printer-friendly

Sample Business Contracts

California-Redwood City-430 Broadway Build to Suit Lease - Martin/Campus Associates LP and At Home Corp.

Construction Contract: Customize your construction contract to avoid misunderstandings on project scope, timelines and payment terms.

Sponsored Links

                               BUILD TO SUIT LEASE
 
                                  BY AND BETWEEN
 
                          MARTIN/CAMPUS ASSOCIATES, L.P.
 
                                    "LANDLORD"
 
                                       AND
 
                               AT HOME CORPORATION
 
                                     "TENANT"

 
 
          For the approximately 86,904 sq. ft. Premises at 430 Broadway
                              Redwood City, CA 94063

    2
 
                                  LEASE SUMMARY

  Lease Date:                 _____________________________________

 Landlord:                   Martin/Campus Associates, L.P.

 Address of Landlord:        100 Bush Street, 26th Floor
                             San Francisco, CA 94104

 Tenant:                     At Home Corporation

 Address of Tenant:          425 Broadway
                             Redwood City, CA

 Contact:                    Kenneth Goldman

 Telephone:                  (650) 569-5353

 Building Address:           430 Broadway
                             Redwood City, California

 Total Building Square Footage:       Approximately 86,904 square feet

 Term:                                Fifteen years from the Commencement
                                      Date under the 450 Broadway Lease
                                      (see Paragraph 4.A.)

 Monthly Rent:               As provided under Paragraph 5.A, and subject to
                             adjustment pursuant to Paragraph 4.C and 5.B

 Security Deposit:           An amount equal to three (3) payments of the initial
                             Monthly Rent (see Paragraph 7)

 Exhibit A:  Premises Exhibit B:  Work Letter Agreement Exhibit C:  Site Plan for
Project Exhibit D:  Commencement Date Memorandum Exhibit E:  Subordination, Nondisturbance
and Attornment Agreement Exhibit F:  Option to Purchase Terms

 

    3

 
 
                                 TABLE OF CONTENTS
                                 -----------------

                                                                               
 1.       Parties..............................................................................2

 2.       Premises.............................................................................2

 3.       Definitions..........................................................................2
          A.       Affiliate...................................................................2
          B.       Alterations.................................................................2
          C.       Broadway Lease..............................................................2
          D.       Capital Improvements........................................................3
          E.       CC&Rs.......................................................................3
          F.       Collateral Agreements.......................................................3
          G.       Commencement Date...........................................................3
          H.       Common Area.................................................................3
          I.       Common Area Maintenance Costs...............................................3
          J.       Final Plans.................................................................5
          K.       HVAC........................................................................5
          L.       Impositions.................................................................6
          M.       Improvements................................................................6
          N.       Index.......................................................................6
          O.       Interest Rate...............................................................6
          P.       INTENTIONALLY DELETED.......................................................6
          Q.       Landlord's Agents...........................................................6
          R.       Lease Year..................................................................7
          S.       Monthly Rent................................................................7
          T.       Parking Area................................................................7
          U.       Person......................................................................7
          V.       Project.....................................................................7
          W.       Real Property Taxes.........................................................7
          X.       Rent........................................................................8
          Y.       Rentable Area...............................................................8
          AA.      Security Deposit............................................................8
          BB.      Sublet......................................................................8
          CC.      Subrent.....................................................................9
          DD.      Subtenant...................................................................9
          EE.      Tenant Delay................................................................9
          FF.      Tenant Improvements.........................................................9
          GG.      Tenant's Percentage Share...................................................9
          HH.      Tenant's Personal Property..................................................9
          II.      Term.......................................................................10
          JJ.      Fixed Charge Ratio.........................................................10

 4. Lease Term................................................................................10
          A.       Term.......................................................................10


     4

                                                                               
                               
          B.       Delays in Completion.......................................................10
          C.       Option to Extend...........................................................10

 5.       Rent and Additional Charges.........................................................13
          A.       Monthly Rent...............................................................13
          B.       Adjustments to Monthly Rent................................................14
          C.       Management Fee.............................................................14
          D.       Common Area Maintenance Costs..............................................15
          E.       Additional Rent............................................................16
          F.       Prorations.................................................................16
          G.       Interest...................................................................16

 6.       Late Payment Charges................................................................16

 7.       Security Deposit....................................................................17
          A.       Deposit Required...........................................................17

 8.       Holding Over........................................................................18

 9.       Tenant Improvements.................................................................19

 10.      Condition of Premises...............................................................19
          A.       Capital Improvements.......................................................19
          B.       Acceptance of Premises.....................................................19

 11.      Use of the Premises and Common Area.................................................19
          A.       Tenant's Use...............................................................20
          B.       Hazardous Materials........................................................20
          C.       Special Provisions Relating to The Americans With Disabilities Act of 1990.24
          D.       Use and Maintenance of Common Area.........................................25

 12.      Quiet Enjoyment.....................................................................25

 13.      Alterations.........................................................................26
          A.       Alteration Rights..........................................................26
          B.       Performance of Alterations.................................................26
          C.       Trade Fixtures.............................................................26

 14.      Surrender of the Premises...........................................................27

 15.      Impositions and Real Property Taxes.................................................27
          A.       Payment by Tenant..........................................................27
          B.       Taxes on Tenant Improvements and Personal Property.........................28
          C.       Proration..................................................................29

 16.      Utilities and Services..............................................................29


     5

                                                                               
 17.      Repair and Maintenance..............................................................29
          A.       Landlord's Obligations.....................................................29
          B.       Tenant's Obligations.......................................................30
          C.       Conditions Applicable to Repairs...........................................31
          D.       Landlord's Rights..........................................................31
          E.       Compliance with Governmental Regulations...................................31

 18.      Liens...............................................................................31

 19.      Landlord's Right to Enter the Premises..............................................32

 20.      Signs...............................................................................32

 21.      Insurance...........................................................................32
          A.       Indemnification............................................................32
          B.       Tenant's Insurance.........................................................33
          C.       Premises Insurance.........................................................34
          D.       Increased Coverage.........................................................34
          E.       Failure to Maintain........................................................34
          F.       Insurance Requirements.....................................................35
          G.       Waiver and Release.........................................................35

 22.      Waiver of Subrogation...............................................................35

 23.      Damage or Destruction...............................................................36
          A.       Landlord's Obligation to Rebuild...........................................36
          B.       Right to Terminate.........................................................36
          C.       Limited Obligation to Repair...............................................37
          D.       Abatement of Rent..........................................................37
          E.       Damage Near End of Term....................................................37

 24.      Condemnation........................................................................37

 25.      Assignment and Subletting...........................................................38
          A.       Landlord's Consent.........................................................38
          B.       Tenant's Notice............................................................38
          C.       Information to be Furnished................................................38
          D.       Landlord's Alternatives....................................................39
          E.       Proration..................................................................39
          F.       Parameters of Landlord's Consent...........................................39
          G.       Permitted Transfers........................................................40

 26.      Default.............................................................................40
          A.       Tenant's Default...........................................................40
          B.       Remedies...................................................................41


     6

                                                                               
                              
          C.       Landlord's Default.........................................................42

 27.      Subordination.......................................................................42
          A.       Subordination..............................................................42
          B.       Attornment.................................................................43
          C.       Non-Disturbance............................................................43

 28.      Notices.............................................................................43

 29.      Attorneys' Fees.....................................................................44

 30.      Estoppel Certificates...............................................................44

 31.      Transfer of the Premises by Landlord................................................45

 32.      Landlord's Right to Perform Tenant's Covenants......................................45

 33.      Tenant's Remedy.....................................................................45

 34.      Mortgagee Protection................................................................45

 35.      Brokers.............................................................................46

 36.      Acceptance..........................................................................46

 37.      Parking.............................................................................46

 38.      Right of First Offer to Purchase....................................................46
          A.       Notice of Sale.............................................................47
          B.       Acceptance.................................................................47
          C.       Rejection..................................................................47
          D.       Offered Terms..............................................................48
          E.       Acceptance of Tenant's Offer...............................................48
          F.       Conditions.................................................................48
          G.       Process....................................................................48
          H.       Rights Personal............................................................49

 39.      General.............................................................................49
          A.       Captions...................................................................49
          B.       Executed Copy..............................................................49
          C.       Time.......................................................................49
          D.       Separability...............................................................49
          E.       Choice of Law..............................................................49
          F.       Gender; Singular, Plural...................................................49
          G.       Binding Effect.............................................................49
          H.       Waiver.....................................................................50

 

     7

               
          I.       Entire Agreement...........................................................50
          J.       Authority..................................................................50
          K.       Exhibits...................................................................50
          L.       Lease Summary..............................................................50
          M.       Memorandum of Lease........................................................50


 

    8
 
                                BUILD TO SUIT LEASE
 
          1. Parties.
 
                   THIS BUILD TO SUIT LEASE (the "Lease"), dated as of ________
1998, is entered into by and between MARTIN/CAMPUS ASSOCIATES, L.P., a Delaware
limited partnership ("Landlord"), whose address is 100 Bush Street, San Francisco,
CA 94104, and AT HOME CORPORATION, a Delaware corporation ("Tenant"), whose address
is 425 Broadway, Redwood City, CA.
 
          2. Premises.
 
                   Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord those certain premises to situated in a building to be constructed by Landlord
pursuant to the terms of this Lease which shall be commonly known as 430 Broadway
(the "Building"), in the City of Redwood City, County of San Mateo, State of California,
as more particularly shown on Exhibit A (the "Premises"), which Premises shall consist
of a total area of approximately 86,904 square feet. On or before the Commencement
Date, Landlord shall measure the Rentable Area of the Premises in accordance with
BOMA Standard (ANSI Z65.1 1980) for full floor office occupancy, and Landlord and
Tenant shall amend this Lease if necessary to reflect any discrepancy in the size
of the Premises disclosed by Landlord's measurement of the Premises by Landlord's
architect. The Premises also includes the appurtenant right to use in common with
other tenants of the Project (as defined below) the Common Area (as defined below)
of the Project owned by Landlord.
 
          3. Definitions.
 
                   The following terms shall have the following meanings in this
Lease:
 
                   A. Affiliate. Any Person that controls, or is controlled by or
is under common control with, Landlord or Tenant. No Person shall be deemed in control
of another simply by virtue of being a partner, director, officer or holder of voting
securities of any Person. For purposes of this Paragraph 3.A, "control" shall mean
the ownership of, and/or the right to vote, stock, partnership interests, membership
interests, or other indicia of ownership possessing at least fifty-one percent (51%)
of either the total combined interests in a Person, or the voting power of all classes
of a Person's capital stock, partnership interests, membership interests, or other
indicia of ownership, that have been issued, outstanding, and (if applicable) are
entitled to vote.
 
                   B. Alterations. Any alterations, additions or improvements made
in, on or about the Premises after the substantial completion of the Improvements,
including, but not limited to, lighting, heating, ventilating, air conditioning,
electrical, partitioning, drapery and carpentry installations.
 
                   C. Broadway Lease. That certain lease dated as of October 18,
1996, by and between Landlord and Tenant, for those certain premises commonly known
as 425 Broadway,

 
 
                                         2    9

 situated in the City of Redwood City, County of San Mateo, State of California.
 
                   D. Capital Improvements. Those certain improvements to the Building
to be constructed by Landlord pursuant to Paragraph 10.A and the Work Letter Agreement
attached to this Lease as Exhibit B (the "Work Letter").
 
                   E. CC&Rs. Any declaration of conditions, covenants and/or restrictions,
or similar instrument, that now encumbers, or may in the future encumber the Project
or the Premises, as adopted by Landlord or its successors in interest from time
to time, and any modifications or amendments thereto.
 
                   F. Collateral Agreements. The following agreements: (i) the Broadway
Lease, (ii) that certain Build to Suit Option Agreement by and between Landlord
and Tenant, dated as of October 25, 1996 (the "Build to Suit Agreement"), (iii)
that certain Agreement Granting Rights of First Offer, by and between Landlord and
Tenant, dated as of October 25, 1996, (iv) that certain Warrant to Purchase Series
A Common Stock of At Home Corporation and that certain Second Amended and Restated
Registration Rights Agreement, executed by Landlord, Tenant and certain other parties,
each dated as of October 18, 1996 (collectively, the "Warrant Agreement"), and (v)
any leases at any time executed by Tenant arising out of Tenant's exercise of any
of its rights set forth in the agreements described in items (ii) and (iii) above.
The "450 Broadway Lease" shall mean that certain lease between Landlord and Tenant
with respect to the premises commonly known as 450 Broadway, Redwood City, California.
 
                   G. Commencement Date. The Commencement Date of this Lease shall
be the first day of the Term determined in accordance with Paragraph 4.A.
 
                   H. Common Area. All areas and facilities within the Project not
appropriated to the exclusive occupancy of tenants, including the Parking Area,
the sidewalks, pedestrian ways, driveways, signs, pools, ponds, service delivery
facilities, common storage areas, common utility facilities and all other areas
in the Project established by Landlord and/or its successors for non-exclusive use.
Landlord may, by written notice to Tenant, elect in its sole discretion to increase
and/or decrease the Common Area from time to time during the Term for any reason
whatsoever (including without limitation an election by Landlord and/or its successors
in their sole discretion to make changes to the buildings situated in the Project,
and/or to subdivide, sell, exchange, dispose of, transfer, or change the configuration
of all or any portion of the Common Area from time to time), so long as Landlord
neither unreasonably interferes with ingress to or egress from the Building, nor
permanently reduces the number of parking spaces available for Tenant's use below
the minimum requirements set forth in Paragraph 37. No such subdivision, sale, exchange,
disposition, transfer, or change to the configuration of all or any portion of the
Common Area shall cause the Common Area to be increased or decreased unless and
until Landlord has given Tenant written notice of such increase or decrease.
 
                   I. Common Area Maintenance Costs. The total of all costs and
expenses paid or incurred by Landlord in connection with the operation, maintenance,
ownership and repair of the Common Area, and the performance of Landlord's obligations
under Paragraphs 17.A and 17.E. Without limiting the generality of the foregoing,
Common Area Maintenance 

 
 
                                        3    10

 Costs include all costs of and expense for: (i) maintenance and repairs of the
Common Area; (ii) resurfacing, resealing, remarking, painting, repainting, striping
or restriping the Parking Area; (iii) maintenance and repair of all public or common
facilities; (iv) maintenance, repair and replacement of sidewalks, curbs, paving,
walkways, Parking Area, Project signs, landscaping, planting and irrigation systems,
trash facilities, loading and delivery areas, lighting, drainage and common utility
facilities, directional or other signs, markers and bumpers, and any fixtures, equipment
and personal property located on the Common Area; (v) wages, salaries, benefits,
payroll burden fees and charges of personnel employed by Landlord and the charges
of all independent contractors retained by Landlord (to the extent that such personnel
and contractors are utilized by Landlord) for the maintenance, repair, management
and/or supervision of the Project, and of any security personnel retained by Landlord
in connection with the operation and maintenance of the Common Area (although Landlord
shall not be required to obtain security services); (vi) maintenance, repair and
replacement of security systems and alarms installed by Landlord (if any); (vii)
depreciation or amortization (or in lieu thereof, rental payments) on all tools,
equipment and machinery used in the operation and maintenance of the Common Area;
(viii) premiums for Comprehensive General Liability Insurance or Commercial General
Liability Insurance, casualty insurance, workers compensation insurance or other
insurance on the Common Area, or any portion thereof or interest therein, and any
deductibles payable with respect to such insurance policies; (ix) all personal property
or real property taxes and assessments levied or assessed on the Project, or any
portion thereof or interest therein, including without limitation the Real Property
Taxes for the Project, if applicable under Paragraph 15.A; (x) cleaning, collection,
storage and removal of trash, rubbish, dirt and debris, and sweeping and cleaning
the Common Area; (xi) legal, accounting and other professional services for the
Project, including costs, fees and expenses of contesting the validity or applicability
of any law, ordinance, rule, regulation or order relating to the Building, and of
contesting, appealing or otherwise attempting to reduce any Real Property Taxes
assessed against the Project; (xii) any alterations, additions or improvements required
to be made to the Common Area in order to reduce Common Area Maintenance Costs or
to protect the health or safety of occupants of the Project, provided that the cost
of any such alterations, additions, improvements or capital improvements, together
with interest at the Interest Rate, shall be amortized over the useful life of the
alteration, addition, improvement or capital improvement in question and included
in Common Area Maintenance Costs for each year over which such costs are amortized;
(xiii) all costs and expenses of providing, creating, maintaining, repairing, managing,
operating, and supervising an amenity center for the Project, which may include
without limitation a dining facility (provided, however, that Landlord shall not
be required to provide or create such an amenity center), which costs and expenses
may include without limitation rent charged by Landlord for the space occupied by
such amenity center; (xiv) all costs and expenses incurred by Landlord in performing
its obligations under Paragraphs 17.A or 17.E, including without limitation all
costs and expenses incurred in performing any

 
 
                                        4    11

 alterations, additions or improvements required to be made to the Building in order
to comply with applicable laws, ordinances, rules, regulations and orders and all
capital improvements required to made in connection with the operation, maintenance
and repair of the Building, provided that the cost of any such alterations, additions,
improvements or capital improvements, together with interest at the Interest Rate,
shall be amortized over the useful life of the alteration, addition, improvement
or capital improvement in question and included in Common Area Maintenance Costs
for each year over which such costs are amortized; (xv) all costs and expenses incurred
in performing any alterations, additions or improvements required to be made to
the Common Area in order to comply with applicable laws, ordinances, rules, regulations
and orders and all capital improvements required to made in connection with the
operation, maintenance and repair of the Common Area, provided that the cost of
any such alterations, additions, improvements or capital improvements, together
with interest at the Interest Rate, shall be amortized over the useful life of the
alteration, addition, improvement or capital improvement in question and included
in Common Area Maintenance Costs for each year over which such costs are amortized;
(xvi) any and all payments due and owing on behalf of the Project or any portion
thereof with respect to any CC&Rs, including without limitation any and all assessments
and association dues; (xvii) any other cost or expense which this Lease expressly
characterizes as a Common Area Maintenance Cost, and (xviii) all costs and expenses
related to the adoption and maintenance of a portion of Highway 101. However, notwithstanding
the foregoing or anything to the contrary in this Lease, Common Area Maintenance
Costs shall not include the cost of or expenses for the following: (A) leasing commissions,
attorneys' fees or other costs or expenses incurred in connection with negotiations
or disputes with other tenants of the Project; (B) depreciation of buildings in
the Project; (C) payments of principal, interest, late fees, prepayment fees or
other charges on any debt secured by a mortgage covering the Project, or rental
payments under any ground lease or underlying lease; (D) any penalties incurred
due to Landlord's violation of any governmental rule or authority (but not excluding
the cost of compliance therewith, if such cost is chargeable to Tenant pursuant
to this Lease); (E) any Real Property Taxes or costs for which Landlord is separately
and directly reimbursed by Tenant or any other tenant of the Project which are assessed
against the Premises or the premises leased by such other tenant(s); (F) items for
which Landlord is reimbursed by insurance; (G) all costs arising from monitoring,
cleaning up and otherwise remediating any release of Hazardous Materials at the
Premises that has been specifically identified by Landlord and Tenant in writing
as of the date of the Lease; (H) all costs associated with the operation of the
business of the entity which constitutes "Landlord", as distinguished from the costs
of operations, including, but not limited to, costs of partnership accounting and
legal matters, costs of defending any lawsuits with any mortgagee (except as the
actions of Tenant may be in issue), costs of selling, syndicating, financing, mortgaging,
or hypothecating any of the Landlord's interest in the Project and/or Common Area,
or any portion thereof, costs of any disputes between Landlord and its employees,
costs of disputes of Landlord with Building management or costs paid in connection
with disputes with Tenant or any other tenants; (I) all costs (including permit,
license and inspection fees) incurred in renovating or otherwise improving or decorating,
painting or redecorating space for other tenants in the Project; (J) the creation
of any reserves for equipment or capital replacement (but not the expenditure of
any funds from such reserves); and (K) all costs arising from monitoring, cleaning
up and otherwise remediating any release of Hazardous Materials at the Premises
to the extent that Landlord (who shall use reasonable efforts to obtain reimbursement)
is actually reimbursed by third parties for such costs (but not the costs of collection
incurred by Landlord, unless such costs of collection are also reimbursed by third
parties).
 
                   J. Final Plans. As defined in the Work Letter.
 
                   K. HVAC. Heating, ventilating and air conditioning.
 
                   L. Impositions. Taxes, assessments, charges, excises and levies,
business 

 
 
                                        5    12

 taxes, license, permit, inspection and other authorization fees, transit development
fees, assessments or charges for housing funds, service payments in lieu of taxes
and any other fees or charges of any kind at any time levied, assessed, charged
or imposed by any federal, state or local entity, (i) upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures or
other personal property located in the Premises, or the cost or value of any Alterations;
(ii) upon, or measured by, any Rent payable hereunder, including any gross receipts
tax; (iii) upon, with respect to or by reason of the development, possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by Tenant
of the Premises, or any portion thereof; or (iv) upon this Lease transaction, or
any document to which Tenant is a party creating or transferring any interest or
estate in the Premises. Impositions do not include franchise, transfer, inheritance
or capital stock taxes, or income taxes measured by the net income of Landlord from
all sources, except to the extent any such taxes are levied or assessed against
Landlord as a substitute for, in whole or in part, any item that would otherwise
be deemed an Imposition under this paragraph.
 
                   M. Improvements. Collectively, the Tenant Improvements and the
Capital Improvements.
 
                   N. Index. The Consumer Price Index, All Urban Consumers, All
Items, published by the U.S. Department of Labor, Bureau of Labor Statistics for
the San Francisco- Oakland-San Jose Metropolitan Area (1982-84=100). If the Base
Year of the Index is changed, then all calculations pursuant to this Lease which
require the use of the Index shall be made by using the appropriate conversion factor
published by the Bureau of Labor Statistics (or successor agency) to correlate to
the Base Year of the Index herein specified. If no such conversion factor is published,
then Landlord shall, if possible, make the necessary calculation to achieve such
conversion. If such conversion is not in Landlord's good-faith, business judgment
possible, or if publication of the Index is discontinued, or if the basis of calculating
the Index is materially changed, then the term "Index" shall mean comparable statistics
on the cost of living, as computed either (i) by an agency of the United States
Government performing a function similar to the Bureau of Labor Statistics, or (ii)
if no such agency performs such function, by a substantial and responsible periodical
or publication of recognized authority most closely approximating the result which
would have been achieved by the Index, as may be determined by Landlord in the exercise
of its reasonable good faith business judgment.
 
                   O. Interest Rate. Either (i) the greater of (a) twelve percent
(12%) per annum, or (b) the reference rate, or succeeding similar index, announced
from time to time by the Bank of America's main San Francisco office, plus three
percent (3%) per annum; or (ii) the maximum rate of interest permitted by law, whichever
is less.
 
                   P. INTENTIONALLY DELETED
 
                   Q. Landlord's Agents. Landlord's authorized agents, partners,
subsidiaries, directors, officers, and employees.
 
                   R. Lease Year. A period of twelve (12) consecutive calendar months
during the Term, commencing with the Commencement Date if the Commencement Date
is the first day 

 
 
                                        6    13

 of a calendar month, or commencing with the first day of the month following the
Commencement Date if the Commencement Date is not the first day of a calendar month.
The first Lease Year shall include the period between the Commencement Date and
the first day of the month following the Commencement Date if the Commencement Date
is not the first day of a calendar month. The last Lease Year shall consist of the
period between the date on which the Term expires or terminates and the day after
the last day of the preceding Lease Year.
 
                   S. Monthly Rent. The rent payable pursuant to Paragraph 5.A.,
as adjusted from time to time pursuant to the terms of this Lease.
 
                   T. Parking Area. All Common Area (except sidewalks and service
delivery facilities) now or hereafter designated by Landlord for the parking or
access of motor vehicles, including roads, traffic lanes, vehicular parking spaces,
landscaped areas and walkways, and including any parking structure constructed during
the Term. Landlord and/or its successors may, by written notice to Tenant, elect
in their sole discretion to increase and/or decrease the Parking Area from time
to time during the Term for any reason whatsoever (including without limitation
an election by Landlord and/or its successors in their sole discretion to make changes
to the buildings situated in the Project, and/or to subdivide, sell, exchange, dispose
of, transfer, or change the configuration of all or any portion of the Parking Area
from time to time), so long as such changes to the Parking Area do not permanently
reduce the number of parking spaces available for Tenant's use below the minimum
requirements set forth in Paragraph 37. No such subdivision, sale, exchange, disposition,
transfer, or change to the configuration of all or any portion of the Parking Area
shall cause the Parking Area to be increased or decreased unless and until Landlord
has given Tenant written notice of such increase or decrease.
 
                   U. Person. Any individual, partnership, firm, association, corporation,
limited liability company, trust, or other form of business or legal entity.
 
                   V. Project. That certain real property shown on Exhibit C. Landlord
and/or its successors may, by written notice to Tenant, elect in their sole discretion
to increase and/or decrease the number of buildings and/or the amount of Rentable
Area situated in the Project from time to time during the Term for any reason whatsoever.
 
                   W. Real Property Taxes. Taxes, assessments and charges now or
hereafter levied or assessed upon, or with respect to, the Project, or any personal
property of Landlord used in the operation thereof or located therein, or Landlord's
interest in the Project or such personal property, by any federal, state or local
entity, including: (i) all real property taxes and general and special assessments;
(ii) charges, fees or assessments for transit, housing, day care, open space, art,
police, fire or other governmental services or benefits to the Project, including
assessments, taxes, fees, levies and charges imposed by governmental agencies for
such purposes as street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services; (iii) service payments in lieu of taxes;
(iv) any tax, fee or excise on the use or occupancy of any part of the Project,
or on rent for space in the Project; (v) any other tax, fee or excise, however described,
that may be levied or assessed as a substitute for, or as an addition to, in whole
or in part, any other Real Property Taxes; and (vi) reasonable consultants, and
attorneys' fees and expenses incurred in connection with proceedings to contest,
determine or reduce Real 

 
 
                                        7    14

 Property Taxes. Real Property Taxes do not include: (A) franchise, transfer, inheritance
or capital stock taxes, or income taxes measured by the net income of Landlord from
all sources, unless any such taxes are levied or assessed against Landlord as a
substitute for, in whole or in part, any Real Property Tax; (B) Impositions and
all similar amounts payable by tenants of the Project under their leases; and (C)
penalties, fines, interest or charges due for late payment of Real Property Taxes
by Landlord. If any Real Property Taxes are payable, or may at the option of the
taxpayer be paid, in installments, such Real Property Taxes shall, together with
any interest that would otherwise be payable with such installment, be deemed to
have been paid in installments, amortized over the maximum time period allowed by
applicable law. If the tax statement from a taxing authority does not allocate Real
Property Taxes to the Building, Landlord shall make the determination of the proper
allocation of such Real Property Taxes based, to the extent possible, upon records
of the taxing authority and, if not so available, then on an equitable basis.
 
                   X. Rent. Monthly Rent plus the Additional Rent as defined in
Paragraph 5.E.
 
                   Y. Rentable Area. The aggregate square footage in any one or
more buildings in the Project, as appropriate, as reasonably determined by Landlord's
architect from time to time in accordance with BOMA Standard (ANSI Z65.1 1980) for
full floor office occupancy.
 
                   AA. Security Deposit. That amount paid by Tenant pursuant to
Paragraph 7.
 
                   BB. Sublet. Any transfer, sublet, assignment, license or concession
agreement, change of ownership, mortgage, or hypothecation of this Lease or the
Tenant's interest in the Lease or in and to all or a portion of the Premises. As
used herein, a Sublet includes the following: (i) if Tenant is a partnership or
a limited liability company, a transfer, voluntary or involuntary, of all or any
part of any interest in such partnership or limited liability company, or the dissolution
of the partnership or limited liability company, whether voluntary or involuntary;
(ii) if Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or the transfer, either by a single transaction or in
a series of transactions, of a controlling percentage of the stock of Tenant (except
that a Sublet shall not include any such transfer of a controlling percentage of
the stock of Tenant occurring at a time when the stock of Tenant is publicly traded
on a nationally recognized stock exchange or over the counter), or the sale, by
a single transaction of or series of transaction, within any one (1) year period,
of corporate assets equaling or exceeding twenty percent (20%) of the total value
of Tenant's assets (except in connection with an initial public offering of the
stock of Tenant on a nationally recognized stock exchange or over the counter);
(iii) if Tenant is a trust, the transfer, voluntarily or involuntarily, of all or
any part of the controlling interest in such trust; and (iv) if Tenant is any other
form of entity, a transfer, voluntary or involuntary, of all or any part of any
interest in such entity. As used herein, the phrases "controlling percentage" and
"controlling interest" means the ownership of, and/or the right to vote, stock,
partnership interests, membership interests, or other indicia of ownership possessing
at least fifty-one percent (51%) of either the total combined interests in Tenant,
or the voting power of all classes of Tenant's capital stock, partnership interests,
membership interests, or other indicia of ownership, that have been issued, outstanding,
and (if applicable) are entitled to vote.

 
 
                                        8    15
 
                   CC. Subrent. Any consideration of any kind received, or to be
received, by Tenant from a subtenant if such sums are related to Tenant's interest
in this Lease or in the Premises, including without limitation bonus money and payments
(in excess of book value) for Tenant's assets, including without limitation its
trade fixtures, equipment and other personal property, goodwill, general intangibles,
and any capital stock or other equity ownership of Tenant.
 
                   DD. Subtenant. The person or entity with whom a Sublet agreement
is proposed to be or is made.
 
                   EE. Tenant Delay. Any delay that Landlord may encounter in the
performance of Landlord's obligations under the Lease because of any act or omission
of any nature by Tenant or its agents or contractors, including without limitation
any (i) delay attributable to the postponement of any Improvements at the request
of Tenant; (ii) delay by Tenant in the submission of information or the giving of
authorizations or approvals within the time limits set forth in the Lease or the
Work Letter; (iii) delay attributable to the failure of Tenant to pay, when due,
any amounts required to be paid by Tenant pursuant to the Lease or the Work Letter;
and (iv) delay resulting from any change order request initiated or requested by
Tenant.
 
                   FF. Tenant Improvements. Those certain improvements to the Premises
to be constructed by Landlord pursuant to Exhibit B, other than the Capital Improvements.
The Tenant Improvements shall at all times be the property of Landlord and shall
not be deemed Tenant's Personal Property.
 
                   GG. Tenant's Percentage Share. The ratio (expressed as a percentage)
of the total Rentable Area of the Premises to the total Rentable Area of all of
the buildings at the Project owned by Landlord from time to time, which as of the
Commencement Date shall equal ________% (i.e., the Rentable Area of the Premises
divided by the Rentable Area of the buildings at the Project owned by Landlord as
of the date of this Lease). Tenant's Percentage Share shall be recalculated each
and every time that the amount of Rentable Area contained in Premises is adjusted,
or the Premises is expanded, buildings are added to or removed from the Project,
or there is a change in the total Rentable Area of those buildings in the Project
owned by Landlord, or Landlord sells, exchanges, or otherwise transfers any or all
of the buildings situated in the Project (including without limitation the Building).
The parties acknowledge and agree that the total Rentable Area of all of the buildings
in the Project owned by Landlord may increase and/or decrease from time to time
during the Term, since Landlord may elect in its sole discretion to sell a building
or buildings or to make changes to the buildings it owns in the Project (so long
as Landlord does not unreasonably interfere with ingress to or egress from the Premises).
 
                   HH. Tenant's Personal Property. Tenant's trade fixtures, furniture,
equipment and other personal property in the Premises.
 
                   II. Term. The Term of this Lease set forth in Paragraph 4.A.,
as it may be extended hereunder pursuant to any options to extend granted herein.

 
 
                                        9    16
 
                   JJ. Fixed Charge Ratio. Tenant's consolidated earnings before
income taxes, depreciation and amortization during the fiscal year in question,
divided by the sum of (i) all interest charges occurring during the fiscal year
in question, and (ii) all of Tenant's scheduled debt amortization payable during
the fiscal year in question.
 
          4. Lease Term.
 
                   A. Term. Subject to adjustment for Tenant Delays pursuant to
Paragraph 4.B below, the Term shall commence on the date of substantial completion
of the Improvements to be constructed by Landlord (the "Commencement Date"), and
terminate on the date that is fifteen (15) years after the "Commencement Date" under
the 450 Broadway Lease. For the purposes of this Lease, substantial completion shall
mean that the Improvements have been completed in accordance with the Final Plans
approved by Landlord and Tenant, subject only to minor punch-list items, and the
City of Redwood City has issued a final building inspection approval for such Improvements.
 
                   B. Delays in Completion. Tenant agrees that if Landlord, for
any reason whatsoever, is unable to substantially complete the Improvements on or
before Landlord's initial estimate of the Commencement Date, Landlord shall not
be liable to Tenant for any loss or damage therefrom, nor shall this Lease be void
or voidable. Upon the establishment of the actual Commencement Date, Landlord and
Tenant shall execute a Commencement Date Memorandum in the form set forth in Exhibit
D. Notwithstanding any provision of this Lease to the contrary, if at any time after
the date of this Lease a Tenant Delay occurs, then the Commencement Date shall be
moved earlier two (2) days for each one (1) day of Tenant Delay that delays the
substantial completion of the Improvements. In addition, Tenant shall pay any and
all costs and expenses incurred by Landlord which result from any Tenant Delay,
including, without limitation, any and all costs and expenses attributable to increases
in the cost of labor or materials.
 
                   C. Option to Extend.
 
                             (i) Grant of Option. Landlord hereby grants to Tenant
one (1) option (the "Option to Extend") to extend the Term of this Lease, for an
additional term of five (5) years. The option term (the "Extended Term") shall commence
upon the expiration of the initial Term. The Option to Extend is expressly conditioned
upon Tenant's not being in default under any term or condition of this Lease after
the expiration of any applicable cure period granted by this Lease, either at the
time the Option to Extend is exercised or at the time the applicable Extended Term
would commence. The Option to Extend shall be personal to the Tenant originally
named in this Lease, and shall not be assigned, sold, conveyed or otherwise transferred
to any other party (including without limitation any assignee or sublessee of such
Tenant) without the prior written consent of Landlord, which consent may be withheld
in Landlord's sole discretion; provided, however, that the Option to Extend may
be transferred to the transferee pursuant to a Permitted Transfer without Landlord's
consent. The Option to Extend shall be exercisable only so long as the Lease remains
in full force and effect and shall be an interest appurtenant to and not separable
from Tenant's estate under the Lease. Under no circumstances shall Landlord be required
to pay any real estate commission to any party with respect to Tenant's exercise
of the Option to Extend.

 
 
                                        10    17
 
                             (ii) Manner of Exercise. Tenant may exercise the Option
to Extend the Lease only by giving Landlord written notice not less than one (1)
year prior to the expiration of the Term. If Tenant fails to exercise the Option
to Extend prior to such 1-year period, then the Option to Extend automatically shall
lapse and thereafter Tenant shall have no right to exercise the Option to Extend.
 
                             (iii) Terms and Rent. The initial Monthly Rent for
the Premises for the Extended Term shall be equal to the greater of (w) ninety-five
percent (95%) of the fair market rent, as determined below, for the Premises as
of the commencement of the Extended Term, or (x) an amount equal to the Monthly
Rent payable during the fourteenth (14th) Lease Year of the initial Term, multiplied
by the greater of (A) the lesser of (I) a fraction, the numerator of which is the
Index published most recently before the first day of the fourteenth (14th) Lease
Year of the initial Term, and the denominator of which is the Index published most
recently before the first day of the thirteenth (13th) Lease Year of the initial
Term, or (II) one hundred sixteen percent (116%), or (B) one hundred seven percent
(107%). During the Extended Term the Monthly Rent shall continue to be subject to
adjustment in accordance with the provisions of Paragraph 5.B below. All other terms
and conditions of the Lease, as amended from time to time by the parties in accordance
with the provisions of the Lease, shall remain in full force and effect and shall
apply during the Extended Term; provided, however, that neither the Option to Extend
nor Landlord's obligations under the Work Letter shall be of any force or effect
during the Extended Term.
 
                             (iv) Determination of Rent. For the purposes of calculating
the Monthly Rent for the Extended Term, the fair market rent shall be equal to the
net effective rent per rentable square foot being charged for leases executed within
the preceding twelve (12) months for comparable space (in buildings with 2 - 4 stories)
at either the Project (if any), or if there are none, for comparable space (in buildings
with 2 - 4 stories) in office and research and development complexes located in
the Redwood Shores area or the Menlo Oaks Business Park (located in Menlo Park,
California), with terms comparable to the terms contained in this Lease, taking
into consideration relevant factors such as the presence or absence of tenant improvement
contributions by the lessor, and the fact that the Monthly Rent during the Extended
Term shall be subject to adjustment under Paragraph 5.B. Any value added to the
Premises by the Tenant Improvements and any Alterations paid for by Tenant shall
not be considered or included in the determination of the fair market rent. The
fair market rent shall be determined by mutual agreement of the parties or, if the
parties are unable to agree within thirty (30) days after Tenant's exercise of an
Option, then fair market rent shall be determined pursuant to the procedure set
forth in Paragraphs 4.C.(v) and 4.C.(vi).
 
                             (v) Landlord's Initial Determination. If the parties
are unable mutually to agree upon the fair market rent pursuant to Paragraph 4.C.(iv),
then the fair market rent initially shall be determined by Landlord by written notice
("Landlord's Notice") given to Tenant promptly following the expiration of the 30-day
period set forth in Paragraph 4.C.(iv). If Tenant disputes the amount of fair market
rent set forth in Landlord's Notice, then, within thirty (30) days after the date
of Landlord's Notice, Tenant shall send Landlord a written notice ("Tenant's Notice")
which specifically (a) disputes the fair market rent set forth in Landlord's Notice,
(b) demands arbitration pursuant to Paragraph 4.C.(vi), and (c) states the name
and address of the person who shall act as arbitrator on Tenant's behalf. Tenant's
Notice shall be deemed defective, 

 
 
                                        11    18

 and not given to Landlord, if it fails strictly to comply with the Requirements
and time period set forth above. If Tenant does not send Tenant's Notice within
thirty (30) days after the date of Landlord's Notice, or if Tenant's Notice fails
to contain all of the required information, then the Monthly Rent for the Extended
Term shall equal ninety-five percent (95%) of the fair market rent specified in
Landlord's Notice. If Tenant sends Tenant's Notice in the proper form within thirty
(30) days after the date of Landlord's Notice, then the Monthly Rent for the Extended
Term shall be determined by arbitration pursuant to Paragraph 4.C(vi) below. If
the arbitration is not concluded prior to the commencement of the Extended Term,
then Tenant shall pay Monthly Rent equal to one hundred twenty-five percent (125%)
of the Monthly Rent payable immediately prior to the commencement of the Extended
Term. If the fair market rent determined by arbitration differs from that paid by
Tenant pending the results of arbitration, then any adjustment required to adjust
the amount previously paid shall be made by payment by the appropriate party within
ten (10) days after the determination of fair market rent.
 
                             (vi) Arbitration. The arbitration shall be conducted
in the City of San Francisco in accordance with the then prevailing rules of the
American Arbitration Association (or its successor) for the arbitration of commercial
disputes, except that the procedures mandated by such rules shall be modified as
follows:
 
                                       (a) Each arbitrator must be a real estate
appraiser with at least five (5) years of full-time commercial appraisal experience
who is familiar with the fair market rent of office and research and development
complexes located in the vicinity of the Premises. Within ten (10) business days
after receipt of Tenant's Notice, Landlord shall notify Tenant of the name and address
of the person designated by Landlord to act as arbitrator on Landlord's behalf.
 
                                       (b) The two arbitrators chosen pursuant to
Paragraph 4.C.(vi)(a) shall meet within ten (10) business days after the second
arbitrator is appointed and shall either agree upon the fair market rent or appoint
a third arbitrator possessing the qualifications set forth in Paragraph 4.C.(vi)(a).
If the two arbitrators agree upon the fair market rent within such ten (10) business
day period, the Monthly Rent for the Extended Term shall equal ninety-five percent
(95%) of such fair market rent. If the two arbitrators are unable to agree upon
the fair market rent and are unable to agree upon the third arbitrator within five
(5) business days after the expiration of such ten (10) business day period, the
third arbitrator shall be selected by the parties themselves. If the parties do
not agree on the third arbitrator within five (5) business days after the expiration
of such five (5) business day period, then either party, on behalf of both, may
request appointment of the third arbitrator by the Association of South say Brokers.
The three arbitrators shall decide the dispute, if it has not been previously resolved,
by following the procedures set forth in Paragraph 4.C.(vi)(c). Each party shall
pay the fees and expenses of its respective arbitrator and both shall share the
fees and expenses of the third arbitrator. Each party shall pay its own attorneys'
fees and costs of witnesses.
 
                                       (c) The three arbitrators shall determine
the fair market rent in accordance with the following procedures. Each of Landlord's
arbitrator and Tenant's arbitrator shall state, in writing, his or her determination
of the fair market rent, supported by the reasons therefor, and shall make counterpart
copies for the other arbitrators. All of the arbitrators shall arrange for a simultaneous
exchange of the proposed resolutions within ten (10) business days 

 
 
                                        12    19

 after appointment of the third arbitrator. If any arbitrator fails to deliver his
or her own determination to the other arbitrators within such ten (10) business
day period, then the fair market rent shall equal the average of the resolutions
submitted by the other arbitrators. If all three (3) arbitrators deliver their determinations
to the other arbitrators within such ten (10) business day period, then the two
(2) closest determinations of the arbitrators shall be averaged, and the resulting
quotient shall be the fair market rent, and the Monthly Rent for the Extended Term
shall equal ninety-five percent (95%) of such fair market rent; provided, however,
that if the determination of one (1) of the arbitrators (the "Average Determination")
is equal to the average of the determinations of the other two (2) arbitrators,
then the Average Determination shall be the fair market rent. However, the arbitrators
shall not attempt to reach a mutual agreement of the fair market rent; each arbitrator
shall independently arrive at his or her proposed resolution.
 
                                       (d) The arbitrators shall have the right
to consult experts and competent authorities for factual information or evidence
pertaining to a determination of fair market rent, but any such consultation shall
be made in the presence of both parties with full right on their part to cross-examine.
The arbitrators shall render the decision and award in writing with counterpart
copies to each party. The arbitrators shall have no power to modify the provisions
of this Lease. In the event of a failure, refusal or inability of any arbitrator
to act, his or her successor shall be appointed by him or her, but in the case of
the third arbitrator, his or her successor shall be appointed in the same manner
as that set forth herein with respect to the appointment of the original third arbitrator.
 
          5. Rent and Additional Charges.
 
                   A. Monthly Rent. Tenant shall pay to Landlord, in lawful money
of the United States, Monthly Rent as follows: commencing on the Commencement Date,
and continuing through the balance of the Term (subject to adjustment pursuant to
Paragraph 5.B), the initial Monthly Rent shall equal that amount calculated pursuant
to the Build to Suit Agreement as the Monthly Rent for the Building. Tenant shall
have no obligation to pay Monthly Rent before the Commencement Date. Until the Monthly
Rent is established under the Build to Suit Agreement, the Monthly Rent shall be
deemed to equal that amount designated from time to time in writing by Landlord
to Tenant as Landlord's reasonable estimate of the amount of Monthly Rent that will
be established under the Build to Suit Agreement upon completion of the construction
of the Building (collectively, the "Estimated Monthly Rent"), based upon Landlord's
estimate of the Development Costs (as defined in the Build to Suit Agreement) that
have been or will be incurred in constructing the Building. Upon the final establishment
of the initial Monthly Rent in accordance with the Build to Suit Agreement, Landlord
and Tenant shall each execute an addendum to this Lease setting forth the initial
Monthly Rent under this Lease. If as of the date the initial Monthly Rent under
this Lease is established (the "Rent Establishment Date"), the aggregate amount
of Estimated Monthly Rent previously paid by Tenant exceeds the aggregate amount
of Monthly Rent payable under this Lease from the Commencement Date to the Rent
Establishment Date, then Landlord may elect, in its sole discretion, to either refund
such excess to Tenant within thirty (30) days after the Rent Establishment Date,
or offset such overpayment against Rent due or remaining due under this Lease. If
as of the Rent Establishment Date the aggregate amount of Estimated Monthly Rent
previously paid by Tenant is less than the 

 
 
                                        13    20

 aggregate amount of Monthly Rent payable under this Lease from the Commencement
Date to the Rent Establishment Date, then Tenant shall pay the deficiency to Landlord
within thirty (30) days after the Rent Establishment Date.
 
                   Monthly Rent shall be paid in advance, on the first day of each
calendar month during the Term, without abatement, deduction, claim, offset, prior
notice or demand. Tenant shall pay to Landlord an amount equal to one (1) month's
advance payment of Monthly Rent for the Premises upon the execution of this Lease
by Landlord and Tenant. Additionally, Tenant shall pay, as and with the Monthly
Rent, the management fee described in Paragraph 5.C., Tenant's Percentage Share
of Common Area Maintenance Costs pursuant to Paragraph 5.D, the Real Property Taxes
and Impositions payable by Tenant pursuant to Paragraph 15, and the monthly cost
of insurance premiums required pursuant to Paragraph 21.C.
 
                   B. Adjustments to Monthly Rent. The Monthly Rent may be adjusted
at any time during the Term in accordance with the provisions of Paragraph 2.1.1
of Exhibit D to the Build to Suit Agreement. In addition, the Monthly Rent shall
be increased, but not decreased, as of the first day of the month which is twenty-five
(25) months from the Commencement Date and every twenty-four (24) months thereafter
during the Term (including without limitation the Extended Term) (each, an "Adjustment
Date") by the greater of (i) the percentage increase in the Index from the previous
Adjustment Date (or, for the first Adjustment Date, from the Commencement Date),
up to a maximum of sixteen percent (16%), or (ii) seven percent (7%). If, however,
the last Adjustment Date occurs at any time after the first day of a calendar month,
the first Adjustment Date shall be the first day of the immediately following calendar
month. On each Adjustment Date, the total aggregate amount of Monthly Rent then
in effect shall be multiplied by the greater of (x) the lesser of (A) a fraction,
the numerator of which is the Index published most recently before the applicable
Adjustment Date, and the denominator of which is the Index published most recently
before the prior Adjustment Date (or, in the case of the first Adjustment Date,
the Index published most recently before the Commencement Date), or (B) one hundred
sixteen percent (116%), or (y) one hundred seven percent (107%); and the corresponding
product shall be the Monthly Rent in effect until the next Adjustment Date. In no
event shall the Monthly Rent in effect after an Adjustment Date be less than one
hundred seven percent (107%) of the Monthly Rent in effect immediately prior to
such Adjustment Date. If no Index is published for either of the months set forth
above, the Index for the next preceding month shall be used.
 
                   C. Management Fee. Tenant shall pay to Landlord monthly, as Additional
Rent, a management fee equal to three and one-half percent (3.5%) of the then Monthly
Rent.
 
                   D. Common Area Maintenance Costs.
 
                             (i) Estimated Payments. Commencing on the Commencement
Date and continuing throughout the entire Term, Tenant shall pay Tenant's Percentage
Share of all Common Area Maintenance Costs paid or payable by Landlord in each year;
provided, however, that Tenant shall pay one hundred percent (100%) of those Common
Area Maintenance Costs arising from Landlord's performance of its obligations under
Paragraphs 17.A and Tenant's obligations under Paragraph 17.D. Before commencement
of the Term and during December of

 
 
                                        14    21

 each calendar year or as soon thereafter as practicable, Landlord shall give Tenant
notice of its estimate of amounts payable under this Paragraph 5.D.(i) for the ensuing
calendar year. Such notice shall show in reasonable detail the basis on which the
estimate was determined. On or before the first day of each month during the ensuing
calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of such estimated
amounts, provided that if such notice is not given in December, Tenant shall continue
to pay on the basis of the prior year's estimate until the month after such notice
is given. If at any time or times it appears to Landlord, in its reasonable judgment,
that the amounts payable under this Paragraph 5.D.(i) for the current calendar year
will vary from its then-current estimate by more than five percent (5%), Landlord
may, in its sole discretion, by notice to Tenant, showing in reasonable detail the
basis for such variance, revise its estimate for such year, in which case subsequent
payments by Tenant for such year shall be based upon such revised estimate. Landlord's
election not to give the notice described in the foregoing sentence shall not affect
Landlord's ability to charge Tenant for, nor Tenant's liability to pay for, any
shortfall in the estimated payments for such calendar year previously made by Tenant,
as set forth in Paragraph 5.D.(ii).
 
                             (ii) Adjustment. Within one hundred twenty (120) days
after the close of each calendar year or as soon after such 120-day period as reasonably
practicable, Landlord shall deliver to Tenant a reasonably detailed statement of
Common Area Maintenance Costs for such calendar year, certified by Landlord or its
property manager, subject to Tenant's right to audit as hereinafter provided. At
that time, Landlord shall also deliver to Tenant a statement, certified as correct
by Landlord, of the adjustments to be made pursuant to Paragraph 5.D.(i) above.
If Landlord's statement shows that Tenant owes an amount that is less than the estimated
payments for such calendar year previously made by Tenant, Landlord may elect, in
its sole discretion, to either refund such excess to Tenant within thirty (30) days
after delivery of the statement, or offset such overpayment against Rent due or
remaining due under this Lease; provided that if no Rent remains due, Landlord shall
refund such excess to Tenant within thirty (30) days after delivery of the statement.
If such statement shows that Tenant owes an amount that is more than the estimated
payments for such calendar year previously made by Tenant, Tenant shall pay the
deficiency to Landlord within thirty (30) days after delivery of the statement.
 
                             (iii) Last Year. If this Lease shall terminate on a
day other than the last day of a calendar year, the adjustment in Rent applicable
to the calendar year in which such termination shall occur shall be prorated on
the basis which the number of days from the commencement of such calendar year to
and including such termination date bears to three hundred sixty (360). The termination
of this Lease shall not affect the obligations of Landlord and Tenant pursuant to
Paragraph 5.D.(ii) to be performed after such termination.
 
                             (iv) Audit. Within one hundred eighty (180) days after
receipt of Landlord's statement of Common Area Maintenance Costs as provided in
Paragraph 5.D.(ii), Tenant or its designee, on not less than five (5) days' prior
written notice to Landlord, shall have the right to, at Tenant's sole cost and expense,
audit, examine and copy Landlord's books and records with respect to the Common
Area Maintenance Costs for the calendar year pertaining to the year for which the
Landlord's statement pertains. Landlord shall cooperate with Tenant in any such
examination of its books and records.

 
 
                                        15    22
 
                   E. Additional Rent. All monies required to be paid by Tenant
under this Lease, including, without limitation, the Tenant Improvement costs pursuant
to Exhibit B, the management fee described in Paragraph 5.D, Tenant's Percentage
Share of Common Area Maintenance Costs pursuant to Paragraph 5.D, Real Property
Taxes and Impositions pursuant to Paragraph 15, and the monthly cost of insurance
premiums required pursuant to Paragraph 21.C, shall be deemed Additional Rent.
 
                   F. Prorations. If the Commencement Date or the Second Half Commencement
Date is not the first (1st) day of a month, or if the termination date of this Lease
is not the last day of a month, a prorated installment of Monthly Rent based on
a 30-day month shall be paid for the fractional month during which such date occurs
or the Lease terminates.
 
                   G. Interest. Any amount of Rent or other charges provided for
under this Lease due and payable to Landlord which is not paid when due shall bear
interest at the Interest Rate from the date that is (i) five (5) days after the
date such Rent is due until such Rent is paid, or (ii) ten (10) days after Tenant
receives written notice from Landlord that any other charge provided for under this
Lease (other than Rent) is due and payable, until such other charge is paid.
 
          6. Late Payment Charges.
 
                   Tenant acknowledges that late payment by Tenant to Landlord of
Rent and other charges provided for under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being extremely
difficult or impracticable to fix. Therefore, if any installment of Rent or any
other charge due from Tenant (excluding late release of the Set-Aside Funds pursuant
to the Work Letter) is not received by Landlord within three (3) days after the
date such Rent or other charge is due, Tenant shall pay to Landlord an additional
sum equal to seven percent (7%) of the amount overdue as a late charge for every
month or portion thereof that the Rent or other charges remain unpaid. The parties
agree that this late charge represents a fair and reasonable estimate of the costs
that Landlord will incur by reason of the late payment by Tenant.

 Initials:

  /s/                                         /s/ - ----------------------------------
         ------------------------------------ Landlord                         
          Tenant
 
          7. Security Deposit.
 
                   A. Deposit Required. Tenant shall deposit with Landlord upon
the execution of this Lease by Landlord and Tenant, an amount equal to three (3)
payments of the Estimated Monthly Rent under this Lease, as the "Security Deposit"
for the full and faithful performance of every provision of this Lease to be performed
by Tenant. Effective as of the Rent Establishment Date, the Security Deposit shall
be adjusted (if necessary) to equal three (3) payments of the initial Monthly Rent
under this Lease. If as of the Rent Establishment Date the Estimated 

 
 
                                        16    23

 Monthly Rent exceeds the initial Monthly Rent as determined under Paragraph 5.A
above, then Landlord shall refund to Tenant, within thirty (30) days after the Rent
Establishment Date, any overpayment of the Security Deposit. If as of the Rent Establishment
Date the Estimated Monthly Rent is less than the initial Monthly Rent as determined
under Paragraph 5.A above, then Tenant shall increase the Security Deposit by paying
the deficiency in the Security Deposit to Landlord within thirty (30) days after
the Rent Establishment Date. For the purposes of this Lease, the term "Security
Deposit" shall include the initial sum deposited by Tenant as the Security Deposit
and any other sum deposited by Tenant as the Security Deposit and any other sum
deposited by Tenant towards the Security Deposit pursuant to this Paragraph 7.A.
At Tenant's option, the Security Deposit may be in the form of an irrevocable standby
letter of credit ("L-C"). Landlord shall not be required to segregate the Security
Deposit from Landlord's general funds; Landlord's obligations with respect to the
Security Deposit shall be those of a debtor and not a trustee, and Tenant shall
not be entitled to any interest on the Security Deposit. Invocation by Landlord
of its rights hereunder shall not constitute a waiver of nor relieve Tenant from
any liability or obligation for any default by Tenant under this Lease.
 
                             (i) Reduction or Replacement. So long as Tenant has
not committed any default under this Lease, then if Tenant can demonstrate to the
reasonable satisfaction of Landlord that Tenant has maintained a Fixed Charge Ratio
of at least 1.25 to 1 for a period of four (4) consecutive fiscal years at any time
after the Commencement Date, then Tenant may elect to reduce the Security Deposit
to a sum equal to the then-current amount of Monthly Rent. For the purposes of this
Paragraph 7, in order for Tenant to demonstrate that it has maintained the required
Fixed Charge Ratio for the fiscal year or years in question, Tenant must at a minimum
deliver to Landlord an audited financial statement of Tenant, showing that Tenant
has maintained the required Fixed Charge Ratio for the fiscal year or years in question.
 
                   If Tenant is entitled to and does elect to reduce the amount
of the Security Deposit pursuant to this Paragraph 7.A.(i), and Tenant delivers
to Landlord written notice of its election to so reduce the amount of the Security
Deposit and the financial statement described in the foregoing grammatical paragraph,
then either (x) if the Security Deposit is in the form of cash, Landlord shall pay
to Tenant the excess amount of the Security Deposit, without interest, within thirty
(30) days after Landlord's receipt of such notice and statement; or (y) if the Security
Deposit is in the form of an L-C, then Tenant may, not less than ten (10) days after
Landlord's receipt of such notice and statement, replace the L-C with an L-C in
an amount equal to the reduced amount of the Security Deposit.
 
                             (ii) Consequences of Default. If Tenant defaults with
respect to any provision of this Lease, after the expiration of any applicable cure
or grace periods expressly provided for in this Lease, Landlord may apply all or
any part of the Security Deposit for the payment of any Rent or other sum in default,
the repair of such damage to the Premises or the payment of any other amount which
Landlord may spend or become obligated to spend by reason of Tenant's default or
to compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default to the full extent permitted by law. If any portion of
a cash Security Deposit is so applied, or any portion of an L-C posted as the Security
Deposit, if applicable, is drawn upon, by Landlord for such purposes, Tenant shall
either, within ten (10) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore 

 
 
                                        17    24

 the Security Deposit to its original amount or deposit a replacement L-C with Landlord
in the amount of the original L-C. If Tenant is not otherwise in default, the Security
Deposit or any balance thereof shall be returned to Tenant within thirty (30) days
of termination of the Lease.
 
                             (ii) Form of L-C. If at any time Tenant elects to deposit
an L-C as the Security Deposit, the L-C shall be issued by a bank reasonably acceptable
to Landlord, shall be issued for a term of at least twelve (12) months and shall
be in a form and with such content reasonably acceptable to Landlord. Tenant shall
either replace the expiring L-C with an L-C in an amount equal to the original L-C
or renew the expiring L-C, in any event no later than thirty (30) days prior to
the expiration of the term of the L-C then in effect. If Tenant fails to deposit
a replacement L-C or renew the expiring L-C, Landlord shall have the right to draw
upon the expiring L-C for the full amount thereof and hold the same as the Security
Deposit; provided, however, that if Tenant provides a replacement L-C that meets
the requirements of this Paragraph, then Landlord shall return to Tenant promptly
in cash that amount of the L-C that had been drawn upon by Landlord. Drawing upon
the L-C shall be conditioned upon the presentation to the issuer of the L-C of a
certified statement executed by a general partner of Landlord that (i) Tenant is
in default under the Lease and Landlord is exercising its right to draw upon so
much of the L-C as is necessary to cure Tenant's default, or (ii) Tenant has not
renewed or replaced an expiring L-C as required by this Lease and Landlord is authorized
to draw upon the L-C prior to its expiration. The L-C shall not be mortgaged, assigned
or encumbered in any manner whatsoever by Tenant without the prior written consent
of Landlord. The use, application or retention of the L-C, or any portion thereof,
by Landlord shall not prevent Landlord from exercising any other right or remedy
provided by this Lease or by law, it being intended that Landlord shall not first
be required to proceed against the L-C, and such use, application or retention shall
not operate as a limitation on any recovery to which Landlord may otherwise be entitled.
 
          8. Holding Over.
 
                   If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term, with the express or implied consent of Landlord,
such tenancy shall be at sufferance only, and shall not constitute a renewal or
extension for any further term. If Tenant remains in possession after the expiration
of the Term, either with or without Landlord's consent, Rent shall be payable at
a rental equal to one hundred thirty percent (130%) of the Monthly Rent payable
during the last month of the Term (which rental shall be due and payable at the
same time as Monthly Rent is due under this Lease), and any other sums due under
this Lease shall be payable in the amount and at the times specified in this Lease.
Such holdover tenancy shall be subject to every other term, condition, and covenant
contained herein; provided, however, that neither the Holdover Option (as defined
below) nor Landlord's obligations under the Work Letter shall be of any force or
effect during any such holdover tenancy.
 
          9. Tenant Improvements.
 
                   Landlord agrees to construct the Tenant Improvements pursuant
to the terms of Exhibit B.

 
 
                                        18    25
 
          10. Condition of Premises.
 
                   A. Capital Improvements. Landlord shall complete the Capital
Improvements in accordance with the terms of Exhibit B; provided, however, that
the construction of the shell and core of the Building shall be governed by the
terms of the Build to Suit Agreement. Except for its obligation to perform the Capital
Improvements and the Tenant Improvements as set forth in this Lease and the Work
Letter, Landlord shall have no obligation whatsoever to do any work or perform any
improvements whatsoever to any portion of the Premises or the Building.
 
                   B. Acceptance of Premises. Within ten (10) days after completion
of the Tenant Improvements Tenant shall conduct a walk-through inspection of the
Premises with Landlord and complete a punch list of items needing additional work.
Other than the items specified in the punch list, if any, and subject to Landlord's
representations and warranties described below, by taking possession of the Premises,
Tenant shall be deemed to have accepted the Premises in good, clean and completed
condition and repair, subject to all applicable laws, codes and ordinances. Any
damage to the Premises caused by Tenant's move-in shall be repaired or corrected
by Tenant, at its sole cost and expense, which repair or corrective work shall not
be paid for out of the Tenant Improvements Allowance. Tenant acknowledges that neither
Landlord nor Landlord's Agents have made any representations or warranties as to
the suitability or fitness of the Premises for the conduct of Tenant's business
or for any other purpose, nor has Landlord or Landlord's Agents agreed to undertake
any Alterations or construct any Improvements to the Premises except as expressly
provided in this Lease. If Tenant fails to submit a punch-list to Landlord within
such 10-day period, it shall be deemed that there are no Improvement items needing
additional work or repair. Landlord's contractor shall complete all reasonable punch-list
items within thirty (30) days after the walk-through inspection or as soon as practicable
thereafter. Upon completion of such punch-list items, Tenant shall approve such
completed items in writing to Landlord. If Tenant fails to approve such items within
fourteen (14) days of completion, such items shall be deemed approved by Tenant.
 
          11. Use of the Premises and Common Area.
 
                   A. Tenant's Use. Tenant shall use the Premises only for general
office, research and development, marketing, sales, and storage related to such
activities, and any other legal use consistent with any CC&Rs. Tenant shall not
use the Premises or suffer or permit anything to be done in or about the Premises
which will in any way conflict with any law, statute, zoning restriction, ordinance
or governmental law, rule, regulation or requirement of public authorities now in
force or which may hereafter be in force, relating to or affecting the condition,
use or occupancy of the Premises. Tenant shall not commit any public or private
nuisance or any other act or thing which might or would disturb the quiet enjoyment
of any other tenant of Landlord or any occupant of nearby property. Tenant shall
place no loads upon the floors, walls or ceilings in excess of the maximum designed
load determined by a licensed structural engineer or which endanger the structure;
nor place any harmful liquids in the drainage systems; nor dump or store waste materials
or refuse or allow waste materials or refuse to remain outside the Building proper,
except in the enclosed trash areas provided. Tenant shall not store or permit to
be stored or otherwise placed any other material of any nature whatsoever outside
the Building, except on a temporary basis.

 
 
                                        19    26
 
                   B. Hazardous Materials.
 
                             (i) Hazardous Materials Defined. As used herein, the
term "Hazardous Materials" shall mean any wastes, materials or substances (whether
in the form of liquids, solids or gases, and whether or not air-borne), which are
or are deemed to be (a) pollutants or contaminants, or which are or are deemed to
be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious,
or which present a risk to public health or to the environment, or which are or
may become regulated by or under the authority of any applicable local, state or
federal laws, judgments, ordinances, orders, rules, regulations, codes or other
governmental restrictions, guidelines or requirements, any amendments or successor(s)
thereto, replacements thereof or publications promulgated pursuant thereto, including,
without limitation, any such items or substances which are or may become regulated
by any of the Environmental Laws (as hereinafter defined); (b) listed as a chemical
known to the State of California to cause cancer or reproductive toxicity pursuant
to Section 25249.8 of the California Health and Safety Code, Division 20, Chapter
6.6 (Safe Drinking Water and Toxic Enforcement Act of 1986); or (c) a pesticide,
petroleum, including crude oil or any fraction thereof, asbestos or any asbestos-
containing material, a polychlorinated biphenyl, radioactive material, or urea formaldehyde.
 
                             (ii) Environmental Laws Defined. In addition to the
laws referred to in Paragraph 11.B.(i) above, the term "Environmental Laws" shall
be deemed to include, without limitation, 33 U.S.C. Section 1251 et seq., 42 U.S.C.
Section 6901 et seq., 42 U.S.C. Section 7401 et seq., 42 U.S.C. Section 9601 et
seq., and California Health and Safety Code Section 25100 et seq., and 25300 et
seq., California Water Code, Section 13020 et seq., or any successor(s) thereto,
all local, state and federal laws, judgments, ordinances, orders, rules, regulations,
codes and other governmental restrictions, guidelines and requirements, any amendments
and successors thereto, replacements thereof and publications promulgated pursuant
thereto, which deal with or otherwise in any manner relate to, air or water quality,
air emissions, soil or ground conditions or other environmental matters of any kind.
 
                             (iii) Use of Hazardous Materials. Tenant agrees that
during the Term of this Lease, Tenant shall not use, or permit the use of, nor store,
generate, treat, manufacture or dispose of Hazardous Materials on, from or under
the Premises (individually and collectively, "Hazardous Use") except to the extent
that, and in accordance with such conditions as, Landlord may have previously approved
in writing in its sole and absolute discretion. Notwithstanding the foregoing, Tenant
shall be entitled to use and store only those Hazardous Materials which are (a)
set forth in a list prepared by Tenant and approved in writing by Landlord, which
shall be deemed given with respect to the Approved Hazardous Materials (hereinafter
defined), (b) necessary for Tenant's business, but then only in the amounts and
for the purposes previously disclosed in writing to and approved in writing by Landlord,
and (c) in full compliance with Environmental Laws, and all judicial and administrative
decisions pertaining thereto. All Hazardous Materials approved in writing by Landlord
as provided in the preceding sentence shall collectively be referred to as the "Approved
Hazardous Materials". Within thirty (30) days after request by Landlord, Tenant
shall deliver to Landlord a list of the Approved Hazardous Materials. Tenant shall
not be entitled to install any tanks under, on or about the Premises for the storage
of Hazardous Materials without the express written consent of Landlord, which may
be given or withheld in Landlord's sole discretion. For the purposes of this Paragraph
11.B.(iii), the 

 
 
                                        20    27

 term Hazardous Use shall include Hazardous Use(s) on, from or under the Premises
by Tenant, any Subtenant occupying all or any portion of the Premises during the
Term, or any of their directors, officers, employees, shareholders, partners, invitees,
agents, contractors or occupants (collectively, "Tenants Parties"), whether known
or unknown to Tenant, occurring during the Term of this Lease. The term "Tenant's
Parties" shall not include any tenants of the Project other than Tenant, except
that the term "Tenant's Parties" shall include any Subtenant occupying all or any
portion of the Premises during the Term.
 
                             (iv) Hazardous Materials Report; When Required. Tenant
shall submit to Landlord a written report with respect to Hazardous Materials ("Report")
in the form prescribed in Paragraph 11.B.(v) below on the following dates:
 
                                       (a) At any time within ten (10) days after
written request by Landlord, and
 
                                       (b) At any time when there has been a violation
of any Environmental Law, or in connection with any proposed request for Landlord's
consent to any change in the list of Approved Hazardous Materials or for an increase
in the intensity of usage or storage of such Approved Hazardous Materials.
 
                             (v) Hazardous Materials Report; Contents. The Report
shall contain, without limitation, the following information:
 
                                       (a) Whether on the date of the Report and
(if applicable) during the period since the last Report there has been any Hazardous
Use on, from or under the Premises, other than the use of Approved Hazardous Materials.
 
                                       (b) If there was such Hazardous Use, the
exact identity of the Hazardous Materials (other than the Approved Hazardous Materials),
the dates upon which such materials were brought upon the Premises, the dates upon
which such Hazardous Materials were removed therefrom, and the quantity, location,
use and purpose thereof.
 
                                       (c) If there was such Hazardous Use, any
governmental permits maintained by Tenant with respect to such Hazardous Materials,
the issuing agency, original date of issue, renewal dates (if any) and expiration
date. Copies of any such permits and applications therefor shall be attached.
 
                                       (d) If there was such Hazardous Use, any
governmental reporting or inspection requirements with respect to such Hazardous
Materials, the governmental agency to which reports are made and/or which conducts
inspections, and the dates of all such reports and/or inspections (if applicable)
since the last Report. Copies of any such Reports shall be attached.
 
                                       (e) If there was such Hazardous Use, identification
of any operation or business plan prepared for any government agency with respect
to Hazardous Use.

 
 
                                        21    28
 
                                       (f) Any liability insurance carried by Tenant
with respect to Hazardous Materials, if any, the insurer, policy number, date of
issue, coverage amounts, and date of expiration. Copies of any such policies or
certificates of coverage shall be attached.
 
                                       (g) Any notices of violation of Environmental
Laws, written or oral, received by Tenant from any governmental agency since the
last Report, the date, name of agency, and description of violation. Copies of any
such written notices shall be attached.
 
                                       (h) Any knowledge, information or communication
which Tenant has acquired or received relating to (x) any enforcement, cleanup,
removal or other governmental or regulatory action threatened or commenced against
Tenant or with respect to the Premises pursuant to any Environmental Laws; (y) any
claim made or threatened by any person or entity against Tenant or the Premises
on account of any alleged loss or injury claimed to result from any alleged Hazardous
Use on or about the Premises; or (z) any report, notice or complaint made to or
filed with any governmental agency concerning any Hazardous Use on or about the
Premises. The Report shall be accompanied by copies of any such claim, report, complaint,
notice, warning or other communication that is in the possession of or is available
to Tenant.
 
                                       (i) Such other pertinent information or documents
as are reasonably requested by Landlord in writing.
 
                             (vi) Release of Hazardous Materials; Notification and
Cleanup.
 
                                       (a) At any time during the Term, if Tenant
knows or believes that any release of any Hazardous Materials has come or will come
to be located upon, about or beneath the Premises, then Tenant shall immediately,
either prior to the release or following the discovery thereof by Tenant, give verbal
and follow-up written notice of that condition to Landlord.
 
                                       (b) At its sole cost and expense, Tenant
covenants to investigate, clean up and otherwise remediate any release of Hazardous
Materials which were caused or created by Tenant or any of Tenant's Parties. Such
investigation, clean-up and remediation shall be performed only after Tenant has
obtained, if practicable, Landlord's written consent, which shall not be unreasonably
withheld; provided, however, that Tenant shall be entitled to respond immediately
to an emergency without first obtaining Landlord's written consent. All clean-up
and remediation shall be done in compliance with Environmental Laws and to the reasonable
satisfaction of Landlord.
 
                                       (c) Notwithstanding the foregoing, Landlord
shall have the right, but not the obligation, in Landlord's sole and absolute discretion,
exercisable by written notice to Tenant, to undertake within or outside the Premises
all or any portion of any reasonable investigation, clean-up or remediation with
respect to any Hazardous Use of such Hazardous Materials by Tenant or any of Tenant's
Parties (or, once having undertaken any of such work, to cease same, in which case
Tenant shall perform the work), all at Tenant's sole cost and expense, which shall
be paid by Tenant as Additional Rent within ten (10) days after receipt of written
request therefor by Landlord (and which Landlord may require to be paid prior to
commencement 

 
 
                                        22    29

 of any work by Landlord); provided, however, that Tenant's obligation to pay for
such work shall only be applicable if Tenant fails to perform its obligations under
this Paragraph 11 (including without limitation the obligations described in Paragraph
11.B.(vi)(b)). No such work by Landlord shall create any liability on the part of
Landlord to Tenant or any other party in connection with such Hazardous Materials
by Tenant or any of Tenant's Parties or constitute an admission by Landlord of any
responsibility with respect to such Hazardous Materials.
 
                                       (d) It is the express intention of the parties
hereto that Tenant shall be liable under this Paragraph 11.B.(vi) for any and all
conditions covered hereby which were or are caused or created by Tenant or any of
Tenant's Parties, whether occurring prior to, on, or after the Commencement Date.
Tenant shall not enter into any settlement agreement, consent decree or other compromise
with respect to any claims relating to any Hazardous Materials in any way connected
to the Premises without first (x) notifying Landlord of Tenant's intention to do
so and affording Landlord the opportunity to participate in any such proceedings,
and (y) obtaining Landlord's written consent, which shall not be unreasonably withheld.
 
                             (vii) Inspection and Testing by Landlord. Landlord
shall have the right at all times during the Term of this Lease to (a) inspect the
Premises, as well as such of Tenant's books and records pertaining to the Premises
and the conduct of Tenant's business therein, and to (b) conduct tests and investigations
to determine whether Tenant is in compliance with the provisions of this Paragraph
11.B. Except in case of emergency, Landlord shall give reasonable notice to Tenant
before conducting any inspections, tests, or investigations in accordance with Paragraph
19, shall provide Tenant with a work plan describing any testing that shall be performed
at the Premises, and shall use reasonable efforts to minimize interference with
the conduct of Tenant's business at the Premises caused by any such inspections,
tests, or investigations. The cost of all such inspections, tests and investigations
shall be borne by Tenant. Neither any action nor inaction on the part of Landlord
pursuant to this Paragraph 11.B.(vii) shall be deemed in any way to release Tenant
from, or in any way modify or alter, Tenant's responsibilities, obligations, and
liabilities incurred pursuant to Paragraph 11.B hereof.
 
                             (viii) Indemnity. Tenant shall indemnify, defend, protect,
hold harmless, and, at Landlord's option (with such attorneys as Landlord may approve
in advance and in writing), defend Landlord, Landlord's Agents, and Landlord's officers,
directors, shareholders, partners, employees, contractors, property managers, agents
and mortgagees and other lien holders, from and against any and all Losses (as defined
below), whenever such Losses arise, arising from or related to: (a) any violation
or alleged violation by Tenant or any of Tenant's Parties of any of the requirements,
ordinances, statutes, regulations or other laws referred to in this Paragraph 11.b,
including, without limitation, the Environmental Laws, whether such violation or
alleged violation occurred prior to, on, or after the Commencement Date; (b) any
breach of the provisions of this Paragraph 11.b by Tenant or any of Tenant's Parties;
or (c) any Hazardous Use on, about or from the Premises by Tenant or any of Tenant's
Parties of any Hazardous Materials (whether or not approved by Landlord under this
Lease), whether such Hazardous Use occurred prior to, on, or after the Commencement
Date. The term "Losses" shall mean all claims, demands, expenses, actions, judgments,
damages (whether consequential, direct or indirect, known or unknown, foreseen or
unforeseen), penalties, fines, liabilities, losses of every kind and nature (including,
without limitation, property damage, diminution in value of 

 
 
                                        23    30

 Landlord's interest in the Premises, damages for the loss of restriction on use
of any space or amenity within the Premises, damages arising from any adverse impact
on marketing space in the Premises, sums paid in settlement of claims and any costs
and expenses associated with injury, illness or death to or of any person), suits,
administrative proceedings, costs and fees, including, but not limited to, attorneys'
and consultants' fees and expenses, and the costs of cleanup, remediation, removal
and restoration, that are in any way related to any matter covered by the foregoing
indemnity.
 
                             (ix) Survival. The provisions of this Paragraph 11.b
shall survive the expiration or earlier termination of this Lease.
 
                   C. Special Provisions Relating to The Americans With Disabilities
Act of 1990.
 
                             (i) Allocation of Responsibility to Landlord. As between
Landlord and Tenant, Landlord shall be responsible that the Common Area owned by
Landlord complies with the requirements of Title III of the Americans with Disabilities
Act of 1990 (42 U.S.C. 12181, et seq., The Provisions Governing Public Accommodations
and Services Operated by Private Entities), and all regulations promulgated thereunder,
and all amendments, revisions or modifications thereto now or hereafter adopted
or in effect in connection therewith (hereinafter collectively referred to as the
"ADA"), and to take such actions and make such alterations and improvements as are
necessary for such compliance; provided, however, that to the extent such requirements
arise from the construction of any Alterations to the Premises made by or on behalf
of Tenant, then as between Landlord and Tenant, Tenant shall be responsible that
the Common Area complies with the requirements of the ADA, and to take such actions
and make such alterations and improvements as are necessary for such compliance.
 
                             (ii) Allocation of Responsibility to Tenant. Except
as expressly provided in the Work Letter, as between Landlord and Tenant, Tenant,
at its sole cost and expense, shall be responsible that the Premises (and all modifications
made by Tenant of access to the Premises from the street), and all alterations and
improvements in the Premises (including without limitation the Tenant Improvements),
and Tenant's use and occupancy of the Premises, and Tenant's performance of its
obligations under this Lease, comply with the requirements of the ADA, and to take
such actions and make such alterations and improvements as are necessary for such
compliance; provided, however, that Tenant shall not make any such alterations or
improvements except upon Landlord's prior written consent (which shall not be unreasonably
withheld) pursuant to the terms and conditions of this Lease. If Tenant fails diligently
to take such actions or make such alterations or improvements as are necessary for
such compliance, Landlord may, but shall not be obligated to, take such actions
and make such alterations and improvements and may recover all of the costs and
expenses of such actions, alterations and improvements from Tenant as Additional
Rent. Tenant shall be entitled to utilize the Tenant Improvements Allowance to pay
for the cost of any improvements required by ADA that are triggered by the construction
of the Tenant Improvements.
 
                             (iii) General. Notwithstanding anything in this Lease
contained to the contrary, no act or omission of either party, including any approval,
consent or acceptance by it 

 
 
                                        24    31

 or its agents, employees or other representatives, shall be deemed an agreement,
acknowledgment, warranty, or other representation by it that the other party has
complied with the ADA as provided under Paragraphs 11.C.(i) or 11.c.(ii) or that
any action, alteration or improvement by it complies or will comply with the ADA
as provided under Paragraphs 11.c.(i) or 11.c.(ii) or constitutes a waiver by it
of the other party's obligations to comply with the ADA under Paragraphs 11.c.(i)
or 11.c.(ii) of this Lease or otherwise. Any failure of either party to comply with
its obligations of the ADA under Paragraphs 11.c.(i) or 11.c.(ii) shall not relieve
such party from any obligations under this Lease or in the case of Landlord's failure
to comply under Paragraph 11.c.(i), constitute or be construed as a constructive
or other eviction of Tenant or disturbance of Tenant's use and possession of the
Premises.
 
                   D. Use and Maintenance of Common Area. Tenant and its employees
and invitees shall have the non-exclusive right to use the Common Area in common
with other persons during the Term of this Lease, subject to the CC&Rs and such
reasonable rules and regulations as may from time to time be deemed necessary or
advisable in Landlord's reasonable discretion for the proper and efficient operation
and maintenance of the Common Area. Such rules and regulations may include, among
other things, the hours during which the Common Area shall be open for use. Landlord
shall maintain and operate the Common Area from time to time owned by Landlord in
good condition, provided that any damage thereto, other than normal wear and tear,
occasioned by the act of Tenant or its employees or invitees shall be paid by Tenant
upon demand by Landlord.
 
          12. Quiet Enjoyment.
 
                   Landlord covenants that Tenant, upon performing the terms, conditions
and covenants of this Lease, shall have quiet and peaceful possession of the Premises
as against any person claiming the same by, through or under Landlord.
 
          13. Alterations.
 
                   A. Alteration Rights. After the Commencement Date, Tenant shall
not make or permit any Alterations in, on or about the Premises, except for nonstructural
Alterations (which shall not include any modifications to the mechanical or electrical
systems of the Building, nor any penetration of the Building's roof) not exceeding
Ten Thousand Dollars ($10,000.00) in aggregate cost during any period of twelve
(12) consecutive months, without the prior written consent of Landlord, and according
to plans and specifications approved in writing by Landlord, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing Tenant shall not, without
the prior written consent of Landlord, make any:
 
                             (i) Alterations to the exterior of the Building;
 
                             (ii) Alterations to the roof of the Building; and
 
                             (iii) Alterations visible from outside the Building,
to which Landlord may withhold Landlord's consent on wholly aesthetic grounds.

 
 
                                        25    32
 
                   B. Performance of Alterations. All Alterations shall be installed
at Tenant's sole expense, in compliance with all applicable laws, by a licensed
contractor, shall be done in a good and workmanlike manner conforming in quality
and design with the Premises existing as of the Commencement Date, and shall not
diminish the value of either the Building or the Premises. All Alterations made
by Tenant shall be and become the property of Landlord upon installation and shall
not be deemed Tenant's Personal Property, and Tenant shall not remove any Alterations
from the Premises unless Tenant has first obtained Landlord's written consent to
such removal. Landlord may require Tenant to remove, at Tenant's expense, any Alterations
from the Premises at the expiration or earlier termination of this Lease; provided,
however, that at the time any Alterations are constructed, Tenant shall have the
right to request Landlord's written approval (which shall not be unreasonably withheld
or delayed) that Landlord will not require the removal of such Alterations at the
expiration or earlier termination of this Lease. Notwithstanding Alterations made
by it to the Premises. Tenant shall give Landlord written notice of Tenant's intention
to perform work on the Premises at least ten (10) days prior to the commencement
of such work to enable Landlord to post and record a Notice of Nonresponsibility
or other notice deemed proper before the commencement of any such work.
 
                   C. Trade Fixtures. Landlord acknowledges that Tenant may lease
from or finance with a third party (collectively, a "Trade Fixture Lessor") all
or a portion of Tenant's Personal Property. Landlord shall duly execute and properly
deliver any waivers or consents which may reasonably be required by any proposed
Trade Fixture Lessor in connection with the leasing or financing of such Tenant's
Personal Property, so long as such waivers and consents shall include the following:
(i) the Trade Fixture Lessor shall agree to repair any damage to the Premises caused
by the Trade Fixtures Lessor's removal of Tenant's Personal Property from the Premises,
and (ii) Landlord's waiver and consent shall be of no force or effect after the
thirtieth (30th) day following the end of the Term or earlier termination of this
Lease.
 
          14. Surrender of the Premises.
 
                   Upon the expiration or earlier termination of the Term, Tenant
shall surrender the Premises to Landlord in its condition existing as of the date
of substantial completion of the Improvements, normal wear and tear and fire or
other casualty excepted, with all interior walls repaired if damaged, all broken,
marred or nonconforming acoustical ceiling tiles replaced, all windows washed, the
plumbing and electrical systems and lighting in good order and repair, including
replacement of any burned out or broken light bulbs or ballasts, the HVAC equipment
serviced and repaired by a reputable and licensed service firm, and all floors cleaned,
all to the reasonable satisfaction of Landlord. Tenant shall remove from the Premises
all of Tenant's Alterations required to be removed pursuant to Paragraph 13, and
all Tenant's Personal Property, and repair any damage and perform any restoration
work caused by such removal. If Tenant fails to remove such Alterations and Tenant's
Personal Property, and such failure continues after the expiration or earlier termination
of this Lease, Landlord may retain such Alterations and Tenant's Property and all
rights of Tenant with respect to it shall cease, or Landlord may place all or any
portion of such Alterations and Tenant's Property in public storage for Tenant's
account. Tenant shall be liable to Landlord for costs of removal of any such Alterations
and Tenant's Personal Property and storage and transportation costs of same, and
the cost of repairing and restoring the Premises, together with interest at the
Interest Rate from the date of expenditure by Landlord. If

 
 
                                        26    33

 the Premises are not so surrendered at the expiration or earlier termination of
this Lease, Tenant shall indemnify Landlord and Landlord's Agents against all loss
or liability, including reasonable attorneys' fees and costs, resulting from delay
by Tenant in so surrendering the Premises.
 
                   Normal wear and tear, for the purposes of this Lease, shall be
construed to mean wear and tear caused to the Premises by a natural aging process
which occurs in spite of prudent application of the best standards for maintenance,
repair and janitorial practices. It is not intended, nor shall it be construed,
to include items of neglected or deferred maintenance which would have or should
have been attended to during the Term of the Lease if the best standards had been
applied to properly maintain and keep the Premises at all times in good condition
and repair.
 
          15. Impositions and Real Property Taxes.
 
                   A. Payment by Tenant. Tenant shall pay all Impositions prior
to delinquency. If billed directly, Tenant shall pay such Impositions and concurrently
present to Landlord satisfactory evidence of such payments. If any Impositions are
billed to Landlord or included in bills to Landlord for Real Property Taxes, then
Tenant shall pay to Landlord all such amounts within fifteen (15) days after receipt
of Landlord's invoice therefor. If applicable law prohibits Tenant from reimbursing
Landlord for an Imposition, but Landlord may lawfully increase the Monthly Rent
to account for Landlord's payment of such Imposition, the Monthly Rent payable to
Landlord shall be increased so that the amount of such increased Monthly Rent, together
with any accompanying increases in the Real Property Taxes payable by Tenant with
respect to such Imposition, are sufficient to net to Landlord the same return without
reimbursement of such Imposition as would have been received by Landlord with reimbursement
of such Imposition. In addition, on or before April 10 and December 10 of each year
of the Term, Tenant shall pay directly to the San Mateo County assessor the Real
Property Taxes for the Premises as set forth on the assessors tax bill for the Premises.
If, however, the Premises are not a separate parcel for tax purposes but constitute
a portion of a larger tax parcel or parcels, the Real Property Taxes payable by
Tenant under this Lease shall be a percentage of the Real Property Taxes payable
for such parcel or parcels, which percentage shall be determined by dividing the
Rentable Area of the Building by the total Rentable Area of all buildings on such
parcel or parcels and multiplying the result by 100, which Real Property Taxes shall
be payable by Tenant to Landlord monthly as part of the Common Area Maintenance
Costs.
 
                             (i) Tax Parcels. If Landlord determines in its reasonable
discretion that the configuration of tax parcels within the Project (including without
limitation the tax parcel on which the Premises is situated) causes the allocation
of Real Property Taxes between the affected tax parcels to be unfair or inequitable,
Landlord reserves the right to internally reallocate the Real Property Taxes assessed
against such affected tax parcels in a manner that reasonably addresses such unfairness
or inequity. If Landlord effects any such reallocation, then the Real Property Taxes
payable by Tenant under this Lease shall be those Real Property Taxes allocated
to the Premises pursuant to this Paragraph 15.A.(i).
 
                             (ii) Payment. Promptly following payment of the Real
Property Taxes, Tenant shall provide Landlord with copies of paid receipts or other
documentary evidence that 

 
 
                                        27    34

 the Real Property Taxes have been paid by Tenant. If Tenant fails to pay the Real
Property Taxes on or before April 10 and December 10, respectively, or if Tenant
fails to pay its share of Real Property Taxes as part of the Common Area Maintenance
Costs, Tenant shall pay to Landlord any penalty incurred by such late payment. In
addition, Tenant shall pay any Real Property Tax not included within the county
tax assessor's tax bill within ten (10) days after being billed for same by Landlord.
The foregoing dates are based on the dates established by the county as the dates
on which Real Property Taxes become delinquent if not paid. If such delinquency
dates change, the dates on which Tenant must pay the Real Property Taxes for the
Premises shall be at least ten (10) days prior to the new delinquency dates. Assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such
purposes as fire protection, street, sidewalk, road, utility construction and maintenance,
refuse removal and for other governmental services which may formerly have been
provided without charge to property owners or occupants. It is the intention of
the parties that all new and increased assessments, taxes, fees, levies and charges
are to be included within the definition of Real Property Taxes for the purposes
of this Lease.
 
                   B. Taxes on Tenant Improvements and Personal Property. Tenant
shall pay any increase in Real Property Taxes resulting from any and all Alterations
and Tenant Improvements of any kind whatsoever placed in, on or about the Premises
for the benefit of, at the request of, or by Tenant. Tenant shall pay prior to delinquency
all taxes assessed or levied against Tenant's Personal Property in, on or about
the Premises or elsewhere. When possible, Tenant shall cause its Personal Property
to be assessed and billed separately from the Premises and the real property or
Personal Property of Landlord.
 
                   C. Proration. Tenant's liability to pay Real Property Taxes shall
be prorated on the basis of a 360-day year to account for any fractional portion
of a fiscal tax year included at the commencement or expiration of the Term. With
respect to any assessments which may be levied against or upon the Premises on all
or any portion of the Project, or which under the laws then in force may be evidenced
by improvements or other bonds or may be paid in annual installments, only the amount
of such annual installment (with appropriate proration for any partial year) and
interest due thereon shall be included within the computation of the annual Real
Property Taxes levied against the Premises or such portion of the Project, as applicable.
 
          16. Utilities and Services.
 
                   Tenant shall be responsible for and shall pay promptly all charges
for water, gas, electricity, telephone, refuse pick-up, janitorial service and all
other utilities, materials and services furnished directly to or used by Tenant
in, on or about the Premises during the Term, together with any taxes thereon. If
any utility, material or service is not separately charged or metered to any portion
of the Premises, Tenant shall pay to Landlord, within ten (10) days after written
demand therefor, Tenant's pro rata share of the total cost thereof as may be determined
by Landlord. Landlord shall not be liable in damages or otherwise for any failure
or interruption of any utility service or other service furnished to the Premises,
except that resulting from the gross negligence or willful misconduct of Landlord.
Tenant shall have the right to contract directly with vendors for janitorial and
maintenance services, provided such vendors must be approved in advance by Landlord,
which approval shall not be unreasonably withheld; and provided further, 

 
 
                                        28    35

 that Tenant shall have no right to contract with any vendor to maintain the Building's
HVAC system, which shall be the sole responsibility of Landlord as set forth in
Paragraph 17.A.
 
          17. Repair and Maintenance.
 
                   A. Landlord's Obligations. Landlord shall keep in good order,
condition and repair the structural parts of the Building, which structural parts
consist only of the foundation, subflooring, exterior walls (excluding the interior
of all walls and the exterior and interior of all windows, doors, ceilings, and
plate glass), and roof of the Building, and all plumbing and electrical facilities
leading up to (but not situated within) the Building, except for any damage thereto
caused by the negligence or willful acts or omissions of Tenant or of Tenant's agents,
employees or invitees, or by reason of the failure of Tenant to perform or comply
with any terms of this Lease, or caused by Alterations made by Tenant or by Tenant's
agents, employees or contractors. It is an express condition precedent to all obligations
of Landlord to repair and maintain that Tenant shall have notified Landlord of the
need for such repairs or maintenance. Tenant waives the provisions of Sections 1941
and 1942 of the California Civil Code and any similar or successor law regarding
Tenant's right to make repairs and deduct the expenses of such repairs from the
Rent due under this Lease. Landlord shall keep in good order, condition, repair
and maintenance the Building's HVAC system and roof, and shall maintain an HVAC
system preventive maintenance service contract from a qualified vendor for the purpose
of maintaining the Building's HVAC system, and a roof maintenance service contract
from a qualified vendor for the purpose of maintaining the Building's roof. Landlord
shall determine in its sole discretion whether any such vendor is qualified. Any
and all costs of any maintenance or repair of the HVAC system or the roof (including
without limitation the cost of maintaining HVAC system preventative maintenance
contracts and roof maintenance service contracts) shall be included in the Common
Area Maintenance Costs payable solely by Tenant for the year in which such cost
is incurred. Landlord may elect, in its sole discretion, to paint the exterior of
the Building and/or to replace or perform capital improvements to any area or aspect
of the Building which Landlord is required keep in good order, condition and repair.
If Landlord decides, in its sole discretion, to replace the roof of the Building
during the Term, then the cost of so replacing the roof, together with interest
at the Interest Rate, shall be amortized on a straight-line basis over the useful
life of the roof (as determined by Landlord in its sole discretion) (the "Useful
Life"), and the entire amount of such amortized costs and interest shall be included
in the monthly Common Area Maintenance Costs payable solely by Tenant during the
entire period over which such costs are amortized, until Tenant has paid to Landlord
that proportion of the total amount of such amortized costs equal to (a) the number
of months remaining during the Term as of the date such roof replacement was completed,
divided by (b) the number of months of the Useful Life; provided that in no event
shall such proportion exceed one hundred percent (100%). For the purposes of example
only and not by way of limitation, if the Building's roof is replaced twenty-four
(24) months before the end of the Term, at a cost of Fifty Thousand Dollars ($50,000.00),
and the Useful Life is one hundred twenty (120) months, then (a) the cost of such
replacement shall be amortized at the rate of Four Hundred Sixteen and 67/100ths
Dollars ($416.67) per month, with interest at the Interest Rate, and (b) the amount
to be included in the monthly Common Area Maintenance Costs payable solely by Tenant
for the balance of the Term shall equal Four Hundred Sixteen and 67/100ths Dollars
($416.67), with interest at the Interest Rate, until Tenant has paid to Landlord
a total aggregate amount of Ten Thousand Dollars 

 
 
                                        29    36

 ($10,000.00), together with interest at the Interest Rate, towards such amortized
costs (i.e., Fifty Thousand Dollars ($50,000.00) multiplied by [Twenty-Four (24)
months divided by One Hundred Twenty (120) months]). If Tenant exercises an Option
to Extend, the total length of the Term (i.e., the initial Term and each Extended
Term) shall be utilized to calculate the maximum amount of such amortized costs
that shall be includable in the monthly Common Area Maintenance Costs payable solely
by Tenant pursuant to this Paragraph 17.A.

 
                   It is the express intent of the parties that except as specifically
set forth in this Paragraph 17.A, Landlord shall have no obligation whatsoever to
repair or maintain the Building, and that Tenant shall be responsible for performing
all repair, operation, and maintenance of the Building except for those tasks specifically
described in this Paragraph 17.A.
 
                   B. Tenant's Obligations. Tenant shall at all times and at its
sole cost and expense clean, keep and maintain in good order, condition and repair
(and replace, if necessary) every part of the Premises which is not within Landlord's
obligation pursuant to Paragraph 17.A. Tenant's repair and maintenance obligations
shall include without limitation all plumbing and electrical facilities situated
within the Building, fixtures, interior walls and ceiling, floors, windows, window
frames, doors, entrances, plate glass, showcases, skylights, all lighting fixtures,
lamps, fans and any exhaust equipment and systems, all mechanical systems (but not
the HVAC system), any automatic fire extinguisher equipment within the Building,
all security systems and alarms, all electrical motors and all other appliances
and equipment of every kind and nature located in, upon or about the Building or
the Premises. Tenant shall also be responsible for all pest control within the Premises.
 
                   C. Conditions Applicable to Repairs. All repairs, replacements
and reconstruction made by or on behalf of Tenant or any person claiming through
or under Tenant shall be made and performed (i) at Tenant's sole cost and expense,
in a good and workmanlike manner and at such time and in such manner as Landlord
may reasonably designate, (ii) by contractors approved in advance by Landlord, (iii)
so that the repairs, replacements or reconstruction shall be at least equal in quality,
value and utility to the original work or installation, (iv) in accordance with
such reasonable requirements as Landlord may impose with respect to insurance and
bonds to be obtained by Tenant in connection with the proposed work, and (v) in
accordance with any rules and regulations for the Building as may be adopted by
Landlord from time to time and in accordance with all applicable laws and regulations
of governmental authorities having jurisdiction over the Premises.
 
                   D. Landlord's Rights. If Tenant fails to perform Tenant's obligations
under Paragraph 17.B, Landlord may in its sole discretion give Tenant notice of
such work as is reasonably required to fulfill such obligations. If Tenant fails
to commence the work within thirty (30) days after receipt of such notice and diligently
prosecute the work to completion, then Landlord shall have the right (but not the
obligation) to do such acts or expend such funds at the expense of Tenant as are
reasonably required to perform such work. Any amount so expended by Landlord shall
be paid by Tenant to Landlord promptly after demand with interest at the Interest
Rate. Landlord shall have no liability to Tenant for any damage to, or interference
with Tenant's use of, the Premises, or inconvenience to Tenant as a result of performing
any such work.

 
 
                                        30    37
 
                   E. Compliance with Governmental Regulations. Tenant shall, at
its sole cost and expense, comply with, including the making by Tenant of any Alteration
to the Premises, all present and future regulations, rules, laws, ordinances, and
requirements of all governmental authorities (including, without limitation state,
municipal, county and federal governments and their departments, bureaus, boards
and officials) applicable to the Premises or the Building.

 
 
          18. Liens.
 
                   Tenant shall keep the Building and the Premises free from any
liens arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant and hereby agrees to indemnify, defend, protect and hold
Landlord and Landlord's Agents harmless from and against any and all loss, claim,
damage, liability, cost and expense, including attorneys' fees and costs, in connection
with or arising out of any such lien or claim of lien. Tenant shall cause any such
lien imposed to be released of record by payment or posting of a proper bond acceptable
to Landlord within ten (10) days after written request by Landlord. Tenant shall
give Landlord written notice of Tenant's intention to perform work on the Premises
which might result in any claim of lien at least ten (10) days prior to the commencement
of such work to enable Landlord to post and record a Notice of Nonresponsibility
or any such other notice(s) as Landlord may deem appropriate. If Tenant fails to
so remove any such lien within the prescribed ten 10-day period, then Landlord may
do so at Tenant's expense and Tenant shall reimburse Landlord for such amounts upon
demand. Such reimbursement shall include all costs incurred by Landlord including
Landlord's reasonable attorneys' fees with interest thereon at the Interest Rate.
 
          19. Landlord's Right to Enter the Premises.
 
                   Tenant shall permit Landlord and Landlord's Agents to enter the
Premises at all reasonable times with reasonable notice, except for emergencies
in which case no notice shall be required, to inspect the same, to post Notices
of Nonresponsibility and similar notices, and real estate "For Sale" signs, to show
the Premises to interested parties such as prospective lenders and purchasers, to
make necessary repairs, to discharge Landlord's obligations under this Lease, to
discharge Tenant's obligations under this Lease when Tenant has failed to do so
within a reasonable time after written notice from Landlord, and at any reasonable
time within one hundred and eighty (180) days prior to the expiration of the Term,
to place upon the Building ordinary "For Lease" signs and to show the Premises to
prospective tenants.
 
          20. Signs.
 
                   Subject to Tenant obtaining all necessary approvals from the
City of Redwood City and subject to Landlord's review and approval of plans and
specifications for any proposed signage, which approval may be withheld only in
Landlord's commercially reasonable judgment, Tenant shall have the exclusive right
to install identification signage on the exterior of the Building, so long as such
signage complies with Landlord's project sign program. Tenant shall have no right
to maintain any Tenant identification sign in any other location in, on or about
the Building or the Premises and shall not display or erect any other Tenant identification
sign, display or other advertising material that is visible from the exterior of
the Building. Any changes to the size, design, color or other physical aspects of
Tenant's identification sign(s) shall be

 
 
                                        31    38

 subject to the Landlord's prior written approval, which shall not be unreasonably
withheld, and any appropriate municipal or other governmental approvals. The cost
of Tenant's sign(s) and their installation, maintenance and removal shall be Tenant's
sole cost and expense. If Tenant fails to maintain its sign(s), or, if Tenant fails
to remove its sign(s) upon termination of this Lease, Landlord may do so at Tenant's
expense and the amounts expended by Landlord in doing so shall be immediately payable
by Tenant to Landlord as Additional Rent.
 
          21. Insurance.
 
                   A. Indemnification. Tenant shall indemnify, defend, protect and
hold Landlord harmless of and from any and all loss, liens, liability, claims, causes
of action, damage, injury, cost or expense arising out of or in connection with,
or related to (i) the making of Alterations, or (ii) injury to or death of persons
or damage to property occurring or resulting directly or indirectly from: (A) the
use or occupancy of, or the conduct of business in, the Premises; (B) the use, storage,
release or disposal by Tenant or Tenant's employees, agents, contractors, licensees
or invitees, of any Hazardous Materials in or about the Premises or any other portion
of the Project; (C) any other occurrence or condition in or on the Premises; and
(D) acts, neglect or omissions of Tenant, its officers, directors, agents, employees,
invitees or licensees in or about any portion of the Project. Tenant's indemnity
obligation includes reasonable attorneys' fees and costs, investigation costs and
all other reasonable costs and expenses incurred by Landlord. If Landlord disapproves
the legal counsel proposed by Tenant for the defense of any claim indemnified against
hereunder, Landlord shall have the right to appoint its own legal counsel, the reasonable
fees, costs and expenses of which shall be included as part of Tenant's indemnity
obligation hereunder. The indemnification contained in this Section 21.A shall extend
to the officers, directors, shareholders, partners, employees, agents and representatives
of Landlord. The obligations assumed by Tenant herein shall survive this Lease.
Notwithstanding the foregoing, Landlord shall have the right, in its sole discretion,
but without being required to do so, to defend, adjust, settle or compromise any
claim, obligation, debt, demand, suit or judgment against Landlord arising out of
or in connection with the matters covered by the foregoing indemnity and, in such
event, Tenant shall reimburse Landlord for all reasonable charges and expenses incurred
by Landlord in connection therewith, including reasonable attorneys' fees; provided,
however, that Landlord shall not undertake any unilateral action or settlement so
long as Tenant or an insurance company, at its or their sole expense, is contesting
in good faith, diligently and with continuity such claim, action, obligation, demand
or suit, and so long as such claim, action, obligation, demand or suit does not
have or threaten to have a material adverse impact on Landlord's assets, reputation
or business affairs.
 
                   B. Tenant's Insurance. Tenant agrees to maintain in full force
and effect at all times during the Term, at its sole cost and expense, for the protection
of Tenant and Landlord, as their interests may appear, policies of insurance issued
by a responsible carrier or carriers acceptable to Landlord which afford the following
coverages:
 
                             (i) Commercial general liability insurance in an amount
not less than Three Million and no/100ths Dollars ($3,000,000.00) combined single
limit for both bodily injury and property damage which includes blanket contractual
liability broad form property damage, personal injury, completed operations, and
products liability, which policy shall name 

 
 
                                        32    39

 Landlord and Landlord's Agents as additional insureds and shall contain a provision
that "the insurance provided Landlord hereunder shall be primary and non-contributing
with any other insurance available to Landlord with respect to any damage, loss,
liability or expense covered by Tenant's indemnity obligations under Paragraph 21.A
of the Lease."
 
                             (ii) Causes of loss-special form property insurance
(including, without limitation, vandalism, malicious mischief, inflation endorsement,
and sprinkler leakage endorsement) on Tenant's Personal Property located on or in
the Premises. Such insurance shall be in the full amount of the replacement cost,
as the same may from time to time increase as a result of inflation or otherwise.
As long as this Lease is in effect, the proceeds of such policy shall be used for
the repair and replacement of such items so insured. Landlord shall have no interest
in the insurance proceeds on Tenant's Personal Property. Notwithstanding the foregoing,
Tenant shall have the right, at its election, to self-insure with respect to any
loss or damage to Tenant's Personal Property.
 
                             (iii) Boiler and machinery insurance, including steam
pipes, pressure pipes, condensation return pipes and other pressure vessels and
HVAC equipment, including miscellaneous electrical apparatus, in an amount satisfactory
to Landlord.
 
                             (iv) Workers compensation insurance in the manner and
to the extent required by applicable law and with limits of liability not less than
the minimum required under applicable law, covering all employees of Tenant having
any duties or responsibilities in or about the Premises.
 
                   C. Premises Insurance. During the Term Landlord shall maintain
causes of loss-special form property insurance (including inflation endorsement,
sprinkler leakage endorsement, and, at Landlord's option, earthquake and flood coverage)
on the Building, excluding coverage of all Tenant's Personal Property located on
or in the Premises, but including the Tenant Improvements. Such insurance shall
also include insurance against loss of rents, including, at Landlord's option, coverage
for earthquake and flood, in an amount equal to the Monthly Rent and Additional
Rent, and any other sums payable under the Lease, for a period of at least twelve
(12) months commencing on the date of loss. Such insurance shall name Landlord and
Landlord's Agents as named insureds and include a lender's loss payable endorsement
in favor of Landlord's lender (Form 438 BFU Endorsement). Tenant shall reimburse
Landlord monthly, as Additional Rent, for one-twelfth (12th) of the annual cost
of such insurance on the first day of each calendar month of the Term, prorated
for any partial month, or on such other periodic basis as Landlord shall elect.
If the insurance premiums are increased after the Commencement Date for any reason,
including without limitation due to an increase in the value of the Building or
its replacement cost, or due to Tenant's use of the Premises or any improvements
installed by Tenant, Tenant shall pay such increase within ten (10) days of notice
of such increase. Landlord may, in its sole discretion, maintain the insurance coverage
described in this Paragraph 21.C as part of an umbrella insurance policy covering
other properties owned by Landlord. Notwithstanding the foregoing, so long as the
original Landlord under this Lease continues to be the Landlord under this Lease,
and subject to the following conditions, Tenant may elect to carry the insurance
required by this Paragraph 21.C if Tenant is able to obtain the coverage required
hereunder at a cost less than that charged by Landlord's insurer. Tenant's right


 
 
                                        33    40

 to carry such insurance shall be subject to the following conditions: (i) all Holders,
defined below, shall have approved Tenant's right to carry such insurance, (ii)
such insurance shall name Landlord, and all parties designated by Landlord, as additional
insureds, and (iii) such insurance shall provide Landlord with at least the same
coverage and rights as Landlord would be entitled to receive if Landlord had obtained
such insurance.
 
                   D. Increased Coverage. Upon demand, Tenant shall provide Landlord,
at Tenant's expense, with such increased amount of existing insurance, and such
other insurance as Landlord or Landlord's lender may reasonably require to afford
Landlord and Landlord's lender adequate protection.
 
                   E. Failure to Maintain. If Tenant fails to maintain any insurance
coverage that Tenant is required to maintain under this Paragraph 21, and Landlord
incurs any liability to its insurance carrier arising out of Tenant's failure to
so maintain such insurance coverage, then any and all loss or damage Landlord shall
sustain by reason thereof, including attorneys' fees and costs, shall be borne by
Tenant and shall be immediately paid by Tenant upon its receipt of a bill therefor
and evidence of such loss. Nothing contained in this Paragraph 21.E shall be deemed
to limit or affect any other remedies or rights available to Landlord under this
Lease that arise from Tenant's failure to so maintain such insurance coverage.
 
                   F. Insurance Requirements. All insurance shall be in a form satisfactory
to Landlord and shall be carried in companies that have a general policy holder's
rating of not less than "A" and a financial rating of not less than Class "X" in
the most current edition of Best's Insurance Reports; and shall provide that such
policies shall not be subject to material alteration or cancellation except after
at least thirty (30) days' prior written notice to Landlord. The policy or policies,
or duly executed certificates for them, together with satisfactory evidence of payment
of the premiums thereon shall be deposited with Landlord prior to the Commencement
Date, and upon renewal of such policies, not less than thirty (30) days prior to
the expiration of the term of such coverage. If Tenant fails to procure and maintain
the insurance it is required to maintain under this Paragraph 21, Landlord may,
but shall not be required to, order such insurance at Tenant's expense and Tenant
shall reimburse Landlord therefor. Such reimbursement shall include all costs incurred
by Landlord in obtaining such insurance including Landlord's reasonable attorneys'
fees, with interest thereon at the Interest Rate.
 
                   G. Waiver and Release. Except to the extent due to the negligence
or willful misconduct of Landlord, Landlord shall not be liable to Tenant or Tenant's
employees, agents, contractors, licenses or invitees for, and Tenant waives as against
and releases Landlord and Landlord's Agents from, all claims for loss or damage
to any property or injury, illness or death of any person in, upon or about the
Premises and/or any other portion of the Project, arising at any time and from any
cause whatsoever (including without limitation any claim caused in whole or in part
by the act, omission, or neglect of other tenants, contractors, licensees, invitees
or other occupants of the Project or their agents or employees; and any claim arising
from any construction activities taking place in, upon or about the Premises and/or
any other portion of the Project). Landlord and Landlord's Agents shall not be liable
for any latent defect in the Premises.
 
          22. Waiver of Subrogation.

 
 
                                        34    41
 
                   Landlord and Tenant each hereby waive all rights of recovery
against the other on account of loss or damage occasioned by such waiving party
to its property or the property of others under its control, to the extent that
such loss or damage would be covered by any causes of loss-special form policy of
insurance or its equivalent required to be or actually carried under Paragraph 21.
Tenant and Landlord shall, upon obtaining policies of insurance required hereunder,
give notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease and Tenant and Landlord shall cause each insurance policy
obtained by such party to provide that the insurance company waives all right of
recovery by way of subrogation against either Landlord or Tenant in connection with
any damage covered by such policy.
 
          23. Damage or Destruction.
 
                   A. Landlord's Obligation to Rebuild. If all or any part of the
Building is damaged or destroyed, Landlord shall promptly and diligently repair
the same unless it has the right to terminate this Lease as provided herein and
it elects to so terminate.
 
                   B. Right to Terminate. Landlord shall have the right to terminate
this Lease in the event any of the following events occur:
 
                             (i) insurance proceeds from the insurance Landlord
is required to carry pursuant to Paragraph 21.C, or that Landlord actually carries,
are not available to pay one hundred percent (100%) of the cost of such repair,
excluding the deductible for which Tenant shall be responsible; provided, however,
that if Tenant pays to Landlord, in immediately available funds, within thirty (30)
days after such casualty, any shortfall in such insurance proceeds, as reasonably
determined by Landlord, then Landlord shall have no right to terminate the Lease
pursuant to this item (i);
 
                             (ii) the Building cannot, with reasonable diligence,
be fully repaired by Landlord within three hundred sixty (360) days after the date
of the damage or destruction; or
 
                             (iii) the Building cannot be safely repaired because
of the presence of hazardous factors, including, but not limited to, earthquake
faults, radiation, Hazardous Materials and other similar dangers.
 
                   If Landlord elects to terminate this Lease, Landlord may give
Tenant written notice of its election to terminate within thirty (30) days after
such damage or destruction, and this Lease shall terminate fifteen (15) days after
the date Tenant receives such notice and both Landlord and Tenant shall be released
of all further liability under this Lease (except to the extent any provision of
this Lease expressly survives termination and except that Landlord shall return
to Tenant the Security Deposit). If Landlord elects not to terminate the Lease,
subject to Tenant's termination right set forth below, Landlord shall promptly commence
the process of obtaining necessary permits and approvals and repair of the Building
as soon as practicable, and this Lease will continue in full force and affect. All
insurance proceeds from insurance under Paragraph 21, excluding proceeds for Tenant's
Personal Property, shall be disbursed and paid to Landlord. Tenant shall be required
to pay to Landlord the amount of any deductibles payable in connection 

 
 
                                        35    42

 with any insured casualties, unless the casualty was caused by the sole negligence
or willful misconduct of Landlord.
 
                   Tenant shall have the right to terminate this Lease if the Building
cannot, with reasonable diligence, be fully repaired within three hundred sixty
(360) days from the date of damage or destruction. The determination of the estimated
repair periods in this Paragraph 23 shall be made by an independent, licensed contractor
or engineer within thirty (30) days after such damage or destruction. Landlord shall
deliver written notice of the repair period to Tenant after such determination has
been made and Tenant shall exercise its right to terminate this Lease, if at all,
within ten (10) days of receipt of such notice from Landlord. Upon such termination
both Landlord and Tenant shall be released of all further liability under this Lease
(except to the extent any provision of this Lease expressly survives termination).
 
                   C. Limited Obligation to Repair. Landlord's obligation, should
it elect or be obligated to repair or rebuild, shall be limited to the basic Building
and the Tenant Improvements and shall not include any Alterations made by Tenant.
 
                   D. Abatement of Rent. Rent shall be temporarily abated proportionately,
during any period when, by reason of such damage or destruction there is substantial
interference with Tenant's use of the Premises, having regard to the extent to which
Tenant may be required to discontinue Tenant's use of the Premises. Such abatement
of Rent shall be proportional to the extent of such interference with Tenant's use
of the Premises reasonably attributable to such damage or destruction (with the
extent of such interference to be reasonably determined by Landlord), and shall
commence upon such damage or destruction and end upon substantial completion by
Landlord of the repair or reconstruction which Landlord is obligated or undertakes
to perform. Tenant shall not be entitled to any compensation or damages from Landlord
for loss of the use of the Premises, damage to Tenant's Personal Property or any
inconvenience occasioned by such damage, repair or restoration. Tenant hereby waives
the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4,
of the California Civil Code, and the provisions of any similar law hereinafter
enacted.
 
                   E. Damage Near End of Term. Anything herein to the contrary notwithstanding,
if the Building is destroyed or materially damaged during the last twelve (12) months
of the Term (unless Tenant has properly exercised an Option to Extend), then either
Landlord or Tenant may, at its option, cancel and terminate this Lease as of the
date of the occurrence of such damage, by delivery of written notice to the other
party and, in such event, upon such termination both Landlord and Tenant shall be
released of all further liability under this Lease (except to the extent any provision
of this Lease expressly survives termination). If neither Landlord nor Tenant elects
to terminate this Lease, the repair of such damage shall be governed by Paragraphs
23.A and 23.B.
 
          24. Condemnation.
 
                   If title to all of the Premises is taken for any public or quasi-public
use under any statute or by right of eminent domain, or so much thereof is so taken
so that reconstruction of the Premises will not, in Landlord's sole discretion,
result in the Premises being reasonably suitable 

 
 
                                        36    43

 for Tenant's continued occupancy for the uses and purposes permitted by this Lease,
this Lease shall terminate as of the date that possession of the Premises or part
thereof is taken, and upon such termination both Landlord and Tenant shall be released
of all further liability under this Lease (except to the extent any provision of
this Lease expressly survives termination). A sale by Landlord to any authority
having the power of eminent domain, either under threat of condemnation or while
condemnation proceedings are pending, shall be deemed a taking under the power of
eminent domain for all purposes of this Paragraph 24.
 
                   If any part of the Premises is taken and the remaining part is
reasonably suitable for Tenant's continued occupancy for the purposes and uses permitted
by this Lease, this Lease shall, as to the part so taken, terminate as of the date
that possession of such part of the Premises is taken, and upon such termination
both Landlord and Tenant shall be released of all further liability under this Lease
with respect to that portion of the Premises that is taken (except to the extent
any provision of this Lease expressly survives termination and except that Landlord
shall return to Tenant the Security Deposit). The Rent and other sums payable hereunder
shall be reduced in the same proportion that Tenant's use and occupancy of the Premises
is reduced. If any portion of the Common Area is taken, Tenant's Rent shall be reduced
only if such taking materially interferes with Tenant's use of the Common Area and
then only to the extent that the fair market rental value of the Premises is diminished
by such partial taking. If the parties disagree as to the amount of Rent reduction,
the matter shall be resolved by arbitration and such arbitration shall comply with
and be governed by the California Arbitration Act, Sections 1280 through 1294.2
of the California Code of Civil Procedure. Each party hereby waives the provisions
of Section 1265.130 of the California Code of Civil Procedure allowing either party
to petition the Superior Court to terminate this Lease in the event of a partial
taking of the Premises.
 
                   All compensation or damages awarded or paid for any taking hereunder
shall belong to and be the property of Landlord, whether such compensation or damages
are awarded or paid as compensation for diminution in value of the leasehold, the
fee or otherwise, except that Tenant shall be entitled to any award allowed to Tenant
for the taking of Tenant's Personal Property, for the interruption of Tenant's business,
for its moving costs, or for the loss of its good will. Except for the foregoing
allocation, no award for any partial or entire taking of the Premises shall be apportioned
between Landlord and Tenant, and Tenant assigns to Landlord its interest in the
balance of any award which may be made for the taking or condemnation of the Premises,
together with any and all rights of Tenant arising in or to the same or any part
thereof.
 
          25. Assignment and Subletting.
 
                   A. Landlord's Consent. Subject to the provisions of Paragraph
25.G below, Tenant shall not enter into a Sublet without Landlord's prior written
consent, which consent shall not be unreasonably withheld. Any attempted or purported
Sublet without Landlord's prior written consent shall be void and confer no rights
upon any third person and, at Landlord's election, shall terminate this Lease. Each
Subtenant shall agree in writing, for the benefit of Landlord, to assume, to be
bound by, and to perform the terms, conditions and covenants of this Lease to be
performed by Tenant, as such terms, conditions and covenants apply to the Sublet
premises. Notwithstanding anything contained herein, Tenant shall not be released
from liability for the performance of each term, condition and covenant of this
Lease by reason of Landlord's 

 
 
                                        37    44

 consent to a Sublet unless Landlord specifically grants such release in writing.
 
                   B. Tenant's Notice. If Tenant desires at any time to Sublet all
or any portion of the Premises, Tenant shall first notify Landlord in writing of
its desire to do so.
 
                   C. Information to be Furnished. If Tenant desires at any time
to Sublet all or any portion of the Premises, then Tenant shall submit in writing
to Landlord: (i) the name of the proposed Subtenant; (ii) the nature of the proposed
Subtenant's business to be carried on in the Premises; (iii) the terms and provisions
of the proposed Sublet and a copy of the proposed form of Sublet agreement containing
a description of the subject premises; and (iv) such financial information, including
financial statements, as Landlord may reasonably request concerning the proposed
Subtenant.
 
                   D. Landlord's Alternatives. At any time within ten (10) days
after Landlord's receipt of the information specified in Paragraph 25.C., Landlord
may, by written notice to Tenant, elect: (i) to consent to the Sublet by Tenant;
or (ii) to refuse its consent to the Sublet. If Landlord consents to the Sublet,
Tenant may thereafter enter into a valid Sublet of the Premises or applicable portion
thereof, upon the terms and conditions and with the proposed Subtenant set forth
in the information furnished by Tenant to Landlord, subject, however, at Landlord's
election, to the condition that the following percentages of any excess of the Subrent
(the "Excess Subrent") over the Rent required to be paid by Tenant under this Lease
(or, if only a portion of the Premises is Sublet, the pro rata share of the Rent
attributable to the portion of the Premises being Sublet) less reasonable attorneys'
fees, leasing commissions, improvement costs required for such Sublet (which shall
not include the cost of any trade fixtures, equipment or personal property) and
other reasonable subletting costs paid by Tenant on the Sublet, shall be paid to
Landlord. Tenant shall pay the following percentages of Excess Subrent to Landlord
in the following circumstances: (i) to the extent the Excess Subrent (for the entire
term of the applicable Sublet) is payable on a monthly basis (as opposed to one
or more lump sums) and to the extent the Excess Subrent is less than or equal to
$0.25/month/square foot of Rentable Area of the portion of the Premises being Sublet,
then Tenant shall pay to Landlord one-third (1/3) of the Excess Subrent; (ii) to
the extent the Excess Subrent (for the entire term of the applicable Sublet) is
payable on a monthly basis (as opposed to one or more lump sums) and to the extent
the Excess Subrent is greater than $0.25/month/square foot of Rentable Area of the
portion of the Premises being Sublet, then Tenant shall pay to Landlord fifty percent
(50%) of the Excess Subrent; (iii) to the extent the Excess Subrent (for the entire
term of the applicable Sublet) is not payable on a monthly basis, then Tenant shall
pay to Landlord fifty percent (50%) of the Excess Subrent; and (iv) to the extent
the Excess Subrent is applicable to any period during an Extended Term, then Tenant
shall pay to Landlord fifty percent (50%) of the Excess Subrent.
 
                   E. Proration. If a portion of the Premises is Sublet, the pro
rata share of the Rent attributable to such partial area of the Premises shall be
determined by Landlord by dividing the Rent payable by Tenant hereunder by the total
square footage of the Premises and multiplying the resulting quotient (the per square
foot rent) by the number of square feet of the Premises which are Sublet.
 
                   F. Parameters of Landlord's Consent. Landlord shall have the
right to base its 

 
 
                                        38    45

 consent to any Sublet hereunder upon such factors and considerations as Landlord
reasonably deems relevant or material to the proposed Sublet and the best interests
of the Project's operations. Without limiting the generality of the foregoing, Tenant
acknowledges that it shall be reasonable for Landlord to withhold its consent to
any Sublet hereunder if Tenant has not demonstrated that: (i) the proposed Subtenant
is financially responsible, with sufficient net worth and net current assets, properly
and successfully to operate its business in the Premises and meet the financial
and other obligations of this Lease; (ii) the proposed Subtenant possesses sound
and good business judgment, reputation and experience, and proven management skills
in the operation of a business or businesses substantially similar to the uses permitted
in the Premises under Paragraph 11.A; and (iii) the use of the Premises proposed
by such Subtenant conforms to the permitted uses specified under Paragraph 11.a,
and involves either no Hazardous Use or only such Hazardous Use as shall be acceptable
to Landlord in its sole discretion.
 
                   G. Permitted Transfers. Notwithstanding the provisions of Paragraph
25.A above, Tenant shall have the right to enter into a Sublet, and Landlord shall
not withhold its consent thereto (provided that all of the conditions set forth
in clauses (A) and (B) below shall be met), if such Sublet is one of the following
"Permitted Transfers": (i) a Sublet to the surviving entity of a merger or consolidation
involving the corporate entity constituting the Tenant under this Lease; or (ii)
a Sublet to any subsidiary or Affiliate of the Tenant originally named in this Lease.
However, the foregoing Permitted Transfers shall be exempt from the requirement
of Landlord's consent only if all of the following conditions shall be met: (A)
there shall be no change in the use or operation of the Premises; (B) Tenant shall
have provided to Landlord all information to allow Landlord to determine, and Landlord
shall have determined, that the proposed transfer is a Permitted Transfer which
is exempt from the requirement of Landlord's consent; and (C) as of the effective
date of such Sublet, the proposed Subtenant has a net worth and net current assets
equal to or greater than those of the original Tenant under this Lease as of the
date of this Lease. No Sublet of the type described in this Paragraph 25.G, nor
any other transfer of all or any portion of Tenant's interest in the Lease or the
Premises, shall release Tenant of its obligations under this Lease.
 
          26. Default.
 
                   A. Tenant's Default. A default under this Lease by Tenant shall
exist if any of the following occurs:
 
                             (i) If Tenant fails to pay within five (5) days after
written notice from Landlord any Rent or any other sum required to be paid hereunder
when due, including, without limitation, any Tenant Improvement costs payable by
Tenant under Exhibit B; or
 
                             (ii) If Tenant fails to perform any term, covenant
or condition of this Lease except those requiring the payment of money, and Tenant
fails to cure such breach within thirty (30) days after written notice from Landlord
where such breach could reasonably be cured within such 30-day period; provided,
however, that where such failure could not reasonably be cured within the 30-day
period, that Tenant shall not be in default if it commences such performance within
the 30-day period and diligently thereafter prosecutes the same to completion; or

 
 
                                        39    46
 
                             (iii) If Tenant assigns its assets for the benefit
of its creditors; or
 
                             (iv) If the sequestration or attachment of or execution
on any material part of Tenant's Personal Property essential to the conduct of Tenant's
business occurs, and Tenant fails to obtain a return or release of such Tenant's
Personal Property within thirty (30) days thereafter, or prior to sale pursuant
to such sequestration, attachment or levy, whichever is earlier; or
 
                             (v) If Tenant vacates or abandons the Premises; or
 
                             (vi) If a court makes or enters any decree or order
other than under the bankruptcy laws of the United States adjudging Tenant to be
insolvent; or approving as properly filed a petition seeking reorganization of Tenant;
or directing the winding up or liquidation of Tenant and such decree or order shall
have continued for a period of sixty (60) days; or
 
                             (vii) If Tenant fails to cure within any applicable
grace period any default by Tenant under any of the Collateral Agreements.
 
                   B. Remedies. Upon a default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or otherwise
provided in this Lease, to which Landlord may resort cumulatively or in the alternative:
 
                             (i) Landlord may continue this Lease in full force
and effect, and this Lease shall continue in full force and effect as long as Landlord
does not terminate this Lease, and Landlord shall have the right to collect Rent
when due. Without limiting the foregoing, Landlord has the remedy set forth in Section
1951.4 of the California Civil Code.
 
                             (ii) Landlord may terminate Tenant's right to possession
of the Premises at any time by giving written notice to that effect, and relet the
Premises or any part thereof. Tenant shall be liable immediately to Landlord for
all costs Landlord incurs in reletting the Premises or any part thereof, including,
without limitation, broker's commissions, expenses of cleaning and redecorating
the Premises required by the reletting and like costs. Reletting may be for a period
shorter or longer than the remaining Term of this Lease. No act by Landlord other
than giving written notice of termination to Tenant shall terminate this Lease.
Neither acts of maintenance, nor efforts to relet the Premises, nor the appointment
of a receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. On termination,
Landlord has the right to remove all Tenant's Personal Property and store the same
at Tenant's sole cost and expense and to recover from Tenant as damages:
 
                                       (a) The worth at the time of award of the
unpaid Rent and other sums due and payable which had been earned at the time of
termination; plus
 
                                       (b) The worth at the time of award of the
amount by which the unpaid Rent and other sums due and payable which would have
been payable after termination until the time of award exceeds the amount of such
Rent loss that Tenant proves could have been reasonably avoided; plus

 
 
                                        40    47
 
                                       (c) The worth at the time of award of the
amount by which the unpaid rent and other sums due and payable for the balance of
the Term after the time of award exceeds the amount of such Rent loss that Tenant
proves could be reasonably avoided; plus
 
                                       (d) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease, or which, in the ordinary course of things,
would be likely to result therefrom, including, without limitation, any costs or
expenses incurred by Landlord: (i) in retaking possession of the Premises; (ii)
in maintaining, repairing, preserving, restoring, replacing, cleaning, altering
or rehabilitating the Premises or any portion thereof, including such acts for reletting
to a new tenant or tenants; (iii) for leasing commissions; or (iv) for any other
costs necessary or appropriate to relet the Premises; plus
 
                                       (e) At Landlord's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by the laws of the State of California.
 
                   The "worth at the time of award" of the amounts referred to in
Paragraphs 26.B.(ii)(a) and 26.B.(ii)(b) is computed by allowing interest at the
Interest Rate on the unpaid rent and other sums due and payable from the termination
date through the date of award. The "worth at the time of award" of the amount referred
to in Paragraph 26.B.(ii)(c) is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%). Tenant waives redemption or relief from forfeiture under California
Code of Civil Procedure Sections 1174 and 1179, or under any other present or future
law, in the event Tenant is evicted or Landlord takes possession of the Premises
by reason of any default of Tenant hereunder.
 
                             (iii) Landlord may, with or without terminating this
Lease, re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant. No reentry or taking possession of the Premises
by Landlord pursuant to this Paragraph 26.B.(iii) shall be construed as an election
to terminate this Lease unless a written notice of such intention is given to Tenant.
 
                   C. Landlord's Default. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within thirty (30) days
after receipt of written notice by Tenant to Landlord specifying the nature of such
default; provided, however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed to be in default if it shall commence such performance within
such 30-day period and thereafter diligently prosecute the same to completion.
 
          27. Subordination.
 
                   A. Subordination. This Lease is or may become subject and subordinate
to underlying leases, mortgages, deeds of trust, easements, and CC&Rs (collectively,
"Encumbrances") which may now or hereafter affect the Premises, and to all renewals,


 
 
                                        41    48

 amendments, modifications, consolidations, replacements and extensions thereof;
provided, however, if the holder or holders of any such Encumbrance (collectively,
"Holder") shall require that this Lease be prior and superior thereto, within fifteen
(15) days of written request of Landlord to Tenant, Tenant shall execute, have acknowledged
and deliver any and all documents or instruments, in the form presented to Tenant,
which Landlord or Holder deems reasonably necessary or desirable for such purposes.
Subject to Paragraph 27.C below, Landlord shall have the right to cause this Lease
to be and become and remain subject and subordinate to any and all Encumbrances
which are now or may hereafter be executed covering the Premises or any renewals,
modifications, consolidations, replacements or extensions thereof, for the full
amount of all advances made or to be made thereunder and without regard to the time
or character of such advances, together with interest thereon and subject to all
the terms and provisions thereof; provided only, that in the event of termination
of any such lease or upon the foreclosure of any such mortgage or deed of trust,
so long as Tenant is not in default, Holder agrees to recognize Tenant's rights
under this Lease as long as Tenant shall pay the Rent and observe and perform all
the provisions of this Lease to be observed and performed by Tenant. Within fifteen
(15) days after Landlord's written request, Tenant shall execute any and all documents
reasonably required by Landlord or the Holder to make this Lease subordinate to
any lien of the Encumbrance (including, without limitation, subordination to all
CC&Rs), including without limitation a Subordination, Non-Disturbance and Attornment
Agreement in the form attached hereto as Exhibit E ("SNDA"). Subject to Paragraph
27.C below, if Tenant fails to do so, such failure shall constitute a default under
this Lease, and it shall be deemed that this Lease is subordinated to such Encumbrance.
 
                   B. Attornment. Notwithstanding anything to the contrary set forth
in this Paragraph 27, Tenant hereby attorns and agrees to attorn to any entity purchasing
or otherwise acquiring the Premises at any sale or other proceeding or pursuant
to the exercise of any other rights, powers or remedies under such Encumbrance;
provided only, that so long as Tenant is not in default, any such purchasing or
acquiring entity agrees to recognize Tenant's rights under this Lease as long as
Tenant shall pay the Rent and observe and perform all the provisions of this Lease
to be observed and performed by Tenant.
 
                   C. Non-Disturbance. Notwithstanding anything to the contrary
in this Lease, if an Encumbrance, other than any CC&R's or Landlord's construction
loan, is created after the execution of this Lease, as a condition to the subordination
of this Lease thereto under Paragraph 27.A above, Landlord shall obtain from the
Holder of such Encumbrance, other than CC&R's or the Holder of the construction
loan, a SNDA in a form reasonably requested by such Holder. Without in any way limiting
the type or form of SNDA that may be required by such Holder, Tenant hereby agrees
that a SNDA in the form attached to this Lease as Exhibit G shall be reasonable.
Only upon Landlord's delivery of a SNDA in the form of Exhibit G or in a form reasonably
requested by the Holder, shall this Lease be automatically subject and subordinate
to such Encumbrance, other than CC&R's or the construction loan.
 
          28. Notices.
 
                   Any notice or demand required or desired to be given under this
Lease shall be in writing and shall be personally served or in lieu of personal
service may be given by certified 

 
 
                                        42    49

 mail, facsimile, or overnight courier service. All notices or demands under this
Lease shall be deemed given, received, made or communicated on the date personal
delivery is effected; or, if sent by certified mail, on the delivery date or attempted
delivery date shown on the return receipt; or, if sent by facsimile, on the date
sent by the sender; or, if sent by overnight courier service, on the delivery date
or attempted delivery date shown on such service's records. At the date of execution
of this Lease, the addresses of Landlord and Tenant are as set forth in Paragraph
1. Either party may change its address by giving notice of same in accordance with
this Paragraph 28.
 
          29. Attorneys' Fees.
 
                   If either party brings any action or legal proceeding for damages
for an alleged breach of any provision of this Lease, to recover Rent, or other
sums due, to terminate the tenancy of the Premises or to enforce, protect or establish
any term, condition or covenant of this Lease or right of either party, the prevailing
party shall be entitled to recover as a part of such action or proceedings, or in
a separate action brought for that purpose, reasonable attorneys' fees and costs,
including without limitation any and all costs and expenses arising from (i) collection
efforts, (ii) any appellate proceedings, and (iii) any bankruptcy, insolvency or
arbitration proceedings.
 
          30. Estoppel Certificates.
 
                   Tenant shall within fifteen (15) days following written request
by Landlord:
 
                             (i) Execute and deliver to Landlord any documents,
including estoppel certificates, in the form prepared by Landlord (a) certifying
that this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying 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 (b) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord, or, if there are uncured defaults
on the part of the Landlord, stating the nature of such uncured defaults, (c) evidencing
the status of the Lease as may be required either by a lender making a loan to Landlord
to be secured by deed of trust or mortgage covering the Premises or a purchaser
of the Premises from Landlord, and (d) such other matters as may be reasonably requested
by Landlord. Tenant's failure to deliver an estoppel certificate within fifteen
(15) days after delivery of Landlord's written request therefor shall be conclusive
upon Tenant (a) that this Lease is in full force and effect, without modification
except as may be represented by Landlord, (b) that there are now no uncured defaults
in Landlord's performance, and (c) that no Rent has been paid in advance.
 
                   If Tenant fails to so deliver a requested estoppel certificate
within the prescribed time it shall be conclusively presumed that this Lease is
unmodified and in full force and effect except as represented by Landlord.
 
                             (ii) Deliver to Landlord the current financial statements
of Tenant, and financial statements of the two (2) years prior to the current financial
statements year, with an opinion of a certified public accountant, including a balance
sheet and profit and loss statement 

 
 
                                        43    50

 for the most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied.
 
          31. Transfer of the Premises by Landlord.
 
                   In the event of any conveyance of the Premises and assignment
by Landlord of this Lease, Landlord shall be and is hereby entirely released from
all liability under any and all of its covenants and obligations contained in or
derived from this Lease occurring after the date of such conveyance and assignment,
and Tenant agrees to attorn to such transferee provided such transferee assumes
Landlord's obligations under this Lease.
 
          32. Landlord's Right to Perform Tenant's Covenants.
 
                   If Tenant shall at any time fail to make any payment or perform
any other act on its part to be made or performed under this Lease, and such failure
shall continue after the expiration of any applicable grace or cure periods provided
in this Lease, Landlord may, but shall not be obligated to (and without waiving
or releasing Tenant from any obligation of Tenant under this Lease), make such payment
or perform such other act to the extent Landlord may deem desirable, and in connection
therewith, pay expenses and employ counsel. All sums so paid by Landlord and all
penalties, interest, expenses and costs in connection therewith shall be due and
payable by Tenant on the next day after any such payment by Landlord, together with
interest thereon at the Interest Rate from such date to the date of payment by Tenant
to Landlord, plus collection costs and attorneys' fees. Landlord shall have the
same rights and remedies for the nonpayment thereof as in the case of default in
the payment of Rent.
 
          33. Tenant's Remedy.
 
                   Landlord shall never be personally liable under this Lease, and
Tenant shall look solely to the net cash flow received by Landlord from its ownership
of the Building, for recovery of any damages for breach of this Lease by Landlord
or on any judgment in connection therewith. None of the persons or entities comprising
or representing Landlord (whether partners, shareholders, officers, directors, trustees,
employees, beneficiaries, agents or otherwise) shall ever be personally liable under
this Lease or for any such damages or judgment, and Tenant shall have no right to
effect any levy of execution against any assets of such persons or entities on account
of any such liability or judgment. Any lien obtained by Tenant to enforce any such
judgment, and any levy of execution thereon, shall be subject and subordinate to
all Encumbrances as specified in Paragraph 27 above.
 
          34. Mortgagee Protection.
 
                   If Landlord defaults under this Lease, Tenant shall give written
notice of such default to any beneficiary of a deed of trust or mortgagee of a mortgage
covering the Premises, and offer such beneficiary or mortgagee a reasonable opportunity
to cure the default, including time to obtain possession of the Premises by power
of sale or a judicial foreclosure, if such should prove necessary to effect a cure.

 
                                        44    51
          35.      Brokers.
 
                   Landlord and Tenant acknowledge and agree that they have utilized
the services of real estate brokers (with AMB Corporate Real Estate Advisors and
Colliers Parrish representing Tenant, and BT Commercial representing Landlord) with
respect to the transactions between Landlord and Tenant that are represented by
this Lease. Tenant warrants and represents that it has had no dealings with any
other real estate broker or agent in connection with the negotiation of this Lease,
and that it knows of no other real estate broker or agent who is or might be entitled
to a commission in connection with this Lease. Tenant shall indemnify, defend and
hold Landlord harmless from and against any and all claims, causes of action, liability
or costs, including reasonable attorney's fees, arising as a result of a breach
of the foregoing warranty and representation. Nothing contained in this Paragraph
35 shall be deemed to obligate or require Landlord to pay any commission whatsoever
to any real estate broker (including without limitation AMB and BT) with respect
to this Lease; the payment of any such commission (if any) shall be governed by
a separate written agreement between Landlord and the real estate broker or brokers
in question. Tenant shall separately compensate AMB and Colliers Parrish for its
services and no commission shall be payable to AMB and Colliers Parrish in connection
with this Lease.
 
          36.      Acceptance.
 
                   This Lease shall only become effective and binding upon full
execution hereof by Landlord and delivery of a signed copy to Tenant. Neither party
shall record this Lease nor a short form memorandum thereof.
 
          37.      Parking.
 
                   Tenant shall have the non-exclusive right, in common with any
other tenants or occupants of the Project, to use up to 3.33 unassigned parking
spaces per each one thousand (1,000) square feet of Rentable Area in the Premises,
upon terms and conditions, as may from time to time be reasonably established by
Landlord; provided, however, that Tenant acknowledges and agrees that during the
construction of the Parking Structure (as defined in the Build to Suit Agreement),
the parking ratio for the Building may from time to time be less than 3.33 spaces
per 1,000 square feet of Rentable Area. Should parking charges or surcharges of
any kind be imposed on the parking facilities by a governmental agency, Tenant shall
reimburse Landlord for such charges and/or surcharges or, if possible, shall pay
such charges and/or surcharges directly to the governmental agency and, in such
event, Tenant shall provide Landlord with proof that such charges and/or surcharges
have been paid by Tenant. Parking on that portion of the Project cross-hatched on
Exhibit C shall be subject such reciprocal easement agreements affecting the such
portion of the Project as Landlord may adopt from time to time.
 
          38.      Right of First Offer to Purchase.
 
                   During the term of this Lease, Landlord shall not sell fee title
to the Building to any unaffiliated third party or parties, without first offering
to sell the Building to Tenant upon the terms, covenants and conditions set forth
in this Paragraph 38; provided, however, that as 

 
                                        45

     52

 provided below this Paragraph 38 may cease to be of any force or effect prior to
the expiration or earlier termination of the term of this Lease. Notwithstanding
any provision of this Lease to the contrary, the provisions of this Paragraph 38
shall not apply to, and Tenant shall have absolutely no rights in connection with,
any of the following: (i) any and all transfers of all or any portion of the Building,
or any interest therein, by means of judicial foreclosure, trustee's sale, deed
in lieu of foreclosure or similar conveyance, (ii) any and all transfers or conveyances
of any ownership interests in Landlord or any of the parties or entities comprising
Landlord (including without limitation transfers of partnership interests, membership
interests, and shares of common and/or preferred stock), (iii) any and all transfers
of tenancy-in-common interests in the Building by Landlord to, or by and among,
the parties or entities comprising Landlord, (iv) the creation of any liens, encumbrances
or security interests or the transfer of any interest in the Building for security
purposes, and (v) the transfer of all or any portion of the Building, or any interest
in the Building, to any Affiliate of Landlord or any partner, member or shareholder
of Landlord.
 
                   A. Notice of Sale. If at any time during the term of this Lease
Landlord desires to sell fee title to the Building to an unaffiliated third party,
Landlord shall give written notice to Tenant specifying the terms, covenants and
conditions upon which Landlord is willing to sell the Building (the "Acceptable
Sale Terms"). The notice shall constitute an irrevocable offer on the part of Landlord
(subject to the conditions described in Paragraph 38.F below) to sell the Building
to Tenant upon the Acceptable Sale Terms, and Landlord and Tenant shall have a period
of thirty (30) days after Landlord's delivery of the notice within which to negotiate
and agree upon the terms and conditions for the sale to Tenant of the Building (the
"Sale Negotiation Period").
 
                   B. Acceptance. If Tenant is interested in acquiring the Building,
Tenant shall give Landlord written notice of such interest ("Notice of Interest
I") within ten (10) days of Tenant's receipt of Landlord's notice (the "Purchase
Response Period"), and Landlord and Tenant shall proceed to negotiate Tenant's purchase
of the Building and the terms and conditions of purchase during the Sale Negotiation
Period. Should the parties reach agreement on the terms and conditions of Tenant's
acquisition of the Building within the Sale Negotiation Period, then Tenant shall
acquire, on an all cash basis, in the manner set forth in Paragraph 38.G, fee title
to the Building, together with any and all improvements situated thereon. Failure
on the part of Tenant either to deliver a Notice of Interest to Landlord within
the Purchase Response Period or to accept Landlord's offer to sell the Building
within the Sale Negotiation Period shall each constitute Tenant's rejection of Landlord's
offer to sell the Building.
 
                   C. Rejection. If (i) Tenant informs Landlord within the Sale
Response Period that Tenant does not desire to negotiate the acquisition of the
Building, or (ii) after commencing negotiations, Landlord and Tenant do not reach
agreement upon the terms and conditions of Tenant's purchase of the Building within
the Sale Negotiation Period, or (iii) Tenant otherwise rejects Landlord's offer
to sell the Building, then, in any such event (except as provided to the contrary
in Paragraphs 38.D and 38.E), this Paragraph 38 shall no longer apply to the Building,
and Landlord (and each and every subsequent owner of the Building) shall be free
to offer to sell all or any portion of the Building (separately or together with
any other parcel or parcels) to any third party or parties upon any terms whatsoever,
including without limitation terms less favorable to Landlord than the Acceptable
Sale Terms, without first offering the Building to 

 
                                        46

     53

 Tenant.
 
                   D. Offered Terms. If Tenant does not accept Landlord's offer
as set forth above, but Tenant does deliver to Landlord within the Sale Negotiation
Period a written offer ("Tenant's Purchase Offer") to acquire the Building for a
purchase price ("Tenant's Offered Price") less than the price contained in the Acceptable
Sale Terms, then Tenant shall be deemed to have made an irrevocable offer to acquire
the Building at Tenant's Offered Price. Tenant's Purchase Offer shall be deemed
to include all of the Acceptable Sale Terms, except that to the extent there is
any discrepancy between the Acceptable Sale Terms and the terms set forth in Tenant's
Purchase Offer, Tenant's Purchase Offer shall be controlling (except as otherwise
provided in Paragraph 38.G below).
 
                   E. Acceptance of Tenant's Offer. If Tenant rejects or otherwise
fails to accept Landlord's offer pursuant to this Paragraph 38 but delivers Tenant's
Purchase Offer to Landlord in accordance with Paragraph 38.D, then Landlord may
at any time within sixty (60) days after Landlord's receipt of Tenant's Purchase
Offer, accept Tenant's Purchase Offer and sell the Building to Tenant in accordance
with the terms thereof and the other terms and conditions set forth in this Paragraph
38. If Landlord thus accepts Tenant's Purchase Offer, then Tenant shall acquire,
on an all cash basis, in accordance with the provisions of Paragraph 38.G, fee title
to the Building, together with the improvements situated thereon. If Landlord does
not accept Tenant's Purchase Offer within such 60-day period, then upon the expiration
of such 60-day period this Paragraph 38 shall terminate and shall no longer apply
to the Building, and Landlord (and each and every subsequent owner of the Building)
shall be free to sell all or any portion of the Building (separately or together
with any other parcel or parcels) to a third party or parties upon any terms whatsoever,
including without limitation terms less favorable to Landlord than the terms contained
in Tenant's Purchase Offer, without first offering to sell the Building to Tenant.
 
                   F. Conditions. The effectiveness of Tenant's right to offer to
acquire any Building, as set forth in this Paragraph 38, is conditioned on the following:
(i) Tenant has not previously entered into a Sublet of this Lease (other than a
Permitted Transfer); and (ii) no monetary or other material default by Tenant exists
under this Lease which remains uncured after the giving of any applicable notice
and the expiration of any applicable cure period. In addition, if any of the conditions
specified under clauses (i) and (ii) above do not continue to be satisfied as of
the date on which the escrow for the sale of the Building to Tenant is scheduled
to close, then unless Landlord waives in writing any such conditions, Tenant's exercise
of its right to acquire the Building under this Paragraph 38 shall be null and void,
and this Lease shall terminate effective as of the date on which the escrow for
the sale of the Building to Tenant was scheduled to close.
 
                   G. Process. In the event that Landlord and Tenant reach agreement
on the terms and conditions of the sale of the Building within the applicable period
of time set forth in this Paragraph 38, Tenant's acquisition of the Building shall
be carried out on (i) the terms and conditions described in this Paragraph 38 and/or
to which Landlord and Tenant have otherwise specifically agreed pursuant to this
Paragraph 38 (collectively, the "Agreed Terms"), and (ii) the terms and conditions
set forth on Exhibit F attached to this Lease (the "Standard Terms for Purchase").
To the extent there is any discrepancy between the Agreed Terms and the Standard

 
                                        47

     54

 Terms, the Agreed Terms shall be controlling; provided, however, that notwithstanding
the foregoing, Tenant shall be required to make an earnest money deposit equal to
five percent (5%) of the purchase price for the Building, pursuant to the Standard
Terms.
 
                   H. Rights Personal. The rights granted to Tenant under this Paragraph
38 shall be personal to Tenant, and shall not be assigned, sold, conveyed or otherwise
transferred to any other party (including without limitation any assignee or sublessee
of Tenant) without the prior written consent of Landlord, which consent may be withheld
in Landlord's sole discretion; provided, however, that the rights granted to Tenant
under this Paragraphs 38 may be transferred without Landlord's consent to the transferee
of Tenant's interest in this Lease pursuant to a Permitted Transfer.
 
          39.      General.
 
                   A. Captions. The captions and headings used in this Lease are
for the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.
 
                   B. Executed Copy. Any fully executed copy of this Lease shall
be deemed an original for all purposes.
 
                   C. Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
 
                   D. Separability. If one or more of the provisions contained herein,
except for the payment of Rent, is for any reason held invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
 
                   E. Choice of Law. This Lease shall be construed and enforced
in accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair meaning
and not strictly for or against either Landlord or Tenant.
 
                   F. Gender; Singular, Plural. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership or corporation
or joint venture, and the singular includes the plural.
 
                   G. Binding Effect. The covenants and agreement contained in this
Lease shall be binding on the parties hereto and on their respective successors
and assigns to the extent this Lease is assignable.
 
                   H. Waiver. The waiver by Landlord of any breach of any term,
condition or covenant, of this Lease shall not be deemed to be a waiver of such
provision or any subsequent breach of the same or any other term, condition or covenant
of this Lease. The subsequent 

 
                                        48

 

     55

 acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach at the time of acceptance of such payment. No covenant, term
or condition of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord.
 
                   I. Entire Agreement. This Lease is the entire agreement between
the parties, and there are no agreements or representations between the parties
except as expressed herein. Except as otherwise provided herein, no subsequent change
or addition to this Lease shall be binding unless in writing and signed by the parties
hereto.
 
                   J. Authority. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of said corporation or partnership, as
the case may be, represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of said entity in accordance with its corporate bylaws,
statement of partnership or certificate of limited partnership, as the case may
be, and that this Lease is binding upon said entity in accordance with its terms.
Landlord, at its option, may require a copy of such written authorization to enter
into this Lease.
 
                   K. Exhibits. All exhibits, amendments, riders and addenda attached
hereto are hereby incorporated herein and made a part hereof.
 
                   L. Lease Summary. The Lease Summary attached to this Lease is
intended to provide general information only. In the event of any inconsistency
between the Lease Summary and the specific provisions of this Lease, the specific
provisions of this Lease shall prevail.
 
                   M. Memorandum of Lease. This Lease shall not be recorded without
the prior consent of both Landlord and Tenant; provided, however, that upon the
written request of Tenant, Landlord and Tenant shall execute and acknowledge, in
recordable form, a memorandum of this Lease in form reasonably acceptable to both
Landlord and Tenant, and shall cause such memorandum to be recorded in the Official
Records of the County of San Mateo, State of California. Upon expiration of the
term of this Lease or earlier termination of this Lease, Tenant shall execute, acknowledge
and deliver to Landlord an appropriate instrument prepared by Landlord which Landlord
may then record in the Official Records of San Mateo County to expunge this Lease
and any memorandum thereof from the public record with respect to the Premises.
In addition, Tenant hereby irrevocably constitutes and appoints Landlord as its
true and lawful attorney in fact, in its name and in its behalf, to make, execute,
acknowledge, deliver, and file any and all such instruments that Tenant so fails
or refuses to execute. Tenant expressly understands and acknowledges that the foregoing
special power of attorney is coupled with an interest, is irrevocable, and shall
survive the dissolution or insolvency of Tenant, or the transfer by Tenant of the
whole or any portion of its interest in this Lease (provided that any such transfer
shall be subject to the restrictions set forth in this Lease).

 
                                        49

    56

 
                   THIS LEASE is effective as of the date the last signatory necessary
to execute the Lease shall have executed this Lease.
 
                                     TENANT:

 Dated:         ,1998                AT HOME CORPORATION,
       ---------                     a Delaware corporation
 
                                     By:   /s/ KENNETH A. GOLDMAN
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------

 
                                     By:
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------
 
                                     LANDLORD:

 Dated:                              MARTIN/CAMPUS ASSOCIATES, L.P.,
       -------------                   a Delaware limited partnership
 
                                          By: Martin/Redwood Partners,
                                              L.P., a California limited
                                              partnership, its General Partner
 
                                              By: TMG Redwood LLC,
                                                  A California limited liability
                                                  Company
                                                  Its: General Partner
 
                                                  By: The Martin Group of
                                                      Companies, Inc., a
                                                      California corporation,
                                                      Its General Partner
 
                                                      By:   /s/
                                                           ----------------------
                                                      Its:  Vice President
                                                           ----------------------
 
                                        50

    57
 
                                     EXHIBIT A
                                     ---------
 
                                     PREMISES
                                     --------

 

 

 

     58
 
                                     EXHIBIT B
                                     ---------
 
                               WORK LETTER AGREEMENT
                               ---------------------
 
                   THIS WORK LETTER ("Agreement") is made and entered into by and
between Landlord and Tenant as of the date of the Lease. This Agreement shall be
deemed a part of the Lease to which it is attached. Capitalized terms which are
used herein and defined in the Lease shall have the meanings given in the Lease.
 
          1.       General.
 
                   1.1 Capital Improvements. Pursuant to the Build to Suit Agreement,
Landlord shall construct the Shell and Core and applicable site work (as defined
in the Build to Suit Agreement) (collectively, the "Capital Improvements"). Except
for its obligation to perform the Capital Improvements and the Tenant Improvements
as set forth in this Lease and the Work Letter, Landlord shall have no obligation
whatsoever to do any work or perform any improvements whatsoever to any portion
of the Premises or the Building; provided, however, that the Tenant Improvements
shall be performed at the sole cost and expense of Tenant (subject to the provisions
of Paragraph 1.4). Landlord shall cause Contractor (as defined below) to perform
all initial leasehold improvements, in accordance with the approved Final Plans
and as otherwise may be required to comply with applicable law (collectively, the
"Tenant Improvements"). The parties acknowledge and agree that the Capital Improvements
and the Tenant Improvements constitute all of the work required to enable Tenant
to occupy, and operate its business in, the Premises.
 
                   1.2 Tenant Improvement Costs. The cost of performing the Tenant
Improvements, including without limitation the costs described in Paragraph 6 below
(collectively, the "Tenant Improvement Costs") shall be paid by Tenant in the manner
set forth in Paragraph 5 below, subject to the provisions of Paragraph 1.4.
 
                   1.3 Tenant Improvements Allowance. If the lender for the Construction
Financing (as defined in the Build to Suit Agreement) is willing to increase the
amount of such Construction Financing to cover all or any portion of the Tenant
Improvement Costs, then Landlord shall provide an allowance for the Tenant Improvement
Costs in an amount equal to that portion of the Construction Financing budgeted
for payment of such costs (the "Tenant Improvements Allowance"); provided, however,
that in no event shall the Tenant Improvements Allowance exceed Thirty Dollars ($30.00)
per square foot of Rentable Area to be situated in the Building.
 
          2.       Approval of Plans for Tenant Improvements.
 
                   2.1 Architect. Within five (5) days after execution of the Lease,
Tenant shall notify Landlord in writing of the name and address of the licensed
architect which Tenant desires to engage for the preparation of plans for Tenant's
Work ("Architect"). Tenant's proposed architect shall be subject to Landlord's prior
written approval. Tenant shall retain Architect's administrative services throughout
the performance of Tenant's Work. Designers who are not 

 

 

    59

 licensed architects will not be acceptable.
 
                   2.2      Submittal of Plans.
 
                            2.2.1. Preliminary Plans. Tenant shall cause Architect
to prepare preliminary plans (the "Preliminary Plans") for the Tenant Improvements
to be performed at the Premises. Tenant shall cause Architect to deliver the Preliminary
Plans to Landlord within thirty (30) days after the date on which the Lease has
been signed by Landlord and Tenant. Within five (5) days after Landlord's receipt
of the Preliminary Plans, Landlord shall either approve or disapprove the Preliminary
Plans, which approval shall not be unreasonably withheld. If Landlord disapproves
the Preliminary Plans, then Landlord shall state in reasonable detail the changes
which Landlord requires to be made thereto. Tenant shall submit to Landlord revised
Preliminary Plans within five (5) days after Tenant's receipt of Landlord's disapproval
notice. Following Landlord's receipt of the revised Preliminary Plans from Tenant,
Landlord shall have the right to review and approve the revised Preliminary Plans
pursuant to this Paragraph 2.2.1. Landlord shall give Tenant written notice of its
approval or disapproval of the revised Preliminary Plans within five (5) days after
the date of Landlord's receipt thereof. If Landlord reasonably disapproves the revised
Preliminary Plans, then the following shall occur: (i) Landlord and Tenant shall
continue to follow the procedures set forth in this Paragraph 2.2.1 until Landlord
and Tenant reasonably approve the Preliminary Plans in accordance with this Paragraph
2.2.1, and (ii) the period between the date of Landlord's reasonable disapproval
and the eventual mutual approval of such Preliminary Plans shall constitute a Tenant
Delay.
 
                            2.2.2. Preliminary Budget. Landlord shall retain a contractor
("Contractor") as the general contractor for the construction of the Tenant Improvements.
Tenant shall have the right to approve the construction contract between Landlord
and Contractor for the construction of the Tenant Improvements, which approval shall
not be unreasonably withheld or delayed; provided, however, that Tenant shall have
no right to disapprove such construction contract if such construction contract
substantially conforms with the applicable AIA form contract and general conditions.
Ten (10) days after approval by Landlord and Tenant of the Preliminary Plans, Contractor
shall prepare a preliminary budget for the Tenant Improvements based upon the approved
Preliminary Plans, which Contractor shall submit to Tenant for its review and approval.
Within three (3) days after Tenant's receipt of the preliminary budget, Tenant shall
either approve or disapprove the preliminary budget. If Tenant reasonably rejects
such preliminary budget, Tenant shall, within five (5) days of Tenant's delivery
of a written rejection notice to Landlord, require Architect to revise the Preliminary
Plans to reduce the cost of the Tenant Improvements. Following Tenant's instructions
to the Architect, Landlord and Tenant shall again follow the procedures set forth
in Paragraph 2.2.1 and this Paragraph 2.2.2 with respect to the approval of the
Preliminary Plans and to the submission and approval of the preliminary budget from
Contractor.
 
                            2.2.3. Final Plans. Within three (3) days after approval
by Landlord and Tenant of the preliminary budget for the Tenant Improvements, Tenant
shall cause Architect to commence preparing complete plans, specifications and working
drawings which incorporate and are consistent with the approved Preliminary Plans
and preliminary budget, and which show in detail the intended design, construction
and finishing of all portions of the Tenant

 

    60

 Improvements described in the Preliminary Plans (collectively, the "Final Plans").
Tenant shall cause Architect to deliver the Final Plans to Landlord, for Landlord's
review and approval, no later than ninety (90) days after the date on which the
Lease has been signed by Landlord and Tenant. Within five (5) days after Landlord's
receipt of the Final Plans, Landlord shall either approve or disapprove the Final
Plans, which approval shall not be unreasonably withheld. If Landlord disapproves
the Final Plans, then Landlord shall state in reasonable detail the changes which
Landlord requires to be made thereto. Tenant shall submit to Landlord revised Final
Plans within five (5) days after Tenant's receipt of Landlord's disapproval notice.
Following Landlord's receipt of the revised Final Plans from Tenant, Landlord shall
have the right to review and approve the revised Final Plans pursuant to this Paragraph
2.2.3. Landlord shall give Tenant written notice of its approval or disapproval
of the revised Final Plans within five (5) days after the date of Landlord's receipt
thereof. If Landlord reasonably disapproves the revised Final Plans, then the following
shall occur: (i) Landlord and Tenant shall continue to follow the procedures set
forth in this Paragraph 2.2.3 until Landlord and Tenant reasonably approve such
Final Plans in accordance with this Paragraph 2.2.3, and (ii) the period between
the date of Landlord's reasonable disapproval and the eventual mutual approval of
such Final Plans shall constitute a Tenant Delay.
 
          3. Construction Budget. Upon approval by Landlord and Tenant of the Final
Plans, Landlord shall instruct Contractor to obtain competitive bids for the Tenant
Improvements from at least three (3) qualified subcontractors for each of the major
subtrades (excluding the mechanical and electrical trades, which shall be on a design/build
basis, unless Landlord elects to competitively bid these trades) and to submit the
same to Landlord and Tenant for their review and approval. Upon selection of the
subcontractors and approval of the bids, Contractor shall prepare a cost estimate
for the Tenant Improvements described in such Final Plans, based upon the bids submitted
by the subcontractors selected. Contractor shall submit such cost estimate to Landlord
and Tenant for their review and approval. Within five (5) days after their receipt
of the cost estimate, Landlord and Tenant shall each either approve or disapprove
the cost estimate, which approval shall not be unreasonably withheld. Tenant's failure
to approve or disapprove the cost estimate within such 5-day period shall constitute
Grounds for the assertion of a Tenant Delay. Landlord or Tenant may each approve
or reject such cost estimate in their reasonable sole discretion. If either Landlord
or Tenant rejects such cost estimate, Landlord shall resolicit bids based on such
Final Plans, in accordance with the procedures specified above. Following any resolicitation
of bids by Landlord pursuant to this Paragraph 3, Landlord and Tenant shall again
follow the procedures set forth in this Paragraph 3 with respect to the submission
and reasonable approval of the cost estimate from Contractor; provided, however
that the period between Tenant's disapproval of the first revised cost estimate
and the eventual mutual approval of a cost estimate shall constitute a Tenant Delay.
 
          4. Landlord to Construct. Landlord shall cause Contractor to construct
the Tenant Improvements in a good and workmanlike manner, in accordance with the
approved Final Plans and in compliance with all applicable laws. Architect shall
be responsible for obtaining all necessary building permits and approvals and other
authorizations from governmental agencies required in connection with the Tenant
Improvements. The cost of all such permits and approvals, including inspection and
other building fees required to obtain the permits for the Tenant Improvements,
shall be included as part of the Tenant Improvement Costs. Tenant shall have the
benefit of any warranties provided by Contractor, the subcontractors and suppliers
in 

 

 

     61

 connection with the Tenant Improvements.
 
          5. Payment for Tenant Improvements. The Tenant Improvement Costs shall
be paid solely by Tenant as follows:
 
                   5.1 Method of Payment. If Landlord provides a Tenant Improvements
Allowance for the Building pursuant to Paragraph 1.4 above, Landlord shall bear
the Tenant Improvement Costs up to the amount of such Tenant Improvements Allowance;
and Tenant shall be responsible for paying any excess in the Tenant Improvement
Costs over the amount of such Tenant Improvements Allowance. If Landlord does not
provide a Tenant Improvements Allowance, Tenant shall be solely responsible for
the payment of any and all Tenant Improvement Costs. For the purposes of this Exhibit
B, the term "Tenant's Share of Tenant Improvement Costs" shall mean the entire amount
of all Tenant Improvement Costs, less any Tenant Improvements Allowance provided
by Landlord; provided, however, that if Landlord does not provide a Tenant Improvements
Allowance, then "Tenant's Share of Tenant Improvement Costs" shall mean the entire
amount of all Tenant Improvement Costs. If required by any lender holding a security
interest encumbering the land on which the Building will be situated, Tenant shall
provide the Set-Aside Funds (as defined in Paragraph 5.1.1) in accordance with the
provisions of Paragraph 5.1.1. If at the time construction of the Building is scheduled
to commence no such lender exists, or if there is such a lender but such lender
does not at any time during the construction of the Building require Landlord to
obtain the Set-Aside Funds from Tenant, then Tenant shall not be required to provide
the Set-Aside Funds for the construction of the Building.
 
                            5.1.1. Set-Aside Funds. If Tenant is required to deposit
the Set-Aside Funds pursuant to Paragraph 5.1, then within five (5) days after the
parties have mutually agreed upon a cost estimate for the Tenant Improvements as
provided above, Tenant shall deposit into a separate account with any financial
institution designated by Landlord, in Tenant's name, subject to restrictions in
favor of such financial institution, an amount (the "Set-Aside Funds") equal to
(a) the entire amount of Tenant's Share of Tenant Improvement Costs, based on the
assumption that the Tenant Improvement Costs shall equal such cost estimate, and
(b) all other amounts to be deposited by Tenant in such account pursuant to the
terms of the Build to Suit Option Agreement. Landlord shall instruct such financial
institution to hold the Set-Aside Funds in a separate interestbearing account with
interest to accrue for Tenant's account, and shall utilize the Set-Aside Funds to
pay for Tenant's Share of Tenant Improvement Costs and any other obligations of
Tenant pursuant to the Build to Suit Option Agreement. Before commencement of construction
of any subsequent portion of the Tenant Improvements, Tenant shall deposit in such
account an additional amount equal to Tenant's Share of Tenant Improvement Costs
for such subsequent Tenant Improvements.
 
                            5.1.2. Payment. If Landlord provides a Tenant Improvements
Allowance pursuant to Paragraph 1.4 above, then within twenty (20) days after Landlord's
receipt of reasonably satisfactory invoices for costs of labor and materials incurred
in connection with the Tenant Improvements, together with such supporting documentation
and lien waivers as Landlord may reasonably require in order to review the costs
covered by the billing, Landlord shall pay the Tenant Improvement Costs represented
by such invoices first coming due for 

 

     62

 payment, up to an aggregate amount equal to the Tenant Improvements Allowance.
As and when any amount of Tenant's Share of Tenant Improvement Costs or any amounts
payable by Tenant pursuant to the Build to Suit Option Agreement become due and
payable, Landlord shall request such financial institution to utilize the remaining
SetAside Funds to pay such amounts; provided, however, that if at any time there
are insufficient Set-Aside Funds to pay any amount of Tenant's Share of Tenant Improvement
Costs and/or any other amounts payable by Tenant pursuant to the Build to Suit Option
Agreement, Tenant shall pay any and all such excess Shell and Core Costs and Tenant
Improvement Costs to Landlord within ten (10) days after the date of Tenant's receipt
of Landlord's written request therefor, together with such supporting documentation
and lien waivers as Tenant may reasonably require in order to review the costs covered
by the billing. Any failure by Tenant to pay any amount of Tenant's Share of Tenant
Improvement Costs or any other amounts payable by Tenant pursuant to the Build to
Suit Option Agreement as and when required under this Exhibit B shall constitute
a default by Tenant under the Lease.
 
                            5.1.3. Penalties. To the extent that any contractor
or subcontractor working on the Tenant Improvements imposes upon Landlord any penalty
or late charge due to Tenant's failure to pay to Landlord any amount due under this
Paragraph 5.1 as and when such amount is due, Tenant shall be solely responsible
for paying such penalty or late charge; provided, however, that if Tenant disputes
the imposition of such penalty or late charge, Tenant shall not be required to pay
the penalty or late charge until the dispute has been settled or otherwise resolved;
provided further, that if any penalty or late charge is imposed due to Tenant's
exercise of its rights under this Paragraph 5.1.3, Tenant shall pay such penalty
or late charge as provided in this Paragraph 5.1.3.
 
                   5.2 Extra Work. Tenant shall be solely responsible for any and
all costs and expenses arising from any improvements to or installations in the
Building desired by Tenant and approved by Landlord that are outside the scope of
the Final Plans.
 
          6. Tenant Improvement Costs. The Tenant Improvement Costs shall include
all reasonable costs incurred in connection with the Tenant Improvements (but not
the Capital Improvements), as determined by Landlord in its reasonable discretion,
including the following:
 
                   (a) All costs of space plans and other architectural and engineering
plans and specifications for the Tenant Improvements, including engineering costs
associated with completion of the State of California energy utilization calculations
under Title 24 legislation required in connection with the Tenant Improvements;
 
                   (b) All costs of obtaining building permits and other necessary
authorizations from the City of Redwood City;
 
                   (c) All costs of interior design and finish schedule plans and
specifications, including as-built drawings by Architect;
 
                   (d) All direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee payable to the Contractor for overhead and profit, and
the cost of all on-site supervisory and 

 

     63

 administrative staff, office, equipment and temporary services rendered by Contractor
in connection with construction of the Tenant Improvements;
 
                   (e) All fees payable to Architect and Landlord's engineering
firm if they are required by Tenant to redesign any portion of the Tenant Improvements
following Tenant's approval of the Final Plans;
 
                   (f) Sewer connection fees (if any);
 
                   (g) All costs of installing an emergency power supply systems
in each of the Buildings, which emergency power supply shall include emergency HVAC
for Tenant's computer rooms;
 
                   (h) All direct and indirect construction costs associated with
complying with Title 24 legislation and ADA compliance for all interior improvements
(including the reconstruction of all restrooms); and
 
                   (i) A construction management fee payable to Landlord equal to
three percent (3%) of the total Tenant Improvement Costs. (Landlord shall either
provide, or cause a third party to provide, construction management services in
connection with the construction of the Tenant Improvements, and the foregoing fee
shall be the sole compensation for such services).
 
          7. Chance Requests. No revisions to the approved Final Plans shall be
made by either Landlord or Tenant unless approved in writing by both parties. Landlord
agrees to make all changes (i) required by any public agency to conform with governmental
regulations, or (ii) requested in writing by Tenant and approved in writing by Landlord,
which approval shall not be unreasonably withheld. Any costs related to such changes
shall be added to the Tenant Improvement Costs and shall be paid for in accordance
with Paragraph 5. The billing for such additional costs shall be accompanied by
evidence of the amounts billed as is customarily used in the business. Costs related
to changes shall include, without limitation, any architectural, structural engineering,
or design fees, and the Contractor's price for effecting the change. Any change
order which may extend the date of substantial completion of the Tenant Improvements
may be disapproved by Landlord unless Tenant agrees that for all purposes under
this Lease, the Tenant Improvements shall be deemed to have been substantially completed
on that date on which such Tenant Improvements would have been substantially completed
without giving effect to the change order in question.
 
          8. Early Access. So long as such entry does not in any way interfere with
or delay Landlord's construction of the Improvements, Tenant shall have the right
to enter the Premises before the Commencement Date for the purpose of installing
cable T.V., telephones, telecommunications cabling, furniture and other similar
items. Such entry shall be subject to all of the terms and conditions of the Lease,
other than the obligation to pay Rent.
 
          9. Acceptance of Building. Within thirty (30) days after completion of
the Tenant Improvements, Tenant shall conduct a walk-through inspection of the Building
with Landlord and complete a punch-list of items needing additional work. Other
than the items specified in the 

     64

 punch list, if any, by taking possession of the Building, Tenant shall be deemed
to have accepted the Building in good, clean and completed condition and repair,
subject to all applicable laws, codes and ordinances. Any damage to the Building
caused by Tenant's move-in shall be repaired or corrected by Tenant, at its sole
cost and expense, which repair or corrective work shall not be paid for out of any
Tenant Improvements Allowance. Tenant acknowledges that neither Landlord nor Landlord's
agents shall be deemed to have made any representations or warranties as to the
suitability or fitness of the Building for the conduct of Tenant's business or for
any other purpose, nor shall Landlord or Landlord's agents be deemed to have agreed
to undertake any alterations or construct any improvements to the Building except
as expressly provided in the Lease, this Exhibit B, and the Build to Suit Option
Agreement. If Tenant fails to submit a punch-list to Landlord within such 30-day
period, it shall be deemed that there are no items needing additional work or repair.
Contractor shall complete all reasonable punch-list items within thirty (30) days
after the walk-through inspection or as soon as practicable thereafter. Upon completion
of such punch-list items, Tenant shall approve such completed items in writing to
Landlord. If Tenant fails to approve such items within fourteen (14) days of completion,
such items shall be deemed approved by Tenant. Landlord shall, upon Tenant's written
request, assign and transfer to Tenant, to the extent reasonably requested by Tenant
and consistent with Landlord's position as the owner of the Building, Landlord's
rights and claims against Contractor arising from Contractor's warranties (express
and implied) with respect to the Building. Nothing contained in this Paragraph 10
shall limit, restrict, or terminate any right of Landlord or Tenant to make any
claim against Contractor based upon the condition of the Building or any and all
of Contractor's warranties (express and implied) with respect to the Building.

 LANDLORD:                                                     TENANT:

 MARTIN/CAMPUS ASSOCIATES, L.P.,         AT HOME CORPORATION, a Delaware limited
partnership          a Delaware corporation

 By: Martin/Redwood Partners,            By:   /s/ KENNETH A. GOLDMAN
     L.P., a California limited                -------------------------------
     partnership, its General           Its:  
     Partner                                   -------------------------------
                                         By:      
                                               -------------------------------
                                        Its:
                                               -------------------------------
     By: The Martin Group of
         Companies, Inc., a
         California corporation,
         its General Partner
 
         By:      /s/
                  ------------------
         
         Its:     Vice President
                  ------------------

     65
 
                                     EXHIBIT C
                                     ---------
 
                               SITE PLAN FOR PROJECT
                               ---------------------
 
          This Exhibit will either be (i) the North Expansion Parcel (see Exhibit
C-1), or (ii) the south campus (see Exhibit C-2), as applicable.

 

    66
 
                                     EXHIBIT D
 
                           COMMENCEMENT DATE MEMORANDUM

 LANDLORD:   Martin/Campus Associates, L.P.

 TENANT:     
             ------------------------------

 LEASE DATE:
             ------------------------------

 PREMISES:
             ------------------------------

 Pursuant to Paragraph 4.A. of the above referenced Lease, the commencement date
is hereby established as __________________ for ____________________, Redwood City,
CA 94063.  The Commencement Date as  defined in Paragraph 4.A. shall be ___________________.
 
                                     TENANT:

 Dated:         ,1998                AT HOME CORPORATION,
       ---------                     a Delaware corporation
 
                                     By:  /s/ KENNETH A. GOLDMAN
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------

 
                                     By:
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------
 
                                     LANDLORD:

 Dated:                              MARTIN/CAMPUS ASSOCIATES, L.P.,
       -------------                   a Delaware limited partnership
 
                                          By: Martin/Redwood Partners,
                                              L.P., a California limited
                                              partnership, its General Partner
 
                                              By: TMG Redwood LLC,
                                                  A California limited liability
                                                  Company
                                                  Its: General Partner
 
                                                  By: The Martin Group of
                                                      Companies, Inc., a
                                                      California corporation,
                                                      Its General Partner
 
                                                      By: 
                                                           ----------------------
                                                      Its:
                                                           ----------------------

    67

 
 
                                     EXHIBIT E
                                     ---------
 
              SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
              -------------------------------------------------------

 

    68
 
                                     EXHIBIT F
                                     ---------
 
                       STANDARD TERMS FOR OPTION TO PURCHASE
                       -------------------------------------
 
          This Exhibit F sets forth certain standard terms that shall be applicable
to the purchase of the Building pursuant Paragraph 38 of the Lease. This Exhibit
shall be deemed a part of the Lease to which it is attached. Capitalized terms which
are used herein and defined in the Lease shall have the meanings given in the Lease.
 
          1.       Sale and Purchase; Title Company.
 
                   1.1 General. In the event Tenant acquires the Building, (the
"Option Property"), Landlord shall sell to Tenant, and Tenant shall purchase from
Landlord, all of the "Property" (as defined below).
 
                   1.2 The Property. As used in this Agreement, the term "Property"
includes the Option Property and all of the items referred to in Paragraphs 1.2.1
through 1.2.4.
 
                            1.2.1. Personal Property. All of Landlord's right, title
and interest in and to any and all personal property located at the Option Property
which is owned by Landlord and which is used in the operation and maintenance of
the Option Property (the "Personal Property").
 
                            1.2.2. Rights and Privileges. All of Landlord's right,
title and interest, if any, in and to all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appurtenances, mineral rights, development rights, air
rights and riparian or littoral rights belonging or appertaining to the Option Property.
 
                            1.2.3. Contracts and Leases. All of Landlord's right,
title and interest in and to (i) all service, maintenance, construction, management
and other contracts relating to the Option Property (collectively, "Contracts"),
and (ii) all leases, tenancy and occupancy agreements for all or any portion of
the Option Property (collectively, "Leases").
 
                            1.2.4. Permits and Warranties. All of Landlord's right,
title and interest in and to (i) all licenses, permits and approvals, if any, affecting
or pertaining to the Option Property which, if assignable, are to be assigned to
Tenant at the Closing (as defined below), and (ii) all warranties, if any, affecting
or pertaining to the Option Property which, if assignable, are to be assigned to
Tenant at the Closing.
 
                   1.3 Title Company. The purchase and sale of the Property shall
be accomplished through an escrow which Landlord has established or will establish
with Chicago Title Insurance Company, One Kaiser Plaza, Oakland, California (the
"Title Company").
 
          2. Title. Title to the Property shall be conveyed from Landlord to Tenant
by grant deed (the "Deed"), subject to: (i) liens to secure payment of real estate
taxes and assessments not delinquent; (ii) applicable zoning and use laws, ordinances,
rules and regulations of any municipality, township, county, state or other governmental
agency or authority; (iii) all matters 

     69

 that would be disclosed by a physical inspection or survey of the Option Property
or that are actually known to Tenant; (iv) any exceptions or matters created by
Tenant, its agents, employees or representatives; (v) all exceptions of record that
were in existence as of the date of the Lease and all CC&Rs recorded by Landlord;
(vi) all Leases and Contracts; and (vii) such other exceptions as Tenant may approve
in writing.
 
          The foregoing exceptions to title are referred to collectively as the
"Conditions of Title". Conclusive evidence of delivery of title in accordance with
the foregoing shall be the willingness of Title Company to issue to Tenant, upon
payment of its regularly scheduled premium, its CLTA owner's policy of title insurance,
in the amount of the Purchase Price, showing title to the Option Property vested
of record in Tenant, subject only to the Conditions of Title (and the standard printed
exceptions and conditions in the policy of title insurance). If Landlord for any
reason is unable to deliver title to the Property subject only to the Conditions
of Title, then Tenant's sole remedy shall be to terminate this Agreement and receive
a return of any Deposit, and neither Landlord nor Tenant shall thereafter have any
further rights or obligations under this Agreement, except Tenant's obligation to
perform the Continuing Obligations (as defined below). Tenant shall have no right
to commence any action for damages, specific performance or other relief as a result
of Landlord's inability to deliver title to the Property subject only to the Conditions
of Title; provided, however, that if Landlord intentionally fails to consummate
the conveyance of the Option Property to Tenant in accordance with the terms of
the Lease, then Tenant shall have the right to commence any actions for damages,
specific performance or other relief as a result of Landlord's intentional breach.
 
          3. Damage, Destruction or Taking. If at any time prior to the Closing,
Landlord determines that the Option Property has been destroyed or damaged by earthquake,
flood or other casualty and that such damage will require more than One Million
Dollars ($1,000,000.00) to repair (a "Casualty"), or if a proceeding is instituted
for the taking of all or any material portion of the Option Property under the power
of eminent domain (a "Taking"), then Tenant shall have the right by giving written
notice to Landlord and Title Company within fifteen (15) days after the date of
receipt of written notice of any such Casualty or Taking, either to: (i) consummate
the purchase of the Property in accordance with the Lease, in which event Landlord
shall assign to Tenant at the Closing (A) any insurance proceeds payable to Landlord
on account of such Casualty, or (B) any award payable to Landlord by reason of the
Taking, as the case may be; or (ii) terminate Landlord's obligations under Paragraph
38 of the Lease and this Exhibit F, effective as of the date such notice of termination
is given. If Tenant fails to give such notice within such 15-day period, then Tenant
shall be deemed to have elected to terminate Landlord's obligations under Paragraph
38 of the Lease and this Exhibit F, pursuant to this Paragraph 3. The Closing Date
shall be deferred, if necessary, to permit Tenant to have the 15-day period following
receipt of notice of a Casualty or a Taking to make the election specified hereinabove.
If Tenant terminates Landlord's obligations under Paragraph 38 of the Lease and
this Exhibit F, pursuant to this Paragraph 3, then any Deposit shall be returned
to Tenant, and neither Landlord nor Tenant shall have any further obligations under
Paragraph 38 of the Lease or this Exhibit F. Nothing herein shall be deemed to constitute
an obligation on the part of Landlord to carry or maintain any insurance of any
kind whatsoever pertaining to the Property.
 
          4.       Landlord's Disclaimer; Release and Indemnification of  Landlord.

     70
 
                   4.1 Landlord's Disclaimer. Tenant acknowledges and agrees that
the sale of the Property to Tenant is made without any warranty or representation
of any kind by Landlord, either express or implied, with respect to any aspect,
portion or component of the Property, including: (i) the physical condition, nature
or quality of the Property, including the quality of the soils on and under the
Property and the quality of the labor and materials included in any buildings or
other improvements, fixtures, equipment or personal property comprising a portion
of the Property; (ii) the fitness of the Property for any particular purpose; (iii)
the presence or suspected presence of hazardous materials on, in, under or about
the Property (including the soils and groundwater on and under the Property); or
(iv) existing or proposed governmental laws or regulations applicable to the Property,
or the further development or change in use thereof, including environmental laws
and laws or regulations dealing with zoning or land use. Tenant further agrees and
acknowledges that, as of the Closing, Tenant shall have made such feasibility studies,
investigations, environmental studies, engineering studies, inquiries of governmental
officials, and all other inquiries and investigations, which Tenant shall deem necessary
to satisfy itself as to the condition, nature and quality of the Property and as
to the suitability of the Property for Tenant's purposes. Tenant further agrees
and acknowledges that, in purchasing the Property, Tenant shall rely entirely on
its own investigation, examination and inspection of the Property, and not upon
any representation or warranty of Landlord, or any agent or representative of Landlord.
Tenant further agrees and acknowledges that Tenant has leased and occupied the Option
Property prior to the Closing, by reason of such tenancy, possession and occupancy,
Tenant is fully aware of the condition of the Option Property. THEREFORE, TENANT
AGREES THAT, IN CONSUMMATING THE PURCHASE OF THE PROPERTY PURSUANT TO THIS LEASE,
TENANT SHALL ACQUIRE THE PROPERTY IN ITS THEN CONDITION, "AS IS, WHERE IS" AND WITH
ALL FAULTS, AND SOLELY IN RELIANCE ON TENANT'S OWN INVESTIGATION, EXAMINATION, INSPECTION,
ANALYSIS AND EVALUATION OF THE PROPERTY. The agreements and acknowledgments contained
in this Paragraph 4.1 constitute a conclusive admission that Tenant, as a sophisticated,
knowledgeable investor in real property, shall acquire the Property solely upon
its own judgment as to any matter germane to the Property or to Tenant's contemplated
use of the Property, and not upon any statement, representation or warranty by Landlord,
or any agent or representative of Landlord, which is not expressly set forth in
this Agreement. At the Closing, upon the request of Landlord, Tenant shall execute
and deliver to Landlord a certificate of Tenant reaffirming the foregoing.
 
                   4.2 Tenant's Release of Landlord. Tenant hereby waives, releases
and forever discharges Landlord and its officers, directors, employees and agents
from any and all claims, actions, causes of action, demands, liabilities, damages,
costs, expenses or compensation whatsoever, whether direct or indirect, known or
unknown, foreseeable or unforeseeable, which Tenant may have at the Closing or which
may arise in the future on account of or in any way arising out of or connected
with the Property, including: (i) the physical condition, nature or quality of the
Property (including the soils and groundwater on and under the Option Property);
(ii) the presence or release in, under, on or about the Property (including the
soils and groundwater on and under the Option Property) of any hazardous materials;
and (iii) the ownership, management or operation of the Property, but excluding
claims to the extent based on Landlord's fraud or intentional misrepresentation.
At the Closing, upon the request of Landlord, Tenant shall deliver to Landlord a
certificate of Tenant reaffirming the foregoing. Tenant hereby waives the protection
of California Civil Code Paragraph 1542, which reads as follows:

     71
 
                   "A general release does not extend to claims which the
                   creditor does not know or suspect to exist in his favor at the
                   time of executing the release, which if known by him must have
                   materially affected his settlement with the debtor."

 Tenant's Initials: /s/
          ----------------
                   4.3 Tenant's Indemnification of Landlord. Tenant shall indemnify,
defend, protect and hold Landlord harmless from and against any and all claims,
actions, causes of action, demands, liabilities, damages, costs and expenses (including
attorneys' fees), whether direct or indirect, known or unknown, foreseeable or unforeseeable,
which may be asserted against or suffered by Landlord at any time after the Closing
on account of or in any way arising out of or connected with the Property, including:
(i) the physical condition, nature or quality of the Property (including the soils
and groundwater on and under the Option Property); (ii) the presence or release
in, under, on or about the Property (including the soils and groundwater on and
under the Option Property) of any hazardous materials; and (iii) the ownership,
management or operation of the Property, including any claim or demand by any tenant
for the refund or return of any security deposit or other deposit, but excluding
claims to the extent based on Landlord's fraud or intentional misrepresentation.
At the Closing, upon the request of Landlord, Tenant shall deliver to Landlord a
certificate reaffirming the foregoing.
 
                   4.4 Flood Hazard Zone. Tenant acknowledges that if the Option
Property is located in an area which the Secretary of HUD has found to have special
flood hazards, then pursuant to the National Flood Insurance Program, Tenant will
be required to purchase flood insurance in order to obtain any loan secured by the
Option Property from any federally regulated financial institution or a loan insured
or guaranteed by an agency of the United States government. Tenant shall have sole
responsibility to determine whether the Option Property is located in an area which
is subject to the National Flood Insurance Program.
 
                   4.5 Inspections. Subject to obtaining Landlord's prior written
consent, which shall not be unreasonably withheld or delayed, Tenant shall have
the right to conduct such inspections, investigations, borings, samplings and other
tests of the Property that Tenant deems to be useful or necessary for the conduct
of Tenant's due diligence in connection with the acquisition of the Property. Upon
request by Tenant, Landlord shall make available to Tenant for inspection all material
documents and reports in Landlord's possession relating to the condition of the
Property. Tenant shall indemnify, defend, protect and hold Landlord harmless from
and against any and all loss, cost, damage, injury, claim (including claims of lien
for work or labor performed or materials or supplies furnished), liability or expense
(including attorneys' fees) as a result of, arising out of, or in any way connected
with the exercise of Tenant's (or its agents', contractors', employees' or authorized
representatives') inspection rights pursuant to this Paragraph 4.5 or the performance
of Tenant's due diligence. Tenant shall promptly repair any damage to the Property
caused by its due diligence.
 
          5.       Closing.

     72
 
                   5.1. Closing. The transaction contemplated by this Exhibit F
shall be consummated through escrow at the office of Title Company on the date described
in Paragraph 5.1.1 below, or on such other date as shall be mutually agreed upon
by Landlord and Tenant (each, a "Closing Date"). For purposes of this Exhibit F.
the term "Closing" shall mean the consummation of the sale and conveyance of the
Property to Tenant as evidenced by recordation of the Deed (as defined below).
 
                            5.1.1. Closing Date. The Closing Date shall be no later
than the date specified in the Agreed Terms.
 
                   5.2. Landlord's Delivery Into Escrow. Landlord shall deliver
the following items into escrow:
 
                            5.2.1. Deed. The Deed, duly executed and acknowledged
by Landlord, except that the amount of any transfer tax shall not be shown on the
Deed, but shall be set forth on a separate affidavit or instrument which, after
recordation of the Deed, shall be attached thereto so that the amount of such transfer
tax shall not be of record.
 
                            5.2.2. Other Documents. Such other documents or instruments
as may be reasonably required to consummate this transaction in accordance with
the terms and conditions herein contained, such as appropriate escrow instructions
to Title Company.
 
                   5.3. Tenant's Delivery Into Escrow. Tenant shall deliver the
following items into escrow:
 
                            5.3.1. Cash. Immediately available funds in the following
amounts: (i) the balance of the Purchase Price, less the amount of the Deposit;
(ii) such amount, if any, as is necessary for Tenant to pay Tenant's share of the
closing costs and prorations specified in Paragraphs 5.5 and 5.6; and (iii) any
other amounts required to close escrow in accordance with the terms of this Exhibit
F.
 
                            5.3.2. Other Documents. Such other documents and instruments
as may be reasonably required in order to consummate this transaction in accordance
with the terms and conditions of this Exhibit F and the Lease, such as appropriate
escrow instructions to Title Company.
 
                            5.3.3. Evidence of Authorization. Such evidence as shall
reasonably establish that Tenant's performance of its obligations under the Lease
and this Exhibit F have been duly authorized and that the person or persons executing
all documents on behalf of Tenant have been duly authorized and empowered to do
so.
 
                   5.4. Landlord's and Tenant's Joint Delivery Into Escrow. Landlord
and Tenant jointly shall deliver the following items into escrow:
 
                            5.4.1. Assignment and Assumption Agreements. A document
by which 

     73

 Landlord assigns to Tenant, and Tenant assumes, the Leases, Contracts, permits
and warranties which will survive the Closing.
 
                            5.4.2. Other Documents. Such other documents and instruments
as may be reasonably required to consummate this transaction in accordance with
the terms and conditions of this Agreement.
 
                   5.5. Closing Prorations. At the Closing, all items of income
and expense of the Property shall be prorated as provided in this Paragraph 5.5
on the basis of a 360-day year, actual days elapsed for the month in which the Closing
occurs, as of midnight on the day immediately preceding the Closing Date. Except
as provided in this Paragraph 5.5, income and expenses attributable to the period
prior to the Closing Date shall be for the account of Landlord, and income and expenses
attributable to the period on and after the Closing Date shall be for the account
of Tenant. Property taxes and assessments shall be prorated through escrow, and
all other items of income and expense shall be prorated outside of escrow on the
Closing Date by the parties. Without limiting the generality of the foregoing, the
following items shall be prorated through escrow as described above:
 
                            (a) Current rents collected by Landlord under the Leases.
With respect to any rent receivables carried by Landlord under the Leases as of
the Closing, Tenant shall pay Landlord full value in immediately available funds
at the Closing and Landlord shall execute and deliver to Tenant at the Closing an
assignment of all of Landlord's right, title and interest with respect thereto.
 
                            (b) Amounts paid or payable in respect of the Contracts
which Tenant assumes at the Closing.
 
                   5.6. Closing Costs. Landlord shall pay the following closing
costs: (i) all fees and costs for releasing all encumbrances, liens and security
interests of record which are not Conditions of Title; and (ii) county documentary
or other transfer taxes payable upon recordation of the Deed. Tenant shall pay the
following closing costs: (a) the premium for Tenant's policy of title insurance;
(b) any and all costs, fees, title insurance premiums and other charges payable
in connection with any financing obtained by Tenant to acquire the Property, including
all escrow fees relating to the funding and/or recordation of such financing; and
(c) all escrow fees. Each party shall pay one-half of any escrow cancellation fee
charged by Title Company in connection with the purchase and sale of the Property
in accordance with this Exhibit F. All other closing costs shall be paid by the
parties in accordance with the custom then prevailing in San Mateo County.
 
                   5.7. Security Deposits. With respect to all Leases which are
in effect at the Closing, Landlord shall give Tenant at the Closing, through Escrow,
a credit in the amount of all security deposits and other deposits then held by
Landlord under such Leases.
 
                   5.8. Possession. Subject to the rights of tenants under the Leases,
Landlord shall deliver exclusive possession of the Property to Tenant at the Closing.

     74
 
                   5.9. Closing Procedure. Title Company shall close escrow when
it is in a position to: (i) pay to Landlord, in immediately available funds, the
amount of the Purchase Price, as such amount may be increased or decreased as a
result of the allocation of the closing costs and prorations as specified in Paragraphs
5.5 and 5.6 and Landlord's obligations with respect to security deposits as specified
in Paragraph 5.7; and (ii) issue to Tenant the policy of title insurance referred
to in Paragraph 2.
 
                   5.10. Escrow. Within five (5) days after Landlord and Tenant
have agreed upon the Agreed Terms, Tenant and Landlord shall deposit an executed
counterpart of this Exhibit F with the Title Company and this Exhibit F shall serve
as instructions to the Title Company for consummation of the purchase and sale contemplated
hereby. Landlord and Tenant shall execute such supplemental escrow instructions
as may be appropriate to enable the Title Company to comply with the terms of this
Exhibit F. provided such supplemental escrow instructions are not in conflict with
this Exhibit F. In the event of any conflict between the provisions of this Exhibit
F and any supplementary escrow instructions signed by Tenant and Landlord, the terms
of this Exhibit F shall control.
 
                   5.11. Compliance. The Title Company shall comply with all applicable
federal, state and local reporting and withholding requirements relating to the
close of the transactions contemplated herein. Without limiting the generality of
the foregoing, to the extent the transactions contemplated by this Exhibit F involve
a real estate transaction within the purview of Section 6045 of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), Title Company shall have
sole responsibility to comply with the requirements of Section 6045 of the Internal
Revenue Code (and any similar requirements imposed by state or local law). For purposes
of this Paragraph 5.11, Landlord's tax identification number is 94-3236971. Title
Company shall hold Tenant, Landlord and their counsel free and harmless from and
against any and all liability, claims, demands, damages and costs, including reasonable
attorney's fees and other litigation expenses, arising or resulting from the failure
or refusal of Title Company to comply with such reporting requirements.
 
          6. Survival of Provisions. Notwithstanding any other provision of this
Exhibit F to the contrary, each representation, warranty, covenant or agreement
contained in this Exhibit F (including Tenant's obligations pursuant to Paragraph
4.3) shall survive and be binding and enforceable following the Closing and shall
not be deemed to be merged into, or waived by delivery or recordation of, the Deed
or any other instruments delivered at the Closing.
 
          7. Exchange. At the option of either party, such party may elect to consummate
the transaction hereunder in whole or in part as a like-kind exchange pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended. If either party (the
"Exchanging Party") so elects, the other party (the "Cooperating Party") shall cooperate
with the Exchanging Party, executing such documents and taking such action as may
be reasonably necessary in order to effectuate this transaction as a like-kind exchange;
provided, however, that (i) the Cooperating Party's cooperation hereunder shall
be without cost, expense or liability to the Cooperating Party of any kind or character,
including, without limitation, any attorneys' fees, costs or expense incurred in
connection with the review or preparation of documentation in order to effectuate
such like-kind exchange, and the Cooperating Party shall have no obligation to take
title to any real property; 

 

    75

 (ii) the Exchanging Party shall assume all risks in connection with the designation,
selection and setting of terms of the purchase or sale of any exchange property;
(iii) the Exchanging Party shall bear all costs and expenses in connection with
any such exchange transaction in excess of the costs and expenses which would have
otherwise been incurred in acquiring or selling the Property by means of a straight
purchase, so that the net effect to the Cooperating Party shall be identical to
that which would have resulted had this Exhibit F closed on a purchase and sale;
(iv) any documents to effectuate such exchange transaction are consistent with the
terms and conditions contained in this Exhibit F; and (v) the Exchanging Party shall
indemnify, defend and hold the Cooperating Party harmless from any and all claims,
demands, penalties, loss, causes of action, suits, risks, liability, costs or expenses
of any kind or nature (including, without limitation, reasonable attorneys' fees)
which the Cooperating Party may incur or sustain, directly or indirectly, related
to or in connection with, or arising out of, the consummation of this transaction
as a like-kind exchange as contemplated hereunder.
 
          8. Deposit. Notwithstanding anything to the contrary set forth in the
Agreed Terms or this Exhibit F, within one (1) day after Landlord and Tenant reach
agreement on the Agreed Terms for Tenant's purchase of the Property from Landlord,
Tenant shall deliver to Title Company a cashier's check in the amount of five percent
(5%) of the Purchase Price (the "Deposit"), as an earnest money deposit on account
of the Purchase Price. Title Company shall deposit the Deposit in an interest-bearing
account, and the term "Deposit" as used in this Exhibit F shall include any interest
earned thereon.
 
          9. Liquidated Damages. TENANT ACKNOWLEDGES THAT THE CLOSING OF THE SALE
OF THE PROPERTY TO TENANT, ON THE TERMS AND CONDITIONS AND WITHIN THE TIME PERIOD
SET FORTH IN THIS EXHIBIT F AND THE LEASE, IS MATERIAL TO LANDLORD. TENANT ALSO
ACKNOWLEDGES THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY LANDLORD IF SUCH TRANSACTION
IS NOT SO CONSUMMATED DUE TO TENANT'S DEFAULT. TENANT FURTHER ACKNOWLEDGES THAT,
AS OF THE DATE THE PARTIES REACH AGREEMENT ON THE AGREED TERMS, LANDLORD'S DAMAGES
WOULD BE EXTREMELY DIFFICULT OR IMPOSSIBLE TO COMPUTE IN LIGHT OF THE UNPREDICTABLE
STATE OF THE ECONOMY AND OF GOVERNMENTAL REGULATIONS, THE FLUCTUATING MARKET FOR
REAL ESTATE AND REAL ESTATE LOANS OF ALL TYPES, AND OTHER FACTORS WHICH DIRECTLY
AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY. IN LIGHT OF THE FOREGOING AND
ALL OF THE OTHER FACTS AND CIRCUMSTANCES SURROUNDING THIS TRANSACTION, AND FOLLOWING
NEGOTIATIONS BETWEEN THE PARTIES, TENANT AND LANDLORD AGREE THAT THE AMOUNT OF THE
DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH LANDLORD WOULD SUFFER
BY REASON OF TENANT'S DEFAULT HEREUNDER. ACCORDINGLY, TENANT AND LANDLORD HEREBY
AGREE THAT, IN THE EVENT OF SUCH DEFAULT BY TENANT, LANDLORD MAY TERMINATE ITS OBLIGATIONS
UNDER PARAGRAPH 38 OF THE LEASE AND THIS EXHIBIT F BY GIVING NOTICE TO TENANT. IN
THE EVENT OF SUCH TERMINATION, LANDLORD SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES
IN LIEU OF ANY OTHER CLAIM LANDLORD MAY HAVE AT LAW OR IN EQUITY (INCLUDING, WITHOUT
LIMITATION, SPECIFIC PERFORMANCE) ARISING 

     76

 BY REASON OF TENANT'S FAILURE TO PURCHASE THE PROPERTY PURSUANT TO THIS EXHIBIT
F. LANDLORD'S RETENTION OF THE DEPOSIT PURSUANT TO THIS PARAGRAPH 9 SHALL IN NO
WAY LIMIT ANY OF LANDLORD'S RIGHTS OR REMEDIES UNDER THE LEASE WITH RESPECT TO ANY
DEFAULT BY TENANT UNDER THE LEASE. THE PARTIES HAVE INITIALED THIS PARAGRAPH 9 TO
ESTABLISH THEIR INTENT SO TO LIQUIDATE DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING
CONTAINED IN THIS PARAGRAPH 9 SHALL BE DEEMED TO LIMIT: (i) TENANT'S OBLIGATIONS
UNDER THE LEASE; OR (ii) TENANT'S INDEMNIFICATION OBLIGATIONS CONTAINED IN THIS
EXHIBIT F.

 Landlord's                          Tenant's Initials:_____                   
  Initials /s/
 
                                     TENANT:

 Dated:         ,1998                AT HOME CORPORATION,
       ---------                     a Delaware corporation
 
                                     By:  /s/ KENNETH A. GOLDMAN
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------

 
                                     By:
                                          ---------------------------------------
                                     Its:
                                          ---------------------------------------
 
                                     LANDLORD:

 Dated:                              MARTIN/CAMPUS ASSOCIATES, L.P.,
       -------------                   a Delaware limited partnership
 
                                          By: Martin/Redwood Partners,
                                              L.P., a California limited
                                              partnership, its General Partner
 
                                              By: TMG Redwood LLC,
                                                  A California limited liability
                                                  Company
                                                  Its: General Partner
 
                                                  By: The Martin Group of
                                                      Companies, Inc., a
                                                      California corporation,
                                                      Its General Partner
 
                                                      By: 
                                                           ----------------------
                                                      Its:
                                                           ----------------------