Exhibit 10.30

 

LEASE

 

THIS LEASE is made as of the 17th day of June, 1991, by and between

 

3000 OAKMEAD VILLAGE DRIVE, LTD.

 

(hereinafter called “Landlord”), and

 

GHz TECHNOLOGY, INC,

 

(hereinafter called “Tenant”).

 

Witnesseth:

 

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the real
property commonly known as APN #216-48-025 and Suite Number 100 (hereinafter
called “Premises”) outlined on the floor plan attached hereto and marked Exhibit
“A”, and said Premises being agreed, for the purpose of this Lease, to have an
area of approximately

 

Nine Thousand eight hundred fifty (9,850) Square Feet

 

of rentable square feet

 

of that certain building complex located at 3000 Oakmead Village Drive, Santa
Clara, California (hereinafter called “Complex”), and all personal property
listed on Exhibit Al attached hereto.

 

The parties hereto agree that said letting and hiring is upon and subject to the
terms, covenants and conditions herein set forth and Tenant covenants as a
material part of the consideration for this Lease to keep and perform each and
all of said terms, covenants and conditions by it to be kept and performed and
that this Lease is made upon the condition of such performance.

 

1.             TERM. The term of this Lease shall be for ten (10) years
commencing on the 1st day of June, 1991, and ending on the 30th day of May,
2001, unless the term of the Premises hereby demised shall be sooner terminated
as hereinafter provided.

 

2.             POSSESSION.

 

(A)          Tenant agrees that in the event of the inability of Landlord to
deliver possession of the Premises

to Tenant on the date above specified for the commencement of the term of this
Lease, this Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom, but the expiration date of
the above term shall be extended by the same number of days that the Tenant’s
possession of the Premises was detained by Landlord’s inability to deliver
possession, and in such event Tenant shall not be liable for any rent until such
time as Landlord tenders delivery of possession of the Premises to Tenant with
Landlord’s work therein if any, substantially completed. Should Landlord tender
possession of the Premises to Tenant prior to the date specified for
commencement of the term hereof, and Tenant elects to accept such prior tender,
such prior occupancy shall be subject to all of the terms, covenants and
conditions of this Lease, including the payment of rent. Notwithstanding the
above, if Landlord does not deliver possession by August 1, 1991 Tenant can
elect to terminate this lease by giving written notice to Landlord within five
(5) days after said date, in which case the lease shall be terminated. However,
delays caused by acts of God, strikes, war, utilities, governmental bodies,
weather, unavailable materials, and delays beyond the Landlord’s control shall
be excluded in calculating such period.

 

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(B)           The term of this Lease shall commence June 1, 1991.

 

3.             RENT.

 

(A) Base Rent. Tenant shall pay to Landlord as Base Rent for the Premises, in
advance and subject to adjustments as provided herein, the sum of eight thousand
three hundred seventy two 50/100

 

Dollars ($8,372.50) on or before the first day of each and every successive
calendar month thereafter during the term hereof, commencing August 1, 1991.

 

(B)              Rental Adjustments. The Base Rent provided for in Paragraph
3(A) of this Lease shall be subject to adjustment at the commencement of the
second year of the term and each and every year thereafter (“the adjustment
dates”) as follows:

 

At the commencement of

 

Year 2 - $.90 per rentable square foot

 

 

Year 3 - $.95   “      “              “       “

 

 

Year 4 - $1.00   “      “             “        “

 

 

Year 6 - $1.05   “    “             “        “

 

 

Year 8 - $1.10   “      “             “        “

 

 

Year 10 - $1.15   “  “             “        “

 

 

 

or as adjusted in accordance with Paragraph 43. of this Lease.

 

(C)                Additional Rent. Beginning with the commencement of the term
of this Lease, Tenant shall pay to Landlord in addition to the Base Rent and as
Additional Rent the following:

 

(i) Taxes.

 

(a)           As Additional Rent and in accordance with Paragraph 3D of this
Lease, Tenant shall pay to Landlord Tenant’s proportionate share of all Real
Property Taxes, which prorata share shall be allocated to the leased Premises by
square footage or other equitable basis. The term “Real Property Taxes”, as used
herein, shall mean (i) all taxes, assessments, levies and other charges of any
kind or nature whatsoever, general and special, foreseen and unforeseen
(including all installments of principal and interest required to pay any
general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Complex)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Complex (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord’s
interest therein; any improvements located within the Complex (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Complex; or parking
areas, public utilities, or energy within the Complex; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Complex; excluding those which may be imposed due to preexisting
conditions of the Complex, and (iii) all reasonable costs and fees (including
attorneys’ fees) incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax. If at any time
during the term of this Lease the taxation or assessment of the Complex
prevailing as of the commencement date of this Lease shall be altered so that in
lieu of or in addition to any Real Property tax described above there shall be
levied, assessed or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause) an
alternate or additional tax or charge (i) on the value, use o-r occupancy of the
Complex or Landlord’s interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Complex, on Landlord’s business of leasing
the Complex, or computed in any manner with respect to the operation of the
Complex, then any such tax or charge, however designated, shall be included
within the meaning of the term “Real Property Taxes” for purposes of this Lease.
If any Real Property Tax is based upon property or rents unrelated to the
Complex then only that part of such Real Property Tax that is fairly allocable
to the Complex shall be

 

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included within the meaning of the term “Real Property Taxes.” Notwithstanding
the foregoing, the term “Real Property Taxes” shall not include estate,
inheritance, gift or franchise taxes of Landlord or the federal or state net
income tax imposed on Landlord’s income front all sources.

 

(b)           (i) Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed
by Tenant in or about the Premises. If any such taxes on Tenant’s personal
property or trade fixtures are levied against Landlord or Landlord’s property or
if the assessed value of the Premises is increased by the inclusion therein of a
value placed upon such personal property or trade fixtures of Tenant and if
Landlord, after written notice to Tenant, pays the taxes based on such increased
assessment, which Landlord shall have the right to do regardless of the validity
thereof, but only under proper protest if requested by Tenant. Tenant shall upon
demand, as the case may be, repay to Landlord the taxes so levied against
Landlord, or the propertion of such taxes resulting from such increase in the
assessment; provided that in any such event Tenant shall have the right, in the
name of Landlord and with Landlord’s full cooperation, to bring suit in any
court of competent jurisdiction to recover the amount of any such taxes so paid
under protest, and any amount so recovered shall belong to Tenant. (ii) If the
Tenant improvements in the Premises, whether installed, and/or paid for by
Landlord or Tenant and whether or not affixed 10 the real property so as to
become a part thereof, arc assessed for real property tax purposes at a
valuation higher than the valuation at which standard office improvements in
other space in the Complex are assessed, then the real property taxes and
assessments levied against Landlord or the Complex by reason of such excess
assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of 3(C)(i)(a) above. If the
records of the County’ Assessor are available and sufficiently detailed to serve
as a basis for determining whether said Tenant improvements are assessed at a
higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

 

(c)           Tenant’s obligation to pay its share of real properly assessments
as Additional Rent under this Subparagraph 3(c)(i) shall be calculated on the
basis of the amount due if Landlord allows the assessments to go to bond, and
the assessment is to be paid in installments, even if Landlord pays the
assessment in full. ‘Property Taxes’ shall not include any taxes attributable to
leasehold improvements made by or for any other tenants in the Complex.

 

(ii)           Property Insurance.  Landlord shall purchase and keep in force
and as Additional Rent and in accordance with Paragraph 3D of this Lease, and
Tenant shall pay to Landlord Tenant’s proportionate share (calculated on a
square footage or other equitable basis as calculated by Landlord) of the cost
of a policy or policies of insurance covering loss or damage to the Premises and
Complex in the amount of the full replacement value thereof, providing
protection against those perils included within the classification of “all
risks” insurance and flood and/or earthquake insurance, if available, at a
reasonable cost as compared to other insurance policy premiums, plus a policy of
rental income insurance in the amount of one hundred (100%) percent of twelve
(12) months Basic Rent, plus sums paid as Additional Rent. If such insurance
cost is increased due to Tenant’s use of the Premises or the Complex, Tenant
agrees to pay to Landlord the full cost of such increase. Tenant shall have no
interest in nor any right to the proceeds of any insurance procured by Landlord
for the Complex.

 

Landlord and Tenant do each hereby respectively release the other, to the extent
of insurance coverage of the releasing party, from any liability for loss or
damage caused by fire or any of the extended coverage casualties included in the
releasing party’s insurance policies, irrespective of the cause of such fire or
casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.

 

(iii) Expenses of Operation, Management and Maintenance of the Common Areas of
the Complex. As Additional Rent, Tenant shall pay to Landlord Tenant’s
proportionate share (calculated on a square footage or other equitable basis as
calculated by Landlord) of all expenses of operating, management, maintenance
and repair of the Common Areas of the Complex including, but not limited to,
license, permit, and inspection fees; security; utility charges associated with
exterior landscaping and lighting (including water and sewer charges); all
charges incurred in the maintenance of landscaped areas, lakes, parking lots,
sidewalks, driveways; maintenance, repair and replacement of a1l fixtures and
electrical, mechanical, and plumbing systems; structural elements and exterior
surfaces of the buildings; salaries and employee benefits of personnel and
payroll taxes to the extent that such employees are employed in the management
or maintenance of the Common Areas of the Complex applicable thereto; supplies,
materials, equipment and tools; the cost of capital expenditures which have the
effect of reducing operating expenses, provided, however, that in the event
Landlord makes such capital improvements, Landlord may

 

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amortize its investment in said improvements (together with interest at the rate
of the Wells Fargo Bank Prime Rate plus two percent (2 %) per annum on the
unamortized balance) as an operating expense in accordance with standard
accounting practices, provided, that such amortization is not at a rate greater
than the anticipated savings in the operating expenses.

 

“Additional Rent” as used herein shall not include Landlord’s debt repayments;
interest on charges; expenses directly or indirectly incurred by Landlord for
the benefit of any other tenant; cost for the installation of partitioning or
any other tenant improvements; cost of attracting tenants; depreciation;
interest, or executive salaries.

 

As Additional Rent, Tenant shall pay its proportionate share (calculated on a
square footage or other equitable basis as calculated by Landlord) of the cost
of operation (including common utilities), management, maintenance, and repair
of the building (including common areas such as lobbies, restrooms, janitor’s
closets, hallways, elevators, mechanical and telephone rooms, stairwells,
entrances, spaces above the ceilings and janitorization of said common areas) in
which the Premises are located. The maintenance items herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truckdoors, main plumbing systems of the building (such as water and
drain lines, sinks, toilets, faucets, drains, showers and water fountains), main
electrical systems (such as panels and conduits), heating and air conditioning
systems (such as compressors, fans, air handlers, ducts, boilers, heaters),
store fronts, roofs, downspouts, building common area interiors (such as wall
coverings, window coverings, floor coverings and partitioning), ceilings,
building exterior doors, skylights (if any), automatic fire extinguishing
systems, and elevators; license, permit, and inspection fees; security; salaries
and employee benefits of personnel and payroll taxes applicable thereto;
supplies, materials, equipment and tools; the cost of capital expenditures which
have the effect of reducing operating expenses, provided, however, that in the
event, Landlord makes such capital improvements, Landlord may amortize its
investment in said improvements (together with interest at the rate of fifteen
(15 %) percent per annum on the unamortized balance) as an operating expense in
accordance with standard accounting practices, provided, that such amortization
is not at a rate greater than the anticipated savings in the operating expenses.
Tenant hereby waives all rights under, and benefits of, subsection 1 of Section
1932 and Sections 1941 and 1942 of the California Civil Code and under any
similar law, statute or ordinance now or hereafter in effect.

 

(iv)          Utilities of the Complex in Which the Premises are Located. As
Additional Rent, Tenant shall pay its proportionate share (calculated on a
square footage or other equitable basis as calculated by Landlord) of the cost
of all utility charges such as water, gas, electricity, telephone, telex and
other electronic communications service, sewer service, waste-pick-up and any
other utilities, materials or services furnished directly to the building in
which the Premises are located, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. Tenant shall enter into an agreement with the other tenant(s) of the
Complex which shall provide for the proration of the utilities of the Complex.
Landlord shall have no obligation to determine or monitor the utilities consumed
or to adjudicate any disputes which may arise.

 

Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord. Tenant agrees that at all time it
will cooperate fully with Landlord and abide by all regulations and requirements
that Landlord may prescribe for the proper functioning and protection of the
building heating, ventilating and air conditioning systems. If Tenant shall
require water, gas, or electric current in excess of that usually furnished or
supplied to Premises, Tenant shall first obtain the written consent of Landlord,
which consent shall Dot be unreasonably withheld and Landlord may cause an
electric current, gas, or water meter to be installed in the Premises in order
to measure the amount of ‘electric current, gas or water consumed for any such
excess use. The cost of any such meter and of the installation, maintenance and
repair thereof, all charges for such excess water, gas and electric current
consumed (as shown by such meters and at the rates then charged by the
furnishing public utility); and any additional expense incurred by Landlord in
keeping account of electric current, gas, or water so consumed shall be paid by
Tenant, and Tenant agrees to pay Landlord therefor promptly upon demand by
Landlord.

 

The Additional Rent due hereunder shall be paid to Landlord (i) within five (5)
days after presentation of invoice from Landlord setting forth such Additional
Rent and/or (ii) at the option of Landlord, Tenant shall pay to Landlord
monthly, in advance, Tenant’s pro rata share of an amount estimated by Landlord
to be Landlord’s approximate average monthly expenditures for such Additional
Rent items, which estimated amount shall be reconciled at the end of each
calendar year as compared to Landlord’s actual expenditure for said Additional
Rent items, with Tenant paying to Landlord, upon demand, any amount of actual
expenses expended by Landlord in excess of said estimated amount, or Landlord
refunding to Tenant (providing Tenant is not in default under this Leases) any
amount of estimated payments made by Tenant in excess of Landlord’s actual
expenditures for said

 

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Additional Rent items.

 

The respective obligations of Landlord and Tenant under this paragraph shall
survive the expiration or other termination of this Lease, and if the term
hereof shall expire or shall otherwise terminate on a day other than the last
day of a calendar year, the actual Additional] Rent incurred for the calendar
year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be pro rated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

 

(D)             Time for Payment.  In the event that the term of this Lease
commences on a date other than the first day of a calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord, as rent for the
period from such date of commencement to the first day of the next succeeding
calendar month, that proportion of the monthly rent hereof which the number of
days beyond such date of commencement and the first day of the next succeeding
calendar month bears to thirty (30). In the event that the term of this Lease,
for any reason, ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the tenn hereof, Tenant shall pay to
Landlord, as rent for the period from said first day of the last calendar month
to and including the last calendar day of the term hereof, that proportion of
the monthly rent hereof which the number of days beyond said first day of said
last calendar month and the last day of the term hereof bears to thirty (30).

 

(E)           Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 3
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge fee for each rental payment in default ten
(10) days. Said late charge shall equal five (5 %) percent of each rental
payment so in default.

 

(F)           First Month’s Rent. Lessor acknowledges receipt from Tenant on the
execution hereof, the sum of Eight thousand three hundred seventy two and 50/100
Dollars ($8,372.50) constituting rent for first month of the term hereof.

 

(G)           Place of Payment of Rent and Direct Expenses. All rental hereunder
and all payments hereunder for Operating Expenses and Taxes shall be paid to
Landlord, without deduction or offset, in lawful money of the United States of
America, at the office of Landlord at

 

700 Emerson Street, Palo Alto, CA 94301

 

or to such other person or to such other place as Landlord may, from time to’
time, designate in writing.

 

(H)             Security Deposit. Concurrently with Tenant’s execution of this
Lease, Tenant shall deposit with Landlord the sum of Twenty thousand and no/100
Dollars ($20.000.00).  Said sum shall be held by Landlord as a Security Deposit
for the faithful performance by Tenant of all of the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the term
hereof. If Tenant defaults with respect to any provision of this Lease,
including, but not limited to, the provisions relating to the payment of rent
and any of the monetary sums due herewith, Landlord may (but shall not be
required to) use, apply or retain all or any part of this Security Deposit for
the payment of any other amount which Landlord may spend by reason of Tenant’s
default or to compensate Lessor for any other loss or damage which Landlord may
suffer by reason of Tenant’s default. If any portion of said Deposit is so used
or applied, Tenant shall, within ten (IO) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount. Tenant’s failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep this Security
deposit separate from its general funds, and Tenant shall not be entitled to
interest on such Deposit. If Tenant fully and faithfully performs every
provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or at Landlord’s option, to the
last assignee of Tenant’s interest hereunder) at the expiration of the Lease
term and after Tenant has vacated the Premises. In the event of termination of
Landlord’s interest in this Lease, Landlord shall transfer said Deposit 10
Landlord’s successor in interest whereupon Tenant agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor.

 

4.             USE. Tenant shall use the Premises for the manufacturer of
semiconductor products, wafer fabrication, assembly and testing, and general
office purposes and shall not use or permit the Premises to be used for any
other purpose without the prior written consent of Landlord. Tenant shall not
use or occupy the Premises in violation of

 

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law or of the certificate of occupancy issued for the Complex of which the
Premises are a part and shall, upon five (5) days’ written notice from Landlord,
discontinue any use of the Premises which is declared by any governmental
authority having jurisdiction to be a violation of law or of said certificate of
occupancy. Tenant shall comply with any direction of any governmental authority
having jurisdiction, which shall by reason of the nature of Tenant’s use or
occupancy of the Premises impose any duty upon Tenant or Landlord with respect
to the Premises, or with respect to the use of occupation thereof. Tenant shall
not do or permit to be done anything which will invalidate or increase the cost
of any lire, extended coverage or any other insurance policy covering the
Complex and/or property located therein. Tenant shall promptly upon demand
reimburse Landlord for any additional premium charged for such policy by reason
of Tenant’s failure to comply with the provisions of this Paragraph. Tenant
shall promptly upon demand reimburse Landlord for any additional premium charged
for such policy by reason of Tenant’s failure to comply with the provisions of
this Paragraph. Tenant shall not do or permit anything to be done in or about
the Premises which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Complex, or injure or annoy them, or use or
allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises.

 

5.             NOTICES.  Any notice required or permitted to be given hereunder
must be in writing and may be given by personal delivery or by mail, and if
given by mail shall be deemed sufficiently given when sent by registered or
certified mail addressed to Tenant at the Complex of which the Premises are a
part, or to Landlord at the address of Landlord set forth in Paragraph 3 (G).
Either party may by written notice to the other specify a different address for
notice purposes except that the Landlord may in any event use the Premises as
Tenant’s address for notice purposes.

 

6.             BROKERS. Tenant and Landlord each warrant that it has had no
dealings with any real estate broker or agent in connection with the negotiation
of this Lease excepting only

 

The Alpha & Omega Group and Cornish & Carey Commercial 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. Upon demand, Tenant shall pay all reasonable
costs, attorneys’ fees and damages incurred by Landlord as a result of any
breach of this warranty.

 

7.             HOLDING OVER.  If Tenant holds over after the expiration or
earlier termination of the term hereof without the express written consent of
Landlord, Tenant shall become a tenant at sufferance only, at double the market
rental rate in effect upon the date of such expiration and otherwise upon the
terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent after such expiration or earlier termination
shall not constitute a holdover hereunder or result in a renewal. The foregoing
provisions of this paragraph are in addition to and do not affect Landlord’s
right of re-entry or any other rights of Landlord hereunder or as otherwise
provided by law.

 

8.             CONDITIONS OF PREMISES. Tenant acknowledges that neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the Premises or the Complex or with respect, to the suitability of either for
the conduct of Tenant’s business. The taking of possession of the Premises by
Tenant shall conclusively establish that the Tenant’s Premises and said Complex
were at such time in satisfactory condition.

 

9.             ALTERATIONS. Tenant shall make no alterations, decorations,
additions or improvements in or to the Premises with a total cost in excess of
three thousand and no/100 Dollars ($3,000.00) without Landlord’s prior written
consent, and then only by contractors or mechanics approved by Landlord which
approval shall not be unreasonably withheld. Tenant agrees that there shall be
no construction or partitions or other obstructions which might interfere with
Landlord’s free access to mechanical installations or service facilities of the
Complex or interfere with the moving of Landlord’s equipment to or from the
enclosures, containing said installations or facilities. All such work shall be
done at such times and in such manner as Landlord may from time to time
designate. Tenant covenants and agrees that all work done by Tenant shall be
performed in full compliance with all laws, rules, orders, ordinances,
directions, regulations and requirements of all governmental agencies, offices,
departments, bureaus and boards having jurisdiction. Before commencing any work,
Tenant shall give Landlord at least five (5) days’ written notice of the
proposed commencement of such work, and shall, if required by Landlord,

 

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secure at Tenant’s own cost and expense a completion and lien indemnity bond,
satisfactory to Landlord, for such work. Tenant further covenants and agrees
that any mechanic’s lien filed against the Premises or against the Complex for
work claimed to have been done for, or materials claimed to have been furnished
to, Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof, at the cost and expense of Tenant. All
alterations, decorations, additions or improvements upon the Premises made by
either party, including (without limiting the generality of the foregoing) all
wallcoverings, built-in cabinet work, paneling and the like, shall, unless
Landlord elects otherwise, become the property of Landlord and shall remain
upon, and be surrendered with, the Premises, as a part thereof, at the end of
the term hereof, except that Landlord may, by written notice to Tenant, require
Tenant to remove all partitions, counters, railings and the like installed by
Tenant, and Tenant shall’ repair or, at Landlord’s option, shall pay to the
Landlord all costs arising from such removal. It is hereby acknowledged that
Tenant shall construct a wall in the Complex which is to physically separate the
Premises from the balance of the Complex. Tenant is to provide floor plan which
specifies location and materials for Landlord’s approval.

 

All personal property, equipment and trade fixtures on the Premises at the
commencement of the Lease shall remain the property of Landlord and shall be
surrendered with the Premises at the expiration of this Lease or sooner
termination of the term hereof. All personal property, office machinery and
equipment trade fixtures, furniture and moveable partitions owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant and may be removed by Tenant at any time during the lease
term when Tenant is not in default hereunder. If Tenant shall fail to remove all
of its effects from said Premises upon termination of this Lease for any cause
whatsoever, Landlord may, at its option, remove the same in any manner that
Landlord shall choose, and store said effects without liability to Tenant for
loss thereof, and Tenant agrees to pay Landlord upon demand any and all
reasonable expenses incurred in such removal, including court costs and
attorneys’ fees and storage charges on such effects for any length of time that
the same shall be in Landlord’s possession; or Landlord may, at its option,
without notice, sell said effects, or any of the same, at private sale and
without legal process, for such price as Landlord may obtain and apply the
proceeds of such sale upon any amounts due under this Lease from Tenant to
Landlord and upon the expenses incident to the removal and sale of said effects.

 

10.           REPAIRS. By entry hereunder Tenant accepts the Premises as being
in good, sanitary order, condition and repair. Tenant shall, at Tenant’s sole
cost and expense, keep the Premises and every part thereof in a high standard of
maintenance and repair and in good and sanitary condition and repair, ordinary
wear and tear and damage from causes beyond the reasonable control of Tenant
excepted. Tenant shall, upon the expiration or sooner termination of the term
hereof, surrender the Premises to Landlord in the same condition as when
received, ordinary wear and tear and damage from causes beyond the reasonable
control of Tenant excepted, with all interior walls painted, or cleaned so that
they appear freshly painted, repaired, and replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed. Landlord shall have no
obligation to alter, remodel, improve, repair, decorate or paint the Premises or
any part thereof and the parties hereto affirm that Landlord has made no
representations to Tenant respecting the conditions of the Premises or the
Complex except as specifically herein set forth.

 

11.           LIENS. Tenant shall keep the Premises, the Complex and the
property upon which the Complex is situated free from any liens arising out of
the work performed, materials furnished or obligations incurred by Tenant.

 

12.           ENTRY BY LANDLORD. Landlord, upon reasonable prior notice to
Tenant, reserves and shall at any and all times have the right to enter the
Premises to inspect same, to supply janitorial services and any other service to
be provided to Tenant by Landlord hereunder, to submit said Premises to
prospective purchasers or tenants, to post notices of nonresponsibility, to
alter, improve or repair the Premises or any portion of the Complex, all without
being deemed guilty of an eviction of Tenant and without abatement of rent, and
may erect scaffolding and other necessary structures where reasonably required
by the character of the work to be performed, provided that the business of the
Tenant shall be interfered with as little as is reasonably practicable. Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord may at Landlord’s sole discretion retain a key with which to
unlock all of the doors in, upon and about the Premises, excluding Tenant’s
vaults and safes, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open said door in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by Landlord
by any of said means, or otherwise, shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant

 

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from the Premises or any portion thereof, and any damages caused on account
thereof shall be paid by Tenant. It is understood and agreed that no provision
of the Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed herein to be
performed by Landlord. In the event Landlord must enter the Premises, Landlord
shall make every effort to minimize any damages or losses to Tenant or Tenant’s
property.

 

13.           INDEMNIFICATIONS. Tenant shall indemnify and hold harmless
Landlord against and from any and all causes and claims including, but not
limited to, those arising from Tenant’s use of the premises or the conduct of
its business or from any activity, work done, permitted or suffered by the
Tenant in or about the premises, from Landlord’s passive negligence, and shall
further indemnify and hold harmless Landlord against and from any and all claims
arising from any breach or default in the performance of any obligation of
Tenant’s part to be performed under the terms of this Lease, or arising from any
act, neglect, fault or omission of the Tenant, or of its agents or employees,
and from and against all costs, attorneys’ fees, expenses and liabilities
incurred in or about such claim or any action or proceeding brought thereon, and
in case any action or proceeding be brought against Landlord by reason of any
such claim, Tenant upon notice from Landlord shall defend the same at Tenant’s
expense by counsel reasonably satisfactory to Landlord. Tenant, as a material
part of the consideration to Landlord, hereby assumes all risk of damage to
property or injury to person in, upon or about the Premises from any cause
whatsoever except that which is caused by the neglect, willful conduct or
failure of Landlord to observe any of the terms and conditions to this Lease
notwithstanding anything in this Lease to the contrary. Landlord shall indemnify
and hold harmless Tenant against and from any and all causes and claims arising
from the active neglect or willful misconduct or intentional failure of Landlord
to observe any of the terms and conditions of this Lease, and pre-existing
contamination from hazardous materials as provided in Paragraph 45. of this
Lease.

 

14.           DAMAGE TO TENANT’S PROPERTY. Notwithstanding the provisions of
Paragraph 15 to the contrary, neither Landlord nor its agents shall be liable
for any damage to property entrusted to employees of the Complex, nor for loss
of or damage to any property by theft or otherwise, nor for any injury or damage
to persons or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, water or rain which may leak from any part of the Complex or
from the pipes, a1ppliances or plumbing works therein or from the roof, street
or sub-surface or from any other place or resulting from dampness or any other
cause whatsoever, unless the same is caused by the active negligence or willful
misconduct of the Landlord. Landlord or its agents shall not he liable for
interference with the light or other incorporeal hereditaments, nor shall
Landlord be liable for any latent defect in the Premises or in the Complex.
Tenant shall give prompt notice to landlord in case of fire or accidents in the
Premises or in the Complex or of defects therein or in the fixtures or
equipment.

 

15.           INSURANCE SUBROGATION. The parties release each other, and their
respective authorized representatives, from any claims for damage to any person
or to the Premises and to the fixtures, personal property, Tenant’s
improvements, and alterations of either Landlord or Tenant in or on the Premises
that are caused by or result from risks insured against under any insurance
policies carried by the parties and in force at the time of any such damage.

 

Each party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage coveted by any policy. Neither party
shall be liable to the other for any damages caused by fire and any of the risks
insured against under any insurance policy required by this Lease.

 

16.           LIABILITY INSURANCE. Tenant shall, at Tenant’s expense, obtain and
keep in force during the term of this Lease, a policy of comprehensive public
liability insurance insuring Landlord and Tenant against any liability arising
out of the ownership, use, occupancy, maintenance, repair or improvement of the
Premises and as appurtenant thereto. Such insurance shall provide $1,000,000.00
combined single limit for bodily injury and property damage. The limits of said
insurance shall not, however, limit the liability of the Tenant hereunder, and
Tenant is responsible for ensuring that the amount of liability insurance
carried by Tenant is sufficient for Tenant’s purposes. Tenant may carry said
insurance under a blanket policy, satisfactory to Landlord. If Tenant shall fail
to procure and maintain said insurance, Landlord may, but shall not be required
to, procure and maintain same, but at the expense of Tenant. Insurance required
hereunder shall be in companies rated A + AAA or better in “Best’s Insurance
Guide.” Tenant shall deliver to Landlord prior to occupancy of the Premises
copies of policies of liability insurance required herein or certificates
evidencing the existence and amounts of such insurance with evidence

 

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satisfactory to Landlord of payment of premiums. No policy shall be cancelable
or subject to reduction of coverage except after fifteen (15) days’ prior
written notice to Landlord. Tenant acknowledges and agrees that insurance
coverage carried by Landlord will not cover Tenant’s property within the
Premises or the Complex and that Tenant shall be responsible, at Tenant’s sole
cost and expense, for providing insurance coverage for Tenant’s movable
equipment, furnishing, trade fixtures and other personal property in or upon the
Premises or the Complex, and for any alterations, additions or improvements to
or of the Premises or any part thereof made by Tenant, in the event of damage or
loss thereto from any cause whatsoever.

 

(A)             Tenant’s Personal Property Insurance and Workman’s Compensation
Insurance. Tenant shall maintain a policy or policies of fire and property
damage insurance in “all risk” form with a sprinkler leakage endorsement
insuring the personal property, inventory, trade fixtures, and leasehold
improvements within the Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement
of such items so insured.

 

Tenant shall also maintain a policy or policies of workman’s compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.

 

17.           DAMAGE OR DESTRUCTION.

 

(A).         In the event the Complex of which the Premises or a part thereof is
damaged the Landlord shall:

 

(i) In the event of the destruction of all or more than twenty-five percent
(25%) of the full insurable value of the Complex, or damage or destruction which
is not covered by insurance, at Landlord’s option, within a period of ninety
(90) days thereafter, commence repair, reconstruction and restoration of said
Complex and prosecute the same diligently to completion, in which event this
Lease shall remain in full force and effect, or within said ninety (90) day
period elect not to so repair, reconstruct or restore said Complex in which
event this Lease shall terminate. In either event, Landlord shall make its best
effort to provide notice or commence repairs as soon as practicable, but in no
event later than ninety (90) days from the date of the happening. Landlord shall
give the Tenant written notice of its intention within said ninety (90) day
period. In the event Landlord elects not to restore said Complex, said Lease
shall be deemed to have terminated as of the date of such total destruction.

 

(ii) In the event of a partial destruction of the Complex to an extent not
exceeding Twenty-Five Percent (25%) of the full insurable value thereof and if
the damage thereto is such that the Complex may be repaired, reconstructed or
restored within a period of ninety (90) days from the date of the happening of
such casualty and Landlord will receive insurance proceeds sufficient to cover
the cost of such repairs, Landlord shall commence and proceed diligently with
the work of repair, reconstruction am! restoration and the Lease shall continue
in full force and effect or Landlord may elect not to repair, reconstruct or
restore and the Lease shall in such event terminate. Under any of these
conditions, the Landlord shall give written notice to the Tenant of its
intention within said ninety (90) day period. In the event Landlord elects not
to restore said Complex, this Lease shall be deemed to have terminated as of the
date of such partial destruction.

 

(B)              Upon any termination of this Lease under any of the provisions
of this Paragraph, the parties shall be released thereby without further
obligation to the other from the date possession of the Premises is surrendered
to the Landlord except for items which have therefore accrued and are then
unpaid.

 

(C)              In the event of repair, reconstruction and restoration as
herein provided, the rental provided to be paid under this Lease shall be abated
proportionally in the ratio which the Tenant’s use of said Premises is impaired
during the period of such repair, reconstruction or restoration. The Tenant
shall not be entitled to any compensation or damages for loss in the use of the
whole or any part of said Premises and/or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction or restoration, provided that
Landlord minimizes interference with the conduct of Tenant’s business.

 

(D)             Tenant shall not be released from any of its obligations under
this Lease except to the extent and

 

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upon the conditions expressly stated in this Paragraph. Notwithstanding anything
to the contrary contained in this Paragraph, should Landlord be delayed or
prevented from repairing or restoring said damaged Premises within one (1) year
after the occurrence of such damage or destruction by reason of acts of God,
war, governmental restrictions, inability to procure the necessary labor or
materials, or other causes beyond the reasonable control of Landlord, the
Landlord shall be relieved of its obligation to make such repairs or restoration
and Tenant shall be released from its obligations under this Lease as of the end
of said one (1) year period.

 

(E)              It is hereby understood that if Landlord is obligated to or
elects to repair or restore as herein provided, Landlord shall be obligated to
make repairs or restoration only of those portions of said Complex and said
Premises which were originally provided at Landlord’s expense; and the repair
and restoration of items not provided at Landlord’s expense shall be the
obligation of Tenant.

 

(F)              Notwithstanding anything to the contrary contained in this
Paragraph, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when the damage resulting from any casualty
covered under this Paragraph occurs during the last twelve (12) months of the
term of this Lease or any extension thereof.

 

(G)              The provisions of Section 1932, Subdivision 2, and Section
1933, Subdivision 4, of the Civil Code of the State of California are hereby
waived by Tenant.

 

18.           EMINENT DOMAIN.  In case the whole of the Premises, or such part
thereof as shall substantially interfere with the Tenant’s use and occupancy
thereof, shall be taken for any public or quasi-public purpose by any lawful
power or authority, by exercise of the right of appropriation, condemnation or
eminent domain, or sold to prevent such taking, the Tenant or the Landlord, may,
at its option, terminate this Lease effective as of the date possession is
required to be surrendered to said authority. Tenant shall not, because of such
taking, assert any claim against the Landlord or the taking authority for any
compensation because of such taking, and Landlord shall be entitled to receive
the entire amount of any award without deduction for any estate or any interest
of Tenant. In the event the amount of property or the type of estate taken shall
not substantially interfere with the conduct of Tenant’s business, Landlord
shall be entitled to the entire amount of the award without deduction for any
estate or interest of Tenant, and Landlord at its option may terminate this
Lease. If Landlord does not so elect, Landlord shall promptly proceed to restore
the Premises to substantially their same condition prior to such partial taking,
and a proportionate allowance shall be made to Tenant for the rent.
corresponding to the time during which said restoration is being made and to the
part of the Premises of which Tenant shall be so deprived on account of such
taking and restoration. Nothing contained in this Paragraph shall be deemed to
give Landlord any interest in any specific award made to Tenant for the taking
of personal property and fixtures belonging to Tenant.

 

19.           DEFAULTS AND REMEDIES.

 

(A)          The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:

 

(i) The abandonment of the Premises by Tenant. Abandonment is herein defined to
include, but is not limited to, any absence by Tenant from the Premises for five
(5) days or longer while in default of any provision of this Lease.

 

(ii) The failure by Tenant to make any payment of rent or additional rent
required to be made bi Tenant hereunder, within live (5) days after written
notice thereof from Landlord to Tenant.

 

(iii) The failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in (i) or (ii) above, where such failure shall continue
for a period of ten (10) days after written notice thereof from Landlord to
Tenant, provided however, than any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161 j provided, further, that if the nature of Tenant’s default is such
that more than ten (10) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant shall commence such cure within
said ten (10) day period and thereafter diligently prosecute such cure to

 

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completion.

 

(iv) (1) The making by Tenant of any general assignment for the benefit of
creditors; (2) the appointment of a trustee or receiver to take possession of
substantially all of Tenant’s assets located at the Premises or of Tenant’s
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; or (3) the attachment, execution or other judicial seizure of
substantially all of Tenant’s assets located at the Premises or of Tenant’s
interest in this Lease where such seizure is not discharged within thirty (30)
days.

 

(B)           In the event of such default by Tenant, in addition to any other
remedies available to Landlord at law or in equity, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder. In
the event that Landlord shall. elect to so terminate this Lease then Landlord
may recover from Tenant:

 

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

 

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

 

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

 

(iv) Any other amount necessary to compensate the Landlord for all the detriment
approximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom.

 

As used in subparagraphs (i) and (ii) above, the “worth at the time of award” is
computed by allowing interest at the prevailing discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus five percent (5%),
but not more than the maximum rate permissible by law. As used in subparagraph
(iii) above, the “worth at the time of award” 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 %).

 

(C)              In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to 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 re-entry or taking possession of the Premises by Landlord
pursuant to this subparagraph shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.

 

20.        ASSIGNMENT AND SUBLETTING. Tenant shall not voluntarily or by
operation of law assign; transfer, mortgage or otherwise encumber all or any
part of Tenant’s interest in this Lease or in the Premises and shall not sublet
all or any part of the Premises, without the prior written consent of Landlord,
which consent shall not be unreasonably withheld. Any attempted assignment,
transfer, mortgage, encumbrance or subletting without such consent shall, at the
option of Landlord, constitute grounds for termination of this Lease.

 

No subletting or assignment, even with the consent of Landlord, shall relieve
Tenant of its obligation to pay rent and to perform all of the other obligations
to be performed by Tenant hereunder. The acceptance of rent by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision of
this Lease or to be a consent of any assignment or subletting.

 

Each subletting or assignment to which Landlord has consented shall be by an
instrument in writing in form satisfactory to Landlord and shall be executed by
the sublessor or assignor and by the sublessee or assignee in each instance, as
the case may be, and each sublessee or assignee shall agree in writing for the
benefit of the Landlord herein to assume, to be bound by and to perform the
terms, covenants, and conditions of this Lease to be done, kept and performed by
the Tenant. One executed copy of such written instrument shall be delivered to
the Landlord.

 

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Tenant agrees to reimburse Landlord for Landlord’s reasonable attorneys’ fees
and such other reasonable charges which Landlord incurs or causes to be incurred
in conjunction with the processing and documentation of any such requested
subletting or assignment of this Lease or Tenant’s interest in and to the
Premises which cost shall not exceed one thousand and no/100 Dollars
($1,000.00). Landlord may require as a condition to Landlord’s consent to an
assignment or subletting all of any sums or other economic consideration
received by Tenant as a result of such subletting or assignment (other than the
rental or other payments received which are attributable to the amortization of
the cost of interior improvements in excess of the building standards and
allowance to the Premises or the sublet portion of the Premises, at the cost of
Tenant), whether denominated rentals under any sublease or otherwise, which
exceed in the aggregate the total sums which Tenant is obligated to pay Landlord
under this Lease (prorated to reflect obligations allocable to that portion of
the Premises, subject to any such sublease) shall be payable to Landlord as
additional rental under this Lease without affecting or reducing any other
obligation of Tenant hereunder. Provided, however, that Tenant shall first be
entitled to recover any costs of assignment or subletting incurred by Tenant,
including, without limitation, real estate commissions and advertising expense.

 

Northwithstanding the foregoing, Tenant shall have the right to assign this
Lease and any. options to extend to a corporation with which it may merge or
consolidate, to a parent, subsidiary, or related company, or to a purchaser of
90% or more of Tenant’s assets, provided that said assignee shall execute an
instrument reasonably satisfactory to Landlord assuming Tenant’s obligations
hereunder, and provided further that said assignee’s net worth both immediately
prior to and immediately after the merger, consolidation or purchase shall equal
or exceed that of Tenant, and provided further that such assignment shall not
affect or limit the liability of Tenant under the terms of this Lease.

 

21.        SUBORDINATION. This Lease shall be subject and subordinate at all
times to all ground and underlying leases which now exist or may hereafter be
executed affecting the Complex or the land upon which the Complex is situated or
both, and to the lien of any mortgages or deed of trust in any amount or amounts
whatsoever now or hereafter placed on or against the land and Complex or either
thereof, or on Landlord’s interest or Estate therein, or portion thereof, or on
or against any ground or underlying lease without the necessity of the execution
and delivery of any further instruments on the part of Tenant to effectuate such
subordination; provided, however, that so long as Tenant is not in default, the
terms of the Lease shall not be affected by termination proceedings in respect
to such ground or underlying lease or foreclosure or other proceedings under
such mortgages or deeds of trust. Tenant hereby agreeing at the written request
of the Landlord under such ground or underlying lease or the purchaser of the
Complex in such foreclosure or other proceedings, to attorn to such Landlord or
to such purchaser or, at such Landlord’s or such purchaser’s option, to enter
into a new lease for the balance of the term hereof upon the same terms and
provisions as are contained in this Lease. Notwithstanding the foregoing, Tenant
will execute and deliver upon demand such further instrument or instruments
evidencing such subordination of the Lease to the lien of any such mortgage or
mortgages or deed of trust as may be required by Landlord.

 

Nothwithstanding the foregoing, this Lease shall not be subordinated to the lien
of any future encumbrance unless the bolder of said encumbrance first executes
in favor of Tenant a non-disturbance agreement reasonably satisfactory to Tenant
confirming that the older of said encumbrance agrees to honor this Lease in all
events except where Tenant is in default hereunder beyond any applicable cure or
grace period. Landlord shall use its best efforts to obtain a similar agreement
from its existing lender in favor of Tenant as soon as reasonably possible
following the execution of this Lease.

 

22.           ESTOPPEL CERTIFICATE. Tenant or Landlord, within ten (10) business
days of each request by the other to do so, shall:

 

(a)           Execute and deliver to the other estoppel certificate(s), (i)
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 (ii) acknowledging that
there are not, to its knowledge, any uncured defaults on the part of the other
party hereunder, or stating the nature of defaults if such exist, and (iii)
evidencing the status of the Lease, as may be required either by a prospective
or actual lender making a loan to Landlord or Tenant or a purchaser of the
Premises from Landlord or successor Landlord with respect to some other interest
in the Premises, Building or Lease;

 

(b)           (Tenant only): Deliver to Landlord its most currently available
financial statements, where reasonably required by a prospective lender of
Landlord. Any such financial statements shall be received by

 

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Landlord and any such lender in confidence, and any such lender shall execute
any non-disclosure agreement with respect thereto reasonably requested by
Tenant.

 

(c)           Either party’s failure to perform timely each of its obligations
jnder this Paragraph 22 shall constitute a material breach of this Lease,
entitling the other party to exercise all of its remedies for same.

 

23.           CONFLICT OF LAWS. This Lease shall be governed by and construed
pursuant to the laws of the State of California.

 

24.           COMMON AREAS. Tenant shall have the non-exclusive right, in common
with others, to the use of common entrances, lobbies, elevators, ramps, drives,
stairs and similar access and service ways and common areas in and adjacent to
the Complex of which the Premises are a part subject to such nondiscriminatory
rules and regulations as may be adopted by Landlord.

 

25.           SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

 

26.           SURRENDER OF PREMISES. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of Landlord, operate as an assignment to it of any or all
subleases or subtenancies.

 

27.           ATTORNEYS’ FEES. In the event that either party should bring suit
or commence arbitration under this Lease or because of the breach of any
provision of this Lease, then all costs and expenses, including reasonable
attorneys’ fees, incurred by the prevailing party therein shall be paid by the
other party, which obligation on the part of the other party shall be deemed to
have accrued on the date of the commencement of such action and shall be
enforceable whether or not the action is prosecuted to judgment.

 

28.        PERFORMANCE BY TENANT. All covenants and agreements to be performed
by Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant’s sale cost and expense and without any abatement of rent. If Tenant
shall fail to pay any sum of money, other than rent required to be paid by it
hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue for ten (10) days after notice
thereof by Landlord, Landlord may, without waiving or releasing Tenant from any
obligations of Tenant, but shall not be obligated to make, make any such payment
or perform any other such action on Tenant’s part to be made or performed as in
this Lease provided. Any amount due from Tenant to Landlord hereunder which is
not paid when due shall bear interest at an annual rate of five percent (5%) per
annum plus the annual percentage rate established by the Federal Reserve Bank of
San Francisco on advances to member banks under Sections 13 and 13(a) of the
Federal Reserve Act prevailing on the 25th day of the month preceding either the
(I) date on which this Lease is executed; or (2) the date the amount became due,
whichever is less (but not more than the maximum rate permissible by law), until
paid, unless otherwise specifically provided herein, but the payment of such
interest shall not excuse or cure any default by Tenant under this Lease.

 

29.           RULES AND REGULATIONS AND COMMON AREA. Subject to the terms and
conditions of this Lease and such Rules and Regulations as Landlord may from
time to time prescribe, Tenant and Tenant’s employees, invitees and customers
shall, in common with other occupants of the Complex in which the Premises are
located, and their respective employees, invitees and customers, and others
entitled to the use thereof, have the non-exclusive right to use the access
roads, parking areas, and facilities provided and designated by Landlord for the
general use and convenience of the occupants of the Complex in which the
Premises are located, which areas and facilities are referred to herein as
“Common Area”, This right shall terminate upon the termination of this Lease,
Landlord reserves the right from time to time to make changes in the shape,
size, location, amount and extent of Common Area. Landlord further reserves the
right to promulgate such reasonable rules and regulations relating to the use of
the Common Area, and any part of parts thereof, as Landlord may deem appropriate
for the best interests of the occupants of the Complex. The Rules and
Regulations shall be binding upon Tenant upon delivery of a copy of them to
Tenant, and Tenant shall abide by them, and cooperate in their observance. Such
Rules and Regulations may be amended by landlord from time to time, with or
without advance notice, and all amendments shall be effective upon delivery of a
copy to Tenant. Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Complex of any of said
Rules and Regulations.

 

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Landlord shall operate, manage and maintain the Common Area. The manner in which
the Common Area shall be maintained in a standard equal to similar properties in
the Santa Clara Valley and the reasonable expenditures for such maintenance
shall be at the discretion of Landlord.

 

29.           DEFINITION OF LANDLORD. The term “Landlord” as used in this Lease,
so far as covenants or obligations on the part of Landlord are concerned, shall
be limited to mean and include only the owner or owners at the time in question
of the fee of the Premises, and in the event of any transfer, assignment or
other conveyance or transfers of any such title, the Landlord herein named (and
in the case of any subsequent transfers or conveyances, the then grantor) shall
be automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability in respect to the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed and, without further agreement, the transferee of
such title shall be deemed to have assumed and agreed to observe and perform any
and all obligations of the Landlord hereunder, during its ownership of the
Premises. Landlord may transfer its interest in the Premises without the consent
of Tenant and such transfer or subsequent transfer shall not be deemed a
violation on Landlord’s part of any of the terms and conditions of this Lease.

 

30.           WAIVER. The waiver by either party of any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
any subsequent breach of the same or any other term, covenant or condition
herein contained nor shall any custom or practice which may arise between the
parties in the administration of the terms hereof be deemed a waiver of, or in
any way affect, the right of either party to insist upon the performance by
other party in strict accordance with said terms. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord’s knowledge of such preceding breach at the time of acceptance of such
rent.

 

31.           PARKING. Tenant shall have the right to use with other tenants the
common parking areas of the Complex. Landlord shall have the right, at
Landlord’s sole discretion, to specifically designate the location of Tenant’s
parking spaces within the common parking areas of the Complex in the event of a
dispute among the tenants occupying the building and/or Complex referred to
herein, in which event Tenant agrees that Tenant, Tenant’s empIoyees, agents,
representatives and/or invitees shall not use any parking spaces other than
those parking spaces specifically designated by Landlord for Tenant’s use. Said
parking spaces, if specifically designated by Landlord to Tenant, may be
relocated by Landlord at any time, and from time to time. Landlord reserves the
right, at Landlord’s sole discretion, to rescind any specific designation of
parking spaces, thereby returning Tenant’s parking spaces to the common parking
area. Landlord shall give Tenant written notice of any change in Tenant’s
parking spaces. Tenant shall not, at any time, park, or permit to be parked, any
trucks or vehicles adjacent to the loading areas so as to interfere in any way
with the use of such areas, nor shall Tenant at any time park, or permit the
parking of Tenant’s trucks or other vehicles or the trucks and vehicles of
Tenant’s suppliers or others, in any portion of the common area not designated
by Landlord for such use by Tenant. Tenant shall not park nor permit to be
parked, any inoperative vehicles or equipment on any portion of the common
parking area or other common areas of the Complex. Tenant agrees to assume
responsibility for compliance by its employees with the parking provision
contained herein. If Tenant or its employees park in other than such designated
parking areas, then Landlord may charge Tenant, as an additional charge, and
Tenant agrees to pay, Ten Dollars ($10.00) per day for each day or partial day
each such vehicle is parked in any area other than that designated. Tenant
hereby authorizes Landlord, at Tenant’s sole expense, to tow away from the
Complex any vehicle belonging to Tenant or Tenant’s employees parked in
violation of these provisions, or to attach violation stickers or notices to
such vehicles. Tenant shall use the parking areas for vehicle parking only, and
shall not use the parking areas for storage.

 

32.           TERMS AND HEADINGS. The words “Landlord” and “Tenant” as used
herein shall include the plural as well as the singular. Words used in any
gender include other genders. If there be more than one Tenant the obligations
hereunder imposed upon Tenant shall be joint and several. The paragraph headings
of this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part thereof.

 

33.           EXAMINATION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for a lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.

 

--------------------------------------------------------------------------------

 

34.           TIME. Time is of the essence with respect to the performance of
every provision of this Lease in which time or performance is a factor.

 

35.           PRIOR AGREEMENTS, AMENDMENTS. This Lease contains all of the
agreements of the parties hereto with respect to any matter covered or mentioned
in this Lease, and no prior agreement or understanding pertaining to any such
matter shall be effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest.

 

36.           SEPARABILITY. Any provision of this Lease which shall prove to be
invalid, void or illegal in no way affects, impairs or invalidates any other
provision hereof, and such other provisions shall remain in full force and
effect.

 

37.           RECORDING. Neither Landlord not Tenant shall record this Lease or
a short form memorandum thereof without the consent of the other.

 

38.           EXHIBITS. All Exhibits that are referred to in this Lease and
attached hereto are incorporated herein by this reference and made a part of the
Lease.

 

39.           LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:

 

(i) the sole and exclusive remedy shall be against Landlord and Landlord’s
assets;

(ii) no partner of Landlord shall be sued or named as a party in any suit or
action (except as may be necessary to secure jurisdiction of the partnership)

(iii) no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership)

(iv) no partner of Landlord shall be required to answer or otherwise plead to
any service of process; (v) no judgment will be taken against any partner of
Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set
aside at any time without bearing;

(vii) no writ of execution will ever be levied against the assets of any partner
of Landlord;

(viii) these covenants and agreements are enforceable both by Landlord and also
by any partner of Landlord.

 

Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.

 

40.           SIGNS. No sign, placard, picture, advertisement, name or notice
shall be inscribed, displayed or printed or affixed on or to any part of the
outside of the Premises or to any exterior windows of the Premises without the
written consent of Landlord first had and obtained which consent shall not be
unreasonably withheld and Landlord shall have the right to remove any such sign,
placard, picture, advertisement, name or notice without notice to and at the
expense of Tenant. If Tenant is allowed to print or affix or in any way place a
sign in, on, or about the Premises, upon expiration or other sooner termination
of this Lease, Tenant at Tenant’s sole cost and expense shall both remove such
sign and repair all damage in such a manner as to restore all aspects of the
appearance of the Premises to the condition prior to the placement of said sign.

 

All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.

 

Tenant shall not place anything or allow anything to be placed near the glass of
any window, door partition or wall which may appear unsightly from outside the
Premises.

 

41.           AUTHORITY. The undersigned parties hereby warrant that they have
proper authority and are empowered to execute this Lease on behalf of the
Landlord and Tenant, respectively.

 

--------------------------------------------------------------------------------

 

42.           ADDENDUM TO LEASE. Paragraphs 43. through 46. are added hereto and
made a part of this Lease.

 

--------------------------------------------------------------------------------

 

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

 

 

TENANT:

 

 

 

GHz TECHNOLOGY, INC.

 

 

Date:

 

 

By:

 

 

 

 

 

 

 

 

Date:

 

 

By:

 

 

 

 

 

 

 

LANDLORD:

 

 

 

3000 OAKMEAD VILLAGE DRIVE, LTD.

 

 

Date:

 

 

By:

 

 

 

 

 

 

 

 

Date:

 

 

By:

 

 

 

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ADDENDUM TO LEASE

 

43.           Expansion Space. Concurrent with the commencement of the third
(3rd) year of the term, Landlord shall deliver the remaining square feet of the
complex consisting of approximately nine thousand eight hundred fifty (9,850)
rentable square feet (“Expansion Space”) which Tenant shall lease from Landlord
on the same terms contained in this Lease, and at the same per square foot
rental rate as that for the Premises. Landlord reserves the right, upon ninety
(90) day prior written notice, to deliver the Expansion Space at any time during
the second year of the term in the event the Expansion Space becomes available
to let, in which event Tenant shall lease the. Expansion Space and the term
shall commence concurrent with the delivery.

 

44.           Options to Extend.

 

(A)            Option Period. Provided that Tenant is not in default hereunder,
either at the time of exercise or at the time the extended term commences,
Tenant shall have the option to extend the initial ten (10) year term of this
lease for two additional periods of five (5) years each (“Option Period”), on
the same terms, covenants and conditions provided hereunder, except that upon
such renewal, the monthly rent due hereunder shall be determined pursuant to
Paragraph 44 (B). Tenant shall notify Landlord in writing not less than one
hundred eighty (180) days prior to the expiration of the initial term of this
Lease or the first Option Period that it wishes to exercise its extension option
(“Option Notice”).

 

(B)             Option Period Monthly Rent.  The initial Monthly Rent for the
Option Period shall be determined as follows:

 

(i) The parties shal have fifteen (15) days after Landlord receives the option
Notice within which to agree on the initial Base Rent for the Option Period
based upon ninety five percent (95%) of the then fair market rental value of the
Premises as defined in Paragraph 44(B) (iii). If the parties agree on the
initial Base Rent for the Option Period within fifteen (15) days, they shall
immediately execute an amendment to this Lease stating the initial Base Rent for
the Option Period.

 

(ii) If the parties are unable to agree on the initial Base Rent for the option
Period within fifteen (15) days, then the initial Base Rent for the option
Period shall be ninety five percent (95%) of the then current fair market rent
value of the Premises as determined in accordance with Paragraph 44(B) (iv).

 

(iii) The “then fair market rental value of the Premises” shall mean the fair
market monthly rental value of the Premises as of the commencement of the option
Period, taking into consideration the uses permitted under this Lease, the
quality, size, design and location of the Premises, and comparable buildings
located in Santa Clara. In no event shall the then fair market monthly rent
value of the Premises for the option Period be less than the Base Rent last
payable under the Lease.

 

(iv) Within seven (7) days after the expiration of the fifteen (15) day period
set forth. in Paragraph 44(B) (i), each party at its cost and by giving notice
to the other party, shall appoint a real estate appraiser with at least five (5)
years’ full time commercial appraisal experience in the area in which the
Premises are located to appraise and set the then fair market rental value of
the Premises for the option Period. If a party does not appoint an appraiser
within ten (10) days after the other party has given notice of the name of its
appraiser, the single appraiser appointed shall be the sale appraiser and shall
set the then fair market rental value of the premises. If the two appraisers are
appointed by the parties as stated in this Paragraph, they shall meet promptly
and attempt to set the then fair market rental value of the Premises. If they
are unable to agree within thirty (30) days after the second appraiser has been
appointed, they shall attempt to elect a third appraiser meeting the
qualifications stated in this paragraph within ten (10) days after the last day
the two appraisers are given to set the then fair market rental value of the
Premises. If they are unable to agree on the third appraiser, either of the
parties to this Lease, by giving ten (10) days notice to the other party, can
apply to the county Real Estate Board, or the then presiding Judge of the Santa
Clara county Superior Court, for the selection of a third appraiser who meets
the qualifications stated in this Paragraph. Each of the parties shall bear one
half (1/2) of the cost of appointing the third appraiser and of paying the third
appraiser’s fee. The third appraiser, however selected, shall be a person who
has not previously acted in any capacity for either party.

 

--------------------------------------------------------------------------------

 

Within thirty (30) days after the selection of the third appraiser, a majority
of the appraisers shall set the then fair market rental value of the Premises.
If a majority of the appraisers are unable to set the then fair market rental
value of the Premises within the stipulated period of time, the three appraisals
shall be added together and their total divided by

three; the resulting quotient shall be the then fair market rental value of the
Premises.

 

If, however, the low appraisal and/or the high appraisal are/is more than ten
(10%) lower and/or higher than the middle appraisal, the low appraisal and/or
the high appraisal shall be disregarded. If only one appraisal is disregarded,
the remaining two appraisals shall be added together and their total divided by
two; the resulting quotient shall be the then fair market rental value to the
Premises. If both the low appraisal and the high appraisal are disregarded as
stated in this Paragraph, the middle appraisal shall be the then fair market
rental value of the Premises.

 

After the then fair market rental value of the Premises has been set, the
appraisers shall multiply said fair market rent value by ninety five percent
(95%) and immediately notify the parties of the product.

 

(v) If Tenant objects to the Base Rent that has been determined pursuant to the
Paragraph 44(B) (iv), Tenant shall have the right to have this Lease expire at
the end of the initial Term provided that Tenant pays for all costs incurred by
Landlord in connection with the appraisal procedure.  Tenant’s election to allow
this Lease to expire at the end of the initial Term must be exercised by
delivering written notice to exercise to Landlord within ten (10) days after the
rent determination procedure set forth in Paragraph 44 (B) (iv) has been
completed and Tenant has received notice of the Base Rent as determined by
appraisal. If Tenant does not so exercise its election to terminate, this Lease
shall be extended as provided in this paragraph.

 

(c)              Rental Adjustments During Option Period. The Base Rent for the
Option Period shall be subject to adjustment at the commencement of the second
(2nd) year of the first (1st) option Period and the second (2nd) year of the
second (2nd) option Period, and each and every year thereafter, “the adjustment
dates” as follows:

 

The base for computing the adjustment is the Consumer Price Index for All Urban
Consumers (base year 1982-84 = 100) for San Francisco-Oakland-San Jose,
California published by the United States Department of Labor, Bureau of Labor
statistics (“Index”) which is last published prior to the commencement of the
option Period (“Beginning Index”). If the Index which is last published prior to
an adjustment date (“Extension Index”) has increased over the Beginning Index,
the Base Rent for the period following the adjustment date and until the next
adjustment date, if any, shall be the Base Rent set forth in Paragraph 44 (B)
multiplied by a fraction, the numerator of which is the Extension Index and the
denominator of which is the Beginning Index. In no case shall the

Base Rent be less than the Base Rent set forth in Paragraph 44(B) or that
resulting from a previous adjustment hereunder. The Base Rent as adjusted shall
continue to be paid in advance on the first day of each and every month of the
Lease term.

 

If the Index is changed during the term of the Lease so that the base year for
the Index differs from that used in the Beginning Index, the Index shall be
converted in accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor statistics. If the Index is
discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised.

 

45.           Hazardous Materials. Landlord and Tenant agree as follows with
respect to the existence of use of “Hazardous Materials” (as defined herein) on
the Premises:

 

A.            Definition of Hazardous Materials. As used herein, the term
“Hazardous Materials” shall mean any hazardous or toxic substance, material or
waste which is or becomes regulated by any local governmental authority, the
state of California, or the United States Government. The term “Hazardous
Materials” includes, without limitation any material or hazardous substance
which is (i) listed under Article 9 or defined as “hazardous” or “extremely
hazardous” pursuant to Article 11 of Title 22 of the California Administrative
Code, Division 4, Chapter 30, (ii) defined as a “hazardous waste” pursuant to
section 1004 of the Federal Resource Conservation and Recovery Act, section 42
U.S.C. section 901 et seq. (42 U.S.C. section 6903), (iii) defined as a
“hazardous

 

--------------------------------------------------------------------------------

 

substance” pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C.
section 9601), (iv) petroleum or any derivative of petroleum, or (v) asbestos.

 

B.            Use of Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, kept or used in or about the Premises by
Tenant, its agents, employees, contractors or invitees without prior written
consent of Landlord. Landlord shall not unreasonably withhold such consent so
long as Tenant demonstrates to Landlord’s reasonable satisfaction that such
Hazardous Materials are necessary or useful to Tenant’s business and will be
used, kept and stored in a manner that complies with all laws regulating the
Hazardous Materials so brought upon or used or kept in or about the Premises.
Tenant, at its sole cost and expense, shall make any and all improvements to the
Premises necessary to assure legal and safe use of the Hazardous Materials. Use
of those Hazardous Materials listed in Exhibit C attached hereto and
incorporated herein by reference have approval of Landlord. Tenant shall remove
all Hazardous Materials used or brought onto the Premises during the Lease Term
from the Premises prior to the expiration or earlier termination of the Lease.

 

C.            Annual Inspection. Each year upon the anniversary of the
commencement of the Lease (“anniversary Date”), Tenant shall, at its sole cost
and expense, (which base cost for the inspection shall not exceed six thousand
and no/100 ($6,000.00) for the initial lease year.  Said cost limitation shall
increase by an amount equal to the net increase in the Consumer Price Index for
All-Urban Consumers (1982-84 = 100) for San Francisco-Oakland-San Jose which is
last published prior to the commencement of the term) hire a qualified
environmental consultant, acceptable to Landlord, to evaluate whether Tenant: is
in compliance with all appl1aabh Hazardous Materials laws. Tenant shall submit
to Landlord a report from such environmental consultant which discusses the
environmental consultant’s finding within two (2) months of each Anniversary
Date. Tenant shall, in a timely manner, take all steps necessary to correct any
and all problems identified by the environmental consultant to the extent such
problems are not the subject of Landlord’s indemnification pursuant to Paragraph
45.(K)

 

D.            Tenant’s Indemnity. Tenant shall indemnify, defend and hold
Landlord harmless from any and all breaches of this Paragraph 45. and for any
and all claims, judgments, damages, decrees, liens, demands, taxes, penalties,
fines, expenses, costs (including but not limited to those costs associated with
investigation, removal and remedial activities as may be sought, initiated or
required in connection with any local, state or federal governmental or private
party environmental demands or claims), fees (including without limitation
attorneys fees), obligations, orders, liabilities or losses (including without
limitation, diminution in the value of the Premises, damages for the loss or
restriction on the use, marketability or any other amenity of the Premises) (all
of the foregoing collectively referred to hereinafter as “Environmental
Claims”), which arise during or after the Lease term as a result of any release
or discharge of Hazardous Materials at, in, onto or under the Premises, or any
contamination of the Premises during the Lease term but only to the extent of
the Tenant’s use of the Premises. The foregoing indemnity (“Tenant’s
Environmental Indemnity”) shall survive the expiration of earlier termination of
this Lease except as provided in section L. of this Paragraph 45.

 

E.             Tenant’s Obligation to Promptly Remediate. Without limiting the
foregoing, if there is a release or discharge of any Hazardous Materials _t, in
onto or under _he Premises or contamination of the Premises that is covered by
Tenant’s Environmental Indemnity, Tenant shall promptly take all action, at its
sole cost and expense, as is necessary to return the Premises to the condition
existing prior to the introduction of any such Hazardous Materials to the
Premises, provided that Landlord’s approval of such action shall first be
obtained. Landlord’s approval shall not be unreasonably withheld so long as such
actions would not have any potential material adverse long-term or short-term
effect on the Premises.

 

F.                Landlord’s Representation and Releases. Landlord represents
that it has provided Tenant with copies of relevant material, data information,
and reports in Landlord’s possession concerning the presence of Hazardous
Materials, at, in, on, about or under the Lease Premises at the date hereof.
Such information includes all of those certain reports described in Exhibit B
attached hereto and incorporated herein by reference (the “Reports”). (Any and
all contamination referenced in the Reports shall hereinafter be referred to as
the “Known Contamination”.) Lanlord expressly acknowledges and agrees that
Tenant shall have no responsibility or liability, either under the Tenant’s
Environmental Indemnity or otherwise, to Landlord for any Environmental Claims
which arise before, during or after the Lease term as a result of the Known
contamination and Landlord hereby expressly releases Tenant from any such
Environmental Claim.

 

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G.            Left blank intentionally.

 

H.            Landlord’s Right of Entry. Landlord and its agents shall have the
right, but not the duty, to inspect Premises during reasonable business hours,
to determine whether Tenant is complying with the terms of this Lease. If Tenant
is not in compliance with this Lease, Landlord shall have the right to
immediately enter upon the Premises to remedy any contamination caused by
Tenant’s failure to comply, notwithstanding any other provision of this Lease.
Landlord shall use its best efforts to minimize the interference with Tenant’s
business, but shall not be liable for any interference caused thereby. Tenant
shall promptly reimburse Landlord for all costs and expenses incurred by
Landlord pursuant to this Subparagraph H.

 

I.              Notice. The provisions of this Subparagraph I. shall only apply
to contamination on the Premises which is not considered to be Known
contamination as defined in Subparagraph F. If at ay time either party shall
become aware of, or have reasonable cause of believe that any Hazardous
Materials have come to be located on

 

--------------------------------------------------------------------------------

 

or beneath the Premises, the parties shall, immediately upon discovering such
presence or suspected presence of Hazardous Materials, give written noticeof the
condition to the other. In addition, each party shall immediately notify the
other, in writing of (i) any enforcement, cleanup, removal or other governmental
regulatory action instituted, completed, or threatened relating to any Hazardous
Materials on or about the Premises, (ii) any claim made or threatened by any
person against either party or the Premises relating to damage, contribution,
cost recovery, compensation, loss or injury relating from or claimed to result
from any Hazardous Materials that have come to be located on or about the
Premises, and (iii) any reports made to any local state or federal environmental
agency arising out of or in connection with any Hazardous Materials _n or about
the Premises, including any complaints, notices, warnings or certain violations
in connection therewith, of which the party becomes aware. Each party shall also
supply the other as promptly as possible, and in event within five (5) business
days after receipt of copies of allclaims, reports, complaints, notices,
warnings or certain violations relating in any way to the Premises or use
therof.

 

J.             Default. Any default under this Paragraph 45. shall be a material
default enabling Landlord to exercise any of the remedies set forth in this
Lease.

 

K.            Landlord Indemnity. Landlord shall be solely responsible for, and
shall indemnify, defend, and hold Tenant and Tenant’s agents, employees,
contractors, licensees, and invitees (collectively, “Tenant’s Agents”) harmless
from and against any and all Environmental Claims as defined in Paragraph 45.0.
of this Lease, proceedings, or hearings (collectively “Non-Tenant Claims”) due
solely to the release of Hazardous Materials onto the Premises through
groundwater migration from another property (“Migration”) by anyone other than
Tenant and its Agents whatsoever, whenever occurring. Landlord shall, promptly
upon demand, at its own sole cost and expense, cause to be performed solely any
and all cleanup, refiting, or other alterations or corrective work to the
Premises necessitated by any such migration. Landlord agrees to defend, on
behalf of Tenant, with counsel acceptable to Tenant, all such Non-Tenant Claims
due soley to migration, and to pay all fees, costs, damages, or expenses
relating to or arising out of any such Non-Tenant Claims, including, without
limitation, as to attorneys’ fees and costs. Landlord shall further agree to be
solely responsible for and shall indemnify, defend, and hold Tenant and its
Agents harmless from and against any and all claims, including, without
limitation, as to reasonable attorneys’ fees and costs, arising out of or in
connection with any removal, cleanup, or restoration work required by any
government agency having jurisdiction and which arises soley from migration onto
the Premises during Tenant’s occupancy of the Premises.

 

Landlord shall be further soley responsible for, and shall indemnify, defend,
and hold Tenant and Tenant’s agents harmless from and against any and all
Environmental Claims as defined in Paragraph 45.0., which arise during or after
the Lease Term, relating to the Known contamination. The foregoing Indemnity
(“Landlord’s Environmental Indemnity”) shall survive the expiration or earlier
termination of this Lease.

 

L.             Lease Termination. At the expiration of the term, or earlier as
provided herein, Tenant shall provide Landlord with a statement certifying that
there has been no release or discharge of any Hazardous Materials at, in, onto
or under the Premises or contamination of the Premises. Tenant shall, at its
sole cost and expense, upon the expiration of the term, or earlier as provided
herein, cause to be performed any and all tests by qualified personnel approved
by Landlord, and shall make any and all improvements necessary to assure
Landlord that there exists no Hazardous Materials, other than Known Contaminants
referred to in Section F of Paragraph 45., at, in, or under the Premises. 
Additionally, Tenant shall provide Landlord copies of all documentation relating
to the Tenant’s use of Hazardous Materials which have been caused or contributed
to by tenant throughout the term, on an annual basis.

 

In the event that the certification has been received by Landlord in accordance
with this section L. of Paragraph 45., and Landlord leases the Premises to a
Subsequent Tenant which contemplates using or bringing onto the Premises
Hazardous Materials which were also used by Tenant during the Lease term and
approved by Landlord (“Duplicate Substance”), Landlord shall indemnify and hold
Tenant harmless from any and all Environmental Claims which’ arise as a result
of the discovery of a Duplicate Substance, after the expiration of the term or
earlier as provided herein.

 

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EXHIBIT A

 

 

Site Plan (Partial)

 

This Site Plan does not include part of the facility’s parking.

 

 

 

Parcel Map

 

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EXHIBIT Al

 

PERSONAL PROPERTY

 

ITEM

 

DESCRIPTION

 

 

 

Process Chiller

 

Trane 50 ton package unit/aircooled/7-1/2 HP circulating pump.

 

 

 

Scrubber

 

PPF paramont Plastic Fabricators #H-105 with #C-365 II centrifugal fan

 

 

 

Acid Waste Neutralization

 

Nottingham # FC-1000, 1000 gallon epoxy/fiberglass lined vault, 2 lightning
mixers 3 Leeds-Northrup Ph monitor/controllers/sensors, 3 Rustrak Ph chart
recorders, 1 in house built expansion controller

 

 

 

Cooling Tower

 

Baltimore Aircoil VXT-135CR

 

 

 

Air Handler

 

Temtrol DH63P, >30,000 cfm, over 60 air changes/hr

 

 

 

Boiler

 

1 Parker boiler, input 1460M btu/hr output 1168M btu/hr

 

 

 

Chiller

 

Carrier #30HR140B401, max cap 160 ton

 

 

 

Vacuum system

 

1 power ring vacuum pump, 25” @ 120 dfm

 

 

 

DI Water System

 

6 GPM max make-up, 10,000 gal storage

 

 

 

Compressed Air

 

2 CompAir/Kellogg/V Compact, 1 Pall air dryer system cap. 118 cfm at 125 psi/per
compresser filtration to 0.05 micron absolute.

 

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EXHIBIT B

 

Oakmead Village Court property. Potential soil and ground water contamination
were believed to exist on-site as a result of ground water quality
investigations conducted at the Intel facility north and immediately
down-gradient from the 2986 Oakmead Village: Court property. A contamination
plume has been reported at the former Intel Ma8netl_ site. 3000 Oakmead Village
Court, and field investigations to characterize the extent of the pollution
began in 1982.

 

In February 1985, a remedial dean-up/pumping program was implemented at 3000
Oakmead Village Court and has been in operation since that time. As ground water
extraction proceeded, an Increase in TCE concentrations near the extraction
system was observed. TCE concentrations as high as 750 micrograms per liter
(ug/l) detected at the 2986 Oakmead Village Court property, and the lack of
relatively high concentrations of TCE in wells located south and immediately
up-gradient from the 2986 Oakmead site, suggest that contaminants from 2986
Oakmead Village Court may be contributing to the 3000 Oakmead Village Court
plume.

 

Results from on-site investigations indicated that the uppermost water bearing
zone has been impacted with VOCs, including Trichlorotrifluoroethane (Freon
113), Trichloroethane (TCA), Trichloroethylene (TCE), and Tetrachloroethylene
(PCE). The results also indicated that these chemicals may have originated
on-site. This conclusion was further supported by several other off-site
Investigations conducted at locations up-gradient and down-gradient from the
subject site (J. V. Lowney & Associates 1987, Weiss &; Associates 1986, Woodward
Clyde 1985). These investigations indicated the absence and/or lower VOCs
concentrations both up-gradient and down-gradient from the 2986 Oakmead Village
Court.

 

The nature, extent, and distribution of chemicals in the soil and ground water
are thoroughly discussed in the Final RI (JVLA, 1991).

 

The combined plume is presently approximately 1,000 feet in length and 500 feet
in width at its down-gradient fringe, occupying an approximate aquifer volume of
170,000 cubic yards. The general trend of the plume is in a northeastern
direction along the approximate hydraulic gradient of the potentiometric surface
established in the A-Zone. The greatest mass of VOC contaminants in A-Zone
ground water is comprised of TCE and TCA.  Other VOCs, including Freon, DCA,
DCE, and PCE also have been detected but in smaller concentrations.

 

The proposed remedial efforts are primarily focused on the plume’s center, which
is presently defined, in our opinion, by the TCE 100 ppb isoconcentration line
(JVLA, 1991). The plume’s center is currently approximately 180 feet in length
and 160 feet in width near the northern property boundary of 2986 Oakmead
Village Court. Total volume of impacted aquifer material is approximately 10,000
cubic yards.

 

The total mass of VOCs present in the A-Zone was estimated based on the
thickness of the upper water bearing zone (10 feet), the estimated average
porosity (0.25) and the extent of contamination. The area of the VOC plume
within select isoconcentration contours was estimated as a percent of the total
plume area. The volume of ground water contained within each Isoconcentration
contour was then calculated. Based on the above parameters, the total mass of
VOCs present in the aqueous phase in the A-Zone was calculated to be
approximately 3 to 4 pounds, or 0.5 to 1 gallon.

 

These chemicals are not readily amenable to biological or chemical breakdown
under ambient ground water conditions. In addition, they have a significant
half-life. Thus, In our opinion, remedial action will likely be required

 

--------------------------------------------------------------------------------

 

to reduce the contamination. Table 2 below lists chemical characteristics
pertinent to the effectiveness and implementability of the remedial
alternatives.

 

TABLE 2. Chemical Characteristics That Potentially Affect
Implementability of Remedial Technologies,
2986 and 3000 Qakmead Village Court
Santa Clara, California

 

 

CONTAMINANT

 

VAPOR
PRESSURE
(mm Hg)

 

MOLECULAR
WEIGHT
(g/mole)

 

WATER
SOLUBILITY
(mg/l)

 

LOG
OCTANOL/
WATER
PARTITION
COEFFICIENT

 

HENRY’S
LAW
CONSTANT
(atm-m(3)/mole

 

ORGANIC
CARBON
PARTITION
COEFFICIENT
(ml/g)

 

Benzene

 

95.2

 

78

 

1,750

 

2.12

 

0.00559

 

83

 

Chloroform

 

151

 

1119

 

8,200

 

1.97

 

0.00287

 

48

 

1,1-Dichloroethane

 

182

 

99

 

5,500

 

1.79

 

0.00431

 

30

 

1.1-Dichloroethene

 

600

 

97

 

2,250

 

1.84

 

0.00340

 

65

 

cis-1,2-Dichloroethene

 

208

 

97

 

3,500

 

0.70

 

0.00758

 

49

 

trans-1,2-Dichloroethene

 

324

 

97

 

6,300

 

0.48

 

0.00656

 

59

 

Freon 11

 

687

 

137

 

1,100

 

2.53

 

0.00583

 

—

 

Freon 113

 

270

 

187

 

10

 

2.0

 

—

 

—

 

Freon 123

 

—

 

—

 

—

 

—

 

—

 

—

 

Methylene Chloride

 

1,310

 

50

 

6,500

 

0.95

 

0.0440

 

35

 

Tetrachloroethene

 

17.8

 

166

 

150

 

2.6

 

0.0259

 

364

 

Toluene

 

28.1

 

92

 

3,350

 

2.73

 

0.00637

 

300

 

1.2,3-Trichlorobenzene

 

—

 

181

 

—

 

—

 

—

 

—

 

1,2,4-Trichlorobenzene

 

0.290

 

181

 

30.0

 

4.3

 

0.00231

 

9,200

 

1,1,1-Trichloroethane

 

123

 

133

 

1,500

 

2.5

 

0.0144

 

152

 

Trichloroethene

 

57.9

 

131

 

1,100

 

2.38

 

0.00910

 

126

 

— Not Available

 

Data from “Superfund Public Health Evaluation Manual,” 1986 and “Groundwater
Chemicals Desk Reference,” 1990

 

The existing data, presented in the Final RI, show that soil and ground water at
2986 Oakmead Village Court have been impacted with VOCS. The major contaminants
of concern are TCE, TCA, Freon 113, and PCE. The anticipated migration pathways
are discussed below.

 

Ground Water: Contaminant migration from the site occurs primarily through
ground water transport. pollutants in ground water tend to be removed or reduced
In concentration with time and distance traveled. In general, actual solute
movement in the ground water is effected by advection, dispersion, sorption,
dilution, and biochemical degradation.

 

The process by which VOCs are transported by bulk motion at an average rate
equal to the average linear velocity of the flowing ground water is termed
advection. However, there is a tendency for the solute to spread out from the
path projected by the hydraulics of the flow system (hydrodynamic ‘dispersion),

 

Microbiological activity present in the subsurface also can retard the spread of
VOCs in the ground water through biochemical degradation. However, only a
relatively small proportion of native microorganisms will have the genetic
ability to degrade the contaminants. The processe3 of biodegradation develops
through a complex series of enzymatic reactions that mayor may not be inherent
to a given bacterial species or group of bacteria.

 

--------------------------------------------------------------------------------

 

Rates of VOC migration in the A-Zone were estimated from the distribution of TCA
between 1983 and 1986. The data suggests a solute migration rate of

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

stored on – site will not exceed the one-month use of that material.

 

MUST HAVES

 

Material

 

Monthly Use

 

Storage

 

Disposal

Oxygen

 

1 cylinder

 

Pad

 

N/A

Nitrogen

 

N/A

 

LN Tank

 

N/A

Pos. Photoresist

 

1 Gallon

 

Cabinet

 

By others

Neg. Photoresist

 

1 Gallon

 

Cabinet

 

“

Pos. DeveloperCabinet

 

3 Gallons

 

Cabinet

 

Neutralization

Neg. Devel (Xylene)

 

5 Gallons

 

fire rated cabinet

 

By others

Sulfuric Acid

 

5 Gallons

 

Outside Pad

 

Neutralization

Hydrofluoric Acid (HF)

 

1 Gallon

 

“      “

 

By others

Ammonium Fluoride

 

5 Gallons

 

“      “

 

“

Ammonium Hydroxide

 

1 Gallon

 

“      “

 

Neutralization

Hydrogen Peroxide

 

2 Gallons

 

“      “

 

“

Potassium Hydroxide

 

1 Gallon

 

“      “

 

“

Nitric Acid

 

1 Gallon

 

“      “

 

“

Acetic Acid

 

1 Gallon

 

“      “

 

“

Phosphoric Acid

 

2 Gallon

 

“      “

 

“

Hydrochloric Acid

 

1 Gallon

 

“      “

 

“

Potassium Iodide Etch

 

1 Quart

 

“      “

 

“

Positive Resist strip

 

4 Gallons

 

“      “

 

“

Isopropyl Alcohol

 

2 Gallons

 

fire rated Cabinet

 

“

Acetone

 

3 Gallons

 

“      “

 

By others

 

OPTIONALS

 

Material

 

Monthly Use

 

Storage

 

Disposal

Hydrogen

 

1 cylinder

 

Outside Pad

 

N/A

HCl gas

 

0.1 cylinder

 

“      “

 

Scrubber

Silane

 

0.1 cylinder

 

“      “

 

“

PH3 5% in Argon

 

0.1 cylinder

 

“      “

 

Decompose to P205

Ammonia

 

0.1 cylinder

 

“      “

 

Scrubber

Silicon Tetrachloride

 

10 grams

 

“      “

 

“

Nitrogen Triflouride

 

0.1 cylinder

 

“      “

 

“

Sulfur Hexaflouride

 

0.1 cylinder

 

“      “

 

“

 

Please note that due to the very low quantities of the above materials, it may
be permissible to store them within the clean room, using a ‘Lecture bottle’
size container. This will have to be confirmed with the governing agencies.

 

This outline is intended to disclose the materials and requirements for our
operations; primarily to define a suitable site. Details of installation and
costs are always negotiable.

 

Applications Lab:

This area will be class 10,000 with services available in the area, electrical,
air, vacuum, like a light electronics assembly area. The area is expected to be
750 to 1000 square feet.

 

Assembly / Test:

This area will be class 10,000 with services available in the area, electrical,
air, vacuum, suitable for electronics assembly. The area is estimated at 2500
square feet.

 

--------------------------------------------------------------------------------

 

AMENDMENT TO LEASE

 

THIS AGREEMENT made and entered into this 29 day of July, 1993, by and between
3000 OAKMEAD VILLAGE DRIVE, LTD., as Landlord, and GHz TECHNOLOGY INC., as
Tenant, for the following:

 

WHEREFORE, ON THE 17th day of June 1991, Landlord and Tenant entered into an
Agreement to Lease for approximately 9,850 square feet of space in that certain
premises known as Suite #100 of that certain building complex known as 3000
Oakmead Village Drive, Santa Clara, California, for a period of ten (10) years
commencing June 1, 1991 and terminating on May 30, 2001; and

 

Landlord and Tenant now desire to amend the terms and conditions of that Lease
as follows:

 

WITNESSETH

 

1.             COMMENCEMENT DATE:   The commencement date for the term of this
lease shall be August 1, 1991 and shall terminate ten (10) years thereafter on
July 31, 2001.

 

2.             Except as herein provided, all other terms of the Lease Agreement
shall remain unchanged.

 

IN WITNESS HERETO the Tenant and Landlord have executed this document on the
date first above written.

 

 

 

LANDLORD:

 

 

 

 

3000 OAKMEAN VILLAGE DRIVE, LTD.

 

 

 

 

By

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

GHz TECHNOLOGY, INC.

 

 

 

 

By

 

 

 

 

 

 

 

 

 

 

 

 

By

 

 

--------------------------------------------------------------------------------

 

SECOND AMENDMENTTO LEASE

 

THIS SECOND AMENDMENT TO LEASE made and entered into this 5 day of July, 2000 by
and between 3000 OAKMEAD VILLAGE DRIVE, LTD., as Landlord, and GHz TECHNOLOGY,
INC., as Tenant, for the following:

 

WHEREAS, Landlord and Tenant entered into an Agreement to Lease dated June 17th,
1991 and as amended by Amendment to Lease dated July 29, 1993 (“Lease”) for the
building complex located at 3000 Oakmead Village Drive, Santa Clara, California
(‘“Complex”),

 

WHEREAS, Tenant desires that certain repairs and replacements be made to the
roof and heating, ventilation and airconditioning equipment of the Complex by
Landlord,

 

WHEREAS, Landlord desires that Tenant extend the lease term provided in the
Lease and that annual rental adjustments be made for the additional term,

 

Landlord and Tenant now desire to amend the terms and conditions of the Lease in
the following particulars:

 

WITNESSETH

 

1. Paragraph 1. of the Lease shall be deleted in its entirety and there shall be
inserted in its place the following: “TERM. The term of this Lease shall be for
fifteen (15) years commencing on August 1, 1991, and ending on the 31st day of
July 2006, unless the tem of the Premises hereby demised shall be sooner
terminated as hereinafter provided.”

 

2. Subparagraph (B) of Paragraph 3. of the Lease shall be amended as follows:
The phrase “or as adjusted in accordance with Paragraph 43. of this Lease,”
shall be deleted in its entirety and the following shall be added to the
schedule of Base Rent::

 

“Year 11 - $61,464.00 per month

Year 12 - $63,927.00   “   “

Year 13 - $66,488.00   “   “

Year 14 - $69,147.00   “   “

Year 15 - $71,905.00   “   “

 

3. The first sentence of Paragraph 44.(A) of the Lease is deleted in its
entirety and the following sentence is inserted in its place: “Provided that
Tenant is not in default hereunder, either at the time of exercise or at the
time the extended term commences or has not been in Default at any time during
the term of the Lease, Tenant shall have the option to extend the fifteen (year)
term of the this Lease for one (1) additional period of five (5) years(“Option
Period”), on the same terms, covenants and conditions provided hereunder, except
that upon such renewal, the monthly rent due hereunder shall be determined
pursuant to Paragraph 44.(B).”

 

4. Paragraph 47. is added and made a part of this Lease: “47. Improvements to
the Premises. Landlord agrees to expend up to Two Hundred Thousand Do1lars
($200,000) for the replacement of the roof and any structural repairs required
in connection therewith and the replacement of the following airconditioning
equipment. Should the cost of the foregoing exceed Two Hundred Thousand Do1lars
($200,000) then and in that event the additional cost shall be paid by Tenant
within ten (10) days of Landlord’s request to Tenant, which shall be accompanied
by a change order from Landlord’s contractor detailing the nature of the
additional cost and the cost breakdown attendant. A

 

--------------------------------------------------------------------------------

 

description of the work to be performed is attached hereto as Exhibit “A”.

 

5. Effectiveness of Lease. Except as set forth in the Amendment to Lease dated
July 29, 1993, and this Second Amendment to Lease all other terms of the Lease
shall remain unchanged.

 

IN WITNESS HERETO the Landlord and Tenant hve executed this document on the date
first above written.

 

 

 

3000 Oakmead Village Drive Ltd,
a partnership formed under the laws
of California

 

 

By:

 

 

 

Landlord

 

 

 

Ghz Technology, Inc., a California

corporation

 

By:

 

 

 

 

Tenant

 

--------------------------------------------------------------------------------

 

THIRD AMENDMENT TO LEASE

 

THIS THIRD AMENDMENT TO LEASE made and entered into this 26 day of September,
2000, by and between 3000 OAKMEAD VILLAGE DRIVE, LTD., as Landlord, and GHz
TECHNOLOGY, INC., as Tenant, for the following:

 

WHEREAS, Landlord and Tenant entered into an Agreement to Lease dated June 17,
1991 and as amended by Amendment to Lease dated July 29, 1993, and Second
Amendment to Lease dated July 5, 2000 (“Lease”) for the building complex located
at 3000 Oakmead Village Drive, Santa Clara, California (“Complex”).

 

WHEREAS, Tenant desires that the security deposit be returned by Landlord prior
to expiration of the Term,

 

Landlord and Tenant now desire to amend the terms and conditions of the Lease in
the following particulars:

 

WITNESSETH

 

Paragraph 3(H) SECURITY DEPOSIT. shall be deleted in its entirety.

 

Except as set forth in the Amendment to Lease dated July 29, 1992 and the Second
Amendment to Lease dated July 5, 2000, all other terms of the Lease shall remain
unchanged.

 

IN WITNESS HERETO the Landlord and Tenant have executed this document on the
date first above written.

 

LANDLORD
3000 Oakmead Village Drive, Ltd.,
a California partnership

 

By:

 

 

 

Mark T. Gates, Jr.

 

 

General Partner

 

 

 

TENANT

 

GHz Technology, Inc.,

 

a California corporation

 

 

 

By:

 

 

 

F. W. Schneider

 

 

President

 

 

--------------------------------------------------------------------------------

 

FOURTH AMENDMENT TO LEASE

 

THIS FOURTH AMENDMENT TO LEASE (this “Amendment”) dated this 29 day of March,
2002, is by and between 3000 OAKMEAD VILLAGE DRIVE, LTD., as landlord
(“Landlord”), and GHZ TECHNOLOGY, INC., as tenant (‘Tenant”).

 

RECITALS

 

A.            Landlord and Tenant entered into that certain Lease dated as of
June I 7, 1991, as amended by Amendment to Lease dated July 29, 1993, by Second
Amendment to Lease dated July 5, 2000, by Third Amendment to Lease dated
September 26, 2000 (collectively, the “Lease”), pursuant to which Tenant leased
certain premises (the “Premises”) commonly known as APN #216-48-025 located at
3000 Oakmead Village Drive, Santa Clara, Santa Clara, California.

 

B.            Tenant will assign to GHz Acqujsition, Inc. (“GHz Acquisition”)
and GHz Acquisition will assume all of the rights, interests and obligations of
Tenant under the Lease by that certain Assignment and Assumption Agreement of
even date herewith.

 

B. Landlord and Tenant now desire to modifY the Lease upon the terms and
conditions hereinafter provided.

 

NOW, THEREFORE, in consideration of the covenants set forth in this Amendment
and other valuable consideration, the receipt and adequacy of which is hereby
acknowledged. Landlord and Tenant hereby agree to amend the Lease as follows:

 

AGREEMENT

 

1.             Guaranty. Advanced Power Technology, Inc. (“Guarantor”) shall
guaranty the due, punctual, and full payment of all Base Rent (as defined in the
Lease) and Additional Rent (as defined in the Lease) payable by Tenant and GHz
Acquisition pursuant to the terms of the Lease. If Guarantor defaults pursuant
to the terms of the Guaranty, Tenant shall be deemed to have committed all event
of default under the Lease and Landlord shall be entitled to exercise all of the
remedies available pursuant to the terms of the Lease and at law or in equity.
The Guaranty shall be in the form of Exhibit “A” attached hereto.

 

2.             Ratification. Except as modified hereby, the Lease is hereby
ratified and affirmed by Landlord and Tenant and remains in full force and
effect.

 

3.             Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed one and the same instrument.

 

4.             Brokers. Landlord and Tenant each represent and warrant to the
other that they have had no dealings with any real estate broker; agent or
finder in connection with the negotiation or execution of this Amendment. Each
party hereto shall indemnify and hold harmless the other party from any claims,
including reasonable attorney’s fees, by a broker, agent or finder for any
leasing commission which may be claimed as a result of the actions of the
indemnifying party.

 

--------------------------------------------------------------------------------

 

5.             Defined Terms. Except as expressly set forth herein to the
contrary, all defined terms used in the Amendment shall have the same meanings
as attributed to such terms in the Lease.

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be
executed as of the day and year first above written.

 

“LANDLORD”

 

3000 OAKMEAD VILLAGE DRlVE, LTD.

 

By:

 

 

 

Print Name:

 

 

 

Its:

 

 

 

‘TENANT”

 

GHZ TECHNOLOGY, INC.

 

By:

 

 

 

Print Name:

 

 

 

Its:

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

FORM OF GUARANTY

 

--------------------------------------------------------------------------------

 

UNCONDITIONAL GUARANTY OF LEASE

 

THIS GUARANTY (“Guaranty”) is made as of March     , 2002, by ADVANCED POWER
TECHNOLOGY, INC., a Delaware corporation Guarantor”), in favor of 3000 OAKMEAD
VILLAGE DRIVE, LTD. (“Landlord”).

 

RECITALS

 

A. Concurrently herewith, Landlord and GHz Technology, Inc. (‘Tenant”), entered
into that certain Lease dated as of .June 17, 1.991., as amended by Amendment to
Lease dated July 29, 1993, by Second Amendment to Lease dated July 5, 2000, by
Third Amendment to Lease dated September 26, 2000, and by Fourth Amendment to
Lease of even date herewith, and as may be further amended nom time to time
hereafter. and as assigned by Tenant to GHz Acquisition, Inc. (“GHz
Acquisition”) by Assignment and Assumption Agreement (the “Assignment
Agreement”) of even date herewith (the “Lease”), concerning that certain
premises (“Premises”) commonly known as APN #216-48-025 located at 3000 Oakmead
Village Drive, Santa Clara. Santa Clara, California, and as more particularly
described in the Lease.

 

B. Landlord would not consent to the Assignment Agreement if Guarantor did not
execute and deliver to Landlord this Guaranty. As an inducement to Landlord to
consent to the Assignment Agreement, Guarantor is willing to enter into and
perform in accordance with this Guaranty.

 

NOW THEREFORE, Guarantor unconditionally guaranties and agrees as follows:

 

1.             Defined Terms.  All terms not specifically defined herein shall
have the meaning assigned to such terms in the Lease.

 

2. Guaranty. Guarantor hereby unconditionally and irrevocably guaranties the
due, punctual, and full payment of all Base Rent (as defined in the Lease) and
Additional Rent (as defined in the Lease) payable by Tenant and GHz Acquisition.
As referred to in the immediately preceding sentence, each and every such rental
and other sum payable by Tenant and GHz Acquisition under the Lease are hereby
individually and collectively referred to as the “Obligations.” All Obligations
shall be payable by Guarantor to Landlord immediately upon demand upon default
by Tenant or GHz Acquisition under the Lease. It is the intention of Landlord
and Guarantor that the term, Obligations be defined to mean the full amount owed
to Landlord and any trustee, including without limitation any interest, default
interest, costs, and fees (including without limitation attorneys’ fees and
costs) that would have accrued under the Lease but for the commencement of a
case under the Bankruptcy Code or any other law governing insolvency,
bankruptcy, reorganization, liquidation, or like proceeding. Without limitation,
this Guaranty is a guaranty of prompt and punctual payment of the Obligations,
whether at stated maturity, by acceleration or otherwise, and is not merely a
guaranty of collection.

 

--------------------------------------------------------------------------------

 

3.             Rights of Landlord. Guarantor authorizes Landlord at any time in
Landlord’s sole discretion, without giving notice to Guarantor or obtaining
Guarantor’s consent and without affecting the liability of Guarantor for the
Obligations, from time to time to:

 

(a)           alter, compromise, settle, modify, renew, amend, extend, suspend,
waive, discharge the performance of, change the manner or terms or time for
payment, enforce or decline to enforce, or release any of the Obligations;

 

(b)           to take and hold security for the performance of the Obligations
and to exchange, enforce, waive, release, and direct the order or manner of sale
thereof as Landlord may determine;

 

(c)           apply payments received by Landlord from Tenant or GHz Acquisition
to the Obligations in such order as Landlord shall determine;

 

(d)           declare all Obligations due and payable upon the occurrence of an
event of default under the Lease;

 

(e)           assign this Guaranty in whole or in part; and

 

(f)            to release, substitute or add anyone or more guarantors.

 

4.             Guarantor’s Waivers. Guarantor waives to the fullest extent
permitted by applicable law:

 

(a)           any right to require Landlord to proceed against Tenant and GHz
Acquisition or any collateral, or pursue any other remedy in Landlord’s power
whatsoever, and Guarantor waives any additional rights arising under California
Civil Code section 2845;

 

(b)           any right to require Landlord to marshall any assets in favor of
Guarantor, Tenant, GHz Acquisition or any other guarantor or other person liable
for the Obligations or against or in payment of any Obligations.

 

(c)           any notice of any default by Tenant or GHz Acquisition with
respect to any Obligation;

 

(d)           any notice of acceptance by Landlord of this Guaranty;

 

(e)           any defense based upon the legal disability of Ten ant or GHz
Acquisition. any other guarantor, or any other person, or by reason of the
cessation or limitation of the liability of Tenant and GHz Acquisition from any
cause (other than full payment of all Obligations);

 

(f)            any defense based upon any lack of authority of the officers,
directors, partners, or agents acting or purporting to act on behalf of Tenant,
GHz Acquisition or any principal of Tenant or GHz Acquisition or any defect in
the formation of Tenant or GHz Acquisition or any principal of Tenant or GHz
Acquisition;

 

--------------------------------------------------------------------------------

 

(g)           any defense based on Landlord’s failure at any time to require
strict performance by Tenant or GHz Acquisition of any term, condition or
covenant of the Lease or by Guarantor of this Guaranty, and Guarantor agrees
that such failure shall not waive, alter or diminish any right of Landlord
thereafter to demand strict compliance and performance therewith;

 

(h)           any defense based on a modification or amendment to the Lease
agreed to by Landlord and GHz Acquisition which changes the scope of Guarantor’s
risks hereunder;

 

(i)            any defense based on Landlord’s election of any remedy against
Guarantor, Tenant, GHz Acquisition or any other guarantor or other person or
some or all of them, or any defense based on the order in which Landlord
enforces its remedies; and

 

(j)            any defense based upon Landlord’s failure to disclose to
Guarantor any information concerning the financial condition of Ten ant or GHz
Acquisition or any other circumstances bearing on the ability of Tenant or GHz
Acquisition to pay or perform the Obligations.

 

5.             Subrogation. Guarantor shall not exercise any rights it may
acquire by reason of any payment made hereunder, whether by way of subrogation,
reimbursement or otherwise, until (i) the prior payment, in full and in cash, of
all Obligations and (ii) termination or expiration of the Lease. Any amount paid
to Guarantor by or on behalf of Tenant or GHz Acquisition on account of any
payment made by Guarantor hereunder prior to the payment in full of all
Obligations and termination or expiration of the Lease shall be held in trust
for the benefit of Landlord. So long as any Obligations remain outstanding or
the Lease remains in existence, Guarantor shall refrain from taking any action
or commencing any proceeding or otherwise, to recover any amounts in respect of
payments made to Landlord under this Guaranty.

 

6.             Subordination. Guarantor does hereby subordinate all existing or
future indebtedness of Tenant and GHz Acquisition to Guarantor to the
Obligations owed to Landlord under the Lease and this Guaranty.

 

7.             Independent Liability. The obligations of Guarantor hereunder
shall be in addition to, and shall not limit or in any way affect, the
obligations of Ten ant and GHz Acquisition under the Lease. This Guaranty may be
enforced by Landlord without the necessity at any time of having to proceed
against the Tenant and GHz Acquisition or to pursue any other remedy or enforce
any other right. Nothing contained herein shall prevent Landlord from exercising
any other rights available to it under the Lease or otherwise. The exercise of
any of the aforesaid rights shall not constitute a discharge of Guarantor’s
obligations hereunder, it being the purpose and intent of Guarantor that
Guarantor’s obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither Guarantor’s obligations
under this Guaranty nor any remedy for the enforcement thereof shall be
impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release, or limitation of the liability of Ten
ant or GHz Acquisition or by reason of the bankruptcy or insolvency of Ten ant
Or GHz Acquisition.

 

8.             Guarantor’s Acknowledgment. Guarantor acknowledges that Landlord
would not consent to the Assignment Agreement but for this Guaranty and that
this Guaranty is a material inducement to Landlord consent to the Assignment
Agreement.

 

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9.             Term. This Guaranty is irrevocable by Guarantor. It is a
continuing guaranty and shall terminate only upon the full satisfaction of the
Obligations and termination or expiration of the Lease, as such Lease term may
be extended. With respect to any Obligation of Tenant and GHz Acquisition that
survives expiration or termination of the term of the Lease, as may be extended,
Guarantor’s liability hereunder as to such Obligation likewise shall survive and
continue co-extensively. If, notwithstanding the foregoing, Guarantor shall have
any nonwaivable right under applicable law or otherwise to terminate or revoke
this Guaranty, Guarantor agrees that such termination or revocation shall not be
effective until written notice of such termination or revocation is received by
Landlord. Such notice shall not affect the right and power of Landlord to
enforce rights arising prior to receipt thereof.

 

10.           Bankruptcy of Tenant and GHz Acquisition. In any bankruptcy or
other proceeding in which the filing of claims is required by law, Guarantor
shall file all claims which Guarantor may have against Tenant or GHz Acquisition
relating to any indebtedness of Tenant or GHz Acquisition to Guarantor and shall
assign to Landlord all rights of Guarantor thereunder. If Guarantor does not
file any such claim, Landlord, as attorney-in-fact for Guarantor, is hereby
authorized to do so in the name of the Guarantor, or, in Landlord’s discretion,
to assign the claim to a nominee and to cause a proof of claim to be filed in
the name of such nominee. The foregoing power of attorney is coupled with an
interest and cannot be revoked. Landlord or its nominee shall have the right, in
its reasonable discretion, to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is entitled
to take. In all such cases, whether in administration, bankruptcy or otherwise,
the person(s) authorized to pay such claim shall pay to Landlord the amount
payable on such claim, and, to the full extent necessary for that purpose,
Guarantor hereby assigns to Landlord all of Guarantor’s rights to any such
payments or distributions; provided however, that Guarantor’s obligations
hereunder shall not be satisfied except to the extent that Landlord receives
cash by reason of such payment or distribution. If Landlord receives anything
hereunder other than cash, the same shall be held as collateral for amounts due
under this Guaranty. Further. notwithstanding any termination of the Guaranty or
Guarantor’s obligations hereunder, the liability of Guarantor hereunder shall be
reinstated and revived, and the rights of Landlord shall continue, with respect
to any amount at any time paid by Tenant or GHz Acquisition on account of the
Lease which Landlord shall be required to restore or return upon the bankruptcy,
insolvency, or reorganization of Tenant or GHz Acquisition, all as though such
amount had not been paid.

 

11.           Costs and Expenses: Attorney’s Fees. Guarantor agrees to pay
Landlord’s reasonable out-of-pocket costs and expenses, including but not
limited to legal fees and disbursements, incurred in any effort to collect or
enforce any of the Obligations or this Guaranty. Without limiting the provisions
of the preceding sentence, in the event of any action or proceeding at law or
equity arising nom or based upon this Guaranty, the prevailing party shall be
entitled to recover nom the other reasonable attorney’s fees and costs. If
Landlord, without fault on Landlord’s part, be made a party to any litigation or
proceeding instituted by or against Guarantor, Guarantor shall pay to Landlord
all costs and expenses incurred by Landlord, including attorney’s fees and
costs.

 

12.           Notices. Unless otherwise provided herein, all notices or demands
by any party relating to this Guaranty shall be in writing, and shall be
sufficiently served by personal delivery, or by delivery by nationally
recognized overnight courier which maintains records of delivery (such as
Federal Express), or by depositing the same in the United States Mail, Certified
and Return Receipt Requested, postage prepaid, and addressed to the addresses
set forth below:

 

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To Landlord at:

 

3000 Oakmead Village Drive, Ltd.

 

 

700 Emerson Street

 

 

Palo Alto, California 94301

 

 

Attn: Mark Gates

 

 

 

To Guarantor at:

 

Advanced Power Technology, Inc.

 

 

405 S. W. Columbia Street

 

 

Bend, Oregon 97702

 

 

Attn: Patrick Sireta

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

 

13.           Assignment: Binding Effect. Guarantor may not assign this Guaranty
without the prior written consent of Landlord, in Landlord’s absolute
discretion. Landlord may assign this Guaranty only in conjunction with its
assignment of the Lease; any such assignment shall not require the consent of
Guarantor, Tenant or GHz Acquisition. This Guaranty shall be binding upon
Guarantor, their successors, heirs, administrators, executors, legal
representatives, and permitted assigns, and shall inure to the benefit of
Landlord and its successors, transferees and assigns. Each person or entity
comprising the Guarantor shall be jointly and severally liable under this
Guaranty.

 

14.           Death of Guarantor. In the event of the death of any Guarantor,
the obligation of the estate of the deceased Guarantor with respect to the
Obligations shall continue in full force and effect.

 

15.           Remedies. No failure on the part of Landlord to exercise, no delay
in exercising and no course of dealing with respect to any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof Or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law or equity.

 

16.           Guarantor’s Default. Landlord may declare the Guarantor in default
under this Guaranty if the Guarantor fails to perform any obligation under this
Guaranty, becomes insolvent, or becomes the subject of any bankruptcy,
insolvency, arrangement, reorganization, or other debtor-relief proceeding under
any federal or state law, whether now existing or hereafter enacted.

 

17.           Miscellaneous. The invalidity or unenforceability in whole or in
part of anyone or more provisions of this Guaranty shall not affect the balance
of such provision or any other provisions. This Guaranty shall be governed by
California law without regard to its conflicts of laws principles, and may be
amended only by a written instrument executed by Guarantor and Landlord. This
Guaranty contains the entire agreement of Guarantor with Landlord covering the
subject matter hereof, and no representation, condition, understanding or
promise shall be enforceable with respect to this Guaranty unless it is
expressly contained herein.

 

WE, THE UNDERSIGNED AS “GUARANTOR,” ACKNOWLEDGE THAT WE WERE AFFORDED THE
OPPORTUNITY TO READ THIS DOCUMENT CAREFULLY AND REVIEW IT WITH AN ATTORNEY OF
OUR CHOICE BEFORE SIGNING BELOW, AND THAT WE UNDERSTOOD THE MEANING AND EFFECT
OF THIS DOCUMENT BEFORE SIGNING BELOW.

 

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IN WITNESS WHEREOF, this Guaranty has been duly executed by the undersigned as
of the date first written above.

 

 

GUARANTOR:

 

ADVANCED POWER TECHNOLOGY, INC.

 

 

By:

 

 

 

Print Name:

 

 

 

Its:

 

 

 

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FIFTH AMENDMENT TO LEASE

 

THIS FIFTH AMENDMENT TO LEASE (this “Amendment’”) dated as of this 1st day of
March, 2003 (the “Effective Date”), is by and between 3000 OAKMEAD VILLAGE
DRIVE. LTD., as landlord (“Landlord”), and ADVANCED POWER TECHNOLOGY RF, INC.,
as tenant (“Tenant”).

 

RECITALS

 

A.            Landlord and Tenant’s predecessor-in-interest, GHz Technology,
Inc., entered into that certain Lease dated as of June 17, 1991, as amended by
Amendment to Lease dated July 29, 1993, by Second Amendment to Lease dated July
5, 2000, by Third Amendment to Lease dated September 26, 2000 and by Fourth
Amendment to Lease dated March 29, 2002 (collectively, the “Lease”), pursuant to
which GHz Technology, Inc. leased certain premises (the “Premises”) commonly
known as APN #216-48-025 located at 3000 Oakmead Village Drive, Santa Clara,
California.

 

B.            GHz Technology, Inc. assigned all of its rights, interest and
obligations under the Lease to Tenant (which was formerly known as GHz
Acquisition, Inc.) by that certain Assignment and Assumption Agreement dated
March 29, 2002 which Landlord consented to in that certain Consent to Assignment
and Assumption Agreement dated March 29, 2002.

 

C.            By that certain Unconditional Guaranty of Lease dated March 29,
2002 (the “Guaranty”), Advanced Power Technology, Inc. guaranteed the due,
punctual, and full payment of all Base Rent and Additional Rent payable by
Tenant pursuant to the terms of the Lease.

 

D.            Landlord and Tenant now desire to modify the Lease upon the terms
and conditions hereinafter provided.

 

NOW, THEREFORE, in consideration of the covenants set forth in this Amendment
and other valuable consideration, the receipt and adequacy of which is hereby
acknowledged, Landlord and Tenant hereby agree to amend the Lease as follows:

 

AGREEMENT

 

1.             Term.  The expiration of the initial term of the Lease is hereby
extended from July 31, 2006 until February 28, 2011.

 

2.             Option to Renew. Tenant shall have the option to extend the Lease
for one (1) additional period of five (5) years beyond the end of the initial
term on the same terms, conditions, covenants and conditions as are provided in
Paragraph 44 of the Lease, as amended by Paragraph 3 of the Second Amendment to
Lease, except that the initial Base Rent during the Option Period (as defined in
the Lease) shall be one hundred (100%) percent of the then fair market rental
value of the Premises (as provided in Subparagraph (B)(iii) of the Paragraph 44
of the Lease) and then adjusted annually thereafter in accordance with
Subparagraph C of Paragraph 44 of the Lease.

 

3.             Base Rent. The following shall be deleted from Subparagraph (B)
of Paragraph 3 of

 

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the Lease, as amended by Paragraph 2 of the Second Amendment to Lease,

 

Year 12 - $63,927.00 per month

Year 13 - $66,488.00 “           “

Year 14 - $69,147.00 “           “

Year 15 - $71,905.00 “           “

 

and replaced with the following:

 

“8/1/02 - 2/28/03

 

$63,927.00 per month

3/1/03 - 2/28/04

 

$41,774.45 per month

3/1104 - 2/28/05

 

$42,448.19 per month

3/1/05 - 2/28/06

 

$43,142.15 per month

3/1/06 - 2/28/07

 

$43,856.92 per month

3/1/07 - 2/28/08

 

$44,593.13 per month

3/1/08 - 2/28/09

 

$45,351.43 per month

3/1/09 - 2/28/10

 

$46,132.48 per month

3/1/10 - 2/28/11

 

$46,936.96 per month.”

 

4.             Condition Precedent. The effectiveness of this Amendment shall be
strictly conditioned upon Advanced Power Technology, Inc. reaffirming the terms
of the Guaranty in the form attached hereto as Exhibit “A”. If Advanced Power
Technology, lnc. fails to reaffirm the terms of the Guaranty on or before March
31, 2003, then this Amendment shall be null and void.

 

5.             Ratification. Except as modified hereby, the Lease is hereby
ratified and affirmed by Landlord and Tenant and remains in full force and
effect.

 

6.             Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed one and the same instrument.

 

7.             Brokers. Landlord and Tenant each represent and warrant to the
other that they have had no dealings with any real estate broker, agent or
finder in connection with the negotiation or execution of this Amendment. Each
party hereto shall indemnify and hold harmless the other party from any claims,
inc]uc1ing reasonable attorney’s fees, by a broker, agent or finder for any
leasing commission which may be claimed as a result of the actions of the
indemnifying party.

 

8.             Defined Terms. Except as expressly set forth herein to the
contrary, all defined terms used in the Amendment shall have the same meanings
as attributed to such terms in the Lease.

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be
executed as of the day and year first above written.

 

“LANDLORD”

 

3000 OAKMEAD VILLAGE DRIVE, LTD.

 

By:

 

 

 

Print Name:

 

 

 

Its:

 

 

 

 

 

“TENANT”

 

ADVANCED POWER TECHNOLOGY
RF, INC., formerly known as GHz Acquisition, Inc.

 

By:

 

 

Patrick Sireta

President & Chief Executive Officer

 

 

By:

 

 

Charles C. Leader

Vice President

 

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EXHIBIT A

 

REAFFIRMATION OF UNCONDITIONAL GUARANTY OF LEASE

 

The undersigned (“Guarantor”) hereby consents to the terms, conditions and
provisions of the Fifth Amendment to Lease dated as of March 1, 2003 between
3000 Oakmead Village Drive, Ltd., as landlord, and Advanced Power Technology RF,
Inc., formerly known as GHz Acquisition, Inc., as tenant. Guarantor hereby
ratifies and reaffirms the full force and effectiveness of the Unconditional
Guaranty of Lease dated March 29, 2002 (the “Guaranty”) in connection with the
Lease dated June 17, 1991, as amended, as well as an acknowledgment that the
obligations under the Guaranty are separate and distinct from those of Advanced
Power Technology RF, Inc.

 

 

Dated this 1st day of March, 2003.

 

 

ADVANCED POWER TECHNOLOGY, INC.

 

 

By:

 

 

 

Print Name:

 

 

 

Its:

 

 

 

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