event shall Subtenant have any obligation to remove any
alterations, additions or improvements existing in, on or about the Building or
Premises that were not constructed by Tenant or that were existing as of the
Early Access Date.

24.  LANDLORD’S COVENANTS.  Landlord shall (i) perform and observe
all of the terms and conditions of the Overlease as “Lessee” thereunder, except
as otherwise set forth in this Sublease; (ii) not modify, amend or waive
any provisions thereof or make any election, exercise any option, right or
remedy, or grant any consent or approval thereunder without, in each instance,
Subtenant’s prior written consent, which consent shall not be unreasonably
withheld, denied or conditioned; provided, however, that if any such
modification, amendment or waiver would increase Subtenant’s monetary
obligations under this Sublease, or otherwise materially increase Subtenant’s
obligations, or materially decrease Subtenant’s rights, under this Sublease,
then Subtenant shall have the right to withhold its consent in Subtenant’s sole
and absolute discretion; and further provided that Subtenant’s consent shall be
deemed granted if Subtenant fails to
respond, within five (5) business days following receipt or refusal to accept 

 15
 

receipt,
to Landlord’s written notice requesting Subtenant’s consent (which notice shall
be given only by certified mail, postage pre-paid, return receipt requested)
and, thereafter, Subtenant fails to respond, within five (5) business days
following receipt or refusal to accept receipt, to a second written notice from
Landlord requesting Subtenant’s consent (which notice shall be given only by
certified mail, postage pre-paid, return receipt requested and which notice
shall not be given any earlier than the day immediately following the
expiration of the initial 5-business day period).

[signatures on following page]

 16
 

IN WITNESS WHEREOF, Landlord and Subtenant herein have
duly executed this instrument on the day and year first above written.

	
  

  	
  LANDLORD:

  	
  NUANCE COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul A. Ricci

  
	
   

  	
   

  	
  Name:

  	
  Paul A. Ricci

  
	
   

  	
   

  	
  Its:

  	
  Chairman and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBTENANT:

  	
  SUPPORTSOFT, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ken Owyang

  
	
   

  	
   

  	
  Name:

  	
  Ken Owyang

  
	
   

  	
   

  	
  Its:

  	
  CFO

  
						

 

 17

SCHEDULE 4

FIXED RENT SCHEDULE

	
  Year

  	
   

  	
  Annual Fixed

  Rent

  	
   

  	
  Monthly Fixed

  Rent

  	
   

  	
  Payable Monthly Fixed Rent

  (Monthly Fixed Rent less

  Rent Credit)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commencement Date thru
  December 31, 2007

  	
   

  	
  $

  	
  898,776.00

  	
   

  	
  $

  	
  74,898.00

  	
   

  	
  $

  	
  61,483.43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2008
  thru December 31, 2008

  	
   

  	
  $

  	
  921,245.40

  	
   

  	
  $

  	
  76,770.45

  	
   

  	
  $

  	
  63,355.88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2009
  thru December 31, 2009

  	
   

  	
  $

  	
  943,714.80

  	
   

  	
  $

  	
  78,642.90

  	
   

  	
  $

  	
  65,228.33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2010
  thru December 31, 2010

  	
   

  	
  $

  	
  943,714.80

  	
   

  	
  $

  	
  78,642.90

  	
   

  	
  $

  	
  65,228.33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2011
  thru December 31, 2011

  	
   

  	
  $

  	
  966,184.20

  	
   

  	
  $

  	
  80,515.35

  	
   

  	
  $

  	
  67,100.78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2012 thru July 31, 2012

  	
   

  	
  $

  	
  988,653.60

  	
   

  	
  $

  	
  82,387.80

  	
   

  	
  $

  	
  68,973.23

  	
   

  

 

SCHEDULE 20

LANDLORD’S WORK

Landlord shall construct any Alterations to the
Premises reasonably necessary, as determined by Landlord in its reasonable
discretion, to allow the Building to be a multi-tenanted facility, including
the following:

(1)                                  All
modifications required by law to make the Building a multi-tenanted
facility;  (In connection therewith, the
main lobby on the first-floor of the Building will not have a guard, but will
contain a lobby directory; lobby doors will be open during regular business
hours and will be controlled by card key access otherwise; and there will not
be a phone outside the building so after hours Tenant will be required to
escort its guests into the Building and Subleased Premises)

(2)                                  Elevator
and ground floor Building lobby card key access systems (including but not
limited to installing card readers in the elevators which can be programmed by
floor, date and time to require card keys for access), and

(3)                                  Risers
and conduits within the interior walls of the Building for telecommunications
access and distribution. (In connection therewith, Landlord shall build an
access corridor to the MPOE on the 1st floor and core drill and install sleeves
connecting the MPOE on the 1st floor to the 3rd floor IDF room.  Subtenant shall pull cabling to the 3rd floor. 
The MPOE will be locked and controlled by Landlord and Subtenant may
schedule reasonable access thereto on reasonable prior written notice to
Landlord.)

EXHIBIT A

OVERLEASE

[attached]

 

TRIPLE
NET BUILDING LEASE

Between

PACIFIC SHORES DEVELOPMENT, LLC,

as

LESSOR

and

NUANCE
COMMUNICATIONS, INC.

a Delaware corporation 

as

LESSEE

for

PREMISES

at

Pacific Shores Center 

Building 3

Redwood City, California

Certain
information has been

redacted by Nuance Communications, Inc.

This information is denoted by asterisks

[***].

 1
 

 

ARTICLE I

PARTIES

Section 1.01 Parties. This Lease,
dated for reference purposes, and effective as of May 5, 2000, is made by and
between PACIFIC SHORES DEVELOPMENT, LLC, or assignee, (“Lessor”) and NUANCE
COMMUNICATIONS, INC., a Delaware corporation (“Lessee”).

ARTICLE
II

PREMISES

Section 2.01 Demise of Premises.
Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at
the rental, and upon all of the terms and conditions set forth herein, Premises
consisting of one building (“Building”) which together with nine (9) other free
standing, office and research and development buildings (“Buildings”) and
various other improvements are to be constructed by Lessor on real property
situated in Redwood City, County of San Mateo, State of California and commonly
known as Pacific Shores Center, all of which real property improvements and
their respective appurtenances (the “Project”). The Building will be four (4)
stories tall and will consist of approximately one hundred forty thousand nine
hundred forty-one (140,941) rentable square feet, as more particularly
described and depicted herein in Exhibit “A.” The actual rentable square
footage of the Building (the “Rentable Area”) will be determined and certified
by Lessor’s architect by a method described as “dripline,” whereby the
measurement encompasses the outermost perimeter of the constructed building,
including every projection thereof and all area beneath each such projection,
whether or not enclosed, with no deduction for any inward deviation of
structure and with the measurement being made floor by floor, but beginning
from the top of the Building provided that, Lessee shall have the right, to be
exercised prior to Commencement Date, to measure the “as-built” Building to
confirm that the aforesaid dripline methodology was accurately utilized by
Lessor’s architect.. The Building and appurtenances described herein, together
with the legal parcel on which it is constructed as well as all other
improvements to be built on said legal parcel are together designated as the “Property.”
The Building leased hereunder, commonly known as Building 3 - Pacific Shores
Center, Redwood City, California, and its appurtenances described herein are
herein designated as the “Premises.”

Section 2.02 Common Area. During the
Lease Term, Lessee shall have the non-exclusive right to use the Common Area
described herein, provided that

 2
 

 

Lessor reserves the right
to modify the Common Area, including reducing the size or changing the use,
configuration and elements thereof in its sole discretion (including without
limitation, for the purpose of construction of parking facilities or additional
buildings, of any nature or size whatsoever, and in any part of the Project
including, without limitation, any of the Common Area including Common Area on
the Property so long as Lessee’s number of parking spaces in not reduced) and
to close or restrict access from time to time for repair, maintenance or to
prevent a dedication thereof, provided, further, that Lessee nonetheless shall
have access to parking and the Premises during such activities and, provided
further, that Lessor will continue to maintain the baseball and soccer fields
and the amenities/athletic facility or replacement items of like kind for so
long as Lessor is legally able to do so during the Lease Term. Lessor further
reserves the right to establish, repeal and amend from time to time rules and
regulations for the use of the Common Area and to grant reciprocal easements or
other rights to use the Common Area to owners of other property, provided that,
to the extent any conflict between this Lease and such amended Common Area
rules and regulations would unreasonably interfere with any new rules and
Regulations and this Lease (including the Rules and Regulations attached hereto
as Exhibit “L”) would materially and adversely affect Lessee’s use of the
Premises, this Lease shall govern, and to grant reciprocal easements or other
rights to use the Common Area to owners of other property. “Common Area”
includes, without limitation, all portions of the Property other than the
Building, including landscaping, sidewalks, walkways, driveways, curbs, parking
lots (including striping), roadways within the Project, sprinkler systems,
lighting, surface water drainage systems, sewer systems, an amenities/athletic
facility to be available for use by Lessee’s employees (the “Amenities/Athletic
Facility”), as well as baseball and soccer fields, a water front park, and a
perimeter walking/biking trial, and, to the extent required by government
authorities having jurisdiction over Lessor’s development of the Project,
amphitheater, marine life resource center, retreat and conference center, child
care center and such different or further portions of the Project or additional
or different facilities as Lessor may from time to time designate or install or
make available for the use by Lessee in common with others. Lessee’s employees
may use, in common with others and without charge, the baseball and soccer
fields and the Amenities/Athletic Facility, subject to such rules and
regulations as Lessor may impose from time to time, but nothing herein shall be
deemed to waive payment for optional services which may be available from time
to time at those fields and/or Facility.

Section 2.03 Parking. Lessor shall
provide Lessee with parking spaces within the Common Area in the ratio to space
within the Building as required by

 3
 

 

law, which is three (3)
spaces per one thousand (1,000) square feet of interior space within the
Building. In the event Lessor elects or is required by any law to limit or
control parking at the Premises, whether by validation of parking tickets or
any other method of assessment, Lessee agrees to participate in such validation
or assessment program under such reasonable rules and regulations as are from
time to time established by Lessor. Lessor agrees that Lessee’s access to
parking shall not be unreasonably limited beyond any requirement of law by any
such rules and regulations and the burden of any such limitation or control
imposed by law on the Project as a whole shall not be allocated to Lessee to an
extent greater than required by such law. Said parking shall be provided at no
additional cost except as expressly provided herein in Article VI for
reimbursement of repair, replacement and maintenance costs and expenses, and in
Article IX for payment or reimbursement of any real property taxes including
governmental or public authority charges, fees or impositions of any nature
hereafter imposed and in Article IV for payment of Additional Rent, without
limitation, including Operating Expenses. Lessor shall act in good faith to
facilitate the availability of the parking spaces allocated to Lessee, but
Lessor does not guarantee the availability of those spaces at all times against
the actions of other tenants of the Project and guests, visitors, invitees and
users of the Project amenities; provided, however, if after the Commencement
Date Lessee demonstrates to Lessor’s satisfaction there is significant
interference with Lessee’s ability to park in the vicinity of the Building,
then at Lessee’s written request to Lessor, Lessor shall designate certain
parking spaces in the vicinity of the Building as reserved for Lessee and/or
Lessee’s visitors, subject to Lessee paying the cost of same. Access to parking
may, at Lessor’s option, be regulated by card, pass, bumper sticker, decal or
other appropriate identification issued by Lessor. Lessor retains the right to
revoke the parking privileges of any user of the parking areas who violates the
rules and regulations governing use of the parking areas (and Lessee shall be
responsible for causing any employee of Lessee or other person using parking
spaces allocated to Lessee to comply with all parking rules and regulations.

Section 2.04 
Construction.

(a)           Government
Approvals. Lessor shall diligently pursue obtaining governmental approval
of a Site Plan and Building design and elevations with respect to the
development of the Premises, copies of which are attached hereto as Exhibit “A.”
The parties acknowledge and agree that the final footprint and elevations of
the Building may vary from those attached as Exhibit “A” because the plans and
specifications will undergo a plancheck process with the City of Redwood City
and Lessor will make such revisions as are required or are

 4
 

 

otherwise deemed
necessary or appropriate by Lessor, provided however, that nothing herein shall
be deemed to relieve Lessor from the duty to develop the Building substantially
in accordance with Exhibit “A.”

(b)           Construction
of Building Shell. Lessor, utilizing Rudolph & Sletten (or such
alternate as Lessor in its sole discretion may select) as general contractor (“General
Contractor”) and DES as the Building Shell Architect (“Architect”), shall
construct the “Building Shell” (as defined in the attached Exhibit “D”)
substantially in accordance with (i) plans and specifications to be attached as
Exhibit “B” and (ii) all existing applicable municipal, local, state and
federal laws, statutes, rules, regulations and ordinances. Lessor shall pay all
costs of constructing the Building Shell.

(c)           Construction
of Tenant Improvements. All improvements not included within the scope of
the Building Shell shall be deemed “Tenant Improvements.” Lessor, using the
General Contractor, shall construct the Tenant Improvements and Lessee shall
pay all costs associated with same. The total compensation to the General
Contractor under such contract shall be equal to a contractor’s fee not to
exceed an amount equal to two and one-half percent (2.5%) of the contract
(provided that a contractor’s fee shall not be payable for change orders
required due to coordination errors caused by the General Contractor or any of
its subcontractors) and an amount not to exceed an amount equal to two and
one-half percent (2.5%) of the contract for general conditions plus an amount
equal to three quarters of a percent (.75%) of the contract for insurance.

(d)           Tenant
Improvement Plans and Cost Estimate. Lessee shall utilize Gensler
Associates or another architect acceptable to both Lessee and Lessor (“Tenant
Improvement Architect”) and shall cause the Tenant Improvement Architect to
develop interior schematic drawings, and schematic drawings for the Generator
described in Subsection 2.04(j) below, and Lessee shall approve and obtain
Lessor’s approval of (which shall not be unreasonably withheld or delayed)
final schematic drawings for the Tenant Improvements and Generator no later
than September 1, 2000, provided that Lessor delivers working drawings for the
Building Shell on or before July 5, 2000 (and the date for delivery of the
schematic drawings by Lessee shall be extended by one day for each day of delay
by Lessor in delivering the Building Shell working drawings to Lessee). Lessee
shall cause the Tenant Improvement Architect to develop working drawings
outlining, among other things, Lessee’s wall layout, detailed electrical and
air conditioning requirements and finishes sufficient to allow the General
Contractor to construct and install all of the Tenant Improvements (“Working
Drawings”) and Lessee shall approve (and obtain Lessor’s approval, which shall
not be

 5
 

 

unreasonably withheld or
delayed) final Working Drawings on or before December 1, 2000. The cost of the
interior schematic drawings and Working Drawings shall be a Tenant Improvement
cost paid by Lessee. Based on this information, Lessor shall cause the General
Contractor to prepare and deliver to Lessee a budget for the Tenant
Improvements (“Budget”). Lessee shall approve the Budget (or modify the same
with Lessor’s consent), in writing, within fourteen (14) days thereafter. The
Working Drawings and Budget must be approved by Lessor and Lessee (neither of
whom shall unreasonably withhold or delay such consent) in writing and must
provide for Tenant Improvements of quality (but not necessarily cost) equal to
or greater than the Interior Specifications Standards set forth in Exhibit “C”
and must encompass the build-out of the entire Premises provided that Lessee
may request and Lessor may consent, in its sole discretion, that certain
improvements of lesser quality or of a type not generally used for Class A
office space (for purposes of this subsection 2.04(d), showers and computer
labs are deemed to be improvements of a type generally used for Class A office
space) be installed to comply with Lessee’s artistic scheme provided, further,
that Lessor may condition its consent on Lessee depositing with Lessor the cost
of removal of such improvements and for the cost of replacing such improvements
with higher quality or of a type more generally used in Class A office space
buildings at the expiration or termination of the Lease Term, provided further,
that the specifications set forth in Schedule One to Exhibit “C” for finish
items are meant only as a guideline and as an example of Class A standard
improvements, and such specifications for finish items are not to be
interpreted as binding on Lessee or as the actual finish specifications for the
construction of the Tenant Improvements, but only as an example of Class A
standard finish improvements. Lessee shall not be required to construct the
finish items of Tenant Improvements to the above-referenced specifications, but
shall be required to construct all the Tenant Improvements, including finish
items, to a Class A standard. Once the Budget is approved, Lessor shall enter
into a guaranteed maximum price (“GMP”) contract with the General Contractor
for the construction of the Tenant Improvements, and any additional costs for
Tenant Improvements in excess of the GMP contract shall be Lessor’s
responsibility except for Lessee initiated change orders which shall be Lessee’s
responsibility.

(e)           Cost
Responsibilities. Attached as Exhibit “C” to this Lease is a Work Letter
Agreement for Tenant Improvements, and Exhibit “D,” Cost Responsibilities of
Lessor and Lessee, which together with this Section 2.04, describe the planning
and payment responsibilities of Lessor and Lessee with respect to the
construction of the Shell Building and Tenant Improvements at the Premises. All
approved Tenant Improvements shall be constructed in accordance

 6
 

 

with a construction
schedule approved by Lessor and no portion of the Building interior shall
remain unimproved.

(f)            Tenant
Improvements. Lessor shall provide to Lessee semi-improved “cold” shell
facilities as described in Exhibit “D” attached. Lessor shall cause the General
Contractor to construct the Tenant Improvements outlined in Exhibit “D,” as
further outlined in the Tenant Improvement Work Letter attached as Exhibit “C”
and Lessee shall pay all costs and expenses of same. Subcontracts for all
Tenant Improvement Work shall be obtained by a sealed competitive bid process
(involving at least two qualified bidders) wherever practical and as to work
done without such process, Lessor or the General Contractor shall provide
reasonable assurance to Lessee that the cost and expense of same is competitive
in the industry for first-class workmanship and materials. Lessee may have a
representative attend weekly construction meetings but failure of Lessee or its
representative to attend any meeting for any reason shall not invalidate
anything which occurs thereat or give rise to any right or remedy in favor of
Lessee.

(g)           Payment
for Tenant Improvements. Within ten (10) business days after the Budget is
approved by Lessor and Lessee, Lessee shall deposit the entire amount (together
with the cost of any Tenant Improvements already made) with Lessor’s
construction lender to be held in an interest-bearing escrow account with
interest being credited to Lessee. Said construction lender shall issue
payments from said account pursuant to the construction contract for the Tenant
Improvements, remaining payments shall be made 100% by Lessee. Lessor shall
manage the construction of the Tenant Improvements for a supervision fee equal
to four percent (4%) of the Budget (as the same may change by agreement of the
parties) due and payable in nine equal monthly installments beginning on the
first day of the calendar month following the calendar month in which the
Budget is first approved.

(h)           Lessee’s
Fixturing Period. By advance written notice, Lessor shall provide Lessee
access to the Premises during the thirty (30) day period (and such earlier date
for items of fixturing requiring earlier access, to the extent Lessee requests
same and Lessor determines same can be granted without interference with the
construction of the Building Shell) prior to the Commencement Date (“Lessee’s
Fixturing Period”) for the purpose of installing furnishings and equipment,
e.g. security system, furniture system and phone and data system, provided,
that Lessee and Lessee’s employees and contractors shall at all times avoid
interfering with Lessor’s ongoing work to bring the Premises to a substantially
completed condition. Except for payment of Base Rent, all terms and provisions
of this Lease shall apply during Lessee’s Fixturing Period,

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including, without
limitation, Lessee’s indemnity and other obligations set forth in Sections 7.07.,
7.08. and 17.22. hereof and payment of Additional Rent pursuant to Section 4.05
hereof.

(i)            Construction
of Offsite and Onsite Improvements. In addition to the Building Shell and
Tenant Improvements, and concurrently with its construction schedule for same,
Lessor shall construct both offsite and onsite improvements required as a
condition to the Certificate of Occupancy for the Building which are (i)
(onsite) waterfront park, baseball field and soccer field, and (ii) (offsite)
Seaport Boulevard improvements and deep water slough restoration.

(j)            Generator.
Lessee, at Lessee’s sole cost and expense, and in compliance with all
applicable legal requirements including required permits, may install, in a
location and configuration to be designated by Lessee and subject to Lessor’s
prior written consent, which shall not be unreasonably withheld, a generator
and fuel storage tank and appropriate screening 
and route all electrical distribution from the Generator to the Premises
(such generator, tank and screening, routing of distribution and any related
improvements being collectively referred to herein as “Generator”).  Lessee shall indemnify and hold Lessor and
any lender whose loan is secured by the Project or Property or any part
thereof, free and harmless from any and all liability, claims, loss, damages,
causes of action (whether in tort or contract, law or equity, or otherwise),
expenses, charges, assessments, fines and penalties of any kind, including
without limitation, reasonable attorneys’ fees, expert witness fees and costs,
arising by reason of the existence, installation, problems with or use of
Generator.  Installation shall be done at
such time and manner as to which Lessor shall consent, which consent shall not
be unreasonably withheld.

ARTICLE III

TERM

Section 3.01 Lease Term.

(a)           Commencement
Date. The term of this Lease (“Lease Term”) shall be for eleven (11) years
beginning on the earlier of (i) the date a Certificate of Occupancy (which
means for purposes of this Lease, either a Certificate of Occupancy or its
equivalent which allows legal occupancy and including, without limitation, a
Notice of Substantial Completion) first is issued affecting the Building, or
(ii) the date on which Lessee first occupies or conducts business at the Premises
and the Seaport Boulevard improvements, the baseball and soccer

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fields have been
substantially completed (the “Commencement Date”) provided that, (i) for each
day of delay by Lessee in failing to approve the interior schematic drawings or
the Working Drawings when required under Section 2.04(d), or (ii) for each day
of delay by Lessee in failing to approve the Budget, in writing, within
fourteen (14) days after delivery by the General Contractor as provided in
Section 2.04(d), or (iii) for each day of delay caused by any changes to the
approved Working Drawings requested by Lessee, or (iv) for each day that any
other act or omission by Lessee causes the construction schedule for Tenant
Improvements to be delayed provided that Lessor gives Lessee written notice of
such Lessee Delay within five (5) business days after its occurrence
(collectively “Lessee Delay”), the Commencement Date shall occur one (1) day in
advance of the date of the Certificate of Occupancy for each such day of delay.
For example, if seven (7) days of Lessee Delay causes the date of issuance of
the Certificate of Occupancy to occur on August 8, 2001 rather than August 1,
2001, the Commencement Date shall be August 1, 2001 for all purposes, including
payment of Base Rent and Additional Rent. The Lease Term shall expire, unless
sooner terminated or extended as provided herein, on the date which completes
eleven (11) years after the Commencement Date occurs or is deemed to have
occurred, e.g. if the date on which the Certificate of Occupancy is issued or
deemed to be issued for the Building is August 1, 2001, the Lease Term shall
expire on July 31, 2012 and if that date is August 3, 2001, the Lease Term
shall expire on August 2, 2012 (“Expiration Date”). The parties shall execute a
“Memorandum of Commencement of Lease Term” when the Commencement Date becomes
known, which shall include a certification by Lessor’s architect of the actual
Rentable Area of the Building determined by the methodology described in
Section 2.01. and the actual monthly installments of Base Rent to be paid
pursuant to Section 4.01., and shall be substantially in the form attached
hereto as Exhibit “E.”

(b)           Scheduled
Commencement Date. Lessor shall use commercially reasonable efforts to
cause the Certificate of Occupancy for the Building to be issued no later than
August 1, 2001 (“Scheduled Commencement Date”). If a Certificate of Occupancy
is not issued for the Building on or before the Scheduled Commencement Date,
this failure shall not constitute a breach of any obligation hereunder on
Lessor’s part to observe or perform nor affect the validity of this Lease or
the obligations of Lessee under it. If the Commencement Date is adjusted for
delay from any cause, the Expiration Date shall be likewise adjusted for a like
period.

(c)           Termination
in Event of Delay. If for any reason Lessor is unable to cause the issuance
of a Certificate of Occupancy for the Building, on or before the

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date which is one hundred
eighty (180) days after the Scheduled Commencement Date (for a reason other
than Lessee Delay or Force Majeure Delay excused under Section 17.21.), Lessee,
at its sole election, may terminate this Lease upon giving notice within ten
(10) business days thereafter. Failure to give such notice within said time
period constitutes an irrevocable waiver of the foregoing right to terminate
under this Section 3.01(c).

Section 3.02 
Option to Extend.

(a)           Exercise.
Lessee is given one (1) option to extend the Lease Term (“Option to Extend”)
for a five (5) year period (“Extended Term”) following the date on which the
initial Lease Term would otherwise expire, which option may be exercised only
by written notice (“Option Notice”) from Lessee to Lessor given not less than
eighteen (18) months prior to the end of the initial Lease Term (“Option
Exercise Date”); provided, however, if Lessee is in material default under this
Lease (beyond the expiration of any applicable notice and cure period) on the
Option Exercise Date or on any day thereafter on or before the last day of the
initial Lease Term, the Option Notice shall be totally ineffective, and this
Lease shall expire on the last day of the initial Lease Term, if not sooner
terminated. The right of Lessee to exercise an Option to Extend shall not be
affected by any sublease or assignment of this Lease previously entered into by
Lessee pursuant to the provisions of this Lease.

(b)           Extended
Term Rent. In the event Lessee exercises its Option to Extend set forth
herein, all the terms and conditions of this Lease shall continue to apply
except that the Base Rent payable by Lessee during each Option Term shall be
equal to one hundred percent (100%) of Fair Market Rent (defined below), as
determined under subparagraph (c) below. “Fair Market Rent” shall mean the
effective rate being charged (including periodic adjustments thereto as
applicable during the period of the Extended Term), for comparable space in
similar buildings in the vicinity, i.e. of a similar age and quality
considering any recent renovations or modernization, and floor plate size or,
if such comparable space is not available, adjustments shall be made in the
determination of Fair Market Rent to reflect the age and quality of the
Building and Premises as contrasted to other buildings used for comparison
purposes, with similar amenities, taking into consideration: size, location,
floor level, leasehold improvements or allowances provided or to be provided,
term of the lease, extent of services to be provided, the time that the
particular rate under consideration became or is to become effective, and any
other relevant terms or conditions applicable to both new and renewing tenants,
but in no event less than the monthly Base Rent prevailing during the last year
of the initial Lease Term or Extended Term, as applicable.

 10

 

(c)                                  Determination
of Fair Market Rent.

(i)            Negotiation. If Lessee so
exercises its Option to Extend in a timely manner, the parties shall then meet
in good faith to negotiate the Base Rent for the Premises for the Extended
Term, during the first thirty (30) days after the date of the delivery by
Lessee of the Option Notice (the “Negotiation Period”). If, during the
Negotiation Period, the parties agree on the Base Rent applicable to the
Premises for the Extended Term, then such agreed amount shall be the Base Rent
payable by Lessee during the Extended Term.

(ii)           Arbitration. In the event that
the parties are unable to agree on the Base Rent for the Premises within the
Negotiation Period, then within ten (10) days after the expiration of the
Negotiation Period, each party shall separately designate to the other in
writing an appraiser to make this determination. Each appraiser designated
shall be a member of MAI and shall have at least ten (10) years experience in
appraising commercial real property, of similar quality and use as the
Premises, in San Mateo County. The failure of either party to appoint an
appraiser within the time allowed shall be deemed equivalent to appointing the
appraiser appointed by the other party, who shall then determine the Fair Market
Rent for the Premises for the Extended Term. Within five (5) business days of
their appointment, the two designated appraisers shall jointly designate a
third similarly qualified appraiser. Within thirty (30) days after their
appointment, each of the two appointed appraisers shall submit to the third
appraiser a sealed envelope containing such appointed appraiser’s good faith
determination of the Fair Market Rent for the Premises for the Extended Term;
concurrently with such delivery, each such appraiser shall deliver a copy of
his or her determination to the other appraiser. The third appraiser shall
within ten (10) days following receipt of such submissions, then determine
which of the two appraisers’ determinations most closely reflects Fair Market
Rent as defined above. The determination most closely reflecting the third
appraiser’s determination shall be deemed to be the Fair Market Rent for the
Premises during the Extended Term; the third appraiser shall have no rights to
adjust, amend or otherwise alter the determinations made by the appraiser
selected by the parties, but must select one or the other of such appraisers’
submissions. The determination by such third appraiser shall be final and
binding upon the parties. Said third appraiser shall, upon selecting the
determination which most closely resembles Fair Market Rent, concurrently
notify both parties hereto. The Base Rent for the Extended Term shall be the
determination so selected. The parties shall share the appraisal expenses
equally. If the Extended Term begins prior to the determination of Fair Market
Rent, Lessee shall pay monthly installments of Base Rent equal to one hundred
ten

 11
 

 

percent (110%) of the
monthly installment of Base Rent in effect for the last year of the initial
Lease Term (in lieu of “holdover rent” payable under Section 17.09(b)). Once a
determination is made, any over payment or under payment shall be reimbursed as
a credit against, or paid by adding to, the monthly installment of Base Rent
next falling due.

ARTICLE
IV

RENT: TRIPLE NET LEASE

Section 4.01 Base
Rent. Lessee shall pay to Lessor as Base Rent an initial
monthly installment of [***] per square foot of Rentable Area as determined
under Section 2.01., in advance, on the first day of each calendar month of the
Lease Term, commencing on the Commencement Date, subject to being credited with
the advance payment of estimated first installment of Base Rent pursuant to
Section 4.03. Base Rent for any period during the Lease Term which is for less
than one month shall be a pro rata portion of the monthly installment (based on
the actual days in that month).

Section 4.02 Rent
Adjustment. The Base Rent set forth in Section 4.01. above
shall be adjusted upward by an annual compounded increase of three and one-half
percent (3.5%), as of the first day of the thirteenth (13th) full calendar
month following the Commencement Date and as of each anniversary of that date
thereafter during the Lease Term, as shown on Exhibit “E” attached hereto.

Section 4.03 First
Payment of Base Rent. Lessee shall pay in advance the first
payment of Base Rent in the estimated amount of [***] within five (5) days
after Lessee’s execution of this Lease. Base Rent payments shall resume on the
first day of the calendar month immediately succeeding the Commencement Date.
If the Commencement Date is other than the first day of a calendar month, the
first payment of Base Rent subsequent to the Commencement Date, but only that
payment of Base Rent, shall be reduced by any excess of the first Base Rent
installment paid in advance over the prorated amount actually due for such
partial first month of the Lease Term.

Section 4.04
Absolute Triple Net Lease. This Lease is what is commonly
called a “Absolute Triple Net Lease,” it being understood that Lessor shall
receive the Base Rent set forth in Section 4.01. free and clear of any and all
expenses, costs, impositions, taxes, assessments, liens or charges of any
nature whatsoever. Lessee shall pay all rent in lawful money of the United
States of America to Lessor at the notice address stated herein or to such
other persons or at such other

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places as Lessor may designate in writing on or before the due date
specified for same without prior demand, set-off or deduction of any nature
whatsoever. It is the intention of the parties hereto that this Lease shall not
be terminable for any reason by Lessee, and that except as herein expressly
provided in Articles III, VIII and XIII, concerning delay, destruction and
condemnation, Lessee shall in no event be entitled to any abatement of or
reduction in rent payable under this Lease. Any present or future law to the
contrary shall not alter this agreement of the parties.

 

Section 4.05  Additional Rent.

(a)           Defined. In addition to the
Base Rent reserved by Section 4.01., Lessee shall pay, as Additional Rent (i)
100% as to amounts applicable solely to the Premises or Property and Lessee’s
Share (as defined in Section 4.07(c) below) as to amounts applicable to the
Project or Common Area of all taxes, assessments, fees and other impositions
payable by Lessee in accordance with the provisions of Article IX, and
insurance premiums in accordance with the provisions of Article VII, (ii)
Lessee’s Share of Operating Expenses defined below provided that
notwithstanding the foregoing, prior to January 1, 2002, during the
construction phase of the Project, Lessee shall pay 100% of Operating Expenses
applicable to the Property or Premises in lieu of paying Lessee’s Share of the
specific items being billed, and (iii) any other charges, costs and expenses
(including appropriate reserves therefor) which are contemplated or which may
arise under any provision of this Lease during the Lease Term, plus a
Management Fee to Lessor equal to 3% of the Base Rent. The Management Fee is
due and payable, in advance, with each installment of Base Rent. All of such
charges, costs, expenses, Management Fee and all other amounts payable by
Lessee hereunder, shall constitute Additional Rent, and upon the failure of
Lessee to pay any of such charges, costs or expenses, Lessor shall have the
same rights and remedies as otherwise provided in this Lease for the failure of
Lessee to pay Base Rent. To the extent any of the aforesaid amounts are fairly
allocable to the Common Area or to other portions of the Project, Lessee’s obligation
is to pay only its proportionate share as determined by Lessor based upon the
ratio of the Rentable Area of the Premises to the Rentable Area of all office
and research and development buildings at the Project which share is presently
determined to be eight point five three percent (8.53 %).

(b)           Payment. To the extent not
paid pursuant to other provisions of this Lease, and at Lessor’s sole election,
Lessor may submit invoices and Lessee shall pay Additional Rent in monthly
installments on the first day of each month in advance in an amount to be
estimated by Lessor, based on Lessor’s experience in

 13
 

 

managing office/research
and development projects. Within ninety (90) days following the end of the
period used by Lessor in estimating Additional Rent, Lessor shall furnish to
Lessee a statement (hereinafter referred to as “Lessor’s Statement”) of the
actual amount of Lessee’s proportionate share of such Additional Rent for such
period. Within fifteen (15) days thereafter, Lessee shall pay to Lessor, as
Additional Rent, or Lessor shall remit or credit to Lessee, as the case may be,
the difference between the estimated amounts paid by Lessee and the actual
amount of Lessee’s Additional Rent for such period as shown by such statement.
Monthly installments for the ensuing year shall be adjusted upward or downward
as set forth in Lessor’s Statement.

Section 4.06  Security Deposit.

(a)           Initial Security Deposit.
Within five (5) business days after the date this Lease is executed by Lessee,
Lessee shall deposit with Lessor a Security Deposit equal to eighteen (18)
month’s estimated Base Rent in the amount of [***] in the form of cash or an
unconditional, irrevocable standby letter of credit without documents, i.e., no
obligation on Lessor’s part to present anything but a sight draft, with Lessor
as beneficiary (or, at Lessor’s option, as co-beneficiary with Lessor’s
Lender), drawable in whole or in part, providing for payment in San Francisco
on presentation of Lessor’s drafts on sight, providing for multiple draws and
multiple successors and otherwise both from a bank and in a form acceptable to
Lessor, including, without limitation, in a form identical to or similar to
that attached to this Lease as Exhibit      (the “Security
Deposit”). The Security Deposit shall be held by Lessor as security for the
faithful performance by Lessee of all of the terms, covenants, and conditions
of this Lease applicable to Lessee. If Lessee defaults with respect to any
provision of this Lease, including but not limited to the provisions relating
to the condition of the Premises upon Lease Termination, Lessor may (but shall
not be required to) use, apply or retain all or any part of the Security
Deposit for the payment of any amount which Lessor may spend by reason of
Lessee’s default or to compensate Lessor for any loss or damage which Lessor
may suffer by reason of Lessee’s default and if all or any part of the Security
Deposit is in the form a of a letter of credit, Lessor may draw on all or any
part of same and thereafter retain any unapplied portion as a cash Security
Deposit. If any portion of the Security Deposit is so used or applied, Lessee
shall, within ten days after written demand therefor, deposit cash (or a
replacement letter of credit in form and substance subject to the same
requirements as the original letter of credit) with Lessor in an amount
sufficient to restore the Security Deposit to its original amount. Lessee’s
failure to do so shall

 14
 

 

be a material default and
breach of this Lease by Lessee. The rights of Lessor pursuant to this Section
4.06. are in addition to any rights which Lessor may have pursuant to Article
12 below. If Lessee fully and faithfully performs every provision of this Lease
to be performed by it, the Security Deposit or any balance thereof shall be
returned (without interest) to Lessee (or, at Lessor’s option, to the last
assignee of Lessee’s interests hereunder) at Lease expiration or termination
and after Lessee has vacated the Premises. Lessor shall not be required to keep
the Security Deposit separate from Lessor’s general funds or be deemed a
trustee of same. If the Security Deposit is in whole or in part in the form of
a letter of credit, failure of Lessee to deliver a replacement letter of credit
to Lessor at least forty-five (45) business days prior to the expiration date
of any current letter of credit shall constitute a separate default entitling
Lessor to draw down immediately and entirely on the current letter of credit
and the proceeds shall constitute a cash Security Deposit.

(b)           Adjustment of Security Deposit.
The letter of credit shall be reduced to an amount equal to the total of three
(3) months of Base Rent at the then current rate, if Lessee establishes through
financial statements prepared in accordance with generally accepted accounting
principles and in a form acceptable to Lessor that Lessee has achieved annual
revenue for a period of at least one (1) fiscal year of at least [***] and has
further achieved quarterly operating profit of at least [***] for not less than
four (4) consecutive quarters.

Section 4.07  Operating Expenses.

(a)           Definition. “Operating
Expenses” shall mean and include, to the extent not billed as a cost or expense
of the Premises, Property or otherwise pursuant to Articles VI, VII or IX, all
costs and expenses of every kind and nature paid or incurred by Lessor (whether
obligated to do so or undertaken at Lessor’s discretion) in the operation,
maintenance, repair and replacement of the Common Areas, including Common Area
buildings and improvements located within the Project and including Common
Areas located on the Property. Such cost and expenses shall include, but not be
limited to, costs of management; cleaning; lighting; the costs of maintaining,
repairing and replacing all Common Area improvements (including but not be
limited to signage, light poles and fixtures, storm and sanitary sewers,
parking lots, driveways, walkways, curbs and roads), repairs to and maintenance
of the structural and non-structural portions of the Amenity/Athletic Facility;
supplies, tools, equipment and materials used in the operation and maintenance
of the Project; snow removal; parking lot striping; removal of trash, rubbish,
garbage and other refuse; painting; removal of graffiti;

 15
 

 

painting of exterior
walls; landscaping; providing security to the extent Lessor determines in its
sole discretion to do so (including security systems and/or systems designed to
safeguard life or property against acts of God and/or criminal and/or negligent
acts, and the costs of maintaining of same); public liability, property damage,
fire insurance, earthquake and flood coverage, all risk or special form
insurance coverage, rent interruption insurance coverage, the costs of excess
award above insurance aggregate, total compensation and benefits (including
premiums for workers’ compensation and other insurance) paid to or on behalf of
employees, including but not limited to full or part time on-site management or
maintenance personnel; personal property taxes; fire protection and fire
hydrant charges (including fire protection system signaling devices, now or
hereafter required, and the costs of maintaining of same); water and sewer
charges; utility charges; license and permit fees necessary to operate and
maintain the initial cost of or the reasonable depreciation of equipment used
in operating and maintaining the Common Areas and rent paid for leasing any
such equipment; reasonable cost of on or off site storage space of any and all
items used in conjunction with the operation, maintenance and management of the
Project, including but not limited to tools, machinery, records, decorations,
tables, benches, supplies and meters; the cost of and installation cost of any
and all items which are installed for the purpose of reducing Operating
Expenses, increasing building or public safety or which may be then required by
governmental authority, laws, statutes, ordinances and/or regulations, a use
privilege charge consisting of Base Rent and Operating Expenses allocated to
the Amenities/Athletic Facility and all costs and expenses arising from the
operation of same. Lessor shall apply the following amounts received by Lessor
to reduce Operating Expenses of the amenities/Athletic Facility or other
portion of the Common Area which generates same; (1) fees paid by any user
other than tenants of the Project (including, without limitation, the public
and Lessee’s employees) for use of the Amenities/Athletic Facility and any of
the other Common Areas; (2) base rent and additional rent paid by the operators
of the Amenities/Athletic Facility and any of the other Common Areas.

(b)           Payment. Lessee shall pay
Lessee’s Share of Additional Rent in monthly installments on the first day of
each month in an amount set forth in a written estimate by Lessor. Lessor
agrees that it will make its estimate in good faith and based on Lessor’s
experience in managing office/research and development projects. Within ninety
(90) days following the end of the period used by Lessor in estimating Lessee’s
share of Additional Rent, Lessor shall furnish to Lessee a statement
(hereinafter referred to as “Lessor’s Statement”) of the actual amount of
Lessee’s Share of such Additional Rent for such period. Within ten (10) days
thereafter, Lessee shall pay to Lessor, as Additional Rent, or

 16
 

 

Lessor shall remit to
Lessee, as the case may be, the difference between the estimated amounts paid
by Lessee and the actual amount of Lessee’s Share of Additional Rent for such
period as shown by such Statement. Lessee’s Share of Additional Rent for the
ensuing estimation period shall be adjusted upward or downward based upon
Lessor’s Statement.

(c)           Lessee’s Share. For purposes
hereof, “Lessee’s Share” shall mean the rentable square footage of the Building
subject to this Lease (at the time in question) divided by a number equal to
the number of rentable square feet of office/research and development buildings
which are then constructed at the Project, in each case measured on a dripline
basis.

(d)           Exclusions. For purposes of
this Lease, the term Operating Expenses shall not include (and Lessee shall
have no liability for) any of the following: initial construction of any Common
Area improvements; legal fees, permit fees, architectural and engineering fees
related to the initial development and construction of the Project; costs
(including permit, license and inspection costs) incurred in renovating or
otherwise improving, decorating or redecorating rentable space for prospective
tenants or vacant rentable space; legal fees, space planner’s fees and
brokerage fees incurred in connection with the original or future leasing of
the Project; any bad debt loss, rent loss, or reserves for bad debts or rent
loss; interest, charges and fees incurred on debt, payments on mortgages and
amounts paid as ground rental for the real property underlying the Project by
Lessor; any costs covered by any warranty, rebate, guarantee or service
contract which are actually collected by Lessor (which shall not prohibit
Lessor from passing through the costs of any such service contract if otherwise
includable in Operating Expenses); interest, late charges and tax penalties
incurred as a result of Lessor’s gross negligence or unwillingness to make
payments or file tax returns when due; any costs representing an amount paid to
a person, firm, corporation or other entity related to Lessor which is in
excess of the amount which would have been paid in the absence of such
relationship. Nothing contained in this Section shall prohibit or limit Lessor
from passing through, in Article IX, any one or more specified items as part of
the Community Facility District Bond.

Section 4.08  Lessee’s Right to Review Supporting Data.

(a)           Exercise of Right by Lessee.
Provided that Lessee is not in default under this Lease and provided further
that Lessee strictly complies with the provisions of this Paragraph, Lessee
shall have the right to reasonably review supporting data for any portion of a
Lessor’s statement that Lessee claims is incorrect. In order for Lessee to
exercise its right under this Paragraph, Lessee

 17
 

 

shall, within thirty (30)
days after any such Lessor’s statement is sent, deliver a written notice to
Lessor specifying the portions of the Lessor’s statement that are claimed to be
incorrect, and Lessee shall simultaneously pay to Lessor all amounts due from
Lessee to Lessor as specified in the Lessor’s statement. Except as expressly
set forth in subparagraph 3 below, in no event shall Lessee be entitled to
withhold, deduct, or offset any monetary obligation of Lessee to Lessor under
the Lease.

(b)           Procedures for Review.  Lessee acknowledges that Lessor maintains its
records for the Building and Project at its offices in San Francisco, and
Lessee therefore agrees that any review of supporting data under this Paragraph
shall occur at such location. Any review to be conducted under this Paragraph
shall be at the sole expense of Lessee and shall be conducted by an independent
firm of certified public accountants of national standing. Lessee acknowledges
and agrees that any supporting data reviewed under this Paragraph constitute
confidential information of Lessor, which shall not be disclosed to anyone
other than the accountants performing the review and the principals of Lessee
who receive the results of the review. The disclosure of such information to
any other person, whether or not caused by the conduct of Lessee, shall
constitute a material breach of this Lease.

(c)           Finding of Error.  Any errors disclosed by the review of
supporting data under this Paragraph shall be promptly corrected, provided that
Lessor shall have the right to cause another review of the supporting data to
be made by an independent firm of certified public accountants of national
standing. In the event of a disagreement between the two accounting firms, the
review that discloses the least amount of deviation from the Lessor’s statement
shall be deemed to be correct and its review shall be final and binding on both
Lessor and Lessee. If the results of the review of supporting data taking into
account, if applicable, the results of any additional review caused by Lessor
reveal that Lessee has overpaid obligations for a preceding period, the amount
of such overpayment shall be credit against Lessee’s subsequent installment
obligations to pay its share of Additional Rent. In the event that such results
show that Lessee has underpaid its obligations for a preceding period, the
amount of such underpayment shall be paid by Lessee to Lessor with the next
succeeding installment obligation of Additional Rent or, if the Lease has
terminated, in cash within thirty (30) days after the determination of
underpayment is delivered to Lessee. Each party shall pay the cost and expense
of its chosen accounting firm.

(d)           Effect of Lessee’s Default.  In the event that Lessee becomes in default
of its obligations under this Lease at any time during the pendency of a

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review of records under
this Paragraph, said right to review shall immediately cease and the matters
originally set forth in the Lessor’s statement shall be deemed to be correct.

ARTICLE V

USE

Section 5.01  Permitted Use and Limitations on Use.  The Premises shall be used and occupied only
for office, research and development, together with such ancillary uses which
do not cause excessive wear of the Premises or increase the potential liability
of Lessor, and for no other use, without Lessor’s prior written consent which
shall not be unreasonably withheld, conditioned or delayed so long as such use
is lawful and does not conflict with any other provision of this Lease,
including, without limitation, the restrictions set forth in the following
provisions of this Section. Lessee shall not use, suffer or permit the use of
the Premises in any manner that will tend to create or constitute waste,
nuisance or unlawful acts. In no event shall it be unreasonable for Lessor to
withhold its consent as to uses which it determines would tend to increase
materially the wear of the Premises or any part thereof or increase the
potential liability of Lessor or decrease the marketability, financability,
leasability or value of the Premises or Project. Lessee shall not do anything
in or about the Premises which will (i) cause structural injury to or threaten
the structural integrity of the Premises, or (ii) cause damage to any part of
the Building or Project except to the extent reasonably necessary for the
installation of Lessee’s trade fixtures and Lessee’s Alterations, and then only
in a manner which has been first approved by Lessor in writing. Lessee shall
not operate any equipment within the Premises which will (i) materially damage
the Building or the Common Area, (ii) overload existing electrical plumbing or
HVAC systems or other equipment or system servicing the Building, (iii) impair
the efficient operation of the sprinkler system or the heating, ventilating or
air conditioning (“HVAC”) equipment within or servicing the Building, (iv)
damage, overload or corrode the sanitary sewer system, or (v) damage or
interferes with the use by others of the Common Area or any other part of the
Project. Lessee shall not attach, hang or suspend anything from the ceiling,
roof, walls or columns of the Building or set any load on the floor in excess
of the load limits for which such items are designed nor operate hard wheel
forklifts within the Premises. Any dust, fumes, or waste products generated by
Lessee’s use of the Premises shall be contained and disposed so that they do
not (i) create an unreasonable fire or health hazard, (ii) damage the Premises,
or (iii) result in the violation of any law. Except as approved by Lessor in
its discretion, Lessee shall not change the exterior of the Building, or
install any equipment or antennas on or make any penetrations of the

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exterior or roof of the
Building, provided that Lessee may install rooftop antennae or other
communication devices on the roof of the Building with Lessor’s prior written
consent which shall not be unreasonably withheld or delayed. Lessee shall not
conduct on any portion of the Premises any sale of any kind, including any
public or private auction, fire sale, going-out-of-business sale, distress sale
or other liquidation sale. No materials, supplies, tanks or containers,
equipment, finished products or semifinished products, raw materials,
inoperable vehicles or articles of any nature shall be stored upon or permitted
to remain within the outside areas of the Project except in any fully fenced
and screened areas outside the Building which have been designed for such
purpose and have been approved in writing by Lessor for such use by Lessee.

Section 5.02  Compliance with Law.

(a)           Lessor shall deliver the Premises to
Lessee on the Commencement Date, for office use, free of violations of any
covenants or restrictions of record, or any applicable law, building code,
regulation or ordinance in effect on such Commencement Date, including without
limitation, the Americans with Disability Act, and free of Year Two Thousand
computer programming defects.

(b)           Except as provided in paragraph
5.02.(a), Lessee shall, at Lessee’s cost and expense, comply promptly with all
statutes, ordinances, codes, rules, regulations, orders, covenants and
restrictions of record, and requirements applicable to the Premises and Lessee’s
use and occupancy of same in effect during any part of the Lease Term, whether
the same are presently foreseeable or not, and without regard to the cost,
expense or inconvenience of compliance.

(c)           By executing this Lease, Lessee
acknowledges that it has reviewed and satisfied itself as to its compliance, or
intended compliance with the applicable zoning and permit laws, hazardous
materials and waste requirements, and all other statutes, laws, or ordinances
relevant to the uses stated in Section 5.01., above, provided that Lessor
represents that the Premises, on the date certified for occupancy, may legally
be used for general office purposes.

Section 5.03  Condition of Premises at Commencement Date.  Subject to all of the terms of this Lease for
the construction of Tenant Improvements, Lessor shall deliver the Building to
Lessee on the Commencement Date with the Building plumbing, lighting, heating,
ventilating, air conditioning, gas, electrical, and sprinkler systems and
loading doors as set forth in Exhibit “D” in proper operating condition and
built substantially in accordance with the approved plans therefor, and in a
workmanlike manner. Except as otherwise provided in this Lease, Lessee

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hereby accepts the
Premises in their condition existing as of the Commencement Date, subject to
all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use and condition of the Premises, and
any covenants or restrictions, liens, encumbrances and title exceptions of
record, and accepts this Lease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto. Lessee acknowledges that neither
Lessor nor any agent of Lessor has made any representation or warranty as to
the present or future suitability of the Premises for the conduct of Lessee’s
business.

Section 5.04  Defective Condition at Commencement Date.  In the event that it is determined, and
Lessee notifies Lessor in writing within one year after the Commencement Date,
that any of the obligations of Lessor set forth in Section 2.04.(b), Section
5.02.(a) or Section 5.03. were not performed, then it shall be the obligation
of Lessor, and the sole right and remedy of Lessee, after receipt of written
notice from Lessee setting forth with specificity the nature of the failed
performance, to promptly, within a reasonable time and at Lessor’s sole cost,
correct same. Except as to certain defects which remain Lessor’s responsibility
under Section 6.01(b) Lessee’s failure to give such written notice to Lessor
within one year after the Commencement Date shall constitute a conclusive
presumption that Lessor has complied with all of Lessor’s obligations under the
foregoing sections 2.04.(b), 5.02.(a) and 5.03., and any required correction
after that date shall be performed by Lessee, at its sole cost and expense. At
the end of the first year of the Lease Term, Lessor shall promptly assign to
Lessee all of Lessor’s contractor’s, and/or manufacturer’s guarantees,
warranties, and causes of action which do not relate to Lessor’s obligations
under Section 6.01(b).

Section 5.05  Building Security.  Lessee acknowledges and agrees that it
assumes sole responsibility for security at the Premises for its agents,
employees, invitees, licensees, contractors, guests and visitors and will
provide such systems and personnel for same including, without limitation, that
portion of the Common Area located on the legal parcel which the Building is
located as it deems necessary or appropriate and at its sole cost and expense.
Lessee acknowledges and agrees that Lessor does not intend to provide any
security system or security personnel at the Premises or Project, including,
without limitation, at the Common Areas, provided, however, that nothing herein
shall be deemed to prevent Lessor from providing such system or personnel in
the future, the cost of which will be included in those items for which Lessee
pays Additional Rent.

Section 5.06  Rules and Regulations.  Lessor may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable for

 21
 

 

the care and orderly
management of the Premises, the Project and/or its Common Area. Such rules and
regulations shall be binding upon Lessor upon delivery of a copy thereof to
Lessor, and Lessor agrees to abide by such rules and regulations. A copy of the
initial Rules and Regulations is attached hereto as Exhibit “L.” If there is a
conflict between the rules and regulations and any of the provisions of this
Lease, the provisions of this Lease shall prevail. Lessor shall not be
responsible for the violation of any such rules and regulations by any person,
including, without limitation, Lessee or its employees, agents, invitees,
licensees, guests, visitors or contractors.

ARTICLE
VI

MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01  Maintenance of Premises.

(a)           Throughout the Lease Term, Lessee, at
its sole cost and expense, shall keep, maintain, repair and replace the
Premises (except as provided in 6.01.(b) and except for uninsured repairs or
replacement costs caused solely by an act of gross negligence or intentional
misconduct by Lessor during the Lease Term) and all improvements and
appurtenances in or serving the Premises, including, without limitation, all
interior and exterior walls, all doors and windows, the roof membrane, all
elevators and stairways, all wall surfaces and floor coverings, all Tenant
Improvements and alterations, additions and improvements installed during the
Lease Term, all sewer, plumbing, electrical, lighting, heating, ventilation and
cooling systems, fire sprinklers, fire safety and security systems, fixture and
appliances and all wiring and glazing, in the same good order, condition and
repair as they are in on the Commencement Date, or may be put in during the
Lease Term, reasonable wear excepted, provided that wear which could be
prevented by first class maintenance shall not be deemed reasonable.

(b)           Lessor, at its sole cost and expense,
(and in addition to its obligations set forth in Section 5.04) shall repair
defects Building Shell, including exterior walls (including all exterior glass
which is damaged by structural defects in such exterior walls), floors
installed as part of the Building Shell, supporting pillars, structural walls,
roof structure and foundations of the Building and sewer and plumbing systems
outside the Building as well as any defects in the offsite and onsite
improvements listed in Section 2.04(i) of which Lessor receives notice during
the final twenty-four (24) months of the Lease Term, provided that the need for
repair is not caused by Lessee, in which event Lessor shall repair same, at
Lessee’s sole cost and expense (to the extent not insured) and Lessee shall
reimburse Lessor for same upon demand. Lessor shall replace the roof membrane

 22
 

 

of the Building, the
parking lot surface, landscaping, drainage, irrigation, sprinkler and sewer and
plumbing systems outside the Building systems when the useful life of each has
expired, and Lessee shall pay that portion of the cost of each replacement,
together with annual interest at the Agreed Rat which shall be amortized over
the useful life of each such replacement applicable to the balance of the Lease
Term, in equal monthly installments due and payable with installments of Base
Rent provided that as to repairs and replacements within the Common Area,
Lessee shall pay Lessee’s Share as described in Section 4.05. Lessee shall give
Lessor written notice of any need of repairs which are the obligation of Lessor
hereunder and Lessor shall have a reasonable time to perform same. Should
Lessor default as provided in Section 12.03 with respect to its obligation to
make any of the repairs assumed by it hereunder with respect to the Building,
Lessee shall have the right to perform such repairs and Lessor agrees that
within thirty (30) days after written demand accompanied by detailed
invoice(s), it shall pay to Lessee the cost of any such repairs together with
accrued interest from the date of Lessee’s payment at the Agreed Rate. Lessor
shall not be liable to Lessee, its employees, invitees, or licensees for any
damage to person or property, and Lessee’s sole right and remedy shall be the
performance of said repairs by Lessee with right of reimbursement from Lessor of
the reasonable fair market cost of said repairs, not exceeding the sum actually
expended by Lessee, together with accrued interest from the date of Lessee’s
payment at the Agreed Rate, provided that nothing herein shall be deemed to
create a right of setoff or withholding by Lessee of Base Rent or Additional
Rent or any other amounts due herein. Lessee hereby expressly waives all rights
under and benefits of Sections 1941 and 1942 of the California Civil Code or
under any similar law, statute or ordinance now or hereafter in effect to make
repairs and offset the cost of same against rent or to withhold or delay any
payment of rent or any other of its obligations hereunder as a result of any
default by Lessor under this Section 6.01.(b).

(c)           Lessee agrees to keep the Premises,
both inside and out, clean and in sanitary condition as required by the health,
sanitary and police ordinances and regulations of any political subdivision
having jurisdiction and to remove all trash and debris which may be found in or
around the Premises. Lessee further agrees to keep the interior surfaces of the
Premises, including, without limitation, windows, floors, walls, doors,
showcases and fixtures clean and neat in appearance.

(d)           If Lessee refuses or neglects to
commence such repairs and/or maintenance for which Lessee is responsible under
this Article VI within a thirty

 23
 

 

(30) day period (or as
soon as practical and in no event later than five (5) days, if the failure to
initiate the repair threatens to cause further damage to the Premises) after
written notice from Lessor and thereafter diligently prosecute the same to
completion, then Lessor may (i) enter the Premises (except in an emergency,
upon at least 24 hours advanced written notice) during Lessor’s business hours
and cause such repairs and/or maintenance to be made and shall not be
responsible to Lessee for any loss or damage occasioned thereby and Lessee
agrees that upon demand, it shall pay to Lessor the reasonable cost of any such
repairs, not exceeding the sum actually expended by Lessor, together with
accrued interest from the date of Lessor’s payment at the Agreed Rate and (ii)
elect to enter into a maintenance contract at a market rate for first-rate
maintenance with a third party for the performance of all or a part of Lessee’s
maintenance obligations, whereupon, Lessee shall be relieved from its
obligations to perform only those maintenance obligations covered by such
maintenance contract, and Lessee shall bear the entire cost of such maintenance
contract which shall be paid in advance, as Additional Rent, on a monthly basis
with Lessee’s Base Rent payments.

Section 6.02  Maintenance of Common Areas.  Subject to 6.01.(c) and subject to Lessee
paying Lessee’s Share of the cost and expense for same pursuant to Section 4.05
Lessor shall maintain, repair and replace all landscape, hardscape and other
improvements within the Common Areas and shall operate and manage the
Amenities/Athletic Facility and other Common Area features and facilities
described in Section 2.02, including, without limitation, all landscape,
hardscape and other improvements within the areas outside of the Premises
located on the Property, including without limitation, landscaping, curbs,
walkways, driveways, parking areas and lighting and sprinkler systems.

Section 6.03  Alterations, Additions and Improvements.  No alterations, additions, or improvements (“Alterations”)
shall be made to the Premises by Lessee without the prior written consent of
Lessor which Lessor will not unreasonably withhold, [***].  As a condition to Lessor’s obligation to
consider any request for consent hereunder, Lessee shall pay Lessor upon demand
for the reasonable costs and expenses of third-party consultants, engineers,
architects and others for reviewing plans and specifications and for monitoring
the construction of any proposed Alterations. Lessor may require Lessee to
remove any such Alterations at the expiration or termination of the

 24
 

 

Lease Term and to restore
the Premises to their prior condition by written notice given on or before the
earlier of (i) the expiration of the Lease Term or (ii) thirty (30) days after
termination of the Lease or (iii) thirty (30) days after a written request from
Lessee for such notice from Lessor provided, that, if Lessee requests same from
Lessor, Lessor will notify Lessee within five (5) business days after receipt
of Lessee’s request and a copy of all plans and specifications for the proposed
Alteration whether it will require removal. All Alterations to be made to the
Premises shall be made under the supervision of a competent, California
licensed architect and/or competent California licensed structural engineer
(each of whom has been approved by Lessor) and shall be made in accordance with
plans and specifications which have been furnished to and approved by Lessor in
writing prior to commencement of work. All Alterations shall be designed,
constructed and installed at the sole cost and expense of Lessee by California
licensed architects, engineers, and contractors approved by Lessor, in
compliance with all applicable law, and in good and workmanlike manner. Any
Alteration except furniture and trade fixtures, shall become the property of
Lessor at the expiration, or sooner termination of the Lease, unless Lessor
directs otherwise, provided that Lessee shall retain title to all furniture and
trade fixtures placed on the Premises. All heating, lighting, electrical, air
conditioning, full height partitioning (but not moveable, free standing
cubicle-type partitions which do not extend to the ceiling or connect to
Building walls), drapery and carpeting installations made by Lessee together
with all property that has become an integral part of the Premises, shall be
and become the property of Lessor upon the expiration, or sooner termination of
the Lease, and shall not be deemed trade fixtures. Within thirty (30) days
after completion of any Alteration, Lessee, Lessee shall provide Lessor with a
complete set of “as built” plans for same.

Section 6.04  Covenant Against Liens.  Lessee shall not allow any liens arising from
any act or omission of Lessee to exist, attach to, be placed on, or encumber
Lessor’s or Lessee’s interest in the Premises or Project, or any portion of
either, by operation of law or otherwise. Lessee shall not suffer or permit any
lien of mechanics, material suppliers, or others to be placed against the
Premises or Project, or any portion of either, with respect to work or services
performed or claimed to have been performed for Lessee or materials furnished
or claimed to have been furnished to Lessee or the Premises. Lessor has the
right at all times to post and keep posted on the Premises any notice that it
considers necessary for protection from such liens. At least seven (7) days
before beginning construction of any Alteration, Lessee shall give Lessor
written notice of the expected commencement date of that construction to permit
Lessor to post and record a notice of nonresponsibility. If any such lien
attaches or Lessee received notice of

 25
 

 

any such lien, Lessee
shall cause the lien to be immediately released and removed of record. Despite
any other provision of this Lease, if the lien is not released and removed
within twenty (20) days after Lessor delivers notice of the lien to Lessee,
Lessor may immediately take all action necessary to release and remove the
lien, without any duty to investigate the validity of it. All expenses
(including reasonable attorney fees and the cost of any bond) incurred by
Lessor in connection with a lien incurred by Lessee or its removal shall be
considered Additional Rent under this Lease and be immediately due and payable
by Lessee.

Section 6.05  Reimbursable Capital Expenditures.  Except for items of capital expenditures
which are to be made at Lessor’s sole cost and expense pursuant to the first
sentence of Section 6.01(b) above, capital expenditures, together with interest
thereon at the Agreed Rate, for any replacement item at the Project made by
Lessor in excess of One Hundred Thousand Dollars ($100,000.00) during the Lease
Term shall be amortized over the remaining Lease Term for the useful life of
such replacement item within the numerator being the number of months remaining
in the Lease Term and the denominator being the number of months of the “useful
life” of the improvements. Lessee shall be obligated for such amortized portion
of any such expenditure in equal monthly installments due and payable with each
installment of Base Rent.

ARTICLE
VII

INSURANCE

Section 7.01  Property/Rental Insurance for Premises.  At all times during the Lease Term, Lessor
shall keep the Premises and Project insured against loss or damage by fire and
those risks normally included in the term “all risk,” including, without
limitation, coverage for (i) earthquake and earthquake sprinkler leakage, (ii)
flood, (iii) loss of rents and extra expense for eighteen (18) months,
including scheduled rent increases, (iv) boiler and machinery, (v) Tenant
Improvements and (vi) fire damage legal liability form, including waiver of
subrogation. Any deductibles shall be paid by Lessee. The amount of such
insurance shall not be less than 100% of replacement cost. Insurance shall
include a Building Ordinance and Increased Cost of Construction Endorsement
insuring the increased cost of reconstructing the Premises incurred due to the
need to comply with applicable statutes, ordinances and requirements of all
municipal, state and federal authorities now in force, which or may be in force
hereafter. Any recovery received from said insurance policy shall be paid to
Lessor and thereafter applied by Lessor to the reconstruction of the Premises
in accordance with the provisions of Article VIII below. Lessee, in addition to
the rent and other charges provided herein, shall reimburse Lessor for the cost
of the premiums for all such insurance covering

 26
 

 

the Premises in
accordance with Article IV. Such reimbursement and shall be made within (15)
days of Lessee’s receipt of a copy of Lessor’s statement therefor. Lessee shall
pay to Lessor any deductible (subject to the above conditions) owing within
fifteen (15) days after receipt of notice from Lessor of the amount owing. To
the extent commercially available, Lessor’s insurance shall have a deductible
not greater than fifteen percent (15%) for earthquake and ten percent (10%) for
the basic “all risk” coverage.

Section 7.02  Property Insurance for Fixtures and Inventory.  At all times during the Lease Term, Lessee
shall, at its sole expense, maintain insurance with “all risk” coverage on any
fixtures, furnishings, merchandise equipment or personal property in or on the
Premises, whether in place as of the date hereof or installed hereafter.  The amount of such insurance shall not be
less than one hundred percent (100%) of the replacement cost thereof, and Lessor
shall not have any responsibility nor pay any cost for maintaining any types of
such insurance.  Lessee shall pay all
deductibles.

Section 7.03  Lessor’s Liability Insurance.  During the Lease Term, Lessor shall maintain
a policy or policies of comprehensive general liability insurance naming Lessor
(and such others as designated by Lessor) against claims and liability for
bodily injury, property damage on our about the Project, with combined single
limit coverage in an amount determined by Lessor in its sole discretion (which
amount is currently Fifty Million Dollars ($50,000,000.00)); provided that if
such policy is a blanket policy that covers properties (other than the Project)
owned by Lessor, only that portion allocable to the Project shall be payable
hereunder. Lessee, in addition to the rent and other charges provided herein,
agrees to pay Lessee’s Share of the premiums for all such insurance in
accordance with Article IV.

Section 7.04  Liability Insurance Carried by Lessee.  At all times during the Lease Term (and any
holdover period) Lessee shall obtain and keep in force a commercial general
liability policy of insurance protecting Lessee, Lessor and any Lender(s) whose
names are provided to Lessee as Additional Insureds against claims and
liability for bodily injury, personal injury and property damage based upon
involving or arising out of ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing a single limit coverage in amount of not less than
Ten Million Dollars ($10,000,000) per occurrence with an Additional Lessors or
Premises Endorsements and containing an “Amendment of the Pollution Exclusion
Endorsement” for damage caused by heat, smoke, fumes from a hostile fire. The
limits of said insurance required by this Lease as carried by Lessee shall

 27
 

 

not, however limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by the Lessee shall be primary to and not contributory
with, any similar insurance carried by Lessor whose insurance shall be
considered excess insurance only.

Section 7.05  Lessee to Furnish Proof of Insurance.  Lessee shall furnish to Lessor prior to the
Commencement Date, and at least thirty (30) days prior to the expiration date
of any policy, certificates indicating that the property insurance and
liability insurance required to be maintained by Lessee is in full force and
effect for the twelve (12) month period following such expiration date; that
Lessor has been named as an additional insured to the extent of contractual
liability assumed in Section 7.07. “Indemnification” and Section 7.08. “Lessor
as Party Defendant”; and that all such policies will not be canceled unless
thirty (30) days’ prior written notice of the proposed cancellation has been
given to Lessor. The insurance shall be with insurers approved by Lessor,
provided, however, that such approval shall not be unreasonably withheld so
long as Lessee’s insurance carrier has a Best’s Insurance Guide rating not less
than A+ VIII. Within ten (10) business days after Lessee’s written request for
same, Lessor shall furnish once during any calendar year, certificates
indicating that the property insurance and liability insurance required to be
kept by Lessor is in full force and effect.

Section 7.06  Mutual Waiver of Claims and Subrogation
Rights.  Lessor and
Lessee hereby release and relieve the other, and waive their entire claim of
recovery for loss or damage to property arising out of or incident to fire,
lightning, and the other perils included in a standard “all risk” insurance
policy of a type described in Sections 7.01 and 7.02 above, when such property
constitutes the Premises, or is in, on or about the Premises, whether or not
such loss or damage is due to the negligence of Lessor or Lessee, or their
respective agents, employees, guests, licensees, invitees, or contractors.
Lessee and Lessor waive all rights of subrogation against each other on behalf
of, and shall obtain a waiver of all subrogation rights from, all property and
casualty insurers referenced above.

Section 7.07  Indemnification and Exculpation.

(a)           Except as otherwise provided in
Section 7.07.(b), Lessee shall indemnify and hold Lessor free and harmless from
any and all liability, claims, loss, damages, causes of action (whether in tort
or contract, law or equity, or otherwise), expenses, charges, assessments,
fines, and penalties of any kind, including without limitation, reasonable
attorney fees, expert witness fees and costs, arising by reason of the death or
injury of any person, including any person who is an employee, agent, invitee,
sublessee, licensee, permittee, visitor, guest or

 28
 

 

contractor of Lessee, or
by reason of damage to or destruction of any property, including property owned
by Lessee or any person who is an employee, agent, sublessee, invitee,
permitee, visitor, or contractor of Lessee, caused or allegedly caused (1)
while that person or property is in or about the Premises; (2) by some
condition of the Premises; (3) by some act or omission by Lessee or its agent,
employee, licensee, invitee, guest, visitor or contractor or any person in,
adjacent, on, or about the Premises with the permission, consent or sufferance
of Lessee; (4) by any matter connected to or arising out of Lessee’s occupation
and use of the Premises, or any breach or default in timely observance or
performance of any obligation on Lessee’s part to be observed or performed
under this Lease.

(b)           Notwithstanding the provisions of
Section 7.07.(a) of this Lease, Lessee’s duty to indemnify and hold Lessor
harmless shall not apply to any liability, claims, loss or damages arising
because of the active negligence or willful acts of misconduct of Lessor or its
agents, employees or contractors or which is or could be covered by the insurance
Lessor is required to carry under this Lease. Lessor hereby waives all claims
against Lessee for any damage which is or could be covered by the insurance
Lessee is required to carry under this Lease.

(c)           Lessee hereby waives all claims
against Lessor for damages to goods, wares and merchandise and all other
personal property in, on or about the Premises and for injury or death to
persons in, on or about the Premises from any cause arising at any time to the
fullest extent permitted by law. In no event shall Lessor be liable (i) for
lost profits or other consequential damages arising from any cause or (ii) for
any damage which is or could be covered by the insurance Lessee is required to
carry under this Lease.

Section 7.08  Lessor as Party Defendant.  If by reason of an act or omission of Lessee
or any of its employees, agents, invitees, licensee, visitors, guests or
contractors, Lessor is made a party defendant or a cross-defendant to any
action involving the Premises or this Lease, Lessee shall hold harmless and
indemnify Lessor from all liability or claims of liability, including all
damages, attorney fees and costs of suit.

ARTICLE
VIII

DAMAGE OR DESTRUCTION

Section 8.01  Destruction of the Premises.

(a)           In the event of a partial destruction
of the Premises (i.e., affecting less than fifty percent (50%) of its Rentable
Area) during the Lease Term from any

 29
 

 

cause, Lessor, upon
receipt of, and to the extent of, insurance proceeds paid in connection with
such casualty and deductibles paid by Lessee, shall forthwith repair the same,
provided the repairs can be made within a reasonable time under state, federal,
county and municipal applicable law, but such partial destruction shall in no
way annul or void this Lease, (except as provided in Section 8.01.(b) below)
provided that Lessee shall be entitled to a proportionate credit for rent equal
to rental income insurance proceeds received by Lessor, provided further, that
if Lessor failed to carry such insurance as required by Article VII hereof,
Lessee shall nonetheless be entitled to an abatement of rent to the same extent
as if Lessor had carried such insurance from such insurance as is required
under Section 7.01. Lessor shall use diligence in making such repairs within a
reasonable time period, subject to the Force Majeure provisions of Section
17.21, in which instance the time period shall be extended accordingly, and
this Lease shall remain in full force and effect, with the rent to be
proportionately reduced as provided in this Section. If the Premises are
damaged by any peril within twelve (12) months prior to the last day of the
Lease Term and, in the reasonable opinion of the Lessor’s architect or
construction consultant, the restoration of the Premises cannot be
substantially completed within ninety (90) days after the date of such damage
Lessor may terminate this Lease on sixty (60) days written notice to Lessee.

(b)           If the Building is damaged or
destroyed by any cause to the extent of more than fifty percent (50%) of its
total Rentable Area during the Lease Term, Lessor shall notify Lessee within
sixty (60) days after such damage or destruction whether it will repair the
same within twelve months (12) (subject to the Force Majeure provisions of
Section 17.21) from the date of such notice and if Lessor states that it will
not repair within said twelve months (12) (subject to Force Majeure) this Lease
shall terminate ten (10) business days after Lessor gives its notice. In the
event of termination, Lessee shall pay to Lessor all insurance proceeds, if any,
received by Lessee as a result of the damage or destruction, except to the
extent allocable to unamortized (sixty (60) equally monthly amounts over the
five (5) year period following installation of same) Tenant Improvements or
other Alterations installed therein at Lessee’s sole cost and expense.

Section 8.02  Waiver of Civil Code Remedies.  Lessee hereby expressly waives any right to
terminate this Lease upon damage or destruction to the Premises, including
without limitation any right pursuant to the provisions of Section 1932,
Subdivisions 1 and 2 and Section 1933, Subdivision 4, of the California Civil
Code, as amended from time-to-time, and the provisions of any similar law
hereinafter enacted.

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Section 8.03 No
Abatement of Rentals. The Base Rent, Additional Rent and any
other amounts due under this Lease shall not be reduced or abated by reason of
any damage or destruction to the Premises (except as provided in Section
8.01.(a) above with respect to rental loss insurance), and Lessor shall be
entitled to all proceeds of the insurance maintained pursuant to Section 7.01.
above during the period of rebuilding pursuant to Section 8.01. above, or if
the Lease is terminated pursuant to Section 8.01. above. Lessee shall have no
claim against Lessor, including, without limitation, for compensation for
inconvenience or loss of business, profits or goodwill during any period of
repair or reconstruction.

Section 8.04
Liability for Personal Property. In no event shall Lessor
have any liability for, nor shall it be required to repair or restore, any
injury or damage to Lessee’s personal property or to any other personal
property or to Alterations (except to the extent Lessor receives insurance
proceeds to repair damage to same) in or upon the Premises by Lessee.

ARTICLE IX

REAL
PROPERTY TAXES

Section 9.01
Payment of Taxes. Subject to Lessee timely paying Lessor the
same in advance as provided below, Lessor shall pay all real property taxes,
including any escaped or supplemental tax and any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license, fee,
charge, excise or imposition (“real property tax”), imposed, assessed or levied
on or with respect to the Project by any Federal, State, County, City or other
political subdivision or public authority having the direct or indirect power
to tax, including, without limitation, any improvement district or any
community facilities district (including the district established for purposes
of constructing the Seaport Boulevard improvements and other improvements as
required in the Development Agreement or by the City of Redwood City (“Community
Facility District”), as against any legal or equitable interest of Lessor in
the Project or against the Project or any part thereof applicable to the
Project for all periods of time included within the Lease Term (as the same may
be extended and during any holdover period), as well as any government or
private cost sharing agreement assessments made for the purpose of augmenting
or improving the quality of services and amenities normally provided by
government agencies. All such payments shall be made by Lessee directly
pursuant to Section 4.05 hereof no later than ten (10) days after Lessor’s
delivery to Lessee of a statement of the real property tax due, together with a
copy of the applicable tax bill. Notwithstanding the foregoing, Lessee shall
not be required to pay any net income taxes, franchise

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taxes, or any succession
or inheritance taxes of Lessor. If at anytime during the Lease Term, the State
of California or any political subdivision of the state, including any county,
city, city and county, public corporation, district, or any other political
entity or public corporation of this state, levies or assesses against Lessor a
tax, fee, charge, imposition or excise on rents under the Lease, the square
footage of the Premises or Project, the act of entering into this Lease, or the
occupancy of Lessee, or levies or assesses against Lessor any other tax, fee,
or excise, however described, including, without limitation, a so-called value
added, business license, transit, commuter, environmental or energy tax fee,
charge or excise or imposition related to the Project as a direct substitution in
whole or in part for, or in addition to, any real property taxes on the Project
the same shall be included n real property taxes and Lessee shall pay ten (10)
days before delinquency or ten (10) days after receipt of the tax bill,
whichever is later, that tax, fee, charge, excise or imposition except to the
extent estimated real property taxes are billed and paid monthly. Real property
taxes payable by Lessee hereunder shall not include real property taxes
applicable to other office/research and development buildings within the
Project or the legal parcels on which such buildings are located, but Lessee
shall pay one hundred percent (100%) of real property taxes applicable to the
Premises and the Property.

Section 9.02 Pro
Ration for Partial Years. If any such real property taxes
paid by Lessee shall cover any period prior to the Commencement Date or after
the Expiration Date of the Lease Term, Lessee’s share of such real property
taxes shall be equitably prorated to cover only the period of time within the tax
fiscal year during which this Lease shall be in effect, and Lessor shall
reimburse Lessee to any extent required. If Lessee shall fail to pay any such
real property taxes, Lessor shall have the right to pay the same in which case
Lessee shall repay such amount to Lessor within ten (10) days after written
demand, together with interest at the Agreed Rate.

Section 9.03  Personal Property Taxes.

(a)           Lessee shall pay prior to delinquency
all taxes imposed, assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Lessee contained in the Premises
or elsewhere. When possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Lessor.

(b)           If any of Lessee’s said personal
property shall be assessed with Lessor’s real property, Lessee shall pay Lessor
the taxes attributable to Lessee

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within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee’s property.

(c)           If Lessee shall fail to pay any such
taxes, Lessor shall have the right to pay the same, in which case Lessee shall
repay such amount to Lessor with Lessee’s next rent installment together with
interest at the Agreed Rate.

Section 9.04.  Lessee’s Right to Contest Real Property Taxes.
Lessee at its sole cost and expense shall have the right, at any time, to seek
a reduction in the assessed valuation of the Premises or to contest any real
property taxes that are to be paid by Lessee with respect to solely the
Premises but Lessee must still pay such taxes timely as required hereunder. If
Lessee seeks a reduction or contests any such real property taxes, the failure
on Lessee’s part to pay such real property taxes shall not constitute a default
as long as Lessee complies with the provisions of this Section. Lessor shall
not be required to join in any proceeding or contest brought by Lessee unless
the provisions of any law require that the proceeding or contest be brought by
or in the name of Lessor or any owner of the Premises. In that case Lessor
shall join in the proceeding or contest or permit it to be brought in Lessor’s
name as long as Lessor is not required to bear any cost or expense. Lessor, on
final determination of the proceeding or contest, shall immediately pay or
discharge any decision or judgment rendered, together with all costs, fees,
charges, interest, penalties and all other amounts incidental to the decision
or judgment.

ARTICLE X

UTILITIES

Section 10.01  Lessee to Pay. Lessee shall
pay prior to delinquency and throughout the Lease Term, all charges for water,
gas, heating, cooling, sewer, telephone, electricity, garbage, air conditioning
and ventilation, janitorial service, and all other materials, services and
utilities supplied to the Premises. The disruption, failure, lack or shortage
of any service or utility due to any cause whatsoever shall not affect any
obligation of Lessee hereunder, and Lessee shall faithfully keep and observe
all the terms, conditions and covenants of this Lease and pay all rent due
hereunder, all without diminution, credit or deduction, provided that, Lessor
shall credit Lessee to the extent of any rental interruption proceeds Lessor
receives as a result of such disruption, failure, lack or shortage of services
or utility.

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ARTICLE
XI

ASSIGNMENT AND SUBLETTING

Section 11.01
Lessor’s Consent Required. Except as provided in Section
11.02, Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, license or otherwise transfer or encumber all or any part of
Lessee’s interest in this Lease or in the Premises or any part thereof, without
Lessor’s prior written consent which Lessor shall not unreasonably withhold or
delay. Lessor shall respond in writing to Lessee’s request for consent
hereunder in a timely manner and any attempted assignment, transfer, mortgage,
encumbrance, subletting or licensing without such consent shall be void, and
shall constitute a breach of this Lease. By way of example, but not limitation,
reasonable grounds for denying consent include: (i) poor credit history or
insufficient financial strength of transferee (but, with respect to a sublease
of less than fifty percent (50%) of the Buildings, not necessarily financial
strength as great as that of Lessee), (ii) transferee’s intended use of the
Premises is inconsistent with the permitted use or will materially and
adversely affect Lessor’s interest. Lessee shall reimburse Lessor upon demand
for Lessor’s reasonable costs and expenses (including attorneys’ fees,
architect fees and engineering fees) involved in renewing any request for
consent whether or not consent is granted.

Section 11.02
Lessee Affiliates. Lessee may assign or sublet the Premises,
or any portion thereof, to any corporation which controls, is controlled by, or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all of Lessee’s stock or all, or substantially all of the assets of Lessee as a
going concern of the business that is being conducted on the Premises (“Affiliate”),
provided that said assignee or sublessee assumes, in full, the obligations of
Lessee under this Lease and provided further that the use to which the Premises
will be put does not materially change. Any such assignment shall not, in any
way, affect or limit the liability of Lessee under the terms of this Lease.

Section 11.03  No Release of Lessee.
Regardless of Lessor’s consent, no subletting or assignment shall release
Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay
the rent and to perform all other obligations to be performed by Lessee
hereunder. The acceptance of rent by Lessor from any other person shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.

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Section 11.04
Excess Rent. In the event Lessor shall consent to a sublease
or an assignment, Lessee shall pay to Lessor with its regularly scheduled Base
Rent payments, fifty percent (50%) of all sums and the fair market value of all
consideration collected or received by Lessee from a sublessee or assignee
which are in excess of the Base Rent and Additional Rent due and payable with
respect to the subject space pursuant to Article IV for the time period
encompassed by the sublease or assignment term, after first deducting (i)
reasonable leasing commissions paid by Lessee with respect to such sublease or
assignment, and (ii) that portion of the cost of Tenant Improvements paid by
Lessee which remains unamortized (using an amortization schedule of the first
sixty (60) months of the Lease Term) during any portion of the sublease or
assignment term.

Section 11.05 No
Impairment of Security. Lessee’s written request to Lessor
for consent to an assignment or subletting or other form of transfer shall be
accompanied by (a) the name and legal composition of the proposed transferee;
(b) the nature of the proposed transferee’s business to be carried on in the
Premises; (c) the terms and provisions of the proposed transfer agreement; and
(d) such financial and other reasonable information as Lessor may request
concerning the proposed transferee.

Section 11.06  Lessor’s Recapture Rights.

(a)           Lessor’s Recapture Rights.
Notwithstanding any other provision of this Article 11, in the event that Lessee
proposes to sublease or assign or otherwise transfer any interest in this Lease
or the Premises or any part thereof affecting, in the aggregate with all other
such subleases, assignments, or transfers then in effect, more than seventy
five thousand (75,000) rentable square feet within the Building (“Recapture
Space”) for more than the lesser of (i) three (3) years, or (ii) fifty percent
(50%) of the then remaining Lease Term, then Lessor shall have the option to
recapture the Recapture Space by written notice to Lessee (Recapture Notice)
given within ten (10) business days after Lessor receives any notice of such
proposed assignment or sublease or other transfer (“Transfer Notice”). A timely
Recapture Notice terminates this Lease for the Recapture Space, effective as of
the date specified in the Transfer Notice. If Lessor declines or fails timely
to deliver a Recapture Notice, Lessor shall have no further right under this
Section 11.06 to the Recapture Space unless it becomes available again after
transfer by Lessee.

(b)           Consequences of Recapture. To
determine the new Base Rent under this Lease if Lessor recaptures the Recapture
Space, the then current Base Rent (immediately before Lessor’s recapture) under
the Lease shall be multiplied by a

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fraction, numerator of
which is the square feet of the Rentable Area retained by Lessee after Lessor’s
recapture and the denominator of which is the total square feet of the Rentable
Area before Lessor’s recapture. The Additional Rent, to the extent that it is
calculated on the basis of the square feet within the Building, shall be
reduced to reflect Lessee’s proportionate share based on the square feet of the
Building retained by Lessee after Lessor’s recapture. This Lease as so amended
shall continue thereafter in full force and effect. Either party may require
written confirmation of the amendments to this Lease necessitated by Lessor’s
recapture of the Recapture Space. If Lessor recaptures the Recapture Space,
Lessor shall, at Lessor’s sole expense, construct, paint, and furnish any
partitions required to segregate the Recapture Space from the remaining
Premises retained by Lessee as well as arrange separate metering of utilities.

ARTICLE
XII

DEFAULTS; REMEDIES

Section 12.01  Defaults. The occurrence of
any one or more of the following events shall constitute a material default and
breach of this Lease by Lessee:

(a)           The vacation of the Premises by
Lessee for a period of time which would thereafter terminate Lessor’s insurance
coverage at the Premises or cause an increase of Lessor’s insurance coverage at
the Project or which for a period of more than six consecutive calendar months
(other than vacation caused by damage or destruction and during the repair of
same) or the commission of waste at the Premises or the making of an assignment
or subletting in violation of Article XI, provided however, abandonment shall
be considered to not occur if the Premises are maintained and occupied to the
extent necessary to maintain the insurance on each and every portion of the Premises;

(b)           The failure by Lessee to make any
payment of rent or any other payment required to be made by Lessee hereunder,
as and when due, if such failure continues for a period of five (5) business
days after written notice thereof from Lessor to Lessee. In the event that
Lessor serves Lessee with a Notice to Pay Rent or Quit in the form required by
applicable Unlawful Detainer statutes such Notice shall constitute the notice
required by this paragraph, provided that the cure period stated in the Notice shall
be five (5) business days rather than the statutory three (3) days;

(c)           Lessee’s failure to provide (i) any
instrument or assurance as required by Section 7.05 or (ii) estoppel
certificate as required by Section 15.01 or (iii) any document subordinating
this Lease to a Lender’s deed of trust if such failure

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continues for five (5)
business days after written notice of the failure. In the event Lessor serves
Lessee with a Notice to Perform Covenant or Quit in the form required by
applicable Unlawful Detainer Statutes, such Notice shall constitute the notice
required by this paragraph, provided that the cure period stated in the Notice
shall be five (5) business days rather than the statutory three (3) days;

(d)           Lessee’s failure to deposit cash with
Lessor in an amount sufficient to restore the Security Deposit to its original
amount within the ten (10) day period provided in Section 4.06.

(e)           The failure by Lessee to observe or
perform any of the covenants, conditions or provisions of this Lease to be observed
or performed by Lessee, other than described in paragraph (a), (b), (c) or (d)
above, if such failure continues for a period of ten (10) days after written
notice thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee’s default is such that more than ten (10) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commences such cure within said ten (10) day period and thereafter diligently
prosecutes such cure to completion;

(f)            (i) The making by Lessee of any
general arrangement or assignment for the benefit of creditors; (ii) the filing
by Lessee of a voluntary petition in bankruptcy under Title 11 U.S.C. or the
filing of an involuntary petition against Lessee which remains uncontested for
a period of sixty days; (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee’s assets located at the Premises or
of Lessee’s interest in this Lease; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee’s assets located at the
Premises or of Lessee’s interest in this Lease, provided, however, in the event
that any provisions of this Section 12.01(e) is contrary to any applicable law,
such provision shall be of no force or effect;

(g)           The discovery by Lessor that any
financial statement given to Lessor by Lessee, or any guarantor of Lessee’s
obligations hereunder, was materially false.

(h)           The occurrence of a material default
and breach by Lessee under any other Lease between Lessee and Lessor (or any
affiliate of Lessor) for Premises in Pacific Shores Center.

Section 12.02  Remedies. In the event of
any such material default and breach by Lessee, Lessor may at any time
thereafter, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default and breach:

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(a)           Terminate Lessee’s right to
possession of the Premises by any lawful means including by way of unlawful
detainer (and without any further notice if a notice in compliance with the
unlawful detainer statutes and in compliance with paragraphs (b), (c) and (d)
of Section 12.01 above has already been given), in which case this Lease shall
terminate and Lessee shall immediately surrender possession of the Premises to
Lessor. In such event Lessor shall be entitled to recover from Lessee all
damages incurred by Lessor by reason of Lessee’s default including, but not
limited to, (i) the cost of recovering possession of the Premises including
reasonable attorney’s fees related thereto; (ii) the worth at the time of the
award of any unpaid rent that had been earned at the time of the termination,
to be computed by allowing interest at the Agreed Rate but in no case greater
than the maximum amount of interest permitted by law, (iii) the worth at the
time at the time of the award of the amount by which the unpaid rent that would
have been earned between the time of the termination and the time of the award
exceeds the amount of unpaid rent that Lessee proves could reasonably have been
avoided, to be computed by allowing interest at the Agreed Rate but in no case
greater than the maximum amount of interest permitted by law, (iv) the worth at
the time of the award of the amount by which the unpaid rent for the balance of
the Lease Term after the time of the award exceeds the amount of unpaid rent
that Lessee proves could reasonably have been avoided, to be computed by
discounting that amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one per cent (1%), (v) any other amount
necessary to compensate Lessor for all the detriment proximately caused by
Lessee’s failure to perform obligations under this Lease, including brokerage
commissions and advertising expenses, expenses of remodeling the Premises for a
new tenant (whether for the same or a different use), and any special
concessions made to obtain a new tenant, and (vi) any other amounts, in
addition to or in lieu of those listed above, that may be permitted by
applicable law.

(b)           Maintain Lessee’s right to possession
as provided in Civil Code Section 1951.4 in which case this Lease shall
continue in effect whether or not Lessee shall have abandoned the Premises. In
such event Lessor shall be entitled to enforce all of Lessor’s rights and
remedies under this Lease, including the right to recover the rent as it
becomes due hereunder.

(c)           Pursue any other remedy now or
hereafter available to Lessor under the laws or judicial decisions of the state
of California. Unpaid amounts of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the Agreed Rate.

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Section 12.03  Default by Lessor. Lessor
shall not be in default under this Lease unless Lessor fails to perform
obligations required of Lessor within a reasonable time, but in no event later
than thirty (30) days after written notice by Lessee to Lessor and to the
holder of any first mortgage or deed of trust covering the Premises whose name
and address shall have theretofore been furnished to Lessee in writing,
specifying that Lessor has failed to perform such obligation; provided,
however, that if the nature of Lessor’s obligation is such that more than
thirty (30) days are reasonably required for performance then Lessor shall not
be in default if Lessor commences performance within such thirty day period and
thereafter diligently prosecutes the same to completion. In the event Lessor
does not commence performance within the thirty (30) day period provided
herein, Lessee may perform such obligation and will be reimbursed for its
expenses by Lessor together with interest thereon at the Agreed Rate. Lessee
waives any right to terminate this Lease or to vacate the Premises on Lessor’s
default under this Lease. Lessee’s sole remedy on Lessor’s default is an action
for damages or injunctive or declaratory relief. Notwithstanding the foregoing,
- nothing herein shall be deemed applicable in the event of Lessor’s delay in
delivery of the Premises. In that situation, all rights and remedies shall be
determined under Section 3.01 above.

Section 12.04  Late Charges. Lessee hereby
acknowledges that late payment by Lessee to Lessor of rent and other sums due
hereunder will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of rent or any
other sum due from Lessee shall not be received by Lessor or Lessor’s
designated agent within five (5) days after such amount is due and owing,
Lessee shall pay to Lessor a late charge equal to five percent (5%) of such
overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason of late
payment by Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee’s default with respect to such overdue amount,
nor prevent Lessor from exercising any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of rent, then rent shall
automatically become due and payable quarterly in advance, rather than monthly,
notwithstanding Section 4.01 or any other provision of this Lease to the
contrary.

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ARTICLE
XIII

CONDEMNATION OF PREMISES.

Section 13.01 Total
Condemnation. If the entire Premises, whether by exercise of
governmental power or the sale or transfer by Lessor to any condemnor under
threat of condemnation or while proceedings for condemnation are pending, at
any time during the Lease Term, shall be taken by condemnation such that there
does not remain a portion suitable for occupation, this Lease shall then
terminate as of the date transfer of possession is required. Upon such
condemnation, all rent shall be paid up to the date transfer of possession is
required, and Lessee shall have no claim against Lessor or the award for the
value of the unexpired portion of this Lease Term.

Section 13.02  Partial Condemnation. If
any portion of the Premises is taken by condemnation during the Lease Term, whether
by exercise of governmental power or the sale for transfer by Lessor to an
condemnor under threat of condemnation or while proceedings for condemnation
are pending, this Lease shall remain in full force and effect except that in
the event a partial taking leaves the Premises unfit for the conduct of the
business of Lessee, then Lessee shall have the right to terminate this Lease
effective upon the date transfer of possession is required. Moreover, Lessor
shall have the right to terminate this Lease effective on the date transfer of
possession is required if more than thirty-three percent (33%) of the total
square footage of the Premises is taken by condemnation. Lessee and Lessor may
elect to exercise their respective rights to terminate this Lease pursuant to
this Section by serving written notice to the other within thirty (30) days
after receipt of notice of condemnation. All rent shall be paid up to the date
of termination, and Lessee shall have no claim against Lessor for the value of
any unexpired portion of the Lease Term. If this Lease shall not be canceled,
the rent after such partial taking shall be that percentage of the adjusted
base rent specified herein, equal to the percentage which the square footage of
the untaken part of the Premises, immediately after the taking, bears to the
square footage of the entire Premises immediately before the taking. If Lessee’s
continued use of the Premises requires alterations and repair by reason of a
partial taking, all such alterations and repair shall be made by Lessee at
Lessee’s expense. Lessee waives all rights it may have under California Code of
Civil Procedure Section 1265.130 or otherwise, to terminate this Lease based on
partial condemnation.

Section 13.03  Award to Lessee. In the
event of any condemnation, whether total or partial, Lessee shall have the
right to claim and recover from the condemning authority such compensation as
may be separately awarded or recoverable by Lessee for loss of its business
fixtures, or equipment belonging to

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Lessee immediately prior
to the condemnation. The balance of any condemnation award shall belong to
Lessor (including, without limitation, any amount attributable to any excess of
the market value of the Premises for the remainder of the Lease Term over the
then present value of the rent payable for the remainder of the Lease Term) and
Lessee shall have no further right to recover from Lessor or the condemning
authority for any claims arising out of such taking, provided that Lessee shall
have the right to make a separate claim in the condemnation proceeding, as long
as the award payable to Lessor is not reduced thereby, for (i) the taking of
the unamortized or undepreciated value of any leasehold improvements owned by
Lessee that Lessee has the right to remove at the end of the Lease Term and
that Lessee elects not to remove, (ii) reasonable removal and relocation costs
for any leasehold improvements that Lessee has the right to remove and elects
to remove (if condemnor approves of the removal), and (iii) relocation costs
under Government Code section 7262, the claim for which Lessee may pursue by
separate action independent of this Lease.

ARTICLE
XIV

ENTRY BY LESSOR

Section 14.01
Entry by Lessor Permitted. Lessee shall permit Lessor and its
employees, agents and contractors to enter the Premises and all parts thereof
(i) upon twenty-four (24) hours notice (or without notice in an emergency),
including without limitation, the Building and all parts thereof at all
reasonable times for any of the following purposes: to inspect the Premises; to
maintain the Premises; to make such repairs to the Premises as Lessor is
obligated or may elect to make; to make repairs, alterations or additions to
any other portion of the Project and (ii) upon twenty-four (24) hours notice to
show the Premises and post “To Lease” signs for the purposes of reletting
during the last twelve (12) months of the Lease Term (provided that Lessee has
failed to exercise its option to extend) or extended Lease Term to show the
Premises as part of a prospective sale by Lessor or to post notices of
nonresponsibility. Lessor shall have such right of entry without any rebate of
rent to Lessee for any loss of occupancy or quiet enjoyment of the Premises
hereby occasioned. Lessee shall have the right to accompany Lessor on any
entry, provided that Lessor shall not be required to give Lessee any notice of
an emergency entry and shall not be required to delay any noticed entry to
accommodate Lessee’s exercise of its right to so accompany.

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ARTICLE
XV

ESTOPPEL CERTIFICATE

Section 15.01
Estoppel Certificate.

(a)           Either party shall at any time upon
not less than fifteen (15) days’ prior written request from the other party
execute, acknowledge and deliver to the other party a statement in writing (i)
certifying, if true, that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying, if
true, that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging, if true, that there are not, to such party’s knowledge, any
uncured defaults on the part of the other party hereunder, or specifying such
defaults if any are claimed and (iii) certifying or acknowledging such other
matters as are requested by any prospective lender or buyer which are
reasonably related to the loan or sale transaction. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.

(b)           Either party’s failure to deliver
such statement within such time shall be conclusive upon the other party (i)
that this Lease is in full force and effect, without modification except as may
be represented by the requesting party in the statement, (ii) that there are no
uncured defaults in requesting party’s performance, and (iii) that not more
than one month’s rent has been paid in advance.

ARTICLE
XVI

LESSOR’S LIABILITY

Section 16.01
Limitations on Lessor’s Liability.  The term “Lessor” as used herein shall mean
only the owner or owners at the time in question of the fee title of the
Premises. In the event of any transfer of such title or interest, Lessor herein
named (and in case of any subsequent transfers then the grantor) shall be relieved
from and after the date of such transfer of all liability as respects Lessor’s
obligations thereafter to be performed, except as to any claim Lessee may have
as to any funds in the hands of Lessor or the then grantor at the time of such
transfer, including without limitation, the Security Deposit, in which Lessee
has an interest, which are not delivered to the grantee. The obligations
contained in this Lease to be performed by Lessor shall, subject as aforesaid,
be binding on Lessor’s successors and assigns, only during their respective
periods of ownership. For any breach of this Lease by Lessor, the liability of
Lessor (including all persons and entities that comprise Lessor, and any
successor Lessor) and any recourse by Lessee against Lessor shall be limited to
the interest of Lessor, and Lessor’s

 42
 

 

successors in interest,
in and to the Premises including any sales proceeds or condemnation awards
received by Lessor from the sale or condemnation of the Premises after said
breach and (ii) any insurance coverage pertaining to such breach provided by
policies carried pursuant to this Lease. On behalf of itself and all persons
claiming by, through, or under Lessee, Lessee expressly waives and releases
Lessor and each member, agent and employee of Lessor from any personal
liability for breach of this Lease.

ARTICLE
XVII

GENERAL PROVISIONS

Section 17.01
Severability.  The
invalidity of any provision of this Lease as determined by a court of competent
jurisdiction, shall in no way affect the validity of any other provision
hereof.

Section 17.02
Agreed Rate Interest on Past-Due Obligations.  Except as expressly herein provided, any
amount due to either party not paid when due shall bear interest at the Bank of
America prime rate (as the same may vary from day to day) plus one percent (1%)
(“Agreed Rate”).  Payment of such
interest shall not excuse or cure any default by Lessee under this Lease.
Despite any other provision of this Lease, the total liability for interest
payments shall not exceed the limits, if any, imposed by the usury laws of the
State of California.  Any interest paid
in excess of those limits shall be refunded to the payor by application of the
amount of excess interest paid against any sums outstanding in any order that
payee requires.  If the amount of excess
interest paid exceeds the sums outstanding, the portion exceeding those sums
shall be refunded in cash to the payor by the payee.  To ascertain whether any interest payable
exceeds the limits imposed, any nonprincipal payment (including late charges)
shall be considered to the extent permitted by law to be an expense or a fee,
premium, or penalty rather than interest.

Section 17.03 Time
of Essence.  Time is of
the essence in the performance of all obligations under this Lease.

Section 17.04
Additional Rent.  Any
monetary obligation of Lessee to Lessor under the terms of this Lease shall be
deemed to be Additional Rent and Lessor shall have all the rights and remedies
for the nonpayment of same as it would have for nonpayment of Base Rent, except
that the one year requirement of Code of Civil Procedure Section 1161(2) shall
apply only to scheduled installments of Base Rent and not to any Additional
Rent. All references to “rent”

 43
 

 

(except specific
references to either Base Rent or Additional Rent) shall mean Base Rent and
Additional Rent.

Section 17.05
Incorporation of Prior Agreements, Amendments and Exhibits.
This Lease (including Exhibits A, B, C, D, E, F, G, H, I, J, K and L) contains
all agreements of the parties with respect to any matter mentioned herein. No
prior agreement or understanding pertaining to any such matter shall be
effective. This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the Lessor nor any employees or
agents of the Lessor has made any oral or written warranties or representations
to Lessee relative to the condition or use by Lessee of said Premises and
Lessee acknowledges that Lessee assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and regulations in effect
during the Lease Term except as otherwise specifically stated in this Lease.
Neither party has been induced to enter into this Lease by, and neither party
is relying on, any representation or warranty outside those expressly set forth
in this Lease.

Section 17.06  Notices.

(a)           Written Notice.  Any notice required or permitted to be given
hereunder shall be in writing and shall be given by a method described in
paragraph (b) below and shall be addressed to Lessee or to Lessor at the
addresses noted below, next to the signature of the respective parties, as the case
may be. Either party may by notice to the other specify a different address for
notice purposes. A copy of all notices required or permitted to be given to
Lessor hereunder shall be concurrently transmitted to such party or parties at
such addresses as Lessor may from time to time hereafter designate by notice to
Lessee, but delay or failure of delivery to such person shall not affect the
validity of the delivery to Lessor or Lessee.

(b)           Methods of Delivery.

(i)            When personally delivered to the
recipient, notice is effective on delivery. Delivery to the person apparently
designated to receive deliveries at the subject address is personally delivered
if made during business hours (e.g. receptionist).

(ii)           When mailed by certified mail with
return receipt requested, notice is effective on receipt if delivery is
confirmed by a return receipt.

 44
 

 

(iii)          When delivery by overnight delivery
Federal Express/Airborne/United Parcel Service/DHL WorldWide Express with
charges prepaid or charged to the sender’s account, notice is effective on
delivery if delivery is confirmed by the delivery service.

(c)           Refused, Unclaimed or
Undeliverable Notices.  Any correctly
addressed notice that is refused, unclaimed, or undeliverable because of an act
or omission of the party to be notified shall be considered to be effective as
of the first date that the notice was refused, unclaimed, or considered
undeliverable by the postal authorities, messenger, or overnight delivery
service.

Section 17.07
Waivers.  No waiver of
any provision hereof shall be deemed a waiver of any other provision hereof or
of any subsequent breach of the same or any other provisions. Any consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of consent to or approval of any subsequent act. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of
any provision hereof, other than the failure of Lessee to pay the particular
rent so accepted, regardless of Lessor’s knowledge of such preceding breach at
the time of acceptance of such rent.

Section 17.08
Recording.  Either
Lessor or Lessee shall, upon request of the other, execute, acknowledge and
deliver to the other a “short form” memorandum of this Lease for recording
purposes, provided that Lessee shall also simultaneously execute in recordable
form and delivering to Lessor a Quit Claim Deed as to its leasehold and any
other interest in the Premises and hereby authorizes Lessor to date and record
the same only upon the expiration or sooner termination of this Lease.

Section 17.09
Surrender of Possession; Holding Over.

(a)           At the expiration of the Lease,
Lessee agrees to deliver up and surrender to Lessor possession of the Premises
and all improvements thereon broom clean and, in as good order and condition as
when possession was taken by Lessee, excepting only ordinary wear and tear
(wear and tear which could have been avoided by first class maintenance
practices and in accordance with industry standards shall not be deemed “ordinary”).
Upon expiration or sooner termination of this Lease, Lessor may reenter the
Premises and remove all persons and property therefrom. If Lessee shall fail to
remove any personal property which it is entitled or obligated to remove from
the Premises upon the expiration or sooner termination of this Lease, for any
cause whatsoever, Lessor, at its option, may remove the same and store or
dispose of them, and Lessee agrees to pay to Lessor

 45
 

 

on demand any and all
expenses incurred in such removal and in making the Premises free from all
dirt, litter, debris and obstruction, including all storage and insurance
charges. If the Premises are not surrendered at the end of the Lease Term,
Lessee shall indemnify Lessor against loss or liability resulting from delay by
Lessee in so surrendering the Premises, including, without limitation, actual
damages for lost rent and with respect to any claims of a successor occupant.

(b)           If Lessee, with Lessor’s prior
written consent, remains in possession of the Premises after expiration of the
Lease Term and if Lessor and Lessee have not executed an express written
agreement as to such holding over, then such occupancy shall be a tenancy from
month to month at a monthly Base Rent equivalent to one hundred fifty percent
(150%) of the monthly rental in effect immediately prior to such expiration,
such payments to be made as herein provided for Base Rent. In the event of such
holding over, all of the terms of this Lease, including the payment of
Additional Rent all charges owing hereunder other than rent shall remain in
force and effect on said month to month basis.

Section 17.10
Cumulative Remedies. 
No remedy or election hereunder by Lessor shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at law or in
equity, provided that notice and cure periods set forth in Article XII are
intended to extend and modify statutory notice provisions to the extent
expressly stated in Section 12.01.

Section 17.11
Covenants and Conditions. 
Each provision of this Lease to be observed or performed by Lessee shall
be deemed both a covenant and a condition.

Section 17.12  Binding Effect; Choice of Law.  Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of Article
XVI, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
of California and any legal or equitable action or proceeding brought with
respect to the Lease or the Premises shall be brought in Santa Clara County,
California.

Section 17.13
Lease to be Subordinate. 
Lessee agrees that this Lease is and shall be, at all times, subject and
subordinate to the lien of any mortgage or other encumbrances which Lessor may
create against the Premises including all renewals, replacements and extensions
thereof provided, however, that regardless of any default under any such
mortgage or encumbrance or any sale of the Premises under such mortgage, so
long as Lessee timely performs all covenants and conditions of this Lease and
continues to make all timely payments hereunder,

 46
 

 

this Lease and Lessee’s
possession and rights hereunder shall not be disturbed by the mortgagee or
anyone claiming under or through such mortgagee. Lessee shall execute any
documents subordinating this Lease within ten (10) days after delivery of same
by Lessor so long as the Lender agrees therein that this Lease will not be
terminated if Lessee is not in default following a foreclosure, including,
without limitation, any Subordination Non-Distribution and Attornment Agreement
(“SNDA”) which is substantially in the form attached hereto as Exhibit “F.”

Section 17.14
Attorneys’ Fees.  If
either party herein brings an action to enforce the terms hereof or to declare
rights hereunder, the prevailing party in any such action, on trial or appeal,
shall be entitled to recover its reasonable attorney’s fees, expert witness
fees and costs as fixed by the Court.

Section 17.15
Signs.  Lessee shall
not place any sign upon the exterior of the Building without Lessor’s prior
written consent, which consent shall not be unreasonably withheld provided that
any such signage shall be subject to approval by the City of Redwood City and
shall comply with the signage described in Exhibit “G” hereto. Lessee, at its
sole cost and expense, after obtaining Lessor’s prior written consent, shall
install, maintain and remove prior to expiration of this Lease (or within ten
(10) days after any earlier termination of this Lease) all signage in full
compliance with (i) all applicable law, statutes, ordinances and regulations
and (ii) all provisions of this Lease concerning Alterations. Lessee shall have
access to any monument sign or Project entrance sign which Lessor installs for
use by Project occupants.

Section 17.16
Merger.  The voluntary
or other surrender of this Lease by Lessee, or a mutual cancellation thereof,
or a termination by Lessor, shall not work a merger, and shall, at the option
of Lessor, terminate all or any existing subtenancies or may, at the option of
Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

Section 17.17
Guarantor. 
[Intentionally Omitted]

Section 17.18
Quiet Possession.  Upon
Lessee timely paying the rent for the Premises and timely observing and
performing all of the covenants, conditions and provisions on Lessee’s part to
be observed and performed hereunder, Lessee shall have quiet possession of the
Premises for the entire Lease Term, subject to all of the provisions of this
Lease.

Section 17.19
Easements.  Lessor
reserves to itself the right, from time to time, to grant such easements,
rights and dedications that Lessor deems necessary

 47
 

 

or desirable, and to
cause the recordation of Parcel Maps and conditions, covenants and restrictions,
so long as such easements, rights, dedications, Maps and conditions, covenants
and restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee shall sign any of the aforementioned or other documents, and
take such other actions, which are reasonably necessary or appropriate to
accomplish such granting recordation and subordination of the Lease to same,
upon request of Lessor, and failure to do so within ten (10) business days of a
written request to do so shall constitute a material breach of this Lease.

Section 17.20
Authority.  Each
individual executing this Lease on behalf of a corporation, limited liability
company or partnership represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of such entity in
accordance with a duly adopted resolution of the governing group of the entity
empowered to grant such authority, and that this Lease is binding upon said
entity in accordance with its terms. Each party shall provide the other with a
certified copy of its resolution within ten (10) days after execution hereof,
but failure to do so shall in no manner (i) be evidence of the absence of
authority or (ii) affect the representation or warranty.

Section 17.21
Force Majeure Delays. 
In any case where either party hereto is required to do any act (other
than the payment of money), delays caused by or resulting from Acts of God or
Nature, war, civil commotion, fire, flood or other casualty, labor
difficulties, shortages of labor or materials or equipment, government
regulations, delay by government or regulatory agencies with respect to
approval or permit process, unusually severe weather, or other causes beyond
such party’s reasonable control (“Force Majeure Delay”) the time during which
act shall be completed, shall be deemed to be extended by the period of such
delay, whether such time be designated by a fixed date, a fixed time or “a
reasonable time.”

Section 17.22
Hazardous Materials.

(a)           Definition of Hazardous Materials
and Environmental Laws.  “Hazardous
Materials” means any (a) substance, product, waste or other material of any
nature whatsoever which is or becomes listed regulated or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sections 9601, et seq. (“CERCLA”); the Hazardous Materials
Transportation Act (“HMTA”) 49 U.S.C. section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. section 6901, et seq. (“RCRA”); the
Toxic Substances Control Act, 15 U.S.C. sections 2601, et seq.

 48
 

 

(“TSCA”); the Clean Water
Act, 33 U.S.C. sections 1251, et seq.; the California Hazardous Waste Control
Act, Health and Safety Code sections 25100, et seq.; the California Hazardous
Substances Account Act, Health and Safety Code sections 26300, et seq.; the
California Safe Drinking Water and Toxic Enforcement Act, Health and Safety
Code sections 25249.5, et seq.; California Health and Safety Code sections
25280, et seq.; (Underground Storage of Hazardous Substances); the California
Hazardous Waste Management Act, Health and Safety Code sections 25170.1, et
seq.; California Health and Safety Code sections 25501. et seq. (Hazardous
Materials Response Plans and Inventory); or the Porter-Cologne Water Quality
Control Act, California Water Code sections 13000, et seq., all as amended, or
any other federal, state or local statute, law, ordinance, resolution, code,
rule, regulation, order or decree regulating, relating to or imposing liability
(including, but not limited to, response, removal and remediation costs) or
standards of conduct or performance concerning any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter may be
in effect (collectively, “Environmental Laws”); (b) any substance, product,
waste or other material of any nature whatsoever whose presence in and of
itself may give rise to liability under any of the above statutes or under any
statutory or common law theory based on negligence, trespass, intentional tort,
nuisance, strict or absolute liability or under any reported decisions of a
state or federal court, (c) petroleum or crude oil, including but not limited
to petroleum and petroleum products contained within regularly operated motor
vehicles and (d) asbestos.

(b)           Lessor’s Representations and
Disclosures.  Lessor represents that
it has provided Lessee with a description of the Hazardous Materials on or
beneath the Property as of the date hereof, attached hereto as Exhibit I and
incorporated herein by reference and that except as described in the documents
identified in Exhibit “I,” Lessor has no actual knowledge of any Hazardous
Materials at the Property. Lessee acknowledges that in providing the attached
Exhibit I, Lessor has satisfied its obligations of disclosure pursuant to
California Health & Safety Code Section 25359.7 which requires:

“Any owner of nonresidential real property who knows, or has reasonable
cause to believe, that any release of hazardous substances has come to be
located on or  beneath that real property
shall, prior to the sale, lease or rental of the real property by that owner,
give written notice of that condition to the buyer, lessee or renter of the
real property.”

 49
 

 

(c)           Use of Hazardous Materials.  Lessee shall not cause or permit any
Hazardous Materials to be brought upon, kept or used in, on or about the
Project by Lessee, its agents, employees, contractors, licensee, guests,
visitors or invitees without the prior written consent of Lessor. Lessor shall
not unreasonably withhold such consent so long as Lessee demonstrates to Lessor’s
reasonable satisfaction that such Hazardous Materials are necessary or useful
to Lessee’s business and will be used, kept and stored in a manner that
complies with all applicable Environmental Laws. Lessee shall, at all times,
use, keep, store, handle, transport, treat or dispose all such Hazardous
Materials in or about the Property in compliance with all applicable
Environmental Laws. Prior to the expiration or earlier termination of the
Lease, Lessee shall remove from the Project all Hazardous Materials used or
brought onto the Premises during the Lease Term by anyone other than Lessor,
its agents, employees or contractors.

(d)           Lessee’s Environmental Indemnity.  Lessee agrees to indemnify and hold Lessor
harmless from any liabilities, losses, claims, damages, penalties, fines,
attorney fees, expert fees, court costs, remediation costs, investigation
costs, or other expenses resulting from or arising out of the use, storage,
treatment, transportation, release, presence, generation, or disposal of
Hazardous Materials on, from or about the Project, and/or subsurface or ground
water, after the Commencement Date from an act or omission of Lessee (or Lessee’s
successor), its agents, employees, invitees, vendors, contractors, guests or
visitors.

(e)           Lessee’s Obligation to Promptly
Remediate.  If the presence of
Hazardous Materials on the Premises after the Commencement Date results from an
act or omission of Lessee (or Lessee’s successors), its agents, employees,
invitees, vendors, contractors, guests, or visitors results in contamination or
deterioration of the Property or any water or soil beneath the Property, Lessee
shall promptly take all action necessary or appropriate to investigate and
remedy that contamination, at its sole cost and expense, provided that Lessor’s
consent to such action shall first be obtained, which consent shall not be
unreasonably withheld.

(f)            Notification.  Lessor and Lessee each agree to promptly
notify the other of any communication received from any governmental entity
concerning Hazardous Materials or the violation of Environmental Laws that
relate to the Property.

(g)           Lessor’s Environmental Indemnity.  In no event shall Lessee be responsible for,
and Lessor shall indemnify and hold Lessee, its agents and employees harmless
with respect to, remediation of Hazardous Materials

 50
 

 

identified in Exhibit “I”
which are at the Premises prior to the Commencement Date.

Section 17.23  Modifications Required by Lessor’s Lender.  If any lender of Lessor requires a
modification of this Lease that will not increase Lessee’s cost or expense or
materially and adversely change Lessee’s rights and obligations, this Lease
shall be so modified and Lessee shall execute whatever documents are required
by such lender and deliver them to Lessor within ten (10) days after the
request.

Section 17.24
Brokers.  Lessor and
Lessee each represents to the other that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease, except
for the real estate brokers or agents identified on the signature page hereof (“Brokers”)
and that they know of no other real estate broker or agent who is entitled to a
commission or finder’s fee in connection with this Lease. Each party shall
indemnify, protect, defend, and hold harmless the other party against all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including reasonable attorney fees) for any leasing commission,
finder’s fee, or equivalent compensation alleged to be owning on account of the
indemnifying party’s dealings with any real estate broker or agent other than
the Brokers. The terms of this Section 17.24 shall survive the expiration or
earlier termination of the Lease Term.

Section 17.25  Not an Offer by Lessor; Effectiveness of
Lease.  The submission
of this Lease to Lessee shall be for examination purposes only and shall not
constitute an offer to or option for Lessee to lease the Premises. Execution of
this Lease by Lessee and its return to Lessor shall constitute an offer by
Lessee to lease the Premises but not be binding upon Lessor, notwithstanding
any time interval, unless and until Lessor has, in fact, executed and delivered
this Lease to Lessee, it being intended that this Lease shall only become
effective upon execution by Lessor and delivery of a fully executed counterpart
to Lessee.

Section 17.26  Acknowledgment of Notices.  Lessor has provided and Lessee hereby
acknowledges receipt of the Notices attached as Exhibits J and K hereto,
concerning the presence of certain uses and operations of neighboring parcels
of land.

 51

Section 17.27 List of Exhibits.

REF. PAGE

	
  EXHIBIT A:

  	
   

  	
  Real Property Legal Description, Site Plan, and
  Building Elevations

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B:

  	
   

  	
  Plans and Specifications for Shell Building

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C:

  	
   

  	
  Work Letter Agreement for Tenant Improvements and
  Interior Specification Standards

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D:

  	
   

  	
  Cost Responsibilities of Lessor and Lessee

  
	
   

  	
   

  	
   

  
	
  EXHIBIT E:

  	
   

  	
  Memorandum of Commencement of Lease Term and
  Schedule of Base Rent

  
	
   

  	
   

  	
   

  
	
  EXHIBIT F:

  	
   

  	
  SNDA

  
	
   

  	
   

  	
   

  
	
  EXHIBIT G:

  	
   

  	
  Signage Exhibit

  
	
   

  	
   

  	
   

  
	
  EXHIBIT H:

  	
   

  	
  Guaranty of Lease [Intentionally Omitted]

  
	
   

  	
   

  	
   

  
	
  EXHIBIT I:

  	
   

  	
  Hazardous Materials Disclosure

  
	
   

  	
   

  	
   

  
	
  EXHIBIT J:

  	
   

  	
  Notice to Tenants

  
	
   

  	
   

  	
   

  
	
  EXHIBIT K:

  	
   

  	
  Notice to Tenants

  
	
   

  	
   

  	
   

  
	
  EXHIBIT L:

  	
   

  	
  Rules and Regulations

  
	
   

  	
   

  	
   

  
	
  EXHIBIT M:

  	
   

  	
  Letter of Credit

  

 

 52
 

LESSOR AND LESSEE EACH
HAS CAREFULLY READ AND HAS REVIEWED THIS LEASE AND BEEN ADVISED BY LEGAL
COUNSEL OF ITS OWN CHOOSING AS TO EACH TERM AND PROVISION CONTAINED HEREIN AND,
BY EXECUTION OF THIS LEASE, SHOWS ITS INFORMED AND VOLUNTARY CONSENT
THERETO.  EACH PARTY HEREBY AGREES THAT,
AT THE TIME THIS LEASE IS EXECUTED, THE TERMS AND CONDITIONS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.

Executed at San Jose,
California, as of the reference date.

	
  LESSOR:

  	
  ADDRESS:

  
	
   

  	
   

  
	
  PACIFIC SHORES DEVELOPMENT, LLC,

  	
   

  
	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:   TECHNOLOGY
  LAND, LLC,

  	
  c/o Jay Paul Company 

  
	
  a Delaware limited
  liability company

  	
  353 Sacramento Street, Suite 1740

  
	
   

  	
  San Francisco, California 94111 

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jay Paul

  	
   

  	
   

  
	
  Jay Paul,
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Thomas G. Perkins, Esq.

  99 Almaden Boulevard., 8th Floor 

  San Jose, California 95113 

  Telephone: (408) 993-9911 

  Facsimile: (408) 286-3312

  
	
   

  	
   

  
	
  LESSEE:

  	
  ADDRESS:

  
	
   

  	
   

  
	
  NUANCE COMMUNICATIONS, INC.,

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
  (Before Commencement Date)

  
	
   

  	
   

  
	
  By:

  	
  /s/ Graham V. Smith

  	
   

  	
  Pacific Shores Center

  
							

 

 53
 

 

	
  

  	
   

  
	
   

  	
  Graham V. Smith

  	
   

  	
  Building 4 

  
	
     (type or print name)

  	
  Redwood City, California

  
	
  Its:

  	
  V.P. and C.F.O.

  	
   

  	
  (After Commencement Date)

  
					

 

 54
 

BROKER
EXECUTION

By
signing below, the indicated real estate broker or agent is not being made a
party hereto, but is signifying its agreement with the provisions hereof
concerning brokerage.

	
  LESSOR’S BROKER:

  	
  ADDRESS:

  
	
   

  	
   

  
	
  CORNISH & CAREY COMMERCIAL

  	
  2804 Mission College Boulevard 

  
	
   

  	
  Suite 120 

  
	
   

  	
  Santa Clara, California 95054

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (type or print
  name)

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  LESSEE’S BROKER:

  	
  ADDRESS:

  
	
   

  	
   

  
	
  CRESA PARTNERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (type or print
  name)

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  

 

 55
 

EXHIBIT A

TO

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

TO

 

 

 

 

NUANCE COMMUNICATIONS, INC.

a Delaware corporation

as

LESSEE

 

 

for

 

 

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California

 

REAL
PROPERTY LEGAL DESCRIPTION,

SITE PLAN AND BUILDING ELEVATIONS

(See Attached)

 56
 

 

EXHIBIT B

TO

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

TO

NUANCE COMMUNICATIONS, INC.

a            
corporation

as

LESSEE

 

for

 

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California

SHELL
BUILDING PLANS AND SPECIFICATIONS

(To be provided)    

[intial illegible]

 

NOTE:  Shell
Building Plans and Specifications shall be consistent with DES Exterior Skin
Package Progress Printing  dated April
24, 2000.

 

                                                                                                                                                       [intial
illegible]

 57
 

Piping off
owner-installed vertical risers

Specialized caging

Special piping for Tank
Farm (If installed)

Hot water heating system

Cool water system

HVAC units

Duoting controls

Air Tempering System’s

Elevators and elevator
pits (Otis Elevator Lessor Specs)

Mechanical platforms,
screens and associated roof accessories

Stairs

Electrical service
(Lessor to provide exterior conduit)

 

 

 

 

 

 

 

 58
 

EXHIBIT C

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC.

a Delaware corporation 

as 

LESSEE

 

for

 

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

WORK
LETTER AGREEMENT FOR TENANT IMPROVEMENTS 

AND INTERIOR SPECIFICATION STANDARDS

This agreement supplements
the above referenced Lease executed concurrently herewith and is as follows:

1.  Lessee shall devote such time as may be
necessary to complete and obtain, by the respective dates specified in Section
2.04(d) of the Lease, Lessor’s written approval, and approval by appropriate
government authorities, of the final Working Drawings.  The Working Drawings, as they may be modified
or provided herein, shall be prepared by Lessee in accordance with the design
specified by Lessee and approved by Lessor. 
Lessee shall be responsible for the suitability, for Lessee’s needs and
business, of the design and function of all Tenant Improvements.  All improvements to be constructed by Lessor
as shown on the Working Drawings, standard or special, shall be defined as “Tenant
Improvements.”  All Tenant Improvements
materials shall be of a quality equal to or greater than the quality of
materials described on the Interior Specification Standards attached hereto as
Schedule One.

2.  Lessor shall cause General Contractor to complete
the construction of the Tenant Improvements in a good and workmanlike manner
and in substantial accordance with the Working Drawings. Lessor shall not,
however, be responsible for procuring or installing in the Premises any trade
fixtures, equipment, furniture, furnishings, telephone equipment or other
personal property (“Personal Property”) to be used in the Premises by Lessee,
and the cost

 59
 

of such Personal Property
shall be paid by Lessee. Lessee shall conform to all Project standards in
installing any Personal Property and shall be subject to any and all rules of
the site during construction.

3.  Payment for the Tenant Improvements shall be
pursuant to Section 2.04(g) of the Lease.

4.  Lessee shall, by signing the Working Drawings
within the time set forth in Section 2.04 (d) of the Lease, give Lessor
authorization to complete the Tenant Improvements in accordance with such
Working Drawings.  If Lessee shall
request any change, addition or alteration in the approved Working Drawings,
Lessor shall promptly give Lessee a written estimate of the cost of engineering
and design services to prepare a change order (the “Change Order”) in
accordance with such request and the time delay expected because of such
request.  If Lessee, in writing, approves
such written estimate, Lessor shall have the Change Order prepared and Lessee
shall concurrently reimburse Lessor for the cost thereof.  Promptly upon the completion of such Change
Order, Lessor shall notify Lessee in writing of the cost and delay which will be
chargeable to Lessee by reason of such change, addition or deletion.  Lessee shall within three (3) business days
notify Lessor in writing whether it desires to proceed with such change,
addition or deletion, and in the absence of such written authorization, the
Change Order will be deemed canceled and Lessee shall be chargeable with any
delay in the completion of the Premises resulting from the processing of such
Change Order, including the three (3) business day approval period.

5.  If the completion of the Tenant Improvements
in the Premises is delayed (i) at the request of Lessee, (ii) by Lessee’s
failure to comply with the time frames set forth in Section 2.04(d), or (iii)
by changes in the work ordered by Lessee or by extra work ordered by Lessee, or
(iv) because Lessee chooses to have additional work performed by Lessor, then
Lessee shall be responsible for all costs and any expenses occasioned by such
delay including, without limitation, any costs and expenses attributable to
increases in labor or materials; and there shall be no delay in the
commencement of Lessee’s obligation to pay Rent because of Lessor’s failure to
complete the Tenant Improvements on time and any such delay in completion shall
constitute Lessee Delay for purposes of Section 3.01(a) of the Lease.

Each
person executing this Work Letter Agreement certifies that he or she is
authorized to do so on behalf of and as the act of the entity indicated.  Executed as of the reference date of the
Lease, at San Jose (Santa Clara County), California.

	
  PACIFIC SHORES DEVELOPMENT, LLC

  	
  NUANCE COMMUNICATIONS, INC.

  
	
   

  	
  a

  	
   

  	
  corporation

  	
   

  

 

 60
 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Jay Paul

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Manager

  	
   

  	
   

  	
    (Type or print name)

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    (Type
  or print name)

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 61

 

SCHEDULE
ONE

TO

EXHIBIT C

TO

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

TO

NUANCE COMMUNICATIONS, INC.

FOR

Pacific Shores Center

Building 3

Redwood City, California

 

INTERIOR
SPECIFICATION STANDARDS

 

ABBREVIATED
BUILDING STANDARDS

For
Pacific Shores

Note:  The Tenant Improvements shall be Class “A”
and, subject to subsection 2.04(d), their quality must be at a minimum, per the
following standards:

GENERAL OFFICE

CUSTOM CABINETRY

SCOPE:  All materials and labor
for the construction and installation of Cabinetry and all related accessories
per WIC Standards.

A.                                   Trade
Standards: Woodworking Institute of California (WIC) latest edition Section 15
and 16 for plastic laminated casework and plastic laminated countertops. Color
of plastic laminate to be selected by Architect

B.                                     All
cabinetry to be constructed to “Custom-Grade” Specifications. Cabinetry to be
flush overlay construction.

C.                                     Plastic
Laminate:  High Pressure thermoset
laminated plastic surfacing material to equal or surpass NEMA LD3, Nevamar,
WilsonArt or approved equal.

1.                                       Countertops,
shelf-tops, splashes, and edges:  Grade
GP 50, 0.050 inches thick.

2.                                       All
other exposed vertical surfaces:  Grade
GP 28, 0.028 inches thick

3.                                       Semi-exposed
backing sheet:  Grade CL 20, 0.020 inches
thick

 61
 

 

4.                                       Concealed
backing sheet:  Grade BK 20, 0.020 inches
thick

D.                                    Adhesives:  Bond surfaces to Type 11 as recommend by
Plastic Laminate Manufacturer.

E.                                      Hinges:
Heavy-duty concealed self-closing hinges. 
Amount of hinges per Door per WIC. 
Stanley or approved equal

F.                                      Door
and Drawer Pulls: Wire-pull with 4-inch centers; Dull Chrome finish; Stanley
4483 or approved equal.

G.                                     Drawer
slides: Heavy-duty grade with ball-bearings. Stanley, Klein, or approved equal

H.                                    Door
Catches: Heavy-duty commercial friction type.

1.                                       Recessed
Adjustable Shelf Standards: Aluminum or zinc-plated recessed type; Knape &
Vogt with clips or approved equal.

J.                                        Base
and Wall Cabinets including doors: 3/4-inch thick medium density particleboard:

1 .                                    Conceal
all fastenings.

2.                                       Provide
clear spaces as required for mechanical and electrical fittings

3.                                       Plastic
laminate and self-edge all shelves.

4.                                       Provide
3/4-inch thick doors and drawer faces.

5.                                       Unless
indicated otherwise, all shelving to be adjustable.

6.                                       Provide
back and ends on all cabinets.

7.                                       All
exposed cabinet faces to be plastic-laminated.

K.                                    Countertops
and Shelving: 3/4-inch thick medium density particleboard. Backsplash to be 3/4
inches thick, glued and screwed into top with scribed edges. Joints in
countertop to be not closer than 24 inches from sinks. Joints shall be shop
fitted, splined, glued and mechanically fastened.

L.                                      Installation
of Cabinetry shall be per WIC instructions, Custom Grade.

WOOD DOORS

SCOPE:            All materials and
labor necessary for the installation of Wood Doors, required accessories and
preparations for hardware.

A.                                   Non-rated
Wood Doors: 1-3/4 inch thick, flush, solid core, plain sliced Birch veneer with
Birch edge. Cores may be either of the following: Glued block Hardwood Core per
NWMA or Particleboard Core per NWMA. Manufacturer: Algoma, Weyerhaeuser, or
approved equal.

B.                                     Fire-rated
Wood Doors: 1-3/4 inch thick, flush, solid core, plain sliced Birch face veneer
with Birch Edge with mineral core per rating. Manufacturer: Algoma,
Weyerhaeuser, or approved equal. Doors shall have a permanent UL label.

C.                                     Vision
Panels (where applies): Fire rated vision panel where required. Set in square
metal stop to match metal doorstops as provided by doorframe manufacturer.

D.                                    Doors
shall be 8’- 0” x 3’-0” leafs typical.

ALUMINUM DOOR AND WINDOW FRAMES

SCOPE:            All materials and
labor necessary for the installation of Aluminum Door Frames.

A.                                   Frame
Manufacturers:  Raco, or Ragland
Manufacturing Company, Inc.

B.                                     Door
Frames:  Non-rated and 20-minute label,
Raco “Trimstyle” frame with Trim 700 (3/8 inch by 1- 1/2 inch) with no exposed
fasteners.

C.                                     Finish,
Door and Window Frame Extrusions, Wall Trim:

1.                                       Painted
and oven-cured with “Duralaq” finish.

2.                                       Color:  Clear.

3.                                       Finish
shall meet or exceed requirements of AAMA Specifications 603.

4.                                       Coat
inside of frame profile with bituminous coating to a thickness of 1/16 inch
where in contact with dissimilar materials.

 62
 

 

DOOR HARDWARE

SCOPE: All materials and
labor for the installation of all Door Hardware, locksets, closers, hinges,
miscellaneous door hardware.

A.                                   Swinging
Door Lockset and Cylinder:  Schlage “L”
series with lever handle with 6 pin 
cylinder.

B.                                     Keyway:  Furnish blank keyways to match existing
master-key system. Match existing keyways.

C.                                     Finishes:  Satin Chrome, 626 finish. Paint closers to
match.

D.                                    Kickplates:  16 gauge stainless steel; 10 inches high:
width to equal door width less 2 inches.

HARDWARE
SCHEDULE

Hardware Group A  (Typical, rated, single door)

	
  1

  	
   

  	
  Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9050PD

  	
   

  
	
  1-1/2 pair

  	
   

  	
  Butt
  Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1279

  	
   

  
	
  1

  	
   

  	
  Closer

  	
   

  	
  Norton

  	
   

  	
  700
  Series

  	
   

  
	
  1

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  (332
  @ carpet)

  	
   

  
	
  1

  	
   

  	
  Smoke Seal

  	
   

  	
  Pemko

  	
   

  	
   

  	
   

  

 

Hardware Group B  (Typical, rated, closet/service door)

	
  1

  	
   

  	
  Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9080PD

  	
   

  
	
  1-1/2 pair

  	
   

  	
  Butt
  Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1279

  	
   

  
	
  1

  	
   

  	
  Closer

  	
   

  	
  Norton

  	
   

  	
  700
  Series w/ hold-open

  	
   

  
	
  1

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  (332
  @ carpet)

  	
   

  
	
  1

  	
   

  	
  Smoke Seal

  	
   

  	
  Pemko

  	
   

  	
   

  	
   

  

 

Hardware Group C  (Typical, non-rated door)

	
  1

  	
   

  	
  Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9050PD

  	
   

  
	
  1-1/2 pair

  	
   

  	
  Butt Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1279

  	
   

  
	
  1

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  (332 @ carpet)

  	
   

  

 

Hardware Group D  (Typical, non-rated, closet/service door)

	
  1

  	
   

  	
  Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9080PD

  	
   

  
	
  1-1/2 pair

  	
   

  	
  Butt Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1279

  	
   

  
	
  1

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  (332 @ carpet)

  	
   

  

 

Hardware Group E  (Card-access door)

	
  1

  	
   

  	
  Electric Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9080PDGU

  	
   

  
	
  1-1/2 pair

  	
   

  	
  Butt Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1279 - NRP (2 pr @ 8’
  door) 

  	
   

  
	
  1

  	
   

  	
  Electric Butt

  	
   

  	
  Hager

  	
   

  	
  ETW

  	
   

  
	
  1

  	
   

  	
  Closer

  	
   

  	
  Norton

  	
   

  	
  700 Series w/ hold-open

  	
   

  
	
  1

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  331-ES (332 @ carpet) 

  	
   

  

 

Hardware Group F  (Typical, double door)

	
  1

  	
   

  	
  Electric Lockset

  	
   

  	
  Schlage

  	
   

  	
  L9050PD

  	
   

  
	
  3 pair

  	
   

  	
  Butt Hinges

  	
   

  	
  Hager

  	
   

  	
  BB1270

  	
   

  
	
  1

  	
   

  	
  Auto Flush Bolt

  	
   

  	
  Glyn Johnson 

  	
   

  	
  FB-8

  	
   

  
	
  1

  	
   

  	
  Dustproof Strike

  	
   

  	
  Glyn Johnson 

  	
   

  	
  DP2

  	
   

  
	
  2

  	
   

  	
  Closer

  	
   

  	
  Norton

  	
   

  	
  7700 Series

  	
   

  
	
  2

  	
   

  	
  Stop

  	
   

  	
  Quality

  	
   

  	
  331-ES (332 @ carpet)

  	
   

  
	
  1

  	
   

  	
  Astragal

  	
   

  	
  Pemko

  	
   

  	
  355CS

  	
   

  
	
  1

  	
   

  	
  Coordinator

  	
   

  	
  Glyn Johnson 

  	
   

  	
  COR-2

  	
   

  
	
  1

  	
   

  	
  Smoke Seal

  	
   

  	
  Pemko

  	
   

  	
  S88W

  	
   

  

 

 63
 

 

GLAZING

SCOPE:    All materials and labor for the installation
of Glass.

A.                                   Manufacturers:
PPG Industries, or Viracon, Inc. See glazing schedule below.

B.                                     Shop
prepares all glazing. Edges to have no chips or fissures.

C.                                     Glazing
Materials:

1.                                       Safety
Glass:  ASTM C1048, fully tempered with
horizontal tempering, Condition A uncoated, Type 1 transparent flat, Class 1
clear, Quality q3 glazing select, conforming to ANSI Z97.1

2.                                       Mirror
Glass:  Clear float type with copper and
silver coating, organic overcoating, square polished edges, 1/4-inch thick,

3.                                       Wire
Glass: Clear, polished both sides, square wire mesh of woven stainless steel
wire 1/2 inch x 1/2 inch grid; 1/4 inch thick.

4.                                       Tempered
Glass:  1/4 inch thick, no tong marks. UL
rated for 1-hour rating.

5.                                       Spacers:  Neoprene.

6.                                       Tape
to be poly-iso-butylene.

D.                                    Schedule:

1 .                                    Type
A:  1/4-inch thick mirror, annealed, heat
strengthened, or full tempered as required.

2.                                       Type
B:  1/4 inch thick clear float glass,
annealed, heat strengthened, or full tempered as required.

3.                                       Type
C:  1/4-inch thick wire glass plate,
square pattern “Baroque”

 

LIGHT GAUGE METAL FRAMING

SCOPE:  All materials and labor necessary for the
installation of metal framing and related accessories.

A.                                   Structural
Studs:  14 gauge punched channel studs
with knurled screw-type flanges, prime-coated steel.  Manufacturer: United States Gypsum SJ or
approved equal. Submit cut-sheet of material.

B.                                     Partition
Studs:  20 gauge studs with key-hole
shaped punch-outs at 24 inches on center. Manufacturer:  United States Gypsum ST or approved equal.

C.                                     Fasteners
for Structural Studs:  Metal screws as
recommended by metal system manufacturer. 
Weld at all structural connection points.

D.                                    Reinforce
framed door and window openings with double studs at each jamb
(flange-to-flange and weld) and fasten to runners with screws and weld.
Reinforce head with 14 gauge double stud same width as wall.  Screw and weld.

E.                                      Provide
all accessories as required to fasten metal-framing per manufacturers
recommendations.

F.                                      Provide
and install flat-strapping at all structural walls (walls with concrete
footings beneath the walls). Minimum bracing shall be 25 % of structural walls
shall be braced with flat-strapping per Manufacturers recommendations.  Weld at all strap ends and at all
intermediate studs.

G.                                     Provide
foundation clips at 4’-0” on center at structural walls.  Anchor with 1/2 inch diameter by 10 inch long
anchor bolts.

H.                                    Non-structural
interior partitions shall be anchored with power-driven fasteners at 4’-0” on
center at the concrete slab.

 

ACOUSTIC CEILING SYSTEM

SCOPE:            All materials and
labor for the installation of the Acoustic Ceiling System including T-Bar
system, Acoustic Ceiling Panels, Suspension wiring and fastening devices and
Glued-down Ceiling Panels.

 64
 

 

A.                                   Manufacturer:  Armstrong, or approved equal.  Exposed T-bar system; factory painted; steel
construction; rated for intermediate duty.

D.                                    Acoustical
Tile: “Second Look”, conforming to the following:

1 .                                    Size:  24 x 48 inches.

2.                                       Thickness:  3/4 inches.

3.                                       Composition:  Mineral.

4.                                       NRC
Range:  .55 to .60.

5.                                       STC
Range:  35 to 39.

6.                                       Flame
Spread:  ASTME84,0-25. UL Label, 25 or
under.

7.                                       Edge:  Tegular, Lay-in.

8.                                       Surface
Color:  White.

9.                                       Surface
Finish:  Factory-applied washable vinyl
latex paint.

 

G.                                     Installation
to be per ASTM C636 structural testing. Lateral support for each 96 square feet
of ceiling flared at 45 degrees in 4 directions.

H.                                    Provide
clips for panel uplift restraints at all panels, 2 per panel.

 

GYPSUM WALLBOARD

SCOPE:    Provide all materials and labor for the
installation of Gypsum Wallboard including all accessories and finishes.

A.                                   Standard
Gypsum Wallboard:  ASTM C36;.  Ends square cut, tapered edges.

B.                                     Fire
Resistant Gypsum Wallboard:  ASTM C36,
5/8 inches thick Type X.  Ends square
cut, tapered edges.  See Drawings for
locations. 

C.                                     Moisture-resistant
gypsum wallboard:  ASTM C630-90.

D.                                    Joint-reinforcing
Tape and Joint Compound:  ASTM C475, as
manufactured by or recommended by wallboard manufacturer. Minimum 3 coat
application for a smooth finish.

E.                                      Corner
Bead:  Provide at all exposed outside
corners;

F.                                      L-shaped
edge trim:  Provide at all exposed
intersections with different materials.

G.                                     All
work shall be done in accordance with the USG recommended method of
installation.

1.                                       Finish:  smooth.

PAINTING

A.                                   Paint
Manufacturers:  ICI,  Dunn-Edwards Corporation, Kelly Moore.

B.                                     Paint
colors shall be selected by the Architect.

C.                                     Painting
Schedule: Provide for 4 different color applications

1 .                                    P-1:  “Field”. 
Color to be selected.

2.                                       P-2:  “Accent”. 
Color to be selected.

3.                                       P-3:  “Accent”. 
Color to be selected.

4.                                       P-4:  “Accent”. 
Color to be selected.

D.                                    Interior
Gypsum Wallboard:

1.                                       Primer:
Vinyl Wall Primer/Sealer.

2.                                       1
stand 2nd Coat:  Eggshell Acrylic Latex.

E.             Metal Framing:

1.                                       Primer:  Red Oxide, shop-primed (for non-galvanized)
if exposed.

F.             Wood Work, Wood
Doors:

1.                                       Two
coats of transparent finish. Sand lightly between coats with steel wool.

 

INSULATION

A.            R-15 in exterior
walls.

B.            R-25 on Roof.

 65
 

 

C.            Sound batts in
conference, restroom and lobby walls.

 

ROOF EQUIPMENT

A.                                   Stainless
steel mechanical platform and associated access stairs and guard rail system 

B.                                     EIFS
roof screen to match detail of exterior GFRC Panel.

 

FULL HEIGHT GLAZED PARTITION

A.                                   1/4”
glazed partition, in building standard aluminum frame

 

FINISHES

A.                                   Vinyl
Composite Tile:  Armstrong stonetex, 12”
x 12”

B.                                     Resilient
Base:  Burke rubber wall base, 4” top set
or cove, as appropriate for VCT or carpet.

C.                                     Window
Coverings:  Miniblinds, Levelor, color:
TBD

D.                                    Carpet:

	
  Option 1:

  	
   

  	
  Designweave, Windswept Classic 30 oz. (Direct glue installation)
  or equal

  
	
   

  	
   

  	
   

  
	
  Option 2: (cut
  pile)

  Upgrade

  	
   

  	
  Designweave, Tempest Classic 32 oz. (Direct glue Upgrade
  installation) or equal.

  
	
   

  	
   

  	
   

  
	
  Option 3: (cut
  pile)

  Upgrade

  	
   

  	
  Designweave, Sabre Classic, 38 oz. 

  (Direct glue Upgrade installation) or equal.

  

 

KITCHEN FIXTURES

A.                                   Sink:  Ekkay stainless steel, GECR-2521-L&R, 20
gauge, 25”w x 21  1/4” D x 5 3/8” D, ADA
compliant.

B.                                     Kitchen
Faucet:  American Standard, Silhouette
Single control, #4205 series, spout 9 
3/4”.

 

KITCHEN APPLIANCES

A.            Dishwasher:

	
  Option 1:

  	
   

  	
  GE GSD463DZWW, 24’W x 24
  3/4” D x 34-35” H, 9 gallons/wash

  
	
  Option 2:

  	
   

  	
  Bosch, SHU5300
  series, 5.4 gallons/wash-with water heater

  

 

B.                                     Refrigerator:

	
  Full Size:

  	
   

  	
  GE, “S” series top-mount, TBX16SYZ, 16.4 cubic feet,
  recessed, recessed handles, 28” W x 29 1/8” D x 66 3/4” H, white, optional
  factory installed ice-maker.

  

 

Under-counter:

	
  Option 1:

  	
   

  	
  U-Line, #29R, 3.5 cubic feet, white

  
	
  Option 2:

  	
   

  	
  U-Line, Combo 29FF, Frost Free with factory
  installed icemaker, 2.1 cubic feet, white

  

 

C.                                     Microwave:
GE, Spacemaker II JEM25WY, Midsize, 9 cubic feet, 800 watts, 23 13/16” W x 11
13/16”D x 12 5/16” H

 66
 

 

 

 

	
  Option 1:

  	
   

  	
  Under counter Mounting Kit, #4AD19-4

  
	
  Option 2:

  	
   

  	
  Accessory Trim Kit # JXB37WN, 26 1/8” W X 18 1/4” H
  (built-in application)

  

 

D.                                    Garbage
Disposal: ISE #77, 3/4” horsepower

E.                                      Water
Heater: To be selected by DES.

 

PUBLIC SPACES

FRONT BUILDING LOBBY

	
  Walk Off Matts:

  	
   

  	
  Design Materials, Sisel, Calcetta #68. Natural, 100%
  coir

  
	
   

  	
   

  	
   

  
	
  Floor Tile:

  	
   

  	
  3/8” x 18” x 18” Stone or Marble set in mortar bed
  in recessed slab as approved by Owner

  
	
   

  	
   

  	
   

  
	
  Transition
  Strips:

  	
   

  	
  5/16” x 1 1/2” x random length strips, cherry wood
  flooring

  
	
   

  	
   

  	
   

  
	
  Corridor
  Carpeting: 

  	
   

  	
  Carpet over pad, Atlas, New Vista or as approved by
  Owner

  
	
   

  	
   

  	
   

  
	
  Lobby Ceiling:

  	
   

  	
  Suspended gypsum board ceiling, Painted

  
	
   

  	
   

  	
   

  
	
  Building Lobby:

  Pendant Fixture

  	
   

  	
  Akarl shades hanging #J1-9 3/4” x 5’-2” or equal as
  approved by owner.

  
	
   

  	
   

  	
   

  
	
  Stairs & Mezzanine
  Railing:

  	
   

  	
  P & P Railing, Modesto with custom cherry guard
  rail Rep: Oliver Capp (805) 241-8810. Hand and guard railing P & P Railings,
  Modesto stainless steel railing with horizontal spirals and custom cherry
  guard rail cap by others, fittings dark gray metallic or equal as approved by
  Owner.

  

 

BACK BUILDING LOBBY &
EMERGENCY STAIRS

	
  Walk Off Matts:

  	
   

  	
  Design Materials, Sisal, Calcutta #68, Natural, 100%
  coir.

  
	
   

  	
   

  	
   

  
	
  Treads &
  Landings:

  	
   

  	
  Carpet covered concrete, as approved by Owner

  
	
   

  	
   

  	
   

  
	
  Stringers,
  Risers & Handrails

  	
   

  	
  Painted steel stringer, eggshell finish enamel.

  
	
   

  	
   

  	
   

  
	
  Ceiling:

  	
   

  	
  Suspended gypsum board ceiling.

  

 

ELEVATORS

	
  Cars:

  	
   

  	
  (1) 3800 lb, (1) 3500 lb 150 ft/min by Otis

  
	
   

  	
   

  	
   

  
	
  Elevator Doors:

  	
   

  	
  Stainless Steel

  
	
   

  	
   

  	
   

  
	
  Elevator
  Interior Paneling:

  	
   

  	
  Cherry veneer with stainless steel reveals and
  railing

  
	
   

  	
   

  	
   

  
	
  Elevator Floor:

  	
   

  	
  Slate 3/8” x 18” x 18” tile as approved by Owner.

  

 

 67
 

 

 

RESTROOMS

	
  Counter tops:

  	
   

  	
  Stone/marble or equal as approved by Owner

  
	
   

  	
   

  	
   

  
	
  Walls at
  Lavatories:

  	
   

  	
  Eggshell finish, latex paint, Benjamin Moore

  
	
   

  	
   

  	
   

  
	
  Floor at
  Toilets:

  	
   

  	
  2” x 2” matte porcelain ceramic floor tiles, thin
  set, Dal-tile.

  
	
   

  	
   

  	
   

  
	
  Walls at
  Toilets:

  	
   

  	
  2” x 2” matte porcelain ceramic floor tiles, thin
  set, Dal-tile.

  
	
   

  	
   

  	
   

  
	
  Ceiling:

  	
   

  	
  Suspended gypsum board ceiling.

  

 

Toilet compartments:

A.                                   Manufactured
floor-anchored metal toilet compartments and wall-hung urinal screens.

B.                                     Approved
Manufacturer, Global Steel Products Corp, or approved equal. 

C.                                     Toilet
Partitions: Stainless Steel finish.

D.                                    Hardware:
Hinges: Manufacturer’s standard self-closing type that can be adjusted to hold
door open at any angle up to 90 degrees. Latch and Keeper: Surface-mounted
latch unit, designed for emergency access, with combination rubber-faced door
strike and keeper. Coat Hook: Combination hook and rubber-tipped bumper. Door
Pull: Manufacturer’s standard.

 

Ceramic Tile

A.                                   Manufacturer:  Dal-Tile or approved equal.

B.                                     Size:
4-1/4” x 4-1/4” for walls, 8 x 8 for floors, 3/4” liner strip as accent.

C.                                     Glaze:  Satin glaze for walls, unglazed tile for floors.

D.                                    Color:  As selected by Architect.

E.                                      Accessories:  Base, corners, coved cap and glazed to match

F.                                      Wall
and floor installation:  per applicable
TCA

G.                                     Waterproof
Membrane: Chloraloy or approved equal. 

H.                                    Tile
Backer Board:  1/2 inch thick wonderboard

I.                                         Grout:  Commercial Portland Cement Grout; Custom
Building Products or approved equal

J.                                        Mortar:
Latex-Portland cement mortar; Custom Building Products or approved equal.

 

RESTROOM:

	
  Toilet:

  	
   

  	
  Kohler/American Standard, commercial quality.

  
	
   

  	
   

  	
   

  
	
  Urinal:

  	
   

  	
  Kohler/American Standard, commercial quality.

  
	
   

  	
   

  	
   

  
	
  Lavatory:

  	
   

  	
  Kohler/American Standard, undercounter.

  
	
   

  	
   

  	
   

  
	
  Lavatory Faucet:

  	
   

  	
  Kroin handicap lavatory faucet #HV1LH, polished
  chrome.

  
	
   

  	
   

  	
   

  
	
  Soap Dispenser Counter:

  	
   

  	
  Bobrick, 8226, Lavatory mounted for soaps, 34 fl oz.

  

 

Toilet accessories:

A.                                   Manufacturer:
Bobrick Washroom Equipment, or approved equal.

B.                                     Schedule:
Model numbers used in this schedule are Bobrick (134) unless otherwise noted.

 68
 

 

C.                                     Combination
Paper Towel Dispenser/Waste Receptacle: Recessed, Model B-3944, one per
restroom #7151 and 7152, and two per restroom #7050 and 7061.

D.                                    Feminine
Napkin Vendor: Recessed, combination napkin/tampon vendor, Model B-3500, with
25 cent operation, one per each women’s toilet room. 

E.                                      Soap
Dispenser: Lavatory mounted dispenser, Model B-822, one per each lavatory.

F.                                      Toilet
Paper Dispenser: Surface-mounted, Model JRT, JR Escort, “In-Sight” by Scott
Paper Company, one per stall.

G.                                     Toilet
Seat Cover Dispenser: Recessed, wall-mounted, Model B-301, one per stall.

H.                                    Sanitary
Napkin Disposal: Recessed, wall-mounted, Model B-353, one per each women’s
handicapped and odd stall.

I.                                         Sanitary
Napkin Disposal: Partition-mounted, Model B-354 (serves two stalls).

J.                                        Grab
Bars: Horizontal 36”, B6206-36: 42”, B62-6-42: one per each handicapped stall.

K.                                    Mop/Broom
Holders: B223-24 (one per janitor closet).

L.                                      Paper
Towel Dispensers: Recessed mounted, Model B-359, one at side wall adjacent to
sink.

 

TENANT CORRIDORS

	
  Walls:

  	
   

  	
  Eggshell finish, latex paint, Benjamin Moore.

  
	
   

  	
   

  	
   

  
	
  Floors:

  	
   

  	
  Level loop carpet over pad with 4” resilient base as
  approved by Owner.

  
	
   

  	
   

  	
   

  
	
  Ceiling:

  	
   

  	
  24” x 24” x 3/4” thick fine fissured type mineral
  fiber, Armstrong Cirus acoustical tile (beveled regular edge) in a 24” x 24”
  Donn Fineline suspended grid, white finish.

  
	
   

  	
   

  	
   

  
	
  Water Fountain:

  	
   

  	
  Haws Model #1114 Stainless Steel #4.

  
	
   

  	
   

  	
   

  
	
  Cross Corridor

  Smoke Detector:

  	
   

  	
  3’-6” x full height, 20 minute rated, pocket
  assembly, on magnetic hold opens.

  
	
   

  	
   

  	
   

  
	
  Corridor

  Wall Sconce

  	
   

  	
  Carpyen “Berta” 35cm x 33 cm, engraved curved opaque
  glass, 2 x 7-9W, #G-23.or equal as approved by owner

  

 

ELECTRICAL

A.                                   50
foot candles at working surface.

B.                                     3
Bulb 2x4 parbolic fixtures

C.                                     1/2
20 Amp circuit for each hard wall office

D.                                    Electrical
Devices:   Recessed wall mounted devices
with plastic cover plate. Color: white, multi-gang plate 80400 Series duplex
wall outlets.

E.                                      Telephone/Data
Outlets:  Recessed wall mounted, Standard
2x4 wall box with 3/4” EMT conduit from box to sub out above ceiling walls pull
string, cabling, terminations and cover-plates, color:  white, provided by tenant’s vendor.  Tenant shall furnish telephone backboard.

F.                                      Light
Switches:  Dual level rocker type,
mounted at standard locations, with plastic cover plate, 5325-W cover plate
single switch B0401-W, double switch B0409-W. Decors by Leviton, colors: white,
and will comply with Title 24 Energy Codes. 
Decors by Leviton.

 

 69
 

 

MECHANICAL

A.                                   VAV
Reheat system - design/build. Each floor to have a minimum of thirty zones.
Provide reheat boxes on all zones on top floor and at all exterior zones on
lower floor. System shall meet T-24 for ventilation.. Design shall be for 73
deg. Ambient interior temperature and 2 1/2 watts per sq. ft. min.

 

FIRE SPRINKLER SYSTEM

As required by NFPA &
factory mutual standard hazard, seismically braced.

END

 70

 

EXHIBIT D

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation

as

LESSEE

for

PREMISES 

at

Pacific Shores Center 

Building 3 

Redwood City, California

COST RESPONSIBILITIES OF LESSOR AND LESSEE 

FOR SHELL TENANT IMPROVEMENTS

A.    Lessor is responsible for the construction
of the building shell improvements which shall include the following items:

Soils Engineer 

Civil Engineer 

Architectural and Structural Engineer 

Landscaping

Empty Electrical Conduits
will be provided from the street to the future electrical room for a 2500 Amp.
Service 277/480 volt service capability for each building . The electrical
conduits will be stubbed up above the floor level.

Lessor to provide two vertical risers for fire sprinklers. 

Testing and Inspection for the shell. 

Building Permits for the Shell and exterior Premises.

 71
 

 

Utility Connection Fee
(Fire Protection). 

Area Fees 

Construction Insurance 

Construction Interest 

Construction Taxes 

Land Interest (if any) 

Temporary Facilities 

All site work to include: 

Site clearing and grading

Excavating/Fill 

Soil compaction 

Site drainage 

Site utilities 

Paving 

Curbs and gutters 

Sidewalks 

Parking lot lights 

Curb painting and parking lot striping and markings as required by the City. 

Fences, to include
special enclosures for trash 

Irrigation System 

Lawns and planting 

Building Shells to include: 

Concrete Formwork 

Concrete Reinforcement (if used) 

Cast in pace concrete (if used) 

Metal decking (if used) 

Metal framing (if used) 

Rough carpentry as related to shell 

Millworks as related to Shell 

Glue-Lam structure (if used) 

Building roof installation 

Roofing tiles 

Flashing 

Drainage Systems for Roof 

Roof Pitch Pans 

Caulking/Sealants 

Exterior Metal Door/Frames related to the Shell 

Wood or Glass Doors as designated as related to the 

Exterior Shell 

Overhead Doors 

Anodized Aluminum Windows 

Finish Hardware as related to the Shell Doors 

Glass Glazing as specific on plans 

Storefront if desired 

Gutters over front and rear entrances

 72
 

 

Exterior Loading Docks as specific on plans 

Water Supply stubbed to the ground floor (first floor of each Building only) 

Roof drainage 

Gas piping to face of building at First Floor 

Telephone and computer conduits between Buildings 

All Government fees applying to the exterior premises and shell.

B.      The following shall be considered interior
improvements costs and shall be the responsibility of the Lessee subject to the
tenant improvement allowance as provided in the Lease:

Interior Building Permits 

Gypsum drywall 

Ceramic Tile or elate Tile in Lobbies 

Quarry Tile as specified 

Flag Pole 

Meal door framing 

All interior Wood doors and Hardware 

Custom Woodwork 

Specialized Security construction 

Interior Glass doors 2nd windows 

Acoustical Treatment (suspended ceiling) 

Resilient flooring 

Any special flooring 

Carpeting 

Sprayed fire proofing if required by the code on structural 

Steel and metal deck surfaces 

Lift and Lift Operator 

Interior Painting 

Wall Coverings including Ceramic Tiles 

Grease Interceptor if required 

Drapery, Blinds or Shades 

Pedestal floors 

Toilet Compartments 

Demountable partitions 

Firefighting devices (Extinguishers) 

Toilet and bath accessories 

Lift (Dock levelers) 

Plumbing fixtures, trims and vertical piping 

Interior electrical distribution 

Lighting 

Electrical controls 

Electrical Power Equipment 

Built in Audio-Visual facilities 

Built-in Projection screens 

Water Treatment Discharge

 73
 

 

Sinks in Coffee Rooms 

Lunch Room plumbing for vending machines 

Specialized security systems 

Specialized Halon Fire Extinguishing systems 

Fire sprinkler head drops and horizontal distribution 

Piping off owner-installed vertical risers 

Specialized caging 

Special piping for Tank Farm (If installed) 

Hot water heating system 

Cool water system 

HVAC units 

Ducting controls 

Air Tempering Systems 

Elevators and elevator pits (Otis Elevator Lessor Specs) 

Mechanical platforms, screens and associated roof accessories 

Stairs 

Electrical service (Lessor to provide exterior conduit)

 74
 

 

EXHIBIT E

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation

as

LESSEE

for

PREMISES 

at

Pacific Shores Center 

Building 3 

Redwood City, California

 

MEMORANDUM

OF 

COMMENCEMENT OF LEASE TERM

Pursuant to
Article III, Section 3.01, paragraph (a) of the above-referenced Lease, the
parties to said Lease agree to the following:

1.     The Commencement Date of
the Lease is                 ,
2001 and the Lease Term commenced on said date. The Expiration Date for the
initial Lease Term is               ,
2013. 

2.               The date for
commencement of rent for the Building is              ,
2001. 

3.               Attached hereto as
a part hereof is a true and correct schedule of Base Rent. 

4.               The total Rentable
Area of the Building is                  
(   ) rentable square feet.

 

Each person executing this Memorandum certifies that
he or she is authorized to do so on behalf of and as the act of the entity
indicated. Executed as of                       ,
2000, at Redwood City (San Mateo County), California.

	
  PACIFIC SHORES DEVELOPMENT,
  LLC

  	
   

  	
  NUANCE COMMUNICATIONS, INC. 

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Jay Paul

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Manager

  	
   

  	
   

  	
   

  	
  (Type or print
  name)

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 75
 

 

 

	
  

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Type or print
  name)

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  

 

 76
 

 

 

EXHIBIT F

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation

as

LESSEE

for

PREMISES 

at

Pacific Shores Center 

Building 3 

Redwood City, California

SNDA

(See Construction
and Permanent SNDA Samples Attached)

 77
 

 

ARTICLE
XVIII

RECORDING REQUESTED AND 

WHEN RECORDED RETURN TO:

[***]

SUBORDINATION,
ACKNOWLEDGMENT OF LEASE ASSIGNMENT,

NONDISTRUBANCE AND ATTORNMENT AGREEMENT

AND
ESTOPPEL CERTIFICATE

(Lease to
Deed of Trust)

NOTICE:   THIS
SUBORDINATION AGREEMENT RESULTS IN YOUR LEASE BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF THE DEED OF TRUST (DEFINED BELOW).

THIS AGREEMENT AND CERTIFICATE
is made this         day of                ,
2000, between DRESDNER BANK AG, NEW YORK BRANCH AND GRAND
CAYMAN BANK, a national banking association (“Lender”)
and                                 ,
a                            
(“Tenant”).

Recitals

A.                                            
(“Landlord”), is the owner of real
property (“Property”) located in                                 
County, California, and legally described on Exhibit A.

B.            Tenant
is a tenant of a portion of the Property (“Premises”)
under a lease (“Lease”) with Landlord dated                            .

C.            Lender
has agreed to make a loan (“Loan”) to
Landlord.  In connection therewith,
Landlord has executed or proposes to execute, a Construction Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing (“Deed of Trust”) encumbering the Property and securing, among
other things, a promissory note (“Note”) in the
principal sum of TWO HUNDRED FIFTY MILLION AND NO/100 DOLLARS ($250,000,000.00),
of even date herewith, in favor of Lender, which Note is payable with interest
and upon the terms described therein. 
The Deed of Trust is to be recorded concurrently herewith.

 78
 

 

D.            The
Deed of Trust constitutes a present assignment to Lender of all right, title,
and interest of Landlord under the Lease.

E.             Lender’s
agreement to make the Loan is conditioned on Tenant’s specific and
unconditional subordination of the Lease to the lien of the Deed of Trust such
that the Deed of Trust at all times remains a lien on the Property, prior and
superior to all the rights of Lessee under the Lease, and Tenant’s agreement to
attorn to Lender if Lender obtains possession of the Property by foreclosure or
deed in lieu of foreclosure. Tenant is willing to do so in consideration of the
benefits to Tenant from the Loan and the Lease and Lender’s agreement not to disturb
Tenant’s possession of the Premises under the Lease.

NOW, THEREFORE,
Lender and Tenant agree as provided below.

1.             Subordination.  Tenant
hereby intentionally and unconditionally subordinates the Lease and all of
Lessee’s right, title and interest thereunder and in and to the Property to the
lien of the Deed of Trust and all of Lender’s rights thereunder, including any
and all renewals, modifications and extensions thereof and agrees that the Deed
of Trust and any and all renewals, modifications and extensions thereof shall
unconditionally be and at all times remain in lien on the Property prior and
superior to the Lease.  Without limiting
the generality of the foregoing, such subordination shall include all rights of
Tenant in connection with any insurance or condemnation proceeds with respect
to the Premises or Property.

2.             Acknowledgment. Tenant understands that Lender would not
make the Loan without this Agreement and the subordination of the Lease to the
lien of the Deed of Trust as set forth herein and that in reliance upon, and in
consideration of, this subordination, specific loans and advances are being and
will be made by Lender and, as part and parcel thereof, specific monetary and
other obligations are being and will be entered into which would not be made or
entered into but for reliance upon this subordination. This Agreement is and
shall be the sole and only agreement with regard to the subordination of the
Lease to the lien of the Deed of Trust and shall supersede and cancel, but only
insofar as would affect the priority between the Deed of Trust and the Lease,
any prior agreement as to such subordination, including, without limitation,
those provisions, if any, contained in the lease which provide for the
subordination of the Lease to a deed or deeds of trust or to a mortgage or
mortgages.

3.             Use of Proceeds. Lender, in making disbursements pursuant to
the Note, the Deed of Trust or any loan agreement with respect to the property,
is under no obligation or duty to, nor has Lender represented that it will, see
to the application of such proceeds by the person or persons to whom Lender
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in such agreement or agreements shall
not defeat this agreement to subordinate in whole or in party.

4.             Nondisturbance. Lender agrees that Tenant’s possession of
the Premises shall not be disturbed by Lender during the tem of the Lease, and
Lender shall not join Tenant in any action or proceeding for the purpose of
terminating the Lease, except upon the occurrence of a default by Tenant under
the Lease and the continuance of such default beyond any cure period given to
Tenant under the Lease.

 79

 

5.             Attornment.  If Lender obtains possession of the Property
by foreclosure or deed in lieu of foreclosure, Tenant shall attorn to Lender,
be bound to Lender in accordance with all of the provisions of the Lease for
the balance of the term thereof, and recognize Lender as the landlord under the
Lease for the unexpired term of the Lease. 
Such attornement shall be effective without Lender being (i) subject to
any offsets or defenses, or otherwise liable, for any prior act or omission of
Landlord, (ii) bound by any amendment, modification, or waiver of any of the
provisions of the Lease, or by any separate agreement between Landlord and
Tenant relating to the Premises or Property, unless any such action was taken
with the prior written consent of Lender, (iii) liable for the return of any
security or other deposit unless the deposit has been paid to Lender, (iv)
bound by any payment of rent or other monthly payment under the Lease made by
Tenant more than one (1) month in advance of the due date, or (v) bound by any
option, right of first refusal, or similar right of Tenant to lease any portion
of the Property (other than the Premises) or to purchase all or any portion of
the Property.  Lender’s obligations as
landlord under the Lease after obtaining possession of the Property by
foreclosure or deed in lieu of foreclosure shall terminate upon Lender’s
subsequent transfer of its interest in the Property.

6.             Termination
of Lease.  Notwithstanding any
other provision of this Agreement, in the event Lender obtains ownership of the
Property by foreclosure or deed in lieu of foreclosure and the Lease requires
the landlord to construct any improvements on the Premises or Property, the
Lease shall terminate unless (i) Lender delivers written notice to Tenant
expressly assuming such obligation within ten (10) days after the foreclosure
sale or acceptance of the deed in lieu of foreclosure, or (ii) Tenant waives
such obligation by delivery of written notice to Lender within ten (10) days
after receiving notice of the foreclosure or deed in lieu of foreclosure.

7.             Covenants of
Tenant.  Tenant covenants and
agrees with Lender as follows:

(a)           Tenant shall pay to
Lender all rent and other payments otherwise payable to Landlord under the
Lease upon written demand from Lender. 
The consent and approval of Landlord to this Agreement shall constitute
an express authorization for Tenant to make such payments to Lender and a
release and discharge of all liability of Tenant to Landlord for any such
payments made to Lender.

(b)           Tenant shall enter into
no material amendment or modification of any of the provisions of the Lease
without Lender’s prior written consent.

(c)           Tenant shall not
subordinate its rights under the Lease to any other mortgage, deed of trust, or
other security instrument without the prior written consent of Lender.

(d)           In the event the Lease
is rejected or deemed rejected in any bankruptcy proceeding with respect to
Landlord, Tenant shall not exercise its option to treat the Lease as terminated
under 11 U.S.C. (S) 365(h), as amended.

 80
 

 

(e)           Tenant shall not accept
any waiver or release of Tenant’s obligations under the Lease by Landlord, or
any termination of the Lease by Landlord, without Lender’s prior written
consent.

(f)            Tenant shall promptly
deliver written notice to Lender of any default by Landlord under the Lease.
Lender shall have the right to cure such default within thirty (30) days after
the receipt of such notice. Tenant further agrees not to invoke any of its
remedies under the Lease until the thirty (30) days have elapsed, or during any
period that Lender is proceeding to cure the default with due diligence, or is
attempting to obtain the right to enter the Premises and cure the default.

8.             Effect of
Assignment. Notwithstanding that Landlord has made a present assignment
of all of its rights under the Lease to Lender, Lender shall not be liable for
any of the obligations of Landlord to Tenant under the Lease until Landlord has
obtained possession of the Property by foreclosure or deed in lieu of
foreclosure, and then only to the extent provided in paragraph 3 above.

9.             Estoppel
Certifications. Tenant hereby certifies and represents to Lender as
provided below.

(a)           The Lease constitutes
the entire agreement between Landlord and Tenant relating to the premises and the
Property.

(b)           The Lease is in full
force and effect, and has not been amended, modified, or assigned by Tenant,
either orally or in writing.

(c)           No payments to become
due under the Lease have been paid more than one (1) month in advance of the
due date.

(d)           Tenant has no present
claim, offset or defense under the Lease, and Tenant has no knowledge of any
uncured breach or default by Landlord or Tenant under the Lease or of any event
or condition which, with the giving of notice or the passage of time or both,
would constitute a breach or default under the lease.

(e)           Tenant has no knowledge
of any prior sale, transfer, assignment, hypothecation or pledge of Landlord’s
interest under the Lease or of the rents due under the Lease.

(f)            Except as otherwise
provided in the Lease, Tenant has made no agreements with Landlord concerning
free rent, partial rent, rebate of rental payments, setoff, or any other type
of rental concession.

10.           Costs and
Attorneys’ Fees.  In the event
of any claim or dispute arising out of this Agreement, the party that
substantially prevails shall be awarded, in addition to all other relief, all
attorneys’ fees and other costs and expenses incurred in connection with such
claim or dispute;  including without
limitation those fees, costs, and expenses incurred before or after suit,

 81
 

 

and in any arbitration,
and any appeal, any proceedings under any present or future bankruptcy act or
state receivership, and any post-judgment proceedings.

11.           Notices.  All notices to be given under this Agreement
shall be in writing and personally delivered or mailed, postage prepaid,
certified or registered mail, return receipt requested, to Lender at the
address indicated on the first page of this Agreement, and to Tenant at its
address indicated below. All notices which are mailed shall be deemed given
three (3) days after the postmark thereof. Either party may change their
address by delivery of written notice to the other party.

12.           Miscellaneous.  This agreement may not be modified except in
writing and executed by the parties hereto or their successors in
interest.  This agreement shall inure to
the benefit of and by binding upon the parties hereto and their successors and
assigns.  As used herein “Landlord” shall
include Landlord’s predecessors and successors in interest under the Lease, and
“Lender” shall include any purchaser of the Property at any foreclosure
sale.  All rights of Lender herein to
collect rents on behalf of Landlord under the Lease are cumulative and shall be
in addition to any and all other rights and remedies provided by law and by
other agreements between Lender and Landlord or others. If any provision of
this Agreement is determined to be invalid, illegal or unenforceable, such
provision shall be considered severed from the rest of this Agreement and the
remaining provisions shall continue in full force and effect as if such
provision had not been included.  This
Agreement shall be governed by the laws of the State of California.  This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same original.

DATED this                  day
of                                    ,
2000.

NOTICE:                       THIS
SUBORDINATION AGREEMENT RESULTS IN YOUR LEASE BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF THE DEED OF TRUST (DEFINED ABOVE). IT IS RECOMMENDED
THAT, PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE PARTIES CONSULT WITH THEIR
ATTORNEYS WITH RESPECT HERETO.

	
   

  	
  “LENDER”

  
	
   

  	
   

  
	
   

  	
  DRESDNER BANK AG, NEW YORK BRANCH AND GRAND
  CAYMAN BANK, AS ADMINISTRATIVE AGENT.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

 82
 

 

 

	
  

  	
  “TENANT”

  
	
   

  	
   

  
	
   

  	
                                                                 ’

  a                                                              

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  CONSENTED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
  “LANDLORD”

  	
   

  
	
   

  	
   

  
	
  PACIFIC SHORES DEVELOPMENT, LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WDLJ PACIFIC SHORES
  ASSOCIATES, LLC,

  	
   

  
	
   

  	
   

  	
  a Delaware
  limited liability company, a member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Walton Street Real Estate Fund II, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware limited partnership, a managing member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Walton Street Managers II, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware limited partnership, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  WSC Managers II, Inc.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Witnesses:

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Walton Street Real Estate Fund III, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware limited partnership, a managing member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Walton Street Managers III, L.P.,

  
	
   

  	
   

  	
   

  	
  a Delaware limited partnership, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  WSC Mangers III, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  a Delaware corporation, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Witnesses:

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
																					

 

ALL SIGNATURES
MUST BE ACKNOWLEDGED

 83
 

 

 

 

SCHEDULE
TWO

TO

EXHIBIT F

TO

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

TO

NUANCE COMMUNICATIONS, INC.

a Delaware corporation

as

LESSEE

for

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California

SNDA

(See Construction
and Permanent SNDA Samples Attached)

 84
 

 

SUBORDINATION,
NON-DISTURBANCE

AND
ATTORNEMENT AGREEMENT

THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) made
as of the              
day of               ,
2000, by and among Nomura Asset Capital Corporation (“Lender”),                                    
(“Tenant”) and                                    
(“Landlord”).

W I T N E S S E T H:

WHEREAS, Lender
has agreed to make a loan (the “Loan”) of up to                       
to Landlord;

WHEREAS, the Loan
will be evidenced by a deed of trust note (the “Note”) of even date herewith
made by Landlord to order of Lender and will be secured by, among other things,
a deed of trust, assignment of leases and rents and security agreement (the “Deed
of Trust”) of even date herewith made by Landlord to Lender covering the land
(the “Land”) described on Exhibit A attached hereto and all improvements (the “Improvements”)
now or hereafter located on the land (the Land and the Improvements hereinafter
collectively referred to as the “Property”); and

WHEREAS, by a
lease dated as of                        
(which lease, as the same may have been amended and supplemented, is
hereinafter called the “Lease”), Landlord leased to Tenant approximately         
square feet of space located in the Improvements (the “Premises”); and

WHEREAS, the
parties hereto desire to make the Lease subject and subordinate to the Deed of
Trust.

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

1.             The Lease, as the
same may hereafter be modified, amended or extended, and all of Tenant’s right,
title and interest in and to the Premises and all rights, remedies and options
of Tenant under the Lease, are and shall be unconditionally subject and
subordinate to the Deed of Trust and the lien thereof, to all the terms,
conditions and provisions of the Deed of Trust, to each and every advance made
or hereafter made under the Deed of Trust, and to all renewals, modifications,
consolidations, replacements, substitutions and extensions of the Deed of
Trust, so that at all times the Deed of Trust shall be and remain a lien on the
Property prior and superior to the Lease for all purposes; provided, however,
and Lender agrees, that so long as (A) no event has occurred and no condition
exists, which would entitle Landlord to terminate the Lease or would cause,
without further action of Landlord, the termination of the Lease or would
entitle Landlord to dispossess Tenant from the Premises, (B) [***] (C) the
Lease shall be in full force and effect and shall not have been otherwise
modified or supplemented in any way without Lender’s prior written

 85
 

 

consent, (D) Tenant shall
duly confirm its attornment to Lender or its successor or assign by written
instrument as set forth in Paragraph 3 hereof, (E) neither Lender nor its
successors or assigns shall be liable under any warranty of construction
contained in the Lease or any implied warranty of construction, and (F) all
representations and warranties made herein by Tenant shall be true and correct
as of the date of such attornement; then, and in such event Tenant’s leasehold
estate under the Lease shall not be terminated, Tenant’s possession of the
Premises shall not be disturbed by Lender and Lender will accept the
attornement of Tenant.

2.             Notwithstanding
anything to the contrary contained in the Lease, Tenant hereby agrees that in
the event of any act, omission or default by Landlord or Landlord’s agents,
employees, contractors, licensees or invitees which would give Tenant the
right, either immediately or after the lapse of a period of time, to terminate
the Lease, or to claim a partial or total eviction, or to reduce the rent
payable thereunder or credit or offset any amounts against future rents payable
thereunder, Tenant will not exercise any such right (i) until it has given
written notice of such act, omission or default to Lender by delivering notice
of such act, omission or default, in accordance with Paragraph 8 hereof, and
(ii) until a period of not less than sixty (60) days for remedying such act,
omission or default shall have elapsed following the giving of such notice.
Notwithstanding the foregoing, in the case of any default of Landlord which
cannot be cured within such sixty (60) day period, if Lender shall within such
period proceed promptly to cure the same (including such time as may be
necessary to acquire possession of the Premises if possession is necessary to
effect such cure) and thereafter shall prosecute the curing of such default
with diligence, then the time within which such default may be cured by Lender
shall be extended for such period as may be necessary to complete the curing of
the same with diligence. Lender’s cure of Landlord’s default shall not be
considered an assumption by Lender of Landlord’s other obligations under the
Lease. Unless Lender otherwise agrees in writing, Landlord shall remain solely
liable to perform Landlord’s obligations under the Lease (but only to the
extent required by and subject to the limitation included with the Lease), both
before and after Lender’s exercise of any right or remedy under this Agreement.
If Lender or any successor or assign becomes obligated to perform as Landlord
under the Lease, such person or entity will be released from those obligations
when such person or entity assigns, sells or otherwise transfers its interest
in the Premises or the Property.

3.             Without limitation of
any of the provisions of the Lease, in the event that Lender succeeds to the
interest of Landlord or any successor to Landlord, then subject to the
provisions of this Agreement including, without limitation, Paragraph 1 above,
the Lease shall nevertheless continue in full force and effect and Tenant shall
and does hereby agree to attorn to and accept Lender and to recognize Lender as
its Landlord under the Lease for the then remaining balance of the term
thereof, and upon request of Lender, Tenant shall execute and deliver to Lender
an agreement of attornment reasonably satisfactory to Lender.

4.             If Lender succeeds to
the interest of Landlord or any successor to Landlord, in no event shall Lender
have any liability for any act or omission of any prior landlord under the
Lease which occurs prior to the date Lender succeeds to the rights of Landlord
under the Lease, nor any liability for claims, offsets or defenses which Tenant
might have had against Landlord. In no event shall Lender have any personal liability
as successor to Landlord and Tenant shall look only to the estate and property
of Lender in the Land and the Improvements for the

 86
 

 

satisfaction of Tenant’s
remedies for the collection of a judgment (or other judicial process) requiring
the payment of money in the event of any default by Lender as Landlord under
the Lease, and no other property or assets of Lender shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant’s
remedies under or with respect to the Lease.

5.             Tenant agrees that no
prepayment of rent or additional rent due under the Lease of more than one
month in advance, and no amendment, modification, surrender or cancellation of
the Lease, and no waiver or consent by Landlord under the terms of the Lease,
shall be binding upon or as against Lender, as holder of the Deed of Trust, and
as Landlord under the Lease if it succeeds to that position, unless consented
to in writing by Lender. In addition, and notwithstanding anything to the
contrary set forth in this Agreement, Tenant agrees that Lender, as holder of
the Deed of Trust, and as Landlord under the Lease if it succeeds to that
position, shall in no event have any liability for the performance or
completion of any initial work or installations or for any loan or contribution
or rent concession towards initial work, which are required to be made by
Landlord (A) under the Lease or under any related Lease documents or (B) for
any space which may hereafter become part of said Premises, and any such requirement
shall be inoperative in the event Lender succeeds to the position of Landlord
prior to the completion or performance thereof. Tenant further agrees with
Lender that Tenant will not voluntarily subordinate the Lease to any lien or
encumbrance without Lender’s prior written consent.

6.             This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute and be construed as one and the same
instrument.

7.             All remedies which
Lender may have against Landlord provided herein, if any, are cumulative and
shall be in addition to any and all other rights and remedies provided by law
and by other agreements between Lender and Landlord or others. If any party
consists of multiple individuals or entities, each of same shall be jointly and
severally liable for the obligations of such party hereunder.

8.             All notices to be
given under this Agreement shall be in writing and shall be deemed served upon
receipt by the addressee if served personally or, if mailed, upon the first to
occur of receipt of the refusal of delivery as shown on a return receipt, after
deposit in the United States Postal Service certified mail, postage prepaid,
addressed to the address of Landlord, Tenant or Lender appearing below, or, if
sent by telegram, when delivered by or refused upon attempted delivery by the
telegraph office. Such addresses may be changed by notice given in the same
manner. If any party consists of multiple individuals or entities, then notice to
any one of same shall be deemed notice to pay such party.

Lender’s Address:

Nomura Asset Capital
Corporation

Two World Financial Center, Building B

New York, New York  10281-1198

 87
 

 

 

	
  Attn: Ms. Sheryl McAfee

  
	
   

  
	
  Tenant’s
  Address:

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Attn:                             

  
	
   

  
	
  Landlord’s
  Address:

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Attn:                             

  

 

9.             This Agreement shall
be interpreted and construed in accordance with and governed by the laws of the
State of California.

10.           This Agreement shall
apply to, bind and inure to the benefit of the parties hereto and their
respective successors and assigns. As used herein “Lender” shall include any
subsequent holder of the Deed of Trust.

11.           Tenant acknowledges
that Landlord has assigned to Lender its right, title and interest in the Lease
and to the rents, issues and profits of the Property and the Property pursuant
to the Deed of Trust, and that Landlord has been granted the license to collect
such rents provided no Event of Default has occurred under, and as defined in,
the Deed of Trust. Tenant agrees to pay all rents and other amounts due under
the Lease directly to Lender upon receipt of written demand by Lender, and
Landlord hereby consents thereto. The assignment of the Lease to Lender, or the
collection of rents by Lender pursuant to such assignment, shall not obligate
Lender to perform Landlord’s obligations under the Lease.

[NO FURTHER TEXT ON THIS PAGE]

 88

 

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

	
  

  	
  NOMURA ASSET CAPITAL CORPORATION, 

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
       Name:

  
	
   

  	
   

  	
       Title:

  
	
   

  	
   

  
	
   

  	
  [LANDLORD]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [TENANT]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
					

 

 91
 

 

STATE OF CALIFORNIA      )

COUNTY OF                           )

On             ,
2000, before me,                   
the undersigned, a notary public in and for said state, personally appeared            ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

 92
 

 

EXHIBIT G 

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation 

as 

LESSEE

 

for

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

SIGNAGE
EXHIBIT

(To be provided)

 93
 

 

EXHIBIT G

to

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

to

NUNANCE COMMUNICATION, INC.

a
                              
corporation

as

LESSEE

for

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California 94063

 

SIGNAGE EXHIBIT

SIGNAGE POLICY

SINGLE TENANT BUILDINGS

Each Tenant of single
tenant Building will be permitted (subject to compliance with Section 17.15 of
the Lease) to place one sign on a monument to be located near the entrance to
the parking lot associated with the Building (“Monument”).  The exact size, design, color, location and
materials of the Monument, and of the Tenant’s sign on the Monument, will be
determined by Lessor in its sole and absolute discretion, provided that Lessor
will not unreasonably withhold its consent to a Tenant sign which employs a
design and color commonly used by such Tenant for marketing purposes so long as
it fits within the space allocated by Lessor, and so long as it is in keeping
with the overall design scheme of the Project. 
Each such Tenant will also be permitted (subject to compliance with
Section 17.15 of the Lease) to place one sign on the exterior surface of the
Building.  Lessor reserves the right to
allow different or additional signage anywhere in the Project, provided that,
so long as Lessor may lawfully do so, Lessor will not reduce the size of space
allocated on the Monument to a size smaller than that permitted as of the
commencement date of the Lease, unless the size of the premises subject to the
lease decreases from its size as of the lease commencement date or unless
Lessor provides alternate signage of reasonably equivalent visibility.  All signs shall comply with the Pacific
Shores Center Site Signage Master Plan (Redwood City Design Review Submittal
11-20-00).

 

 

 

 

 

 

 94
 

 

EXHIBIT H

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation 

as 

LESSEE

for

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

Guaranty
of Lease

[Intentionally
Omitted]

 95
 

 

EXHIBIT I

TO

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation 

as 

LESSEE

for

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

HAZARDOUS
MATERIALS DISCLOSURE

Lessor has provided Lessee, and Lessee acknowledges
that it has received and pursuant to Section 17.22(b) of the Lease, reviewed
same, a copy of each of those certain documents entitled: (i) PHASE I,
ENVIRONMENTAL SITE ASSESSMENT, PACIFIC SHORES CENTER, REDWOOD CITY, CALIFORNIA,
Prepared for: The Jay Paul Company, San Francisco, California, Prepared by:
IRIS ENVIRONMENTAL, Oakland, California, December 20, 1999, Job No. 99-122A;
and (ii) PHASE II, ENVIRONMENTAL SITE ASSESSMENT, PACIFIC SHORES CENTER, 1000
SEAPORT BOULEVARD, REDWOOD CITY, CALIFORNIA, Prepared for: The Jay Paul
Company, San Francisco, California, Prepared by: IRIS ENVIRONMENTAL, Oakland,
California, January 14, 1999, Job No. 99-122-B

	
   

  	
  LESSEE

  
	
   

  	
   

  
	
   

  	
  NUANCE COMMUNICATIONS, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Type or print name)

  	
   

  
	
   

  	
  Its: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Type or print name)

  	
   

  

 96
 

 

EXHIBIT J

TO 

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC.

 a Delaware corporation

as 

LESSEE

for

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

(a)           NOTICE
TO TENANTS AND TRANSFEREES OF

(b)           CURRENT
OR FUTURE USES OF ADJACENT PORT PROPERTY

Notice is hereby given to all lessees, tenants and
transferees of land or interests in land located within Pacific Shores Center
of the presence or potential future presence of Port related industrial
activities on Port property adjacent to and west of Pacific Shores Center. All
recipients of this notice should be aware of the following facts:

1.             The
parcel of Port property adjacent to Pacific Shores Center to the northwest
shown on the Exhibit      attached hereto (the “Port Parcel”)
is now or may be developed for Port related maritime and industrial uses
similar to those occupying other properties along the west side of Seaport
Boulevard and to the west of 

 97
 

 

Pacific Shores Center.

2.             Such
Port related maritime and industrial activities are those which are permitted
by the general industrial zoning of the City of Redwood City and may include
heavy industrial land uses, including uses which involve the receipt,
transport, storage or management of hazardous wastes, aggregates, cement,
gravel and similar materials, including the outdoor storage and handling of
such materials.

3.             Pacific
Shores Center Limited Partnership, on behalf of itself, its successors and
assigns, has recognized, accepted and approved such uses of the Port Parcel
subject to the utilization of Best Available Management Practices in the
development and use of the Port Parcel. Best Available Management Practices are
defined on Exhibit      attached hereto.

4.             Despite
the use of Best Available Management Practices on the Port Parcel by the Port
and its lessees and licensees and despite Pacific Shores Center Limited
Partnership’s efforts to ensure compatibility between such uses and those in
Pacific Shores Center, it is possible that such uses will cause emissions into
the air of dust or other particulate matter, or noise or odorous substances
which may be offensive to or be perceived as a nuisance by occupants of Pacific
Shores Center.

5.             Pursuant
to covenants made by Pacific Shores Center Limited Partnership on behalf of its
successors and assigns, tenants and lessees, the tenants, lessees and
transferees of Pacific Shores Center Limited Partnership have approved and
accepted such neighboring uses subject to their utilization of Best Available
Management Practices.

6.             Any
actions to enjoin the continuation of such uses or to recover any damages to
persons or property related to their operations are subject to a requirement
for prior notice found in recorded covenants by Pacific Shores Center Limited
Partnership. The following language is excerpted from such covenants:

“In the event that either party hereto believes that
the other has failed to perform any covenant made herein in favor of the other,
at least ten (10) days prior to the commencement of any action to enforce the
covenants hereunder or to recover damages for the

 98
 

 

breach thereof, that party who believes that a failure
to perform has occurred (the “Complaining Party”) shall give written notice
(the “Notice”) to the party alleged not to have performed the covenant (the “Non-
Complaining Party”) of the specific nature of the alleged failure and of the
intent of the Complaining Party to take action to remedy the breach by the
Non-Complaining Party. In the event that the nature of the alleged failure to
perform is such that the same cannot reasonably be cured within ten (10) days
after receipt of the Notice (the “Notice Period”), the Non- Complaining Party
shall not be deemed to be in violation of its covenants and no action shall be
commenced by the Complaining Party if, within the Notice Period, the
Non-Complaining Party commences such cure and thereafter diligently and
continuously prosecutes the same to completion within a reasonable time.
Provided, however, that the Complaining Party shall not be precluded from
recovering any actual damages suffered by reason of the alleged failure to
perform prior to or after delivery of the Notice, whether or not such failure
is thereafter cured.”

 99
 

 

EXHIBIT K

TO

PACIFIC SHORES DEVELOPMENT, LLC 

LEASE 

TO 

NUANCE COMMUNICATIONS, INC. 

a Delaware corporation 

as 

LESSEE

for

PREMISES 

at 

Pacific Shores Center 

Building 3 

Redwood City, California

(c)  NOTICE
TO PACIFIC SHORES TENANTS, LESSEES, SUCCESSORS, ASSIGNS AND TRANSFEREES
REGARDING CURRENT OR FUTURE USES OF ADJACENT RMC LONESTAR AND PORT PROPERTY

Notice is hereby given to all tenants, lessees,
successors, assigns and transferees of land or interest in land located within
the Pacific Shores Center the of presence or potential future presence of
maritime and industrial activities on RMC Lonestar and Port of Redwood City property
west and adjacent to Pacific Shores Center. Recipients of this notice should be
aware of the following:

1.             The
RMC Lonestar property and parcels of port property adjacent to and west of
Pacific Shores Center are shown on the map attached to this notice. The RMC
Lonestar and Port properties are now devoted to, or will be developed for,
maritime and industrial uses.

2.             These maritime and industrial uses
are those which are permitted by the “Heavy Industry” General Plan designation
and general industrial zoning of the City of Redwood City. These uses include,
by way of example and not limitation, uses involving the receipt, transport,
storage, handling, processing or management of aggregates, cement, concrete,
asphalt, soil or other landscaping materials, recyclable metals and plastics,
recyclable concrete and asphalt, chemicals, petroleum products, hazardous
wastes, and similar materials, including indoor storage, mixing and handling of
these materials.

3.             These
uses may cause, on either a regular or intermittent basis, air emissions,
including without limitation, dust and other particulates, odors, vibrations,
loud noises, and heavy truck, rail or marine vessel traffic. These uses may
have visual, aesthetic or other aspects that may be offensive or perceived as a
nuisance by occupants of Pacific Shores Center.

 100
 

 

 

EXHIBIT L

TO

PACIFIC SHORES DEVELOPMENT, LLC.

LEASE

TO

NUANCE COMMUNICATIONS, INC.

a                          
corporation

as

LESSEE

 

for

 

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California

 

 

RULES AND REGULATIONS

1.             Lessee and Lessee’s employees shall not in any way
obstruct the sidewalks, entry passages, pedestrian passageways, driveways,
entrances and exits to the Project or the Building, and they shall use the same
only as passageways to and from their respective work areas.

2.             Any sash doors, sashes, windows, glass doors, lights and
skylights that reflect or admit light into the Common Area of the Project shall
not be covered or obstructed by the Lessee. 
Water closets, urinals and wash basins shall not be used for any purpose
other than those for which they were constructed, and no rubbish, newspapers,
food or other substance of any kind shall be thrown into them.  Lessee shall not mark, drive nails, screw or
drill into, paint or in any way deface the exterior walls, roof, foundations,
bearing walls or pillars without the prior written consent of Lessor, which
consent may be withheld in Lessor’s sole discretion.  The expense of repairing any breakage,
stoppage or damage resulting from a violation of this rule shall be borne by
Lessee.

 101
 

 

3.             No awning or shade shall be affixed or installed over or
in the windows or the exterior of the Premises except with the consent of
Lessor, which may be withheld in Lessor’s discretion.

4.             No boring or cutting for wires shall be allowed, except
with the consent of Lessor, which consent may be withheld in Lessor’s
discretion.

5.             Lessee shall not do anything in the Premises, or bring
or keep anything therein, which will in any way increase or tend to increase
the risk of fire or the rate of fire insurance or which shall conflict with the
regulations of the fire department or the law or with any insurance policy on
the Premises or any part thereof, or with any rules or regulations established
by any administrative body or official having jurisdiction, and it shall not
use any machinery therein, even though its installation may have been
permitted, which may cause any unreasonable noise, jar, or tremor to the floors
or walls, or which by its weight might injure the floors of the Premises.

6.             Lessor may reasonably limit weight, size and position of
all safes, fixtures and other equipment used in the Premises.  If Lessee shall require extra heavy
equipment, Lessee shall notify Lessor of such fact and shall pay the cost of
structural bracing to accommodate it. 
All damage done to the Premises or Project by installing, removing or
maintaining extra heavy equipment shall be repaired at the expense of the
Lessee.

7.             Lessee and Lessee’s officers, agents and employees shall
not make nor permit any loud, unusual or improper noises nor interfere in any
way with other Lessees or those having business with them, nor bring into or
keep within the Project any animal or bird or any bicycle or other vehicle,
except such vehicle as Lessor may from time to time permit.

8.             No machinery of any kind will be allowed in the Premises
without the written consent of Lessor. 
This shall not apply, however, to customary office equipment or trade
fixtures or package handling equipment.

9.             All freight must be moved into, within and out of the
Project only during such hours and according to such reasonable regulations as
may be posted from time to time by Lessor.

 102
 

 

10.           No aerial or satellite dish or
similar device shall be erected on the roof or exterior walls of the Premises,
or on the grounds, without in each instance, the written consent of
Lessor.  Any aerial so installed without
such written consent shall be subject to removal without notice at any
time.  Lessor may withhold consent in its
sole discretion.

11.           All garbage, including wet garbage,
refuse or trash shall be placed by the Lessee in the receptacles appropriate
for that purpose and only at locations prescribed by the Lessor.

12.           Lessee shall not burn any trash or
garbage at any time in or about the Premises or any area of the Project.

13.           Lessee shall observe all security
regulations issued by the Lessor and comply with instructions and/or directions
of the duly authorized security personnel for the protection of the Project and
all tenants therein.

14.           Any requirements of the Lessee will
be considered only upon written application to Lessor at Lessor’s address set
forth in the Lease.

15.           No waiver of any rule or regulation
by Lessor shall be effective unless expressed in writing and signed by Lessor
or its authorized agent.

16.           Lessor reserves the right to exclude
or expel from the Project any person who, in the judgment of Lessor, is
intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of the law or the rules and regulations of the
Project.

17.           Lessor reserves the right at any time
to change or rescind any one or more of these rules and regulations or make
such other and further reasonable rules and regulations as in Lessor’s judgment
may from time to time be necessary for the operation, management, safety, care
and cleanliness of the Project and the Premises, and for the preservation of
good order therein, as well as for the convenience of other occupants and
tenants of the Project.  Lessor shall not
be responsible to Lessee or the any other person for the non-observance or
violation of the rules and regulations by any other tenant or other
person.  Lessee shall be deemed to have
read these rules and have agreed to abide by them as a condition to its
occupancy of the Premises.

 103
 

 

18.           Lessee shall abide by any additional
rules or regulations which are ordered or requested by any governmental or
military authority.

19.           In the event of any conflict between
these rules and regulations, or any further or modified rules and regulations
from time to time issued by Lessor, and the Lease provisions, the Lease
provisions shall govern and control.

20.           Lessor specifically reserves to
itself or to any person or firm it selects, (i) the right to place in and upon
the Project, coin-operated machines for the sale of cigarettes, candy and other
merchandise or service, and (ii) the revenue resulting therefrom.

 104
 

 

EXHIBIT M

TO

PACIFIC SHORES DEVELOPMENT, LLC

LEASE

TO

NUANCE COMMUNICATIONS, INC.

a                                 corporation

as

LESSEE

 

for

 

PREMISES

at

Pacific Shores Center

Building 3

Redwood City, California

 

 

 

LETTER OF CREDIT

(Intentionally Omitted)

 105

 

EXHIBIT
B

PLAN OF SUBLEASED
PREMISES

[attached]

 

 

 

EXHIBIT
C

PLAN OF FIRST FLOOR SHOWING
THE PUBLIC LOBBY

[attached]

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