California MCLE - California-Cupertino-Results Way Corporate Park Lease

TABLE OF CONTENTS


SECTION		PAGE
1.	PREMISES, PROJECT, CAMPUS AND COMMON AREAS		5
2.	TERM		5
3.	RENT		6
4.	SECURITY DEPOSIT		11
5.	USE AND COMPLIANCE WITH LAWS		11
6.	TENANT IMPROVEMENTS & ALTERATIONS		14
7.	MAINTENANCE AND REPAIRS		16
8.	TENANT’S TAXES		18
9.	UTILITIES AND SERVICES		18
10.	EXCULPATION AND INDEMNIFICATION		20
11.	INSURANCE		21
12.	DAMAGE OR DESTRUCTION		23
13.	CONDEMNATION		25
14.	ASSIGNMENT AND SUBLETTING		26
15.	DEFAULT AND REMEDIES		29
16.	LATE CHARGE AND INTEREST		31
17.	WAIVER		32
18.	ENTRY, INSPECTION AND CLOSURE		32
19.	SURRENDER AND HOLDING OVER		33
20.	ENCUMBRANCES		34
21.	ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS		35
22.	NOTICES		35
23.	ATTORNEYS’ FEES		35
24.	QUIET POSSESSION		36
25.	SECURITY MEASURES		36
26.	FORCE MAJEURE		36
27.	RULES AND REGULATIONS		37
28.	LANDLORD’S LIABILITY		37
29.	CONSENTS AND APPROVALS		37
30.	WAIVER OF RIGHT TO JURY TRIAL		37
31.	BROKERS		38
32.	RELOCATION OF PREMISES		38
33.	MISCELLANEOUS		38
34.	AUTHORITY		38
35.	HAZARDOUS SUBSTANCE DISCLOSURE		39
36.	ENTIRE AGREEMENT		39

-i-

INDEX OF DEFINED TERMS



Additional Rent			9
Affiliate			30
Alterations			15
Annual Expenses			10
Award			25
Broker			39
Building			5
Building Rules			38
Building Systems			12
Campus			5
Claims			21
Common Areas			5
Condemnation			25
Condemnor			25
Construction Rider			15
Control			30
Controls			18
Date of Condemnation			26
Encumbrance			35
Environmental Losses			13
Environmental Requirements			13
Event of Default			30
Existing Premises			5
Existing Premises Commencement Date			6
Expansion Premises			5
Expansion Premises Commencement Date			6
Expiration Date			6
Fees			36
Handled by Tenant			13
Handling by Tenant			13
Hazardous Materials			12
HVAC			12
Interest Rate			33
Land			5
Landlord			5
Landlord Parties			14
Late Charge			32
Laws			7
Main Utility Lines			5
Minor Changes			15
Mortgagee			35
Newly Enacted Laws			7
Operating Costs			6
Parking Facility			5
Past Due Notice			32
Permitted Hazardous Materials			13
Permitted Transfer			30
Permitted Transferee			30
Premises			5
Premises Utilities			19
Project			5
Property Manager			22
Proposed Transferee			27
Rent			11
Rental Tax			18
Representatives			13
Security Deposit			11
Service Failure			19
Structural Elements			17
Taxes			8
Telecommunication Provider			21
Tenant			5
Tenant Improvements			15
Tenant’s Inspection			10
Tenant’s Inspection Notice			10
Tenant’s Share of the Building			8
Tenant’s Taxes			18
Term			6
Trade Fixtures			16
Transfer			27
Transfer Consideration			28
Transferee			27
Visitors			13

BASIC LEASE INFORMATION


Lease Date:		For identification purposes only, the date of this Lease is April 24, 2007

Landlord:		ECI TWO RESULTS LLC, a California limited liability company

Tenant:		ARCSIGHT, INC., a Delaware corporation

Project:		Site One at Results Way Corporate Park, consisting of four (4) buildings containing a total of approximately 146,237 rentable square feet, located at Two, Three, Four and Five Results Way, Cupertino, CA 95014, and the land parcel(s) of approximately 8 acres on which such buildings and their associated parking areas are situated, including “Common Areas” serving the Project, which Common Areas consist of: driveways, sidewalks, landscaping, parking and other common exterior areas available for use by occupants.

Campus:		The Results Way Corporate Park, including the Project, and approximately 12 acres adjacent to the Project, as more particularly defined in Article 1 of the Lease

Premises:		The Premises consists of two (2) spaces, (a) one of which is the Existing Premises, and (b) the other of which is the Expansion Premises, both as defined below.

		The Premises contains a total of approximately 79,629 rentable square feet


Building Address of Existing Premises:		Five Results Way

Existing Premises:		The entire Building located at Five Results Way, and containing approximately 44,320 rentable square feet

Building Address of Expansion Premises:		Four Results Way

Expansion Premises:		The entire Building located at Four Results Way and containing approximately 35,309 rentable square feet

Existing Premises Commencement Date:		May 1, 2007


Expansion Premises Commencement Date:		October 1, 2007

Term:		Seventy-eight (78) full calendar months following the Existing Premises Commencement Date

Expiration Date:		October 31, 2013

Base Rent:


		05/01/07 — day immediately before the Expansion Premises Commencement Date:		$81,992.00 per month

		Expansion Premises Commencement Date — 04/30/08:		$147,313.65 per month

		05/01/08 — 04/30/09:		$153,206.20 per month
		05/01/09 — 04/30/10:		$159,334.44 per month
		05/01/10 — 04/30/11:		$165,707.82 per month
		05/01/11— 04/30/12:		$172,336.13 per month
		05/01/12 — 04/30/13:		$179,229.58 per month
		05/01/13 — 10/31/13:		$186,398.76 per month


Maintenance, Operating Costs and Taxes:		This is a “triple net lease” where Tenant is responsible for maintenance of specific portions of the Premises, and reimbursing Landlord for operating costs and taxes, all as more specifically contained in the applicable provisions of the Lease.

Tenant’s Share of each of the Buildings:		100%

Security Deposit:		$200,000.00 cash, subject to reduction in steps to $100,000.00 in accordance with the provisions contained in Article 40 of Exhibit D attached hereto, plus:

		As additional security for Tenant’s obligations under this Lease, on execution of this Lease Tenant shall deliver to Landlord a $800,000 letter of credit in accordance with the provisions of Article 4 of this Lease, as more particularly described in Section 40 of Exhibit D attached hereto.


Landlord’s Address for Payment of Rent:		ECI TWO RESULTS LLC One Results Way P.O. Box 301104 Los Angeles, CA 90030-1104

Landlord’s Address for Notices:		ECI TWO RESULTS LLC c/o Embarcadero Capital Partners, LLC 1301 Shoreway Road, Suite 250 Belmont, CA 94002 Attn: John Hamilton

		with a copy to:

		Ed Cherry, Esq. Cox Castle & Nicholson LLP 555 Montgomery Street, Suite 1500 San Francisco, CA 94111

Tenant’s Address for Notices:		ArcSight, Inc. Five Results Way Cupertino, CA 95014 Attn: Stewart Grierson, Chief Financial Officer

Broker(s):		Colliers International Services Group

Property Manager:		CB Richard Ellis


Additional Provisions:	37.	Parking
	38.	Right of First Offer
	39.	Extension Option
	40.	Letter of Credit and Security Deposit
	41.	Satellite Dish or Dishes
	42.	Signs

THIS LEASE is made as of the Lease Date set forth in the Basic Lease Information, by and between the Landlord identified in the Basic Lease Information (“Landlord”), and the Tenant identified in the Basic Lease Information (“Tenant”). Landlord and Tenant hereby agree as follows:

1. PREMISES, PROJECT, CAMPUS AND COMMON AREAS.

1.1 Leasing of the Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon the terms and subject to the conditions of this Lease, the space identified in the Basic Lease Information as the Existing Premises (the “Existing Premises”), and the Expansion Premises (the “Expansion Premises”) in the buildings located at the addresses specified in the Basic Lease Information (individually and together, the “Building”). The Existing Premises and the Expansion Premises together constitute the Premises (the “Premises”). The approximate configuration and location of the Existing Premises is shown on Exhibit A-1. The approximate configuration and location of the Expansion Premises is shown on Exhibit A-2. Landlord and Tenant agree that the rentable area of the Existing Premises, the Expansion Premises and each Building for all purposes under this Lease shall be the Rentable Areas specified in the Basic Lease Information.

1.2 The Project, Campus and Common Areas. Each Building is part of the Project identified in the Basic Lease Information (the “Project”), which includes the parcel(s) of land on which the Project is situated (the “Land”). Tenant shall have the non-exclusive right to use in common with other tenants in the Project, subject to the rules and regulations contained in Exhibit C, those portions of the Project, including the parking facilities serving the Project (the “Parking Facility”), which are provided, from time-to-time, for use in common by Landlord, Tenant and any other tenants in the Project (such areas are referred to herein as the “Common Areas”). The Project is part of the Results Way Corporate Park (the “Campus”), which also includes several buildings on approximately 12 acres of land adjacent to the Project. Certain of the Common Areas serve the Campus as a whole in addition to the Project or the Building. The Common Areas include the “Main Utility Lines”, consisting of the pipes, conduits, lines, trails and/or systems for electricity, telephone, water, storm drain, gas and sewer services serving all or a part of the Campus and located under or on portions of the Campus. A site plan showing the approximate configuration of the Project and Campus is contained on Exhibit A-3.

1.3 Use of Common Areas. The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord and the use thereof shall be subject to any easements, to any covenants, conditions and restrictions of record, and to such rules, regulations and restrictions as Landlord may make from time to time. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas provided that Tenant’s use of and access to the Premises and the Parking Facility are not materially diminished, except for any temporary closing of the Common Areas or Parking Facilities which materially limit Tenant’s access to the Premises for not more than three (3) consecutive Business Days.

2. TERM. Tenant has been occupying the Existing Premises pursuant to a sublease which expires on April 30, 2007. The term of this Lease (the “Term”) shall commence on May 1, 2007 (the “Existing Premises Commencement Date” and, unless sooner terminated,

shall expire on the Expiration Date set forth in the Basic Lease Information (the “Expiration Date”).

The “Expansion Premises Commencement Date” shall be October 1, 2007. Notwithstanding the foregoing, if Tenant occupies the Expansion Premises prior to October 1, 2007, Tenant shall not be obligated to pay Base Rent for the Expansion Premises until October 1, 2007. Landlord shall not be liable for any claims, damages or liabilities if the Expansion Premises are not ready for occupancy by the Expansion Premises Commencement Date.

3. RENT.

3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set forth in the Basic Lease Information, without prior notice or demand, on the first day of each and every calendar month during the Term, except that Base Rent for the first full calendar month in which Base Rent is payable shall be paid upon Tenant’s execution of this Lease and Base Rent for any partial month at the beginning of the Term shall be paid on the Commencement Date. Base Rent for any partial month at the beginning or end of the Term shall be prorated based on the actual number of days in the month.

Tenant’s obligations to pay Base Rent and Additional Rent (as defined below) for the Existing Premises shall commence on the Existing Premises Commencement Date. Tenant’s obligations to pay Base Rent and Additional Rent for the Expansion Premises shall commence on the Expansion Premises Commencement Date.

If the Basic Lease Information provides for any change in Base Rent by reference to years or months (without specifying particular dates), the change will take effect on the applicable annual or monthly anniversary of the Commencement Date (which might not be the first day of a calendar month).

This Lease is intended to be a “net” lease, and the Base Rent shall be paid to Landlord absolutely net of all costs and expenses, except to the extent expressly provided to the contrary in this Lease. The provisions for payment of Operating Costs and Taxes are intended to pass on to Tenant and to reimburse Landlord for all costs and expenses incurred in connection with the ownership and operation of the Project and the Common Areas, except to the extent expressly provided to the contrary in this Lease.

3.2 Additional Rent: Operating Costs and Taxes.

(a) Definitions.

(1) “Operating Costs” means all costs, expenditures, fees and charges of managing, operating, maintaining and repairing the Building, including, for: (A) operation, maintenance and repairs (including maintenance, repair and replacement of glass, the roof covering or membrane, and landscaping); (B) utilities and services (including telecommunications facilities and equipment, recycling programs and trash removal), and associated supplies and materials; (C) compensation (including employment taxes and fringe benefits for persons at or below the level of property manager or building engineer who perform duties in connection with such operation, management, maintenance and repair, such

compensation to be appropriately allocated for persons who also perform unrelated duties; (D) property (including coverage for earthquake and flood if carried by Landlord), liability, rental income and other insurance relating to the Building, and expenditures for commercially reasonable deductible amounts under such insurance; (E) licenses, permits and inspections; (F) complying with the requirements of any law, statute, ordinance or governmental rule or regulation or any orders pursuant thereto (collectively “Laws”) either (i) not in effect as of the Commencement Date or (ii) as any Laws in effect as of the Commencement Date may be amended, changed, added to, interpreted or re-interpreted by applicable governmental authority or court decision, or administrative ruling subsequent to the Commencement Date (such [i] and [ii] being herein called “Newly Enacted Laws” ”; (G) amortization, over such useful life as Landlord reasonably determines, with interest on the unamortized balance at ten percent (10%) per annum, of the cost of capital improvements made or required to comply with Laws, or to reduce Operating Costs or improve the utility, efficiency or capacity of any Building System, or otherwise for the safety, comfort and convenience of tenants, or which are required to comply with conservation programs, except as provided in Section 7.2 of this Lease; (H) property management fees equal to three percent (3%) of gross revenue receivable by Landlord (and not payable by tenants to third parties); (I) accounting, legal, engineering and other professional services; (J) a reasonable allowance for depreciation on machinery and equipment used for operation and maintenance, and other personal property owned by Landlord in the Building (including window coverings and carpeting in common areas); (K) any cost incurred at the Project or Campus level that is exclusively for the benefit of the Building or any other building; and (L) any other cost, expenditure, fee or charge, whether or not hereinbefore described, which in accordance with generally accepted property management practices would be considered an expense of managing, operating, maintaining and repairing the Building. Operating Costs shall also include (but without duplication) those costs, expenditures, fees and charges of the same type and nature as items (A) through (L) in the foregoing sentence that are incurred at the Project level or Campus level to the extent the same are equitably allocated to the Building, including by way of example, (M) the cost to maintain an office for the management of the Project or Campus, including expenses of furnishing and equipping such office and the rental value of any space occupied for such purposes; (N) accounting, legal and other professional fees incurred in connection with the operation of the Project or Campus; (O) a reasonable allowance for depreciation of machinery and equipment used to maintain the Project or Campus; (P) any shared Project or Campus costs or Common Area maintenance costs and expenses (including costs and expenses of operating, managing, owning and maintaining the Main Utility Lines, the Common Areas, and non-building specific costs, and the Parking Facility of the Project and Campus); and (Q) the cost of maintaining and operating any associations created under any covenants, conditions and restrictions governing the Building, Project or Campus.

Operating Costs for the Building for any calendar year during which average occupancy of the Building is less than one hundred percent (100%) shall be calculated based upon the Operating Costs that would have been incurred if the Building had an average occupancy of one hundred percent (100%) during the entire calendar year.

Operating Costs for the Project or Campus for any calendar year during which average occupancy of the Project or Campus is less than one hundred percent (100%) shall be calculated based upon the Operating Costs that would have been incurred if the Project had an average occupancy of one hundred percent (100%) during the entire calendar year.

Operating Costs shall not include (i) capital improvements (except as specifically enumerated above); (ii) costs of special services rendered to individual tenants (including Tenant) for which separate, direct reimbursement is made; (iii) costs of electricity and other services sold or provided to individual tenants (including Tenant) and for which Landlord is reimbursed by such tenants as a separate additional charge or rental over and above the basic rent or escalation payment payable under the Lease with such tenant; (iv) ground rent, and interest and principal payments on loans or indebtedness secured by any part of the Campus; (v) costs of tenant improvements for Tenant or other tenants of the Campus; (vi) costs of services or other benefits of a type which are not available to Tenant but which are available to other tenants or occupants without special, separate charge; (vii) leasing commissions, attorneys’ fees and other expenses incurred in connection with leasing space in the Campus or enforcing such leases; (viii) depreciation or amortization, other than as specifically enumerated above; and (ix) fines or penalties incurred due to Landlord’s violation of any Law.

(2) “Taxes” means that portion of the following taxes on the Project which are allocable to the Building in Landlord’s reasonable judgment: all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, nature or origin, imposed on or by reason of the ownership or use of the Project; governmental charges, fees or assessments for transit or traffic mitigation (including area-wide traffic improvement assessments and transportation system management fees), housing, police, fire or other governmental service or purported benefits to the Project; personal property taxes assessed on the personal property of Landlord used in the operation of the Project; service payments in lieu of taxes and taxes and assessments of every kind and nature whatsoever levied or assessed in addition to, in lieu of or in substitution for existing or additional real or personal property taxes on the Project or the personal property described above; any increases in the foregoing caused by changes in assessed valuation, tax rate or other factors or circumstances (in which case Taxes will be as finally determined after any appeals); and the reasonable cost of contesting by appropriate proceedings the amount or validity of any taxes, assessments or charges described above. To the extent paid by Tenant or other tenants as “Tenant’s Taxes” (as defined in Section 8 — Tenant’s Taxes), “Tenant’s Taxes” shall be excluded from Taxes.

(3) “Tenant’s Share of the Building” means the Rentable Area of the Premises divided by the total Rentable Area of the Building, as set forth in the Basic Lease Information. If the Rentable Area of the Premises is changed by Tenant’s leasing of additional space hereunder or for any other reason, Tenant’s Share shall be adjusted accordingly.

(b) Additional Rent.

(1) Tenant shall pay Landlord as “Additional Rent” for each calendar year or portion thereof during the Term Tenant’s Share of the sum of (x) the amount of Operating Costs, and (y) the amount of Taxes.

(2) Prior to the Existing Premises Commencement Date and each calendar year thereafter, Landlord shall notify Tenant of Landlord’s estimate of Operating Costs, Taxes and Tenant’s Additional Rent for the following calendar year (or first partial year following the Commencement Date). If Landlord later estimates that Operating Costs or Taxes for such year will vary from Landlord’s prior estimate, Landlord may, by notice to Tenant, revise

the estimate for such year (and Additional Rent shall thereafter be payable based on the revised estimate).

Commencing on (a) the Existing Premises Commencement Date with respect to the Existing Premises, and (b) the Expansion Premises Commencement Date with respect to the Expansion Premises, and continuing on the first day of every month thereafter in such year, Tenant shall pay to Landlord one-twelfth (1/12th) of the Additional Rent, as reasonably estimated by Landlord for such full calendar year.

In calendar years following the initial partial year, commencing on the first day of January of each calendar year and continuing on the first day of every month thereafter in such year, Tenant shall pay to Landlord one-twelfth (1/12th) of the Additional Rent, as reasonably estimated by Landlord for such full calendar year.

(3) As soon as reasonably practicable after the end of each calendar year, Landlord shall furnish Tenant a statement with respect to such year, showing Operating Costs, Taxes and Additional Rent for the year, and the total payments made by Tenant with respect thereto. Unless Tenant raises any objections to Landlord’s statement within ninety (90) days after receipt of the same, such statement shall conclusively be deemed correct and Tenant shall have no right thereafter to dispute such statement or any item therein or the computation of Additional Rent based thereon. If Tenant does object to such statement, then Landlord shall provide Tenant with reasonable verification of the figures shown on the statement and the parties shall negotiate in good faith to resolve any disputes. Any objection of Tenant to Landlord’s statement and resolution of any dispute shall not postpone the time for payment of any amounts due Tenant or Landlord based on Landlord’s statement, nor shall any failure of Landlord to deliver Landlord’s statement in a timely manner relieve Tenant of Tenant’s obligation to pay any amounts due Landlord based on Landlord’s statement.

(4) If Tenant’s Additional Rent as finally determined for any calendar year exceeds the total payments made by Tenant on account thereof, Tenant shall pay Landlord the deficiency within ten (10) days of Tenant’s receipt of Landlord’s statement. If the total payments made by Tenant on account thereof exceed Tenant’s Additional Rent as finally determined for such year, Tenant’s excess payment shall be credited toward the rent next due from Tenant under this Lease. For any partial calendar year at the beginning or end of the Term, Additional Rent shall be prorated on the basis of a 360-day year by computing Tenant’s Share of Operating Costs and Taxes for the entire year and then prorating such amount for the number of days during such year included in the Term. The obligations of Landlord to refund any overpayment of Additional Rent and of Tenant to pay any Additional Rent not previously paid shall survive the expiration or termination of this Lease. Landlord shall pay to Tenant or Tenant shall pay to Landlord, as the case may be, within ten (10) days after Tenant’s receipt of Landlord’s final statement for the calendar year in which this Lease terminates, the difference between Tenant’s Additional Rent for that year, as finally determined by Landlord, and the total amount previously paid by Tenant on account thereof.

If for any reason Taxes for any year during the Term are reduced, refunded or otherwise changed, Tenant’s Additional Rent shall be adjusted accordingly. If Taxes are temporarily reduced as a result of space in the Project being leased to a tenant that is entitled

to an exemption from property taxes or other taxes, then for purposes of determining Additional Rent for each year in which Taxes are reduced by any such exemption, Taxes for such year shall be calculated on the basis of the amount the Taxes for the year would have been in the absence of the exemption. The obligations of Landlord to refund any overpayment of Additional Rent and of Tenant to pay any Additional Rent not previously paid shall survive the expiration of the Term.

(c) For a period of sixty (60) days after receipt of a statement of Operating Costs, Taxes and Additional Rent (“Annual Expenses”), Tenant shall be entitled, upon not less than ten (10) days’ prior written notice to Landlord (“Tenant’s Inspection Notice”) to inspect and examine Landlord’s books and records relating to the determination of Annual Expenses for the immediately preceding year (“Tenant’s Inspection”), subject to the following terms and conditions: (a) Tenant shall not conduct Tenant’s Inspection at any time that Tenant is in default of any of the terms of this Lease; (b) Tenant’s Inspection shall be done during normal business hours, at the office of the property manager for the Building, (c) Tenant shall not conduct Tenant’s Inspection more than one (1) time for any calendar year, and (d) Tenant’s Inspection Notice shall specify in detail which items of expense Tenant, in good faith, believes have been misstated. Tenant acknowledges that Tenant’s right to conduct Tenant’s Inspection for the preceding calendar year is for the exclusive purpose of determining whether Landlord has complied with the terms of the Lease with respect to Annual Expenses. Within fifteen (15) business days after receipt of Tenant’s Inspection Notice, Landlord will provide copies of or give Tenant reasonable access to those documents and date as Landlord reasonably believes relate to the expense items specified in Tenant’s Inspection Notice. If Landlord affords access to such documents and data, Tenant shall not remove such materials from the location where the same have been made available, but Tenant shall have the right to make copies of the same at Tenant’s expense. Tenant shall have thirty (30) days after Landlord shall have provided copies of or access to the relevant documents and data as aforesaid to complete Tenant’s Inspection. Tenant shall deliver to Landlord a copy of the results of Tenant’s Inspection within thirty (30) days conducting Tenant’s Inspection. Failure of Tenant to request an inspection within the above sixty (60)-day period shall render the statement of Annual Expenses conclusive and binding on Tenant for all purposes. If, after conducting Tenant’s Inspection, Tenant disputes the amount of Annual Expenses charged by Landlord, Tenant may, by written notice to Landlord, request an independent audit of such books and records. The independent audit of the books and records shall be conducted by a certified public accountant (“CPA”) reasonably acceptable to both Landlord and Tenant. If, within thirty (30) days after Landlord’s receipt of Tenant’s notice requesting an audit, Landlord and Tenant are unable to agree on the CPA to conduct such audit, then Landlord may designate a “Big Five” accounting firm not then employed by Landlord or Tenant to conduct the audit. The audit shall be limited to the determination of the amount of Annual Expenses for the subject year. If the audit discloses that the amount of Annual Expenses billed to Tenant was incorrect, the appropriate party shall pay to the other party the deficiency or overpayment, as applicable. All costs and expenses of the audit shall be paid by Tenant unless the audit shows that Landlord overstated Annual Expenses for the subject year by more than five percent (5%), in which case Landlord shall pay all costs and expenses of the audit. Tenant and the CPA shall keep the information gained from any audit confidential and shall not disclose it to any other party. Tenant’s Inspection and any exercise by Tenant of the audit rights hereunder shall not relieve Tenant of its obligation to

timely pay all sums due under this Lease, including, without limitation, the disputed Excess Expenses.

3.3 Payment of Rent. All amounts payable or reimbursable by Tenant under this Lease, including late charges and interest (collectively, “Rent”), shall constitute rent and shall be payable and recoverable as rent in the manner provided in this Lease. All sums payable to Landlord on demand under the terms of this Lease shall be payable within ten (10) days after Landlord invoices Tenant therefor or otherwise makes demand of the amounts due. All rent shall be paid without offset or deduction in lawful money of the United States of America to Landlord at Landlord’s Address for Payment of Rent as set forth in the Basic Lease Information, or to such other person or at such other place as Landlord may from time to time designate.

4. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with Landlord the amount specified in the Basic Lease Information and the letter of credit identified in Section 40 below as the Security Deposit (collectively, the “Security Deposit”), as security for the performance of Tenant’s obligations under this Lease. Landlord may (but shall have no obligation to) use the Security Deposit or any portion thereof to cure any breach or default by Tenant under this Lease, to fulfill any of Tenant’s obligations under the Lease, or to compensate Landlord for any damage it incurs as a result of Tenant’s failure to perform any of Tenant’s obligations hereunder. In such event, Tenant shall pay to Landlord on demand an amount sufficient to replenish the Security Deposit to the full amount of the cash specified in the Basic Lease Information and the applicable Face Amount (defined in Section 40 below) of the letter of credit. If at the expiration or termination of this Lease, Tenant is not in default, has otherwise fully performed all of Tenant’s obligations under this Lease, and there are no outstanding Claims (defined in Section 10.1 below, and including all existing and potential Claims) for which Tenant is responsible, Landlord shall return to Tenant the Security Deposit or the balance thereof then held by Landlord and not applied as provided above. Landlord may commingle the Security Deposit with Landlord’s general and other funds. Landlord shall not be required to pay interest on the Security Deposit to Tenant. Tenant acknowledges that Landlord has agreed to accept a letter of credit in lieu of an additional cash deposit as an accommodation to Tenant. Tenant waives the provisions of Section 1950.7 of the California Civil Code, and all other provisions of Law now in force or that become in force after the date of this Lease, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant, or to clean the Premises. Landlord and Tenant agree that Landlord may, in addition, claim and use those sums necessary to compensate Landlord for any foreseeable or unforeseeable loss or damage caused by the act or omission by Tenant, including, without limitation, any post default damages and such remedies to which Landlord is entitled under the provisions of Section 15.2 of this Lease.

5. USE AND COMPLIANCE WITH LAWS.

5.1 Use. The Premises shall be used and occupied for the purposes of (a) general business office, (b) computer programming and related development, (c) customer training and support, and (d) sales and marketing, and for no other use or purpose. Tenant shall comply with all present and future Laws relating to Tenant’s use or occupancy of the Premises and make any repairs, alterations or improvements as required to comply with all such Laws to the extent that such Laws relate to or are triggered by (a) Tenant’s particular use of the Premises

(as opposed to general office use), or (b) any Alterations. Tenant shall observe the “Building Rules” (as defined in Section 27 — Rules and Regulations). Tenant shall not do, bring, keep or sell anything in or about the Premises that is prohibited by, or that will cause a cancellation of or an increase in the existing premium for, any insurance policy covering the Building or any part thereof. Tenant shall not permit the Premises to be occupied or used in any manner that will constitute waste or a nuisance, or disturb the quiet enjoyment of or otherwise annoy other tenants in the Building. Without limiting the foregoing, the Premises shall not be used for educational activities, practice of medicine or any of the healing arts, providing social services, for any governmental use (including embassy or consulate use), or for personnel agency, customer service office, studios for radio, television or other media, travel agency or reservation center operations or uses. Tenant shall not, without the prior consent of Landlord, (i) bring into the Building or the Premises anything that may cause substantial noise, odor or vibration, overload the floors in the Premises or the Building or any of the heating, ventilating and air-conditioning (“HVAC”), mechanical, elevator, plumbing, electrical, fire protection, life safety, security or other systems in the Building (“Building Systems”), or jeopardize the structural integrity of the Building or any part thereof; (ii) connect to the utility systems of the Building any apparatus, machinery or other equipment other than typical low power task lighting or office equipment; or (iii) connect to any electrical circuit in the Premises any equipment or other load with aggregate electrical power requirements in excess of 80% of the rated connected load capacity of the circuit. Tenant’s use of electricity shall never exceed the safe capacity of the feeders to the Building or the risers or wiring installation of the Building.

5.2 Hazardous Materials.

(a) Definitions.

(1) “Hazardous Materials” shall mean any substance: (A) that now or in the future is regulated or governed by, requires investigation or remediation under, or is defined as a hazardous waste, hazardous substance, pollutant or contaminant under any governmental statute, code, ordinance, regulation, rule or order, and any amendment thereto, including the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. ¤9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. ¤6901 et seq., or (B) that is toxic, explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline, diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos, radon and urea formaldehyde foam insulation.

(2) “Environmental Requirements” shall mean all present and future Laws, orders, permits, licenses, approvals, authorizations and other requirements of any kind applicable to Hazardous Materials.

(3) “Handled by Tenant” and “Handling by Tenant” shall mean and refer to any installation, handling, generation, storage, use, disposal, discharge, release, abatement, removal, transportation, or any other activity of any type by Tenant or its agents, employees, contractors, licensees, assignees, sublessees, transferees or representatives (collectively, “Representatives”) or its guests, customers, invitees, or visitors (collectively, “Visitors”), at or about the Premises in connection with or involving Hazardous Materials.

(4) “Environmental Losses” shall mean all costs and expenses of any kind, damages, including foreseeable and unforeseeable consequential damages, fines and penalties incurred in connection with any violation of and compliance with Environmental Requirements and all losses of any kind attributable to the diminution of value, loss of use or adverse effects on marketability or use of any portion of the Premises or Project.

(b) Tenant’s Covenants. No Hazardous Materials shall be Handled by Tenant at or about the Premises or Project without Landlord’s prior written consent, which consent may be granted, denied, or conditioned upon compliance with Landlord’s requirements, all in Landlord’s absolute discretion. Notwithstanding the foregoing, normal quantities and use of those Hazardous Materials customarily used in the conduct of general office activities, such as copier fluids and cleaning supplies (“Permitted Hazardous Materials”), may be used and stored at the Premises without Landlord’s prior written consent, provided that Tenant’s activities at or about the Premises and Project and the Handling by Tenant of all Hazardous Materials shall comply at all times with all Environmental Requirements. At the expiration or termination of the Lease, Tenant shall promptly remove from the Premises and Project all Hazardous Materials Handled by Tenant at the Premises or the Project. Tenant shall keep Landlord fully and promptly informed of all Handling by Tenant of Hazardous


Exhibits:
Exhibit A-1:		The Existing Premises
Exhibit A-2:		The Expansion Premises
Exhibit A-3:		The Campus
Exhibit B:		Construction Rider
Exhibit B-2:		Preliminary Space Plan
Exhibit C:		Building Rules
Exhibit D:		Additional Provisions
Exhibit E:		Form of Letter of Credit