EXECUTION ORIGINAL
 
BISHOP RANCH BUSINESS PARK
BUILDING LEASE
 
Sunset Development Company    
One Annabel Lane, Suite 201, San Ramon, CA 94583
Tel: 925 886 0100 Fax: 925 856 1330
 

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SBE, INC.
 
BISHOP RANCH BUSINESS PARK - BUILDING LEASE

TABLE OF CONTENTS

1.
PREMISES
1      
2.
TERM
1  
2.1
Term
1  
2.2
Delay in Commencement
1  
2.3
Acknowledgment of Commencement Date
1      
3.
RENT
1  
3.1
Base Rent
2  
3.2
Adjustments to Base Rent
2  
3.3
Amounts Constituting Rent
2      
4.
SECURITY DEPOSIT
2      
5.
TAX AND OPERATING COST INCREASES
3  
5.1
Definitions
3  
5.2
Tenant’s Share
5
 
5.3
Notice and Payment
5  
5.4
Additional Taxes
6  
5.5
Tenant’s Taxes
6      
6.
USE
6  
6.1
Use
 7  
6.2
Suitability
7  
6.3
Uses Prohibited.
 7      
7.
SERVICE AND UTILITIES
 7  
7.1
Landlord’s Obligations
7  
7.2
Tenant’s Obligation
8  
7.3
Tenant’s Additional Requirements
8  
7.4
Nonliability
9      
8.
MAINTENANCE AND REPAIRS: ALTERATIONS AND ADDITIONS
9  
8.1
Maintenance and Repairs
9  
8.2
Alterations and Additions
10      
9.
ENTRY BY LANDLORD
11      
10.
LIENS
11      
11.
INDEMNITY
12  
11.1
Indemnity.
12

 

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11.2
Exemption of Landlord from Liability
12
 
 
 
12.
INSURANCE
12
 
12.1
Coverage
12
 
12.2
Insurance Policies
13
 
12.3
Landlord’s Insurance
13
 
12.4
Waiver of Subrogation
13
 
 
 
13.
DAMAGE OR DESTRUCTION.
13
 
13.1
Landlord’s Duty to Repair
13
 
13.2
Landlords Right to Terminate
14
 
13.3
Tenant’s Right to Terminate
14
 
13.4
Exclusive Rights
15
 
 
 
14.
CONDEMNATION
15
 
 
 
15.
ASSIGNMENT AND SUBLETTING
15
 
15.1
Landlord’s Consent Required
15
 
15.2
Reasonable Consent.
15
 
15.3
Excess Consideration
16
 
15.4
No Release of Tenant
16
 
15.5
Attorneys’ Fees
16
 
15.6
Transfer of Ownership Interest
17
 
15.7
Effectiveness of Transfer
17
 
15.8
Landlord’s Right to Space
17
 
15.9
No Net Profits Leases
17
 
 
 
16.
SUBORDINATION
17
 
16.1
Subordination
17
 
16.2
Junior Liens
18
 
16.3
Subordination Agreements
18
 
16.4
Attornment
18
 
 
 
17.
QUIET ENJOYMENT
18
 
 
 
18.
DEFAULT REMEDIES
18
 
18.1
Default
18
 
18.2
Remedies
19
 
18.3
Late Charges
21
 
18.4
Interest
21
 
18.5
Default by Landlord
22
 
 
 
19.
PARKING
22
 
 
 
20.
RELOCATION OF PREMISES
22
 
20.1
Conditions
22
 
20.2
Notice
22

 

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21.
MORTGAGEE PROTECTION.
23
 
 
 
22.
ESTOPPEL CERTIFICATES.
23
 
 
 
23.
SURRENDER, HOLDING OVER
24
 
23.1
Surrender
24
 
23.2
Holding Over
24
 
 
 
24.
HAZARDOUS MATERIALS
24
 
 
 
25.
MISCELLANEOUS
25
 
25.1
Attornment
25
 
25.2
Captions: Attachments: Defined Terms
25
 
25.3
Entire Agreement
25
 
25.4
Severability
26
 
25.5
Costs of Suit
26
 
25.6
Time: Joint and Several Liability
26
 
25.7
Binding Effect: Choice of Law
26
 
25.8
Waiver
26
 
25.9
Force Majeure
27
 
25.10
Landlord’s Liability
27
 
25.11
Consents and Approvals
27
 
25.12
Signs
28
 
25.13
Rules and Regulations
28
 
25.14
Notices
28
 
25.15
Authority
28
 
25.16
Lease Guaranty
28
 
25.17
Brokers
29
 
25.18
Reserved Rights
29
 
25.19
Right of First Refusal
29
 
25.20
Option to Extend
29

 
EXHIBIT A - SITE AND FLOOR PLANS
EXHIBIT B - WORK LETTER (INTENTIONALLY DELETED)
EXHIBIT C - SPACE PLAN
EXHIBIT D - RULES AND REGULATIONS
EXHIBIT E - JANITORIAL SPECIFICATIONS
EXHIBIT F - DOOR SIGN, DIRECTORY STRIP AND MAIL BOX REQUEST
EXHIBIT G - COMMENCEMENT OF LEASE (INTENTIONALLY DELETED)

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BISHOP RANCH BUSINESS PARK
 
BUILDING LEASE
 
This Lease is made and entered into this 27th day of July, 2005, by and between
ALEXANDER PROPERTIES COMPANY, a California’ partnership, (hereinafter
“Landlord”) and SBE, INC. (hereinafter “Tenant”). For and in consideration of
the rental and of the covenants and agreements hereinafter set forth to be kept
and performed by Tenant, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises herein described for the term, at the rental
and subject to and upon all of the terms, covenants and agreements hereinafter
set forth.
 
1.            PREMISES
 
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises (the “Premises”) crosshatched on Exhibit A containing 22,308 rentable
square feet (20,097 usable square feet) known as Suite 200, located on the
Second floor of 4000 Executive Parkway, Building P (including all tenant
improvements thereto, the “Building”), located at San Ramon, California 94583.
The Building is part of a Complex containing the Building and Two (2) other
buildings (the “Complex”). The Complex, which contains 631,578 rentable square
feet, the land on which the Complex is situated (the “Land”), the common areas
of the Complex, any other improvements in the Complex and the personal property
used by Landlord in the operation of the Complex (the “Personal Property”) are
herein collectively called the “Project.” Landlord shall provide Tenant with a
Suite Improvement Allowance (the “Suite Improvement Allowance”) up to an amount
equal to ONE HUNDRED FIFTY THOUSAND SEVEN HUNDRED TWENTY-SEVEN AND 50/100
DOLLARS ($150,727.50) (or $7.50 per usable square foot of Premises Leased),
which may be used by Tenant at any time during the Term of this Lease for
alterations or additions to the Premises. Any costs in excess of the Suite
Improvement Allowance shall be paid for by Tenant prior to the commencement of
construction.
 
2.            TERM
 
2.1 Term. The term of this Lease shall commence on September 1, 2005 (the
“Commencement Date”) and shall end Five (5) years thereafter (the “Expiration
Date”), unless sooner terminated pursuant to this Lease.
 
2.2 Delay in Commencement. (Intentionally Deleted)
 
2.3 Acknowledgment of Commencement Date. (Intentionally Deleted)
 
3.            RENT
 
3.1 Base Rent. Tenant shall pay to Landlord monthly as base rent (“Base Rent”)
for the Premises in advance on the Commencement Date and on the first day of
each calendar month thereafter during the term of this Lease without deduction,
offset, prior notice or demand, in lawful money of the United States of America,
the sum of FORTY-EIGHT THOUSAND THREE HUNDRED THIRTY-FOUR AND NO/100 DOLLARS
($48,334.00). For any prorations of Base Rent due to changes in the Premises on
a day other than the first or last day of the month, the portion of Base Rent
associated with the change in the Premises shall be calculated by multiplying
the number of days that the space was part of the Premises by the daily Base
Rent defined to be the monthly Base Rent for said space divided by 30.
Notwithstanding the foregoing, Rent shall he abated for the months of September,
October, November and December of 2005, and one-half of January 2006.
 
Please Initial

Tenant (             )
Landlord (             )
 
1

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Concurrently with Tenant’s execution of this Lease, Tenant shall pay to Landlord
the sum of FORTY-EIGHT THOUSAND THREE HUNDRED THIRTY-FOUR AND NO/100 DOLLARS
($48,334.00) to be applied against Base Rent when it becomes due.
 
3.2 Adjustments to Base Rent. (Intentionally Deleted)
 
3.3 Amounts Constituting Rent. All amounts payable or reimbursable by Tenant
under this Lease, including late charges and interest, “Operating Cost Payments”
(as defined in Paragraph 5), and amounts payable or reimbursable under the Work
Letter and the other Exhibits hereto, shall constitute “Rent” and be payable and
recoverable as such. Base Rent is due and payable as provided in Paragraph 3.1 -
“Base Rent”, Operating Cost Payments are due and payable as provided in
Paragraph 5.3 - “Notice and Payment”, and all other Rent payable to Landlord on
demand under the terms of this Lease, unless otherwise set forth herein, shall
be payable within thirty (3D) days after written notice from Landlord of the
amounts due. All Rent shall be paid to Landlord without deduction or offset in
lawful money of the United States of America at the address for notices or at
such other place as Landlord may from time to time designate in writing.
 
4.            SECURITY DEPOSIT
 
Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with
Landlord the sum of FORTY-EIGHT THOUSAND THREE HUNDRED THIRTY-FOUR AND NO/100
DOLLARS ($48,334.00) (the “Security Deposit”). The Security Deposit shall be
held by Landlord as security for the faithful performance by Tenant of all of
the terms, covenants and conditions of this Lease to be performed by Tenant
during the term hereof. If Tenant defaults with respect to any provision of this
Lease, including the provisions relating to the payment of any Rent, Landlord
may (but shall not be required to) use, apply or retain all or any part of the
Security Deposit to cure such default or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant’s default. If any
portion of said deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount; Tenant’s
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit, If Tenant shall fully
and faithfully perform every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or, at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) upon the
expiration of the Lease term and Tenant’s vacating the Premises; provided,
however, that Landlord may elect, in its discretion, to retain a portion of the
Security Deposit in an amount to be determined by Landlord in its reasonable
judgment and Landlord shall, promptly upon determining the increases in
Operating Costs for the calendar year in which this Lease terminates, pursuant
to Paragraph 5.3 - “Notice and Payment,” apply from such retained portion of the
Security Deposit any sums underpaid by Tenant with respect to Operating Costs
for the final year of the Lease term, and return the balance, if any, to Tenant
or its assignee. In the event of termination of Landlord’s interest in this
Lease, Landlord shall transfer the Security Deposit to Landlord’s successor in
interest whereupon Landlord shall be released from liability for the return of
the Security Deposit or the accounting therefor. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of any Regulations, now or hereafter in force, which restricts the
amount or types of claim that a landlord may make upon a security deposit or
imposes upon a landlord (or its successors) any obligation with respect to the
handling or return of security deposits.

Please Initial

Tenant (             )
Landlord (             )
 
2

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5.            TAX AND OPERATING COST INCREASES
 
5.1 Definitions. For purposes of this paragraph, the following terms are  herein
defined:
 
(a) Base Year: The calendar year in which this Lease commences.
 
(b) Operating Costs: Operating Costs shall include all costs and expenses of
ownership, operation, repair and maintenance of the Project (excluding
depreciation of the improvements in the Project and all amounts paid on loans of
Landlord) computed in accordance with accounting principles adopted by Landlord
consistently applied, including by way of illustration but not limited to: real
property taxes, taxes assessed on the Personal Property, any other governmental
impositions imposed on or by reason of the ownership, operation or use of the
Project, and any tax in addition to or in lieu thereof; other than taxes covered
by Paragraph 5.4, whether assessed against Landlord or Tenant or collected by
Landlord or both; parts; equipment; supplies; insurance premiums; license,
permit and inspection fees; cost of services and materials (including property
management fees); cost of compensation (including employment taxes and fringe
benefits) of all persons who perform duties connected with the operation,
maintenance and repair of the Project; costs of providing utilities and
services, including water, gas, electricity, sewage disposal, rubbish removal,
janitorial, gardening, security, parking, window washing, supplies and
materials, and signing (but excluding services not uniformly available to
substantially all of the Project tenants); costs of capital improvements (i)
required to cause the Project to comply with all laws, statutes, ordinances,
regulations, rules and requirements of any governmental or public authority,
including, without limitation, the Americans with Disabilities Act of 1990 (the
“ADA”) (collectively, “Legal Requirements”), except for costs, if any, of
correcting any failure of the Project to comply, as of the Commencement Date,
with any Legal Requirement as enacted as of the Commencement Date, or (ii) which
reduce Operating Costs, such costs, together with interest on the unamortized
balance at the rate of twelve percent (12%) per annum, to be amortized over such
reasonable periods as Landlord shall determine; costs of maintenance and
replacement of landscaping; legal, accounting and other professional services
incurred in connection with the operation of the Project and the calculation of
Operating Costs; and rental expense or a reasonable allowance for depreciation
of personal property used in the maintenance, operation and repair of the
Project. If the Project is not fully occupied for any calendar year during the
term of this Lease, Operating Costs shall be adjusted to the amount which would
have been incurred if the Project had been fully occupied for the year.

Please Initial

Tenant (             )
Landlord (             )
 
3

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Notwithstanding the foregoing, Operating Costs shall not include the following:
 
(1) Depreciation and amortization, except as provided for above.
 
(2) Costs of capital repairs, replacements or improvements, except as provided
for above.
 
(3) Costs to acquire sculpture, paintings or other objects of art.
 
(4) Costs incurred in connection with upgrading the Building to comply with
disability, life, fire, safety codes, ordinances, statutes, or other laws in
effect prior to the Commencement Date including, without limitation, the ADA,
and penalties or damages incurred due to such non-compliance.
 
(5) Advertising and promotional expenses.
 
(6) Real estate broker’s or other leasing commissions, attorneys’ fees,
architects’ fees and other costs incurred in connection with negotiations or
disputes with tenants or prospective tenants of the Building or Project, other
than disputes as to the common areas.
 
(7) Costs incurred in renovating or otherwise improving or decorating or
redecorating space for tenants or other occupants in the Project or vacant space
in the Project.
 
(8) Repairs or other work occasioned by fire, windstorm, or other casualty and
public liability claims, to the extent such are covered by insurance proceeds,
the cost of which is included in Operating Costs, and costs incurred by Landlord
in connection with or made necessary by the actual or threatened exercise by
governmental authorities (or other entities with power of eminent domain) of the
power of eminent domain.
 
(9) Costs, other than Operating Costs, specially billed to Tenant or any other
specific tenants, such as (but not limited to) above Building Standard janitor
service, or electrical usage or other services or benefits above Building
Standard.
 
(10) Costs incurred to remedy or monitor any Hazardous Materials condition
except if caused by Tenant.
 
(11) Interest on penalties resulting from (a) late payment of any operating
expense by Landlord due to Landlord’s negligence or willful misconduct (unless
Landlord in good faith disputes a charge and subsequently loses or settles that
dispute); or (b) any amount payable by Landlord to any tenant resulting solely
from Landlord’s default in its obligations to that tenant.

Please Initial

Tenant (             )
Landlord (             )

4

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(12) Costs incurred in installing, operating and maintaining any specialty
service that is not necessary for Landlord’s provision, management, maintenance
and repair of the Project. The following are examples of these specialty
services:
 
observatory; broadcasting facilities (other than the life-support and security
system for the Project); luncheon club, cafeteria, or other dining facility;
newsstand; flower services; shoeshine service; carwash; and athletic or
recreational club.
 
(13) Any compensation paid to clerks, attendants, or other persons in commercial
concessions in the Project that are operated by Landlord.
 
(14) Debt service, interest or other financing.
 
(15) Rental payments to any ground Lessor.
 
5.2 Tenant’s Share. If Operating Costs during any calendar year following the
Base Year exceed the rentable square footage of the Complex multiplied by $9.75
(the “Expense Stop”), Tenant shall pay to Landlord “Tenant’s Share” multiplied
by such excess (“Operating Cost Payments”). “Tenant’s Share” means 3.53%, which
is calculated by dividing the rentable square footage of the Premises by the
rentable square footage of the Complex as such rentable square footages are set
forth in Paragraph I, and multiplying such number by 100.
 
5.3 Notice and Payment. As soon as reasonably practical after the end of each
calendar year following the Base Year, Landlord shall furnish Tenant a written
statement showing in reasonable detail the Operating Costs for the preceding
calendar year, and the amount of any payment due from Tenant to Landlord or from
Landlord to Tenant, taking into account prier Operating Cost Payments made by
Tenant for such preceding calendar year. Tenant shall have one hundred eighty
(180) days after receipt of Landlord’s statement to notify Landlord of any
objections they have to such statement, or of their intention to review
supporting documentation for such statement. If Tenant does not so notify
Landlord, such statement shall conclusively be deemed correct and Tenant shall
have no right thereafter to dispute or review support for such statement, any
item therein, or the computation of Operating Costs. If Tenant does so notify
the Landlord within the one hundred eighty (180) day period, Tenant shall have
one (1) year from the date of receipt of Landlord’s statement to complete their
review of the supporting documentation and notify Landlord of all objections, if
any, to such statement. Landlord and Tenant hereby agree that Tenant will submit
in writing to Landlord on or before the end of said one (1) year period, all
objections to Landlord’s statement, and Tenant’s only rights after said one (1)
year period shall be nonreversible removals or reductions of the said objections
submitted to Landlord. Landlord and Tenant hereby agree that after said one (1)
year period, Tenant has no further rights to review any supporting documentation
to Landlord’s statement. Any notifications to Landlord will be done in
accordance with Paragraph 25.14.

Please Initial

Tenant (             )
Landlord (             )

5

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Coincidentally with the monthly Base Rent next due following Tenant’s receipt of
such statement, Tenant shall pay to Landlord (in the case of an underpayment) or
Landlord shall credit against the next Base Rent due from Tenant (in the case of
an overpayment) the difference between (i) Tenant’s Share of any excess of
Operating Costs for the preceding calendar year over the Expense Stop (the
“Prior Year’s Increase”), and (ii) the Operating Cost Payments made by Tenant
for such preceding calendar year. In addition, Tenant shall pay to Landlord
coincidentally with such next due Base Rent an amount equal to (A) one-twelfth
(112th) of the Prior Year’s Increase, if any, multiplied by (B) the number of
months or partial months (including the then current month) then elapsed in the
current calendar year, less (C) the aggregate of any Operating Cost Payments
made by Tenant for such current calendar year. Monthly thereafter until
adjustment is made the following year pursuant to this paragraph, Tenant shall
pay together with the monthly Base Rent one-twelfth (1/12) of any such Prior
Year’s Increase. In no event will Tenant be entitled to receive the benefit of a
reduction in Operating Costs below the Expense Stop.
 
For any partial calendar year at the termination of this Lease, Tenant’s Share
of any increases in Operating Costs for such year over the Expense Stop shall be
prorated on the basis of a 365-day year by computing Tenant’s Share of the
increases in Operating Costs for the entire year and then prorating such amount
for the number of days this Lease was in effect during such year.
Notwithstanding the termination of this Lease, and within ten (10) days after
Tenant’s receipt of Landlord’s statement regarding the determination of
increases in Operating Costs for the calendar year in which this Lease
terminates, Tenant shall pay to Landlord or Landlord shall pay to Tenant, as the
case may he, an amount equal to the difference between Tenant’s Share of the
increases in Operating Costs for such year (as prorated) and the amount
previously paid by Tenant toward such increases.
 
5.4 Additional Taxes. Tenant shall reimburse to Landlord, within thirty (30)
days after receipt of a demand therefor, Tenant’s Share of any and all taxes
payable by Landlord (other than net income taxes or any taxes included within
Operating Costs), whether or not now customary or within the contemplation of
the parties hereto (i) upon, allocable to or measured by the area of the
Building, (ii) upon all or any portion of the Rent payable hereunder and under
other leases of space in the Building, including any gross receipts tax or
excise tax levied with respect to the receipt of such Rent, or (iii) upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Building or any portion thereof.
Tenant shall not be required to reimburse Landlord for taxes under this
Paragraph 5.4 to the extent Tenant has paid Tenant’s Share of such taxes through
Operating Cost Payments under Paragraph 5.2.
 
5.5 Tenant’s Taxes. Tenant shall pay before delinquency (whether levied on
Landlord or Tenant), any and all taxes assessed upon or measured by (i) Tenant’s
equipment, furniture, fixtures and other personal property located in the
Premises, (ii) any improvements or alterations made to the Premises prior to or
during the term of this Lease paid for by Tenant (“Above-Standard
Improvements”), or (iii) this transaction or any document to which Tenant is a
party creating or transferring an interest or an estate in the Premises. For the
purpose of determining said amounts, figures supplied by the County Assessor as
to the amount so assessed shall be conclusive. Tenant shall comply with the
provisions of any law, ordinance or rule of the taxing authorities which require
Tenant to file a report of Tenant’s property located in the Premises.

Please Initial

Tenant (             )
Landlord (             )
 
6

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6.            USE
 
6.1 Use. The Premises shall be used and occupied by Tenant for general office
purposes and for no other purpose without the prior written consent of Landlord.
 
6.2 Suitability. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises or
the Building or with respect to the suitability of either for the conduct of
Tenant’s business, nor has Landlord agreed to undertake any modification,
alteration or improvement to the Premises except as provided in the Work Letter.
The taking of possession of the Premises by Tenant shall conclusively establish
that the Premises and the Building were at such time in satisfactory condition
unless within ten (10) days after such date Tenant shall give Landlord written
notice specifying in reasonable detail the respects in which the Premises or the
Building were not in satisfactory condition.
 
6.3 Uses Prohibited.
 
(a) Tenant shall not do nor permit anything to be done in or about the Premises
nor bring or keep anything therein which will in any way increase the existing
rate or affect any fire or other insurance upon the Building or any of its
contents, or cause a cancellation of any insurance policy covering said Building
or any part thereof or any of its contents, nor shall Tenant sell or permit to
be kept, used or sold in or about said Premises any articles which may be
prohibited by a standard form policy of fire insurance.
 
(b) Tenant shall not do or permit anything to be done in or about the Premises
which will in any way obstruct or interfere with the tights of other tenants or
occupants of the Building, or injure or annoy them, or use or allow the Premises
to be used for any unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises. Tenant shall
not bring onto the Premises any apparatus, equipment or supplies that may
overload the Premises or the Building or any utility or elevator systems or
jeopardize the structural integrity of the Building or any part thereof.
 
(c) Tenant shall not use the Premises or permit anything to be done in or about
the Premises which will in any way conflict with, and at its sole cost and
expense shall promptly comply with, any Legal Requirement now in force or which
may hereafter be enacted or promulgated relating to the condition, use or
occupancy of the Premises, excluding structural changes not relating to or
affecting the condition, use or occupancy of the Premises or Tenant’s
improvements or acts. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any Legal Requirement, shall be
conclusive of the fact as between Landlord and Tenant.
 
7.            SERVICE AND UTILITIES
 
7.1 Landlord’s Obligations. Provided Tenant is not in default hereunder,
Landlord shall furnish to the Premises during reasonable hours of generally
recognized business days, to be determined by Landlord, and subject to the rules
and regulations of the Building, water, gas and electricity suitable for the
intended use of the Premises, heat and air conditioning required in Landlord’s
judgment for the comfortable use and occupancy of the Premises, scavenger,
janitorial services as described in Exhibit E attached hereto, window washing
service and elevator service customary in similar buildings in the competing
geographical areas. Landlord shall also maintain and keep lighted the common
lobbies, hallways, stairs and toilet rooms in the Building.
 
Please Initial

Tenant (             )
Landlord (             )
 
7

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(a) Landlord’s current hours of operation in Bishop Ranch (hereinafter “Hours of
Operation”) are 7 a.m. to 7 p.m., Monday through Friday, excepting holidays (New
Year’s Day, President’s Day, Memorial Day, July 4th (Independence Day), Labor
Day, Thanksgiving, and Christmas Day). In the event the holiday falls on a
weekend, the business day closest to the holiday will be considered to be the
holiday. The building and its services are available to Tenant 24 hours a day,
seven (7) days a week, 365 days a year. The after hours rate for air
conditioning and heating service after Landlord’s Hours of Operation is
currently $75.00 per hour, per floor. This rate is subject to adjustment based
upon the decrease or increase in utilities as charged by Landlord’s utility
provider.
 
7.2 Tenant’s Obligation. Tenant shall pay for, prior to delinquency, all
telephone and all other materials and services, not expressly required to be
paid by Landlord, which may be furnished to or used in, on or about the Premises
during the term of this Lease.
 
7.3 Tenant’s Additional Requirements
 
(a) Tenant shall pay for heat and air-conditioning furnished at Tenant’s request
during non-business hours and/or on non-business days on an hourly basis at a
reasonable rate established by Landlord. Tenant shall not use in excess of
Building Standard amounts (as determined by Landlord) of electricity, water or
any other utility without Landlord’s prior written consent, which consent
Landlord may refuse. Landlord may cause a water meter or electric current meter
to be installed in the Premises so as to measure the amount of water and
electric current consumed for any such excess use, The cost of such meters and
of installation, maintenance and repair thereof shall be paid by Tenant and
Tenant agrees to pay Landlord promptly upon demand by Landlord for all such
water and electric current consumed as shown by said meters, at the rates
charged for such services by the city in which the Building is located or by the
local public utility furnishing the same, plus any additional expense incurred
in keeping account of the water and electric current so consumed. If a separate
meter is not installed to measure any such excess use, Landlord shall have the
right to estimate the amount of such use through qualified personnel. In
addition, Landlord may impose a reasonable charge for the use of any additional
or unusual janitorial services required by Tenant because of any Suite
Improvements different from or above Building Standard, carelessness of Tenant
or the nature of Tenant’s business (including hours of operation).
Notwithstanding the foregoing, Tenant’s Server Room has been submetered and
there shall be no additional charge to Tenant for the installation of said
meter.
 
(b) If any lights other than Building Standard or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord may install supplementary air conditioning units
in the Premises and the cost thereof; including the cost of installation,
operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord. In addition, if any lights other than Building Standard are
used in the Premises, Tenant shall pay the cost to replace any worn or dead
bulbs or tubes.

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(c) In no event shall Tenant (i) connect any apparatus, machine or device
through electrical outlets except in the manner for which such outlets are
designed and without the use of any device intended to increase the plug
capacity of any electrical outlet or (ii) maintain at any time an electrical
demand load in excess of four (4) watts per square foot of usable area of the
Premises
 
7.4 Nonliability. Landlord shall not be liable for, and Tenant shall not be
entitled to any abatement or reduction of Rent, by reason of Landlord’s failure
to furnish any of the foregoing when due to “Force Majeure Events” (as defined
in Paragraph 25.9). If failure to furnish the foregoing is within Landlord’s
reasonable control and Tenant is unable to occupy the Premises due to such
failure, Tenant shall be entitled to an abatement of Base Rent commencing with
the fifteenth consecutive day of such failure unless prior thereto Landlord
commences to cure such failure and thereafter diligently proceeds with such
cure. Any failure to furnish any of the foregoing shall not constitute an
eviction of Tenant, constructive or otherwise and, notwithstanding any law to
the contrary that may now or hereafter exist, Tenant shall not be entitled to
terminate this Lease on account of such failure. Landlord shall not be liable
under any circumstances for loss of or injury to property or business or
consequential damages, however occurring, through or in connection with failure
to furnish any of the foregoing.
 
8.            MAINTENANCE AND REPAIRS: ALTERATIONS AND ADDITIONS
 
8.1 Maintenance and Repairs
 
(a) Landlord’s Obligations. Landlord shall maintain in good order, condition and
repair the structural and common areas of the Building, and the basic heating,
ventilating, air conditioning, electrical, plumbing, fire protection, life
safety, security and mechanical systems of the Building (the “Building
Systems”), and shall cause the common areas of the Building to comply with all
Legal Requirements (including, without limitation, the ADA), provided that any
maintenance and repair caused by the acts or omissions of Tenant or Tenant’s
agents, employees, invitees, visitors (collectively “Tenant’s Representatives”)
shall be paid for by Tenant. Notwithstanding any law to the contrary that may
now or hereafter exist, Tenant shall not have the right to make repairs at
Landlord’s expense or to terminate this Lease because of Landlord’s failure to
keep the foregoing in good order, condition and repair, nor shall Landlord be
liable under any circumstances for any consequential damages or loss of
business, however occurring, through or in connection with any such failure.
 
(b) Tenant’s Obligations
 
(1) Tenant, at Tenant’s sole cost and expense, except for services furnished by
Landlord pursuant to Paragraph 7 hereof, shall maintain the Premises in good
order, condition and repair including the interior surfaces of the ceilings,
walls and floors, all doors, interior windows, and all plumbing pipes,
electrical wiring, switches, fixtures, nonbuilding standard lights, and
equipment installed for the use of the Premises, and shall cause the Premises to
comply with all Legal Requirements (including, without limitation, the ADA).
Notwithstanding any law to the contrary that may now or hereafter exist, Tenant
shall not have the right to make repairs at Landlord’s expense or to terminate
this Lease because of Landlord’s failure to keep the Premises in good order,
condition and repair.

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(2) In the event Tenant fails to maintain the Premises in good order, condition
and repair, Landlord shall give Tenant notice to do such acts as are reasonably
required to so maintain the Premises. In the event Tenant fails to promptly
commence such work and diligently prosecute it to completion, Landlord shall
have the right to do such acts and expend such funds at the expense of Tenant as
are reasonably required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest from the date
expended by Landlord until paid by Tenant at the “Default Rate,” as defined
below. Landlord shall have no liability to Tenant for any damage, inconvenience
or interference with the use of the Premises by Tenant as a result of performing
any such work. As used in this Lease, “Default Rate” shall mean the lesser of
twelve percent per annum (12%) or the maximum rate permitted by law.
 
(c) Compliance with Law. Landlord and Tenant shall each do all acts required to
comply with all applicable Legal Requirements relating to their respective
maintenance and repair obligations as set forth herein.
 
8.2 Alterations and Additions
 
(a) Tenant shall make no alterations, additions or improvements to the Premises
or any part thereof without obtaining the prior written consent of Landlord.
 
(b) Landlord may impose as a condition to the aforesaid consent such
requirements as Landlord may deem necessary in its sole discretion, including
without limitation thereto, performing the work itself, specifying the manner in
which the work is done, and selecting the contractor by whom the work is to be
performed and the limes during which it is to be accomplished. Tenant shall pay
to Landlord upon demand an amount equal to the reasonable costs and expenses for
time spent by Landlord’s employees or contractors in supervising, approving and
administering such alterations.
 
(c) All such alterations, additions or improvements, all other Above-Standard
Improvements, and all work performed under the Work Letter shall be the property
of Landlord and shall remain upon and be surrendered with the Premises, unless
Landlord upon or prior to the termination or expiration of the Lease requests in
writing that Tenant remove all or any part of same. Notwithstanding the
foregoing, as of the date of this Lease Landlord has reviewed and approved
Tenant’s Plans attached hereto as Exhibit C for the Suite Improvements and
Tenant, except as provided in Subsection 23.1 of this Lease, shall have no
obligation to Landlord to remove any of the Improvements shown on Tenant’s
Plans.
 
(d) All articles of personal property and all business and trade fixtures,
machinery and equipment, cabinetwork, furniture and movable partitions owned by
Tenant or installed by Tenant at its expense in the Premises shall be and remain
the property of Tenant and may be removed by Tenant at any time during the Lease
term when Tenant is not in default hereunder.

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9.            ENTRY BY LANDLORD
 
Landlord and Landlord’s agents shall at any and all times have the right to
enter the Premises to inspect the same, to supply janitorial service and any
other service to be provided by Landlord to Tenant hereunder, to show the
Premises to prospective purchasers or tenants, to post notices of
non-responsibility and “for lease” signs, and to alter, improve or repair the
Premises and any portion of the Building, and may for that purpose erect
scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, always providing the entrance to the
Premises shall not be blocked thereby. Landlord shall conduct its activities
under this Paragraph 9 in a manner that will minimize inconvenience to Tenant
without incurring additional expense to Landlord. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant’s vaults and
safes, and Landlord and Landlord’s agents shall have the right to use any and
all means which Landlord may deem proper to open said doors in an emergency, in
order to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord or Landlord’s agents by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction of Tenant from the
Premises or any portion thereof. Tenant shall not be released from its
obligations under this Lease nor be entitled to any abatement of Rent on account
of Landlord’s entry under this Paragraph, and Tenant hereby waives any claim for
damages for any injury or inconvenience to or interference with Tenant’s
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby.
 
10.          LIENS
 
Tenant shall keep the Premises and the Building free from any liens arising out
of work performed, materials furnished, or obligations incurred by Tenant and
shall indemnify, hold harmless and defend Landlord from any liens and
encumbrances arising out of any work performed, materials furnished or
obligations incurred by or at the direction of Tenant. In the event that Tenant
shall not, within twenty (20) days following the imposition of any such lien,
cause such lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith, including attorneys’ fees and costs, shall be payable to
Landlord by Tenant on demand with interest at the Default Rate until paid.
Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or which Landlord shall deem
proper, for the protection of Landlord and the Premises, and any other party
having an interest therein, from mechanics’ and material men’s liens, and Tenant
shall give to Landlord at least three (3) business days prior written notice of
the expected date of commencement of any work relating to alterations or
additions to the Premises.

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11.          INDEMNITY
 
11.1 Indemnity.
 
(a) Tenant agrees to indemnify Landlord against and save Landlord harmless from
any and all loss, cost, liability, penalties, fines and reasonable attorneys’
fees and disbursements arising from (i) any default or breach by Tenant in the
observance or performance of any of the material terms, covenants or conditions
of this Lease by Tenant or (ii) any negligence or willful misconduct of Tenant,
its agents, servants, employees invitees or licensees of Tenant in, on, or about
the Premises, or any part of the Complex, either during or prior to occupancy or
during the Term of this Lease. Notwithstanding the foregoing, in no event shall
Tenant be liable for indirect or consequential damages of Landlord (including
lost profits) however occurring.
 
(b) Landlord agrees to indemnify Tenant against and save Tenant harmless from
any and all loss, cost liability, damage, and expense, including without
limitation penalties, fines and reasonable attorneys’ fees and disbursements,
incurred in connection with or arising from any gross negligence or willful
misconduct of Landlord, or its contractors, agents, servants, employees,
invitees, or licensees in, on, or about the Premises, or any part of the
Complex, either during prior occupancy or during the Term of this Lease.
Notwithstanding the foregoing, in no event shall Landlord be liable for indirect
or consequential damages of Tenant (including lost profits) however occurring.
 
11.2 Exemption of Landlord from Liability. Landlord shall not be liable for
injury or damage which may be sustained by the person or property of Tenant, its
employees, invitees or customers, or any other person in or about the Premises
caused by or resulting from fire, steam, electricity, gas, water or rain, which
may leak or flow from or into any part of the Premises, or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, telephone cabling or wiring, or lighting
fixtures of the same, whether the damage or injury results from conditions
arising upon the Premises or upon other portions of the Building of which the
Premises are a part, or from other sources. Landlord shall not be liable for any
damages arising from any act or neglect of any other tenant of the Building.
 
12.          INSURANCE
 
12.1 Coverage. Tenant shall, at all times during the term of this Lease, and at
its own cost and expense, procure and continue in force the following insurance
coverage:
 
(a) Commercial General Liability Insurance with a combined single limit for
personal or bodily injury and property damage of not less than $3,000,000 or
such other level of coverage that Landlord may require in its reasonable
judgment.
 
(b) Fire and Extended Coverage Insurance, including vandalism and malicious
mischief coverage, covering and in an amount equal to the full replacement value
of all fixtures, furniture and improvements installed in the Premises by or at
the expense of Tenant.

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12.2 Insurance Policies. The aforementioned minimum limits of policies shall in
no event limit the liability of Tenant hereunder. The aforesaid insurance shall
name Landlord and its partners, property manager, and mortgagees as an
additional insured. Said insurance shall be with companies having a rating of
not less than A+, XI in “Best’s Insurance Guide”. Tenant shall furnish from the
insurance companies or cause the insurance companies to flattish certificates of
coverage. No such policy shall be cancelable or subject to reduction of coverage
or other modification or cancellation except after thirty (30) days prior
written notice to Landlord by the insurer. All such policies shall be written as
primary policies, not contributing with and not in excess of the coverage which
Landlord may carry. Tenant shall, at least twenty (20) days prior to the
expiration of such policies, furnish Landlord with evidence of renewals or
binders. Tenant agrees that if Tenant does not take out and maintain such
insurance, Landlord may (but shall not be required to) procure said insurance on
Tenant’s behalf and charge Tenant the premiums together with a reasonable
handling charge and Default Interest from the date paid by Landlord, payable
upon demand. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant, provided such blanket policies
expressly afford coverage to the Premises and to Tenant as required by this
Lease.
 
12.3 Landlord’s Insurance. During the term of this Lease Landlord shall maintain
in effect insurance on the Building against fire, extended coverage perils and
vandalism and malicious mischief (to the extent such coverages are available),
with responsible insurers licensed to do business in California, insuring the
Building in an amount equal to at least ninety-five percent (95%) of the
replacement cost thereof, excluding foundations, footings and underground
installations. Landlord may, but shall not be obligated to, carry insurance
against additional perils and/or in greater amounts.
 
12.4 Waiver of Subrogation. Tenant and Landlord hereby waive and release any and
all right of recovery, whether arising in contract or tort, against the other,
including employees and agents, arising during the Term for any and all loss or
damage to any property located within or constituting a part of the Building or
Complex, which loss or damage arises from the perils that could be insured
against under the ISO Causes of Loss-Special Form Coverage including any
deductible thereunder (whether or not the party suffering the loss or damage
actually carries such insurance, recovers under such insurance or self insures
the loss or damage) or which right of recovery arises from loss of earnings or
rents resulting from loss or damage caused by such a peril. This mutual waiver
is in addition to any other waiver or release contained in this Lease. Landlord
and Tenant shall each have their insurance policies issued in such form as to
waive any right of subrogation which might otherwise exist.
 
13.          DAMAGE OR DESTRUCTION.
 
13.1 Landlord’s Duty to Repair. If all or a substantial part of the Premises are
rendered untenantable or inaccessible by damage to all or any part of the
Project from fire or other casualty then, unless either party elects to
terminate this Lease pursuant to Paragraphs 13.2 or 13.3, Landlord shall, at its
expense, use its commercially reasonable efforts to repair and restore the
Premises and/or access thereto, as the case may be, to substantially their
former condition to the extent permitted by the then applicable codes, laws and
regulations; provided, however, that Tenant rather than Landlord shall be
obligated at Tenant’s expense to repair or replace Tenant’s personal property,
trade fixtures and any items or improvements that are required to be covered by
Tenant’s insurance under Paragraph 12.1(b).

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If Landlord is required or elects to repair damage to the Premises and/or access
thereto, this Lease shall continue in effect but Tenant’s Base Rent and
Operating Cost Payments from the date of the casualty through the date of
substantial completion of the repair shall be abated by a proportionate amount
based on the portion of the Premises that Tenant is prevented from using by
reason of such damage or its repair; provided, however, that if the casualty is
the result of the willful misconduct or negligence of Tenant or Tenant’s
Representatives, there will be no such rental abatement. In no event shall
Landlord be liable to Tenant by reason of any injury to or interference with
Tenant’s business or property arising from fire or other casualty or by reason
of any repairs to any part of the Project made necessary by such casualty.
 
13.2 Landlords Right to Terminate. Landlord may elect to terminate this Lease,
effective as of the last day of the calendar month in which such election is
made, under the following circumstances:
 
(a) Where, in the reasonable judgment of Landlord, the damage cannot be
substantially repaired and restored under applicable laws and governmental
regulations within one (1) year after the date of the casualty;
 
(b) Where, in the reasonable judgment of Landlord, adequate proceeds are not,
for any reason, made available to Landlord from Landlord’s insurance policies to
make the required repairs;
 
(c) Where the Project is damaged or destroyed to the extent that the cost to
repair and restore the Project exceeds twenty-five percent (25%) of the full
replacement cost of the Project, whether or not the Premises are damaged or
destroyed; or
 
(d) Where the damage occurs within the last twelve (12) months of the term of
the Lease.
 
If any of the circumstances described in this Paragraph 13.2 arise, Landlord
must notify Tenant in writing of that fact within one hundred and twenty (120)
days after such circumstances arise and in such notice Landlord must also advise
Tenant whether Landlord has elected to terminate the Lease.
 
13.3 Tenant’s Right to Terminate. Tenant shall have the right to terminate this
Lease if all or a substantial part of the Premises are rendered untenantable or
inaccessible by damage to all or any part of the Project from fire or other
casualty, provided that such casualty is not the result of the willful
misconduct or negligence of Tenant or Tenant’s Representatives, but only under
the following circumstances:
 
(a) Tenant may elect to terminate this Lease if Landlord had the right under
Paragraph 13.2 to terminate this Lease but did not elect to so terminate and
Landlord failed to commence the required repair within ninety (90) days after
the date it received proceeds to commence such repair. In such event, Tenant may
terminate this Lease as of the date of the casualty by notice to Landlord given
before the earlier of the date on which Landlord commences such repair or ten
(10) days after the expiration of such ninety (90)-day period; or

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(b) Tenant may elect to terminate this Lease in the circumstance described in
Subparagraph 13.2(a). In such event, Tenant may terminate this Lease as of the
date of the casualty by notice to Landlord given within thirty (30) days after
Landlord’s notice to Tenant pursuant to Paragraph 13.2.
 
13.4 Exclusive Rights. Landlord and Tenant each hereby agree that,
notwithstanding any law to the contrary that may now or hereafter exist, neither
party shall have any right to terminate this Lease in the event of any damage or
destruction under any circumstances other than as provided in Paragraphs 13.2
and 13.3.
 
14.          CONDEMNATION
 
If all or a material portion of the Premises shall be taken or appropriated for
public or quasi-public use by right of eminent domain with or without litigation
or transferred by agreement in connection with such public or quasi-public use,
either party hereto shall have the right at its option, exercisable within
thirty (30) days of receipt of notice of such taking, to terminate this Lease as
of the date possession is taken by the condemning authority, provided, however,
that before Tenant may terminate this Lease by reason of taking or appropriation
as provided hereinabove, such taking or appropriation shall be of such an extent
and nature as to substantially handicap, impede or impair Tenant’s use of the
Premises. If any part of the Building other than the Premises shall be so taken
or appropriated, Landlord shall have the right at its option to terminate this
Lease. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for the taking of personal
property and fixtures belonging to Tenant and/or for Tenant’s unamortized cost
of leasehold improvements, so long as such award to Tenant does not decrease the
value of the award that would otherwise be made to Landlord in such taking or
condemnation. In the event of a partial taking which does not result in a
termination of this Lease, rent shall be abated in the proportion which the part
of Premises so made unusable bears to the rented area of the Premises
immediately prior to the taking, and Landlord, at Landlord’s cost, shall restore
the Premises remaining to an architectural whole with the Base Rent reduced in
proportion to what the area taken bears to the Premises prior to the taking. No
temporary taking of the Premises and/or of Tenant’s rights therein or under this
Lease shall give Tenant the right to terminate this Lease or to any abatement of
Rent thereunder. Any award made to Tenant by reason of any such temporary taking
where Landlord does not terminate this Lease shall belong entirely to Tenant so
long as said award does not diminish Landlord’s award.
 
15.          ASSIGNMENT AND SUBLETTING
 
15.1 Landlord’s Consent Required. Tenant shall not assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein (each a
“Transfer”), and shall not sublet the Premises or any part thereof, without the
prior written consent of Landlord and any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a breach
of this Lease.

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15.2 Reasonable Consent.
 
(a) If Tenant complies with the following conditions, Landlord sail not
unreasonably withhold its consent to the subletting of the Premises or any
portion thereof or the assignment of this Lease. Tenant shall submit in writing
to Landlord (i) the name and legal composition of the proposed subtenant or
assignee; (ii) the nature of the business proposed to be carried on in the
Premises; (iii) the terms and provisions of the proposed sublease; (iv) such
reasonable financial information as Landlord may request concerning the proposed
subtenant or assignee; and (v) the form of the proposed sublease or assignment.
Within ten (10) business days after Landlord receives all such information it
shall notify Tenant whether it approves such assignment or subletting or if it
elects to proceed under Paragraph 15.8 below.
 
(b) The parties hereto agree and acknowledge that, among other circumstances for
which Landlord could reasonably withhold its consent to a sublease or
assignment, it shall be reasonable for Landlord to withhold its consent where
(i) Landlord reasonably disapproves of the Transferee’s reputation or
creditworthiness or the character of the business to be conducted by the
Transferee at the Premises, (ii) the assignment or subletting would increase the
burden on the Building services or the number of people occupying the Premises,
or (iii) Landlord otherwise determines that the assignment or sublease would
have the effect of decreasing the value of the Project or increasing the
expenses associated with operating the Project. In no event may Tenant publicly
advertise or offer all or any portion of the Premises for assignment or sublease
at a rental less than that then sought by Landlord for comparable space in the
Project.
 
15.3 Excess Consideration. If Landlord consents to the assignment or sublease,
Landlord shall be entitled to receive as additional Rent hereunder 50% of any
consideration paid by the Transferee for the assignment or sublease and, in the
case of a sublease, 50% of the excess of the rent and other consideration
payable by the subtenant over the amount of Base Rent and Operating Cost
Payments payable hereunder applicable to the subleased space.
 
15.4 No Release of Tenant. No consent by Landlord to any assignment or
subletting by Tenant shall relieve Tenant of any obligation to be performed by
Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting, and the Transferee shall be jointly and severally
liable with Tenant for the payment of Rent (or that portion applicable to the
subleased space in the case of a sublease) and for the performance of all other
terms and provisions of the Lease. The consent by Landlord to any assignment or
subletting shall not relieve Tenant and any such Transferee from the obligation
to obtain Landlord’s express written consent to any subsequent assignment or
subletting. The acceptance of rent by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any assignment, subletting or other transfer. Consent to one
assignment, subletting or other transfer shall not be deemed to constitute
consent to any subsequent assignment, subletting or other transfer.
 
15.5 Attorneys’ Fees. Tenant shall pay Landlord’s reasonable attorneys’ fees
(not to exceed $500.00) incurred in connection with reviewing any proposed
assignment or sublease.

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15.6 Transfer of Ownership Interest. If Tenant is a business entity, any direct
or indirect transfer of 50 percent or more of the ownership interest of the
entity (whether all at one time or over the term of the Lease) shall be deemed a
Transfer.
 
15.7 Effectiveness of Transfer. No permitted assignment by Tenant shall be
effective until Landlord has received a counterpart of the assignment and an
instrument in which the assignee assumes all of Tenant’s obligations under this
Lease arising on or after the date of assignment. The voluntary, involuntary or
other surrender of this Lease by Tenant, or a mutual cancellation by Landlord
and Tenant, shall not work a merger, and any such surrender or cancellation
shall, at the option of Landlord, either terminate all or any existing subleases
or operate as an assignment to Landlord of any or all of such subleases.
 
15.8 Landlord’s Right to Space. Notwithstanding any of the above provisions of
this Paragraph 15 to the contrary, if Tenant notifies Landlord that it desires
to assign this Lease or sublet all or any part of the Premises, Landlord, in
lieu of consenting to such assignment or sublease, may elect to terminate this
Lease (in the case of an assignment or a sublease of the entire Premises), or to
terminate this Lease as it relates to the space proposed to be subleased by
Tenant (in the case of a sublease of less than the entire Premises). In such
event, this Lease (or portion thereof) will terminate on the date the assignment
or sublease was to be effective, and Landlord may lease such space to any party,
including the prospective Transferee identified by Tenant.
 
15.9 No Net Profits Leases. Anything contained in the foregoing provisions of
this Paragraph 15 to the contrary notwithstanding, neither Tenant, nor any other
person having an interest in the possession, use, occupancy or utilization of
the Premises, shall enter into any lease, sublease, license, concession or other
agreement for the use, occupancy or utilization of space in the Premises which
provides for rental or other payment for such use, occupancy or utilization
based in whole or in part on the net income or profits derived by any person
from the premises leased, used, occupied or utilized (other than an amount based
on a fixed percentage or percentages of receipts or sales), and any such
purported lease, sublease, license, concession or other agreement shall be void
and ineffective as a conveyance of any right or interest in the possession, use,
occupancy or utilization of any part of the Premises.
 
16.          SUBORDINATION
 
16.1 Subordination. Except as provided in the next sentence, or as the Tenant
and the mortgagee or trustee of any “First Mortgage” (as defined below) may
otherwise agree, this Lease, at Landlord’s option, shall be subject and
subordinate to all ground or underlying leases which now exist or may hereafter
be executed affecting all or any part of the Project, and to the lien of any
first mortgages or first deeds of trust (each a “First Mortgage”) in any amount
or amounts whatsoever now or hereafter placed on or against the Land or
Building, Landlord’s interest or estate therein, or any ground or underlying
lease, without the necessity of the execution and delivery of any further
instruments on the part of Tenant to effectuate such subordination, If any
mortgagee or trustee of a First Mortgage or ground lessor shall elect to have
this Lease prior to the lien of its First Mortgage or ground lease, and shall
give written notice thereof to Tenant, this Lease shall be deemed prior to such
First Mortgage or ground lease, whether this Lease is dated prior to or
subsequent to the date of said First Mortgage or ground lease or the date of the
recording thereof.

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Tenant (             )
Landlord (             )

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16.2 Junior Liens. Tenant hereby agrees that this Lease shall be superior to the
lien of any present or future mortgages or deeds of trust that are junior to any
First Mortgage.
 
16.3 Subordination Agreements. Tenant will execute and deliver upon demand
without charge therefor, such further instruments evidencing the subordination
of this Lease to any First Mortgage or ground lease, or the subordination of any
First Mortgage or ground lease to such Lease, pursuant to Section 1 6,1, as the
case maybe, as may be required by Landlord. Tenant’s failure to comply with its
obligations under this Paragraph 16.3 within fifteen (15) days of demand shall
constitute an Event of Default and Landlord shall have the right, in such event,
to impose upon Tenant a monetary penalty of $1,000.00 for such non-compliance,
in addition to all other remedies available to Landlord under this Lease and by
law. Tenant hereby appoints Landlord as Tenant’s attorney-in-fact, irrevocably,
to execute and deliver any such agreements, instruments, releases or other
documents.
 
16.4 Attornment. If this Project is transferred to any purchaser pursuant to or
in lieu of proceedings to enforce any mortgage, deed of trust or ground lease
(collectively, “Encumbrance”), and this Lease is either prior to such
Encumbrance or the mortgagee or trustee of a First Mortgage or ground lessor of
the Project elects to have this Lease survive such transfer, Tenant shall attorn
to such purchaser and recognize such purchaser as the landlord under this Lease,
and this Lease shall continue as a direct lease between such purchaser and
Tenant.
 
17.          QUIET ENJOYMENT
 
Landlord covenants and agrees with Tenant that upon Tenant paying the Rent and
performing its other covenants and conditions under this Lease, Tenant shall
have the quiet possession of the Premises for the term of this Lease as against
any persons or entities lawfully claiming by, through or under Landlord,
subject, however, to the terms of this Lease and of any Encumbrance.
 
18.          DEFAULT REMEDIES
 
18.1 Default. The occurrence of any of the following shall constitute an “Event
of Default” by Tenant:
 
(a) Tenant fails to pay Rent when due and such failure continues for five (5)
days after the same is due;
 
(b) Tenant fails to deliver any subordination agreement requested by Landlord
within the period described in Paragraph 16;
 
(c) Tenant fails to deliver any estoppel certificate requested by Landlord
within the period described in Paragraph 22;

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Landlord (             )
 
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(d) Tenant Transfers or attempts to Transfer this Lease without complying with
the provisions of Paragraph 15;
 
(e) Tenant fails to observe and perform any other provision of this Lease to be
observed or performed by Tenant, where such failure continues for twenty (20)
days after written notice thereof by Landlord to Tenant; provided, however, that
if the nature of the default is such that the same cannot reasonably be cured
within said twenty (20) day period, Tenant shall not be deemed to be in default
if Tenant shall within such period commence such cure and thereafter diligently
prosecute the same to completion;
 
(f) Tenant abandons the Premises; or
 
(g) The making by Tenant of any general assignment or general arrangement for
the benefit of creditors; the filing by or against Tenant of a petition seeking
relief under any law relating to bankruptcy (unless, in the case of a petition
filed against Tenant, the same is dismissed within sixty (60) days); the
appointment of a trustee or receiver to take possession of substantially all of
Tenant’s assets located at the Premises or of Tenant’s interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially all of Tenant’s
assets located at the Premises or of Tenant’s interest in this Lease, where such
seizure is not discharged within thirty (30) days.
 
18.2 Remedies. Upon the occurrence of an Event of Default, Landlord may, at any
time thereafter exercise the following remedies, which shall be in addition to
any other rights or remedies now or hereafter available to Landlord at law or in
equity:
 
(a) Maintain this Lease in full force and effect and recover Rent as it becomes
due, without terminating Tenant’s right to possession irrespective of whether
Tenant shall have abandoned the Premises. In the event Landlord elects not to
terminate the Lease, Landlord shall have the right to attempt to relet the
Premises at such rent and upon such conditions and for such a term, and to do
all acts necessary to maintain or preserve the Premises as Landlord deems
reasonable and necessary without being deemed to have elected to terminate the
Lease, including removal of all persons and property from the Premises; such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant. In the event any such reletting occurs,
rents received by Landlord from such subletting shall be applied (i) first, to
the payment of the costs of maintaining, preserving, altering and preparing the
Premises for subletting and other costs of subletting, including but not limited
to brokers’ commissions, attorneys’ fees and expenses of removal of Tenant’s
personal property, trade fixtures, alterations and leasehold improvements; (ii)
second, to the payment of Rent then due and payable; (iii) third, to the payment
of future Rent as the same may become due and payable hereunder; and (iv)
fourth, the balance, if any, shall be paid to Tenant upon (but not before)
expiration of the term of this Lease. If the rents received by Landlord from
such subletting, after application as provided above, are insufficient in any
month to pay the Rent due and payable hereunder for such month, Tenant shall pay
such deficiency to Landlord monthly upon demand. Notwithstanding any such
subletting for Tenant’s account without termination, Landlord may at any time
thereafter, by written notice to Tenant, elect to terminate this Lease by virtue
of a previous Event of Default. During the continuance of an Event of Default,
for so long as Landlord does not terminate Tenant’s right to possession of the
Premises, Landlord shall not unreasonably withhold its consent to an assignment
of this Lease or a sublease of the Premises as set forth in Paragraph 15.2 -
“Reasonable Consent”.

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Tenant (             )
Landlord (             )
 
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(b) Terminate Tenant’s right to possession of the Premises at any time by
written notice to Tenant, in which case Tenant shall immediately surrender
possession of the Premises to Landlord. Tenant expressly acknowledges that in
the absence of such written notice from Landlord, no other act of Landlord,
including, but not limited to, its re-entry into the Premises, its efforts to
relet the Premises, its reletting of the Premises for Tenant’s account, its
storage of Tenant’s personal property and trade fixtures, its acceptance of keys
to the Premises from Tenant or its exercise of any other rights and remedies
under this Paragraph 18.2, shall constitute an acceptance of Tenant’s surrender
of the Premises or constitute a termination of this Lease or of Tenant’s right
to possession of the Premises. If Landlord terminates Tenant’s right to
possession in writing, Landlord shall be entitled to recover from Tenant all
damages as provided in California Civil Code Section 1951.2 or any other
applicable existing or future law, ordinance or regulation providing for
recovery of damages for such breach, including but not limited to the following:
 
(1) The reasonable cost of recovering the Premises; plus
 
(2) The reasonable cost of removing Tenant’s alterations, trade fixtures and
Above-Standard Improvements; plus
 
(3) All unpaid Rent due or earned hereunder prior to the date of termination,
less the proceeds of any resetting or any rental received from subtenants prior
to the date of termination applied as provided in subsection (a) above, together
with interest at the Default Rate, on such sums from the date such Rent is due
and payable until the date of the award of damages; plus
 
(4) The amount by which the Rent which would be payable by Tenant hereunder,
including Operating Cost Payments as reasonably estimated by Landlord, from the
date of termination until the date of the award of damages exceeds the amount of
such rental loss Tenant proves could have been reasonably avoided, together with
interest at the Default Rate on such sums from the date such Rent is due and
payable until the date of the award of damages; plus
 
(5) The amount by which the Rent which would be payable by Tenant hereunder,
including Operating Cost Payments, as reasonably estimated by Landlord, for the
remainder of the then term, after the date of the award of damages exceeds the
amount of such rental loss as Tenant proves could have been reasonably avoided,
discounted at the discount rate published by the Federal Reserve Bank of San
Francisco for member banks at the time of the award plus one percent (1%); plus
 
(6) Such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable law.

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Tenant (             )
Landlord (             )
 
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(c) During the continuance of an Event of Default, Landlord may enter the
Premises without terminating this Lease and remove all Tenant’s personal
property, and trade fixtures from the Premises. If Landlord removes such
property from the Premises and stores it at Tenant’s risk and expense, and if
Tenant fails to pay the cost of such removal and storage after written demand
therefor and/or to pay any Rent then due, after the property has been stored for
a period of thirty (30) days or more Landlord may sell such property at public
or private sale, in the manner and at such times and places as Landlord in its
sole discretion deems commercially reasonable following reasonable notice to
Tenant of the time and place of such sale. The proceeds of any such sale shall
be applied first to the payment of the expenses for removal and storage of the
property, preparation for and conducting such sale, and attorneys’ fees and
other legal expenses incurred by Landlord in connection therewith, and the
balance shall be applied as provided in subsection (a) above.
 
Tenant hereby waives all claims for damages that may be caused by Landlord’s
reentering and taking possession of the Premises or removing and storing
Tenant’s personal property pursuant to this Paragraph, and Tenant shall hold
Landlord harmless from and against any loss, cost or damage resulting from any
such act. No reentry by Landlord shall constitute or be construed as a forcible
entry by Landlord.
 
(d) Landlord may cure the Event of Default at Tenant’s expense. If Landlord pays
any sum or incurs any expense in curing the Event of Default, Tenant shall
reimburse Landlord upon demand for the amount of such payment or expense with
interest at the Default Rate from the date the sum is paid or the expense is
incurred until Landlord is reimbursed by Tenant.
 
18.3 Late Charges. Tenant hereby acknowledges that late payment by Tenant to
Landlord of Rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges.
Accordingly, if any installment of Base Rent or Operating Costs Payments is not
received by Landlord or Landlord’s designee within five (5) days of the date
such amount shall be due, or if any installment of other Rent is not received by
Landlord or Landlord’s designee on or before the date such amount shall be due,
Tenant shall pay to Landlord a late charge equal to ten percent (10%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant’s default with respect to such overdue amount nor
prevent Landlord from exercising any of the other rights and remedies granted
hereunder.
 
18.4 Interest. In addition to the late charges referred to above which are
intended to defray Landlord’s costs resulting from late payments, any late
payment of Rent shall, at Landlord’s option, bear interest from the due date of
any such payment to the date the same is paid at the Default Rate, provided,
however, that if Landlord imposes a late charge on any overdue payment, such
overdue payment shall not begin to bear interest under this Paragraph 18.4 until
thirty (30) days after the due date thereof.

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Landlord (             )
 
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18.5 Default by Landlord. Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after written notice by Tenant to Landlord and
to any mortgagee, trustee or ground lessor of the Project (each a “Holder”)
whose name and address shall have theretofore been furnished to Tenant in
writing, specifying that Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for performance, then Landlord shall not be
in default if Landlord commences performance within such thirty (30) day period
and thereafter diligently prosecutes the same to completion.
 
19.          PARKING
 
Tenant and Tenant’s employees, invitees and customers shall have the right to
use the parking areas of the Building subject to such regulations and charges as
Landlord shall adopt from time to time, and subject to the right of Landlord to
restrict the use by Tenant and Tenant’s Representatives when in the sole
judgment of Landlord such use is excessive for the parking area in relationship
to the reasonable use required by other Tenants. If Landlord becomes obligated
under applicable laws or regulations or any other directive of any governmental
or quasi-governmental authority to pay or assess fees or charges for parking in
the Building’s parking area, Tenant shall pay such amounts to Landlord as
additional Rent.
 
20.          RELOCATION OF PREMISES
 
20.1 Conditions. For the purpose of maintaining an economical and proper
distribution of Tenants throughout Bishop Ranch acceptable to Landlord, Landlord
shall have the right from time to time during the term of this Lease to relocate
the Premises within another Class A, five-story building in Bishop Ranch,
subject to the following terms and conditions;
 
(a) The rented and usable areas of the new Premises must be of equal size to the
existing Premises (subject to a variation of up to ten percent (10%) provided
the amount of Base Rent payable under this Lease is not increased);
 
(b) Landlord shall pay the cost of providing tenant improvements in the new
Premises comparable to the tenant improvements in the existing Premises;
 
(c) Landlord shall pay the expenses reasonably incurred by Tenant in connection
with such substitution of Premises, including but not limited to costs of
moving, door lettering, telephone and telephone cabling relocation and
reasonable quantities of new stationery;
 
20.2 Notice. Landlord shall deliver to Tenant written notice of Landlord’s
election to relocate the Premises, specifying the new location and the amount of
rent payable therefore at least sixty (60) days prior to the date the relocation
is to be effective. If the relocation of the Premises is not acceptable to
Tenant, Tenant for a period of ten (10) days after receipt of Landlord’s notice
to relocate shall have the right (by delivering written notice to Landlord) to
terminate this Lease. If Tenant so notifies Landlord, Landlord at its option may
withdraw its relocation notice, in which event this Lease shall continue and
Tenant shell not be relocated, or accept Tenant’s termination notice, in which
event this Lease shall terminate effective as of the date the relocation was to
be effective,

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Landlord (             )
 
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21.          MORTGAGEE PROTECTION.
 
Tenant agrees to give any Holder, by registered mail, a copy of any notice of
default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing (by way of notice of assignment of rents and leases, or
otherwise) of the address of such Holder. If Landlord shall have failed to cure
such default within the time period set forth in Paragraph 18.5 the Holder shall
have an additional thirty (30) days within which to cure such default or if such
default cannot be cured within that time, then such additional time as may be
necessary to cure such default (including the time necessary to foreclose or
otherwise terminate its Encumbrance, if necessary to effect such cure), and this
Lease shall not be terminated so long as such remedies are being diligently
pursued.
 
22.          ESTOPPEL CERTIFICATES.
 
(a) Upon thirty (30) days’ notice from Landlord, Tenant shall execute and
deliver to Landlord, in form provided by or satisfactory to Landlord, a
certificate stating that this Lease is in full force and effect, describing any
amendments or modifications hereto, acknowledging that this Lease is subordinate
or prior, as the case may be, to any Encumbrance and stating any other
information Landlord may reasonably request, including the term of this Lease,
the monthly Base Rent, the estimated Operating Cost Payments, the date to which
Rent has been paid, the amount of any security deposit or prepaid Rent, whether
either party hereto is in default under the terms of the Lease, whether Landlord
has completed its construction obligations hereunder and any other information
reasonably requested by Landlord. Any person or entity purchasing, acquiring an
interest in or extending financing with respect to the Project shall be entitled
to rely upon any such certificate. Tenant shall be liable to Landlord for any
reasonable damages incurred by Landlord including any profits or other benefits
from any financing of the Project or any interest therein which are lost or made
unavailable as a result, directly or indirectly, of Tenant’s failure or refusal
to timely execute or deliver such estoppel certificates.
 
(b) Tenant’s failure to deliver such statement within such time shall be
conclusive upon Tenant:
 
(1) That this Lease is in full force and effect, without modification except as
may be represented by Landlord;
 
(2) That there are no uncured defaults in Landlord’s performance; and
 
(3) That not more than one month’s Rent has been paid in advance; and
 
(4) That Landlord has completed its construction obligations.

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Landlord (             )
 
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(c) If Landlord desires to finance or refinance the Building, or any part
thereof, Tenant hereby agrees to deliver to any lender designated by Landlord
such financial statements of Tenant as may be reasonably required by such
lender. Such statements shall include the past three years’ financial statements
of Tenant. All such financial statements shall be received by Landlord in
confidence and shall be used only for the purposes herein set forth.
 
23. SURRENDER, HOLDING OVER
 
23.1 Surrender. Upon the expiration or termination of this Lease, Tenant shall
surrender the Premises to Landlord in its original condition, except for
reasonable wear and tear and damage from casualty or condemnation; provided,
however, that prior to the expiration or termination of this Lease Tenant shall
remove from the Premises all Tenant’s personal property, trade fixtures,
alterations and other Above-Standard Improvements that Tenant has the right or
is required by Landlord to remove under the provisions of this Lease. Tenant
shall also be responsible for removal of all telephone cables and wires, CRT,
data and telephone equipment, and any other form of cabling that exists in
Tenant’s space. If any of such removal is not completed at the expiration or
termination of this Lease, Landlord may remove the same at Tenant’s expense. Any
damage to the Premises or the Building caused by such removal shall be repaired
promptly by Tenant or, if Tenant fails to do so, Landlord may do so at Tenant’s
expense, in which event Tenant shall immediately reimburse Landlord for such
expenses together with interest at the Default rate until so paid. Tenant’s
obligations under this Paragraph shall survive the expiration or termination of
this Lease. Upon expiration or termination of this Lease or of Tenant’s
possession, Tenant shall surrender all keys to the Premises or any other part of
the Building and shall make known to Landlord the combination of locks on all
safes, cabinets and vaults that may be located in the Premises.
 
23.2 Holding Over. If Tenant remains in possession of the Premises after the
expiration or termination of this Lease, Tenant’s continued possession shall be
on the basis of a tenancy at the sufferance of Landlord, and Tenant shall
continue to comply with or perform all the terms and obligations of the Tenant
under this Lease, except that the Base Rent during Tenant’s holding over shall
be one hundred fifty percent (150%) of the monthly Base Rent payable in the last
month prior to the termination or expiration hereof.
 
24. HAZARDOUS MATERIALS
 
Tenant shall not (either with or without negligence) cause or permit the escape,
disposal or release of any biologically or chemically active or other hazardous
substances or materials. Tenant shall not allow the storage or use of such
substances or materials in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such substances
or materials, nor allow to be brought into the Project any such materials or
substances except to use in the ordinary course of Tenant’s business, and then
only after written notice is given to Landlord of the identity of such
substances or materials. Without limitation, hazardous substances and materials
shall include those described in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., any applicable state or local laws and the regulations adopted under these
acts. If any lender or governmental agency shall ever require testing to
ascertain whether or not there has been any release of hazardous materials, then
Tenant shall promptly notify Landlord of the same, and the reasonable costs
thereof shall be reimbursed by Tenant to Landlord upon demand as additional
charges if such requirement applies to the Premises. Landlord shall have the
right, but not the obligation, to enter the Premises at any reasonable time to
perform any required testing, to confirm Tenant’s compliance with the provisions
of this Paragraph, and to perform Tenant’s obligations under this Paragraph if
Tenant has failed to do so. In addition, Tenant shall execute affidavits,
representations and the like from time to time at Landlord’s request concerning
Tenant’s best knowledge and belief regarding the presence of hazardous
substances or materials on the Premises. In all events, Tenant shall indemnify
Landlord in the manner elsewhere provided in this Lease from any release of
hazardous materials on the Premises occurring while Tenant is in possession, or
elsewhere if caused by Tenant or persons acting under Tenant. The within
covenants shall survive the expiration or earlier termination of the lease term.
 

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Landlord (             )
 
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25. MISCELLANEOUS
 
25.1 Attornment. Upon any transfer by Landlord of Landlord’s interest in the
Premises or the Building (other than a transfer for security purposes only),
Tenant agrees to attorn to any transferee or assignee of Landlord,
 
25.2 Captions: Attachments: Defined Terms
 
(a) The captions of the paragraphs of this Lease are for convenience only and
shall not be deemed to be relevant in resolving any question of interpretation
or construction of any paragraph of this Lease. The provisions of this Lease
shall be construed in accordance with the fair meaning of the language used and
shall not be strictly construed against either party. When required by the
contents of this Lease, the singular includes the plural. Wherever the term
“including’ is used in this Lease, it shall be interpreted as meaning
“including, but not limited to,” the matter or matters thereafter enumerated.
 
(b) Exhibits attached hereto, and addenda and schedules initialed by the
parties, are deemed to constitute part of this Lease and are incorporated
herein.
 
(c) The words “Landlord” and “Tenant” as used herein, shall include the plural
as well as the singular. Words used in neuter gender include the masculine and
feminine and words in the masculine or feminine gender include the neuter. The
obligations of this Lease as to a Tenant which consists of husband and wife
shall extend individually to their sole and separate property as well as
community property.
 
25.3 Entire Agreement. This Lease along with any exhibits and attachments hereto
constitutes the entire agreement between Landlord and Tenant relative to the
Premises, and this Lease and the exhibits and attachments may be altered,
amended or revoked only by instrument in writing signed by both Landlord and
Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives
relative to the leasing of the Premises are merged in or revoked by this Lease.

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25.4 Severability. If any term or provision of this Lease shall, to any extent,
be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by law.
 
25.5 Costs of Suit
 
(a) If Tenant or Landlord brings any action for the enforcement or
interpretation of this Lease, including any suit by Landlord for the recovery of
Rent or possession of the Premises, the losing party shall pay to the prevailing
party a reasonable sum for attorneys’ fees. The “prevailing party” will be
determined by the court before whom the action was brought based upon an
assessment of which party’s major arguments or positions taken in the suit or
proceeding could fairly be said to have prevailed over the other party’s major
arguments or positions on major disputed issues in the court’s decision.
 
(b) Should Landlord, without fault on Landlord’s part, be made a party to any
litigation instituted by Tenant or by any third party against Tenant, or by or
against any person holding under or using the Premises by license of Tenant, or
for the foreclosure of any lien for labor or material furnished to or for Tenant
or any such other person or otherwise arising out of or resulting from any act
or transaction of Tenant or of any such other person, Tenant covenants to save
and hold Landlord harmless from any judgment rendered against Landlord or the
Premises or any part thereof, and all costs and expenses, including reasonable
attorneys’ fees, incurred by Landlord in or in connection with such litigation.
 
25.6 Time: Joint and Several Liability. Time is of the essence of this Lease and
each and every provision hereof, except as to the conditions relating to the
delivery of possession of the Premises to Tenant. All the terms, covenants and
conditions contained in this Lease to he performed by either party, if such
party shall consist of more than one person or organization, shall be deemed to
be joint and several, and all rights and remedies of the parties shall be
cumulative and nonexclusive of any other remedy at law or in equity.
 
25.7 Binding Effect: Choice of Law. The parties hereto agree that all provisions
hereof are to be construed as both covenants and conditions as though the words
imparting such covenants and conditions were used in each separate paragraph
hereof. Subject to any provisions hereof restricting assignment or subletting by
Tenant, all of the provisions hereof shall bind and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and
assigns. This Lease shall be governed by the laws of the State of California.
 
25.8 Waiver. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed, and any waiver or breach of any covenant, term or condition shall not
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other covenant, term or condition. Acceptance by Landlord of any performance
by Tenant after the time the same shall have become due shall not constitute a
waiver by Landlord of the breach or default of any covenant, term or condition
unless otherwise expressly agreed to by Landlord in writing.
 
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25.9 Force Majeure. In the event Landlord is delayed, interrupted or prevented
from performing any of its obligations under this Lease, including its
obligations under the Work Letter, and such delay, interruption or prevention is
due to fire, act of God, governmental act, strike, labor dispute, unavailability
of materials or any other cause outside the reasonable control of Landlord, then
the time for performance of the affected obligations of Landlord shall be
extended for a period equivalent to the period of such delay, interruption or
prevention. Each day of delay under this Subsection shall result in one (1)
Scheduled Commencement Adjustment Day.
 
25.10 Landlord’s Liability. The term “Landlord”, as used in this Lease, shall
mean only the owner or owners of the Project at the time in question.
Notwithstanding any other term or provision of this Lease, the liability of
Landlord for its obligations under this Lease is limited solely to Landlord’s
interest in the Project as the same may from time to time be encumbered, and no
personal liability shall at any time be asserted or enforceable against any
other assets of Landlord or against Landlord’s stockholders, directors, officers
or partners on account of any of Landlord’s obligations or actions under this
Lease, In addition, in the event of any conveyance of title to the Building or
the Project, then from and after the date of such conveyance, Landlord shall be
relieved of all liability with respect to Landlord’s obligations to be performed
under this Lease after the date of such conveyance. Upon any conveyance of title
to the Building or the Project, the grantee or transferee, by accepting such
conveyance, shall be deemed to have assumed Landlord’s obligations to be
performed under this Lease from and after the date of transfer subject to the
limitations on liability set forth above in this Paragraph 25.10. In no event
will Landlord be liable under this Lease for consequential or indirect damages
or loss of profits.
 
25.11 Consents and Approvals. Wherever the consent, approval, judgment or
determination of Landlord is required or permitted under this Lease, Landlord
may exercise its good faith business judgment in granting or withholding such
consent or approval or in making such judgment or determination without
reference to any extrinsic standard of reasonableness, unless the provision
providing for such consent, approval, judgment or determination specifies that
Landlord’s consent or approval is not to be unreasonably withheld, or that such
judgment or determination is to be reasonable, or otherwise specifies the
standards under which Landlord may withhold its consent. If it is determined
that Landlord failed to give its consent where it was required to do so under
this Lease, Tenant shall be entitled to specific performance but not to monetary
damages for such failure, unless Landlord withheld its consent maliciously and
in bad faith.
 
The review and/or approval by Landlord of any item to be reviewed or approved by
Landlord under the terms of this Lease or any Exhibits hereto shall not impose
upon Landlord any liability for accuracy or sufficiency of any such item or the
quality or suitability of such item for its intended use. Any such review or
approval is for the sole purpose of protecting Landlord’s interest in the
Project under this Lease, and no third parties, including Tenant or Tenant’s
Representatives or any person or entity claiming by, through or under Tenant,
shall have any rights hereunder.

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Tenant (             )
Landlord (             )
 
27

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25.12 Signs. Tenant shall not place or permit to be placed in or upon the
Premises where visible from outside the Premises or any part of the Building,
any signs, notices, drapes, shutters, blinds or displays of any type without the
prior consent of Landlord. Landlord shall include Tenant in the Building
directories located in the Building. Landlord reserves the right in Landlord’s
sole discretion to place and locate on the roof, exterior of the Building, and
in any area of the Building not leased to Tenant such signs, notices, displays
and similar items as Landlord deems appropriate in the proper operation of the
Building.
 
25.13 Rules and Regulations. Tenant and Tenant’s Representatives shall observe
and comply fully and faithfully with all reasonable and nondiscriminatory rules
and regulations adopted by Landlord for the care, protection, cleanliness and
operation of the Building and its tenants including those annexed to this Lease
as Exhibit D and any modification or addition thereto adopted by Landlord,
provided Landlord shall give written notice thereof to Tenant. Landlord shall
not be responsible to Tenant for the nonperformance by any other tenant or
occupant of the Building of any of said rules and regulations.
 
25.14 Notices. All notices or demands of any kind required or desired to be
given by Landlord or Tenant hereunder shall be in writing and shall be
personally delivered, sent in the United States mail, certified or registered,
postage prepaid, or sent by private messenger, addressed to the Landlord or
Tenant respectively at the addresses set forth below:
 
Landlord:
 
ALEXANDER PROPERTIES COMPANY
One Annabel Lane
Suite 201
San Ramon, CA 94583
Tenant:
 
Mr. Dave Brunton
SBE, INC.
4000 Executive Parkway, Suite 200
San Ramon, CA 94583

 
or such other address as shall be established by notice to the other pursuant to
this paragraph. Notices personally delivered or delivered by private messenger
shall be deemed delivered when received at the address for such party designated
pursuant to this paragraph. Notices sent by mail shall be deemed delivered on
the earlier of the third business day following deposit thereof with the United
States Postal Service or the delivery date shown on the return receipt prepared
in connection therewith. Notwithstanding the foregoing, Landlord shall have the
right, upon notice to Tenant thereof, to eliminate personal delivery as an
effective means of notice hereunder.
 
25.15 Authority. If Tenant is a corporation or a partnership, each individual
executing this Lease on behalf of Tenant represents and warrants that Tenant is
a duly organized and validly existing entity, the persons signing on behalf of
Tenant, are duly authorized to execute and deliver this Lease on behalf of
Tenant and this Lease is binding upon Tenant in accordance with its terms. If
Tenant is a corporation, Tenant shall, within thirty (30) days after execution
of this Lease, deliver to Landlord a certified copy of a resolution of the board
of directors of said corporation authorizing or ratifying the execution of this
Lease.
 
25.16 Lease Guaranty. INTENTIONALLY DELETED.

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Tenant (             )
Landlord (             )
 
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25.17 Brokers. Tenant warrants and represents to Landlord that in the
negotiating or making of this Lease neither Tenant nor anyone acting on its
behalf has dealt with any real estate broker or finder who might be entitled to
a fee or commission for this Lease other than Jeff Well of Colliers
International, whose commission is to be paid by Tenant. Tenant agrees to
indemnify and hold Landlord harmless from any claim or claims, including costs,
expenses and attorney’s fees incurred by Landlord asserted by any other broker
or finder for a fee or commission based upon any dealings with or statements
made by Tenant or its agents, employees or representatives.
 
25.18 Reserved Rights. Landlord retains and shall have the rights set forth
below, exercisable without notice and without liability to Tenant for damage or
injury to property, person or business and without effecting an eviction,
constructive or actual, or disturbance of Tenant’s use or possession of the
Premises or giving rise to any claim for set-off or abatement of Rent, to
reduce, increase, enclose or otherwise change at any time and from time to time
the size, number, location, layout and nature of the common areas and facilities
and other tenancies and premises in the Project and to create additional
rentable areas through use or enclosure of common areas.
 
25.19 Right of First Refusal. Landlord hereby grants Tenant with a Right of
First Refusal to lease any space on the Second Floor of Building that Tenant
does not initially lease (the “Right of First Refusal Premises”). In order for
Tenant to exercise its Right of First Refusal, Tenant agrees that, within five
(5) business days from Tenant’s receipt of Landlord’s written notice of
Landlord’s intent to lease said Right of First Refusal Premises to another
party, Tenant shall notify Landlord whether it will or will not exercise said
Right of First Refusal. In the event Tenant exercises its Right of First
Refusal, the terms and conditions applicable to the Right of First Refusal
Premises shall be the same as in the proposed lease with another party for the
Right of Refusal Premises and Tenant and Landlord shall, within fifteen (15)
days from the date of Tenant’s notice, execute a Lease Addendum which shall
incorporate the terms and conditions of the Right of Refusal Premises into this
Lease..
 
If Tenant does not notify Landlord within the aforementioned time frame of its
intent to exercise its Right of First Refusal, Tenant shall be deemed to have
waived its Right of First Refusal and Landlord shall be free to lease the space
to another party.
 
25.20 Option to Extend. Subject to the provisions of this Subsection 25.20,
Landlord hereby grants Tenant one (1) Option to Extend the Term of this Lease
for a period of five (5) years. Tenant’s notice of its election to exercise the
Option to Extend must be given to Landlord in writing no sooner than twelve (12)
months and no later than ten (10) months prior to the expiration date of the
Term.
 
(a) Rent. Base Rent for the Option period shall be set at Fair Market Value, but
not less than $26.00 per rentable square foot. Fair Market Value is described in
(b) below.

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Tenant (             )
Landlord (             )
 
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(b) Fair Market Value. The Term “Fair Market Value” used in this Lease shall
mean the annual rental rate being charged in the general area of the buildings
in San Ramon, Pleasanton and Dublin for space in like size buildings and
comparable to the space for which Fair Market Value is to be determined, taking
into consideration use, location and floor level within the applicable building,
the location, size of tenancy, quality and age of the building, the definition
of rentable area or net rentable area, as the case may be, rental concessions
for renewal tenants, the date the particular rate under consideration became
effective, the term of the lease under consideration, the extent of services
provided thereunder, applicable distinctions between “gross” leases and “net”
leases, expense stop figures for escalation purposes, and other adjustments to
base rental, with respect to which such rental rates are computed for renewal
tenants.
 
(c) Within thirty (30) days following Tenant’s notice to Landlord to extend the
term of this Lease, Landlord shall notify Tenant of the proposed Fair Market
Value. Tenant shall have thirty (30) days following receipt of Landlord’s notice
in which to:
 
(1) accept such determination; or
 
(2) elect to have such determination made by arbitration as described below; or
 
(3) withdraw its notice of exercise of Option to Extend.
 
If Tenant fails to notify Landlord of its election within said thirty (30) day
period, Tenant shall be deemed conclusively to have withdrawn its notice of
exercise of Option to Extend the Lease and the Lease shall terminate on the Term
Expiration Date as if such notice was never given. If Tenant elects to have such
determination made by arbitration, then:
 
(i) Within ten (10) days after Landlord receives Tenant’s notice of its election
to have such determination made by arbitration, Landlord and Tenant shall each
appoint and employ, at its cost, a real estate appraiser (who shall be licensed
in the state where the Premises are located and be a member of the American
Institute of Real Estate Appraisers (MAI) with at least ten (10) years of full
time commercial appraisal and real estate marketing experience in the immediate
area where the Premises are located) to appraise and establish the pair Market
Value.
 
(ii) The two appraisers, thus appointed, shall meet promptly and attempt to
agree upon and designate a third appraiser meeting the qualifications set forth
above within ten (10) days after the date of appointment of the last of the two
appraisers.
 
(iii) If the two appraisers are unable to agree on the third appraiser, either
of the parties, after giving five (5) days’ notice to the other, shall request
the American Arbitration Association in the county in which the Premises are
located to appoint such independent third appraiser who shall be of similar
affiliation or background of the appraisers aforementioned. Each of the parties
shall bear one-half of the cost of the appointment of the third appraiser and of
the third appraiser’s fee.

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Tenant (             )
Landlord (             )
 
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(iv) Within thirty (30) days after the selection of the third appraiser, a
majority of the appraisers shall agree upon the Fair Market Value. If a majority
of the appraisers are unable to agree within the stipulated time, then each
appraiser shall render his/her separate appraisal within such time, and the
three appraisals shall be averaged in order to establish such rate; provided,
however, if the low appraisal and/or the high appraisal are more than ten (10%)
percent lower and/or higher than the middle appraisal, the low appraisal and/or
high appraisal shall he disregarded. If only one appraisal is disregarded, the
remaining two appraisals shall be averaged in order to establish such Fair
Market Value. If both the low appraisal and the high appraisal are disregarded,
the middle appraisal shall establish the Fair Market Value. After the Fair
Market Value has been established, the appraisers shall immediately notify the
parties in writing.
 
(d) Notice. In the event Tenant does not provide Landlord with written notice of
its intent to exercise this Option to Extend within the aforementioned time
frame, Tenant shall be deemed to have waived its Option to Extend.
 
(e) Option is Personal. Except as permitted in Section 15 of this Lease, the
Option to Extend is Personal to the Tenant executing this Lease and is otherwise
not assignable or transferable, except to an affiliate of Tenant.

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Tenant (             )
Landlord (             )
 
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Landlord and Tenant have executed this Lease on the date and year set forth at
the beginning of this Lease,

Landlord:
 
ALEXANDER PROPERTIES COMPANY, a
California partnership
 
Tenant:
 
SBE, INC.
           
By:
   
By:
 
Title:
   
Title:
                     
By:
   
By:
 
Title:
   
Title:
 

 

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[Map of property]
 

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EXHIBIT B
 
WORK LETTER
 
INTENTIONALLY DELETED
 

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EXHIBIT C
 
SPACE PLAN
 
TO BE PROVIDED
 

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EXHIBIT D
 
RULES AND REGULATIONS
 
1. No sign, placard, picture, advertisement, name or notice shall be inscribed,
displayed, printed, affixed or otherwise displayed by Tenant on or to any part
of the outside or inside of the Building or the Premises without the prior
written consent of Landlord and Landlord shall have the right to remove any such
sign, placard, picture, advertisement, name or notice without notice to and at
the expense of Tenant. All approved signs or lettering on doors shall be
printed, painted, affixed or inscribed at the expense of Tenant by a person
approved by Landlord. Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises; provided, however that Tenant may request
Landlord to furnish and install a building standard window covering at all
exterior windows at Tenant’s cost. Tenant shall not install any radio or
television antenna, loud speaker, or other device on or about the roof area or
exterior walls of the Building.
 
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by Tenant or used by it for any purpose other than for
ingress to and egress from the Premises. The halls, passages, exits, entrances,
elevators, stairways, balconies and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to the common areas by persons with whom Tenant
normally deals in the ordinary course of its business unless such persons are
engaged in illegal activities. In no event may Tenant go upon the roof of the
Building.
 
3. Landlord will furnish Tenant with 50 keys to the Premises, free of charge.
Additional keys shall be obtained only from Landlord and Landlord may make a
reasonable charge for such additional keys. No additional locking devices shall
be installed in the Premises by Tenant, nor shall any locking devices be changed
or altered in any respect without the prior written consent of Landlord. All
locks installed in the Premises excluding Tenant’s vaults and safes, or special
security areas (which shall be designated by Tenant in a written notice to
Landlord), shall be keyed to the Building master key system. Landlord may make
reasonable charge for any additional lock or any bolt (including labor)
installed on any door of the Premises. Tenant, upon the termination of its
tenancy, shall deliver to Landlord all keys to doors in the Premises.
 
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be deposited therein and Tenant shall
bear the expense of any breakage, stoppage or damage resulting from its
violation of this rule.
 
5. Tenant shall not overload the floor of the Premises or mark, drive nails,
screw or drill into the partitions, woodwork or plaster or in any way deface the
Premises or any part thereof. No boring, cutting or stringing of wires or laying
of linoleum or other similar floor coverings or installation of wallpaper or
paint shall be permitted except with the prior written consent of the Landlord
and as the Landlord may direct.
 

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6. Tenant may use the freight elevators in accordance with such reasonable
scheduling as Landlord shall deem appropriate. Tenant shall schedule with
Landlord, by written notice given no less than forty-eight (48) hours in
advance, its move into or out of the Building which moving shall occur after
5:30 p.m. or on weekend days if required by Landlord; and Tenant shall reimburse
Landlord upon demand for any additional security or other charges incurred by
Landlord as a consequence of such moving. The persons employed by Tenant to move
equipment or other items in or out of the Building must be acceptable to
Landlord. The floors, corners and walls of elevators and corridors used for
moving of equipment or other items in or out of the Project must be adequately
covered, padded and protected and, Landlord may provide such padding and
protection at Tenant’s expense if Landlord determines that such measures
undertaken by Tenant or Tenant’s movers are inadequate. Landlord shall have the
right to prescribe the weight, size and position of all safes and other heavy
equipment or furnishings brought into the Building and also the times and manner
of moving the same in or out of the Building. Safes or other heavy objects
shall, if considered necessary by Landlord, stand on wood strips of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or damage to any such safe or property from any cause
and all damage done to the Building by moving or maintaining any such safe or
other property shall be repaired at the expense of Tenant. There shall not be
used in any space, or in the public halls of the Building, either by any Tenant
or others, any hand trucks except those equipped with rubber tires and side
guards.
 
7. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to by
Landlord in writing. Except with the written consent of Landlord, no person or
persons other than those approved by Landlord shall be permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by reason of Tenant’s carelessness or indifference in the
preservation of good order and cleanliness. Landlord shall in no way be
responsible to any Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant by the janitor or any
other employee or any other person. Janitor service will not be furnished on
nights when rooms are occupied after 9:30 p.m. Window cleaning shall be done
only by Landlord.
 
8. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or flammable, combustible or noxious fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord.
Tenant shall not use, keep or permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to the Landlord or other occupants
of the Building by reason of noise, odors and/or vibrations, or interfere in any
way with other tenants or those having business therein, nor shall any animals
or birds be brought in or kept in or about the Premises or the Building. Tenant
shall not make or permit to be made any unseemly or disturbing noises or disturb
or interfere with occupants of this or neighboring Buildings or premises or
those having business with them whether by the use of any musical instrument,
radio, phonograph, unusual noise, or in any other way.
 

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9. The Premises shall not be used for the storage of merchandise except as such
storage may be incidental to the use of the Premises for general office
purposes. Tenant shall not occupy or permit any portion of the Premises to be
occupied for the manufacture or sale of liquor, narcotics, or tobacco in any
form. The Premises shall not be used for lodging or sleeping or for any illegal
purposes. No cooking shall be done or permitted by Tenant on the Premises,
except that use by Tenant of Underwriters’ Laboratory approved portable
equipment for brewing coffee, tea and similar beverages and of microwave ovens
approved by Landlord shall be permitted provided that such use is in accordance
with all applicable federal, state and local laws, codes, ordinances, rules and
regulations.
 
10. Landlord will direct electricians as to where and how telephone wires and
any other cables or wires are to be installed. No boring or cutting for cables
or wires will be allowed without the consent of Landlord. The location of
telephones, call boxes and other office equipment affixed to the Premises shall
be subject to the approval of Landlord.
 
11. Tenant shall not lay linoleum, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by the Landlord. Tenant shall bear the expense of repairing
any damage resulting from a violation of this rule or removal of any floor
covering.
 
12. No furniture, packages, supplies, equipment or merchandise will be received
in the Building or carried up or down in the elevators, except between such
hours and in such elevators as shall be designated by Landlord. In its use of
such, Tenant shall not obstruct or permit the obstruction of walkways, ingress
and egress to the Building and tenant spaces and at no time shall Tenant park
vehicles which will create traffic and safety hazards or create other
obstructions.
 
13. On Saturdays, Sundays and legal holidays all day, and on other days between
the hours of 7:00 p.m. and 7:00 a.m. the following day, access to the Building
or to the halls, corridors, elevators, or stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to the person
or employee of the Building in charge and has a pass or is properly identified.
Landlord shall in no case he liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. Tenant assumes all
responsibility for protecting its Premises from theft, robbery and pilferage, In
case of invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the continuance of
the same by closing the doors or otherwise, for the safety of the Tenants and
protection of property in the Building and the Building. Landlord reserves the
right to close and keep locked all entrance and exit doors of the Building on
Saturdays, Sundays and legal holidays all day, and on other days between the
hours of 7:00 p.m. and 7:00 a.m. and during such further hours as Landlord may
deem advisable for the adequate protection of said Building and the property of
its tenants, and to implement such additional security measures as Landlord
deems appropriate for such purposes. The cost of such additional security
measures, as reasonably allocated by Landlord to Tenant, shall be reimbursed by
Tenant within thirty (30) days after receipt of Landlord’s demand therefor.
 

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14. Tenant shall see that the doors of the Premises are closed and securely
locked before leaving the Building and must observe strict care and caution that
all water faucets, water apparatus and utilities are entirely shut off before
Tenant or Tenant’s employees leave the Building, and that all electricity shall
likewise be carefully shut off, so as to prevent waste or damage and for any
default or carelessness Tenant shall make good all injuries sustained by other
tenants or occupants of the Building or Landlord. On multiple-tenancy floors,
all tenants shall keep the doors to the Building corridors closed at all times
except for ingress and egress, and all tenants shall at all times comply with
any rules and orders of the fire department with respect to ingress and egress.
 
15. Landlord reserves the right to exclude or expel from the Building any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Building.
 
16. Landlord shall attend to the requests of Tenant after notice thereof from
Tenant by telephone, in writing or in person at the Office of the Landlord.
Employees of Landlord shall not perform any work or do anything outside of their
regular duties unless under special instructions from the Landlord.
 
17. No vending machine or machines (except for Tenant’s sole use) of any
description shall be installed, maintained or operated upon the Premises without
the written consent of the Landlord. In the event Tenant installs vending
machines for the use of their employees, the vending machines shall have no
exposure to the exterior of the Building.
 
18. Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time-to-time by Landlord and Tenant also shall provide
Landlord with the name of a designated responsible employee to represent Tenant
in all matters pertaining to such fire or security regulations.
 
19. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of those Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Project.
 
20. Canvassing, soliciting, peddling or distribution of handbills or other
written material in the Building and Project is prohibited and Tenant shall
cooperate to prevent same.
 
21. Landlord reserves the right to (i) select the name of the Project and
Building and to make such change or changes of name, street address or suite
numbers as it may deem appropriate from time to time, (ii) grant to anyone the
exclusive right to conduct any business or render any service in or to the
Building and its tenants, provided such exclusive right shall not operate to
require Tenant to use or patronize such business or service or to exclude Tenant
from its use of the Premises expressly permitted in the Lease, and (iii) reduce,
increase, enclose or otherwise change at any time and from time to time the
size, number, location, layout and nature of the common areas and facilities and
other tenancies and premises in the Project and to create additional rentable
areas through use or enclosure of common areas. Tenant shall not refer to the
Project by any name other than the name as selected by Landlord (as same may be
changed from time to time), or the postal address, approved by the United States
Post Office. Without the written consent of Landlord, Tenant shall not use the
name of the Building or Bishop Ranch Business Park in connection with or in
promoting or advertising the business of Tenant or in any respect except as
Tenant’s address.
 

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22. Tenant shall store all its trash and garbage within the Premises until
removal of same to such location in the Project as may be designated from time
to time by Landlord. No material shall be placed in the Project trash boxes or
receptacle if such material is of such nature that it may not be disposed of in
the ordinary and customary manner of removing and disposing of trash and garbage
in the City of San Ramon without being in violation of any law or ordinance
governing such disposal.
 
23. Landlord shall furnish heating and air conditioning during the hours of 7:00
a.m. and 7:00 p.m., Monday through Friday, except for holidays. In the event
Tenant requires heating and air conditioning during off hours, Saturdays,
Sundays or holidays, Landlord shall on notice provide such services at the rate
established by Landlord from time-to-time. Landlord shall have the right to
control and operate the public portions of the Building and the public
facilities, and heating and air conditioning, as well as facilities furnished
for the common use of the Tenants, in such manner as it deems best for the
benefit of the Tenants generally.
 
24. The directory of the Building will be provided for the display of the name
and location of tenants and Landlord reserves the right to exclude any other
names therefrom. Any additional name that Tenant shall desire to place upon the
directory must first be approved by Landlord and, if so approved, a charge will
be made for each such name.
 
25. Except with the prior written consent of Landlord, Tenant shall not sell, or
permit the sale from the Premises of, or use or permit the use of any sidewalk
or common area adjacent to the Premises for the sale of newspapers, magazines,
periodicals, theater tickets or any other goods, merchandise or service, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, business in or from the Premises for the service or accommodation of
occupants of any other portion of the Building, nor shall the Premises be used
for manufacturing of any kind, or for any business or activity other than that
specifically provided for in Tenant’s lease.
 
26. The word “Tenant” occurring in these Rules and Regulations shall mean Tenant
and Tenant’s Representatives. The word “Landlord” occurring in these Rules and
Regulations shall mean Landlord’s assigns, agents, clerks, employees and
visitors.
 
ACKNOWLEDGED AND ACCEPTED:

Landlord:
 
Tenant:
     
By:
   
By:
 
Title:
   
Title:
 

 

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EXHIBIT E
 
JANITORIAL SPECIFICATIONS
 
The following specific janitorial services will be provided in accordance with
provisions of Paragraph 7.1, Landlord’s Obligations:
 
OFFICE AREAS (DAILY)
 
1. Empty all waste baskets and disposal cans, if liners used, replace as
necessary.
2. Spot dust desks, chairs, file cabinets, counters and furniture.
3. Spot vacuum all carpets and walk-off mats; spot as necessary.
4. Sweep all hard surface floors with treated dust mop.
 
OFFICE AREAS (WEEKLY)
 
1. Vacuum carpets completely, including around base boards, etc.
2. Perform low dusting of furniture.
3. Dust window sills and ledges.
 
OFFICE AREAS (QUARTERLY)
 
1. Perform all high dusting of doors, sashes, moldings, etc.
2. Dust mini blinds as needed.
 
OFFICE AREA CORRIDORS AND LOBBIES (DAILY SERVICE)
 
1. Vacuum carpets and dust mop any hard floors.
2. Spot clean carpets of all spillage.
3. Clean all thresholds.
 
OFFICE AREA CORRIDORS AND LOBBIES (WEEKLY)
 
1. Perform all high dusting of doors, sashes, moldings, etc.
2. Vacuum and clean all ceiling vents.
3. Polish any metal railings, placards, etc.
 
STAIRWAYS (DAILY)
 
1. Sweep all hard surface steps.
2. Dust banisters.
 
STAIRWAYS (WEEKLY)
 
1. Sweep all hard surfaces.
2. Spot mop all spills as needed.
 

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RESTROOMS COMMON AREA (DAILY SERVICE)
 
1. Empty all waste containers and replace liners as needed.
2. Clean all metal, mirrors, and fixtures.
3. Sinks, toilet bowls and urinals are to be kept free of scale.
4. Clean all lavatory fixtures using disinfectant cleaners.
5. Wash and disinfect underside and tops of toilet seats,
6. Wipe down walls around urinals.
7. Refill soap, towel, and tissue dispensers.
8. Wet mop tile floors with disinfectant solution.
9. Refill sanitary napkin machines as necessary.
 
RESTROOMS COMMON AREA (WEEKLY)
 
1. Perform high dusting and vacuum vents.
2. Use germicidal solution in urinal traps, lavatory traps, and floor drains.
 
RESTROOMS COMMON AREA (MONTHLY)
 
1. Scrub floors with power machine.
2. Wash down all ceramic tile and toilet compartments.
 
ELEVATORS (DAILY)
 
1. Vacuum floors.
2. Clean thresholds.
3. Spot walls and polish surfaces.
 
GENERAL
 
All glass entry doors to offices, corridors, or lunch rooms are to be cleaned as
necessary.
 

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EXHIBIT F
 
DOOR SIGN, DIRECTORY STRIP AND MAIL BOX REQUEST,
 
1. I, the undersigned, hereby authorize Landlord to order one door sign of ( )
wood, ( ) vinyl, (x) chrome. The business name on it shall be:
 
 

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2. The directory strip shall read:
 

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3. The mail box strip shall read:
 

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Signature
 
Date

 
Street Address:
4000 Executive Parkway
   
Suite Number:
200
   
Complex:
Bishop Rauch 8, Building P

 

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EXHIBIT G
 
COMMENCEMENT OF LEASE
 
INTENTIONALLY DELETED
 

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