Exhibit 10.1

Basic Lease Information

 

715-735 SYCAMORE DRIVE

 

The following is a summary of lease information that is referred to in the Lease
(as defined below).  To the extent there is any conflict between the provisions
of this summary and any more specific provision of the Lease, such more specific
provision shall control.

 

LEASE EFFECTIVE DATE:

 

March 16, 2012

 

 

 

LANDLORD:

 

SYCAMORE DRIVE HOLDINGS, LLC,
a California limited liability company

 

 

 

ADDRESS OF LANDLORD:

 

c/o Nearon Enterprises
500 La Gonda Way
Suite 210
Danville, California 94526

 

With a copy to:
Orchard Commercial
2055 Laurelwood Road, Suite 130
Santa Clara, CA 95054

 

 

 

TENANT:

 

OMNICELL, INC.,
a Delaware corporation

 

 

 

ADDRESS OF TENANT:

 

At the Premises
Attn: General Counsel

 

With a copy to:
Cooley LLP
101 California Street, 5th Floor
San Francisco, CA 94111
Attn: Anna B. Pope

 

 

 

PREMISES:

 

 

 

Premises

 

Rentable
Square Footage

 

 

 

 

 

735 Sycamore Drive
Milpitas, California 95035
as identified on Exhibit A attached hereto

 

46,307 r.s.f.

 

BUILDING:

 

715-735 Sycamore Drive
Milpitas, California 95035

 

(Total Building: 90,254 r.s.f.; Total Project: 197,604 r.s.f.)

 

 

 

LEASE TERM:

 

Five (5) years, subject to extension in accordance with the Extension Option
contained in the Rider No. 1 to Lease for one (1), five (5) year term

 

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POSSESSION DATE:

 

The date that Landlord delivers possession of the Premises to Tenant with
Landlord’s Work (as defined in Exhibit D attached hereto) Substantially Complete
(as defined in Paragraph 4(c) below), provided, however, for each day of Tenant
Delay (as defined in Exhibit D attached hereto), the Possession Date shall be
one (1) day earlier than the date that Landlord actually delivers possession of
the Premises to Tenant with Landlord’s Work Substantially Complete.

 

 

 

COMMENCEMENT DATE:

 

The earlier of (i) the date that is the later of (1) One Hundred Fifty (150)
days after the Possession Date, and (2) October 1, 2012, and (ii) the date that
Tenant commences business operations at the Premises

 

 

 

EXPIRATION DATE:

 

The date that immediately precedes the fifth (5th ) annual anniversary of the
Commencement Date

 

 

 

RENT:

 

(i)  The Commencement Date through the date that immediately precedes the first
annual anniversary of the Commencement Date (the “1 Year Anniversary”)

 

$28,479.00 (per month);
$341,748.00 (per year);

 

 

 

 

 

 

 

(ii)  For the period commencing on the 1 Year Anniversary through the day
immediately preceding the second annual anniversary of the Commencement Date
occurs (the “2 Year Anniversary”);

 

$29,333.37 (per month);
$352,000.44 (per year);

 

 

 

 

 

 

 

(iii)  For the period commencing on the 2 Year Anniversary through the day
immediately preceding the third annual anniversary of the Commencement Date (the
“3 Year Anniversary”);

 

$30,213.37 (per month);
$362,560.44 (per year);

 

 

 

 

 

 

 

(iv)  For the period commencing on the 3 Year Anniversary through the day
immediately preceding the fourth annual anniversary of the Commencement Date
(the “4 Year Anniversary”);

 

$31,119.77 (per month);
$373,437.24 (per year);

 

 

 

 

 

 

 

(v)  For the period commencing on the 4 Year Anniversary through the Expiration
Date.

 

$32,053.37 (per month);
$384,640.44 (per year);

 

 

 

PERMITTED USE:

 

Distribution, manufacturing, light assembly, general executive and
administrative office and other legally permitted uses, subject to Paragraph 6
of the Lease

 

 

 

SECURITY DEPOSIT:

 

$32,053.44

 

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TENANT’S PERCENTAGE SHARE:

 

Fifty-One and Three-Tenths Percent (51.3%) (with respect to Operating Expenses
[as such term is defined in Exhibit B hereto] allocated by Landlord on a
Building specific basis) and Twenty-Three and Four-Tenths Percent (23.4%) (with
respect to Operating Expenses and Property Taxes [as such term is defined in
Exhibit B hereto] allocated by Landlord on a Development wide basis).

 

 

 

UNRESERVED PARKING SPACES

 

Tenant shall have access to Eighty-Seven (87) unreserved parking spaces.

 

 

 

LANDLORD’S BROKER:

 

CBRE

 

 

 

TENANT’S BROKER:

 

Colliers International

 

 

 

ATTACHMENTS:

 

Exhibit A

 

—

 

Floor Plan

 

 

Exhibit B

 

—

 

Operating Expenses and Property Taxes

 

 

Exhibit C

 

—

 

Rules And Regulations

 

 

Exhibit D

 

—

 

Landlord’s Work

 

 

Exhibit E

 

—

 

Tenant Improvement Work Letter

 

 

Exhibit F

 

—

 

Subordination, Non-Disturbance and Attornment Agreement

 

 

Exhibit G

 

—

 

Commencement Letter

 

 

Exhibit H

 

—

 

Possession Confirmation Letter

 

 

Rider No. 1

 

—

 

Extension Option

 

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TABLE OF CONTENTS

 

1.

LEASE EFFECTIVE DATE AND PARTIES

1

2.

PREMISES, COMMON AREA AND PARKING

1

3.

TERM

2

4.

DELIVERY OF POSSESSION

2

5.

RENT

3

6.

USE

4

7.

OPERATING EXPENSES AND TAXES

6

8.

RULES AND REGULATIONS

7

9.

ASSIGNMENT AND SUBLETTING

7

10.

LIABILITY OF LANDLORD

9

11.

MAINTENANCE AND REPAIRS

10

12.

SERVICES

11

13.

ALTERATIONS

11

14.

INSURANCE, INDEMNIFICATION AND EXCULPATION

13

15.

DESTRUCTION

15

16.

ENTRY

15

17.

EVENTS OF DEFAULT

16

18.

TERMINATION UPON DEFAULT

17

19.

CONTINUATION AFTER DEFAULT

17

20.

OTHER RELIEF

17

21.

LANDLORD’S RIGHT TO CURE DEFAULT

17

22.

ATTORNEY’S FEES

18

23.

NO WAIVER

18

24.

NOTICES

18

25.

EMINENT DOMAIN

18

26.

LATE CHARGE/RETURNED CHECKS

19

27.

TENANT STATUS AND COMPLIANCE

19

28.

SIGNAGE

20

29.

ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS

20

30.

SURRENDER

20

31.

HOLDING OVER

21

32.

FUTURE CONSTRUCTION

21

33.

SECURITY DEPOSIT

21

34.

SUBORDINATION

22

35.

INABILITY TO PERFORM

22

36.

CORPORATE AUTHORITY

23

37.

MISCELLANEOUS

23

38.

BROKER

24

 

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1.                                      LEASE EFFECTIVE DATE AND PARTIES.

 

THIS LEASE (this “Lease”) is dated and executed as of the Lease Effective Date
provided in the Basic Lease Information.  PRIOR TO THE DATE THIS LEASE IS
EXECUTED BY LANDLORD, THE TERMS OF THIS LEASE SHALL NOT BE BINDING ON LANDLORD
AND, UNTIL SIGNED BY LANDLORD, THIS DOCUMENT SHALL BE CONSTRUED ONLY AS AN OFFER
BY TENANT TO LEASE THE PREMISES.  UNTIL SIGNED BY BOTH LANDLORD AND TENANT,
NEITHER PARTY SHALL HAVE ANY OBLIGATION OF ANY KIND TO ANY OF THE PARTIES
INVOLVED IN MAKING THIS OFFER TO LEASE THE PREMISES.

 

This Lease is made and entered into as of the Lease Effective Date by and
between SYCAMORE DRIVE HOLDINGS, LLC, a California limited liability company
(“Landlord”) and OMNICELL, INC., a Delaware corporation (“Tenant”).

 

2.                                      PREMISES, COMMON AREA AND PARKING.

 

(a)                                 Landlord does hereby lease to Tenant, and
Tenant does hereby lease from Landlord, for the term and subject to the
covenants and conditions hereinafter set forth, to all of which Landlord and
Tenant agree, those certain premises (“Premises”) identified in the Basic Lease
Information and approximately shown on Exhibit A attached to this Lease and
hereby made a part hereof, and comprising a portion of that certain building
owned by Landlord (“Building”) located at 715-735 Sycamore Drive, Milpitas,
California.  The Building and the Common Areas (as that term is hereinafter
defined), and the land upon which the same are located, as included from time to
time by Landlord, are herein collectively referred to as the “Development”. 
Tenant shall have the right to use, in common with others, the Common Areas that
are designated by Landlord in its sole discretion for common use by occupants of
the Development as an incident to and for purposes directly relating to its
occupancy of the Premises for the Permitted Use identified in the Basic Lease
Information.  The term “Common Areas” is defined as all areas and facilities
outside the Building and/or within the exterior boundary line of the Development
that are provided and designated by Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and of other occupants of the Development,
and their respective employees, suppliers, shippers, customers, contractors and
invitees, including but not limited to parking areas (to the extent not
otherwise restricted by this Lease), loading and unloading areas, trash areas,
roadways, sidewalks, walkways, ramps, driveways and landscaped areas.  Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas.  The exterior walls of the Building, and any space in the Premises
used for structural columns, pipes, conduits, ducts, plumbing and waste lines,
electric or other utilities, or other Building facilities, and the use thereof
and access thereto through the Premises for the purposes of operation,
maintenance and repairs, are reserved to Landlord.

 

(b)                                 The rentable square footage of the Premises
has been determined in accordance with BOMA’s Standard Method of Measuring Floor
Area in Industrial Buildings (BOMA 2004), utilizing the Drip Line Methodology as
modified by Landlord for uniform use at the Building (the “BOMA Standard”). 
Tenant’s Percentage Share has been determined by taking the quotient arrived at
by dividing the number of rentable square feet of the Premises provided in the
Basic Lease Information by the number of the rentable square foot of the
Building (with respect to Operating Expenses allocated by Landlord on a Building
specific basis) and the Development (with respect to Operating Expenses and
Property Taxes allocated by Landlord on a Development wide basis), as the case
may be, in each case determined in accordance with the BOMA Standard, and
multiplying said quotient by 100.  The square footage figures contained in this
Lease are final and binding on the parties, and shall not be subject to
remeasurement except in the case of a change in the physical size of the
Premises, the Building or the Development.

 

(c)                                  So long as no uncured Event of Default has
been declared hereunder and subject to the Project Rules (as defined in
Paragraph 8), Tenant shall be entitled to use the number of Unreserved Parking
Spaces specified in the Basic Lease Information on an unreserved basis located
in those portions of the Common Areas designated from time to time by Landlord
for parking (the “Parking Facility”) at no charge.  Tenant shall not use more
parking spaces than said number.  Said parking spaces shall be used for parking
by vehicles no larger than full-size passenger automobiles (including pick-up
trucks with campers), herein called “Permitted Size Vehicles.”  Vehicles other
than Permitted Size Vehicles shall be parked and loaded or unloaded as directed
by Landlord in the Project Rules.

 

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Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant’s employees, suppliers, shippers, customers, contractors or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities.  If Tenant permits or allows any of the
prohibited activities described in this Lease or in any Project Rules then in
effect, Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable upon
demand by Landlord.  Tenant acknowledges that Landlord does not provide any
policing or reconnaissance services associated with the Parking Facility and
that Tenant is delegated the sole responsibility for employee safety for access
to and from the Premises and the parking of motor vehicles in the Parking
Facility.  Neither Landlord nor any of Landlord’s employees, agents or
representatives shall have any liability or responsibility to Tenant or any
other party parking in the Parking Facility for any loss or damage that may be
occasioned by or may arise out of such parking, including, without limitation,
loss of property or damage to person or property from any cause whatsoever,
other than to the extent arising from the gross negligence or willful misconduct
of Landlord, its agents, employees and/or representatives.  Tenant, in
consideration of the parking privileges hereby conferred on Tenant waives, any
and all liabilities against Landlord and any of Landlord’s employees, agents and
representatives, by reason of occurrences in the Parking Facility and the
driveway access and entrances thereto, other than to the extent arising from the
gross negligence or willful misconduct of Landlord, its agents, employees and/or
representatives.

 

3.                                      TERM.

 

The term of this Lease (“Term”) shall be for the period identified in the Basic
Lease Information.  The Term shall commence on the Commencement Date and shall
end on the Expiration Date.  Landlord and Tenant shall execute a written
statement in the form attached hereto as Exhibit G (the “Commencement Letter”),
setting forth (i) the Commencement Date and the Expiration Date; and (ii) the
other matters referenced in such Commencement Letter.  The enforceability of
this Lease shall not be affected and the term of this Lease shall commence on
the Commencement Date and end on the Expiration Date whether or not the
Commencement Letter is executed.

 

4.                                      DELIVERY OF POSSESSION.

 

(a)                                 Subject to the terms of this Paragraph 4,
Landlord shall use commercially reasonable efforts (provided that Landlord shall
not be obligated to incur over-time charges) to deliver possession of the
Premises to Tenant, with Landlord’s Work Substantially Complete, on or before
the date that is ninety (90) days after the Lease Effective Date.  Upon
Landlord’s delivery of possession of the Premises to Tenant with Landlord’s Work
Substantially Complete, Landlord and Tenant shall execute a written statement in
the form attached hereto as Exhibit H (the “Possession Confirmation Letter”),
setting forth the Possession Date; and (ii) any other matters referenced in such
Possession Confirmation Letter.  The enforceability of this Lease shall not be
affected and possession of the Premises shall have been delivered to Tenant on
the Possession Date, whether or not the Possession Confirmation Letter is
executed.  Notwithstanding anything to the contrary contained in this Lease, if
Landlord has not delivered the Premises to Tenant, with Landlord’s Work
Substantially Complete, on or before the date that is one hundred eighty (180)
days after the Lease Effective Date (subject to a day for day delay in such date
for each day of Tenant Delay (as defined in Exhibit D attached hereto)), then,
until the occurrence of the Possession Date, Tenant shall have the right to
terminate this Lease by written notice to Landlord, and upon such termination,
Landlord shall return all sums theretofore deposited by Tenant with Landlord,
and neither party shall have any further liability to the other.  On and after
the occurrence of the Possession Date, Tenant’s termination right described in
this Paragraph 4(a) shall be null, void, and irrevocably waived, and any attempt
by Tenant to exercise such right on or after the Possession Date shall have no
force or effect.

 

(b)                                 Landlord shall deliver possession of the
Premises to Tenant, and Tenant shall accept the same, in its “AS IS” condition
(except as provided in Paragraph 4(c) below and Exhibit D hereto), subject to
all recorded matters and governmental regulations, and without any
representations or warranties of any kind, express or implied, including without
limitation, any representation or warranty of present or future condition or
compliance with law, or that the Premises or any portion thereof or any
improvements constructed or installed by Landlord therein are suitable for
Tenant’s use or for the conduct of Tenant’s business.  Tenant agrees that except
as provided in Paragraph 4(c) below and Exhibit D hereto, Landlord has no
obligation and has made no promise to alter, remodel, improve, or repair the
Premises or any part thereof or to repair, bring into compliance with Applicable
Laws, or improve any condition

 

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existing in the Premises as of the Commencement Date.  Any items of personal
property located in any portion of the Premises are delivered without any
representation or warranty from Landlord, either express or implied, of any
kind, including merchantability or suitability for a particular purpose.

 

(c)                                  Landlord shall construct and install in the
Premises Landlord’s Work defined in, and in accordance with, Exhibit D attached
hereto.  Except as expressly provided in this Lease (including the Work Letter),
Tenant’s initial occupancy of the Premises shall constitute Tenant’s
acknowledgment that all Landlord’s Work required under this Lease is
Substantially Complete.  “Substantially Complete” or “Substantial Completion”
means that Landlord has completed Landlord’s Work, subject only to the
performance of minor punchlist items, the completion of which items is not
required for Tenant to perform the Tenant Improvements (as defined in Exhibit E
hereto).  Landlord’s Work includes causing the existing loading doors and dock
levelers serving the Premises and the existing Building Systems (as defined in
Paragraph 11 below) serving the Premises (collectively, the “Premises Systems”)
to be in good working condition.  For a period of one hundred eighty (180) days
after the Possession Date, without charge to Tenant, Landlord shall replace and
repair any defect in construction of the Premises Systems or Landlord’s Work
upon written notice from Tenant.  Thereafter, Landlord shall have no liability
or responsibility with respect to any defect in Landlord’s Work or the Premises
Systems, except as expressly set forth in Paragraphs 11 and 15 below.

 

(d)                                 Subject to the terms of Paragraph 4(c) above
and Exhibit D hereto, by its acceptance of possession of the Premises, Tenant
shall be deemed conclusively to have accepted the Premises and to have
acknowledged that the Premises and the Building were at such time of delivery of
possession in good and satisfactory order, condition and repair as required by
this Lease.  At Tenant’s sole cost and expense, Tenant shall construct the
Tenant Improvements in the Premises in accordance with Tenant Improvement Work
Letter attached hereto as Exhibit E.

 

(e)                                  So long as Tenant has delivered to Landlord
evidence of insurance satisfying the requirements of this Lease, and subject to
the terms and conditions of this Paragraph 4(e), Landlord shall grant Tenant
access to the Premises for the period that commences on the date that Landlord’s
Work is Substantially Complete (or such earlier date as the parties may mutually
agree) and ends on the date that immediately precedes the Commencement Date (the
“Early Occupancy Period”) for the purpose of enabling Tenant and its agents,
employees and contractors to install in the Premises the Tenant Improvements,
data and telecommunications wiring, equipment, furniture and fixtures, and
Tenant’s personal property, except that Tenant shall not conduct business from
within the Premises until the Commencement Date.  All of the terms of this Lease
shall be binding on and apply to Tenant during the Early Occupancy Period,
except that Tenant’s obligation to pay Base Rent (as defined in Paragraph
5(a)(i) below) shall commence on the Commencement Date.

 

5.                                      RENT.

 

(a)                                 Tenant shall pay to Landlord the following
amounts as rent for the Premises:

 

(i)            During the Term, commencing on the Commencement Date specified in
the Basic Lease Information, Tenant shall pay to Landlord, as base monthly rent,
the respective amounts of monthly rent specified in the Basic Lease Information
(the “Base Rent”).  If the Commencement Date should occur on a day other than
the first day of a calendar month, or if the Expiration Date should occur on a
day other than the last day of a calendar month, then the Base Rent for such
fractional month shall be prorated upon a daily basis based upon a thirty (30)
day month.  Beginning on the Commencement Date, Base Rent is due and payable
monthly, in advance, on the first day of each calendar month, except that Base
Rent for the first full calendar month of the Term for which Base Rent is
payable (the “First Rent Month”) shall be paid upon execution of this Lease.  If
the Commencement Date occurs on a day other than the first day of a calendar
month, Base Rent for the period from the Commencement Date through the end of
said calendar month shall be due and payable on the Commencement Date, and the
Base Rent payable upon execution of this Lease shall be credited against the
Base Rent due for the First Rent Month as of the first day of such month.

 

(ii)           Subject to the terms of Paragraph 7 hereof, during each calendar
year or part thereof during the Term, Tenant shall pay to Landlord, as
additional monthly rent, Tenant’s Percentage Share, as specified in the Basic
Lease Information, of all Operating Expenses and all Property Taxes paid or
incurred by Landlord in such calendar year or part thereof.  Payments on account
of Tenant’s Percentage Share of Operating Expenses and of

 

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Property Taxes, determined in accordance with Paragraph 7, are due and payable
monthly together with the payment of Base Rent, beginning on the Commencement
Date. “Tenant’s Percentage Share” shall mean the percentage set forth in the
Basic Lease Information.

 

(iii)          Throughout the Term, Tenant shall pay, as additional rent, all
other amounts of money and charges required to be paid by Tenant under this
Lease, whether or not such amounts of money or charges are designated
“additional rent.”  As used in this Lease, “rent” shall mean and include all
Base Rent, additional monthly rent as described in Paragraph 5(a)(ii) above, and
any other additional rent payable by Tenant in accordance with this Lease.

 

(b)                                 Rent shall be paid to Landlord in lawful
money of the United States of America at the following address: 2055 Laurelwood
Road, Suite 130, Santa Clara, CA 95054, Attn: Orchard Commercial, or at such
other place as Landlord may designate in writing in advance, free from all
claims, demands, or set-offs against Landlord of any kind or character
whatsoever.

 

(c)                                  It is the intention of Landlord and Tenant
that Base Rent payable under this Lease shall be net of any Operating Expenses
and Property Taxes, and that, except as expressly provided in this Lease
(including, without limitation, Paragraphs 7, 11 and 15 below), all costs of
maintenance and repair of the Premises, or any portion thereof, and/or services
provided under this Lease (including, without limitation, utilities and other
services furnished to the Premises in accordance with Paragraph 12 of this
Lease), and/or repair and maintenance costs of Building Systems and equipment
servicing the Premises, shall be payable by Tenant as additional rent, or
provided by Landlord to Tenant for the account of, or subject to reimbursement
by, Tenant as additional rent.  If and to the extent any taxes are payable by
Landlord with respect to the rent payable by Tenant under this Lease (excluding
taxes otherwise excluded by the terms of this Lease), Tenant shall pay Landlord
an amount, together with the payment of such rent, equal to the taxes accruing
thereon.

 

6.                                      USE.

 

(a)                                 The Premises shall be used for the purposes
identified in the Basic Lease Information (except as limited by Paragraph 6(b)
and (c) below), and, subject to the terms of this Lease, uses incidental
thereto, and shall be used for no other purpose without the prior written
consent of Landlord, which consent, provided the same is consistent with the
character of the Development, shall not be unreasonably withheld, conditioned or
delayed, but shall otherwise be in the sole discretion of Landlord.  Subject to
compliance with the terms of this Lease and the Project Rules, Tenant shall have
access to the Premises seven days per week, on a 24-hour per day basis. 
Notwithstanding anything in the foregoing to the contrary, in the case of public
unrest, a general state of emergency or other circumstances rendering such
action advisable in Landlord’s opinion, Landlord reserves the right to prevent
access to the Building during the continuance of the same by such action as
Landlord may deem appropriate, including closing doors and such action shall not
relieve or result in any abatement of Tenant of any obligations under this
Lease.  Tenant acknowledges that Landlord does not provide any access control or
access monitoring or screening services at the Development, and that
responsibility for developing access control and employee and visitor screening
procedures and policies with respect to the Premises is delegated solely to
Tenant.

 

(b)                                 Tenant shall not operate any equipment
within the Premises that will (i) cause vibration of any structural elements of
the Building or generate noise or sounds that can be heard outside of the
exterior demising walls of the Premises, (ii) materially damage the Building or
the Common Area, (iii) overload existing electrical systems or other mechanical
equipment servicing the Building, (iv) impair the efficient operation of the
sprinkler system or the heating, ventilating or air conditioning (“HVAC”)
equipment within or servicing the Building, or (v) damage, overload or corrode
the sanitary sewer system.

 

(c)                                  As further consideration to Landlord to
enter into this Lease, Tenant covenants and agrees as follows:

 

(i)                                     Except as approved by Landlord, Tenant
shall not change the exterior of the Building (which approval may be withheld in
Landlord’s sole discretion), or install any equipment, signs or antennas on or
make any penetrations of the exterior or roof of the Building (which approval
shall not be unreasonably withheld, conditioned or delayed).

 

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(ii)           Tenant shall not commit any waste in or about the Premises.

 

(iii)          Tenant shall not conduct on any portion of the Premises or the
Development any sale of any kind, including any public or private auction, fire
sale, going-out-of-business sale, distress sale or other liquidation sale.

 

(iv)          No materials, supplies, tanks or containers, equipment, finished
products or semi-finished products, raw materials, inoperable vehicles or
articles of any nature shall be stored upon or permitted to remain outside of
the Premises except in fully fenced and screened areas outside the Building
which have been designed for such purpose and have been approved in writing by
Landlord for such use by Tenant.

 

(d)           Tenant shall not use the Premises or permit anything to be done in
or about the Premises or the Building which will in any way conflict with any
present or future law, statute, ordinance, code, rule regulation, requirement,
license, permit, certificate, judgment, decree, order or direction of any
present or future governmental or quasi-governmental authority, agency,
department, board, panel or court, or the provisions of any covenants,
conditions, restrictions, easements, development agreements, mortgages or deeds
of trust, ground leases, rights of way, and other matters or documents recorded
against Landlord’s title (singularly and collectively “Applicable Laws”). 
Tenant shall, at its expense, promptly comply with all Applicable Laws
(including, without limitation, the Federal Americans with Disabilities Act (as
it affects Tenant’s operations within the Premises or as it is triggered by the
Tenant Improvements), and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to
or affecting the condition, use or occupancy of the Premises.  It is the intent
of the parties to allocate to Tenant the cost of compliance of any and all
Applicable Laws, including, without limitation the cost of compliance with any
such Applicable Laws to the extent compliance therewith is triggered by any
Alterations performed by Tenant, regardless of the existing condition of the
Premises, the cost of compliance or the foreseeability of the enactment or
application of the Applicable Laws to the Premises.  Notwithstanding the
foregoing, (i) Tenant shall not be required to make structural changes to the
Premises or modify the outside path of travel to the Building unless they arise
or are required because of or in connection with Tenant’s specific use of the
Premises, or the type of business conducted by Tenant in the Premises, or
Tenant’s Alterations (including any Tenant Improvements), or Tenant’s acts or
omissions, (ii) nor shall Tenant have any responsibility for the costs of
compliance with Applicable Laws relating to Hazardous Substances not introduced
to the Premises by Tenant.  Tenant shall obtain and maintain in effect during
the Term all licenses and permits required for the proper and lawful conduct of
Tenant’s business in the Premises, and shall at all times comply with such
licenses and permits.

 

(e)           Supplementing the provisions of Paragraph 6(d) above, Tenant shall
not use or permit the generation, possession, storage, use, transportation, or
disposal of any Hazardous Substances in, on or from the Premises, other than the
use of any ordinary and customary materials in quantities reasonably required to
be used by Tenant in the normal course of Tenant’s business as permitted under
the terms of Paragraph 6(a) above, and so long as such use is not a Reportable
Use (as hereinafter defined) that has not been approved by Landlord in writing. 
The term “Hazardous Substances” as used in this Lease shall mean any product,
substance, chemical, material or waste whose presence, nature, quantity and/or
intensity of existence, use, manufacture, disposal, transportation, spill,
release or effect, either by itself or in combination with other materials
expected to be on the Premises, is either: (i) potentially injurious to the
public health, safety or welfare, the environment or the Premises, (ii)
regulated or monitored by any federal, state or local governmental or
quasi-governmental authority, agency, department, board, panel or court under
any Applicable Laws, or (iii) a basis for liability of Landlord to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products, by-products or fractions
thereof.  Tenant shall not engage in any activity in, on or about the Premises,
the Building or any other part of the Development which constitutes a Reportable
Use (as hereinafter defined) of Hazardous Substances without the express prior
written consent of Landlord and any such use shall be in compliance in a timely
manner (at Tenant’s sole cost and expense) with all Applicable Laws. 
“Reportable Use” shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with any governmental authority.  Reportable Use shall
also include Tenant being responsible for the presence in, on or about the
Premises, Building or any other part of the Development of a Hazardous Substance
with respect to which any

 

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Applicable Law requires that a notice be given to persons entering or occupying
the Premises, Building or Development or neighboring properties.  If Tenant
knows, or has reasonable cause to believe, that a Hazardous Substance has come
to be located in, on, under or about the Premises, Building or Development,
other than as permitted by the terms of this Paragraph 6(d), Tenant shall
immediately give Landlord written notice thereof, together with a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill, release,
discharge of, or exposure to, such Hazardous Substance including but not limited
to all such documents as may be involved in any Reportable Use involving the
Premises.

 

7.                                      OPERATING EXPENSES AND TAXES.

 

The additional monthly rent payable pursuant to Paragraphs 5(a)(ii) hereof shall
be calculated and paid in accordance with the following procedures:

 

(a)                                 On or before the Commencement Date and the
first day of each subsequent calendar year during the Term, or as soon
thereafter as practicable, Landlord shall give Tenant written notice of
Landlord’s reasonable estimate of the amounts payable by Tenant under Paragraph
5(a)(ii) hereof for the ensuing calendar year.  On or before the first day of
each month during such ensuing calendar year, Tenant shall pay to Landlord
one-twelfth of such estimated amounts.  If such notice is not given for any
calendar year, Tenant shall continue to pay on the basis of the prior year’s
estimate until the month after such notice is given, and subsequent payments by
Tenant shall be based on Landlord’s current estimate, adjusted, as determined by
Landlord, so that the subsequent monthly installments payable by Tenant
hereunder through the end of the calendar year shall reimburse Landlord for all
amounts payable by Tenant under Paragraph 5(a)(ii) hereof.  If at any time it
appears to Landlord that the amounts payable under Paragraph 5(a)(ii) hereof
(including, without limitation, unbilled or underbilled amounts not charged by
Landlord for the period of said calendar year prior to said notice) for the
current calendar year will vary from Landlord’s estimate, Landlord may, by
giving written notice to Tenant, revise Landlord’s estimate for such year, and
subsequent payments by Tenant for such year shall be based on such revised
estimate.

 

(b)                                 Within one hundred twenty (120) days after
the end of each calendar year during the Term of this Lease or as soon after
such date as practicable, Landlord shall give Tenant a written statement of the
amounts payable under Paragraph 5(a)(ii) hereof for the prior calendar year
certified by Landlord.  If such statement shows an amount owing by Tenant that
is less than the estimated payments for such calendar year previously made by
Tenant, provided no Event of Default shall then exist under this Lease or if
this Lease has previously been terminated or the Term expired, no Event of
Default shall have existed under this Lease as of said termination or expiration
date, Landlord shall, at its option, either refund or credit the excess to
Tenant within thirty (30) days of the date of such statement.  If such statement
shows an amount owing by Tenant that is more than the estimated payments for
such calendar year previously made by Tenant, Tenant shall pay the deficiency to
Landlord within thirty (30) days after delivery of such statement and payment of
such deficiency shall be a condition precedent to Tenant’s rights to inspect
Landlord’s books pursuant to Paragraph 7(d) below.  Failure by Landlord to give
any notice or statement to Tenant under this Paragraph 7 shall not waive
Landlord’s right to receive, or Tenant’s obligation to pay, the amounts payable
by Tenant under Paragraph 5(a)(ii) hereof.

 

(c)                                  If the Term ends on a day other than the
last day of a calendar year, the amounts payable by Tenant under Paragraph
5(a)(ii) hereof applicable to the calendar year in which such Term ends shall be
prorated according to the ratio which the number of days in such calendar year
to and including the end of the Term bears to three hundred sixty (360). 
Termination of this Lease shall not affect the obligation of Tenant pursuant to
paragraph (b) hereof to be performed after such termination.

 

(d)                                 So long as no uncured Event of Default has
occurred hereunder, and not more often than once per calendar year, Tenant shall
have the right, at its sole cost and expense, to inspect the books of Landlord
directly relating to Operating Expenses and Property Taxes, after giving a
minimum of fifteen (15) day’s prior written notice to Landlord, within ninety
(90) days of receipt of Landlord’s statement.  Tenant shall conduct its
inspection of Landlord’s books during the business hours of Landlord at
Landlord’s office in the Building or at such other northern California location
as Landlord may reasonably designate, for the purpose of verifying the
information in such statement.  Tenant shall have no right to copy any of
Landlord’s books or remove such books from the location

 

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maintained by Landlord.  Tenant shall use a certified public accountant
reasonably acceptable to Landlord to conduct its inspection of Landlord’s books
and in no event shall Tenant have the right to pay such accountant on a
contingency fee basis.  If Tenant shall have availed itself of its right to
inspect the books and records, and whether or not Tenant disputes the accuracy
of the information set forth in such books and records, Tenant shall
nevertheless pay the amount set forth in Landlord’s statement and continue to
pay the amounts required by the provisions of Paragraph 7(b), pending resolution
of said dispute.  Any default in the payment of such charges by Tenant shall be
deemed an Event of Default (as hereinafter defined) under this Lease.  If
Tenant’s inspection of Landlord’s books reveals that the aggregate amount of
Operating Expenses paid or incurred by Landlord in the calendar year being
reviewed, plus the aggregate amount of Property Taxes paid or incurred by
Landlord in the calendar year being reviewed (collectively, “Reviewed Expenses
and Taxes”) are overstated, then Landlord shall within thirty (30) days after
the completion of the inspection elect to either reimburse or credit Tenant for
any and all overcharges; or if the Reviewed Expenses and Taxes for any calendar
year are not overstated, then Tenant shall within thirty (30) days after the
completion of the inspection pay to Landlord the amount (if any) by which Tenant
has underpaid Tenant’s Share of Operating Expenses and/or Property Taxes for the
calendar year being reviewed.  If such review demonstrates that Landlord has
overcharged Tenant by more than five percent (5%), then Landlord shall reimburse
Tenant for the cost of such review up to the maximum amount of Two Thousand Five
Hundred and No/100 Dollars ($2,500).  If Tenant fails to notify Landlord of
Tenant’s election to inspect Landlord’s books within ninety (90) days of
Tenant’s receipt of Landlord’s statement, Landlord’s statement shall be deemed
final and binding on Tenant and Tenant shall have no further right to inspect
Landlord’s books with respect to the Operating Expenses and Property Taxes for
the calendar year for which the Landlord’s statement pertains.

 

8.                                      RULES AND REGULATIONS.

 

Tenant shall faithfully observe and comply with the Rules and Regulations
attached to this Lease as Exhibit C and made a part hereof, and such other
reasonable rules and regulations as Landlord may from time to time adopt for the
safety, care and cleanliness of the Development, the facilities thereof, or the
preservation of good order therein (collectively, the “Project Rules”). 
Landlord reserves the right from time to time in its sole discretion to make all
reasonable additions and modifications to the Project Rules.  Any additions and
modifications to the Project Rules shall be binding on Tenant when delivered to
Tenant.  Landlord shall not be liable to Tenant for violation of any such
Project Rules, or for the breach of any covenant or condition in any lease, by
any other tenant in the Building.  In the event of any conflict between this
Lease and the Project Rules, the terms of this Lease shall govern.  A waiver by
Landlord of any rule or regulation for any other tenant shall not constitute nor
be deemed a waiver of the rule or regulation for this Tenant.

 

9.                                      ASSIGNMENT AND SUBLETTING.

 

(a)                                 Except in connection with a Permitted
Transfer, Tenant will not assign, mortgage or hypothecate this Lease, or any
interest therein, or permit the use of the Premises by any person or persons
other than the Tenant, or sublet the Premises, or any part thereof, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed.  For purposes of this Paragraph 9, an
assignment shall not include an assignment for security purposes, which shall
only be permitted with the prior consent of Landlord in its sole and absolute
discretion.  Consent to any such assignment or sublease shall not operate as a
waiver of the necessity for consent to any subsequent assignment or sublease,
and the terms of such consent shall be binding upon any person holding by, under
or through Tenant.

 

(b)                                 If Tenant desires to assign its interest in
this Lease or to sublease all or any part of the Premises, Tenant shall notify
Landlord in writing at least thirty (30) days in advance of the proposed
transaction.  This notice shall be accompanied by:  (i) a statement setting
forth the name and business of the proposed assignee or subtenant; (ii) a copy
of the proposed form of assignment or sublease (and any collateral agreements)
setting forth all of the material terms and the financial details of the
sublease or assignment (including, without limitation, the term, the rent and
any security deposit, “key money,” and amounts payable for Tenant’s Property and
the common use of any personnel or equipment); (iii) financial statements and
other information requested by Landlord relating to the proposed assignee or
subtenant; and (iv) any other information concerning the proposed assignment or
sublease which Landlord may reasonably request.

 

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(c)                                  Subject to the terms of this Paragraph 9,
Landlord shall not unreasonably withhold, condition or delay its consent to an
assignment or subletting (a “Transfer”).  Tenant agrees that the withholding of
Landlord’s consent shall be deemed reasonable if all of the following conditions
are not satisfied:

 

(i)            The proposed assignee or subtenant shall use the Premises only
for the Permitted Use provided in the Basic Lease Information, and the business
of the proposed assignee or subtenant is consistent with the other uses and the
standards of the Building, in Landlord’s reasonable judgment.

 

(ii)           The proposed assignee or subtenant is reputable and the proposed
assignee has a net worth not less than the net worth of Tenant on the date of
execution of this Lease, has a credit rating reasonably acceptable to Landlord,
and otherwise has sufficient financial capabilities to perform all of its
obligations under this Lease, in Landlord’s reasonable judgment, and the
proposed assignee or subtenant is not a person (or entity) or an affiliate of
any entity with whom Landlord or an affiliate of Landlord has had adverse
dealings.

 

(iii)          Provided Landlord has comparable space then available for Lease
in the Building, neither the proposed assignee or subtenant nor any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with, the proposed assignee or subtenant is a party (including,
without limitation, an existing occupant of any part of the Building) to whom
Landlord has, during the six (6) month period prior to the delivery of Tenant’s
written notice, marketed space in the Building that would generally fit such
party’s leasing requirements.

 

(iv)          Tenant is not in default and has not committed acts or omissions
which with the running of time or the giving of notice or both would constitute
a default under this Lease.

 

(v)           All of the other terms of this Paragraph 9 are complied with.

 

The conditions described above are not exclusive and shall not limit or prevent
Landlord from considering additional factors in determining if it should
reasonably withhold its consent.

 

(d)                                 Each permitted assignee, other than
Landlord, shall assume and be deemed to have assumed this Lease and shall be and
remain liable jointly and severally with Tenant for the payment of the rent and
for the due performance or satisfaction of all of the provision, covenants,
conditions and agreements herein contained on Tenant’s part to be performed or
satisfied.  Each permitted subtenant shall agree not to cause a breach of the
terms of this Lease and to acknowledge that its rights under its sublease are
subordinant to the terms of this Lease.  Regardless of Landlord’s consent, no
subletting or assignment shall release or alter Tenant’s obligation or primary
liability to pay the rent and perform all other obligations under this Lease. 
No permitted assignment or sublease shall be binding on Landlord unless such
assignee, subtenant or Tenant shall deliver to Landlord a counterpart of such
assignment or sublease which contains a covenant of assumption by the assignee
or subtenant, but the failure or refusal of the assignee or subtenant to execute
such instrument of assumption shall not release or discharge the assignee or
subtenant from its liability as set forth above.

 

(e)                                  If Tenant is a partnership, a transfer of a
controlling interest of any general partner of Tenant or a transfer of a
controlling interest of any person that directly or indirectly controls said
general partner, a withdrawal of one or more general partner(s) from the
partnership, or a change in control of any general partner or of any person that
directly or indirectly controls said general partner, shall be deemed to be an
assignment of this Lease.  If Tenant is currently a partnership (either general
or limited), joint venture, co-tenancy, joint tenancy or an individual, the
conversion of the Tenant entity or person into any type of entity which
possesses the characteristics of limited liability such as, by way of example
only, a corporation, a limited liability company, limited liability partnership,
or limited liability limited partnership, shall be deemed an assignment for
purposes of this Lease.  If Tenant is a corporation, limited partnership or
limited liability company, unless Tenant is a public entity, that is to say, an
entity whose stock or partnership or membership interests are regularly traded
on a national stock exchange, or is regularly traded in the over-the-counter
market and quoted on NASDAQ, any merger, consolidation, or other reorganization
of Tenant, or the sale or other transfer of any of the voting stock or
partnership or membership interests of Tenant or of

 

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any person that directly or indirectly controls Tenant in one or more
transactions that in the aggregate results in a transfer of more than fifty
percent (50%) of the voting and/or equity, partnership or membership interest(s)
in Tenant or such other person, or the sale or other transfer of substantially
all of the assets of Tenant, shall be deemed to be an assignment of this Lease. 
The term “control” as used in this Paragraph 9 shall mean the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting or equity
rights attributable to the interest of the controlled entity or the right or
power to direct or cause the direction of the management of the controlled
entity.  Notwithstanding anything to the contrary contained in this Lease,
Tenant may assign this Lease or sublet the Premises, or any portion thereof,
without Landlord’s consent, to any entity which controls, is controlled by, or
is under common control with Tenant; to any entity which results from a merger
of, reincorporation of, reorganization of, or consolidation with Tenant; to any
entity engaged in a joint venture with Tenant where Tenant controls such entity;
or to any entity which acquires substantially all of the memberships, interests,
stock or assets of Tenant, as a going concern, with respect to the business that
is being conducted in the Premises (hereinafter each a “Permitted Transfer”). 
Tenant shall provide Landlord with written notice of any Permitted Transfer a
minimum of ten (10) days prior to the effective date of such Permitted
Transfer.  In addition, a sale or transfer of the memberships, interests or
stock of Tenant shall be deemed a Permitted Transfer if (1) such sale or
transfer occurs in connection with any bona fide financing or capitalization for
the benefit of Tenant, or (2) Tenant is, or in connection with the proposed
transfer becomes, a publicly traded entity.  Landlord shall have no right to
terminate the Lease in connection with, and shall have no right to any sums or
other economic consideration resulting from, any Permitted Transfer.

 

(f)                                   Landlord shall have the option, to be
exercised by notice to Tenant prior to expiration of such 30-day review period
described in Paragraph 9(b) above (the “Review Period”), and in lieu of
consenting to the assignment or sublease transaction, to (i) terminate this
Lease effective as of the commencement date of the proposed Transfer (provided,
that if the proposed Transfer is a sublease, such termination shall be limited
to the area of the Premises proposed to be sublet) at no cost to Tenant; or (ii)
sublease or take an assignment, as the case may be, from Tenant of the interest,
or any portion thereof, in this Lease or the Premises that Tenant proposes to
Transfer, on the same terms and conditions as stated in the proposed Transfer
agreement, and no such subleasing or assignment to Landlord shall work a
merger.  If Landlord makes an election described under clause (i) or (ii) above
(a “Recapture Right”), then Landlord shall have the right (but not the
obligation) to negotiate directly with the proposed Transferee and to enter into
any agreement with such party on such terms as may be acceptable to Landlord in
its sole discretion, and Tenant waives any and all Claims against Landlord
related thereto.  If Landlord elects to exercise its Recapture Right, Landlord’s
election shall be deemed final and binding on Tenant unless Tenant, within five
(5) business days after Landlord’s Notice, rescinds its original Notice to
Landlord of Tenant’s intent to enter into an assignment or subletting
transaction.  If Landlord does not elect to exercise its Recapture Right,
Landlord’s rights with respect to any such proposed transaction shall be as
otherwise provided under this Paragraph 9, without giving effect to the terms of
this Paragraph 9(f).

 

(g)                                  Any notice by Tenant to Landlord pursuant
to this Paragraph 9 of a proposed assignment or sublease shall be accompanied by
a payment of $1,500 as a non-refundable fee for the processing of Tenant’s
request for Landlord’s consent.  In addition to said fee, Tenant shall reimburse
Landlord for reasonable attorneys’ fees incurred by Landlord in connection with
such review and the preparation of documents in connection therewith.  Tenant
shall pay to Landlord monthly on or before the first (1st) of each month fifty
percent (50%) of the rent or other consideration received from such assignee(s)
or subtenant(s) over and above the concurrent underlying rent payable by Tenant
to Landlord for that portion of the Premises being assigned or sublet, and after
deduction for the amortized portion of the reasonable expenses actually paid by
Tenant to unrelated third parties for brokerage commissions, legal fees, tenant
improvements to the Premises, or design fees incurred as a direct consequence of
the assignment or sublease.  Tenant shall furnish Landlord with a true signed
copy of such assignment(s) or sublease(s) and any supplementary agreements or
amendments thereto, within five (5) days after their respective execution.

 

10.                               LIABILITY OF LANDLORD.

 

It is expressly understood and agreed that the obligations of Landlord under
this Lease shall be binding upon Landlord and its successors and assigns and any
future owner of the Building only with respect to events occurring during its
and their respective ownership of the Building.  In the event of any conveyance
of title to the Development (or any portion thereof in which the Building is
located), then the grantor or transferor shall be relieved of all liability with
respect to Landlord’s obligations to be performed under this Lease after the
date of such

 

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conveyance.  In addition, Tenant agrees to look solely to Landlord’s interest in
the Building for recovery of any judgment against Landlord arising in connection
with this Lease, it being agreed that neither Landlord nor any successor or
assign of Landlord nor any future owner of the Building, nor any partner,
shareholder, or officer of any of the foregoing shall ever be personally liable
for any such judgment.

 

11.                               MAINTENANCE AND REPAIRS

 

(a)                                 Landlord shall, at all times during the Term
of this Lease, at its sole cost and expense (and without reimbursement under
Paragraph 7 hereof) maintain and repair the Building foundation, roof structure
(including membrane, but the costs of repair and maintenance of the membrane
shall be included in Operating Expenses) and other structural elements of the
Building (excluding exterior windows).  In addition, subject to reimbursement as
an item of Operating Expenses to the extent provided in Exhibit B, Landlord
shall, at all times during the Term of this Lease, maintain and repair (which
may include replacement, as reasonably determined by Landlord):

 

(i)            the Common Areas;

 

(ii)           any and all mechanical, plumbing, waste and electrical
installations and facilities and systems serving the Building (collectively,
“Building Systems”) up to the main panel, or demarcation point, terminus or
split-off of any common service lines leading to the Premises;

 

(iii)          surface elements of the Building exterior, including windows,
entrance door, painting and facade, and any loading dock, and shipping and
receiving areas of the Building.

 

As to all of the foregoing in this Paragraph 11(a), Landlord shall keep such
areas, elements and systems in good order and condition, consistent with the
standards of other comparable buildings in the Milpitas, California area. 
Notwithstanding the foregoing, subject to the waiver of subrogation contained in
this Lease, any damage in or to any such areas, elements or systems caused by
Tenant or any agent, officer, employee, contractor, licensee or invitee of
Tenant shall be repaired by Landlord at Tenant’s expense and Tenant shall pay to
Landlord, upon billing by Landlord, as additional rent, the cost of such repairs
incurred by Landlord.

 

(b)           Except as required of Landlord above in Paragraph 11(a), Tenant
shall, at all times during the Term of this Lease and at Tenant’s sole cost and
expense, maintain and repair the Premises and every part thereof and any and all
equipment, fixtures and improvements therein, and keep all of the foregoing
clean and in good order and operating condition, ordinary wear and tear and
damage thereto by fire or other casualty excepted.  Without limiting the
generality of the foregoing, Tenant, at Tenant’s sole cost and expense, shall:

 

(i)            maintain in a clean condition all walls, partitions, floors,
doors, interior windows, and the interior of all exterior windows in the
Premises, and any painting, repairing or replacing of wall coverings, and/or any
Premises improvements that are not deemed a part of the Building structural
elements;

 

(ii)           provide its own janitorial service for the Premises;

 

(iii)          store all refuse and other waste materials outside the Premises
in a location designated by Landlord; and

 

(iv)          maintain in good operating condition and repair all of the
following which are in or exclusively serve the Premises: electrical and
plumbing pipes, lines, outlets, fixtures, and other utility installations
(including all lighting fixtures, lamps, bulbs, tubes, fans, vents, exhaust
equipment and systems) and also maintain in good operating condition and repair
all plumbing and sanitary waste lines and facilities wholly within the Premises
(including all such facilities that are within the walls or floor of the
Premises).

 

(c)           Tenant agrees to give Landlord or its property manager prior
written notice of the necessity for any repairs in or to the Premises which are
Landlord’s responsibility under this Lease.  All repairs and replacements made
by or on behalf of Tenant shall be made and performed at Tenant’s cost and
expense and at such time and in such manner as Landlord may reasonably
designate, by contractors or mechanics reasonably approved by Landlord (which

 

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approval shall not be unreasonably withheld, conditioned or delayed) and so that
the same shall be at least equal in quality, value, character and utility to the
original work or installation being repaired or replaced.  Tenant hereby waives
all rights under California Civil Code Section 1941 and all rights to make
repairs at the expense of Landlord or in lieu thereof to vacate the Premises as
provided by California Civil Code Section 1942 or any other law, statute or
ordinance now or hereafter in effect.

 

12.                               SERVICES.

 

(a)                                 Landlord shall supply the Premises with
access to electricity for operation of the HVAC unit serving the Premises, and
for lighting and the operation of equipment used in connection with any
Permitted Use, and water as may be required for any Permitted Use.  In no event
shall Tenant’s use of electrical energy or water in the Premises at any time
exceed the capacity of any of the electrical panel boards, risers, transformers,
plumbing and other equipment designated by Landlord for service to the
Premises.  Landlord reserves the right to change the supplier or provider of any
utility or service from time to time.  Tenant shall have no right to contract
with or otherwise obtain any electrical or other service for or with respect to
the Premises or Tenant’s operations therein from any supplier or provider of any
such utility or service.  Landlord shall have the right to cooperate voluntarily
with the efforts of national, state or local governmental agencies or utility
suppliers in reducing energy or other resource consumption.  There shall be no
abatement of rent and Landlord shall not be liable in any respect whatsoever for
the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to riot, strike, labor dispute, breakdown, accident, repair,
cooperation with governmental request or directions, or any other cause
whatsoever, whether resulting from or caused by acts of Landlord or otherwise,
except to the extent caused by the gross negligence or willful misconduct of
Landlord or its employees or agents, nor shall Landlord be liable under any
circumstances for loss of or injury to property or the business of Tenant,
however occurring, through or in connection with or incidental to the furnishing
of any of the foregoing utilities or services, nor constitute or be construed as
a constructive or other eviction of Tenant.  Tenant hereby waives the provisions
of California Civil Code Section 1932(1) or any other applicable existing or
future law with respect to any such interruption or discontinuance of utilities
or Building services.

 

(b)                                 Tenant shall pay for all water, sewer, gas,
electricity, telephone, janitorial, and other utility-type services furnished to
Tenant or to the Premises exclusively, together with all related installation or
connection charges or deposits charged by the utility company, if any.  Other
than electricity and gas service which shall be separately metered to the
Premises, if any such utility service is not separately metered, including,
without limitation water service, Landlord shall have the right to estimate
Tenant’s usage based on Landlord’s reading of its meter (or to install a
submeter, at Tenant’s expense, to measure Tenant’s usage thereof), and Tenant
shall pay Landlord for such utility usage, at the rates charged to Landlord,
upon being invoiced therefore by Landlord, together with the next month’s
payment of Base Rent.  Except for any items included in the definition of
Landlord’s Work, Tenant shall be solely responsible for any utility upgrades
required in order to accommodate Tenant’s Permitted Use contemplated by this
Lease.  In no event shall Tenant’s use of electrical energy in the Premises at
any time exceed the capacity of any of the electrical panel boards, risers,
transformers and other equipment available for service to the Premises.

 

(c)                                  Any refuse disposed of by Tenant in excess
of that of a general office Tenant (e.g. additional refuse associated with any
Alterations, including the installation of furniture, fixtures and/or equipment,
office parties and other events conducted within the Premises), and for which
Landlord incurs an additional charge, shall be paid by Tenant as additional
rent, within fifteen (15) days following written demand.

 

(d)                                 Tenant’s installation of telephone lines,
cables, and other electronic telecommunications services and equipment shall be
subject to the terms and conditions of Paragraph 13 of this Lease.  Upon the
expiration or earlier termination of this Lease, upon request by Landlord,
Tenant shall remove, at Tenant’s sole cost and expense, all of Tenant’s
telecommunications lines and cabling designated by Landlord.

 

13.                               ALTERATIONS

 

(a)                                 Tenant shall make no alterations,
improvements or additions in or to the Premises or any part thereof or any
portion of the Development (individually and collectively, “Alterations”) that
either (i) has a cost in excess of Twenty-Five Thousand Dollars ($25,000) for
any one project, or (ii) impacts the structural elements or exterior of the
Building, the Premises Systems, the Building systems, or any portion of the
Development outside of the

 

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Premises, without giving Landlord prior notice of the proposed Alterations and
obtaining Landlord’s prior written consent thereto.  All Alterations shall be
undertaken and completed at Tenant’s sole cost and expense.  Landlord shall not
unreasonably withhold, condition or delay giving its consent to any proposed
Alterations; however, Landlord’s consent shall be deemed to have been reasonably
withheld if the proposed Alterations could (i) adversely affect any structural
component of the Building; (ii) be visible from or otherwise affect any portion
of the Development other than the interior of the Premises; (iii) adversely
affect any Building systems or involve any improvements to any portion of the
Development outside of the Building.  Any and all work by Tenant shall be
performed only by contractors approved by Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed) and, where the prior consent of
Landlord is required, upon the approval by Landlord of fully detailed and
dimensioned plans and specifications pertaining to the work in question, to be
prepared and submitted by Tenant at its sole cost and expense.  Landlord’s
approval or consent to any such work shall not impose any liability upon
Landlord, and no action taken by Landlord in connection with such approval,
including, without limitation, attending construction meetings of Tenant’s
contractors, shall render Tenant the agent of Landlord for purposes of
constructing any Alterations.  In addition, Tenant acknowledges and agrees that,
except for Landlord’s Work, no Alterations have been expressly or impliedly
required as a condition to the execution of this Lease for the use of the
Premises permitted under this Lease or in lieu of payment of rent.  Without
limiting the generality of the foregoing, as a condition of its consent to any
Alterations costing in excess of six (6) months’ Base Rent, Landlord may impose
a requirement that Tenant provide Landlord with a surety bond, a letter of
credit, or other financial assurance that the cost of the Alterations will be
paid when due.  Upon substantial completion of any Alterations, Tenant shall
deliver to Landlord two (2) sets of “as built” plans covering said Alterations
and a copy of the final building permit for the work signed off as approved by
the appropriate building inspector.

 

(b)                                 Tenant shall at its sole cost and expense
obtain all necessary approvals and permits pertaining to any Alterations. 
Tenant shall be responsible for any additional alterations and improvements
required by law to be made by Landlord to or in the Building as a result of any
alterations, additions or improvements to the Premises made by or for Tenant. 
All alterations, additions, fixtures (other than trade fixtures) and
improvements, including, but not limited to carpeting, other floor coverings,
built-in shelving, bookcases, paneling and built-in security systems (excluding
any leased system) made in or upon the Premises either by or for Tenant and
affixed to or forming a part of the Premises, shall immediately upon
installation become Landlord’s property free and clear of all liens and
encumbrances.  At the time Tenant seeks Landlord’s approval for the installation
or construction of any Alteration, Tenant shall have the right to request from
Landlord a determination of whether Landlord shall require such Alteration to be
removed upon the expiration or any sooner termination of this Lease, and if
Landlord so requires, Tenant shall remove or cause to be removed at its expense
such Alterations.

 

(c)                                  Tenant shall keep the Premises and the
Building free from any mechanics’ liens, vendors liens or any other liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, and agrees to defend, indemnify and hold harmless Landlord from and
against any such lien or claim or action thereon, together with costs of suit
and reasonable attorneys’ fees incurred by Landlord in connection with any such
claim or action.  Before commencing any work or alteration, addition or
improvement to the Premises which requires Landlord’s consent, Tenant shall give
Landlord at least ten (10) business days’ written notice of the proposed
commencement of work (to afford Landlord an opportunity to post appropriate
notices of non-responsibility).  In the event that there shall be recorded
against the Premises or the Building or the property of which the Premises is a
part any claim or lien arising out of any such work performed, materials
furnished or obligations incurred by Tenant and such claim or lien shall not be
removed, bonded over or discharged by Tenant within ten (10) days of written
notice from Landlord, Landlord shall have the right but not the obligation to
pay and discharge said lien by bond or otherwise without regard to whether such
lien shall be lawful or correct.  Any reasonable costs, including attorney’s
fees incurred by Landlord, shall be paid by Tenant within twenty (20) days after
demand by Landlord.

 

(d)                                 Before any Alterations or construction with
respect thereto are undertaken by or on behalf of Tenant, Tenant shall provide
Landlord with certificates of insurance evidencing the maintenance in effect by
Tenant (or Tenant shall require any contractor performing work on the Premises
to carry and maintain, at no expense to Landlord) of workers’ compensation
insurance as required by the jurisdiction in which the Building is located, All
Risk Builder’s Risk insurance in the amount of the replacement cost of any
alterations, additions or improvements (or such other amount reasonably required
by Landlord) and Commercial General Liability insurance (including, without
limitation, Contractor’s Liability coverage, Contractual Liability coverage and
Completed Operations

 

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coverage) written on an occurrence basis with a minimum combined single limit of
One Million Dollars ($1,000,000.00) and adding the “Owner(s) of the Building and
its (or their) respective members, principals, beneficiaries, partners,
officers, directors, employees, agents (and their respective members and
principals) and mortgagee(s)” (and any other designees of Landlord as the
interest of such designees shall appear) as additional insureds.

 

(e)                                  Tenant shall reimburse Landlord for any
reasonable third-party out of pocket expenses incurred by Landlord in the
supervision and coordination of the work described in this Article 13, which
reimbursement obligation shall not apply with respect to Tenant’s performance of
the Tenant Improvements, and shall not exceed two and one-half percent (2.5%) of
the cost of any such Alterations.

 

14.                               INSURANCE, INDEMNIFICATION AND EXCULPATION

 

(a)           Tenant shall, at Tenant’s expense, obtain and keep in force during
the Term of this Lease a policy of Commercial General Liability insurance
utilizing an Insurance Services Office standard form with Broad Form General
Liability Endorsement (CL00011188), or equivalent, in an amount not less than
$5,000,000.00 combined single limit per occurrence/aggregate of bodily injury
and property damage, or in such greater amount as reasonably determined by
Landlord and shall insure Tenant and Landlord, Landlord’s property manager, and
any lender(s) whose names have been provided to Tenant in writing (as additional
insureds) against liability arising out of the use, occupancy or maintenance of
the Premises. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an “insured contract” for the performance
of Tenant’s indemnity obligations under this Lease. No deductible (including any
self-insured retention) under such policy shall exceed Ten Thousand Dollars
($10,000.00).  Compliance with the above requirements shall not, however, limit
the liability of Tenant nor relieve Tenant of any obligation hereunder.  All
insurance to be carried by Tenant shall be primary to and not contributory with
any similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only.

 

(b)                                 (i)                                    
Landlord shall obtain and keep in force during the term of this Lease
(reimbursable as an item of Operating Expense) a policy or policies in the name
of Landlord, with loss payable to Landlord and to any Lender(s), insuring
against loss or damage to the Premises and Building, but not Tenant’s personal
property or Alterations.  The amount of such insurance shall be for full
replacement cost, as the same shall exist from time to time, or the amount
required by any Lender(s), but in no event more than the commercially reasonable
and available insurable value thereof if, by reason of the unique nature or age
of the improvements involved, such latter amount is less than full replacement
cost.  Landlord’s policy or policies shall insure against all risks of direct
physical loss or damage (including the perils of flood and/or earthquake if
elected by Landlord or required by a Lender), and may include coverage for any
additional costs resulting from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the Building required
to be demolished or removed by reason of the enforcement of any building,
zoning, safety or land use laws as the result of a covered loss, but not
including plate glass insurance.  Said policy or policies may also contain an
agreed valuation provision in lieu of any co-insurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located.

 

(ii)                                  Tenant shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Development if said increase is caused by Tenant’s acts,
omissions, use or occupancy of the Premises.

 

(c)           (i)                                     Tenant at its cost shall
either by separate policy or by endorsement to a policy already carried by
Tenant, maintain insurance coverage on all of Tenant’s personal property and
Alterations in, on, or about the Premises.  Such insurance shall be full
replacement cost coverage.  Landlord shall be named as loss payee under said
policy.  The proceeds from any such insurance shall be used by Tenant for the
replacement and/or restoration of Tenant’s personal property and Alterations. 
No deductible (including any self-insured retention) under such policy shall
exceed One Hundred Thousand Dollars ($100,000.00).

 

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(ii)                                  Tenant shall obtain and maintain loss of
income and extra expense insurance in amounts as will reimburse Tenant for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Tenant or attributable to
prevention of access to the Premises as a result of such perils.

 

(d)                                 Insurance required hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a “General Policyholders Rating”
of at least A+, X, or such other rating as may be required by a Lender, as set
forth in the most current issue of “Best’s Insurance Guide.”  Tenant shall not
do or permit to be done anything that shall invalidate the insurance policies
referred to in this Paragraph 14.  Tenant shall cause to be delivered to
Landlord, prior to the Possession Date, and from time to time upon Landlord’s
request, certified copies of, or certificates evidencing the existence and
amounts of, the insurance required to be maintained by Tenant hereunder with the
insureds and loss payable clauses as required by this Lease.  No such policy
shall be cancelable or subject to modification except after thirty (30) days
prior written notice to Landlord.  Tenant shall at least thirty (30) days prior
to the expiration of such policies, furnish Landlord with evidence of renewals
or “insurance binders” evidencing renewal thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant to Landlord upon demand.

 

(e)                                  Without affecting any other rights or
remedies of the parties, Tenant and Landlord each hereby agree to cause the
insurance companies issuing their respective first party insurance to waive any
subrogation rights that such insurers may have against Landlord and Tenant,
respectively, as long as the insurance is not invalidated by such waiver.  If
such waivers of subrogation are contained in their respective insurance
policies, Landlord and Tenant each waive, release and relieve the other, and
waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the waiving party’s property arising
out of or incident to the perils required to be insured against under this
Paragraph 14, to the extent that the loss or damage is insured under their
respective insurance policies.

 

(f)                                   Except for instances of Landlord’s gross
negligence or willful misconduct, Tenant shall indemnify, protect, defend and
hold harmless the Premises, Landlord, Landlord’s master or ground lessor, any
lenders, Landlord’s partners and members, and each of their officers, directors,
shareholders, managers, employees, agents and representatives from and against
any and all claims, loss of rents and/or damages, costs, liens, judgments,
penalties, permits, attorney’s and consultant’s fees, expenses and/or
liabilities arising out of, involving, or in dealing with, (i) the occupancy of
the Premises by Tenant, (ii) the conduct of Tenant’s business, (iii) any act,
omission or neglect of Tenant, its agents, contractors, employees or invitees,
and/or (iv) any default or breach by Tenant in the performance in a timely
manner of any obligation on Tenant’s part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Landlord) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding is brought against
Landlord by reason of any of the foregoing matters, Tenant upon notice from
Landlord shall defend the same at Tenant’s expense by counsel reasonably
satisfactory to Landlord and Landlord shall cooperate with Tenant in such
defense.  Landlord need not have first paid any such claim in order to be so
indemnified. The foregoing indemnification obligations shall survive the
expiration or earlier termination of this Lease to and until the last date
permitted by law for the bringing of any claim with respect to which
indemnification may be claimed under this paragraph.

 

(g)                                  Except to the extent caused by Landlord’s
gross negligence or willful misconduct, Tenant hereby releases Landlord from,
and Landlord shall not be liable for, injury or damage to the person or goods,
wares, merchandise or other property of Tenant, Tenant’s employees, contractors,
invitees, customers, or any other person in or about the Premises, Building or
the Development, whether such damage or injury is caused by or results from
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether said injury or damage results from conditions arising on the Premises or
on other portions of the Building or the Development, from other sources or
places, and regardless of whether the cause of such damage or injury or the
means of repairing the same is accessible or not or is attributable to
Landlord’s negligent acts or omissions.  Landlord shall not be liable for any
damages arising from any act or neglect of any other lessee of Landlord nor from
the failure by Landlord to enforce the provisions of any other lease in the
Development.  Notwithstanding Landlord’s negligence or breach of

 

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this Lease, Landlord shall under no circumstances be liable for injury to
Tenant’s business or for any loss of income or profit therefrom.

 

(h)                                 Except to the extent caused by Tenant’s
gross negligence or willful misconduct, Landlord shall indemnify, protect,
defend and hold harmless the Tenant and its officers, directors, shareholders,
managers, employees, agents and representatives from and against any and all
claims, loss of rents and/or damages, costs, liens, judgments, penalties,
permits, attorney’s and consultant’s fees, expenses and/or liabilities arising
out of, involving, or in dealing with, Landlord’s gross negligence or willful
misconduct.  The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Tenant) litigated and/or reduced to
judgment, and whether well founded or not. In case any action or proceeding is
brought against Tenant by reason of any of the foregoing matters, Landlord upon
notice from Tenant shall defend the same at Landlord’s expense by counsel
reasonably satisfactory to Tenant and Tenant shall cooperate with Landlord in
such defense.  Tenant need not have first paid any such claim in order to be so
indemnified. The foregoing indemnification obligations shall survive the
expiration or earlier termination of this Lease to and until the last date
permitted by law for the bringing of any claim with respect to which
indemnification may be claimed under this paragraph.

 

15.                               DESTRUCTION.

 

(a)                                 In the event of a partial destruction of the
Building during the Term from any cause, Landlord shall forthwith repair the
same (except as otherwise provided in this Paragraph 15 as to a casualty
occurring during the last twelve (12) months of the Term), provided such repairs
can be made within one hundred eighty (180) days under the laws and regulations
of State, county, federal or municipal authorities, but such partial destruction
shall not annul or void this Lease.  If such repairs cannot be made within one
hundred eighty (180) days of such casualty, or if the casualty occurs during the
last twelve (12) months of the Term, Landlord may, at its option, elect to make
such repairs within a reasonable time, this Lease continuing in full force and
effect.  In such event, this Lease shall remain in full force and effect except
that an abatement of Base Rent shall be allowed Tenant for such part of the
Premises as shall be rendered unusable by Tenant in the conduct of its business
during the time such part is so unusable.  In the event that (i) such repairs
are not completed within one hundred eighty (180) days after the date the
casualty occurs, (ii) are reasonably estimated by Landlord’s contractor to
require longer than one hundred eighty (180) days to complete, or (iii) a
casualty that cannot be repaired within sixty (60) days occurs during the last
twelve (12) months of the term, then within a reasonable time following the
casualty (but in no event not less than sixty (60) days), this Lease may be
terminated at the option of either party by written notice to the other party. 
In respect to any partial destruction which Landlord is obligated to repair or
may elect to repair under the terms of this Paragraph, Tenant waives the
provisions of California Civil Code Sections 1932(2) and 1933(4).  In the event
that any portion of the Building other than the Premises is destroyed to the
extent of ten percent (10%) or more of the replacement cost of the Building,
Landlord may elect to terminate this Lease, whether the Premises be damaged or
not.  A total destruction of the Building shall terminate this Lease.

 

(b)                                 If the Premises are to be repaired under
this Paragraph, Landlord shall repair at its cost (subject to the limitations
contained in this Paragraph) any injury or damage to the Building itself and the
initial permanently affixed improvements to the Premises made by Landlord or
existing in the Premises as of the date of delivery of possession of the
Premises to Tenant.  Tenant shall pay the cost of repairing or replacing all
other improvements in the Premises and Tenant’s trade fixtures, furnishings,
equipment and other personal property.  No casualty (nor Landlord’s subsequent
restoration and repair work) shall constitute a constructive eviction or give
Tenant any rights to terminate this Lease, except as expressly set forth in this
Lease.

 

16.                               ENTRY.

 

Landlord, Landlord’s agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground
leases on the Premises shall have, upon a minimum of twenty-four (24) hours
advance notice (except in case of an emergency, in which case no prior notice
shall be required) the right to enter the Premises at any time in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting the
condition of the Premises, performing any services required of Landlord by this
Lease, showing the same to prospective purchasers, lenders, or (during the last
nine (9) months of the Term) lessees, making such alterations,

 

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repairs and improvements to the Premises or to the Development as Landlord may
deem reasonable or desirable, and for verifying compliance by Tenant with this
Lease and all Applicable Laws, and Landlord shall be entitled to employ experts
and/or consultants in connection therewith to advise Landlord with respect to
Tenant’s activities, including but not limited to Tenant’s installation,
operation, use, monitoring, maintenance, or removal of any Hazardous Substance
on or from the Premises.  Landlord shall use commercially reasonable efforts to
minimize interference with Tenant’s use of the Premises.  Except in case of an
emergency (in which case Landlord shall not be obligated to afford Tenant’s
representative the opportunity to accompany Landlord in any such entry), Tenant
shall be entitled to require Landlord or its invitees to be accompanied by a
representative of Tenant, provided, however, if Tenant exercises such right,
Tenant shall make such representative available during normal business hours. 
The costs and expenses of any such inspections shall be paid by Landlord, unless
(i) an Event of Default, violation of any Applicable Law, or a contamination,
caused or materially contributed to by Tenant is found to exist or be imminent,
(ii) the inspection is requested or ordered by a governmental authority as the
result of any such existing or imminent violation or contamination, or (iii)
such activities involve a Reportable Use that has not been approved by Landlord.
In any such case, Tenant shall upon request reimburse Landlord for the costs and
expenses of such inspections.  Landlord shall have the right to retain keys to
the Premises and to unlock all doors in or upon the Premises other than to
files, vaults and safes, and in the case of emergency to enter the Premises by
any reasonably appropriate means, and any such entry shall not be deemed a
forcible or unlawful entry or detainer of the Premises or an eviction.  Tenant
waives any charges for damages or injuries or interference with Tenant’s
property or business in connection therewith.  Any such entry shall be without
any rebate of rent to Tenant for any loss of occupancy or quiet enjoyment of the
Premises, or damage, injury or inconvenience thereby occasioned.

 

17.                               EVENTS OF DEFAULT.

 

(a)                                 The occurrence of any one or more of the
following events (each, an “Event of Default”) shall constitute a breach of this
Lease by Tenant:  (i) if Tenant shall default in its obligation to pay any rent
or other payment(s) due hereunder as and when due and payable and such failure
continues for three (3) business days after written notice from Landlord to
Tenant, or upon the second (2nd) occurrence in any twelve (12)-month period
during the Term that Tenant fails to pay any rent or other payment(s) due
hereunder when due (whether or not such failure or breach is thereafter cured
within any stated cure or grace period); or (ii) if Tenant shall fail to perform
or observe any other term hereof (except as otherwise provided in this
Paragraph) or of the Project Rules described in Paragraph 8 hereof to be
performed or observed by Tenant, such failure shall continue for more than ten
(10) days after notice thereof from Landlord, and Tenant shall not within such
period commence with due diligence and dispatch the curing of such default, or,
having so commenced, thereafter shall fail or neglect to prosecute or complete
with due diligence the curing of such default; or (iii) any assignment or
subletting in violation of the terms of this Lease; or (iv) the failure of
Tenant to maintain insurance coverages required by this Lease and/or to provide
evidence of such coverages within three (3) business days after request therefor
from Landlord; or (v) Tenant’s failure to timely execute and deliver, when
requested, an estoppel certificate in accordance with the terms of this Lease;
or (vi) the taking of any action leading to, or the actual dissolution or
liquidation of Tenant, if Tenant is other than an individual; or (vii) any
guarantor of Tenant’s obligations under this Lease (“Guarantor”) shall become
insolvent, file a petition in bankruptcy, or shall have ceased to pay its debts
in the ordinary course of business, or Guarantor shall default, beyond any
applicable notice and cure period, under its obligations under said guaranty; or
(viii) if within sixty (60) days after the commencement of any proceeding
against Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been dismissed
or if this Lease or any estate of Tenant hereunder shall be levied upon under
any attachment or execution and such attachment or execution is not vacated
within thirty (30) days after notice to Tenant.

 

(b)                                 Any notice required to be given by Landlord
under this Lease shall, in each case, be in lieu of, and not in addition to, any
notice required to be given under California Code of Civil Procedure Sections
1161 through 1162, or any other applicable unlawful detainer statutes, to the
extent the substance thereof is given in compliance therewith and the notice is
served as provided in this Lease, and any time periods provided under such
statutes shall run concurrently with the time periods contained in any notice
provided under this Lease.

 

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18.                               TERMINATION UPON DEFAULT.

 

In any notice given pursuant to any one or more Events of Default, Landlord in
its sole discretion may elect to declare a forfeiture of this Lease as provided
in Section 1161 of the California Code of Civil Procedure, and provided that
Landlord’s notice states such an election, Tenant’s right to possession shall
terminate and this Lease shall terminate, unless on or before the date specified
in such notice all arrears of rent and all other sums payable by Tenant under
this Lease, and all costs and expenses incurred by or on behalf of Landlord
hereunder, including attorneys’ fees, incurred in connection with such default,
shall have been paid by Tenant and all other breaches of this Lease by Tenant at
the time existing shall have been fully remedied to the satisfaction of
Landlord. Upon such termination, Landlord may recover from Tenant (a) the worth
at the time of award of the unpaid rent which had been earned at the time of
termination; (b) 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 rent loss that Tenant proves could reasonably
have been avoided; (c) the worth at the time of award of the amount by which the
unpaid rent for the balance of the Term after the time of award exceeds the
amount of such rent loss that Tenant proves could be reasonably avoided; and (d)
any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom.  The “worth at the time of award” of the amount referred to in
clauses (a) and (b) above is computed by allowing interest at the discount rate
of the Federal Reserve Bank of San Francisco plus five percent (5%) per annum at
date of termination, but in no event in excess of the maximum rate of interest
permitted by law.  The worth at the time of award of the amount referred to in
clause (c) above 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%).  For the purpose of determining unpaid rent under clause (c) above, the
monthly rent reserved in this Lease shall be deemed to be the sum of the Base
Rent and the amounts last payable by Tenant as reimbursement of expenses
pursuant to Paragraphs 5(a)(ii) and (iii) hereof for the calendar year in which
Landlord terminated this Lease as provided herein.  Tenant waives any rights of
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other applicable present or future law, if
Tenant is evicted or Landlord takes possession of the Premises by reason of any
Event of Default.

 

19.                               CONTINUATION AFTER DEFAULT.

 

Even though Tenant has breached this Lease and/or abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant’s right to possession as provided in Paragraph 18 hereof, and Landlord
may enforce all its rights and remedies under this Lease, including the right to
recover rent as it becomes due under this Lease.  In such event, Landlord may
exercise all of the rights and remedies of a landlord under Section 1951.4 of
the California Civil Code (which provides that a landlord may continue a lease
in effect after a tenant’s breach and abandonment and recover rent as it becomes
due, if the tenant has the right to sublet or assign, subject only to reasonable
limitations), or any successor statute.  Acts of maintenance or preservation or
efforts to relet the Premises or the appointment of a receiver upon initiative
of Landlord to protect Landlord’s interest under this Lease shall not constitute
a termination of Tenant’s right to possession.  If a receiver is appointed at
the instance of Landlord in any action against Tenant, the receiver may, if it
is necessary or convenient in order to collect rents and profits, conduct the
business of Tenant then being carried on in the Premises, and may take
possession of any personal property belonging to Tenant and used in the conduct
of such business and may use the same in conducting such business.

 

20.                               OTHER RELIEF.

 

In the event of re-entry or taking possession of the Premises, Landlord shall
have the right but not the obligation to remove all or any part of the trade
fixtures, furnishings, equipment and personal property located in the Premises
and to place the same in storage at a public warehouse at the expense and risk
of Tenant or to sell such property in accordance with applicable law.  The
remedies provided for in this Lease are in addition to any other remedies
available to Landlord at law or in equity, by statute or otherwise.

 

21.                               LANDLORD’S RIGHT TO CURE DEFAULT.

 

All agreements and provisions to be performed by Tenant under any of the terms
of this Lease shall be at its sole cost and expense and without abatement of
rent.  If Tenant shall fail to pay any sum of money, other than rent,

 

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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 not be cured, Landlord
may, but shall not be obligated to so do, and without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant’s part to be made or performed as provided in this Lease. 
All sums so paid by Landlord and all necessary incidental costs shall be deemed
additional rent hereunder and shall be payable to Landlord on demand.

 

22.                               ATTORNEY’S FEES.

 

If as a result of any breach or default on the part of Tenant under this Lease
Landlord uses the services of an attorney in order to secure compliance with
this Lease, Tenant shall reimburse Landlord upon demand as additional rent for
any and all attorneys’ fees and expenses incurred by Landlord, whether or not
formal legal proceedings are instituted.  Should either party bring an action
against the other party, by reason of or alleging the failure of the other party
to comply with any or all of its obligations hereunder, whether for declaratory
or other relief, then the party which prevails in such action shall be entitled
to its reasonable attorneys’ fees and expenses related to such action, in
addition to all other recovery or relief.  The “party which prevails in such
action” (a) as used in the context of proceedings in the Bankruptcy Court, means
the prevailing party in an adversary proceeding or contested matter, or any
other action taken by the non bankruptcy party which is reasonably necessary to
protect its rights under this Agreement, and (b) as used in the context of
proceedings in any court other than the Bankruptcy Court, shall mean the party
that prevails in obtaining a remedy or relief which most nearly reflects the
remedy or relief which the party sought, so that, for example, the party which
prevails may be a party which is ordered to pay $100 where the obligation to pay
$80 was undisputed and the other party claimed that it was entitled to $1,000.

 

23.                               NO WAIVER.

 

Landlord’s failure to take advantage of any default or breach of covenant on the
part of Tenant shall not be, or be construed as a waiver thereof, nor shall any
custom or practice which may grow up between the parties in the course of
administering this instrument be construed to waive or to lessen the right of
Landlord to insist upon the performance by Tenant of any term, covenant or
condition hereof, or to exercise any rights given him on account of any such
default.  A waiver of a particular breach or default shall not be deemed to be a
waiver of the same or any other subsequent breach or default.  The acceptance of
rent hereunder shall not be, nor be construed to be, a waiver of any breach of
any term, covenant or condition of this Lease.

 

24.                               NOTICES.

 

All approvals, consents and other notices given by Landlord or Tenant under this
Lease shall be properly given only if made in writing and either deposited in
the United States mail, postage prepaid, certified with return receipt
requested, or delivered by hand (which may be through a messenger or recognized
delivery, courier or air express service) and addressed to Landlord at the
address of Landlord specified in the Basic Lease Information or at such other
place as Landlord may from time to time designate in a written notice to Tenant,
and addressed to Tenant at the address of Tenant specified in the Basic Lease
Information and, after the Commencement Date, at the Premises, together with a
copy to such other address as Tenant may from time to time designate in a
written notice to Landlord.  Such approvals, consents and other notices shall be
effective on the date of receipt (evidenced by the certified mail receipt), if
mailed, or on the date of hand delivery, if hand delivered.  If any such
approval, consent or other notice is not received or cannot be delivered due to
a change in the address of the receiving party of which notice was not
previously given to the sending party or due to a refusal to accept by the
receiving party, such request, approval, consent, notice or other communication
shall be effective on the date delivery is attempted.  Any approval, consent or
other notice under this Lease may be given on behalf of a party by the attorney
for such party.  Tenant hereby appoints as its agent to receive the service of
all default notices and notice of commencement of unlawful detainer proceedings
the person in charge of or apparently in charge of or occupying the Premises at
the time, and, if there is no such person, then such service may be made by
attaching the same on the door of the Premises and such service shall be
effective for all purposes under this Lease.

 

25.                               EMINENT DOMAIN.

 

If all or any part of the Premises shall be taken as a result of the exercise of
the power of eminent domain or agreement in lieu thereof, this Lease shall
terminate as to the part so taken as of the date of taking, and, in the case of

 

18

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a partial taking, Landlord shall have the right to terminate this Lease as to
the balance of the Premises by giving written notice to Tenant within sixty (60)
days after such date.  Common Areas taken shall be excluded from the Common
Areas usable by Tenant and no reduction of rent shall occur with respect thereto
or by reason thereof.  In the event of any taking, Landlord shall be entitled to
any and all compensation, damages, income, rent, awards, or interest therein
which may be paid or made in connection therewith, and, except as hereinafter
expressly provided, Tenant waives and relinquishes to Landlord any and all
claims for the value of any unexpired Term of this Lease or otherwise.  In the
event of a partial taking of the Premises which does not result in a termination
of this Lease, the Base Rent thereafter to be paid shall be equitably reduced. 
If all or any part of the Building shall be taken as a result of the exercise of
the power of eminent domain, and, in the case of a partial taking, Landlord
determines that the remainder of the Building is not suitable for the continued
operation as a multi-tenant office building, Landlord shall have the right to
terminate this Lease by giving written notice to Tenant within sixty (60) days
of the date when the possession is required.  Notwithstanding anything to the
contrary in this Paragraph, in the event of a temporary taking for a period less
than twenty-four (24) months (or the remainder of the Term, whichever is less),
this Lease shall not terminate, but Tenant’s obligation to pay Base Rent and
additional rent for the portion of the Premises subject to such temporary taking
shall abate for the period during which such taking is in effect.  Without
obligation to Tenant, Landlord may agree to transfer to any condemnor all or any
portion of the Development sought by such condemnor, free from this Lease and
the rights of Tenant hereunder, without first requiring that any action or
proceeding be instituted or, if instituted, pursued to a judgment. Landlord and
Tenant hereby waive the provisions of California Code of Civil Procedure
Sections 1265.110 through 1265.160 to the extent that such provisions are
inconsistent with the terms of this Lease.

 

26.                               LATE CHARGE/RETURNED CHECKS.

 

Rent or other payments due under this Lease which remain unpaid when due shall
bear interest from and after the date said amount was due at the discount rate
of the Federal Reserve Bank of San Francisco on the date said amount was due,
plus five percent (5%) per annum, but in no event in excess of the maximum rate
of interest permitted by law.  Tenant acknowledges that late payment by Tenant
to Landlord of such rent or other payments will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such costs being extremely
difficult and impracticable to fix.  Therefore, if any installment of rent or
other payment due from Tenant is not received by Landlord by the fifth (5th) day
of the month when due, Tenant shall pay to Landlord an additional sum of five
percent (5%) of the overdue amount as a late charge.  Said late charge shall be
due as of the sixth (6th) day of the month in question.  If any check for
payment by Tenant to Landlord of Base Rent or other sums due hereunder shall be
drawn on a closed account or on an account with insufficient funds or returned
to Landlord by Tenant’s bank for any reason, all payments made by Tenant, for
the period of six (6) months following, shall be made with certified funds.  In
addition to the foregoing, in the event any payment of rent or other sums due
Landlord from Tenant is made by the tender of a check, and said check is
dishonored by Tenant’s bank for insufficient funds or for any other reason,
Tenant shall pay Landlord a $50.00 returned check fee (the “NSF charge”) to
compensate Landlord for the costs associated with processing such dishonored
check.  The parties agree that the foregoing late charges and NSF charge
represent a fair and reasonable estimate of the costs Landlord will incur
because of said late or dishonored payment.  Acceptance of said charges by
Landlord shall not constitute a waiver of Tenant’s default for the overdue
amount, nor prevent Landlord from exercising the other rights and remedies
granted Landlord under this Lease.

 

27.                               TENANT STATUS AND COMPLIANCE.

 

(a)                                 Tenant represents, warrants and covenants
that Tenant and each partner, member or stockholder in or of Tenant, and all
beneficial owners of any such partner, member or stockholder, is in compliance
with the requirements of Executive Order No. 13224, 66 Fed. Reg. 49079
(September 25, 2001) (the “Order”), and other similar requirements contained in
the rules and regulations of the Office of Foreign Asset Control, Department of
the Treasury (OFAC”), and in enabling legislation or other Executive Orders in
respect thereof (the Order and such other rules, regulations, legislation or
orders are collectively called the “Orders”).  Without limiting the generality
of the foregoing, Tenant represents, warrants and covenants that neither Tenant,
nor any partner, member or stockholder in or of Tenant, nor the beneficial owner
of any such partner, member of stockholder: (i) is listed on the Specially
Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the
Order and/or on any other list of terrorists or terrorist organizations
maintained pursuant to any of the rules and regulations of OFAC pursuant to any
other applicable Orders (such lists being collectively referred to as the
“Lists”), (ii) is a person who has been determined by competent authority to be
subject to the prohibitions contained in the Orders; or (iii) is owned or

 

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controlled by, nor acts for or on behalf of, any person on the Lists or any
other persons who have been determined by competent authority to be subject to
the prohibitions contained in the Orders.  Tenant agrees to execute such
certificates as may be reasonably requested by Landlord from time to time to
enable Landlord to comply with the Orders and/or any anti-money laundering laws
as relates to this Lease.

 

28.                               SIGNAGE.

 

During the Term of this Lease, Tenant shall be permitted to place Landlord
approved Tenant identification signs on the exterior façade of the Building, the
entrance to the Premises, and on the exterior Building monument sign, all at
locations reasonably designated by Landlord.  Tenant is responsible for the cost
of all signage, and all work relating thereto shall be performed as an
Alteration under Paragraph 13 of this Lease, Tenant’s signs shall conform to the
then applicable signage criteria of the Development and shall comply with the
governing municipal and county bodies and any other applicable laws.  Subject to
the foregoing, Tenant shall not place on the exterior walls of the Building any
sign, awning, canopy, marquee, advertising matter, decoration, letter or other
thing of any kind without the prior written consent of Landlord.  Under no
circumstances shall Tenant place a sign on any roof of the Building.  Landlord
reserves the right to remove Tenant’s signage during any reasonable period when
Landlord repairs, restores, constructs or renovates the Building, so long as
Landlord promptly re-installs such signage upon the conclusion of such repair,
restoration, construction or renovation.  Upon the expiration or termination of
this Lease, Tenant shall remove its signs, and repair all damage to the Building
or Premises occasioned thereby.

 

29.                               ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS.

 

Within ten (10) days after notice from Landlord, Tenant shall execute and
deliver to Landlord, in recordable form, a certificate stating (i) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect, as modified, and
stating the date and nature of each modification), (ii) the date, if any, to
which rental and other sums payable hereunder have been paid, (iii) that no
notice has been received by Tenant of any default which has not been cured,
except as to defaults specified in said certificate, (iv) that in the event a
lender of Landlord or any other party becomes the owner of the Building and
succeeds to the interest of Landlord under this Lease, Tenant will attorn to and
recognize such party as otherwise provided in Paragraph 34(b) hereof as the
Landlord under this Lease, (v) the matters contained in Paragraph 34(b) hereof,
and (vi) such other matters as may be reasonably requested by Landlord.  Failure
to deliver such certificate within such ten (10) day period shall be conclusive
upon Tenant for the benefit of Landlord and any successor to Landlord, that this
Lease is in full force and effect and has not been modified except as may be
represented by Landlord.

 

Tenant acknowledges that the financial capability of Tenant to perform its
obligations under this Lease is material to Landlord and that Landlord would not
enter into this Lease but for its belief, based on its review of Tenant’s
financial statements, that Tenant is capable of performing such financial
obligations.  Tenant hereby represents, warrants and certifies to Landlord that
any financial statements of Tenant and any person guarantying the obligations of
Tenant under this Lease previously delivered to Landlord were at the time given
true and correct in all material respects and that there have been no material
subsequent changes thereto as of the date of this Lease.  At the request of
Landlord, from time to time, Tenant shall provide Landlord with Tenant’s and any
such guarantor’s current financial statements, and such other information
discussing the financial worth of Tenant and any guarantor of Tenant’s
obligations under this Lease reasonably requested by Landlord, which statements
and information Landlord shall use solely for purposes of this Lease and in
connection with the ownership, management, financing and disposition of the
Building.

 

30.                               SURRENDER.

 

(a)                                 Tenant shall surrender the Premises at the
expiration or sooner termination of this Lease in broom clean condition, and in
the same condition as the condition of the Premises on the Commencement Date,
reasonable wear and tear and damage by casualty excepted.  At the expiration or
sooner termination of this Lease, Tenant shall remove or cause to be removed at
its sole expense all of Tenant’s personal property, furniture, equipment and all
trade fixtures, and, unless otherwise notified by Landlord prior to the
termination of this Lease, any and all Alterations (including signage) installed
by Tenant in connection with Tenant’s occupancy of the Premises, except that
Tenant shall not be required to remove any Alterations for which Tenant inquired
with Landlord whether such

 

20

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Alteration would be required to be removed at the expiration or sooner
termination of this Lease, and Landlord confirmed in writing that such
Alterations would not be required to be removed.  Tenant shall repair at its
expense all damage to the Premises and the Development, or any portion thereof,
caused by the removal of any of the items provided herein.  Any Alteration or
improvement made without Landlord’s approval, whether or not such approval is
required hereunder, shall be subject to removal at the expiration or sooner
termination of this Lease at Landlord’s sole discretion.

 

(b)                                 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, terminate all of any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.

 

(c)                                  Tenant obligations under this Paragraph
shall survive the termination of this Lease.

 

31.                               HOLDING OVER.

 

If, without objection by Landlord, Tenant holds possession of the Premises after
expiration of the Term of this Lease, Tenant shall become a tenant from month to
month upon the terms herein specified but at a Base Rent equal to one hundred
fifty percent (150%) of the Base Rent in effect at the expiration of the Term of
this Lease, payable in advance on or before the first day of each month.  Such
month-to-month tenancy may be terminated by either Landlord or Tenant by giving
thirty (30) days’ written notice of termination to the other at any time.  If
Tenant fails to surrender the Premises upon the expiration or termination of
this Lease except as hereinabove provided, Tenant hereby indemnifies and agrees
to hold Landlord harmless from all costs, loss, expense or liability, including
without limitation, costs, real estate brokers claims and attorneys’ fees,
arising out of or in connection with any delay by Tenant in surrendering and
vacating the Premises, including, without limitation, any claims made by any
succeeding tenant based on any delay and any liabilities arising out of or in
connection with these claims.  Nothing in this Paragraph 31 shall be deemed to
permit Tenant to retain possession of the Premises after the expiration or
sooner termination of the Lease Term.

 

32.                               FUTURE CONSTRUCTION.

 

Provided that Landlord uses commercially reasonable efforts to minimize
interference with Tenant’s use (but in no event shall Landlord be required to
incur over-time charges in connection therewith), Landlord shall have the right,
in Landlord’s sole discretion, from time to time, to:

 

(a)                                 Perform such acts and make such changes in,
to or with respect to the Building as Landlord may, in the exercise of sound
business judgment, deem to be appropriate, including, without limitation,
changes in the size, shape and appearance thereof;

 

(b)                                 Close temporarily any of the Common Areas
for maintenance purposes so long as reasonable access to the Premises remains
available;

 

(c)                                  Add additional buildings and improvements
to the Development, including, without limitation, additional Common Areas;

 

(d)                                 Use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Development, or any
portion thereof; and

 

(e)                                  Perform such acts and make such changes in,
to or with respect to the Common Areas and Development as Landlord may, in the
exercise of sound business judgment, deem to be appropriate.

 

33.                               SECURITY DEPOSIT.

 

Upon signing this Lease, Tenant shall pay to Landlord the amount of the Security
Deposit specified in the Basic Lease Information.  The Security Deposit shall be
held by Landlord as security for the performance by Tenant of all of the
covenants of this Lease to be performed by Tenant, including, without
limitation, defaults by Tenant in the payment of rent, the repair of damage to
the Premises caused by Tenant, the cleaning of the Premises upon

 

21

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termination of the tenancy created hereby, and for any damages that Landlord may
incur as a consequence of any default by Tenant under this Lease, and Tenant
shall not be entitled to interest thereon.  No use of the Security Deposit shall
constitute a bar or defense to any of Landlord’s remedies under this Lease or at
law.  If Landlord uses or applies the Security Deposit or any portion thereof,
Tenant shall, within ten (10) days after demand deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to the full amount, and
Tenant’s failure to do so shall be deemed a material breach of this Lease. 
Landlord’s obligations with respect to the Security Deposit are those of a
debtor and not a trustee.  Landlord shall not be required to maintain the
Security Deposit separate and apart from Landlord’s general or other funds.
Landlord may commingle the Security Deposit with any of Landlord’s general or
other funds and no interest shall accrue or be payable to Tenant with respect
thereto.  Upon termination of the original Landlord’s or any successor owner’s
interest in the Premises or the Building, the original Landlord or such
successor owner shall be released from further liability with respect to the
Security Deposit upon the original Landlord’s or such successor owner’s
complying with California Civil Code Section 1950.7.  Subject to the foregoing,
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code or any successor statute, and all other provisions of law, now or hereafter
in force, which provide that Landlord may claim from a security deposit only
those sums reasonably necessary to remedy defaults in the payment of rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or damage caused by the default of Tenant under this
Lease.  The parties agree that Landlord shall have the right to (i) retain the
Security Deposit until the time of entry of an award in any action brought by
Landlord pursuant to California Civil Code Section 1951.2, and (ii) offset the
Security Deposit against any such award.  In the event the Security Deposit
exceeds the amount of the award, Landlord shall refund to Tenant any remainder
within thirty (30) days of the entry of the award.

 

34.                               SUBORDINATION.

 

(a)                                 This Lease shall be subordinate to any
ground lease, master lease, mortgage, deed of trust, or any other hypothecation
for security (collectively, “Deed of Trust”) now or later placed upon the
Building and to any advances made on the security of it or Landlord’s interest
in it, and to all renewals, modifications, consolidations, replacements, and
extensions of it; provided, however, such subordination shall be conditioned
upon Tenant’s receipt of a commercially reasonable form of subordination,
non-disturbance and atornment agreement with respect to any such Deed of Trust. 
Tenant approves the form of the subordination, non-disturbance and attornment
agreement attached hereto as Exhibit F (the “SNDA”), and any other
subordination, non-disturbance and attornment agreement that is in substantially
similar form.  Tenant shall execute and notarize, where applicable, the SNDA and
deliver the same to Landlord on or before the Lease Effective Date.  However, if
any mortgagee, beneficiary under a deed of trust, master lessor or ground lessor
elects to have this Lease prior to the lien of its mortgage or deed of trust or
prior to its master lease or ground lease, and gives notice of that to Tenant,
this Lease shall be deemed prior to the mortgage, deed of trust, master lease or
ground lease, whether this Lease is dated prior or subsequent to the date of the
mortgage, deed of trust, master lease or ground lease, or the date of recording
of it.  In the event any mortgage or deed of trust to which this Lease is
subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, Tenant shall attorn to the purchaser at the
foreclosure sale or to the grantee under the deed in lieu of foreclosure
(collectively, an “Acquiring Party”).  In the event of termination of any master
lease or ground lease to which this Lease is subordinate, Tenant shall attorn to
the master lessor or ground lessor.  Tenant shall execute, within ten (10) days
of request by Landlord, such further instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases, or to evidence such attornment.

 

(b)                                 No Acquiring Party shall (i) be liable for
any act or omission of the prior Landlord; (ii) be subject to any offsets or
defense that Tenant might have against any prior Landlord; (iii) be bound by any
rent or additional rent that Tenant might have paid for more than one (1) month
in advance of the date the same was due under this Lease; or (iv) be liable to
Tenant beyond its interest in the Development.

 

35.                               INABILITY TO PERFORM

 

Neither party shall be in default hereunder nor shall a party be liable to the
other party for any loss or damages if such party is unable to fulfill any of
its obligations, or is delayed in doing so, if the inability or delay is caused
by reason of accidents, strike, labor troubles, acts of God, or any other cause,
whether similar or dissimilar,

 

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which is beyond the reasonable control of such party (provided that the
foregoing shall not excuse Tenant’s obligation to pay Rent).

 

36.                               CORPORATE AUTHORITY.

 

If Tenant is a corporation or limited liability company, Tenant represents and
warrants to Landlord that (a) Tenant is duly incorporated or formed, as the case
may be and validly existing under the laws of its state of incorporation or
formation, (b) Tenant is qualified to do business in California, (c) Tenant has
the full right, power and authority to enter into this Lease and to perform all
of Tenant’s obligations hereunder, and (d) each person signing this Lease on
behalf of the corporation or company is duly and validly authorized to do so. 
If Tenant is a partnership (whether a general or limited partnership), each
person executing this Lease on behalf of Tenant represents and warrants to
Landlord that (i) he/she is a general partner of Tenant, (ii) he/she is duly
authorized to execute and deliver this Lease on behalf of Tenant, (iii) this
Lease is binding on Tenant (and each general partner of Tenant) in accordance
with its terms, and (iv) each general partner of Tenant is personally liable for
the obligations of Tenant under this Lease.

 

37.                               MISCELLANEOUS.

 

(a)                                 The words “Landlord” and “Tenant” as used
herein shall include the plural as well as the singular.  Words used in
masculine gender include the feminine and neuter.  If there be more than one
Tenant, the obligations hereunder imposed on Tenant shall be joint and several. 
Subject to the provisions hereof relating to assignment and subletting, this
Lease is intended to and does bind the heirs, executors, administrators,
successors and assigns of any and all of the parties hereto.  Time is of the
essence of this Lease.

 

(b)                                 There are no oral agreements between
Landlord and Tenant affecting this Lease, and this Lease supersedes and cancels
any and all previous negotiations, arrangements, brochures, agreements and
understandings, if any, between Landlord and Tenant or displayed by Landlord to
Tenant with respect to the subject matter of this Lease or the Building.  There
are no representations between Landlord and Tenant other than those contained in
this Lease and all reliance with respect to any representations is based solely
upon the terms of this Lease.  Notwithstanding the preparation of this Lease by
Landlord or its agent, all of the provisions of this Lease have been freely
negotiated by the parties hereto, and each of the parties has had the
opportunity to be represented by counsel in connection with the negotiation and
execution of this Lease.  Accordingly, the parties agree that there shall be no
presumption or implication against either party with respect to the meaning or
interpretation of this Lease, and any presumption against the drafter implied by
law are hereby waived.

 

(c)                                  Tenant shall not use the name of the
Building for any purpose other than as an address of the business to be
conducted by Tenant in the Premises.  Landlord shall have the right to (i)
change the name, address or title of the Development or the building in which
the Premises are located upon not less than ninety (90) days prior written
notice, (ii) at Tenant’s expense, provide and install Building standard graphics
on the door of the Premises and such portions of the Common Areas as Landlord
shall reasonably deem appropriate, and (iii) to place such signs, notices or
displays as Landlord reasonably deems necessary or advisable upon the roof,
exterior of the buildings or the Development or to post signs in the Common
Areas.

 

(d)                                 Any provision of this Lease which shall be
held invalid, void or illegal shall in no way affect, impair or invalidate any
of the other provisions hereof and such other provisions shall remain in full
force and effect.

 

(e)                                  The obstruction of Tenant’s view, air, or
light by any structure erected in the vicinity of the Building, whether by
Landlord or third parties, shall in no way affect this Lease or impose any
liability upon Landlord.

 

(f)                                   Tenant hereby waives trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto on
any matters whatsoever arising out of or in any way connected with this Lease.

 

(g)                                  Each provision of this Lease to be observed
or performed by Tenant shall be deemed both a covenant and a condition.

 

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(h)                                 Except as expressly limited by, or waived by
a party to, this Lease, no right, remedy or election hereunder or at law or in
equity shall be deemed exclusive but shall, wherever possible, be cumulative
with all other rights, remedies or elections.

 

(i)                                     This Lease shall be governed by the laws
of the State of California applicable to transactions to be performed wholly
therein.

 

(j)                                    Any agreement made after the date of this
Lease is ineffective to modify, waive, or terminate this Lease, in whole or in
part, unless such agreement is in writing, signed by the parties to this Lease,
and specifically states that such agreement modifies this Lease.

 

38.                               BROKER.

 

Tenant represents and warrants to Landlord that Tenant has had no dealings with
any broker, finder, or similar person who is or might be entitled to a
commission or other fee in connection with the execution of this Lease, except
for Landlord’s Broker and Tenant’s Broker.  Landlord represents and warrants to
Tenant that Landlord has had no dealings with any broker, finder, or similar
person who is or might be entitled to a commission or other fee in connection
with the execution of this Lease, except for Landlord’s Broker and Tenant’s
Broker.  Landlord shall pay the commission due Landlord’s Broker and Tenant’s
Broker pursuant to a separate agreement between Landlord and Landlord’s Broker. 
Landlord and Tenant shall each indemnify, defend and hold the other harmless
from and against any and all claims and damages and for any and all costs and
expenses (including reasonable attorneys’ fees and costs) resulting from claims
that may be asserted against the other party by any broker, agent or finder not
disclosed herein.

 

[SIGNATURES ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first above written.

 

 

LANDLORD:

 

TENANT:

 

 

 

SYCAMORE DRIVE HOLDINGS, LLC,

 

OMNICELL, INC.,

a California limited liability company

 

a Delaware corporation

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

 

Delaware limited liability company,

 

By:

/s/ Rob Seim

 

its sole Member

 

 

 

 

 

 

Its:

CFO

 

 

 

 

 

 

 

 

Date:

3-14-12

 

By:

Nearon Enterprises,

 

 

 

 

 

a California corporation,

 

 

 

 

 

its Managing Member

 

By:

/s/ Randall A. Lipps

 

 

 

 

 

 

 

 

By:

/s/ David S. Christensen

 

Its:

CEO

 

 

 

 

 

 

 

 

 

Name:

David S. Christensen

 

Date:

3-14-12

 

 

 

 

 

 

 

 

Its:

Co-President & COO

 

 

 

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EXHIBIT A

 

FLOOR PLAN

 

[g68381ke07i001.jpg]

 

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

 

EXHIBIT B

 

OPERATING EXPENSES AND PROPERTY TAXES

 

715-735 Sycamore Drive, Milpitas

 

A.            The term “Operating Expenses” shall mean the aggregate of those
costs and expenses paid or incurred by or on behalf of Landlord (whether
directly or through independent contractors) relating to Landlord’s obligations
under this Lease with respect to the maintenance, repair, replacement and
operation of the Building and the Common Areas of the Development.  Without
limiting the generality of the foregoing, Operating Expenses shall include the
following:

 

(1)           Insurance.  The term “Insurance” shall mean all insurance of any
type that Landlord, in its reasonable discretion, shall deem necessary or
advisable to carry, including, but not limited to, that necessary in order to
protect itself, the Building, the Development, Landlord’s personal property used
in connection therewith, or its interests therein, including the deductible
amounts payable by Landlord under any such insurance policies, provided that the
insurance carried and the related deductible shall be reasonably similar to
those maintained by other commercial landlords of similar properties in the
Milpitas, CA area.  Subject to the foregoing,  Landlord shall have the right,
but not the obligation, to change, cancel, decrease or increase any insurance
coverages in respect of the Building and/or the Development, or add additional
forms of insurance as Landlord shall deem necessary or desirable (including,
without limitation, earthquake, terrorism and rental value); and/or to obtain
umbrella or other policies covering both the Building and other buildings in the
Development.

 

(2)           Maintenance Costs.  The term “Maintenance Costs” shall mean all
costs paid or incurred in connection with the operation, maintenance, repair
and/or replacement (to the extent hereinafter expressly provided) of all Common
Areas and, to the extent provided by the terms of the Lease, elements and
components of the Building.  Maintenance Costs shall include, but are not
limited to, the following:

 

(i)            Painting the exterior of the Building.

 

(ii)           Subject to subsection (viii) below, striping, resurfacing and
repaving of the Parking Facility.

 

(iii)          Providing utilities to the Common Area (including lighting, trash
removal and water for landscaping irrigation); maintenance and repair (including
replacement) of Common Area lighting fixtures, directional or other signs and
signals, irrigation systems, trees, shrubs, ground cover and other plant
materials, and all landscaping in the Common Area.

 

(iv)          Providing sewer facilities to and within the Building, including,
without limitation, sewer facilities for rest rooms and kitchen facilities.

 

(v)           All expenses incurred for supplies and materials used in the
operation, maintenance and repair of the Building, including, but not limited to
replacement of worn out mechanical or damaged equipment (subject to subsection
(viii) below).

 

(vi)          The cost of all maintenance and service agreements for the
Building and all Common Areas, pest extermination and landscape maintenance.

 

(vii)         The non-capitalized cost of repairs to or maintenance of any
Building systems, including HVAC equipment, utility facilities and other
building service equipment, roof membrane, and the normal repair and replacement
of worn-out equipment, facilities and installations.

 

(viii)        The amortized cost of installation and/or replacement of capital
improvement items and repairs for which Landlord is obligated to maintain and
repair under the terms of the Lease, including,

 

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without limitation, roof membrane, Building HVAC equipment, sewer facilities,
and capital improvements for which Landlord is legally responsible and that are
required under any Applicable Laws going into effect on or after the
Commencement Date.  Permitted capital expenditures shall include the
amortization of the cost of each such improvement or asset over its reasonable
useful life at an interest rate equal to the lesser of (a) the prime rate of
interest published from time to time in The Wall Street Journal or any successor
publication plus two and one-half percent (2.5%) per annum or (b) the maximum
legal rate of interest allowed by applicable law.  All such costs shall be
amortized over the reasonable life of the capital improvement or asset, with the
reasonable life and amortization schedule being determined in accordance with
generally accepted accounting principles.

 

(3)           Management Fees.  The term “Management Fees” shall mean all fees
(including, without limitation, salaries and fringe benefits of employees of
Landlord below the level of property manager and only to the extent such
employees are providing services to the Building and any third party agent
engaged by Landlord), accounting costs and disbursements and other professional
services associated with the operation and maintenance of the Development. 
Notwithstanding anything to the contrary contained in this Lease, the Management
Fee payable by Tenant for any given period shall be in the amount of three
percent (3%) of the Base Rent payable by Tenant during such period.

 

(4)           Miscellaneous Expenses.   The term “Miscellaneous Expenses” means
any and all licenses, dues, permits and other governmental charges including,
without limitation, all costs and expenses resulting from compliance with any
laws, ordinances, rules, regulations or orders applicable to the Building, and
all accounting, legal and other professional fees and expenses incurred with
respect to the provision of Operating Expenses.

 

B.            Anything herein to the contrary notwithstanding, Operating
Expenses shall not include (i) Landlord’s general corporate overhead and
administrative expenses; (ii) expenses directly relating to the leasing of space
in the Building (including tenant improvements, leasing commissions and
advertising expenses incurred in connection with the listing of available space
in the Building); (iii) legal fees and disbursements incurred in connection with
the negotiation of leases, or the enforcement of leases, or any financings or
refinancings relating to the Building; (iv) costs resulting from Landlord’s
gross negligence or willful misconduct in the performance of its obligations
under this Lease, or Landlord’s violation of applicable laws; (v) management or
other fees paid to any entity controlled by, controlling or under common control
with Landlord to the extent the same are substantially in excess of the industry
standard for similarly situated office buildings in the general vicinity of the
Building; (vi) depreciation of the Building and, except as specifically provided
hereinabove, amortization; (vii) costs incurred to remedy defects in the
original design or construction of the Building; (viii) the cost of repairs
necessitated by a fire or other casualty to the extent of any insurance proceeds
received by Landlord in connection therewith; (ix) any costs incurred in the
ownership of the Premises, as opposed to the operation and maintenance of the
Premises, including Landlord’s income taxes, excess profit taxes, franchise
taxes or similar taxes on Landlord’s business; preparation of income tax
returns; corporation, partnership or other business form organizational
expenses; franchise taxes; filing fees; or other such expenses; (x) expenses in
connection with services or other benefits of a type which are not Building
standard and are not generally available to all tenants of the Building; (xi)
advertising and promotional expenses, brochures with respect to the Building or
Development, (xii) penalties, fines, legal expenses, or late payment interest
incurred by Landlord due to violation by Landlord, or Landlord’s agents,
contractors or employees, of either the payment terms and conditions of any
lease or service contract covering space in the Building or Landlord’s
obligations as owner of the Building (such as late payment penalties and
interest on real estate taxes, late payment of utility bills); provided, that
the exclusion contained in this clause shall not apply to any such penalties,
fines, legal expenses, or late payment interest incurred by Landlord as a result
of Tenant failing to perform its obligations under this Lease, and (xiii) costs
relating to remediation of Hazardous Materials which (A) existed on or under the
Premises as of the Lease Effective Date, (B) migrated onto the Premises from an
offsite source (except to the extent caused by Tenant or Tenant’s agents), or
(C) were brought onto the Premises by Landlord or Landlord’s agents

 

C.            Landlord reserves the right, in good faith and in a commercially
reasonable manner, to establish classifications for the equitable allocation of
Operating Expenses that are incurred for the direct benefit of specific types or
categories of tenants of the Development, including, without limitation, tenants
of a particular Building in

 

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the Development (“Cost Pools”).  Such Cost Pools may include, but shall not be
limited to, Operating Expenses allocable to all Common Areas in the Development
and Operating Expenses allocable to or utilized only by certain tenants of the
Building.  Tenant acknowledges that the allocation of Operating Expenses among
Cost Pools does not affect all Operating Expenses, and is limited to specific
items which Landlord determines, in good faith and in a commercially reasonable
manner, would be inequitable to share, in whole or in part, among tenants,
generally, in the Development, or among tenants of other Cost Pools established
by Landlord in the Development.

 

D.            As used in this Lease, “Property Taxes” shall mean all taxes,
assessments, excises, levies, fees and charges (and any tax, assessment, excise,
levy, fee or charge levied wholly or partly in lieu thereof or as a substitute
therefor or as an addition thereto) of every kind and description, general or
special, ordinary or extraordinary, foreseen or unforeseen, secured or
unsecured, that are levied, assessed, charged, confirmed or imposed by any
public or government authority on or against, or otherwise with respect to, the
Development or any real property or improvements that are a part thereof, or any
personal property used in connection with the Development, excluding anything
which is excluded from Operating Expenses above.  Property Taxes shall not
include net income (measured by the income of Landlord from all sources or from
sources other than solely rent), franchise, documentary transfer, inheritance or
capital stock taxes of Landlord, unless levied or assessed against Landlord in
whole or in part in lieu of, as a substitute for, or as an addition to any
Property Taxes.

 

E.            In addition to all rent and other charges to be paid by Tenant
under the Lease, Tenant shall reimburse Landlord upon demand for all taxes,
assessments, excises, levies, fees and charges levied, assessed, charged,
confirmed or imposed by any public or government authority upon, or measured by,
or reasonably attributable to (i) the cost or value of Tenant’s equipment,
furniture, fixtures and other personal property located in the Premises or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, regardless of whether title to such improvements is vested in Tenant or
Landlord, (ii) any rent payable under this Lease, including any gross income tax
or excise tax levied by any public or government authority with respect to the
receipt of any such rent, or (iii) this transaction or any document to which
Tenant is a party creating or transferring an interest or an estate in the
Premises.  All taxes, assessments, excises, levies, fees and charges payable by
Tenant under this Exhibit shall be deemed to be, and shall be paid as,
additional rent.

 

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EXHIBIT C

 

RULES AND REGULATIONS

 

715-735 Sycamore Drive, Milpitas

 

PARKING RULES

 

1.             Automobile parking areas shall be used only for parking by
vehicles no longer than full size, passenger automobiles (including pick-up
trucks with campers) herein called “Permitted Size Vehicles”.  Vehicles other
than Permitted Size Vehicles are herein referred to as “Oversized Vehicles”.

 

2.             Tenant shall not permit or allow any vehicles that belong to or
are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in areas other than those
designated by Landlord for such activities.

 

3.             Unless otherwise instructed, every person using the parking area
is required to park and lock his own vehicle.  Landlord is not responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.

 

4.             The maintenance, washing, waxing or cleaning of vehicles in the
parking structure or anywhere on the property is prohibited.

 

5.             Tenant shall be responsible for ensuring that all of its
employees, agents and invitees comply with the applicable parking rules,
regulations, laws and agreements.

 

6.             Landlord reserves the right to modify these rules and/or adopt
such other reasonable and nondiscriminatory rules and regulations (which do not
involve the imposition of fees) as it may deem necessary for the proper
operation of the parking area.

 

7.             Parking herein provided is intended as a license only and no
bailment is intended or shall be created hereby.

 

8.             Users of the parking area will obey all posted signs and park
only in the areas designated for vehicle parking.

 

SUPPLEMENTAL TO LEASE

 

These Rules and Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the covenants of this Lease.  In
the event of any conflict between the terms of the body of the Lease and this
Exhibit, the terms of the body of the Lease shall prevail.

 

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EXHIBIT D

 

LANDLORD’S WORK

 

Landlord will perform, at its sole cost and expense, the work described in this
Exhibit D (“Landlord’s Work”), and shall deliver the Premises to Tenant with
Landlord’s Work Substantially Complete.  Landlord shall correct and complete the
items on any punchlist promptly after such written notice thereof from Tenant,
which notice must be delivered by Tenant to Landlord, if at all, within thirty
(30) days after the first date that Landlord’s Work is Substantially Complete. 
Landlord’s Work shall be the following improvements, which are more particularly
described in the plans and specifications (the “Plans and Specifications”)
attached hereto as Schedule 1:

 

1.                                      Construct a wall (“Demising Wall”) to
demise the Premises from the remainder of the Building.  The Demising Wall shall
be a full height wall, consisting of 6” studs, 5/8ths inch gypsum board, and
insulation, and shall include a fire taped finish to match existing
improvements.  The location of the Demising Wall is shown in the Plans and
Specifications.

 

2.                                      Install an electrical meter that
exclusively serves the Premises, separate/split power at the Demising Wall, and
re-feed lighting, HVAC, office & warehouse power.  Power provided to the
Premises shall be 800 amps, 277/480 volt, 3 phase power.

 

3.                                      Basic Separation of HVAC units and
ducting at the Demising Wall.  HVAC units will be re-connected such that the
existing lay-out is correctly serviced.  No re-feed or reducting of HVAC to
Premises shall be performed.

 

4.                                      Cause the existing loading doors and
dock levelers serving the Premises and the existing Premises Systems to be in
good working condition.

 

To the extent reasonably practical, Landlord shall utilize Building Standard
Materials in the performance of Landlord’s Work.  By its execution of the Lease,
Tenant hereby authorizes Landlord to perform and commence work on Landlord’s
Work through contractors selected and under the supervision and control of
Landlord.  As used herein, the term “Building Standard Materials” refers to the
materials maintained in stock or typically used by Landlord for use in the
improvements of tenant space in the Building.

 

As used herein, the term “Delay” or “Delays” shall mean any delay that Landlord
may encounter in the performance of Landlord’s obligations under this Exhibit D
or the Lease to construct Landlord’s Work because of any act or omission of any
nature by Tenant or its agents, including, without limitation, delays resulting
from Tenant requested changes in or additions to the plans for Landlord’s Work
as attached hereto; delays due to the failure to give authorizations or
approvals required by Landlord to enable Landlord to proceed with any work
beyond three (3) business days following Landlord’s request for approval; or
delays due to the postponement of any Landlord Work at the request of Tenant. 
Any Delay that actually causes a delay in Substantial Completion of Landlord’s
Work, as reasonably determined by Landlord, shall be referred to as a “Tenant
Delay”.

 

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SCHEDULE 1TO EXHIBIT D

 

PLANS AND SPECIFICATIONS

 

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EXHIBIT E

 

TENANT IMPROVEMENT WORK LETTER

 

THIS TENANT IMPROVEMENT WORK LETTER (“Work Letter”), dated as of March     ,
2012, is entered into by and between SYCAMORE DRIVE HOLDINGS, LLC, a California
limited liability company (“Landlord”) and OMNICELL, INC., a Delaware
corporation (“Tenant”).  On or about the date hereof, Landlord and Tenant
entered into that certain Lease (together with all exhibits thereto, the
“Lease”) for certain premises (the “Premises”) situated at 715-735 Sycamore
Drive, Milpitas, California (the “Building”).  This Work Letter sets forth the
agreement of Landlord and Tenant with respect to the improvements to be
constructed by Tenant in the Premises.  All defined terms used herein shall have
the meaning set forth in the Lease, unless otherwise defined in this Work
Letter.

 

1.             Tenant Improvements.  Except as expressly provided in the Lease,
Tenant acknowledges that it is leasing the Premises in their “as is” condition,
and Landlord shall have no obligation to make any improvements or to perform any
work in the Premises.  Except as expressly provided in the Lease, Tenant shall
be responsible for performing all work required to prepare the Premises for
occupancy by Tenant pursuant to the Lease, including, but not limited to, all
work that may be required to make the Tenant Improvements comply with applicable
law and all work that arises out of, or is necessitated by, any work described
in this Work Letter.  The work that is to be performed by Tenant pursuant to
this Work Letter as described in the approved Final Plans (defined below) is
hereinafter referred to as the “Tenant Improvements” and shall be in substantial
compliance with the improvements identified in that certain space plan (the
“Space Plan”), a copy of which is attached hereto as Schedule 1, and the Final
Plans (as defined below).  All of the Tenant Improvements shall be performed in
a first-class manner at Tenant’s sole cost and expense.  Tenant acknowledges and
agrees to use its best efforts to utilize materials of a quality, as reasonably
determined by Landlord, no less than Building Standard Materials in the
construction of the Tenant Improvements.  “Building Standard Materials” shall
mean those materials either maintained in stock or typically used by Landlord
for use in the improvements of tenant space in the Building.  Landlord shall
provide Tenant with a list of Building Standard Materials within three (3) days
following written request by Tenant therefor.  Tenant acknowledges and agrees
that Landlord’s Work (as defined in Exhibit D to the Lease) and the Tenant
Improvements constitute all of the improvements to the Premises required to
enable Tenant to occupy and operate its business in the Premises.

 

2.             Contractor.  Tenant shall retain a contractor (“Contractor”) to
perform the Tenant Improvements.  Contractor shall be subject to Landlord’s
prior written approval (which approval shall not be unreasonably withheld,
conditioned or delayed) and subject to the reasonable administrative
construction rules of Landlord.

 

3.             Architect.  Tenant shall retain a licensed architect
(“Architect”) for the design and preparation of plans for the Tenant
Improvements, which plans shall be reasonably acceptable to both parties and
subject to Landlord’s approval as set forth in Paragraph 4 below.  Architect
shall be subject to Landlord’s prior written approval, not to be unreasonably
withheld, conditioned or delayed.  Architect shall be responsible for obtaining
all necessary building permits and approvals and other authorizations from
governmental agencies required in connection with the Tenant Improvements.  The
cost of all such permits and approvals, including inspection and other building
fees required to obtain the permits for the Tenant Improvements, shall be
included as part of the cost of performing the Tenant Improvements
(collectively, the “Tenant Improvement Costs”).  Tenant shall retain Architect’s
administrative services throughout the performance of the Tenant Improvements.

 

4.             Final Plans.  Tenant shall cause Architect to commence preparing
complete plans, specifications and working drawings which incorporate and are
consistent with the Space Plan, and which show in detail the intended design,
construction and finishing of all portions of the Tenant Improvements
(collectively, the “Final Plans”).  Tenant shall cause Architect to deliver the
Final Plans to Landlord, for Landlord’s review and approval, as promptly as
possible after the Lease Effective Date.  Within ten (10) days after Landlord’s
receipt of the Final Plans, Landlord shall either approve or disapprove the
Final Plans, which approval shall not be unreasonably withheld, conditioned or
delayed.  Tenant acknowledges that it shall be reasonable for Landlord to
withhold its approval of the Final Plans if Landlord is not satisfied with any
proposed modifications to the Building Systems, including, without limitation,
the electrical, mechanical, plumbing, utility, life-safety or HVAC systems or if
the proposed work would

 

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impact any portion of the Building outside of the Premises.  Landlord’s failure
to approve or disapprove the Final Plans within such 10-day period shall be
deemed to constitute Landlord’s approval of the Final Plans.  If Landlord
disapproves the Final Plans in writing, then Landlord shall state in reasonable
detail the changes which Landlord requires to be made thereto (the “Disapproval
Notice”).  Tenant shall submit to Landlord revised Final Plans within ten
(10) business days after Tenant’s receipt of the Disapproval Notice.  Following
Landlord’s receipt of the revised Final Plans from Tenant, Landlord shall again
have the right to review and approve and/or disapprove the revised Final Plans
pursuant to this Paragraph 4.  Landlord and Tenant shall continue to follow the
procedures set forth in this Paragraph 4 until Landlord and Tenant reasonably
approve such Final Plans in accordance with this Paragraph 4.

 

5.             Notices of Non-responsibility.  Prior to the commencement of
performance of the Tenant Improvements at the Premises, Landlord shall have the
right to post in a conspicuous location on the Premises, as well as to record
with the County of Santa Clara, Notices of Non-Responsibility.

 

6.             Commencement and Performance of Tenant Improvements. Tenant shall
adopt a construction schedule (the “Construction Schedule”) for the Tenant
Improvements and shall perform the Tenant Improvements in such a way as not to
unreasonably disrupt, interfere with, hinder or delay the operations of Landlord
or any other tenant or occupant of the Building, provided that Tenant shall not
be obligated to incur over-time charges.  Any costs incurred by Landlord as a
result of any such disruption, interference, hindrance or delay of the
operations of Landlord or any other tenant or occupant caused by Tenant or its
contractors shall be paid by Tenant to Landlord upon demand.  Tenant and its
contractors shall comply with all of the following requirements:

 

(a)           Construction of the Tenant Improvements shall not commence until
Landlord has approved in writing, which approval shall not be unreasonably
withheld, the following: (i) the Contractor and the Architect, (ii) the amount
and coverage of public liability and property damage insurance carried by
Contractor and any subcontractors, (iii) the Final Plans, (iv) the Construction
Schedule, and (v) any other matter reasonably related to the Tenant
Improvements;

 

(b)           The Tenant Improvements shall be performed in a good and
workmanlike manner, strictly in accordance with this Work Letter, the Lease, the
Final Plans, the Construction Schedule, and in conformity with a valid building
permit, a copy of which shall be furnished to Landlord before such work is
commenced.  The Tenant Improvements shall comply with all applicable laws, codes
and ordinances of any governmental entity having jurisdiction over the
Building.  Landlord shall have no responsibility for Tenant’s failure to comply
with such applicable laws, and no such failure, or any delay in Tenant’s
occupancy of the Premises, shall delay or postpone in any manner Tenant’s
obligation to pay any rent in accordance with the Lease.  Tenant covenants and
agrees that the Tenant Improvements shall be performed in a manner that does not
void and/or otherwise limit the effectiveness of the warranty applicable to the
roof of the Building;

 

(c)           Tenant or Contractor shall arrange for necessary utilities with
Landlord, and shall pay such reasonable costs for such services as may be
charged by Landlord, without mark-up;

 

(d)           Tenant shall promptly pay Landlord upon demand for any extra
expense reasonably incurred by Landlord by reason of faulty work done by Tenant
or its contractors, or by reason of inadequate cleanup by Tenant or Contractor,
or its subcontractors;

 

(e)           Storage of Contractor’s and its subcontractor’s construction
materials, tools and equipment shall be confined within the Premises, and in any
other areas designated for such purposes by Landlord.  Contractor and its
subcontractors shall not run pipes or conduits over or through any other
tenant’s space, or outside of the Premises, except as directed by Landlord; and

 

(f)            Upon a minimum of twenty-four (24) hours’ prior notice to Tenant,
Landlord shall have the right to inspect the Premises and the Tenant
Improvements.  Tenant shall cause a representative for each of Tenant and
Contractor to accompany Landlord during all such inspections.

 

7.             Payment for Tenant Improvements.  Tenant shall bear and pay all
of the Tenant Improvement Costs.  Upon completion of the Tenant Improvements,
Tenant shall notify Landlord that Tenant has completed

 

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construction and performance of the Tenant Improvements, which notice shall be
accompanied by all of the following (collectively, “Tenant’s Completion
Notice”): (i) copies of paid invoices and unconditional full lien waivers from
Contractor and any subcontractors, showing that full payment has been received
for the performance of the Tenant Improvements; (ii) a detailed break-down of
final and total Tenant Improvement Costs; (iii) certification from Architect
that all of the Tenant Improvements have been completed in accordance with the
Final Plans; (iv) evidence reasonably satisfactory to Landlord that all legal
requirements for Tenant’s occupancy of the Premises have been satisfied; (v) two
(2) complete sets of as-built plans and specifications (one (1) of which shall
be reproducible) describing all portions of the Tenant Improvements; and
(vi) any other information reasonably requested by Landlord.

 

8.             Tenant Improvement Costs.  The Tenant Improvement Costs shall
include all reasonable costs incurred in connection with the Tenant
Improvements, including without limitation the following:

 

(a)           All costs of space plans and other architectural and engineering
plans and specifications for the Tenant Improvements;

 

(b)           All costs of obtaining building permits and other necessary
authorizations from the City of Milpitas;

 

(c)           All costs of interior design and finish schedule plans and
specifications, including as-built drawings by Architect;

 

(d)           All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee payable to the Contractor for overhead and profit, and
the cost of all on-site supervisory and administrative staff, office, equipment
and temporary services rendered by Contractor in connection with construction of
the Tenant Improvements; and

 

(e)           All fees payable to Architect and Contractor.

 

9.             Change Requests.  Any request by Tenant for a change in the
approved Final Plans (each, a “Change”) shall be in writing and shall be
accompanied by all information necessary to clearly identify and explain the
proposed Change, including, without limitation, the estimated cost of such
Change as well as the estimated increase in construction time caused by the
Change, if any.  Landlord shall either approve or disapprove any such Change
within three (3) business days after receipt of Tenant’s notice.  Upon an
approval by Landlord, Tenant shall be authorized to proceed with the
implementation of the requested Change. If Landlord disapproves such Change in
writing, Landlord shall state in reasonable detail the revisions that Landlord
requires to be made thereto.  Landlord’s failure to approve the Change within
the three (3) business day period shall be deemed approval of the Change.  If
Landlord disapproves a Change, Tenant shall modify the Change and resubmit to
Landlord for Landlord’s approval in accordance with this Paragraph 9 until
Landlord and Tenant reasonably approve the Change in accordance with this
Paragraph 9.

 

10.          Mechanics’ Liens.  Tenant shall keep the Premises, the Building and
the Development free from any mechanics’ liens, vendors liens or any other liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant arising out of or related to the Tenant Improvements, and agrees to
protect, defend, indemnify and hold harmless Landlord from and against any such
lien or claim or action thereon, together with costs of suit and reasonable
attorneys’ fees incurred by Landlord in connection with any such claim or
action.  In the event that there shall be recorded against the Premises or the
Building or the property of which the Premises is a part any claim or lien
arising out of any such work performed, materials furnished or obligations
incurred by Tenant and such claim or lien shall not be removed, bonded over or
discharged by Tenant within ten (10) days of written notice from Landlord,
Landlord shall have the right but not the obligation to pay and discharge said
lien by bond or otherwise without regard to whether such lien shall be lawful or
correct.  Any reasonable costs, including attorney’s fees incurred by Landlord
in connection therewith, shall be paid by Tenant within twenty (20) days after
demand by Landlord.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Work Letter as of the
date first above written.

 

LANDLORD:

 

TENANT:

 

 

 

SYCAMORE DRIVE HOLDINGS, LLC,

 

OMNICELL, INC.,

a California limited liability company

 

a Delaware corporation

 

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

 

Delaware limited liability company,

 

By:

 

 

its sole Member

 

Name:

 

 

 

 

Its

 

 

By:

Nearon Enterprises,

 

 

 

 

a California corporation,

 

 

 

 

its Managing Member

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

 

 

Its:

 

 

 

 

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SCHEDULE 1 TO EXHIBIT F

 

SPACE PLAN

 

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EXHIBIT F

 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

 

SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT

(Lease To Deed of Trust)

 

NOTICE:                             THIS SUBORDINATION AGREEMENT RESULTS IN YOUR
SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN
THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

 

THIS SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT (“Agreement”) is made March     , 2012
by and between SYCAMORE DRIVE HOLDINGS, LLC, a California limited liability
company (“Owner”), OMNICELL, INC., a Delaware corporation (“Lessee”) and
(“Lender”).

 

R E C I T A L S

 

A.            Pursuant to the terms and provisions of a lease dated March     ,
2012 (“Lease”), Owner, as “Lessor”, granted to Lessee a leasehold estate in and
to a portion of the property described on Exhibit A attached hereto and
incorporated herein by this reference (which property, together with all
improvements now or hereafter located on the property, is defined as the
“Property”).

 

B.            Owner has executed a deed of trust with absolute assignment of
leases and rents, security agreement and fixture filing (“Deed of Trust”)
securing, among other things, an amended and restated promissory note (“Note”)
in the principal sum of, dated, in favor of Lender, which Note is payable with
interest and upon the terms and conditions described therein (“Loan”).  The Deed
of Trust was recorded on, as Document No., in the Official Records of Santa
Clara County, State of California.

 

C.            As a condition to making the Loan secured by the Deed of Trust,
Lender requires that the Deed of Trust be unconditionally and at all times
remain a lien on the Property, prior and superior to all the rights of Lessee
under the Lease and that the Lessee specifically and unconditionally subordinate
the Lease to the lien of the Deed of Trust.

 

D.            Owner and Lessee have agreed to the subordination, attornment and
other agreements herein in favor of Lender.

 

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NOW THEREFORE, Owner and Lessee hereby agree for the benefit of Lender as
follows:

 

1.                            SUBORDINATION.  Owner and Lessee hereby agree
that:

 

1.1                      Prior Lien.  The Deed of Trust securing the Note in
favor of Lender, and any modifications, renewals or extensions thereof
(including, without limitation, any modifications, renewals or extensions with
respect to any additional advances made subject to the Deed of Trust), shall
unconditionally be and at all times remain a lien on the Property prior and
superior to the Lease;

 

1.2                      Subordination.  Lender would not make the Loan without
this agreement to subordinate; and

 

1.3                      Whole Agreement.  This Agreement shall be the whole
agreement and only agreement with regard to the subordination of the Lease to
the lien of the Deed of Trust and shall supersede and cancel, but only insofar
as would affect the priority between the Deed of Trust and the Lease, any prior
agreements as to such subordination, including, without limitation, those
provisions, if any, contained in the Lease which provide for the subordination
of the Lease to a deed or deeds of trust or to a mortgage or mortgages.

 

AND FURTHER, Lessee individually declares, agrees and acknowledges for the
benefit of Lender, that:

 

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

 

1.5                      Waiver, Relinquishment and Subordination.  Lessee
intentionally and unconditionally waives, relinquishes and subordinates all of
Lessee’s right, title and interest in and to the Property to the lien of the
Deed of Trust and understands that in reliance upon, and in consideration of,
this waiver, relinquishment and subordination, specific loans and advances are
being and will be made by Lender and, as part and parcel thereof, specific
monetary and other obligations are being and will be entered into which would
not be made or entered into but for said reliance upon this waiver,
relinquishment and subordination.

 

2.                            ASSIGNMENT.  Lessee acknowledges and consents to
the assignment of the Lease by Lessor in favor of Lender.

 

3.                            ESTOPPEL.  Lessee acknowledges and represents
that:

 

3.1                      Lease Effective.  The Lease has been duly executed and
delivered by Lessee and, subject to the terms and conditions thereof, the Lease
is in full force and effect, the obligations of Lessee thereunder are valid and
binding and there have been no modifications or additions to the Lease, written
or oral;

 

3.2                      No Default.  To the best of Lessee’s knowledge, as of
the date hereof:  (i) there exists no breach, default, or event or condition
which, with the giving of notice or the passage of time or both, would
constitute a breach or default under the Lease; and (ii) there are no existing
claims, defenses or offsets against rental due or to become due under the Lease;

 

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3.3                      Entire Agreement.  The Lease constitutes the entire
agreement between Lessor and Lessee with respect to the Property and Lessee
claims no rights with respect to the Property other than as set forth in the
Lease; and

 

3.4                      No Prepaid Rent.  No deposits or prepayments of rent
have been made in connection with the Lease, except as follows:  (if none, state
“None”) $ Security Deposit.

 

3.5                      No Broker Liens.  Neither Lessee nor Owner has incurred
any fee or commission with any real estate broker which would give rise to any
lien right under state or local law, except as follows (if none, state “None”): 
Owner obligated to pay and leasing fees as per separate agreement.

 

4.                            ADDITIONAL AGREEMENTS.  Lessee covenants and
agrees that, during all such times as Lender is the Beneficiary under the Deed
of Trust:

 

4.1                      Modification, Termination and Cancellation.  Lessee
will (i) not consent to any modification or amendment of the Lease (in whole or
in part) without Lender’s prior written consent and will not make any payment to
Lessor in consideration of any modification or amendment of the Lease (in whole
or in part) without Lender’s prior written consent, (ii) not tender a surrender
of the Lease other than pursuant to, and in accordance with, the express terms
of the Lease, and (iii) notify Lender of any default by Lessor under the Lease
and of any act or omission of Lessor which would give Lessee the right to cancel
or terminate the Lease or to claim a partial or total eviction, promptly
following Lessee becoming aware of the same.

 

4.2                      Notice of Default.  Lessee will notify Lender in
writing concurrently with any notice given to Lessor of any default by Lessor
under the Lease, and Lessee agrees that Lender has the right (but not the
obligation) to cure any breach or default specified in such notice within the
time periods set forth below and Lessee will not declare a default of the Lease,
as to Lender, if Lender cures such default within fifteen (15) days from and
after the expiration of the time period provided in the Lease for the cure
thereof by Lessor; provided, however, that if such default cannot with diligence
be cured by Lender within such fifteen (15) day period, the commencement of
action by Lender within such fifteen (15) day period to remedy the same shall be
deemed sufficient so long as Lender pursues such cure with diligence;

 

4.3                      No Advance Rents.  Lessee will make no payments or
prepayments of rent more than one (1) month in advance of the time when the same
become due under the Lease; and

 

4.4                      Assignment of Rents.  Upon receipt by Lessee of written
notice from Lender that Lender has elected to terminate the license granted to
Lessor to collect rents, as provided in the Deed of Trust, and directing the
payment of rents by Lessee to Lender, Lessee shall comply with such direction to
pay and shall not be required to determine whether Lessor is in default under
the Loan and/or the Deed of Trust.

 

5.                            ATTORNMENT.  In the event of a foreclosure under
the Deed of Trust, Lessee agrees for the benefit of Lender (including for this
purpose any transferee of Lender or any transferee of Lessor’s title in and to
the Property by Lender’s exercise of the remedy of sale by foreclosure under the
Deed of Trust) as follows:

 

5.1                      Payment of Rent.  Lessee shall pay to Lender all rental
payments required to be made by Lessee pursuant to the terms of the Lease for
the duration of the term of the Lease;

 

5.2                      Continuation of Performance.  Lessee shall be bound to
Lender in accordance with all of the provisions of the Lease for the balance of
the term thereof, and Lessee hereby attorns to

 

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Lender as its landlord, such attornment to be effective and self-operative
without the execution of any further instrument immediately upon Lender
succeeding to Lessor’s interest in the Lease and giving written notice thereof
to Lessee;

 

5.3                      No Offset.  Lender shall not be liable for, nor subject
to, any offsets or defenses which Lessee may have by reason of any act or
omission of Lessor under the Lease (except to the extent that Lessee has given
to Lender written notice of, and an opportunity to cure, the underlying cause of
such off-set or defense in accordance with Section 4.2 of this Agreement, and
the underlying cause of such off-set or defense continues after Lender or its
successor-in-interest takes possession or title to the Property), nor for the
return of any sums which Lessee may have paid to Lessor under the Lease as and
for security deposits, advance rentals or otherwise (except to the extent that
such sums are actually delivered by Lessor to Lender); and

 

5.4                      Subsequent Transfer.  If Lender, by succeeding to the
interest of Lessor under the Lease, should become obligated to perform the
covenants of Lessor thereunder, then, upon any further transfer of Lessor’s
interest by Lender, all of such obligations shall terminate as to Lender.

 

6.                            NON-DISTURBANCE.  In the event of a foreclosure
under the Deed of Trust, so long as there shall then exist no breach, default,
or event of default on the part of Lessee beyond any applicable cure period
under the Lease, Lender agrees for itself and its successors and assigns that
the leasehold interest of Lessee under the Lease shall not be extinguished or
terminated by reason of such foreclosure, but rather the Lease shall continue in
full force and effect and Lender shall recognize and accept Lessee as tenant
under the Lease subject to the terms and provisions of the Lease except as
modified by this Agreement; provided, however, that Lessee and Lender agree that
the following provisions of the Lease (if any) shall not be binding on Lender: 
any option to purchase with respect to the Property; or any right of first
refusal with respect to a purchase of the Property.

 

7.                            MISCELLANEOUS.

 

7.1                      Heirs, Successors, Assigns and Transferees.  The
covenants herein shall be binding upon, and inure to the benefit of, the heirs,
successors and assigns of the parties hereto; and

 

7.2                      Notices.  All notices or other communications required
or permitted to be given pursuant to the provisions hereof shall be deemed
served upon delivery or, if mailed, upon the first to occur of receipt or the
expiration of three (3) days after deposit in United States Postal Service,
certified mail, postage prepaid and addressed to the address of Lessee or Lender
appearing below:

 

“OWNER”

 

SYCAMORE DRIVE HOLDINGS, LLC

c/o Nearon Enterprises

500 La Gonda Way, Suite 200

Danville, CA 94526
Attn:  Tony Perino and Gregory B. Chabolla

 

With copy to:

Orchard Commercial

2055 Laurelwood Road, Suite 130

Santa Clara, CA 95054

 

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“LESSEE”

 

OMNICELL, INC.,

735 Sycamore Drive

Milpitas, CA 95035
Attn:  General Counsel

 

With copy to:

Cooley LLP

101 California Street, 5th Floor

San Francisco, CA 94111

Attn:  Anna B. Pope

 

“LENDER”

 

provided, however, any party shall have the right to change its address for
notice hereunder by the giving of written notice thereof to the other party in
the manner set forth in this Agreement; and

 

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

 

7.4                      Remedies Cumulative.  All rights of Lender herein to
collect rents on behalf of Lessor under the Lease are cumulative and shall be in
addition to any and all other rights and remedies provided by law and by other
agreements between Lender and Lessor or others; and

 

7.5                      Paragraph Headings.  Paragraph headings in this
Agreement are for convenience only and are not to be construed as part of this
Agreement or in any way limiting or applying the provisions hereof.

 

INCORPORATION.  Exhibit A attached hereto and incorporated herein by this
reference.

 

[Signatures Follow on Next Page]

 

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

 

NOTICE:                       THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION
WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A
LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF
THE LAND.

 

IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE PARTIES
CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.

 

 

“OWNER”

 

 

 

SYCAMORE DRIVE HOLDINGS, LLC, a California limited liability company

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

Delaware limited liability company,

 

 

its sole Member

 

 

 

 

 

By:

Nearon Enterprises,

 

 

 

a California corporation,

 

 

 

its Managing Member

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

Its:

 

 

 

 

“LESSEE”

 

 

 

OMNICELL, INC., a Delaware corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

“LENDER”

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

(ALL SIGNATURES MUST BE ACKNOWLEDGED)

 

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EXHIBIT A

Loan No. 1000413

 

DESCRIPTION OF PROPERTY

 

EXHIBIT A to Subordination Agreement; Acknowledgment of Lease Assignment,
Estoppel, Attornment and Non-Disturbance Agreement, executed by SYCAMORE DRIVE
HOLDINGS, LLC, a California limited liability company, as “Owner”,
OMNICELL, INC., a Delaware corporation, as “Lessee”, and, as “Lender”, dated as
of March     , 2012.

 

All that certain real property located in the City of Milpitas, County of Santa
Clara, State of California, described as follows:

 

PARCEL ONE:

 

PARCEL B AS SHOWN ON THE PARCEL MAP FILED OCTOBER 18, 1979 IN BOOK 451 OF MAPS,
PAGES 49, 50 AND 51, RECORDS OF SANTA CLARA COUNTY.

 

PARCEL TWO:

 

A NONEXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS AND
DRIVEWAY PURPOSES AS GRANTED IN THAT CERTAIN RECIPROCAL EASEMENT AGREEMENT FOR
INGRESS, EGRESS AND MAINTENANCE RECORDED JUNE 23, 1994 AS INSTRUMENT NO.
12551325, OFFICIAL RECORDS.

 

APN:  086-03-033

 

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STATE OF CALIFORNIA

COUNTY OF                                    SS.

 

On                                                                      before
me,                                                                           ,
personally appeared
                                                                                                              ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal

 

 

Signature

 

 

 

 

 

 

My commission expires

.

 

STATE OF CALIFORNIA

COUNTY OF                                    SS.

 

On                                                                      before
me,                                                                           ,
personally appeared
                                                                                                              ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal

 

 

Signature

 

 

 

 

 

 

My commission expires

.

 

F-8

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STATE OF CALIFORNIA

COUNTY OF                                    SS.

 

On                                                                      before
me,                                                                           ,
personally appeared
                                                                                                              ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal

 

 

Signature

 

 

 

 

 

 

My commission expires

.

 

F-9

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EXHIBIT G

 

COMMENCEMENT LETTER

 

, 20

 

 

 

 

 

Re:          Lease dated March     , 2012 (“Lease”), by and between Sycamore
Drive Holdings, LLC, a California limited liability company (“Landlord”), and
Omnicell, Inc., a Delaware corporation (“Tenant”), with respect to 735 Sycamore
Drive, Milpitas, California, 95035 (“Premises”)

 

Dear Tenant:

 

In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:

 

Commencement Date of the Lease:               , 20    ;

1 Year Anniversary:               , 20    ;

2 Year Anniversary:               , 20    ;

3 Year Anniversary:               , 20    ;

4 Year Anniversary:               , 20    ;

Expiration Date of the Lease:               , 20    .

 

To Tenant’s actual knowledge, Landlord’s Work is Substantially Complete, and any
punchlist items that Tenant has timely notified Landlord of pursuant to the
terms of the Lease, have been completed.

 

Terms used but not defined herein shall have the meanings given such terms in
the Lease.  Please acknowledge your acceptance of possession of the Premises and
agreement to the terms set forth above by signing both copies of this
Commencement Letter in the space provided and returning one (1) fully executed
copy of the same to my attention.

 

Sincerely,

 

SYCAMORE DRIVE HOLDINGS, LLC,

 

a California limited liability company

 

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

Delaware limited liability company,

 

 

its sole Member

 

 

 

 

 

By:

Nearon Enterprises,

 

 

 

a California corporation,

 

 

 

its Managing Member

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Its:

 

 

 

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AGREED AND ACCEPTED:

 

 

 

a                                              

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

G-2

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EXHIBIT H

 

POSSESSION CONFIRMATION LETTER

 

, 20

 

 

 

 

Re:          Lease dated March     , 2012 (“Lease”), by and between Sycamore
Drive Holdings, LLC, a California limited liability company (“Landlord”), and
Omnicell, Inc., a California limited liability company (“Tenant”), with respect
to 735 Sycamore Drive, Milpitas, California, 95035 (“Premises”)

 

Dear Tenant:

 

In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:

 

Possession Date of the Lease:               , 20    ;

To Tenant’s actual knowledge, Landlord’s Work is Substantially Complete.

 

Terms used but not defined herein shall have the meanings given such terms in
the Lease.  Please acknowledge your acceptance of possession of the Premises and
agreement to the terms set forth above by signing both copies of this Possession
Confirmation Letter in the space provided and returning one (1) fully executed
copy of the same to my attention.

 

Sincerely,

 

SYCAMORE DRIVE HOLDINGS, LLC,

 

a California limited liability company

 

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

Delaware limited liability company,

 

 

its sole Member

 

 

 

 

 

By:

Nearon Enterprises,

 

 

 

a California corporation,

 

 

 

its Managing Member

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Its:

 

 

 

 

AGREED AND ACCEPTED:

 

 

 

a                                              

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

H-1

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RIDER NO. 1 TO LEASE

 

715-735 SYCAMORE DRIVE

 

This Rider No. 1 to Lease is attached to and incorporated by reference into that
certain Lease, dated March     , 2012, entered into by and between SYCAMORE
DRIVE HOLDINGS, LLC, a California limited liability company, as Landlord, and
OMNICELL, INC., a Delaware corporation, as Tenant (the “Lease”).  Landlord and
Tenant hereby amend and supplement the Lease as hereinafter set forth.  In the
event of any conflict or inconsistency between the Lease and this Addendum, the
terms of this Addendum shall control and prevail.  Capitalized terms used herein
and not otherwise defined shall have the meaning given said terms in the Lease.

 

39.          EXTENSION OPTION.

 

(a)           Tenant shall have the right to extend the Term of this Lease (the
“Extension Option”), for one (1),  five (5)-year period (the “Extension Term”)
if Tenant (i) gives Landlord written notice of such election (the “Option
Notice”) not earlier than nine (9) months, and not later than six (6) months,
before the expiration of the Term of this Lease; (ii) is not in default under
any provision of this Lease on the date of giving the Option Notice; and
(iii) is not in default of any provision of this Lease on the date of the
expiration of the then current Term of this Lease.  The foregoing conditions are
for the sole benefit of Landlord, and Landlord, alone, shall have the right in
its sole and absolute discretion to insist on strict observance with the
foregoing conditions or to waive any of the foregoing conditions.  All of the
terms and conditions of this Lease shall apply during the Extension Term (other
than the further right to extend the Term, and any obligation of Landlord to
construct Landlord’s Work provided in this Lease, which shall be inapplicable). 
The Base Rent for the Extension Term shall equal one hundred percent (100%) of
the fair market rental value of the Premises as of the Expiration Date for the
occupancy of the Premises for the permitted use under this Lease (“Market
Rent”), but in no event less than the then current Base Rent being paid under
this Lease.

 

(b)           The determination of Market Rent shall be made as follows:  Within
thirty (30) days after receipt of Tenant’s Option Notice, Landlord shall advise
Tenant of Landlord’s determination of the applicable Base Rent for the Premises
for the Extension Term.  Landlord’s determination of Market Rent shall be no
less than the then current Base Rent and shall reflect Landlord’s determination
of the then prevailing rent structure for comparable leases, so that if, for
example, at the time Market Rent is being determined the prevailing rent
structure for comparable space and for comparable lease terms includes periodic
rent adjustments, Market Rent shall reflect such rent structure.  Tenant, within
fifteen (15) days after the date on which Landlord advises Tenant of the
applicable Base Rent rate, shall either (i) give Landlord final binding written
notice (“Binding Notice”) of Tenant’s exercise of the Extension Option, or
(ii) if Tenant disagrees with Landlord’s determination, provide Landlord with
written notice of rejection (the “Rejection Notice”).  If Tenant fails to
provide Landlord with either a Binding Notice or Rejection Notice within such
fifteen (15) day period, Tenant’s Extension Option shall be null and void and of
no further force and effect.  If Tenant provides Landlord with a Binding Notice,
Landlord and Tenant shall enter into an amendment to the Lease confirming the
terms of the Base Rent as determined by Landlord.  If Tenant provides Landlord
with a Rejection Notice, Landlord and Tenant shall work together in good faith
to agree upon the Market Rent for the Premises during the Extension Term.  Upon
agreement, Tenant shall provide Landlord with Binding Notice and Landlord and
Tenant shall enter into an amendment to the Lease in accordance with the terms
and conditions hereof.

 

(c)           If Landlord and Tenant are unable to agree upon Market Rent for
the Premises within thirty (30) days after the date on which Tenant provides
Landlord with a Rejection Notice (the “Arbitration Date”), Market Rent shall be
determined as follows:  Within ten (10) days after the Arbitration Date each
party, at its own cost and by giving written notice to the other party, shall
appoint a licensed real estate appraiser who is a member of the American
Institute of Real Estate Appraisers or the Society of Real Estate Appraisers,
and has at least ten (10) years’ full-time commercial appraisal experience in
the San Francisco Bay Area industrial leasing market, to appraise and determine
Market Rent.  If, in the time provided, only one (1) party shall give notice of
appointment of an appraiser, the single appraiser appointed shall determine the
Market Rent.  If two (2) appraisers are appointed by the parties, the two
(2) appraisers shall independently, and without consultation, prepare a written
appraisal of the Market Rent within ten (10) days.  Each appraiser shall seal
its respective appraisal after completion.  After both appraisals are

 

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completed, the resulting estimates of Market Rent shall be opened simultaneously
and compared.  If, in the time provided, only one (1) appraiser shall submit a
written appraisal of Market Rent, the Market Rent shall be the Market Rent
determined by said single appraiser.

 

(d)           If the values of the appraisals differ, and the parties do not
otherwise then agree as to the determination of Market Rent, the two
(2) appraisers shall designate a third appraiser, who shall be a licensed real
estate appraiser and a member of the American Institute of Real Estate
Appraisers or the Society of Real Estate Appraisers, with at least ten
(10) years’ experience in appraising fair market rental values in commercial
industrial buildings in the San Francisco Bay Area industrial leasing market. 
If the two (2) appraisers have not agreed on the third appraiser after ten
(10) days, then either Landlord or Tenant, by giving ten (10) days written
notice to the other party, may apply to the then presiding judge of the Superior
Court of Santa Clara County for the selection of a third appraiser who meets the
qualifications set forth in this subparagraph (d).  The third appraiser, however
selected, shall be a person who has not previously acted in any capacity for
either party.  The third appraiser shall make an appraisal of the Market Rent
within thirty (30) days after selection and without consultation with the first
two (2) appraisers, and shall select the Market Rent of one of the two
(2) appraisers that the third appraiser determines is closest, on a dollar
basis, to the Market Rent determined by the third appraiser.  The third
appraiser shall have no right to determine, modify or impose Market Rent other
than as provided above.  Each party may submit written material to the third
appraiser, with a copy to the other party, on the issue of Market Rent.

 

(e)           If the determination of the Market Rent is delayed beyond the
commencement of the Extension Term, Tenant shall pay Base Rent based on
Landlord’s determination of Market Rent until the final determination of Market
Rent hereunder.  Following the final determination of Market Rent, if Market
Rent is determined to be other than as designated by Landlord, there shall be an
adjustment made to the Base Rent payment then due for the difference between the
amount of Base Rent Tenant has paid to Landlord since the Extension Term
commencement and the amount that Tenant would have paid if the Base Rent as
adjusted pursuant to this subsection had been in effect as of the Extension Term
commencement.

 

(f)            Each party shall pay the fees and expenses of its own appraiser,
and if a third appraiser is selected or necessary, the party whose Market Rent
determination is not chosen shall pay one hundred percent (100%) of the fees and
expenses of the third appraiser.

 

(g)           The appraisers shall determine the Market Rent using the “market
comparison approach,” with the relevant market being that for renewal tenants
occupying similar space in the Milpitas market as of the Extension Term
commencement, taking into consideration location, condition and the value of the
improvements made by Landlord or which would be owned by Landlord at the
expiration of the Lease, as compared to that of the comparison space.  Market
Rent shall also reflect the then prevailing rent structure for comparable
industrial leases, so that if, for example, at the time Market Rent is being
determined the prevailing rent structure for comparable space and for comparable
lease terms includes periodic rent adjustments, Market Rent shall reflect such
rent structure.  The appraisers shall determine the Market Rent in accordance
with the terms of the Lease, and shall not act as advocates for either Landlord
or Tenant.

 

(h)           The appraisers shall have no power to modify the provisions of
this Paragraph 39, and their sole function shall be to determine the Market Rent
in accordance herewith.

 

(i)            The foregoing Extension Option is personal to the named Tenant
and any assignee of a Permitted Transfer under this Lease, and shall not inure
to the benefit of any other assignee or subtenant.  The Extension Option shall
be void and of no further effect if at any time the named Tenant under this
Lease assigns this Lease (other than in connection with a Permitted Transfer) or
subleases the Premises for the remainder of the Term.

 

Rider-2

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IN WITNESS WHEREOF, the parties have executed this Rider as of the date first
set forth above.

 

LANDLORD:

TENANT:

 

 

 

SYCAMORE DRIVE HOLDINGS, LLC,

OMNICELL, INC.,

a California limited liability company

a Delaware corporation

 

 

 

By:

Nearon Mission Pointe Holdings II, LLC,

 

 

Delaware limited liability company,

By:

 

 

its sole Member

Name:

 

 

 

Its

 

 

By:

Nearon Enterprises,

 

 

 

a California corporation,

 

 

 

its Managing Member

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Its:

 

 

 

Rider-3

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