Exhibit 10.11

 

FIRST AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO LEASE (this "Amendment") is dated for reference purposes
only as of June 18, 2009, by and between CARR NP PROPERTIES, L.L.C., a Delaware
limited liability company ("Landlord"), and SHORETEL, INC., a Delaware
corporation ("Tenant").

RECITALS

A.        Landlord and Tenant are parties to that certain Office Lease dated as
of April 20, 2007 (the "Existing Lease"), pursuant to which Landlord leases to
Tenant certain premises, containing approximately 63,781 rentable square feet of
space, comprising the entirety of the building located at 960 Stewart Drive,
Sunnyvale, California (the "Premises"). The Existing Lease is scheduled to
expire on October 31, 2009.

B.        Landlord and Tenant now desire to extend the Lease Term to expire on
September 30, 2014, and make certain other amendments to the Existing Lease, all
subject to, and on the basis of, the terms, covenants and conditions hereinafter
set forth. The Existing Lease, as amended by this Amendment, is sometimes
referred to herein as the "Lease."

NOW, THEREFORE, in consideration of the foregoing and the agreements of Landlord
and Tenant herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:

1.         Use of Defined Terms; Recitals; Effective Date.

1.1               Definitions; Recitals. All capitalized terms used and not
defined herein shall have the defined meanings ascribed to them in the Existing
Lease. The provisions of the Recitals above are fully incorporated herein by
this reference.

1.2               Effective Date. Unless otherwise specifically provided herein,
all provisions of this Amendment shall be effective as of May 1, 2009 (the
"Effective Date").

2.         Term. The Lease Term is hereby extended for a period of fifty-nine
(59) months (the "Extension Term"), commencing on November 1, 2009 (the
"Extension Term Commencement Date"), and expiring on September 30, 2014 (which,
for all purposes under the Lease, shall hereinafter be the "Lease Expiration
Date"), unless earlier terminated pursuant to the terms and conditions of the
Lease.

 

 

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3.         Amendments to Lease. Commencing on the Effective Date, the Existing
Lease shall be amended as follows:

3.1               Monthly Base Rent. Tenant shall pay Base Rent in accordance
with the following:

Period During
Lease Term

Annual
Base Rent

Monthly
Installment
of Base Rent

Monthly Base
Rent
per Rentable
Square Foot

May 1, 2009 – September 30, 2009

N/A

$0.00

$0.00

October 1, 2009 – September 30, 2010

$994,983.60

$82,915.30

$1.30

October 1, 2010 – September 30, 2011

$1,024,833.11

$85,402.76

$1.34

October 1, 2011 – September 30, 2012

$1,055,578.10

$87,964.84

$1.38

October 1, 2012 – September 30, 2013

$1,087,245.44

$90,603.79

$1.42

October 1, 2013 – September 30, 2014

$1,119,862.81

$93,321.90

$1.46

The parties acknowledge that, as of the Effective Date, Tenant has a credit
against Base Rent equal to Three Hundred Five Thousand Eight Hundred Nineteen
and 18/100 Dollars ($305,819.18) ("Base Rent Credit"), which amount was
previously paid by Tenant as Base Rent and Tenant's Share of Direct Expenses for
the months of May and June 2009. Landlord shall apply the Base Rent Credit
against the Base Rent payments for the months of October, November and December
2009 and January 2010, until the Base Rent Credit has been exhausted.

3.2               Direct Expenses. During the period commencing May 1, 2009 and
ending September 30, 2009, Tenant's obligation to pay Tenant's Share of Direct
Expenses pursuant to Section 4.1 of the Existing Lease shall be abated. Nothing
contained herein shall affect Tenant's continuing obligation to pay for all
janitorial services and other utilities charges relating to the Premises
pursuant to Article 6 of the Existing Lease.

3.3               Security Deposit. As of the Effective Date, provided that
Tenant is not then in default in the performance of any of its covenants under
the Lease, the Security Deposit shall be reduced to Ninety-Three Thousand Three
Hundred Twenty-One and 90/100 Dollars ($93,321.90). Accordingly, within thirty
(30) days following the Effective Date, Landlord shall refund to Tenant an
amount equal to Twenty-Four Thousand Six Hundred Seventy-Two and 95/100 Dollars
($24,672.95).

 

 

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3.4

Repairs.

(a)               The parties acknowledge that the reference to "Section
4.2.3(o)" in Section 4.2.3 and Section 7.1.4 of the Existing Lease was a
typographical error and should have referred to Section 4.2.3(p) of the Existing
Lease; and that such correction shall be effective as of the effective date of
the Existing Lease.

(b)               Notwithstanding the provisions of Section 7.1.2 or Section
7.1.4 of the Existing Lease, if any repairs or replacements are required to be
performed to the Base Building Systems (as defined in Section 4.1(c) below)
prior to May 1, 2010 (i.e., one (1) year following the Effective Date), then,
provided that such repairs are not necessitated by the negligence or willful
misconduct of Tenant or any Tenant Parties, or by Tenant's failure to provide
normal service to such Base Building Systems as required by the Existing Lease
(e.g., HVAC preventive maintenance contracts), then Landlord shall, at no cost
to Tenant, make such repairs or replacements. Without limiting the provisions of
Section 7.1.2 of the Existing Lease, after the one (1) year warranty period
above, Tenant shall have the benefit of all warranties available to Landlord
regarding the Building Systems for which Tenant is responsible pursuant to
Section 7.1 of the Existing Lease.

(c)               Without limiting Landlord's obligations set forth in Section
3.4(b) above or Section 4.1 below, Landlord and Tenant acknowledge that, prior
to the date of this Amendment, Tenant engaged an HVAC contractor to complete an
independent inspection of the existing HVAC system serving the Premises, and
that such inspection established that "HVAC Unit No. 3" has a useful life of
less than five (5) years. Accordingly, following the Effective Date, Landlord
shall promptly make such repairs and replacements as may be necessary to keep
"HVAC Unit No. 3" in good working condition and repair, and, at such time that,
consistent with reasonable and prudent industry practices, replacement of such
HVAC Unit is required, Landlord shall promptly replace "HVAC Unit No. 3" at no
cost to Tenant.

3.5               Permitted Alterations. The parties acknowledge and agree that,
following the Effective Date, Tenant intends to perform certain Alterations to
the Premises, which Alterations shall be performed subject to, and in accordance
with, the terms and conditions contained in Article 8 of the Existing Lease,
except as follows:

(a)               Notwithstanding the provisions of Section 8.2 of the Existing
Lease, Tenant reserves the right to retain its own architectural/interior design
firm and general contractor and oversee the design and construction of the
Alterations. Tenant shall provide Landlord with schematic plans depicting
Tenant's proposed Alterations for Landlord's approval, which approval shall not
be unreasonably withheld. Tenant's Alterations may be constructed in phases,
some prior to the Extension Term Commencement Date and others thereafter.

(b)               Subject to Landlord's approval of Tenant's improvement plans,
the Alterations will be completed in accordance with all Applicable Requirements
by Tenant's retained interior design firm and general contractor, who shall be
licensed in the State of

 

 

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California. Such work may commence upon completion and execution of all
documentation and receipt of all approvals and/or permits required for the
construction. Landlord will not charge any fee for review, approval and
oversight of Tenant’s plans and specifications in connection with such
Alterations.

(c)               Notwithstanding the provisions of Section 8.5 of the Existing
Lease, upon the expiration or any early termination of the Lease, Tenant shall
have no obligation to remove any of the existing improvements or the Alterations
shown on the preliminary plan attached hereto as Exhibit A, except for Tenant's
personal property.

(d)               Notwithstanding the provisions of Section 24.1 of the Existing
Lease or Section 4.2 below, if Tenant's Alterations give rise to
governmentally-required changes to the structural portions of the Building
because of the Building's non-compliance as of the Effective Date (based on the
current interpretation of the Applicable Requirements by applicable governmental
or quasi-governmental authorities as of the Effective Date), then such changes
to the structural portions of the Building shall be Landlord's Repair
Obligations pursuant to Section 7.2.1 of the Existing Lease, and Tenant shall
pay Landlord the cost of such changes as an Included Capital Item. The exclusion
from Operating Expenses described in Section 4.2.3(p) of the Existing Lease
shall not be applicable to Landlord's changes to the Building pursuant this
Section.

 

3.6

Alterations Allowance.

(a)               Upon Tenant's written request and satisfaction of the
conditions set forth in Section 3.6(b) below, Landlord will contribute to the
cost of any interior office and lab improvements to the Premises, cabling and
signage (collectively, "Permitted Alterations") that Tenant hereafter performs
in or to the Premises to the extent of the lesser of (i) One Million Fifty-Two
Thousand Three Hundred Eighty-Six and 50/100 Dollars ($1,052,386.50) (calculated
on the basis of $16.50 per rentable square foot in the Premises) or (ii) the
actual cost of the Permitted Alterations (the lesser of the previously-described
amounts being hereinafter referred to as the "Alterations Allowance"). The
Alterations Allowance may only be applied to the payment or reimbursement of
documented "hard costs" of labor and materials and "soft costs" relating to the
Permitted Alterations. Tenant shall pay for all costs of Permitted Alterations
in excess of the Alterations Allowance; provided, however, that, in addition to
the Alterations Allowance, Landlord shall provide Tenant a "test fit" allowance
not to exceed $6,378.10 towards the cost of preparing preliminary space plans
and interior design plans relating to the Permitted Alterations (such amount to
be reimbursed by Landlord to Tenant within thirty (30) days of reasonably
detailed invoices therefor).

(b)               Provided that this Lease is then in full force and effect,
Landlord shall pay the Alterations Allowance to Tenant within thirty (30) days
after satisfaction of each of the following conditions: (i) Tenant's delivery to
Landlord of invoices and other reasonably satisfactory evidence of the cost of
the Permitted Alterations; (ii) with respect to any portion of the Permitted
Alterations requiring a building permit, Tenant's delivery to Landlord of a
certificate issued by Tenant's architect certifying, for the benefit of
Landlord, that such portion of the Permitted Alterations has been completed in
accordance with the plans approved by Landlord (excepting only minor field
changes not inconsistent with the intent of such approved plans and

 

 

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any change orders approved by Landlord) and in compliance with all Applicable
Requirements; (iii) Tenant's delivery to Landlord of lien releases, in statutory
form, from the Tenant's contractor, major subcontractors, and any other persons
and entities providing work or materials covered by such statement who have
given a preliminary 20-day notice in accordance with California Civil Code
Section 3097; and (iv) Tenant's delivery to Landlord of as-built plans and
specifications for the Permitted Alterations, if appropriate (provided that, in
all cases, Tenant shall deliver to Landlord reasonably detailed plans and
specifications for its cabling).

(c)               If Tenant fails to submit reasonably satisfactory
documentation requesting disbursement of the Alterations Allowance on or before
December 31, 2010, Landlord shall have no further obligation to provide the
Alterations Allowance or any remaining balance thereof to Tenant, nor shall
Tenant be entitled to any credit against Rent for any unused portion.

3.7               Transfer Premium. Section 14.3.1 of the Existing Lease is
hereby deleted and replaced in its entirety with the following:

"If Landlord consents to a Transfer, as a condition thereto which the parties
hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of
any "Transfer Premium," as that term is defined in this Section 14.3, received
by Tenant from such Transferee. "Transfer Premium" means (i)(a) in the case of
an assignment, any consideration (including, without limitation, payment for
leasehold improvements) paid by the assignee on account of such assignment, and
(b) in the case of any other Transfer, all rent, additional rent or other
consideration paid by the Transferee to the Transferor pursuant to such Transfer
in excess of the base rent and additional rent payable by such Transferor during
the term of the Transfer on a per rentable square foot basis, minus (ii) any
brokerage commissions, reasonable attorneys' fees and tenant improvement costs
or allowances paid by Transferor in connection with the Transfer ("Recoverable
Expenses"). For purposes of calculating the Transfer Premium in connection with
a sublease, the Recoverable Expenses shall first be deducted before payment to
Landlord of Landlord's share of the Transfer Premium. Payment of the portion of
the Transfer Premium due Landlord hereunder shall be made to Landlord as
follows: (1) in the case of an assignment, the Transferor shall pay the portion
of the Transfer Premium due to Landlord within ten (10) business days after the
Transferor receives the consideration described in clause (i)(a) above; and (2)
in the case of any other Transfer, after Tenant has recouped the Recoverable
Expenses from the consideration described in clause (i)(b) above, then on the
first day of each succeeding month during the term of the Transfer, the
Transferee shall pay directly to Landlord fifty percent (50%) of the amount by
which the rent, additional rent or other consideration due from the Transferee
for such month exceeds the base rent and additional rent payable by the
applicable Transferor for said month which is allocable to the Contemplated
Transfer Space."

3.8               Recapture. Notwithstanding the provisions of Section 14.4 of
the Existing Lease, Landlord shall have no right to recapture the Contemplated
Transfer Space unless the Contemplated Transfer Space constitutes at least sixty
percent (60%) of the Building to which

 

 

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the Transfer is applicable, in which event Landlord shall exercise such right of
recapture by giving written notice to Tenant within thirty (30) days after
receipt of the Transfer Notice.

3.9               Holding Over. Article 16 of the Existing Lease is hereby
deleted and replaced in its entirety with the following:

"If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express written consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Tenant
shall pay Rent at a monthly rate equal to (a) for the first thirty (30) days of
such holding over, one hundred percent (100%) of the Base Rent payable by Tenant
immediately prior to such holding over (without regard to any abatements of Rent
on account of casualty or otherwise), plus Tenant's Share of Operating Expenses
and Tax Expenses, computed on a monthly basis for each full or partial month
Tenant remains in possession; and (ii) thereafter, an amount equal to one
hundred fifty percent (150%) of the Base Rent payable by Tenant immediately
prior to such holding over (without regard to any abatements of Rent on account
of casualty or otherwise), plus Tenant's Share of Operating Expenses and Tax
Expenses, computed on a monthly basis for each full or partial month Tenant
remains in possession. Such month-to-month tenancy shall be subject to every
other applicable term, covenant and agreement contained herein. If Tenant holds
over after any such month-to-month tenancy has been terminated, then Tenant
shall be a tenant at sufferance only, for the entire Premises upon all of the
terms and conditions of this Lease as might be applicable to such tenancy;
provided, however, that, as liquidated damages and not as a penalty, Tenant
shall pay Base Rent at a monthly rate equal to one hundred fifty percent (150%)
of the Base Rent payable by Tenant immediately prior to such holding over
(without regard to any abatements of Rent on account of casualty or otherwise),
plus Tenant's Share of Operating Expenses and Tax Expenses, computed on a
monthly basis for each full or partial month Tenant remains in possession.
Nothing contained in this Article 16 shall be construed as consent by Landlord
to any holding over by Tenant, and Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law. If
Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
Claims resulting from such failure, including, without limiting the generality
of the foregoing, any Claims made by any succeeding tenant founded upon such
failure to surrender and any lost profits to Landlord resulting therefrom."

3.10             Roof Rights. Section 22.2(c) of the Lease is hereby deleted
and, Tenant shall have the exclusive use of the roof of the Building, except for
Landlord’s rights of entry for inspection, repair, replacement or the provision
of services as are set forth in the Lease.

 

 

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3.11             Signage. Section 23.1 of the Existing Lease is hereby deleted
and replaced in its entirety with the following:

"23.1   Signage Rights. Tenant shall not place on any portion of the Premises
any sign, placard, lettering, banner, displays, graphic, decor or other
advertising or communicative material which is visible from the exterior of the
Building without Landlord's prior written approval; provided, however, that
Tenant shall, subject to the provisions of this Section 23.1, be entitled to the
following signage rights in accordance with Landlord's signage standards in
effect at the time ("Signage Standards") and all Applicable Requirements
("Tenant's Signage Rights"): (a) Project-standard tenant identification signage
on the monument sign for the Building and (b) Tenant-identification signage on
the top of the Building. The material, typeface, graphic format and proportions
of Tenant's signs, as well as the precise location of such signs, shall be
subject to Landlord's approval, which shall not be unreasonably withheld.
Tenant, at its expense, shall be responsible for obtaining all approvals for
such signs and for obtaining and installing such signs. The failure of Tenant to
obtain such approvals shall not release Tenant from any of its obligations under
this Lease. Any approved signs shall strictly conform to all Applicable
Requirements and shall be installed and removed at Tenant's expense. Tenant, at
its sole expense, shall maintain such signs in good condition and repair during
the Term. Prior to the expiration or earlier termination of this Lease, Tenant
at its sole cost shall remove all of its exterior signage and repair any and all
damage caused to the Building and/or Project (including and fading or
discoloration) by such signs and/or the removal of such signs from the Building
and/or Project."

Promptly after execution of this Amendment, Landlord shall submit the Project's
Signage Standards for governmental approval, which, as to the top of the
Building Tenant-identification signage referenced in clause (b) above ("Tenant's
Building Signage"), shall be consistent with the signage shown on Exhibit B
attached hereto, and Landlord shall use commercially reasonable efforts to get
such Signage Standards approved. Concurrently with Landlord's submittal of the
Project's Signage Standards for governmental approval, Tenant shall have the
right to submit Tenant's Building Signage for governmental approval. Subject to
Landlord's obtaining approval of the Signage Standards, and subject to Tenant's
obtaining all required approvals for Tenant's Building Signage, (1) Tenant's
Building Signage shall be in the approximate location shown on Exhibit B
attached hereto, and (2) Landlord hereby approves the typeface, graphic format
and proportions of the signage shown on Exhibit B. However, Tenant acknowledges
that, if changes to the signage shown on Exhibit B are required to obtain
governmental approval of Tenant's Building Signage or the Signage Standards,
then the location of Tenant's Building Signage and/or the typeface, graphic
format and proportions of such signage shall be modified accordingly; and,
further, if the approved Signage Standards do not, for any reason, permit
signage on the exterior of the Building, Landlord shall have no liability to
Tenant, and Tenant shall not be released from any of its obligations under the
Lease.

3.12             Pre-Existing Hazardous Substances. Notwithstanding the
provisions of Section 24.2 of the Existing Lease, if any Remedial Work is
required to be performed as a result of Hazardous Substances in, on or below the
Premises as of the Effective Date, then, except to

 

 

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the extent such Remedial Work is covered by Tenant's environmental indemnity
contained in the last sentence of Section 24.2.1(a) of the Existing Lease or by
the provisions of Section 24.2.3 of the Existing Lease, Landlord shall perform
or cause to be performed such Remedial Work, at no cost to Tenant, in compliance
with Applicable Requirements.

3.13             Prohibited Uses. Without limiting the provisions of Section 5.2
of the Existing Lease, no portion of the Premises shall be used for any of the
following uses: any pornographic or obscene purposes, any commercial sex
establishment, any pornographic, obscene, nude or semi-nude performances,
modeling, materials, activities, or sexual conduct or any other use that, as of
the time of the execution hereof, has or could reasonably be expected to have a
material adverse effect on the Property or its use, operation or value.

 

4.

Condition of Premises.

 

4.1

Building Systems - Good Working Condition.

(a)               Tenant acknowledges and agrees that its possession of the
Premises as of the Effective Date is a continuation of Tenant's possession of
the Premises under the Existing Lease, and that, except as specifically set
forth in the Lease, including, without limitation, in Section 3.4 and Section
3.5 above, this Section 4.1 and Section 4.2 below, Tenant agrees to accept the
Premises as of the Effective Date in their existing condition, "as is", without
any obligation of Landlord to repair, remodel, improve or alter the Premises, to
perform any other construction or other work of improvement upon the Premises,
or to provide Tenant with any construction or refurbishing allowance whatsoever;
provided, however, that, on the Effective Date, the roof of the Building shall
be in watertight condition, the Base Building Systems and the Common Areas,
including walkways, parking lots and driveways and landscaping, shall be in good
working condition and repair (except to the extent repairs are necessitated by
the acts or omissions of Tenant or any Tenant Parties).

(b)               If it is determined that, on the Effective Date, the roof of
the Building is not in a watertight condition, or any of the Base Building
Systems or Common Areas are not in good working condition and repair (for
reasons other than the acts or omissions of Tenant or any Tenant Parties), then
Landlord shall not be liable to Tenant for any damages, but as Tenant's sole
remedy, Landlord, at no cost to Tenant, shall perform such work or take such
other action as may be necessary to place the same in the required condition;
provided, however, that if Tenant does not give Landlord written notice of any
deficiency in the Base Building Systems within thirty (30) days following the
Effective Date, correction of such deficiency shall be the obligation of
Landlord or Tenant, as the case may be, pursuant to Article 7 of the Existing
Lease (as the same is amended by Section 3.4 of this Amendment).

(c)               For purposes of the Lease, the "Base Building Systems" means
the base building mechanical, electrical (excluding light bulb of maintenance),
plumbing and fire and life safety systems, and glazing and roll-up doors located
in or on the Premises on the Effective Date that serve the Premises generally
(as distinguished from the portions of such systems that may be installed or
modified by Tenant, and any systems, equipment or components that serve a
particular portion of the Premises or Tenant's particular use of the Premises,
such as a computer server room, "clean room" or other laboratory space).

 

 

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4.2               Compliance with Applicable Requirements. In addition to
Landlord's obligations in Section 4.1 above, Landlord shall, at no cost to
Tenant, perform all work required to cause the Premises, including the base
building, and Common Areas to comply with Applicable Requirements as of the
Effective Date, including current laws, rules, regulations and ordinances, and
including, specifically, the ADA (as such Applicable Requirements are
interpreted by applicable governmental or quasi-governmental authorities as of
said date), so long as such compliance is not necessitated by reason of the
installation of any of Tenant's specialized improvements or personal property
(i.e., improvements or personal property that are non-standard and required
because of Tenant's particular use of the Premises) to be constructed or
installed in the Premises, or by Tenant's particular use of the Premises or the
particular manner in which it conducts (or proposes to conduct) its business
therein (collectively, "Tenant's Particular Requirements"); and, provided,
however, that, (a) the foregoing shall not affect Landlord's obligations set
forth in Section 3.5(d) above in the event that structural changes to the
Building are required as a result of Tenant's Alterations; and (b) unless Tenant
gives Landlord written notice of the non-compliance within one hundred twenty
(120) days after the commencement of Tenant's Alterations pursuant to Section
3.5 above, Landlord shall have no further responsibility or liability therefor,
except as otherwise expressly provided in the Lease. Nothing contained herein
shall be deemed to prohibit Landlord from obtaining a variance or relying upon a
grandfathered right in order to achieve compliance with Applicable Requirements
hereunder. Any compliance work required to be performed resulting from Tenant's
Particular Requirements shall be Tenant's sole responsibility.

 

5.

Extension Options.

5.1               Grant of Additional Extension Options; Additional Extension
Terms. Landlord hereby grants to Tenant two (2) successive options to further
extend the Lease Term (each, an "Extension Option" and, collectively, the
"Extension Options") for additional periods of five (5) years each (each, an
"Additional Extension Term") commencing on the first day following the Lease
Expiration Date (as the same may have then been extended), on the terms and
subject to the conditions set forth in this Section 5; provided, however, that
(a) the Extension Options shall be exercised, if at all, only with respect to
the entire Premises (as the same may then be expanded); (b) the second Extension
Option may be exercised only if the first Extension Option has been duly
exercised; and (c) if Tenant is in default beyond applicable notice and cure
periods under any of the terms, covenants or conditions of the Lease either at
the time Tenant exercises any Extension Option or upon the commencement of the
applicable Additional Extension Term, Landlord shall have, in addition to all of
Landlord's other rights and remedies provided in the Lease, the right to
terminate such Extension Option and to unilaterally revoke Tenant's exercise of
such Extension Option, in which event the Lease shall expire on the Lease
Expiration Date, unless sooner terminated pursuant to the terms hereof, and
Tenant shall have no further rights under the Lease to renew or extend the Lease
Term.

5.2               Exercise. Tenant shall exercise any Extension Option, if at
all, by giving Landlord unconditional, irrevocable written notice of such
election not more than three hundred sixty (360) days nor less than two hundred
seventy (270) days prior to the Lease Expiration Date (as the same may have then
been extended), the time of such exercise being of the essence. Subject to the
provisions of this Section 5, upon the giving of such notice, the Lease and the
Lease Term shall be extended without execution or delivery of any other or
further documents.

 

 

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5.3               Terms and Conditions. If Tenant exercises an Extension Option
pursuant to Section 5.2 above, all of the terms, covenants and conditions of the
Lease shall continue in full force and effect during the applicable Additional
Extension Term, including provisions regarding payment of Additional Rent, which
shall remain payable on the terms herein set forth, except that (a) the Base
Rent during such Additional Extension Term shall be as determined in accordance
with Section 5.4 below, (b) Tenant shall continue to possess and occupy the
Premises (as the same may be expanded) in their existing condition, "as is", as
of the commencement of such Additional Extension Term, and, except as set forth
in the Lease, Landlord shall have no obligation to repair, remodel, improve or
alter the Premises, to perform any other construction or other work of
improvement upon the Premises, or to provide Tenant with any construction or
refurbishing allowance whatsoever, and (c) Tenant shall have no further rights
to extend the Lease Term after the expiration of the second Additional Extension
Term.

 

5.4

Determination of Base Rent.

(a)               The Base Rent payable by Tenant for the Premises during the
first Additional Extension Term shall be ninety-five percent (95%) of the
"Market Rate" (as defined below) for the Premises, valued as of the commencement
of such Additional Extension Term, determined in the manner hereinafter
provided; and the Base Rent payable by Tenant for the Premises during the second
Additional Extension Term shall be one hundred percent (100%) of the Market Rate
for the Premises, valued as of the commencement of such Additional Extension
Term, determined in the manner hereinafter provided. As used herein, the term
"Market Rate" shall mean the annual base rent that a willing tenant would pay,
and that a willing landlord would accept, at arm's length, for space comparable
to the Premises at other comparable office/R&D buildings in the vicinity of the
Building ("Comparable Buildings"), based upon binding lease transactions for
tenants in the Comparable Buildings that, where possible, commence or are to
commence within six (6) months prior to or within six (6) months after the
commencement of the applicable Additional Extension Term ("Comparison Leases").
Comparison Leases shall include renewal and new non-renewal tenancies, but shall
exclude subleases and leases of space subject to another tenant's expansion
rights and renewals if there was a base rent floor applicable to the
determination of base rent. Rental rates payable under Comparison Leases shall
be adjusted to account for variations between the Lease and the Comparison
Leases with respect to: (1) the length of the Additional Extension Term compared
to the lease term of the Comparison Leases; (2) rental structure, including,
without limitation, rental rates per rentable square foot (including type, gross
or net, and if gross, adjusting for base year or expense stop), additional
rental, escalation provisions, all other payments and escalations; (3) the size
of the Premises compared to the size of the premises of the Comparison Leases;
(4) location, floor levels and efficiencies of the floor(s) for which the
determination is being made; (5) free rent, moving expenses and other cash
payments, allowances or other monetary concessions affecting the rental rate;
(6) the age and quality of construction of the Building (including compliance
with applicable codes on the applicable floors); and (7) leasehold improvements
and/or allowances, including the amounts thereof in renewal leases, and taking
into account, in the case of renewal leases (including the Lease), the value of
existing leasehold improvements to the renewal tenant.

(b)               Not later than six (6) months prior to the commencement of an
Additional Extension Term, provided Tenant has given valid notice of exercise of
the applicable Extension Option, Landlord shall deliver to Tenant a good faith
written proposal of the Market

 

 

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Rate. Within twenty-one (21) days after receipt of Landlord's proposal, Tenant
shall notify Landlord in writing (1) that Tenant accepts Landlord's proposal or
(2) that Tenant elects to submit the determination of Market Rate to arbitration
in accordance with subparagraphs (c) through (d) below. If Tenant does not give
Landlord a timely notice in response to Landlord's proposal, Landlord's proposal
of Market Rate shall be binding upon Tenant.

(c)               If Tenant timely elects to submit the determination of Market
Rate to arbitration, Landlord and Tenant shall first negotiate in good faith in
an attempt to determine the Market Rate for the applicable Additional Extension
Term. If Landlord and Tenant are able to agree within thirty (30) days following
the delivery of Tenant's notice to Landlord electing arbitration (or if Tenant
accepts Landlord's initial proposal), then such agreement shall constitute a
determination of the Market Rate for purposes of this Section, and the parties
shall immediately execute an amendment to the Lease stating the Market Rate and
the Base Rent for such Additional Extension Term. If Landlord and Tenant are
unable to agree on the Market Rate within such negotiating period, then within
fifteen (15) days after the expiration of such negotiating period, the parties
shall meet and concurrently deliver to each other their respective written
estimates of the Market Rate for the Additional Extension Term, supported by the
reasons therefor (respectively, "Landlord's Determination" and "Tenant's
Determination"). Landlord's Determination may be more or less than its initial
proposal of the Market Rate. If either party fails to deliver its Determination
in a timely manner, then the Market Rate shall be the amount specified by the
other party. If Tenant's Determination of the Market Rate is higher than
Landlord's Determination, then the Market Rate shall be the average of the two.
In every other case, the Market Rate shall be determined as follows, each party
being bound to its Determination and such Determinations establishing the only
two choices available to the Appraisal Panel (as hereinafter defined):

(i)              Within ten (10) days after the parties exchange Landlord's and
Tenant's Determinations, the parties shall each appoint one arbitrator who shall
be a licensed California real estate broker with at least ten (10) years'
experience in leasing commercial office space similar to the Building in the
commercial submarket that the Building is located immediately prior to his or
her appointment, and be familiar with the rentals then being charged in the
Comparable Buildings. The parties may appoint the real estate brokers who
assisted them in making their Determinations as their respective arbitrators.
Within twenty (20) days following their appointment, the two arbitrators so
selected shall appoint a third, similarly-qualified arbitrator (the "Independent
Arbitrator").

(ii)             If either Landlord or Tenant fails to appoint an arbitrator,
then the Market Rate for the Additional Extension Term shall be the
Determination of the other party. If the two party-designated arbitrators have
not selected a third arbitrator by the end of the 20-day period above, then
either party, on behalf of both, may request such appointment by the local
office of the American Arbitration Association (or any successor thereto), or in
the absence, failure, refusal or inability of either of such entities to act,
then either party may apply to the presiding judge for the County in which the
Premises are located, for the appointment of such an Independent Arbitrator, and
the other party shall not raise any question as to the court's full power and
jurisdiction to entertain the application and make the appointment. In all
events, the determination of the arbitrators shall be limited solely to the
issue area of whether Landlord's or

 

 

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Tenant's Determination is the closest to the actual Market Rate as determined by
the arbitrators, taking into account the requirements of Section 5.4(a) above.

(iii)            Within five (5) days following notification of the identity of
the third (3rd) arbitrator so appointed, Landlord and Tenant shall submit copies
of Landlord's Determination and Tenant's Determination to the three arbitrators
(the "Appraisal Panel"). The Appraisal Panel shall conduct a hearing, at which
Landlord and Tenant may each make supplemental oral and/or written
presentations, with an opportunity for rebuttal by the other party and for
questioning by the members of the Appraisal Panel, if they so wish. Within a
reasonable time following the hearing, the Appraisal Panel, by majority vote,
shall select either Landlord's Determination or Tenant's Determination as the
Base Rent for the applicable Additional Extension Term, and shall have no right
to propose a middle ground or to modify either of the two proposals or the
provisions of the Lease. The Appraisal Panel shall attempt to render a decision
within fifteen (15) business days after appointment. In any case, the Appraisal
Panel shall render a decision within forty-five (45) days after appointment. The
decision of the Appraisal Panel shall be final and binding upon the parties, and
may be enforced in accordance with the provisions of California law. In the
event of the failure, refusal or inability of any member of the Appraisal Panel
to act, a successor shall be appointed in the manner that applied to the
selection of the member being replaced. Each party shall pay the fees and
expenses of the arbitrator designated by such party, and one-half of the fees
and expenses of the Independent Arbitrator and the expenses incident to the
proceedings (excluding attorneys' fees and similar expenses of the parties which
shall be borne separately by each of the parties).

(d)               Until the matter is resolved by agreement between the parties
or a decision is rendered in any arbitration commenced pursuant to this
Section 5.4, Tenant's monthly payments of Base Rent shall be in an amount equal
to Landlord's Determination. Within ten (10) business days following the
resolution of such dispute by the parties or the decision of the arbitrators, as
applicable, Tenant shall pay to Landlord, or Landlord shall pay to Tenant, the
amount of any deficiency or excess, as the case may be, in the Base Rent
theretofore paid.

5.5               Extension Option Personal to Tenant. Tenant's right to
exercise the Extension Options is personal to, and may be exercised only by, the
Original Tenant or any assignee of Tenant's interest in the Lease pursuant to
Section 14.8 of the Existing Lease (a "Permitted Assignee"), and only if the
Original Tenant or any Permitted Transferee continues to occupy at least sixty
percent (60%) of the Premises at the time of such exercise. If Tenant shall
assign this Lease or sublet more than forty percent (40%) of the Premises (other
than to a Permitted Transferee) under a sublease which is effective at any time
during the final three (3) months of the Extension Term (or first Additional
Extension Term, as the case may be), then immediately upon such assignment or
subletting, Tenant's right to exercise the remaining Extension Options shall
simultaneously terminate and be of no further force or effect. No assignee
(other than a Permitted Assignee) or subtenant shall have any right to exercise
the Extension Options granted herein.

6.                 Expansion Option. Landlord hereby grants to the Original
Tenant or any Permitted Assignee the right to lease additional space in the
Project upon the terms and conditions set forth in this Section 6 ("Expansion
Option").

 

 

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6.1               Expansion Spaces. Original Tenant or a Permitted Assignee only
(and not any other assignee, sublessee or other Transferee of Tenant's interest
in this Lease) shall have the right to lease one of the "Available Expansion
Spaces," as that term is defined below, in the manner as set forth in this
Section 6. The term "Available Expansion Spaces," as used in this Amendment,
shall mean the following buildings in the Project; provided, however, that
unless 940 Stewart Drive becomes available for lease to third parties prior to
the Expansion Exercise Deadline, 940 Stewart Drive shall not constitute an
Available Expansion Space hereunder.

Available Expansion Spaces:

 

940 Stewart Drive:

approximately 44,700 rentable square feet

 

920 Stewart Drive:

approximately 63,780 rentable square feet

 

945 Stewart Drive:

approximately 63,780 rentable square feet

 

6.2

Method of Exercise.

(a)               Tenant shall have the right to exercise the Expansion Option,
by giving Landlord written notice ("Exercise Notice") of the exercise of such
Expansion Option not later than June 1, 2010 ("Expansion Exercise Deadline"),
time being of the essence, which Exercise Notice must, in Tenant's sole
discretion, identify which one of the then Available Expansion Spaces that
Tenant wishes to lease from Landlord (which, as to the buildings located at 920
Stewart Drive and 945 Stewart Drive, must be exercised by Tenant with respect to
the entirety of one floor [i.e., at least 31,890 rentable square feet] or the
entirety of the building; and which, as to the building located at 940 Stewart
Drive, must be exercised by Tenant with respect to the entirety of one floor
[i.e., at least 22,350 rentable square feet] or the entirety of the building).
The building, or portion of a building, that Tenant identifies in such Exercise
Notice shall, for purposes hereof, be the "Expansion Space".

(b)               Notwithstanding the provisions of Section 6.2(a) above to the
contrary, if, at any time before the Expansion Exercise Deadline, Landlord
receives an offer from a bona fide third party to lease the building located at
920 Stewart Drive or 945 Stewart Drive (or, if applicable, 940 Stewart Drive),
that Landlord is prepared to accept, then, before Landlord enters into a lease
or letter of intent with respect to such building, Landlord shall so notify
Tenant, in which event the Expansion Exercise Deadline with respect to such
building only shall be accelerated to mean the earlier to occur of (i) the date
that is ten (10) business days following Tenant's receipt of such notice, or
(ii) June 1, 2010.

6.3               Lease of Expansion Space. If Tenant timely and validly
exercises the Expansion Option, then this Lease shall be deemed to be modified
to provide that the applicable Expansion Space shall become part of the Premises
and, therefore, subject to all of the terms and conditions of the Lease which
apply to the Premises, except that with respect to such Expansion Space:

(a)               Landlord shall use commercially reasonable efforts to deliver
possession of the Expansion Space to Tenant not later than September 1, 2010 or,
in the event that the Expansion Space is the building located at 945 Stewart
Drive, not later than March 1, 2011 (as applicable, the "Expansion Space
Delivery Deadline"), so that Tenant can commence its

 

 

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Alterations, which shall be performed pursuant to Article 8 of the Existing
Lease; provided, however, that, if a Force Majeure event (including a holdover
by the previous tenant) causes a delay in delivery of possession of the
Expansion Space to Tenant on or before the Expansion Space Delivery Deadline,
then Landlord shall not be liable to Tenant for the failure of the same to occur
on or before such date, provided that, in the case of a holdover by a previous
tenant, Landlord agrees to bring an unlawful detainer action in exercising its
commercially reasonable efforts to deliver possession of the Expansion Space to
Tenant. Without limiting the foregoing, if Landlord fails to deliver possession
of the Expansion Space to Tenant within sixty (60) days following the Expansion
Space Delivery Deadline ("Outside Delivery Deadline"), then Tenant, as its sole
remedy, shall be entitled to a rent credit equal to Two and 2/10ths Cents
($0.022) per rentable square foot of the Expansion Space for each day that
Landlord is delayed in delivering possession of the Expansion Space to Tenant
beyond the Outside Delivery Deadline, which credit Tenant may apply against Rent
payable by Tenant for the Expansion Space following the Expansion Space
Commencement Date, until such credit is exhausted. Provided that Landlord uses
commercially reasonable efforts to deliver possession of the Expansion Space to
Tenant, the Outside Delivery Deadline shall be extended by the number of days
that Landlord is delayed in delivering possession of the Expansion Space to
Tenant due to any Force Majeure event.

(b)               Subject to delay as provided in Section 6.3(a) above, Tenant
shall commence payment of the Base Rent for the Expansion Space and the term of
the Expansion Space shall commence upon that date (the "Expansion Space
Commencement Date") which is one hundred twenty (120) days following the date
that Landlord delivers possession of the Expansion Space to Tenant, and the
Lease Term for the Expansion Space shall expire on September 30, 2014, and shall
be coterminous with the Lease Term with respect to the initial Premises.
Notwithstanding the foregoing, in the event that the Expansion Space is the
building located at 945 Stewart Drive, Landlord shall not deliver possession of
the Expansion Space to Tenant sooner than September 1, 2010, and the Expansion
Space Commencement Date shall not occur sooner than December 30, 2010.

(c)               Tenant shall accept the Expansion Space in its then existing
"as is" condition, except as specifically set forth in the Lease and in Section
3.4(b), Section 4.1 and Section 4.2 above (provided that, for purposes of these
Sections, all references to the "Premises" shall mean the applicable Expansion
Space, all references to the "Effective Date" shall mean the date that Landlord
delivers possession of the Expansion Space to Tenant; and, in Section 3.4(b),
the reference to "May 1, 2010" shall mean one (1) year following the date that
Landlord delivers possession of the Expansion Space to Tenant). Further,
notwithstanding the foregoing, upon Tenant's written request and satisfaction of
the conditions set forth in Section 3.6(b) above, Landlord will contribute to
the cost of any Alterations that Tenant performs in or to the Expansion Space
(collectively, "Expansion Space Alterations") to the extent of the lesser of (i)
the "Prorated Allowance Amount" (as defined below) or (ii) the actual cost of
such Alterations (the lesser of the previously-described amounts being
hereinafter referred to as the "Expansion Space Alterations Allowance"). The
Expansion Space Alterations Allowance may only be applied to the payment or
reimbursement of documented "hard costs" of labor and materials and "soft costs"
relating to the Alterations. Tenant shall pay for all costs of Alterations in
excess of the Expansion Space Alterations Allowance. If Tenant fails to submit
reasonably satisfactory documentation requesting disbursement of the Expansion
Space Alterations Allowance within eighteen (18) months following the Expansion
Space Commencement Date, Landlord shall have

 

 

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no further obligation to provide the Expansion Space Alterations Allowance or
any remaining balance thereof to Tenant, nor shall Tenant be entitled to any
credit against Rent for any unused portion. As used herein, the "Prorated
Allowance Amount" means Sixteen and 50/100 Dollars ($16.50) per rentable square
foot in the Expansion Space, multiplied by a fraction, the numerator of which is
the number of months between the Expansion Space Commencement Date and September
30, 2014 (prorated for any partial month on the basis of a 30-day month), and
the denominator of which is sixty (60). For example, if the Expansion Space
Commencement Date is January 15, 2011, and the Expansion Space consists of
31,890 rentable square feet, then the Prorated Allowance Amount shall equal
$390,253.88 (i.e., $16.50 x 31,980 = $526,185.00, multiplied by a fraction, the
numerator of which is 44.5 and the denominator of which is 60).

(d)               Commencing on the Expansion Space Commencement Date, Tenant
shall pay Base Rent for the Expansion Space, which shall be calculated at the
same rates (and subject to the same periodic increases) as are applicable to the
remainder of the Premises pursuant to Section 3.1 above; provided, however, that
Tenant shall be entitled to an abatement of Base Rent and Tenant's Share of
Direct Expenses for a number of months (or portions of months) after the
Expansion Space Commencement Date, equal to the product of (i) a fraction, the
numerator of which is the number of months between the Expansion Space
Commencement Date and September 30, 2014 (prorated for any partial month on the
basis of a 30-day month), and the denominator of which is sixty (60), multiplied
by (ii) five (5). For example, if the Expansion Space Commencement Date occurs
on July 1, 2010, then Tenant shall be entitled to an abatement of Base Rent and
Tenant's Share of Direct Expenses from the Expansion Space Commencement Date
through November 10, 2010 (i.e., 52 / 60 months x 5 = 4.333 months of
abatement), at which time Base Rent shall equal $1.34 per rentable square foot
in the Expansion Space per month until September 30, 2011. Base Rent for the
Expansion Space shall then increase on October 1, 2011 to $1.38 per rentable
square foot in the Expansion Space per month, on October 1, 2012 to $1.42 per
rentable square foot in the Expansion Space per month, and so on as more
particularly set forth in Section 3.1.

(e)               Tenant’s Share shall equal 100% of the Building for purposes
of calculating of Tenant's Share of Direct Expenses for the Expansion Space,
unless the Expansion Space comprises less than the entirety of a building, in
which event Tenant's Share of Direct Expenses for the Expansion Space shall
equal 50%, and the Existing Lease will be modified as Landlord may reasonably
require to reflect a multi-tenant building (e.g., deletion of Tenant's exclusive
right to the roof of the multi-tenant building, deletion or modification of
Tenant's exterior signage rights to accommodate another tenant of the building).

(f)               Prior to the Expansion Space Commencement Date, Tenant shall
pay to Landlord, as an increase in the Security Deposit, an amount equal to the
monthly installment of Base Rent for the Expansion Space payable for September
2014.

6.4               Amendment to Lease. If Tenant timely exercises its right to
lease Expansion Space as set forth herein, then, within fifteen (15) days
thereafter, Landlord and Tenant shall execute an amendment adding such Expansion
Space to the Lease upon the same terms and conditions as the initial Premises,
except as otherwise set forth in this Section 6.

 

 

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6.5               Expansion Option Personal to Tenant; No Defaults. Tenant's
right to exercise the Expansion Option is personal to, and may be exercised only
by, the Original Tenant or any Permitted Assignee, and only if the Original
Tenant or any Permitted Transferee continues to occupy at least sixty percent
(60%) of the Premises at the time of such exercise. If Tenant shall assign this
Lease or sublet more than forty percent (40%) of the Premises (other than to a
Permitted Transferee) under a sublease which is effective at any time during the
final three (3) months of the Extension Term, then immediately upon such
assignment or subletting, Tenant's right to exercise the Expansion Option shall
simultaneously terminate and be of no further force or effect. No assignee
(other than a Permitted Assignee) or subtenant shall have any right to exercise
the Extension Options granted herein. If Tenant is in default beyond applicable
notice and cure periods under any of the terms, covenants or conditions of the
Lease either at the time Tenant exercises the Expansion Option or upon the
Expansion Space Commencement Date, then Landlord shall have, in addition to all
of Landlord's other rights and remedies provided in the Lease, the right to
terminate such Expansion Option and/or to unilaterally revoke Tenant's exercise
of such Expansion Option.

 

7.

UPS/Emergency Generator.

7.1               Generator License. Landlord hereby grants to Tenant a license
(the "Generator License"), at Tenant's sole cost and expense, but otherwise
without charge, to install, operate, maintain and use in a location reasonably
approved by Landlord and Tenant, a UPS back-up system or electrical generator
and related equipment (collectively, the "Generator"), including, but not
limited to, fuel storage and lines, electrical lines and electrical power
connections and meters to service the Premises, subject to, and in accordance
with, the terms and conditions contained in Article 8 of the Existing Lease (as
the same is amended above) and this Section 7.

 

7.2

General Requirements. The Generator License is subject to the following
requirements:

(a)               The manufacturer of the Generator, the type, size, and quality
of the Generator, the substance to be stored in the Generator, the precise
location of the Generator, all safety, monitoring, and related Generator
equipment, the method and manner of installation, and all other matters material
to the installation of the Generator, including, without limitation, all
Building penetrations, are subject to Landlord's prior written approval, which
approval shall not be unreasonably withheld.

(b)               Tenant's contractor for installation of the Generator shall be
subject to Landlord's prior approval (which approval will not be unreasonably
withheld), and such contractor must provide evidence of insurance reasonably
satisfactory to Landlord prior to commencing work in or about the Building.

(c)               The Generator must be installed in a good and workmanlike
manner and in accordance with all Applicable Requirements, and in accordance
with plans and specifications approved in advance by Landlord. Without limiting
the generality of the foregoing, such plans and specifications must include for
Landlord's approval, which approval shall not be unreasonably withheld, (i) a
hazardous substances management plan, (ii) an elevation showing the location of
penetrations, and planned methods of waterproofing the penetrations; and (iii)
details on screening the Generator and the Generator enclosure. The giving of
any approval by Landlord shall not eliminate any of Tenant's obligations under
the Lease, including, without limitation, Tenant's obligation to obtain all
required permits and to secure

 

 

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compliance with all Applicable Requirements and other requirements set forth in
Section 7.4 below. Tenant agrees to pay, within thirty (30) days after receipt
of an invoice therefor, Landlord's actual out-of-pocket costs incurred in
payments to third parties with respect to Landlord's review and approval of the
plans and specifications.

(d)               Tenant shall provide Landlord with reasonable advance notice
prior to commencing installation of the Generator or other work on or to the
Generator from time to time, and agrees to afford Landlord the opportunity to be
present for all such work.

(e)               After the initial installation of the Generator hereunder,
Tenant shall not make any alteration, addition or improvement thereto, or to the
substances stored therein, without first obtaining Landlord's prior written
approval thereof, which approval shall not be unreasonably withheld, delayed or
conditioned; and any such alterations, additions or improvements shall be
subject to all the conditions and restrictions that apply to the original
Generator, including, without limitation, the requirement that Tenant furnish
Landlord with detailed plans and specifications relating to the proposed
alterations, additions or improvements.

(f)               Tenant shall have sole access to the Generator location for
the purposes of installation, operation, maintenance and repair of the
Generator, subject to reasonable rules and restrictions of Landlord.

(g)               Tenant, at its expense, shall at all times keep the Generator
in good order, condition and repair, and the Generator location and the areas
immediately surrounding same neat and clean. With respect to all operations
relating to the Generator, Tenant shall conduct its business and control its
agents, employees and invitees in such manner as not to create any nuisance, or
interfere with, annoy or disturb any other licensee or tenant of the Project or
Landlord in its operation of the Building.

 

7.3

Compliance With Laws; Hazardous Substances.

(a)               Tenant shall accept the designated location for the Generator
(to be reasonably approved by Landlord and Tenant following the date of this
Amendment), in its condition and "as-built" configuration existing on the
Effective Date. Landlord has made no representations or promise as to the
suitability or effectiveness of the Generator location for Tenant's proposed
use, or as to any Applicable Requirements applicable to Tenant's proposed use of
the Generator, or as to the condition of (or alteration or improvement of) the
Generator location. Tenant, at its sole cost and expense, shall comply with all
Applicable Requirements applicable to the installation, maintenance, operation
and use of the Generator. Without limiting the generality of the foregoing,
Tenant shall be responsible for obtaining any building permits, and any
licenses, consents, approvals or permits which may be required by any federal,
state and local agencies or governmental authorities required for the
installation, maintenance, operation and removal of the Generator, shall provide
copies of the same to Landlord, and shall, at all times during the term of the
License, comply with all requirements of any such agency or authority.

(b)               Tenant shall respond to any release of Hazardous Substances
from the Generator immediately after Tenant becomes aware of such release,
regardless of the amount of the release, and shall make all required
governmental notifications in the event of a release. In addition, Tenant shall
immediately notify Landlord of such release after Tenant becomes aware thereof.

 

 

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(c)               In the event any Remedial Work is required to be performed in
the Project under any Applicable Requirements, as the result of the design,
installation, location, maintenance, operation or removal of the Generator by
Tenant or any Tenant Parties, then, at Landlord's option, either Tenant shall
perform or cause to be performed the Remedial Work in compliance with such
Environmental Laws or Landlord may cause such Remedial Work to be performed and
Tenant shall reimburse Landlord for the reasonable expenses thereof within
thirty (30) days of demand and delivery of applicable invoices therefor. All
Remedial Work performed by Tenant shall be performed by one or more contractors,
selected by Tenant and reasonably approved in advance in writing by Landlord,
and under the supervision of a consulting engineer selected by Tenant and
reasonably approved in advance in writing by Landlord. All costs and expenses of
such Remedial Work shall be paid by Tenant, including, without limitation, the
charges of such contractor(s), the consulting engineer, and Landlord's
reasonable attorneys' fees and costs incurred in connection with monitoring or
review of such Remedial Work. Nothing in this Section 7 shall affect any of
Landlord's other rights (or Tenant's obligations) elsewhere in the Lease.

(d)               Tenant shall immediately forward to Landlord copies of any and
all notices, correspondence, warnings, guidance, or other written materials
received from any governmental authority in connection with the Generator, the
substances contained therein, or the equipment or Tenant's operations in
connection therewith.

7.4               Damage to Building. Any damage to the Building resulting from
the installation, operation, maintenance or removal of the Generator, including
without limitation, leakage or water damage, shall be repaired by Tenant, at
Tenant's sole cost and expense; provided, however, that to the extent Tenant
fails to make such repairs after applicable notice and cure periods (except in
an Emergency Situation, in which event Landlord shall furnish Tenant with
reasonable notice in light of the circumstances), Landlord may make such
repairs, in which event Tenant shall reimburse Landlord for the reasonable cost
thereof within thirty (30) days following receipt of a reasonably detailed
invoice therefor.

7.5               Ownership of Generator; Removal and Restoration. The Generator
shall be Tenant's property and, at Tenant's option, Tenant may, at its own
expense, remove the Generator not later than the expiration or earlier
termination of the Lease, and repair all damage to the Building caused by such
removal. If Tenant does not remove the Generator within thirty (30) days after
the expiration or earlier termination of the Lease, then Tenant shall be
conclusively presumed to have, at Landlord's election: (a) conveyed the
Generator to Landlord without compensation or (b) abandoned the Generator, in
which event Landlord may dispose of or store the Generator in any manner at
Tenant's sole cost, without waiving Landlord's right to claim from Tenant all
expenses arising out of Tenant's failure to remove the Generator, and without
liability to Tenant or any other person.

7.6               Certification. Within thirty (30) days following Landlord's
request (which may be made not more frequently than once per Lease Year, except
in connection with any bona fide sale,

 

 

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financing or refinancing of the Project or any portion thereof), Tenant shall
certify in writing to Landlord (and, upon Landlord's request, to any mortgagee,
potential mortgagee, or potential purchaser of all or a portion of the Project)
that (a) Tenant has complied with all Applicable Requirements and its
obligations hereunder, including, without limitation, all maintenance and
monitoring requirements, and (b) to Tenant's knowledge, neither the Generator
nor the substances contained therein have resulted in soil, water, or other
contamination on, under, or adjacent to the Premises or the Project and do not
pose a threat to health, safety, or the environment (or, to the extent
applicable, that any such contamination or threat have been fully remediated to
the satisfaction of all applicable governmental entities having jurisdiction).

7.7               Generator Inspection. Landlord and its representatives shall
have the right, at any reasonable time and from time to time, to inspect the
Generator, and to conduct testing, monitoring and analyses and to review any
permits, documents, materials, inventories, financial data, or notices or
correspondence to or from private parties or governmental authorities in
connection therewith. Tenant shall maintain copies all permits and other
documentation relating to the Generator at the Premises.

7.8               Tenant Default. In the event Tenant fails or is not able, for
any reason, to comply with Environmental Laws or Tenant's obligations under this
Section 7, in whole or in part, or if Landlord reasonably believes that the
Generator has resulted in or threatens to cause soil, water, or other
contamination or pose a threat to health, safety, or the environment, Landlord
shall have the right, but not the obligation, to take any one or more of the
following actions:

(a)               To require Tenant to take such action as it may reasonably
deem necessary to ensure compliance or to mitigate, abate, or correct the
contamination or other threat;

(b)               If Tenant fails to take the actions required pursuant to
Section 7.8(a) within thirty (30) days (or such shorter or longer time as may be
reasonable under the circumstances), to require Tenant to remove the Generator
in accordance with applicable Environmental Laws and the reasonable satisfaction
of Landlord, and, to the extent practicable at commercially reasonable expense,
restore the area in the vicinity of the Generator to the condition existing
prior to installation thereof; and/or

(c)               Pursue all additional remedies as Landlord may have under the
Lease.

 

7.9

Insurance; Indemnity.

(a)               Tenant shall cause the insurance policies required to be
maintained pursuant to Section 10.3 of the Existing Lease to cover the Generator
and any Claims arising in connection with the presence, use, operation,
installation, repair, maintenance, or removal of the Generator.

(b)               Without limiting the provisions of Section 10.1 of the
Existing Lease, Tenant hereby agrees, to the maximum extent permitted by law, to
protect, defend, indemnify and hold Landlord and the other Landlord Parties, and
each of them, harmless from and against any and all Claims arising from or
connected in any way with the Generator or the operations of Tenant or any
Tenant Parties in connection therewith, or a breach of any

 

 

19

 

 

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representation, warranty, covenant, or condition of this Section. The foregoing
indemnification shall apply regardless of the active or passive negligence of
Landlord Parties and regardless of whether liability without fault or strict
liability is imposed or sought to be imposed on the Landlord Parties; provided,
however, that, with respect to any Landlord Party, Tenant's obligations under
this Section shall be inapplicable to the extent such Claims arise from the
gross negligence or willful misconduct of such Landlord Party and are not
covered by the insurance required to be carried by Tenant hereunder, or to the
extent such obligations are prohibited by applicable law. The foregoing
indemnity shall survive the expiration or earlier termination of the Generator
License and the Lease.

8.                 SNDA. Without limiting the generality of Article 18 of the
Existing Lease, (a) Tenant shall, concurrently with its execution and delivery
of this Amendment to Landlord, deliver to Landlord an SNDA, duly executed (and
acknowledged) by Tenant, in the form attached hereto as Exhibit D; and
(b) Landlord shall use best efforts to cause LaSalle Bank, N.A., as Trustee in
Trust for Holders of Deutsche Mortgage & Asset Receiving Corporation, COMM
2006-FL12 Commercial Mortgage Pass-Through Certificates (the "Existing Lender"
to execute the SNDA as soon as reasonably practicable following Landlord's
receipt of the SNDA from Tenant. Except for making such best efforts, Landlord
will be under no duty or obligation hereunder with respect to the SNDA, nor will
the failure or refusal of the Existing Lender to grant a non-disturbance
agreement render Landlord liable to Tenant, or affect this Lease, in any manner.

9.                 Tenant's Certification. Tenant hereby certifies to Landlord
that, as of the execution and delivery of this Amendment by Tenant to Landlord,
there are no existing defenses against the enforcement of any of the obligations
of Tenant under the Lease, and Landlord is not in default under the Lease by
reason of its failure to perform any obligations thereunder, and there is no
circumstance, event, condition or state of facts which, by the passage of time
or the giving of notice, or both, could entitle Tenant to any such defenses or
constitute or result in such a default.

10.               Real Estate Brokers. Tenant represents and warrants that
Tenant has not had any dealings with any broker in connection with the
negotiation or execution of this Amendment, other than Jones Lang LaSalle.
Tenant agrees to indemnify Landlord and hold Landlord harmless from any and all
costs (including attorneys' fees), expenses or liability for commissions or
other compensation claimed by any other broker or agent claiming to have had
dealings with Tenant in connection with this Amendment. Landlord shall pay Jones
Lang LaSalle a commission ("Broker's Commission") pursuant to a separate
agreement ("JLL Agreement").

 

11.

Miscellaneous.

11.1             Right of Offset. To secure the Landlord’s payment of the
Alterations Allowance and Broker’s Commission, Landlord agrees that, if Landlord
fails to disburse any portion of the Alterations Allowance or Broker's
Commission when required pursuant to this Amendment or the JLL Agreement, as the
case may be, and such failure continues for 30 days following Tenant's written
demand therefor (which demand shall reference, and quote verbatim in its
entirety, this Section 11.1), then Tenant may deduct such sums from the next due
installment of Base Rent and each subsequent installment of Base Rent until
Tenant is fully reimbursed for such amounts; provided, however, that Tenant may
not make such deduction from Base Rent if,

 

 

20

 

 

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before Tenant makes such deduction, Landlord notifies Tenant in writing that
Landlord denies that it was obligated to make such disbursement.

11.2             Ratification. Except as modified by this Amendment, all of the
terms, conditions and provisions of the Existing Lease shall remain in full
force and effect and are hereby ratified and confirmed.

11.3                   Conflict. To the extent the terms of the Existing Lease
and this Amendment are inconsistent, the terms of this Amendment shall control.

11.4                   No Offer. The submission of this Amendment to Tenant for
examination or execution does not create an option or constitute an offer to
Tenant to amend the Existing Lease on the terms and conditions contained herein,
and this Amendment shall not become effective as an amendment to the Existing
Lease unless and until it has been executed and delivered by both Landlord and
Tenant.

11.5                   Time of the Essence. Time is of the essence for each and
every provision of this Amendment.

11.6                   Entire Agreement. This Amendment contains the entire
agreement of Landlord and Tenant with respect to the subject matter hereof. It
is understood that there are no oral agreements between Landlord and Tenant
affecting the Existing Lease as hereby amended, and this Amendment supersedes
and cancels any and all previous negotiations, representations, agreements and
understandings, if any, between Landlord and Tenant and their respective agents
with respect to the subject matter thereof, and none shall be used to interpret
or construe the Lease. Tenant acknowledges that all prior communications from
Landlord or its agents are not and were not, and shall not be construed to be,
representations or warranties of Landlord or its agents as to the matters
communicated, and have not and will not be relied upon by Tenant. Under no
circumstances shall Tenant be entitled to any free rent, improvement allowance,
leasehold improvements, or other work to the Premises, or any similar economic
incentives that may have been provided Tenant in connection with entering into
the Existing Lease, unless specifically set forth in this Amendment.

11.7                   Counterparts. This Amendment may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same agreement. This Amendment may be
executed by a party's signature transmitted by facsimile ("fax") or by
electronic mail in pdf format ("pdf"), and copies of this Amendment executed and
delivered by means of faxed or pdf signatures shall have the same force and
effect as copies hereof executed and delivered with original signatures. All
parties hereto may rely upon faxed or pdf signatures as if such signatures were
originals. Any party executing and delivering this Amendment by fax or pdf shall
promptly thereafter deliver a counterpart of this Amendment containing said
party's original signature. All parties hereto agree that a faxed or pdf
signature page may be introduced into evidence in any proceeding arising out of
or related to this Amendment as if it were an original signature page.

 

 

21

 

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed on the
dates set forth below.

LANDLORD:

CARR NP PROPERTIES, L.L.C.,

a Delaware limited liability company

By:             Name:             Title:      

 

Date of Execution:      

 

TENANT:

SHORETEL, INC.,

a Delaware corporation

 

 

By:           Name:             Title:       [chairman, president or
vice-president]  

 

 

By:           Name:            Title:      

[secretary, assistant secretary,

chief financial officer or assistant treasurer]

 

 

Date of Execution:  

 

 

23

 

 

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EXHIBIT A

 

TENANT'S PROPOSED ALTERATIONS

 

 

Exhibit A

 

 

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EXHIBIT B

 

TOP OF BUILDING SIGNAGE

[img1.gif]

 

 

Exhibit B, Page 1

 

 

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[img2.gif]

 

 

Exhibit B, Page 2

 

 

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EXHIBIT C

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

RECORDING REQUESTED BY

WHEN RECORDED RETURN TO

 

Bank of America N.A.

Attn: Servicing Manager

900 West Trade Street, Ste 650
Charlotte, NC 28255

 

APN: 205-22-023, 205-25-014

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

SHORETEL, INC.

Tenant

AND

LASALLE BANK, N.A., as Trustee in trust for

Holders of Deutsche Mortgage & Asset Receiving Corporation,

COMM 2006-FL12 Commercial Mortgage Pass-Through Certificates

Lender

 

Premises:

960 Stewart Drive, Sunnyvale, California

    Dated: as of ___________ ___, 2009  

 

 

 

Exhibit C, Page 1

 

 

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SUBORDINATION,

NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS AGREEMENT made as of this ___ day of _________, 2009, between LASALLE BANK,
N.A., as Trustee in Trust for Holders of Deutsche Mortgage & Asset Receiving
Corporation, COMM 2006-FL12 Commercial Mortgage Pass-Through Certificates,
having an address at c/o Bank of America N.A., Attn: Servicing Manager, 900 West
Trade Street, Ste 650, Charlotte, NC 28255 (hereinafter called "Lender"), and
SHORETEL, INC., a California corporation, having an address at 960 Stewart
Drive, Sunnyvale, California 94085 (hereinafter called "Tenant").

RECITALS:

WHEREAS, by a lease dated as of April 20, 2007 (the "Initial Lease"), between
Carr NP Properties L.L.C., a Delaware limited liability company (hereinafter
called "Landlord"), as landlord, and Tenant, as tenant ("Lease"), Landlord
leased to Tenant certain premises located at 960 Stewart Drive, Sunnyvale,
California (the "Premises") on the property described in Schedule "A" annexed
hereto and made a part hereof (the "Property"); and

WHEREAS, the Initial Lease has been amended by that certain First Amendment to
Lease dated as of June 18, 2009 (the "First Amendment"; and, together with the
Initial Lease, the "Lease");

WHEREAS, Lender has made a loan to Landlord, which loan is secured by, among
other things, a mortgage or deed of trust (which mortgage or deed of trust, and
all amendments, renewals, increases, modifications, replacements, substitutions,
extensions, spreaders and consolidations thereof and all re-advances thereunder
and addictions thereto, is referred to as the "Security Instrument") encumbering
the Property and recorded in the Santa Clara County Official Records; and

WHEREAS, Lender and Tenant desire to confirm their understanding and agreement
with respect to the Lease and the Security Instrument.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Lender and Tenant hereby agree and covenant as follows:

1.         The Lease, and all of the terms, covenants, provisions and conditions
thereof (including, without limitation, any right of first refusal, right of
first offer, option or any similar right with respect to the sale or purchase of
the Property, or any portion thereof) is, shall be and shall at all times remain
and continue to be subject and subordinate in all respects to the lien, terms,
covenants, provisions and conditions of the Security Instrument and to all
advances and re-advances made thereunder and all sums secured thereby. This
provision shall be self-operative but Tenant shall execute and deliver any
additional instruments which Lender may reasonably require to effect such
subordination.

2.         So long as (i) Tenant is not in default (beyond any period given in
the Lease to Tenant to cure such default) in the payment of rent, percentage
rent or additional rent or in the performance or observance of any of the other
terms, covenants, provisions or conditions of the

 

 

Exhibit C, Page 2

 

 

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Lease on Tenant's part to be performed or observed, (ii) Tenant is not in
default under this Agreement and (iii) the Lease is in full force and effect
(except if terminated pursuant to the Landlord’s bankruptcy): (a) Tenant's
possession of the Premises and Tenant's rights and privileges under the Lease,
or any extensions or renewals thereof which may be effected in accordance with
any option therefor which is contained in the Lease, shall not be diminished or
interfered with by Lender, and Tenant's occupancy of the Premises shall not be
disturbed by Lender for any reason whatsoever during the term of the Lease or
any such extensions or renewals thereof and (b) Lender will not join Tenant as a
party defendant in any action or proceeding to foreclose the Security Instrument
or to enforce any rights or remedies of Lender under the Security Instrument
which would cut-off, destroy, terminate or extinguish the Lease or Tenant's
interest and estate under the Lease (except to the extent required so that
Tenant's right to receive or set-off any monies or obligations owed or to be
performed by any of Lender's predecessors-in-interest shall not, except as set
for in Section 11.1 of the First Amendment, be enforceable thereafter against
Lender or any of Lender's successors-in-interest). Notwithstanding the foregoing
provisions of this paragraph, if it would be procedurally disadvantageous for
Lender not to name or join Tenant as a party in a foreclosure proceeding with
respect to the Security Instrument, Lender may so name or join Tenant without in
any way diminishing or otherwise affecting the rights and privileges granted to,
or inuring to the benefit of, Tenant under this Agreement.

3.                 (A)      After notice is given by Lender that the Security
Instrument is in default and that the rentals under the Lease should be paid to
Lender, Tenant will attorn to Lender and pay to Lender, or pay in accordance
with the directions of Lender, all rentals and other monies due and to become
due to Landlord under the Lease or otherwise in respect of the Premises. Such
payments shall be made regardless of any right of off-set, counterclaim or other
defense which Tenant may have against Landlord, whether as the tenant under the
Lease or otherwise, except as set forth in Section 11.1 of the First Amendment.

(B)      In addition, if Lender (or its nominee or designee) shall succeed to
the rights of Landlord under the Lease through possession or foreclosure action,
delivery of a deed or otherwise, or another person purchases the Property or the
portion thereof containing the Premises upon or following foreclosure of the
Security Instrument or in connection with any bankruptcy case commenced by or
against Landlord, then at the request of Lender (or its nominee or designee) or
such purchaser (Lender, its nominees and designees, and such purchaser, and
their respective successors and assigns, each being a "Successor-Landlord"),
Tenant shall attorn to and recognize Successor-Landlord as Tenant's landlord
under the Lease and shall promptly execute and deliver any instrument that
Successor-Landlord may reasonably request to evidence such attornment. Upon such
attornment, the Lease shall continue in full force and effect as, or as if it
were, a direct lease between Successor-Landlord and Tenant upon all terms,
conditions and covenants as are set forth in the Lease. If the Lease shall have
terminated by operation of law or otherwise as a result of or in connection with
a bankruptcy case commenced by or against Landlord or a foreclosure action or
proceeding or delivery of a deed in lieu, upon request of Successor-Landlord,
Tenant shall promptly execute and deliver a direct lease with Successor-Landlord
which direct lease shall be on substantially the same terms and conditions as
the Lease (subject, however, to the provisions of clauses (i)-(v) of this
paragraph 3(B) and shall be effective as of the day the Lease shall have
terminated as aforesaid. Notwithstanding the continuation of the Lease, the
attornment of Tenant thereunder or the

 

 

Exhibit C, Page 3

 

 

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execution of a direct lease between Successor-Landlord and Tenant as aforesaid,
Successor-Landlord shall not:

(i)        be liable for any previous act or omission of Landlord under the
Lease;

(ii)       be subject to any off-set, defense, or counterclaim which shall have
theretofore accrued to Tenant against Landlord, except as expressly provided in
Section 11.1 of the First Amendment;

(iii)      be bound by any modification of the Lease or by any previous
prepayment of rent or additional rent made more than one (1) month prior to the
date same was due which Tenant might have paid to Landlord, unless such
modification or prepayment shall have been expressly approved in writing by
Lender or Successor Landlord and except as set forth in Section 3.1 of the First
Amendment;

(iv)      be liable for any security deposited under the Lease unless such
security has been physically delivered to Lender or Successor Landlord; and

(v)       be liable or obligated to comply with or fulfill any of the
obligations of the Landlord under the Lease or any agreement relating thereto
with respect to the construction of, or payment for, improvements on or above
the Premises (or any portion thereof), leasehold improvements, tenant work
letters and/or similar items.

4.         Tenant agrees that, without the prior written consent of Lender, it
shall not (a) amend, modify, terminate or cancel the Lease or any extensions or
renewals thereof, (b) tender a surrender of the Lease, (c) make a prepayment of
any rent or additional rent more than one (1) month in advance of the due date
thereof, and except as set forth in Section 3.1 of the First Amendment, or (d)
subordinate or permit the subordination of the Lease to any lien subordinate to
the Security Instrument. Any such purported action without such consent shall be
void as against the holder of the Security Instrument.

5.                 (A)      Tenant shall promptly notify Lender of any default
by Landlord under the Lease and of any act or omission of Landlord which would
give Tenant the right to cancel or terminate the Lease or to claim a partial or
total eviction.

(B)      In the event of a default by Landlord under the Lease which would give
Tenant the right, immediately or after the lapse of a period of time, to cancel
or terminate the Lease or to claim a partial or total eviction, or in the event
of any other act or omission of Landlord which would give Tenant the right to
cancel or terminate the Lease, Tenant shall not exercise such right (i) until
Tenant has given written notice of such default, act or omission to Lender and
(ii) unless Lender has failed, within sixty (60) days after Lender receives such
notice, to cure or remedy the default, act or omission, or, if such default, act
or omission shall be one which is not reasonably capable of being remedied by
Lender within such sixty (60) day period, until a reasonable period for
remedying such default, act or omission shall have elapsed following the giving
of such notice and following the time when Lender shall have become entitled
under the Security Instrument to remedy the same (which reasonable period shall
in no event be less than the period to which Landlord would be entitled under
the Lease or otherwise,

 

 

Exhibit C, Page 4

 

 

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after similar notice, to effect such remedy), provided that Lender shall with
due diligence give Tenant written notice of its intention to and shall commence
and continue to, remedy such default, act or omission. If Lender cannot
reasonably remedy a default, act or omission of Landlord until after Lender
obtains possession of the Premises, Tenant may not terminate or cancel the Lease
or claim a partial or total eviction by reason of such default, act or omission
until the expiration of a reasonable period necessary for the remedy after
Lender secures possession of the Premises through appointment of a receiver or
foreclosure. To the extent Lender incurs any expenses or other costs in curing
or remedying such default, act or omission, including, without limitation,
attorneys' fees and disbursements, Lender shall be subrogated to Tenant's rights
against Landlord.

(C)      Notwithstanding the foregoing, Lender shall have no obligation
hereunder to remedy such default, act or omission.

6.         To the extent that the Lease shall entitle Tenant to notice of the
existence of any mortgage and the identity of any mortgagee or any ground
lessor, this Agreement shall constitute such notice to Tenant with respect to
the Security Instrument and Lender.

7.         Upon and after the occurrence of a default under the Security
Instrument, which is not cured after any applicable notice and/or cure periods,
Lender shall be entitled, but not obligated, to exercise the claims, rights,
powers, privileges and remedies of Landlord under the Lease and shall be further
entitled to the benefits of, and to receive and enforce performance of, all of
the covenants to be performed by Tenant under the Lease as though Lender were
named therein as Landlord.

8.         Anything herein or in the Lease to the contrary notwithstanding, in
the event that a Successor-Landlord shall acquire title to the Property or the
portion thereof containing the Premises, Successor-Landlord shall have no
obligation, nor incur any liability, beyond Successor-Landlord's then interest,
if any, in the Property, and Tenant shall look exclusively to such interest, if
any, of Successor-Landlord in the Property for the payment and discharge of any
obligations imposed upon Successor-Landlord hereunder or under the Lease, and
Successor-Landlord is hereby released or relieved of any other liability
hereunder and under the Lease. Tenant agrees that, with respect to any money
judgement which may be obtained or secured by Tenant against Successor-Landlord,
Tenant shall look solely to the estate or interest owned by Successor-Landlord
in the Property, and Tenant will not collect or attempt to collect any such
judgement out of any other assets of Successor-Landlord.

9.         Notwithstanding anything to the contrary in the Lease, Tenant agrees
for the benefit of Landlord and Lender that, except as permitted by, and fully
in accordance with, applicable law, Tenant shall not generate, store, handle,
discharge or maintain in, on or about any portion of the Property, any asbestos,
polychlorinated biphenyls, or any other hazardous or toxic materials, wastes and
substances which are defined, determined or identified as such (including, but
not limited to, pesticides and petroleum products if they are defined,
determined or identified as such) in any federal, state or local laws, rules or
regulations (whether now existing or hereafter enacted or promulgated) or any
judicial or administrative interpretation of any thereof, including any judicial
or administrative interpretation of any thereof, including any judicial or
administrative orders or judgments.

 

 

Exhibit C, Page 5

 

 

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10.       If the Lease provides that Tenant is entitled to expansion space,
Successor-Landlord shall have no obligation nor any liability for failure to
provide such expansion space if a prior landlord (including, without limitation,
Landlord), by reason of a lease or leases entered into by such prior landlord
with other tenants of the Property, has precluded the availability of such
expansion space.

11.       Except as specifically provided in this Agreement, Lender shall not,
by virtue of this Agreement, the Security Instrument or any other instrument to
which Lender may be a party, be or become subject to any liability or obligation
to Tenant under the Lease or otherwise.

12.               (A)      Tenant acknowledges and agrees that this Agreement
satisfies and complies in all respects with the provisions of Article 18 of the
Lease and that this Agreement supersedes (but only to the extent inconsistent
with) the provisions of such Article and any other provision of the Lease
relating to the priority or subordination of the Lease and the interests or
estates created thereby to the Security Instrument.

(B)      Tenant agrees to enter into a subordination, non-disturbance and
attornment agreement with any lender which shall succeed Lender as lender with
respect to the Property, or any portion thereof, provided such agreement is
substantially similar to this Agreement. Tenant does herewith irrevocably
appoint and constitute Lender as its true and lawful attorney-in-fact in its
name, place and stead to execute such subordination, non-disturbance and
attornment agreement, without any obligation on the part of Lender to do so.
This power, being coupled with an interest, shall be irrevocable as long as the
Indebtedness secured by the Security Instrument remains unpaid. Lender agrees
not to exercise its rights under the preceding two sentences if Tenant promptly
enters into the subordination, non-disturbance and attornment agreement as
required pursuant to the first sentence of this subparagraph (B).

13.               (A)      Any notice required or permitted to be given by
Tenant to Landlord shall be simultaneously given also to Lender, and any right
to Tenant dependent upon notice shall take effect only after notice is so given.
Performance by Lender shall satisfy any conditions of the Lease requiring
performance by Landlord, and Lender shall have a reasonable time to complete
such performance as provided in Paragraph 5 hereof.

(B)      All notices or other communications required or permitted to be given
to Tenant or to Lender pursuant to the provisions of this Agreement shall be in
writing and shall be deemed given only if mailed by United States registered
mail, postage prepaid, or if sent by nationally recognized overnight delivery
service (such as Federal Express or United States Postal Service Express Mail),
addressed as follows: to Tenant, at the address first set forth above,
Attention: Director of Facilities and Chief Financial Officer, with a copy to
Lender, at the address first set forth above; or to such other address or number
as such party may hereafter designate by notice delivered in accordance
herewith. All such notices shall be deemed given three (3) business days after
delivery to the United States Post office registry clerk if given by registered
mail, or on the next business day after delivery to an overnight delivery
courier.

14.       This Agreement may be modified only by an agreement in writing signed
by the parties hereto, or their respective successors-in-interest. This
Agreement shall inure to the

 

 

Exhibit C, Page 6

 

 

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benefit of and be binding upon the parties hereto, and their respective
successors and assigns. The term "Lender" shall mean the then holder of the
Security Instrument. The term "Landlord" shall mean the then holder of the
landlord's interest in the Lease. The term "person" shall mean an individual,
joint venture, corporation, partnership, trust, limited liability company,
unincorporated association or other entity. All references herein to the Lease
shall mean the Lease as modified by this Agreement and to any amendments or
modifications to the Lease which are consented to in writing by Lender. Any
inconsistency between the Lease and the provisions of this Agreement shall be
resolved, to the extent of such inconsistency, in favor of this Agreement.

 

15.

Tenant hereby represents to Lender as follows:

 

(a)

The Lease is in full force and effect and has not been further amended.

(b)       There has been no assignment of the Lease or subletting of any portion
of the premises demised under the Lease.

(c)       There are no oral or written agreements or understandings between
Landlord and Tenant relating to the premises demised under the Lease or the
Lease transaction except as set forth in the Lease.

(d)       The execution of the Lease was duly authorized and the Lease is in
full force and effect and to the best of Tenant's knowledge there exists no
default (beyond any applicable grace period) on the part of either Tenant or
Landlord under the Lease.

(e)       There has not been filed by or against nor to the best of the
knowledge and belief of Tenant is there threatened against Tenant, any petition
under the bankruptcy laws of the United States.

(f)        To the best of Tenant's knowledge, there is no present assignment,
hypothecation or pledge of the Lease or rents accruing under the Lease by
Landlord, other than pursuant to the Security Instrument.

16.       Whenever, from time to time, reasonably requested by Lender (but not
more than three (3) times during any calendar year), Tenant shall execute and
deliver to or at the direction of Lender, and without charge to Lender, one or
more written certifications, in a form acceptable to Tenant, of all of the
matters set forth in Paragraph 15 above, and any other information the Lender
may reasonably require to confirm the current status of the Lease.

17.       BOTH TENANT AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

18.       This Agreement shall be governed by and construed in accordance with
the laws of the State in which the Property is located.

 

 

Exhibit C, Page 7

 

 

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

LENDER

LASALLE BANK, N.A., as Trustee in trust for Holders of Deutsche Mortgage & Asset
Receiving Corporation, COMM 2006-FL12 Commercial Mortgage Pass-Through
Certificates

     

 

By:

Bank of America N.A., as Sub-Servicer

          By:               Name:               Title:  

    TENANT          

SHORETEL, INC.,

a California corporation

            By:               Name:               Title:  

 

AGREED AND CONSENTED TO:

CARR NP PROPERTIES, L.L.C.

 

By:       Name:       Title:  

 

 

Exhibit C, Page 8

 

 

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STATE OF _______________________   )

 

) ss.

COUNTY OF ______________________

)

 

 

On ___________________, before me, _____________________________, personally
appeared _____________________________________, personally known to me (or
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.

 

WITNESS my hand and official seal.

 

_______________________________________________

Signature of Notary Public                            (Seal)

 

 

STATE OF _______________________

)

 

) ss.

COUNTY OF ______________________

)

 

 

On ___________________, before me, _____________________________, personally
appeared _____________________________________, personally known to me (or
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.

 

WITNESS my hand and official seal.

 

_______________________________________________

Signature of Notary Public                            (Seal)

 

 

 

Exhibit C, Page 9

 

 

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STATE OF _______________________

)

 

) ss.

COUNTY OF ______________________

)

 

 

On ___________________, before me, _____________________________, personally
appeared _____________________________________, personally known to me (or
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.

 

WITNESS my hand and official seal.

 

_______________________________________________

Signature of Notary Public                            (Seal)

 

STATE OF _______________________

)

 

) ss.

COUNTY OF ______________________

)

 

 

On ___________________, before me, _____________________________, personally
appeared _____________________________________, personally known to me (or
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.

 

WITNESS my hand and official seal.

 

_______________________________________________

Signature of Notary Public                            (Seal)

 

 

 

Exhibit C, Page 10

 

 

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SCHEDULE A

Legal Description of Property

All that real property situated in the City of Sunnyvale, County of Santa Clara,
State of California, more particularly described as follows:

 

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Exhibit C, Page 11

 

 

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