Exhibit 10.2

 

 

 

 

 

 

 

 

PURCHASE AND SALE AGREEMENT

 

Dated as of July 9, 2013

 

by and between

 

Exar Corporation

(“Seller”)

 

and

 

Ellis Partners LLC

(“Purchaser”)

 

 

 
 

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TABLE OF CONTENTS

 

Page

1.

Sale And Purchase

1

1.1.

General

1

1.2.

Certain Definitions

1

1.3.

Title Company

3

2.

Payment of Purchase Price

3

2.1.

Amount

3

2.2.

Terms of Payment

3

3.

Liquidated Damages

4

4.

Review of The Property; Inspection Period

5

4.1.

Document Review

5

4.2.

Access To Property, Inspection And Due Diligence

5

4.3.

Inspection and Right to Terminate

6

4.4.

Confidentiality

6

4.5.

Restoration And Insurance

7

5.

Title; Title Objections

7

5.1.

Title Report

7

5.2.

Title

7

5.3.

Title Objections

8

5.4.

Pre-Closing “Gap” Title Defects

8

5.5.

Monetary Liens

9

6.

Condemnation or Casualty

9

6.1.

Condemnation

9

6.2.

Casualty

9

7.

Representations And Warranties

10

7.1.

Seller’s Knowledge

10

7.2.

Representation And Warranties

10

7.3.

Purchaser’s Representations And Warranties

12

8.

“AS IS” Purchase; Release of Seller

13

8.1.

“As Is” Purchase

14

8.2.

Release of Seller

14

8.3.

Natural Hazards Disclosures

15

8.4.

Nonresidential Building Energy Use Disclosure Program

15

8.5.

Leaseback Lease Prevails

16

9.

Conditions Precedent

16

9.1.

Conditions in Favor of Purchaser

16

9.2.

Conditions in Favor of Seller

16

10.

Closing

17

10.1.

Closing

17

 

 

 
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TABLE OF CONTENTS

 

10.2.

Seller’s Delivery Into Escrow

17

10.3.

Purchaser’s Delivery Into Escrow

18

10.4.

Procedure

18

10.5.

Closing Prorations

18

10.6.

Closing Costs

19

10.7.

Closing Procedure

19

10.8.

Possession; Notices

19

10.9.

Removal of Power Co-Generation Facility

19

10.10.

Maintenance

20

10.11.

Purchaser Remedies

20

11.

Brokers

21

12.

Miscellaneous

21

12.1.

Notices

21

12.2.

Rules of Construction

22

12.3.

Amendment; Waivers

23

12.4.

Time of Essence

23

12.5.

Attorneys’ Fees

23

12.6.

Law

23

12.7.

Entire Agreement

23

12.8.

Assignment; Successors And Assigns

23

12.9.

Exhibits

24

12.10.

Business Day

24

12.11.

Survival

24

12.12.

Counterparts

24

 

 

EXHIBITS AND SCHEDULES

 

Exhibit A

Legal Description of Land

Exhibit B

Nondisclosure Agreement

Exhibit C

Form of Grant Deed

Exhibit D

Form of Leaseback Lease

Exhibit E

Affidavit of Non-Foreign Status

Exhibit F

General Assignment

Exhibit G

Assignment of Purchase and Sale Agreement

Schedule 1.2.5

Contracts Schedule

Schedule 1.2.12

Schedule of Fixtures

Schedule 4.1.1

Schedule of Feasibility Documents

      

 

 
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PURCHASE AND SALE AGREEMENT

 

 

This Purchase and Sale Agreement (“Agreement”) is dated as of July 9, 2013, for
reference purposes only, and is made by and between Exar Corporation, a Delaware
corporation (“Seller”), and Ellis Partners LLC, a California limited liability
company (“Purchaser”). This Agreement shall be effective on the “Effective
Date,” which is the date on which the Title Company (as defined below) shall
have confirmed in writing that it has received this Agreement fully executed by
Purchaser and Seller.

 

In consideration of the mutual covenants of the parties herein contained and
other valuable consideration, the parties agree as follows:

 

1.     Sale And Purchase.

 

1.1.     General. Subject to the terms, covenants and conditions contained in
this Agreement, Seller shall sell to Purchaser, and Purchaser shall purchase
from Seller, all of the Property, as defined in Section 1.2 below.

 

1.2.     Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:

 

1.2.1.     Box Site. The file sharing network site established by or on behalf
of Seller with respect to the Property on which written materials regarding the
Property have been posted.

 

1.2.2.     Business Day. Any Monday, Tuesday, Wednesday, Thursday or Friday,
other than any federal holiday, State of California holiday or other day on
which banks are required or permitted to close for business in the State of
California.

 

1.2.3.     Closing. The consummation of the sale and conveyance of the Property
to Purchaser as evidenced by recordation of the Deed.

 

1.2.4.     Closing Date. The date that is fifteen (15) days after the date of
the expiration of the Inspection Period, or such earlier date as the parties may
agree upon in writing.

 

1.2.5.     Contracts. All of Seller’s right, title and interest in and to all
assignable contracts and agreements listed and described on Schedule 1.2.5 (the
“Contracts Schedule”) attached hereto and made a part hereof, relating to the
repair, maintenance or operation of the Real Property.

 

1.2.6.     Deed. The form of grant deed pursuant to which title to the Real
Property shall be conveyed from Seller to Purchaser, in the form of Exhibit C
hereto which is made a part hereof.

 

1.2.7.     Deposit. Such term shall have the meaning set forth in Section 2.2.2
below.

 

 

 
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1.2.8.     Due Diligence Materials. Such term shall have the meaning set forth
in Section 4.1.1 below.

 

1.2.9.     Effective Date. Such term has the meaning set forth in the preamble
of this Agreement.

 

1.2.10.     Feasibility Documents. Such term shall have the meaning set forth in
Section 4.1.1 below.

 

1.2.11.     General Assignment. The assignment and assumption of various assets
in the form of Exhibit F attached hereto.

 

1.2.12.     Improvements. The buildings, structures, and other improvements on
the Land, including that certain building with a street address of 48720 Kato
Road, Fremont, California, containing approximately 55,085 rentable square feet
of space (“Building One”), and that certain building with a street address of
48760 Kato Road, Fremont, California, containing 95,962 rentable square feet of
space (“Building Two”), as well as any other buildings and structures located on
the Land, and all apparatus, installed equipment and appliances owned by Seller
that are permanently affixed to the Land, buildings or structures, and are used
in connection with the ownership, operation or occupancy of the Land and are
designated as “Fixtures” in Schedule 1.2.12 attached hereto, but excluding the
Personal Property, inventory, and trade fixtures of Seller.

 

1.2.13.     Initial Deposit. Such term shall have the meaning set forth in
Section 2.2.1 below.

 

1.2.14.     Inspection Period. The period ending at 5:00 p.m. California time on
the date that is thirty (30) days after the Effective Date; provided that, if
Purchaser sends an Approval Notice pursuant to Section 4.3 below, then the
Inspection Period shall end as of the date of the Approval Notice.

 

1.2.15.     Land. That certain real property located in the City of Fremont,
County of Alameda, State of California, and as more particularly described in
Exhibit A attached hereto and made a part hereof, and all rights, privileges and
easements appurtenant to the Land, as well as all development rights, land use
entitlements, including without limitation building permits, licenses, permits
and certificates, air rights, mineral rights, off-site parking rights, water,
water rights, riparian rights and water stock relating to the Land and any
rights-of-way or other appurtenances used in connection with the beneficial use
and enjoyment of the Land and all of Seller’s right, title and interest, if any,
in and to all roads and alleys adjoining or servicing the Land.

 

1.2.16.     Leaseback Lease. That certain Lease in the form attached hereto as
Exhibit D pursuant to which Seller shall lease back Building Two from Purchaser
post-Closing on the terms and conditions set forth therein.

 

 

 
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1.2.17.     Personal Property. All of Seller’s right, title and interest in and
to all personal property located upon the Land or within the Improvements, or
used in connection therewith.

 

1.2.18.     Property. Collectively, the Real Property, the Contracts and the
Warranties owned by Seller as set forth on the schedules and the related
exhibits to this Agreement.

 

1.2.19.     Purchase Price. Such term shall have the meaning set forth in
Section 2.1 below.

 

1.2.20.     Real Property. The Land and the Improvements.

 

1.2.21.     Seller’s Knowledge. Such term shall have the meaning set forth in
Section 7.1 below.

 

1.2.22.     Title Company. First American Title Insurance Company, at its
offices located at 100 Spear Street, Suite 1600, San Francisco, CA 94105, Attn.:
Kimberleigh Toci; Telephone No.: 415/837-2251; Fax No.: 415/398-1750.

 

1.2.23.     Warranties. All assignable existing warranties and guaranties issued
to Seller in connection with the Real Property or Fixtures.

 

1.3.     Title Company. The purchase and sale of the Property shall be handled
through an escrow that Seller has established or will establish with Title
Company. Seller and Purchaser agree to execute such escrow instructions as are
reasonably required by Title Company to consummate the transaction, which escrow
instructions may be executed on behalf of either party by its counsel. The
escrow instructions shall not be deemed to modify the provisions of this
Agreement unless any modifications are specifically identified as such and are
initialed by both Seller and Purchaser.

 

2.     Payment of Purchase Price.

 

2.1.     Amount. The purchase price to be paid by Purchaser to Seller for the
Property (the “Purchase Price”) shall be EIGHTEEN MILLION ONE HUNDRED THOUSAND
DOLLARS ($18,100,000.00).

 

2.2.     Terms of Payment. Purchaser shall pay the Purchase Price to Seller as
follows:

 

2.2.1.     Initial Deposit. Purchaser shall deposit in escrow established by the
Title Company pursuant to Section 1.3 above within two (2) Business Days after
the Effective Date the sum of Five Hundred Thousand and No/100 Dollars
($500,000.00) in readily available funds as an earnest money deposit on account
of the Purchase Price (together with interest accrued thereon while held by
Title Company, the “Initial Deposit”). The Initial Deposit shall be invested by
Title Company in a money market fund or such other investment instrument or
account designated by Purchaser, and together with interest thereon, shall be
credited against the Purchase Price at Closing. Prior to Purchaser’s delivery of
an Approval Notice in accordance with Section 4.3 below, the Initial Deposit
shall be fully refundable to Purchaser.

 

 

 
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2.2.2.     Additional Deposit. Unless the Agreement is earlier terminated, then
by no later than 5:00 p.m. California time two (2) Business Days following the
expiration of the Inspection Period, Purchaser shall deposit in escrow an
additional sum of Five Hundred Thousand and No/100 Dollars ($500,000.00) (for a
total principal deposit of One Million Dollars and No/100 Dollars
($1,000,000.00)) by delivering to the Title Company readily available funds in
such amount (and such additional funds, together with interest accrued thereon
while held by Title Company and the Initial Deposit, shall be collectively
referred to as the “Deposit”). In the event that Purchaser delivers an Approval
Notice in accordance with Section 4.3 below, the Deposit shall be non-refundable
except in the event that (a) any condition to Closing in favor of Purchaser is
neither satisfied nor waived, (b) Seller defaults hereunder in any material
respect, or (c) this Agreement terminates in accordance with the provisions of
Articles 5 or 6 below.

 

2.2.3.     Payment of Balance. The balance of the Purchase Price shall be paid
in full, in cash, through escrow at Closing as provided in Section 10.4.

 

2.2.4.     Independent Consideration. In order to establish independent
consideration for Purchaser’s right to purchase the Property hereunder, the
Title Company shall deliver to Seller One Hundred Dollars ($100.00) of the
Deposit as independent consideration (the “Independent Consideration”) within
two (2) Business Days following Purchaser’s deposit of the Deposit, which
Independent Consideration shall be nonrefundable in all circumstances and shall
be credited against the Purchase Price at Closing.

 

3.     Liquidated Damages. Purchaser acknowledges that the closing of the sale
of the Property to Purchaser, on the terms and conditions and within the time
period set forth in this Agreement, is material to Seller. Purchaser also
acknowledges that Seller will suffer substantial damages if such transaction is
not so consummated due to Purchaser’s default under this Agreement. Purchaser
further acknowledges that, as of the date of this Agreement, Seller’s damages
would be extremely difficult or impossible to compute in light of the
unpredictable state of the economy and of governmental regulations, the
fluctuating market for real estate and real estate loans of all types, and other
factors which directly affect the value and marketability of the Property. In
light of the foregoing and all of the other facts and circumstances surrounding
this transaction, and following negotiations between the parties, Purchaser and
Seller agree that the amount of the Deposit represents a reasonable estimate of
the damages which Seller would suffer by reason of Purchaser’s default
hereunder. Accordingly, Purchaser and Seller hereby agree that, in the event of
such default by Purchaser under this Agreement, Seller’s sole remedy shall be to
terminate this Agreement by giving notice to Purchaser and Title Company and to
retain the Deposit as liquidated damages in lieu of any other claim Seller may
have in law or in equity (including, without limitation, specific performance)
arising by reason of Purchaser’s default. The obligations of Purchaser under
this Article 3 shall survive the termination of this Agreement. The parties have
initialed this Section 3 to establish their intent so to liquidate damages.
Notwithstanding the foregoing, nothing contained in this Article 3 shall be
deemed to limit, waive or otherwise modify: (a) Purchaser’s obligation to
perform any continuing obligations, or (b) Purchaser’s indemnification
obligations contained in this Agreement.

 

Seller’s

Purchaser’s

Initials:_________

Initials:__________

 

 
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4.     Review of The Property; Inspection Period.

 

4.1.     Document Review. Not later than one (1) Business Day following the
Effective Date, Purchaser shall be provided access to the Box Site, on which
Seller has posted copies of the documents set forth in Schedule 4.1.1 attached
hereto (the “Feasibility Documents”). In addition, during the Inspection Period,
as defined below, Seller shall make available to Purchaser for Purchaser’s
review and inspection, at the office of Seller or Seller’s property manager and
upon at least one (1) Business Day’s prior notice, and in each case to the
extent the materials are currently in the Seller’s possession, copies of written
materials relating to the Property, its condition (including materials regarding
the environmental condition of the Property and Seller’s compliance with all
applicable environmental laws) and its operation that are reasonably requested
by Purchaser (collectively, including the Feasibility Documents, the “Due
Diligence Materials”); provided that the Due Diligence Materials shall not
include appraisals, internal financial projections, internal correspondence,
valuation reports and/or related information, or any of Seller’s organizational
documents (e.g., articles of incorporation, partnership or limited liability
company agreements). Except for the Feasibility Documents delivered to
Purchaser, none of the Due Diligence Materials shall be removed from the
location of inspection by Purchaser. Purchaser may make copies of the Due
Diligence Materials at Purchaser’s sole cost and expense (except that Seller
shall bear the cost of reproducing the Feasibility Documents provided to
Purchaser). Seller shall reasonably cooperate with Purchaser if Purchaser
decides to use a copy service to copy any or all of the Due Diligence Materials.

 

4.2.     Access To Property, Inspection And Due Diligence.

 

4.2.1.     Access to Property. During the Inspection Period, Seller agrees that
Purchaser and its authorized agents or representatives may enter upon the
Property during normal business hours upon no less than twenty-four (24) hours
advance written or telephonic notice to Seller and make such reasonable,
nondestructive investigations, studies and tests including, without limitation,
surveys and engineering studies as Purchaser reasonably deems necessary or
advisable; provided, however, that Purchaser shall not be permitted to conduct
physically invasive testing without Seller’s prior written consent, which
consent Seller may withhold in its reasonable discretion. Seller’s prior written
consent for physically intrusive inspections or testing may be conditioned upon
receipt of a detailed description of the proposed physical inspection or
testing, a list of contractors who will be performing the physical inspection or
testing, evidence of insurance satisfactory to Seller as provided below, and
such other information as Seller requires in connection with such proposed
inspection or testing.

 

 

 
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4.2.2.     Inspection Standards. Purchaser agrees that in conducting any
inspections, investigations or tests of the Property, Purchaser and its agents
and representatives shall (i) not damage any part of the Property, (ii) not
unreasonably disturb Seller’s occupancy of the Property, (iii) not injure or
otherwise cause bodily harm to Seller, its guests, agents, invitees,
contractors, and employees, (iv) maintain insurance as provided below,
(v) promptly pay when due the costs of all tests, investigations and
examinations done with regard to the Property, (vi) not permit any liens to
attach to the Property by reason of the exercise of Purchaser’s rights
hereunder, (vii) immediately on completion of each such test or inspection,
fully restore the Property to the condition in which the same was found before
any such inspection or tests were undertaken, and (viii) not reveal or disclose
any information obtained during the Inspection Period concerning the Property to
anyone outside Purchaser’s organization, except as permitted by Section 4.4 of
this Agreement. In the event Purchaser fails to perform any affirmative duty or
obligation of Purchaser under Subsection 4.2.2 (iv), (v), (vi) or (vii) above
within three (3) Business Days after written notice to Purchaser of its failure
(and without notice in case of an emergency), Seller may (but shall not be
obligated to) perform such duty or obligation on Purchaser’s behalf and
Purchaser shall reimburse Seller upon demand for the costs and expenses of any
such performance (including penalties, interest and reasonable attorneys’ fees
incurred in connection therewith).

 

4.3.     Inspection and Right to Terminate. Purchaser shall have the right to
promptly commence and actively pursue its due diligence on the Property as
provided for in Sections 4.1 and 4.2 above. If Purchaser determines to proceed
with the purchase of the Property in accordance with this Agreement, then
Purchaser shall, before the end of the Inspection Period, notify Seller in
writing (an “Approval Notice”) that Purchaser has approved the matters described
in Sections 4.1 and 4.2 above, which determination shall be made by Purchaser in
its sole and absolute discretion. In such event, Purchaser shall increase the
Deposit as provided in Section 2.2.2 above and, except as expressly provided
otherwise in this Agreement, the Deposit shall become nonrefundable and shall
serve as liquidated damages in accordance with Section 3 above. In the event
that Purchaser fails to deliver an Approval Notice to Seller before the end of
the Inspection Period, then Purchaser shall be deemed to have elected to
terminate this Agreement, and the Deposit shall be returned to Purchaser and
this Agreement shall be null and void without recourse to either party hereto
(except to the extent such recourse arises in connection with a provision of
this Agreement which expressly survives termination).

 

4.4.     Confidentiality. The parties have entered into a Nondisclosure
Agreement, effective as of May 13, 2013, which is attached hereto as Exhibit B
and made a part hereof (the “Nondisclosure Agreement”), and it shall control the
disclosure of Confidential Information (as defined therein) that one party
receives from the other party, except to the extent any term is expressly
modified herein. Each party hereto agrees to maintain as Confidential
Information, and not to discuss with or to disclose to any person or entity that
is not a party to this Agreement any material term of this Agreement or any
aspect of the transactions contemplated hereby, except as provided in this
Section. Seller may publicly disclose the existence of this Agreement but not
the identity of Purchaser and the Purchase Price; provided, however, that Seller
may disclose the identity of Purchaser, the Purchase Price, and the terms of
this Agreement in its current report under SEC Form 8-K or as otherwise required
by law. Purchaser shall not disclose to anyone other than its partners and
financiers any information disclosed by Seller to Purchaser which is not
generally known by the public regarding Seller’s operations and/or the Property.
Each party hereto may discuss with and disclose to its accountants, attorneys,
existing or prospective lenders, investment bankers, underwriters, rating
agencies, partners, directors, officers, employees, agents, consultants and
other advisors information regarding this Agreement to the extent such persons
or entities reasonably need to know such information. Further, Purchaser may
disclose the existence of this Agreement, though not any of its material
economic terms, in dealing with third parties (including governmental officials)
in conducting its due diligence in connection with its prospective purchase.
Additionally, each party may discuss and disclose such matters to the extent
necessary to comply with any requirements of the Securities and Exchange
Commission (“SEC”) or in order to comply with any law or interpretation thereof
or court order. This provision shall survive termination of this Agreement for a
period of one (1) year from the Effective Date but shall terminate upon the
Closing; provided, however, that the Nondisclosure Agreement and the obligations
thereunder shall terminate only in accordance with the terms of the
Nondisclosure Agreement. Any press release to be made regarding any matter which
is the subject of the confidentiality obligation created in this Section
(including any press release made by either party’s brokers) shall be subject to
the reasonable approval of each of Purchaser and the Seller, both as to timing
and content.

 

 

 
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4.5.     Restoration And Insurance. If any inspection or test disturbs any of
the Property, Purchaser will restore the Property to substantially the same
condition as existed prior to any such inspection or test. Purchaser shall keep
the Property free and clear of any liens and will indemnify, defend, and hold
Seller harmless from all liabilities, losses, costs and damages, including
reasonable attorneys’ fees, incurred by Seller as a result of such entry or
investigation or the exercise of any rights under Section 4.2 by or on behalf of
Purchaser other than any liability, loss, cost or damage arising from a
pre-existing condition that is discovered (but not caused) by such
investigation. This indemnity obligation of Purchaser shall survive Closing or
the termination of this Agreement. Purchaser shall obtain, or arrange for its
inspecting consultant to obtain, and shall keep in force a policy of
comprehensive general liability insurance (including coverage for bodily injury
and property damage) on an occurrence basis with a combined single limit of One
Million Dollars and No/100 Dollars ($1,000,000.00) issued by an insurer
reasonably acceptable to Seller. Such policy shall name Seller as an additional
insured and shall provide that there shall not be any cancellation or reduction
in coverage without thirty (30) days’ prior written notice to Seller at the
address set forth in Section 12.1.

 

5.     Title; Title Objections.

 

5.1.     Title Report. Within three (3) Business Days of the Effective Date,
Seller shall cause Title Company to issue and deliver to Purchaser a preliminary
title report on the Property, which will form the basis of Title Company’s
commitment to issue to Purchaser, as the proposed insured, its regular CLTA or
ALTA (as determined by Purchaser) Owner’s title insurance policy (“Owner’s Title
Policy”) in the amount of the purchase price (“Title Commitment”), together with
a legible copy of all documents of record and all exceptions to title indicated
on the Title Commitment.

 

5.2.     Title. Title to the Real Property shall be conveyed from Seller to
Purchaser by the Deed, free and clear of all liens and encumbrances except the
following which title shall be taken subject to: (i) liens to secure payment of
taxes and assessments not delinquent; (ii) mechanics’ liens, materialmen’s liens
and other liens and claims arising out of any work performed, materials
furnished or obligations incurred by or for Seller, provided that Seller shall
discharge such liens, by bond or otherwise, within 10 days after the filing
thereof, at Seller's sole cost; (ii) applicable zoning and use laws, ordinances,
rules and regulations of any municipality, township, county, state or other
governmental agency or authority; (iii) liens in respect of pledges or deposits
under workers’ compensation laws or similar legislation; and (iv) any other
exceptions of record acceptable to Purchaser. The foregoing exceptions to title
are referred to collectively as the “Permitted Exceptions”. Conclusive evidence
of delivery of title in accordance with the foregoing shall be the willingness
of Title Company to issue to Purchaser, upon payment of its regularly scheduled
premium, the Owner’s Title Policy in the amount of the Purchase Price, showing
fee title to the Property vested of record in Purchaser as of Closing, subject
only to the Permitted Exceptions (and the standard printed exceptions and
conditions in the policy of title insurance).

 

 

 
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5.3.     Title Objections. If the Title Commitment discloses title exceptions
other than the Permitted Exceptions or if the survey discloses survey matters
which, in the reasonable judgment of Purchaser, interfere with Purchaser’s
ability to use or finance the Real Property, Purchaser shall notify Seller in
writing of its objections thereto on or before the date seven (7) Business Days
following the later of the Effective Date or Purchaser’s receipt of the Title
Commitment and all related title exceptions (“Title Objections”). Seller shall
have five (5) Business Days from the receipt of such notice (“Seller’s Removal
Period”) to have such title exceptions removed from the Title Commitment and to
correct any such survey at Seller’s expense. If Seller fails to timely provide
such removal, correction or insurance, one of the following shall occur: (i)
Purchaser may declare this Agreement null and void by giving written notice to
Seller prior to expiration of the Inspection Period, unless the parties mutually
agree in writing to extend the time for providing such notice (the “Termination
Notice”), whereupon the parties hereto shall have no further obligations
hereunder (except for those obligations which otherwise survive the termination
of this Agreement) and the Deposit shall be returned to Purchaser; or (ii) if
Purchaser does not timely give the Termination Notice, Purchaser shall be
obligated to close the purchase and sale of the Property as otherwise provided
herein. If Purchaser does not provide Seller with notice of Title Objections
within the time periods specified in the first sentence of this Section 5.3,
Purchaser shall be deemed to have approved the Title Commitment.

 

5.4.     Pre-Closing “Gap” Title Defects. In the event that Title Company first
notifies Seller in writing of any title matters not constituting Permitted
Exceptions after the expiration of the time period in which Purchaser may
provide Title Objections pursuant to Section 5.3 above, including any items
disclosed by any survey of the Property or update to the survey that Purchaser
elects to order, Purchaser may object to such matters by delivering written
notice thereof to Seller not more than five (5) Business Days after Purchaser
first receives notice of such matters (and Purchaser’s failure to provide such
written notice shall constitute Purchaser’s waiver of any such objections). With
respect to any objections to title set forth in such notice, Seller shall have
the same option to cure and Purchaser shall have the same option to accept title
subject to such matters or to terminate this Agreement as those which apply to
any notice of objections made by Purchaser as set forth in Section 5.3 above. If
Seller elects to attempt to cure any such matters, the date for Closing shall be
automatically extended by a reasonable additional time to effect such a cure,
but in no event shall the extension exceed fifteen (15) days after the
originally scheduled Closing Date

 

 

 
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5.5.     Monetary Liens. Notwithstanding any other provision hereof, Seller
shall be obligated to remove any voluntary monetary liens at Closing except for
the Permitted Exceptions.

 

6.     Condemnation or Casualty

 

6.1.     Condemnation. If, at any time after the Effective Date but prior to
Closing, a proceeding is instituted for the taking of all or any material
portion of the Property under the power of eminent domain (a “Taking”), then
Purchaser shall have the right by giving written notice to Seller and Title
Company within ten (10) Business Days after the date of receipt of written
notice of any such Taking (and the Closing Date shall be postponed, if
necessary, to allow Purchaser to have such ten (10) Business Day period), either
to: (a) consummate the purchase of the Property in accordance with this
Agreement, in which event Seller shall assign to Purchaser at Closing any award
payable by reason of the Taking, or (b) terminate this Agreement effective as of
the date such written notice of termination is given. If Purchaser fails to give
such written notice within such ten (10) Business Day period, then Purchaser
shall be deemed to have elected not to terminate this Agreement pursuant to this
Article 6. If Purchaser terminates this Agreement pursuant to this Article 6,
then the Deposit (including any portion of the Deposit passed through to Seller)
shall be returned to Purchaser less Purchaser’s share of transaction costs
determined pursuant to this Agreement, and neither Seller nor Purchaser shall
have any further obligations under this Agreement, except such obligations of
the parties that expressly survive the termination of this Agreement.

 

6.2.     Casualty.

 

6.2.1.     Minor Damage. In the event of damage to the Property or any portion
thereof prior to Closing caused by any casualty that is not “major” (as
hereinafter defined), this Agreement shall remain in full force and effect
provided Seller performs any necessary repairs or, at Seller’s option, assigns
to Purchaser all of Seller’s right, title and interest to any claims and
proceeds Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the premises in question. In the event that
Seller performs repairs upon the Property, Seller shall use reasonable efforts
to complete such repairs promptly; and, at Seller’s option, either (i) the date
of Closing shall not be extended due to Seller’s repair work but the reasonable
estimated value of any such repair work remaining to be completed as of Closing
shall be held in escrow until the completion of said repair work by Seller, or
(ii) the date of Closing shall be extended for a reasonable time in order to
allow the completion of such repairs by Seller. If Seller assigns the claim and
proceeds to Purchaser, the Purchase Price shall be reduced by an amount equal to
the applicable deductible amount, if any, under Seller’s insurance policy. Upon
Closing, full risk of loss with respect to the Property shall pass to Purchaser.

 

6.2.2.     Major Damage. In the event of a “major” loss or damage, Purchaser may
terminate this Agreement by giving written notice to Seller within ten (10)
Business Days after receipt of written notice of such major loss or damage, in
which event the Deposit shall be returned to Purchaser less Purchaser’s share of
transaction costs determined pursuant to this Agreement. If Purchaser fails to
give such written notice within such ten (10) Business Day period, then
Purchaser shall be deemed to have elected to proceed with Closing, in which
event Seller shall, at Seller’s option, either (a) perform any necessary
repairs, or (b) assign to Purchaser all of Seller’s right, title and interest to
any claims and proceeds Seller may have with respect to any casualty insurance
policies relating to the premises in question. In the event that Seller performs
repairs upon the Property, Seller shall use reasonable efforts to complete such
repairs promptly; and, at Seller’s option, either (i) the date of Closing shall
not be extended due to Seller’s repair work but the reasonable estimated value
of any such repair work remaining to be completed as of Closing shall be held in
escrow until the completion of said repair work by Seller, or (ii) the date of
Closing shall be extended for a reasonable time in order to allow the completion
of such repairs by Seller. If Seller assigns the claim and proceeds to
Purchaser, the Purchase Price shall be reduced by an amount equal to the
applicable deductible amount, if any, under Seller’s insurance policy. Upon
Closing, full risk of loss with respect to the Property shall pass to Purchaser.

 

 

 
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6.2.3.     Definition of “Major” Loss or Damage. For purposes of Sections 6.2.1
and 6.2.2, “major” loss or damage refers to loss or damage to the Property or
any portion thereof such that the cost of repairing or restoring the premises in
question to a condition substantially identical to that of the premises in
question prior to the event of damage would be, in the opinion of a general
contractor selected by Seller and reasonably approved by Purchaser, equal to or
greater than Five Hundred Thousand Dollars ($500,000.00).

 

7.     Representations And Warranties.

 

7.1.     Seller’s Knowledge. As used in this Agreement, the term “Seller’s
Knowledge” or words of similar import mean the actual knowledge of Todd Smathers
without duty of inquiry and without being charged with record or constructive
knowledge, as of the date of this Agreement or as of the Closing Date, as
applicable, whom Seller represents and warrants is the person in Seller’s
organization who is primarily responsible for the management and operation of
the Property.

 

7.2.     Representation And Warranties. Seller hereby makes the following
representations and warranties as of the date of this Agreement and as of the
Closing Date:

 

7.2.1.     Authority. Seller is a corporation duly formed and organized, and
validly existing under the laws of Delaware and is qualified to transact
business in California. Seller has the full right and authority to enter into
this Agreement and to perform the obligations of Seller under this Agreement.
The persons signing this Agreement on behalf of Seller are authorized to do so.

 

7.2.2.     Leases. There are no leases, subleases or tenancy agreements
applicable to the Property, or any portion thereof.

 

 

 
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7.2.3.     Contracts. To Seller’s Knowledge, the Contracts Schedule accurately
identifies in all material respects all of the Contracts and, as of the Closing
Date, except as disclosed in the Contracts Schedule or otherwise disclosed in
writing to Purchaser, to Seller’s Knowledge, no material default or breach shall
exist under any Assigned Contract.

 

7.2.4.     Financial Information. Seller’s audited financial statements for the
fiscal year ended March 31, 2013, are accurate and complete in all material
respects as of the respective dates thereof and for the periods referred to
therein, all in accordance with United States Generally Accepted Accounting
Principles, consistently applied.

 

7.2.5.     Due Diligence Materials. To Seller’s Knowledge, the Due Diligence
Materials delivered or made available to Purchase pursuant to Section 4.1 of
this Agreement, including the reports and information listed on Schedule 4.1.1
hereto, constitute all material documents presently in Seller’s possession
regarding the Property (i) that have been requested by Purchaser under Section
4.1, and (ii) that have been located by Seller after a reasonably diligent
search of documents in its possession, excluding such internal documents
described in Section 4.1 that are not being made available to Purchaser.

 

7.2.6.     Hazardous Materials Violation Notices. Seller has not received any
written notice from any applicable governmental authority that, at the present
time, there is (i) a violation of any applicable environmental laws concerning
hazardous materials, hazardous waste, or other contaminants placed or located
upon the Property, or (ii) a threatened or ongoing investigation concerning the
same.

 

7.2.7.      Bankruptcy. Seller has not (i) commenced a voluntary case, or had
entered against it a petition, for relief under any federal bankruptcy act or
any similar petition, order or decree under any federal or state law or statute
relative to bankruptcy, insolvency or other relief for debtors; (ii) caused,
suffered or consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator or similar official in any federal, state or foreign
judicial or non-judicial proceedings, to hold, administer or liquidate all or
substantially all of its property; or (iii) made an assignment for the benefit
of creditors.

 

7.2.8.     Condemnation/Special Assessments. Seller has not received any written
notice of any threatened or contemplated special assessments or eminent domain
or condemnation actions against the Property or any part thereof.

 

7.2.9.     Legal Compliance. Seller has not received any written notice from any
governmental or public authority (i) that the Property is in violation of any
applicable fire, health, building, use, occupancy or zoning laws, where such
violation remains outstanding and, if not corrected, would have a material
adverse effect on the use of the Property as currently owned and operated, or
(ii) that any work is required to be done upon or in connection with the
Property, where such work remains outstanding and, if not performed, would have
a material adverse effect on the use of the Property as currently owned and
operated.

 

 

 
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7.2.10.     No Conflict. To Seller’s Knowledge, the execution and delivery of
this Agreement, and the sale and conveyance of the Property contemplated hereby,
do not and will not (a) violate any provisions of (i) any rule, regulation,
statute, or law, or (ii) the terms of any order, writ or decree of any court or
judicial or regulatory authority or body, or (iii) the charter or governing
instruments of Seller, and (b) conflict with or result in a breach of any
condition or provision or constitute a default under or pursuant to the terms of
any material contract, mortgage, lien, lease, agreement, debenture or instrument
to which the Seller is a party.

 

7.2.11.     Non-Foreign Person. Seller is not a foreign person as defined in
Internal Revenue Code Section 1445(f)(3). At Closing, Seller shall deliver to
Purchaser through escrow a declaration under penalty of perjury confirming the
foregoing statement in the form of Exhibit E attached hereto (“Affidavit of
Non-Foreign Status”).

 

7.2.12.     Patriot Act. Seller is not a person or entity with whom Purchaser is
restricted from doing business under the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, H.R. 3162, Public Law 107-56 (commonly known as the "USA Patriot Act") or
Executive Order Number 13224 on Terrorism Financing, effective September 24,
2001 and regulations promulgated pursuant thereto (collectively, "Anti Terrorism
Laws"), including without limitation persons and entities named on the Office of
Foreign Asset Control Specially Designated Nationals and Blocked Persons List.

 

7.2.13.     ERISA. The Property does not constitute plan assets of Seller within
the meaning of Section 3(42) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”).

 

7.3.     Purchaser’s Representations And Warranties. Purchaser hereby makes the
following representations and warranties as of the date of this Agreement and as
of the Closing Date:

 

7.3.1.     Due Authorization. Purchaser is a limited liability company duly
formed and organized, and validly existing under the laws of California and is
qualified to transact business in California. Purchaser has been duly authorized
to execute and perform its obligations under this Agreement. The persons signing
this Agreement on behalf of Purchaser have the power and authority to do so and
to bind Purchaser to this Agreement. All the instruments, agreements and other
documents executed by Purchaser which are to be delivered to Seller at Closing
are and at the time of Closing will be duly authorized, executed and delivered
by Purchaser.

 

7.3.2.     Legal Proceedings. To Purchaser’s actual knowledge, Purchaser has not
received written notice of any legal actions or proceedings in any court pending
against Purchaser that affect Purchaser’s ability to purchase the Property.

 

7.3.3.     No Consents. No consent to the sale and conveyance of the Property by
Seller to Purchaser is required to be obtained from any governmental agency or
public administrative body or any other person or entity.

 

 

 
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7.3.4.     Bankruptcy. Purchaser has not (i) commenced a voluntary case, or had
entered against it a petition, for relief under any federal bankruptcy act or
any similar petition, order or decree under any federal or state law or statute
relative to bankruptcy, insolvency or other relief for debtors; (ii) caused,
suffered or consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator or similar official in any federal, state or foreign
judicial or non-judicial proceedings, to hold, administer or liquidate all or
substantially all of its property; or (iii) made an assignment for the benefit
of creditors.

 

7.3.5.     No Conflict. The execution and delivery of this Agreement, and the
sale and conveyance of the Property contemplated hereby, do not and will not (a)
violate any provisions of (i) any rule, regulation, statute, or law, or (ii) the
terms of any order, writ or decree of any court or judicial or regulatory
authority or body, or (iii) the charter or governing instruments of Purchaser,
and (b) conflict with or result in a breach of any condition or provision or
constitute a default under or pursuant to the terms of any material contract,
mortgage, lien, lease, agreement, debenture or instrument to which the Purchaser
is a party.

 

7.3.6.     Patriot Act. Purchaser is not a person or entity with whom Seller is
restricted from doing business under the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, H.R. 3162, Public Law 107-56 (commonly known as the "USA Patriot Act") or
Executive Order Number 13224 on Terrorism Financing, effective September 24,
2001 and regulations promulgated pursuant thereto (collectively, "Anti Terrorism
Laws"), including without limitation persons and entities named on the Office of
Foreign Asset Control Specially Designated Nationals and Blocked Persons List.

 

7.3.7.     ERISA. Purchaser is not acquiring the Property with the assets of an
employee benefit plan as defined in Section 3(3) of ERISA, which is subject to
Title 1 of ERISA.

 

8.     “AS IS” Purchase; Release of Seller.

 

 

 
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8.1.     “AS IS” Purchase. Purchaser hereby represents, warrants, and agrees
that, as of the date of this Agreement and as of the Closing Date: (i) it is
buying and accepting the Property on an “AS IS” basis, with all patent, latent,
and hidden defects; (ii) it has had the opportunity to make or will have made
prior to the Closing its own investigations, studies, and inspections of the
Property as it deems necessary or appropriate, including, without limitation,
the physical aspects and condition of the Property and the Property’s compliance
with all laws and regulations applicable to the Property’s current or intended
use or development; (iii) in connection with its investigations, studies and
inspections of the Property it has contracted or had the opportunity to contract
with certain advisors and consultants, including, but not limited to,
environmental consultants, engineers and geologists, to conduct such
environmental, hazardous material, geological, soils, hydrology, seismic,
endangered species, archeological, physical, structural, mechanical and other
inspections of the Property as Purchaser deemed to be necessary, including
without limitation those items described in the Natural Hazard Disclosure
Statement; (iv) it is relying solely on its and its advisors’ and consultants’
investigations, studies and inspections as to the Property, its condition and
other characteristics and compliance with laws and regulations; (v) it is
relying solely on its own review and analysis of the Due Diligence Materials,
and it acknowledges and agrees that, except for the express representations and
warranties in Section 7.2 of this Agreement, Seller has not made any
representation or warranty whatsoever concerning the completeness or the
accuracy of information contained in the Due Diligence Materials; (vi) it has
not received from Seller any accounting, tax legal, architectural, engineering,
property management, environmental or other advice with respect to this
transaction and is relying solely upon the advice of its own accounting, tax,
legal, architectural, engineering, property management, environmental and other
advisors; and (vii) it is not relying on any implied or express warranty or
representation by Seller (except for the express representations and warranties
in Section 7.2 of this Agreement), and Seller shall have no liability, with
respect to the value, uses, habitability, physical or environmental condition,
design, operation, financial condition or prospects, or fitness for purpose or
use of the Property (or any portion thereof), or any other aspect, portion or
component of the Property. Without limiting the generality of the foregoing,
except for the express representations and warranties of Seller contained in
Section 7.2 of this Agreement, Seller disclaims the making of any
representations or warranties, express or implied, regarding the Property, its
condition, or matters affecting the Property, including, without limitation,
title to or the boundaries of the Property, topography, climate, air, water
rights, utilities, leases, water, present and future zoning, physical condition,
soil condition, pest control matters, engineering characteristics, traffic
patterns, purposes to which the Property may be suited, value, potential for
development, hazardous materials, contamination, flood hazard areas, drainage,
access to public roads, proposed routes of roads or extensions thereof, the
square footage of the Property or the Improvements, compliance with building,
health and safety laws, environmental laws, land use laws and regulations to
which the Property may be subject and all other matters in any way affecting the
Property, or the use or ownership thereof. The provisions of this Section 8.1
shall survive Closing.

 

8.2.     Release of Seller. The acknowledgments and agreements contained in this
Article 8 constitute a conclusive admission that Purchaser, as a sophisticated,
knowledgeable investor in commercial property, has relied upon its own judgment
as to any matter germane to the Property, or its purchase or contemplated use
thereof, and that any other statement with respect thereto, whether oral,
written, constructive, express or implied, is immaterial to Purchaser. Effective
as of the Closing Date, Purchaser, on behalf of itself and its affiliates,
subsidiaries, partners, limited partners, shareholders, directors, officers,
employees, agents, contractors, attorneys, lenders, representatives,
administrators, trustees, successors and assigns, hereby releases and forever
discharges Seller and its affiliates, subsidiaries, partners, limited partners,
shareholders, directors, officers, employees, agents, contractors, attorneys,
lenders, representatives, administrators, trustees, successors, and assigns from
any and all claims, causes of action, derivative actions, administrative
actions, actions at law or in equity, demands, damages, fees, costs, losses,
expenses and liabilities of any nature – whether known or unknown, suspected or
unsuspected, contingent or fixed – that Purchaser has or may have in the future,
arising out of the physical, environmental, economic or legal condition of the
Property, its compliance with applicable laws and regulations or its fitness for
Purchaser’s intended purpose; provided, however, that the foregoing release
shall not apply to (i) any obligations of Seller arising under the Leaseback
Lease during the term thereof, (ii) Seller’s obligations under Section

 

 
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10.9 and Article 11 of this Agreement, or (iii) claims for contribution to or
indemnity of cleanup and remediation costs that are incurred due to an order
issued by, or legal action brought by, any applicable governmental authority for
a release of hazardous materials, hazardous waste, or other contaminants in
violation of applicable environmental laws, but only to the extent of those
cleanup and remediation costs that are caused by Seller’s release of hazardous
materials, hazardous waste, or other contaminants in violation of applicable
environmental laws prior to the Closing Date. In giving the foregoing release,
Purchaser hereby acknowledges that it has read and does hereby waive the
provisions of §1542 of the California Civil Code, which reads as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

The provisions of this Section 8.2 shall survive Closing.

 

SELLER’S

PURCHASER’S

INITIALS:_________

INITIALS:__________

 

 

8.3.     Natural Hazards Disclosures. The parties acknowledge that the
“Disclosure Statutes” (as defined below) provide that a seller of real property
must make certain disclosures regarding certain natural hazards potentially
affecting the property, as more particularly provided therein. As used in this
Agreement, “Disclosure Statutes” means, collectively, California Government Code
Sections 8589.3, 8589.4 and 51183.5, California Public Resources Code Sections
2621.9, 2694 and 4136 and any other California statutes that require Seller to
make disclosures concerning the Property. Seller shall order a Natural Hazard
Disclosure Report for the Property (the “Report”) from the Title Company or
another reputable company and shall deliver the Report to Purchaser promptly
upon Seller’s receipt thereof, and in no event later than five (5) days prior to
the expiration of the Inspection Period. Purchaser hereby agrees as follows with
respect to the Disclosure Statutes and the Report:

 

(a)     The delivery of the Report to Purchaser as provided above shall be
deemed to satisfy all obligations and requirements of Seller under the
Disclosure Statutes;

 

(b)     Seller shall not be liable for any error or inaccuracy in, or omission
from, the information in the Report; and

 

(c)     The Report is being provided by Seller for purposes of complying with
the Disclosure Statutes and shall not be deemed to constitute an implied or
express representation or warranty by Seller as to the presence or absence in,
at or around the Property of the conditions that are the subject of the
Disclosure Statutes.

 

8.4.     Nonresidential Building Energy Use Disclosure Program. The parties
acknowledge and agree that the California Energy Commission has suspended its
regulations implementing the Nonresidential Building Energy Use Disclosure
Program (AB 1103/AB 531) until September 1, 2013, and accordingly they are
inapplicable to this Agreement, but Seller has made available to Purchaser on
the Box Site information on energy use by Seller at the Property for at least
the last 12 months. Purchaser hereby agrees that these disclosures satisfy all
obligations and requirements of Seller under the Nonresidential Building Energy
Use Disclosure Program (assuming that any such requirements are applicable),
that Seller shall not be liable for any error or inaccuracy in, or omission
from, such disclosures, and that such disclosures shall not be deemed to
constitute an implied or express representation or warranty by Seller as to the
energy use at Building One and Building Two.

 

 

 
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8.5.     Leaseback Lease Prevails. Notwithstanding the foregoing provisions of
this Article 8, in the event of any conflict arising out of the provisions of
this Article 8 and the respective rights and obligations of the parties as
landlord and tenant under the Leaseback Lease following the Closing, the
provisions of the Leaseback Lease shall prevail as to the parties’ Lessor-Lessee
relationship.

 

9.     Conditions Precedent.

 

9.1.     Conditions in Favor of Purchaser. Purchaser’s obligation to close the
purchase of the Property pursuant to this Agreement shall be subject to the
following conditions precedent in favor of Purchaser, each of which may be
waived by Purchaser in its sole discretion:

 

(a)     The representations and warranties of Seller set forth in Section 7.2
above shall be true and correct in all material respects as of the Closing Date;

 

(b)     Seller shall have made, in all material respects, the deliveries
required of Seller pursuant to Section 10.2 below and timely performed, in all
material respects, the obligations required by the terms of this Agreement to be
performed by Seller; and

 

(c)     Title Company shall be irrevocably committed to issue to Purchaser the
Owner’s Title Policy as described in Section 5.1, subject only to payment of the
applicable premium.

 

9.2.     Conditions in Favor of Seller. Seller’s obligation to close the
purchase of the Property pursuant to this Agreement shall be subject to the
following conditions precedent in favor of Seller, each of which may be waived
by Seller in its sole discretion:

 

(a)     The representations and warranties of Purchaser set forth in Section 7.3
above shall be true and correct in all material respects as of the Closing Date;

 

(b)     Purchaser shall have made, in all material respects, the deliveries
required of Purchaser pursuant to Section 10.3 below and timely performed, in
all material respects, the obligations required by the terms of this Agreement
to be performed by Purchaser; and

 

(c)     Purchaser shall have approved Seller’s tenant improvements under the
Leaseback Lease.

 

 

 
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10.     Closing.

 

10.1.     Closing. The transaction contemplated by this Agreement shall be
consummated through escrow at the office of Title Company on or prior to the
Closing Date. The parties agree that time is of the essence with respect to the
closing of this transaction. The Closing shall take place at a time on the
Closing Date so that the Title Company will be able to wire-transfer all funds
owing to Seller by no later than 11:00 a.m. California time. Purchaser hereby
acknowledges that Purchaser may be required by the Title Company to wire funds
into Escrow on the day before the Closing Date to allow Seller’s funds to be
wired as described in the preceding sentence.

 

10.2.     Seller’s Delivery Into Escrow. Seller shall deliver the following
items into escrow:

 

10.2.1.     Deed. The Deed, duly executed and acknowledged by Seller, except
that the amount of any transfer tax shall not be shown on the Deed, but shall be
set forth on a separate affidavit or instrument which, after recordation of the
Deed, shall be attached thereto so that the amount of such transfer tax shall
not be of record.

 

10.2.2.     Leaseback Lease. Two (2) originals of the Leaseback Lease duly
executed by Seller.

 

10.2.3.     General Assignment. The General Assignment, duly executed by Seller.

 

10.2.4.     Affidavits of Non-Foreign Status. The Affidavit of Non-Foreign
Status duly executed by Seller.

 

10.2.5.     California Form 593. A California Form 593 Real Estate Withholding
Certificate executed by Seller.

 

10.2.6.     Termination of Contracts. At Closing, Seller shall provide evidence
reasonably acceptable to Purchaser that the Disapproved Contracts have been
terminated or that Seller has taken reasonable actions to terminate them and
their termination will be effective with the passage of time.

 

10.2.7.     Evidence of Authorization. Such evidence as shall reasonably
establish that Seller’s execution of this Agreement and performance of its
obligations hereunder have been duly authorized and that the person or persons
executing this Agreement on behalf of Seller have been duly authorized and
empowered to do so.

 

10.2.8.     Other Documents. Such other documents or instruments as may be
reasonably required to consummate this transaction in accordance with the terms
and conditions of this Agreement, such as appropriate escrow instructions to
Title Company.

 

 
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10.3.     Purchaser’s Delivery Into Escrow. Purchaser shall deliver the
following items into escrow:

 

10.3.1.     Cash. Immediately available funds in the following amounts: (i) the
balance of the Purchase Price; and (ii) such amount, if any, as is necessary for
Purchaser to pay Purchaser’s share of the closing costs and prorations specified
in Sections 10.6 and 10.7 below.

 

10.3.2.     Leaseback Lease. Two (2) originals of the Leaseback Lease duly
executed by Purchaser.

 

10.3.3.     Evidence of Authorization. Such evidence as shall reasonably
establish that Purchaser’s execution of this Agreement and performance of its
obligations hereunder have been duly authorized and that the person or persons
executing this Agreement on behalf of Purchaser have been duly authorized and
empowered to do so.

 

10.3.4.     Other Documents. Such other documents and instruments as may be
reasonably required in order to consummate this transaction in accordance with
the terms and conditions of this Agreement, such as appropriate escrow
instructions to Title Company.

 

10.4.     Procedure. Seller and Purchaser shall cause the following to occur at
the Closing on the Closing Date:

 

10.4.1.     The Deed, duly executed and acknowledged by Seller, shall be
recorded in the applicable land records.

 

10.4.2.     Title Company shall date as of the Closing Date and deliver to
Purchaser (i) one (1) fully executed original of the Leaseback Lease, and (ii)
the General Assignment, each executed by Seller.

 

10.4.3.     Title Company shall date as of the Closing Date and deliver to
Seller one (1) fully executed original of the Leaseback Lease executed by
Purchaser.

 

10.4.4.     Purchaser shall pay to Seller the total purchase price for the
Property in accordance with Section 2.1 hereof.

 

10.4.5.     The Title Company shall issue to Purchaser the Owner’s Title Policy.

 

10.4.6.     The Title Company shall file the information return for the sale of
the Property required by Section 6045 of the Internal Revenue Code of 1986, as
amended, and the Income Tax Regulations thereunder.

 

10.5.     Closing Prorations. At Closing, the items of income and expense of the
Property set forth below shall be prorated on the basis of a 365-day year,
actual days elapsed for the month in which Closing occurs, as of midnight on the
day immediately preceding the Closing Date. Income and expenses attributable to
the period prior to the Closing Date shall be for the account of Seller, and
income and expenses attributable to the period on and after the Closing Date
shall be for the account of Purchaser. Without limiting the generality of the
foregoing, all current real property taxes, non-delinquent bonds or improvement
assessments, general and special, non-delinquent public or governmental charges
or assessments affecting the Property (including current assessments, liens or
encumbrances for sewer, water, drainage or other public improvements whether
completed or commenced on, or prior to, the date of this Agreement) shall be
prorated as of Closing. If the Closing Date occurs before the tax rate or
assessment is fixed, the proration of such taxes and assessments by Title
Company shall be made at Closing based upon the most recent tax bills available.
Notwithstanding the foregoing, to the extent that Seller, as tenant under the
Leaseback Lease, is solely responsible for the payment of real estate taxes and
other Property expenses, such items shall not be prorated at Closing and shall
be solely Seller’s responsibility.

 

 

 
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10.6.     Closing Costs. Seller shall be responsible for 100% of city and county
documentary transfer taxes. Purchaser shall be responsible for 100% of the cost
of the Owner’s Policy and all escrow charges. Purchaser and Seller shall each be
responsible for 50% of the cost of a new survey of the Property. All other
closing costs shall be allocated between Purchaser and Seller consistent with
local custom. Each party shall pay its own attorneys’ fees incurred in
connection with this Agreement or the transaction contemplated herein. The
provisions of this Section 10.6 shall survive Closing.

 

10.7.     Closing Procedure. Title Company shall close escrow when it is in a
position to: (i) pay to Seller, by certified check or wire transfer in
immediately available funds, the amount of the Purchase Price, as such amount
may be increased or decreased as a result of the allocation of the closing costs
and prorations as specified in Sections 10.5 and 10.6; and (ii) issue to
Purchaser the Owner’s Title Policy.

 

10.8.     Possession; Notices. On the Closing Date, Seller shall transfer to
Purchaser possession of the Property. On the Closing Date or as soon thereafter
as practicable (unless earlier notice is required), Seller and Purchaser shall
send notices to all vendors and contractors under any Assigned Contracts
informing them that Seller sold the Property and assigned the Assigned Contracts
to Purchaser on the Closing Date. Notwithstanding anything in this Agreement to
the contrary, Purchaser shall have until the expiration of the Inspection Period
to notify Seller in writing whether it desires any Contracts to remain in effect
after Closing and to be assigned to it as an Assigned Contract, and any Contract
not so specified by Purchaser shall be terminated at Closing, unless Seller has
taken reasonable actions to terminate them and their termination will be
effective with the passage of time at no cost to Purchaser (the “Disapproved
Contracts”); provided, however, that Seller shall not be required to terminate
any Contract that Seller, as tenant under the Leaseback Lease, desires to keep
in effect post-Closing (the “Non-Assigned Contracts”). The Assigned Contracts,
if any, shall be assigned by Seller to Purchaser at Closing pursuant to the
General Assignment. The provisions of this Section 10.8 shall survive Closing.

 

10.9.     Removal of Power Co-Generation Facility. Not more than one hundred
twenty (120) days following Closing, Seller, at its sole cost and expense, shall
remove from the Property the existing unused “Power Co-Generation Facility”
currently located behind Building Two; provided, however, that the Property is
being sold “As Is” and Seller shall have no obligation to restore or remodel the
area where the Power Co-Generation Facility is located, including, without
limitation, removing the concrete pad that it sits upon or the walled enclosure
area in which it is located. Seller shall repair any damage to the Property
resulting from the removal of the Power Co-Generation Facility and shall ensure
that the removal of such facility does not in any way adversely affect the
operations of Building One or Building Two. Prior to such removal, Seller shall
provide to Purchaser any plans for the removal and contracts related thereto for
Purchaser’s prior written approval, which approval shall not be unreasonably
withheld or delayed. If the removal occurs post-Closing, Seller shall provide
Purchaser with written evidence that it and its contractors have in place
liability insurance in an amount satisfactory to Purchaser in its reasonable
discretion (and naming Purchaser as an additional insured) and Purchaser shall
reasonably cooperate with Seller to provide access to the portion of the
Property necessary in order to complete such removal. Notwithstanding any other
provisions hereof, Seller shall indemnify, defend and hold Purchaser harmless
from any and all costs, damages, losses and liabilities arising out of, or
related to, such removal. Seller shall retain for its own account the proceeds,
if any, from the sale, reuse, or scrapping of the Power Co-Generation Facility,
and such proceeds will not reduce the Purchase Price. The provisions of this
Section 10.9 shall survive the Closing.

 

 

 
19

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10.10.     Maintenance. Seller shall, between the Seller’s execution of this
Agreement and the Closing Date, at Seller’s sole cost and expense maintain the
Property in good order, condition and repair, reasonable wear and tear excepted
(and further subject to Section 6.2), and otherwise operate the Property in the
ordinary course of Seller's business and substantially in accordance with
Seller's present practice. From and after the Effective Date and prior to the
Closing hereunder (or earlier termination of this Agreement in accordance with
the terms of this Agreement), Seller shall not, without the prior written
consent of Purchaser which will not be unreasonably withheld or delayed, (i)
enter into any new lease of the Property, (ii) enter into any contract or
agreement for the provision of materials, goods or services to or with respect
to the Property unless Seller shall continue to be responsible for any
obligations thereunder after the Closing Date (and Purchaser shall assume no
such obligations), or (iii) create any encumbrances or liens upon the Property,
or originate or cause any assessments to be charged against the Property, that
are not Permitted Exceptions or will not be removed from the title to the
Property by Seller on or before the Closing.

 

10.11.     Purchaser Remedies. If Seller breaches this Agreement in any material
respect prior to the Closing or refuses to sell the Property as required by this
Agreement (other than due to a prior material breach of this Agreement by
Purchaser), Purchaser shall have the right, as its sole remedy, either (a) to
terminate this Agreement by giving written notice to Seller and receive the
return of the Deposit, which return shall operate to release Seller from any and
all liability hereunder, except that in the event that such breach occurs after
Purchaser has delivered an Approval Notice pursuant to Section 4.3, Seller also
shall be obligated to reimburse Purchaser for all of its reasonable and
documented out of pocket due diligence costs and attorneys’ fees incurred in
connection with this Agreement, not to exceed $50,000 in the aggregate, or (b)
if the Deposit has become non-refundable in accordance with the provisions of
Section 4.3 above and Purchaser is prepared to close the sale of the Property,
then to enforce specific performance of Seller's obligation to sell the Property
to Purchaser in accordance with this Agreement. Except as provided in the
foregoing sentence, Purchaser expressly waives all rights to obtain damages in
the event of Seller's failure to close the sale of the Property hereunder.
Purchaser shall be deemed to have elected to terminate this Agreement and
receive the return of the Deposit if Purchaser fails to file suit for specific
performance against Seller, in a court having jurisdiction in the county and
state in which the Property is located, within thirty (30) days following the
date upon which Closing was to have occurred. This Section 10.11 shall survive
the termination of this Agreement.

 

 

 
20

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11.     Brokers. Seller and Purchaser each warrant and represent to the other
that no person, firm or entity who or which has been retained by either Seller
or Purchaser, other than Mike Michaels and Wayne Lamb of CRESA, as Seller’s
agent (“Broker”), is in a position to claim a real estate brokerage commission,
due diligence fee or finder’s fee against the other party as a procuring cause
of this transaction based upon contacts with such party or the Property.
Pursuant to the terms of a separate written agreement, Seller shall pay, at
Closing and only if there is a Closing, to Broker, any agreed-upon real estate
commission due as a result of the purchase and sale evidenced hereby. Each party
shall indemnify, defend, protect and hold the other party harmless from and
against any and all claims, actions, causes of action, demands, liabilities,
damages, costs and expenses (including reasonable attorneys’ fees) arising as a
result of a breach of the foregoing warranties and representations. The
provisions of this Article 11 shall survive Closing or the termination of this
Agreement.

 

12.     Miscellaneous.

 

12.1.     Notices. All notices, demands or other communications of any type
given by either party to the other or to Title Company, whether required by this
Agreement or in any way related to this transaction, shall be in writing and
delivered: (i) by hand, facsimile, email or Federal Express or similar courier
service; or (ii) by United States Mail, as a certified item, return receipt
requested, and deposited in a Post Office or other depository under the care or
custody of the United States Postal Service, with proper postage affixed. Each
notice to a party shall be addressed as follows:

 

To Seller

Exar Corporation

48760 Kato Road

Fremont, CA 94538

Attn.: Law Department

Telephone No.: 510.668.7112

Facsimile No.: 510.668.7002

Email: thomas.melendrez@exar.com

 

With A Copy To:

Albert J. Boro, Jr., Attorney at Law

345 Franklin Street

San Francisco, CA 94102

Attn.: Albert J. Boro, Jr.

Telephone No.: 415.999.1210

Facsimile No.: 415.276.5870

Email: ajboro@aol.com

 

 
21

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To Purchaser:

Ellis Partners LLC

111 Sutter Street, Suite 800

San Francisco, CA 94104

Attn.: Melinda Ellis Evers

Telephone No.: 415.391.9800

Facsimile No.: 415.391.4711

Email: melinda@ellispartners.com

 

With A Copy To:

Stein & Lubin LLP

600 Montgomery Street, 14th Floor

San Francisco, CA 94111

Attn.: Richard B. Caine

Telephone No.: 415.981.0550

Facsimile No.: 415.981.4343

Email: rcaine@steinlubin.com

 

To Title Company:

First American Title Insurance Company

100 Spear Street, Suite 1600

San Francisco, CA 94105

Attn.: Kimberleigh Toci

Telephone No.: 415-837-2251

Facsimile No.: 415-398-1750

Email: ktoci@firstam.com

 

Any notice delivered by hand or Federal Express or similar courier service shall
be deemed to be delivered when actual delivery is made. Any notice delivered by
facsimile or email shall be deemed to be delivered when sent, provided that
confirmation of effective transmission is received in the case of a facsimile,
and no email delivery failure notice is received in the case of an email, and
provided further that a confirmation copy of the notice is sent the same day by
United States first class mail, postage pre-paid, properly addressed. Any notice
deposited in the United States Mail in the manner required above shall be deemed
to be delivered three (3) calendar days after the date of such deposit, and any
time periods provided for herein during which a party may act shall not commence
until such notice is deemed to be so delivered. Either party hereto may change
its address by notice given as provided herein to the other party and Title
Company.

 

12.2.     Rules of Construction. Where required for proper interpretation, words
in the singular shall include the plural, the masculine gender shall include the
neuter and the feminine, and vice versa. The headings of the Articles, Sections,
Subsections and paragraphs contained in this Agreement are included only for
convenience of reference and shall be disregarded in the construction and
interpretation of this Agreement. References in this Agreement to Articles,
Sections, Subsections and paragraphs are references to the Articles, Sections,
Subsections and paragraphs contained in this Agreement. Each reference in this
Agreement to an Article shall be deemed a reference to all Sections and
Subsections contained within such Article; each reference to a Section shall be
deemed a reference to all Subsections contained within such Section. This
Agreement has been fully negotiated at arms’ length between the parties, after
advice by counsel and other representatives chosen by the parties, and the
parties are fully informed with respect thereto. No party shall be deemed the
scrivener of this Agreement and, accordingly, the provisions of this Agreement
shall be construed as a whole according to their common meaning and not strictly
for or against any party. Use in this Agreement of the words “including” or
“such as”, or words of similar import, following any general term, statement or
matter shall not be construed to limit such term, statement or matter to the
enumerated items, whether or not language of non-limitation (such as “without
limitation” or “but not limited to”) are used with reference thereto, but rather
shall refer to all items or matters that could reasonably fall within the
broadest scope of such term, statement or matter.

 

 

 
22

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12.3.     Amendment; Waivers. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties hereto. A party may
waive any of the conditions contained herein or any of the obligations of the
other party hereunder, but any such waiver shall be effective only if in writing
and signed by the party waiving such conditions or obligations.

 

12.4.     Time of Essence. Time is of the essence of this Agreement and each
provision hereof.

 

12.5.     Attorneys’ Fees. If either party brings an action or proceeding at law
or in equity to interpret or enforce this Agreement or any provisions contained
herein, or to seek damages or other redress for a breach, the prevailing party
shall be entitled to recover in addition to all other remedies or damages,
reasonable attorneys’ fees incurred in such action or proceeding. This Section
12.5 shall survive Closing or the termination of this Agreement.

 

12.6.     Law. This Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.

 

12.7.     Entire Agreement. This Agreement, including the exhibits hereto,
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings of the parties in connection therewith. No representation,
warranty, covenant, agreement or condition not expressed in this Agreement shall
be binding upon the parties hereto or shall affect or be effective to interpret,
change or restrict the provisions of this Agreement.

 

12.8.     Assignment; Successors And Assigns. Purchaser shall have no right to
assign this Agreement or any of Purchaser’s rights hereunder without first
having obtained Seller’s prior written consent to such assignment, which consent
may be withheld in Seller’s sole discretion, except that Seller’s consent shall
not be required with respect to an assignment of this Agreement by Purchaser to
an assignee who (a) agrees to be bound by all of the terms and conditions of
this Agreement by executing an Assignment in the form of Exhibit G attached
hereto, which is executed by such assignee and delivered to Seller prior to such
assignment becoming effective, and (b) is a business entity (i) in which
Purchaser has a direct or indirect ownership interest and over which Purchaser
has management authority (the “SPE”), or (ii) that is affiliated with (or is)
Westport Capital Partners LLC (collectively, “WCP”), provided that, as of the
date of such assignment, WCP, in turn, has agreed in writing to further assign
this Agreement to the SPE, or cause the SPE to acquire the Property, at Closing;
provided, however, in both cases of subsections (b)(i) and (b)(ii) above, any
such assignments shall be null and void ab initio, unless the ultimate assignee
who purchases the Property under this Agreement at Closing shall also be
“Landlord” under the Leaseback Lease (as defined therein) at Closing and shall
have executed an Assignment in the form of Exhibit G attached hereto, which
shall have been executed by such assignee and delivered to Seller prior to such
assignment becoming effective. Any purported assignment by Purchaser to an
unauthorized party shall be null and void. Subject to the foregoing, this
Agreement, and the terms, covenants and conditions herein contained, shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, heirs and assigns. In no event shall an assignment by Purchaser of
this Agreement or any of Purchaser’s rights hereunder release Purchaser from its
obligations under this Agreement.

 

 

 
23

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12.9.     Exhibits. The exhibits and schedules to which reference is made in
this Agreement are deemed incorporated into this Agreement in their entirety by
such reference.

 

12.10.     Business Day. In the event that any date or any period provided for
in this Agreement shall end on a day other than a Business Day, the applicable
date or period shall be the next Business Day.

 

12.11.     Survival. Except for those provisions that by their express terms
survive Closing and/or the termination of this Agreement (and then only to the
extent of such terms), neither Seller nor Purchaser shall have further
obligations under this Agreement upon Closing or the termination of this
Agreement. For the avoidance of doubt, the representations and warranties of the
parties set forth in Article 7 shall terminate at, and not survive, Closing.

 

12.12.     Counterparts. This Agreement may be executed in one or more
counterparts by the parties hereto. All counterparts shall be construed together
and shall constitute one agreement. Purchaser acknowledges and agrees that this
Agreement shall be of no force or effect unless and until a copy hereof is
counter-executed by a duly authorized officer of Seller.

 

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

 
24

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IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement
on the dates set forth below.

 

 

 

SELLER:

EXAR CORPORATION,
a Delaware corporation

 

 

By:                                                                               

Name:                                                                          

Title:                                                                            

Date:                                                                            

    

PURCHASER:

ELLIS PARTNERS LLC,
a California limited liability company

 

 

By:                                                                                

Name:                                                                           

Title:                                                                             

Date:                                                                             

 

 
25

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EXHIBIT A

 

Legal Description of Land

 

LOTS 9, 10 AND 17 OF TRACT 4642, FILED MARCH 10, 1981, MAP BOOK 126, PAGE 30,
ALAMEDA COUNTY RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 9, TRACT 4642, HEREINABOVE
DESCRIBED, SAID POINT BEING ON THE EASTERLY LINE OF KATO ROAD AS SHOWN ON SAID
MAP; THENCE ALONG SAID EASTERLY LINE, SOUTH 21° 45' 17" EAST 70.60 FEET TO THE
BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 356.02 FEET;
THENCE SOUTHEASTERLY A LENGTH OF 556.91 FEET ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 89° 37' 33"; THENCE NORTH 68° 37' 10" EAST 259.34 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 40.00 FEET; THENCE
NORTHEASTERLY ALONG SAID CURVE A LENGTH OF 62.83 FEET THROUGH A CENTRAL ANGLE OF
90° 00' 00" TO THE WESTERLY LINE OF MILMONT DRIVE; THENCE ALONG SAID WESTERLY
LINE, NORTH 21° 22' 50“ WEST 160.47 FEET TO THE BEGINNING OF A CURVE CONCAVE TO
THE EAST HAVING A RADIUS OF 532.00 FEET; THENCE NORTHERLY ALONG SAID CURVE A
LENGTH OF 258.91 FEET; THENCE NORTH 6° 30' 15" EAST 183.35 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE WEST HAVING A RADIUS OF 468.00 FEET; THENCE NORTHERLY
ALONG SAID CURVE A LENGTH OF 215.65 FEET THROUGH A CENTRAL ANGLE OF 26° 24' 03“
TO THE NORTHERLY LINE OF SAID LOT 10; THENCE ALONG SAID NORTHERLY LINE, SOUTH
68° 37' 10" WEST 398.01 FEET; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 17,
SOUTH 69° 23' 28" WEST 460.78 FEET TO THE EASTERLY LINE OF KATO ROAD; THENCE
ALONG SAID EASTERLY LINE, SOUTH 20° 36' 32" EAST 29.68 FEET TO THE BEGINNING OF
A CURVE CONCAVE TO THE EAST HAVING A RADIUS OF 3960.23 FEET; THENCE SOUTHERLY
ALONG SAID CURVE A LENGTH OF 79.20 FEET THROUGH A CENTRAL ANGLE OF 1° 08' 45";
THENCE SOUTH 21° 45' 17" EAST 291.15 FEET TO THE SAID POINT OF BEGINNING OF THIS
DESCRIPTION.

 

PURSUANT TO THE "DECLARATION OF MERGER" RECORDED JANUARY 12, 1995 AS INSTRUMENT
NO. 95-7233 OF OFFICIAL RECORDS.

 

 

 
A-1 

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EXHIBIT C

 

 

Recorded at Request of:

 

______________________________

 

When Recorded Mail to:

 

______________________________

______________________________

______________________________

 

 

Mail Tax Statements to:

 

______________________________

______________________________

______________________________

 

 

GRANT DEED

 

For valuable consideration, receipt of which is acknowledged, Exar Corporation,
a Delaware corporation, hereby grants to
_____________________________________________, the real property located in the
City of Fremont, County of Alameda, State of California, described in Exhibit A
attached hereto and made a part hereof.

 

Dated: _______________, 2013

 

Exar Corporation,

a Delaware corporation

 

 

By:                                                              

 

Name:                                                         

 

Title:                                                           

 

 

 
C-1

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Exhibit A

 

All of the real property located in the City of Fremont, County of Alameda,
State of California, described as follows:

 

LOTS 9, 10 AND 17 OF TRACT 4642, FILED MARCH 10, 1981, MAP BOOK 126, PAGE 30,
ALAMEDA COUNTY RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 9, TRACT 4642, HEREINABOVE
DESCRIBED, SAID POINT BEING ON THE EASTERLY LINE OF KATO ROAD AS SHOWN ON SAID
MAP; THENCE ALONG SAID EASTERLY LINE, SOUTH 21° 45' 17" EAST 70.60 FEET TO THE
BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 356.02 FEET;
THENCE SOUTHEASTERLY A LENGTH OF 556.91 FEET ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 89° 37' 33"; THENCE NORTH 68° 37' 10" EAST 259.34 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 40.00 FEET; THENCE
NORTHEASTERLY ALONG SAID CURVE A LENGTH OF 62.83 FEET THROUGH A CENTRAL ANGLE OF
90° 00' 00" TO THE WESTERLY LINE OF MILMONT DRIVE; THENCE ALONG SAID WESTERLY
LINE, NORTH 21° 22' 50“ WEST 160.47 FEET TO THE BEGINNING OF A CURVE CONCAVE TO
THE EAST HAVING A RADIUS OF 532.00 FEET; THENCE NORTHERLY ALONG SAID CURVE A
LENGTH OF 258.91 FEET; THENCE NORTH 6° 30' 15" EAST 183.35 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE WEST HAVING A RADIUS OF 468.00 FEET; THENCE NORTHERLY
ALONG SAID CURVE A LENGTH OF 215.65 FEET THROUGH A CENTRAL ANGLE OF 26° 24' 03“
TO THE NORTHERLY LINE OF SAID LOT 10; THENCE ALONG SAID NORTHERLY LINE, SOUTH
68° 37' 10" WEST 398.01 FEET; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 17,
SOUTH 69° 23' 28" WEST 460.78 FEET TO THE EASTERLY LINE OF KATO ROAD; THENCE
ALONG SAID EASTERLY LINE, SOUTH 20° 36' 32" EAST 29.68 FEET TO THE BEGINNING OF
A CURVE CONCAVE TO THE EAST HAVING A RADIUS OF 3960.23 FEET; THENCE SOUTHERLY
ALONG SAID CURVE A LENGTH OF 79.20 FEET THROUGH A CENTRAL ANGLE OF 1° 08' 45";
THENCE SOUTH 21° 45' 17" EAST 291.15 FEET TO THE SAID POINT OF BEGINNING OF THIS
DESCRIPTION.

 

PURSUANT TO THE "DECLARATION OF MERGER" RECORDED JANUARY 12, 1995 AS INSTRUMENT
NO. 95-7233 OF OFFICIAL RECORDS.

 

 
C-2

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State of California                                          )

County of                                                        )

 

On ____________________, 2013 before me,
                                                            , Notary Public,
personally appeared
                                                                                ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

 

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

 

WITNESS my hand and official seal.

 

 

 

Signature:                                                                                                            

(seal)

 

 
C-3 

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EXHIBIT D

 

Form of Leaseback Lease

 

• 48720 & 48760 Kato Road •

• Fremont, California •

 

• NET LEASE •

 

BASIC LEASE INFORMATION

 

 

 

Date of Lease:

_____, 2013

       

Landlord:

__________

       

Landlord’s Notice Address:

 

 

 

 

__________________

c/o Ellis Partners LLC

111 Sutter Street, Suite 800

San Francisco, CA 94104

Attn: James F. Ellis

   

Tenant:

EXAR CORPORATION 

   

Tenant’s Notice Address:

48760 Kato Road

Fremont, California 94538

Attn: Law Department

   

Building:

The two (2) story building (known by the parties as “Building Two”) whose
address is 48760 Kato Road, Fremont, California.

       

Leased Premises:

Approximately 95,962 rentable square feet consisting of the entire Building

 

 

Rentable Area:

 

Leased Premises:

Building:

Building One:

Project:

Approximately 95,962 rentable square feet

Approximately 95,962 rentable square feet

Approximately 55,085 rentable square feet

Approximately 151,047 rentable square feet

 

 
i 

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Term Commencement Date:

______________, 2013, which is the “Closing Date” as defined in that certain
Purchase and Sale Agreement for the Project, by and between Tenant, as seller,
and Landlord, as purchaser.

 

 

Term Expiration Date:

The last day of the one hundred twentieth (120th) full calendar month after the
Term Commencement Date (meaning if the Term Commencement Date shall occur on a
date other than the first day of a calendar month, the Term shall be one hundred
twenty (120) full calendar months plus a partial month).

   

Option to Extend:

Number of Extension Periods: Two (2)

Years per Extension Period:Five (5)

   

Base Rent:

Term Commencement Date through the last day of the 12th full calendar month
after the Term Commencement Date = $81,567.70 per month.

 

Month 13 through Month 24 = $84,830.41 per month.

 

Month 25 through Month 36 = $88,223.62 per month.

 

Month 37 through Month 48 = $91,752.57 per month.

 

Month 49 through Month 60 = $95,422.67 per month.

 

Month 61 through Month 72 = $99,239.58 per month.

 

Month 73 through Month 84 = $103,209.16 per month.

 

Month 85 through Month 96 = $107,337.53 per month.

 

Month 97 through Month 108 = $111,631.03 per month.

 

Month 109 through Term Expiration Date = $116,096.27 per month.

 

 

 
ii 

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    Tenant’s Proportionate

Share:

100.00% of the Building and

63.53% of the Project

Maintenance, Utilities, Janitorial,

and Refuse Removal:

In addition to payment of Tenant’s Proportionate Share of Basic Operating Costs
and other expenses, Tenant shall be responsible for, among other things, (i)
maintaining and repairing the Leased Premises, including, without limitation,
maintenance of the HVAC system exclusively serving the Leased Premises, and (ii)
the payment of all utilities, janitorial services, and refuse removal for the
Leased Premises.

   

Parking Spaces:

Three Hundred Sixteen (316) unreserved, surface parking spaces (based on 3.3
parking spaces per 1,000 rentable square feet of Rentable Area of the Leased
Premises).

   

Security Deposit:

$489,406.20, which shall be provided in the form of cash or a letter of credit
as elected by Landlord (the Security Deposit is subject to reduction as set
forth in Section 5.14). 

   

Guarantor:

None 

   

Landlord’s Broker:

None

 

 

Tenant’s Broker:

None

 

 
iii 

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EXHIBITS:

 

Exhibit A -     Floor Plan of the Leased Premises and Site Plan of the Project

Exhibit B -     Initial Improvement of the Leased Premises

Exhibit C -     Confirmation of Term of Lease

Exhibit D -     Building Rules and Regulations

Exhibit E -     Hazardous Materials Questionnaire

 

[SIGNATURE PAGE FOLLOWS]

 

 
iv

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The foregoing BASIC LEASE INFORMATION is incorporated herein and made a part of
the LEASE to which it is attached. If there is any conflict between the BASIC
LEASE INFORMATION and the LEASE, the BASIC LEASE INFORMATION shall control.

 

“LANDLORD”:

 

_____________,

a ___________

 

 

By:                                                                     
                 

Printed Name:                                                           
        

Title:                                                                           
        

 

“TENANT”:

 

EXAR CORPORATION,

a Delaware corporation

 

 

By:                                                                           
           

Printed Name:                                                           
        

Title:                                                                        
           

 

 

 
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NET LEASE

 

THIS LEASE is made as of the date specified in the BASIC LEASE INFORMATION
sheet, by and between the landlord specified in the BASIC LEASE INFORMATION
sheet (“Landlord”) and the tenant specified in the BASIC LEASE INFORMATION sheet
(“Tenant”).

 

Definitions

 

Definitions: Terms used herein shall have the following meanings:

 

“Additional Rent” shall mean all monetary obligations of Tenant under this Lease
other than the obligation for payment of Net Rent.

 

Intentionally deleted.

 

“Base Rent” shall mean the minimum monthly rental amounts set forth in the Basic
Lease Information due from time to time as rental for the Leased Premises.

 

Intentionally deleted.

 

“Basic Operating Costs” shall have the meaning given in Section 3.5.

 

“Building” shall mean the building and other improvements associated therewith
identified on the Basic Lease Information sheet.

 

“Building Standard Improvements” shall mean the standard materials ordinarily
used by Landlord in the improvement of the Leased Premises.

 

“Common Areas” shall mean, as applicable, (a) the areas of the Building devoted
to non-exclusive uses such as common corridors, lobbies, fire vestibules,
electric and telephone closets, restrooms, mechanical closets, janitor closets,
loading docks, and other similar facilities for the benefit of all tenants (and
invitees) and (b) other areas of the Project available for the non-exclusive use
and benefit of all tenants (and invitees). Common Areas shall include, without
limitation, (i) the electrical room located in the Building, the electrical room
located in Building One, the telecommunications room located in the Building
(including the maintenance/storage area connected to such room), the area (as
required by Landlord) behind the current security desk in the Building, which
houses, among other things, the life safety monitoring equipment for the
Project, and other areas or rooms in the Building or Building One benefiting the
other building or the Common Areas (collectively, the “Project Utility Rooms”),
(ii) the elevated walkway connecting the Building and Building One and the patio
area located between the Building and Building One, and (iii) the Excess Land
prior to Excess Land Exclusion Date (as defined in Section 3.4(e) below).
Landlord may, during the Term of this Lease, allocate the rentable square
footage of certain rooms comprising the Project Utility Rooms to the Building or
Building One exclusively if such room(s) or area(s) is/are no longer considered
common area (i.e., it is no longer benefiting both buildings of the Project).

 

 

 
 

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“Computation Year” shall mean a fiscal year consisting of the calendar year
commencing January 1st of each year during the Term and continuing through the
Term with a short or stub fiscal year in (i) the period between the Term
Commencement Date and December 31 of such year and (ii) any partial year in
which the Lease expires or is terminated for the period between January 1 of
such year and the date of lease termination or expiration.

 

Intentionally deleted.

 

“Landlord’s Broker” shall mean the individual or corporate broker identified on
the Basic Lease Information sheet as the broker for Landlord.

 

Intentionally deleted.

 

“Leased Premises” shall mean the floor area more particularly shown on the floor
plan attached hereto as Exhibit A, containing the Rentable Area (as such term is
defined in Section 1.19 below) specified on the Basic Lease Information sheet.

 

“Net Rent” shall mean the total of Base Rent and Tenant’s Proportionate Share of
Basic Operating Costs calculated in accordance with Section 3.4.

 

“Permitted Use” shall mean general office activities, research and development
activities, back-end semiconductor manufacturing and packaging, light
manufacturing, product design work, engineering and testing work, quality
assurance testing, customer support, and sales and marketing, in addition to
other work activities that are part of Tenant’s business as presently conducted
at the Project as of the Date of Lease; provided, however, that Permitted Use
shall not include (a) offices or agencies of any foreign government or political
subdivision thereof; (b) offices of any agency or bureau of any state, county or
city government; (c) offices of any health care professionals; (d) schools or
other training facilities which are not ancillary to corporate, executive or
professional office use; or (e) retail or restaurant uses. Except as set forth
above, the Leased Premises shall not be used for any other purpose.

 

“Project” shall mean that certain real property that includes the Building and
currently consists of approximately 13.10 acres of land consisting of the
following: (i) approximately 8.587 acres of land that is currently improved with
that certain building with a street address of 48720 Kato Road, Fremont,
California, containing approximately 55,085 rentable square feet of space
(“Building One”), and that certain building with a street address of 48760 Kato
Road, Fremont, California, containing approximately 95,962 rentable square feet
of space (“Building Two”), and the walkways, driveways, parking spaces, fences,
landscaping and common areas affiliated therewith, and (ii) approximately 4.510
acres of unimproved land that is currently being used for recreational purposes
(the “Excess Land”). Building One, Building Two and the Excess Land are more
particularly shown on the site plan attached hereto as Exhibit A. Building One,
Building Two and the Excess Land are currently on one parcel; however, Landlord
reserves the right in the future, in Landlord’s sole discretion, to, among other
things, separate the two buildings into two separate parcels and/or separate the
Excess Land into a separate parcel(s), adjust parcel lines, grant easements,
and, to the extent such parcelization, division or adjustment of parcel lines is
completed in the future, the definition of Project shall be revised accordingly.
In addition, the acreage of the Project (including the Excess Land) may be
remeasured by a surveyor prior to the Term Commencement Date and in the event
that the surveyor determines that the acreage of the Project (including the
Excess Land) is different from the acreage set forth above, this Lease shall be
modified by a lease amendment in accordance with such determination.

 

 

 
 

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“Rent” shall mean Net Rent plus Additional Rent.

 

“Rentable Area” shall mean the area or areas of space in the Leased Premises,
the Building, Building One and the Project. The rentable square footage of the
Leased Premises, the Building, Building One and the Project shall be remeasured
by Landlord prior to the Term Commencement Date in accordance with the BOMA Drip
Line Methodology (Method B) which measurement is basically from the outermost
exterior edge of the overhang above the frontage wall or walls (the “dripline”)
to the exterior faces of all other exterior walls or to the centerline of party
walls, as the case may be. The Rentable Area of the Leased Premises shall
include its proportionate share of the Project Utility Rooms as determined in
accordance with BOMA. In the event that Landlord determines that the Rentable
Area of the Leased Premises, the Building, Building One and the Project are
different from those amounts set forth in the Basic Lease Information, all
amounts, percentages and figures appearing or referred to in this Lease that are
expressly based upon Rentable Area (including, without limitation, the amount of
Tenant’s Proportionate Share) shall be modified in a lease amendment in
accordance with such determination.

 

“Security Deposit” shall mean the amount specified on the Basic Lease
Information sheet to be provided by Tenant to Landlord and held and applied
pursuant to Section 5.14.

 

Intentionally deleted.

 

Intentionally deleted.

 

“Tenant Improvements” shall have the meaning given in Exhibit B, if any.

 

“Tenant’s Broker” shall mean the individual or corporate broker identified on
the Basic Lease Information sheet as the broker for Tenant.

Intentionally deleted.

 

“Tenant’s Proportionate Share” is specified on the Basic Lease Information sheet
and is based on the percentage which the Rentable Area of the Leased Premises
bears to the total Rentable Area of the Building or the Project, as the case may
be.

 

“Term” shall mean the period commencing with the Term Commencement Date and
ending at midnight on the Term Expiration Date.

 

“Term Commencement Date” shall be the date set forth on the Basic Lease
Information sheet.

 

“Term Expiration Date” shall be the date set forth on the Basic Lease
Information sheet, unless sooner terminated pursuant to the terms of this Lease
or unless extended pursuant to the provisions of Section 8.1.

 

Other Terms. Other terms used in this Lease and on the Basic Lease Information
sheet shall have the meanings given to them herein and thereon.

 

 
 

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Leased Premises

 

Lease. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Leased Premises upon all of the terms, covenants and conditions set forth in
this Lease.

 

Acceptance of Leased Premises. Landlord and Tenant acknowledge that Tenant is
currently in possession of the Leased Premises. Tenant agrees that it has
accepted the Leased Premises in its AS IS, WITH ALL FAULTS condition existing on
the date Tenant executes this Lease. Landlord shall have no obligation to make
any improvements, alterations or repairs to the Leased Premises at any time
during the Lease Term, except as otherwise provided for herein. If the
commencement date and/or the expiration date of this Lease is other than the
Term Commencement Date and Term Expiration Date specified in the Basic Lease
Information sheet or is not set forth in the Basic Lease Information sheet, the
parties shall execute that certain Confirmation of Term of Lease, substantially
in the form of Exhibit C hereto specifying the actual commencement date,
expiration date and the date on which Tenant is to commence paying Rent. Tenant
shall execute and return such Confirmation of Term of Lease to Landlord within
fifteen (15) days after Tenant’s receipt thereof.    

 

Right To Relocate Leased Premises. Intentionally deleted.

 

Reservation of Rights. Landlord reserves the right from time to time, to
install, use, maintain, repair, relocate and/or replace pipes, conduits, wires
and equipment within and around the Building and the Common Areas, separate
utilities that are currently common between the Building, Building One and/or
the Common Areas, and to do and perform such other acts and make such other
changes, additions, improvements, removal, modifications, repairs and/or
alterations in, to or with respect to the Building, the Common Areas and the
Project (including without limitation with respect to the Project Utility Rooms,
the elevated walkway connecting the Building and Building One, the patio area
located between the Building and Building One, driveways, parking areas,
walkways, and entrances to the Project) as Landlord may, in the exercise of
sound business judgment, deem to be appropriate. In connection therewith,
Landlord shall have the right to close temporarily any of the Common Areas while
engaged in making any such repairs, improvements or alterations. Notwithstanding
any other provision in this Lease to the contrary, each of Tenant and Landlord
acknowledges and agrees that Landlord’s and Tenant’s access to the Project
Utility Rooms located in the Building is critical and Landlord and Tenant shall
be granted access to such at all times to, among other purposes, maintain,
repair, and monitor the equipment and/or meters in such Project Utility Rooms
located in the Building, and neither shall deny access to the other.

 

Term, Use and Rent

 

Term. Except as otherwise provided in this Lease, the Term shall commence upon
the Term Commencement Date, and unless sooner terminated, shall end on the Term
Expiration Date. Subject to factors entirely beyond the reasonable control of
Landlord, Tenant shall have access to the Leases Premises twenty-four (24) hours
per day, seven (7) days per week, and fifty-two (52) weeks per year.     

 

 

 
 

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Use. Tenant shall use the Leased Premises solely for the Permitted Use and for
no other use or purpose.

 

Base Rent.

 

Tenant shall pay the Base Rent to Landlord in accordance with the schedule set
forth on the Basic Lease Information sheet and in the manner described below.
Tenant shall pay the Net Rent (consisting of Base Rent plus, when applicable in
accordance with Section 3.4 below, Tenant’s Proportionate Share of Basic
Operating Costs) in monthly installments on or before the first day of each
calendar month during the Term and any extensions or renewals thereof, in
advance without demand and without any reduction, abatement, counterclaim or
setoff, in lawful money of the United States at Landlord’s address specified on
the Basic Lease Information sheet or at such other address as may be designated
by Landlord in the manner provided for giving notice under Section 9.11 hereof.

 

If the Term commences on other than the first day of a month, then the Base Rent
provided for such partial month shall be prorated based upon a thirty (30)-day
month and the prorated installment shall be paid on the first day of the
calendar month next succeeding the Term Commencement Date together with the
other amounts payable on that day. If the Term terminates on other than the last
day of a calendar month, then the Net Rent provided for such partial month shall
be prorated based upon a thirty (30)-day month and the prorated installment
shall be paid on the first day of the calendar month in which the date of
termination occurs.

 

Tenant’s Proportionate Share of Basic Operating Costs.

 

Commencing on the Term Commencement Date and continuing through the remainder of
the Term, Tenant shall pay to Landlord Tenant’s Proportionate Share of Basic
Operating Costs.

 

During the first Computation Year, on or before the first day of each month
during such Computation Year, Tenant shall pay to Landlord one-twelfth (1/12th)
of Landlord’s estimate of the amount payable by Tenant under Section 3.4(a) as
set forth in Landlord’s written notice to Tenant. During the last month of each
Computation Year (or as soon thereafter as practicable), Landlord shall give
Tenant notice of Landlord’s estimate of the amount payable by Tenant under
Section 3.4(a) for the following Computation Year. On or before the first day of
each month during the following Computation Year, Tenant shall pay to Landlord
one-twelfth (1/12) of such estimated amount, provided that if Landlord fails to
give such notice in the last month of the prior year, then Tenant shall continue
to pay on the basis of the prior year’s estimate until the first day of the
calendar month next succeeding the date such notice is given by Landlord; and
from the first day of the calendar month following the date such notice is
given, Tenant’s payments shall be adjusted so that the estimated amount for that
Computation Year will be fully paid by the end of that Computation Year. If at
any time or times Landlord determines that the amount payable under Section
3.4(a) for the current Computation Year will vary from its estimate given to
Tenant, Landlord, by written notice to Tenant, may revise its estimate for such
Computation Year, and subsequent payments by Tenant for such Computation Year
shall be based upon such revised estimate.

 

 

 
 

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12.12.1.     Within one hundred twenty (120) days of the end of each Computation
Year, Landlord shall deliver to Tenant a statement of amounts payable under
Section 3.4(a) for such Computation Year. If such statement shows an amount
owing by Tenant that is less than the payments for such Computation Year
previously made by Tenant, and if no Event of Default (as defined below) is
outstanding at the time such statement is delivered, Landlord shall credit such
amount to the next payment(s) of Net Rent falling due under this Lease. If such
statement shows an amount owing by Tenant that is more than the estimated
payments for such Computation Year previously made by Tenant, Tenant shall pay
the deficiency to Landlord within fifteen (15) days after delivery of such
statement. Notwithstanding the foregoing, if subsequent to the delivery of the
statement of amounts payable under Section 3.4(a) for a Computation Year,
Landlord receives a refund or credit attributable to Basic Operating Costs
previously charged to Tenant, and if no Event of Default (as defined below) is
outstanding at such time, then Landlord shall credit Tenant’s Proportionate
Share of such amount to the next payment(s) of Net Rent falling due under this
Lease. The respective obligations of Landlord and Tenant under this Section
3.4(c) shall survive the Term Expiration Date, and, if the Term Expiration Date
is a day other than the last day of a Computation Year, the adjustment in
Tenant’s Proportionate Share of Basic Operating Costs pursuant to this Section
3.4(c) for the Computation Year in which the Term Expiration Date occurs shall
be prorated in the proportion that the number of days in such Computation Year
preceding the Term Expiration Date bears to three hundred sixty-five (365).

 

(1)     If, within ninety (90) days of Tenant's receipt of Landlord's statement,
Tenant notifies Landlord that Tenant desires to audit or review Landlord's
statement, Landlord shall cooperate with Tenant to permit such audit or review
during normal business hours. Landlord shall make available in the San Francisco
Bay Area at Landlord's, or at Landlord's election at Landlord's property
manager's, place of business, such books and records as are reasonably necessary
for Tenant to conduct and complete such audit. Tenant shall have the right to
examine and make copies of such books and records at Tenant's sole cost and
expense. Tenant shall bear all other costs and expenses associated with Tenant's
audit (including fees of Tenant's auditor or consultant), unless such audit
shall conclude that Tenant was overcharged by an amount in excess of five
percent (5%) of the amount charged to Tenant hereunder as Tenant's Proportionate
Share of Basic Operating Costs, in which event Landlord shall bear the
reasonable out-of-pocket costs of the audit up to a maximum amount of $5,000.00.

 

(2)     Within ten (10) business days of completion of the audit, if Tenant
desires to challenge Landlord's statement, then Tenant shall provide Landlord
with a copy of Tenant's audit report. Within twenty (20) days of Landlord's
receipt of Tenant's audit report, Landlord shall notify Tenant as to whether
Landlord agrees or disagrees with the conclusions reached in Tenant's audit
report. After Landlord's notice, Landlord and Tenant shall endeavor to resolve
any disagreements regarding Tenant's auditor's report. If Landlord and Tenant
are unable to resolve such disagreement regarding Tenant's audit report within
twenty (20) business days of the completion of such audit, then Landlord and
Tenant shall submit the matter to an independent audit (paid for by Tenant,
except as set forth below), conducted by an independent nationally, regionally
or locally recognized accounting firm or a nationally, regionally or locally
recognized real estate management or consulting firm that has been mutually
selected by Tenant and Landlord. If Landlord and Tenant fail to agree upon and
appoint such auditor/arbitrator, then the appointment shall be made by Judicial
Arbitration and Mediation Services (“JAMS”). The results of such independent
audit shall be conclusive and binding upon Landlord and Tenant. In the event
Tenant’s audit reveals a discrepancy in Tenant's favor, and Landlord agrees with
the conclusions of Tenant's audit, or in the event that the independent audit
determines a discrepancy in Tenant's favor, then Landlord shall credit the
amount of such discrepancy and the costs of such independent auditor/arbitrator
to the next payment(s) of Net Rent falling due under this Lease. In the event
such audit reveals a discrepancy in Landlord's favor, Tenant shall pay the
amount of the discrepancy to Landlord within ten (10) business days of
completion of the audit. Any such audit by Tenant may only be conducted by an
independent nationally, regionally or locally recognized accounting firm or a
nationally, regionally or locally recognized real estate management or
consulting firm that is not being compensated by Tenant on a contingency fee
basis.

 

 

 
 

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(3)     The failure of Tenant to notify Landlord that Tenant desires an audit
within two (2) years of Tenant's receipt of Landlord's statement under this
Section 3.4(c) shall constitute an acceptance by Tenant of Landlord's statement
and a waiver by Tenant of its right to audit for such Computation Year. If
Tenant commences an audit in accordance with this Section 3.4(c), then such
audit and the Tenant's auditor's report must be completed within ninety (90)
days of Tenant's notice to Landlord of Tenant's desire to audit. Failure of
Tenant to complete the audit within such ninety (90) day period shall constitute
an acceptance by Tenant of Landlord's statement for such Computation Year unless
such failure was caused by the failure of Landlord to make its books and records
available to Tenant as required under this Section.      

 

Landlord shall have the same remedies for a default in the payment of Tenant’s
Proportionate Share of Basic Operating Costs as for a default in the payment of
Base Rent.

 

12.12.2.     Notwithstanding anything to the contrary contained in this Lease,
(A) in no event shall Tenant’s Proportionate Share of Basic Operating Costs
include property taxes, insurance, maintenance charges, utilities, and other
charges attributable to the Excess Land after the earlier of (i) the date that
the Excess Land is separately parceled, (ii) the date that the Excess Land is
sold or title is otherwise transferred to a party other than Landlord or an
affiliate of Landlord, or (iii) the first (1st) anniversary of the Term
Commencement Date (as applicable, the “Excess Land Exclusion Date”); and (B)
Tenant’s Proportionate Share of Basic Operating Costs, including, without
limitation, property taxes, with respect to the entire Project (inclusive of the
Excess Land prior to Excess Land Exclusion Date) shall be based on the Rentable
Area of the Project occupied by Tenant (including, without limitation, the
Rentable Area of Building One occupied by Tenant under the short-term license
set forth in Section 9.31 below during the term of such license), as a
percentage of the total Rentable Area of the Project. Commencing on the Excess
Land Exclusion Date, in no event shall Tenant’s Proportionate Share of Basic
Operating Costs include any Basic Operating Costs attributable to the Excess
Land, including, but not limited to, property taxes, insurance, maintenance
charges, utilities, and other charges; and after excluding any portion of Basic
Operating Costs attributable to the Excess Land, Tenant’s Proportionate Share of
Basic Operating Costs shall be based on the Rentable Area of the Project
occupied by Tenant (including, without limitation, the Rentable Area of Building
One occupied by Tenant under the short-term license during the term of such
license), as a percentage of the total Rentable Area of the Project.

 

 

 
 

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Basic Operating Costs.

 

12.12.3.     Basic Operating Costs shall mean all expenses and costs (but not
specific costs which are separately billed to and paid by particular tenants of
the Project or are included in Additional Rent) of every kind and nature which
Landlord shall pay or become obligated to pay because of or in connection with
the management, ownership, maintenance, repair, replacement, preservation and
operation of the Leased Premises, the Building, the Project and its supporting
facilities directly servicing the Building and/or the Project (determined in
accordance with United States generally accepted accounting principles,
consistently applied) including, but not limited to, the following:

 

a.     Wages, salaries and related expenses and benefits of all on-site and
off-site employees and personnel engaged in the operation, maintenance, repair
and security of the Project, but only for that portion of their time spent
working on the Project.

 

b.     Intentionally deleted.

 

c.     All supplies, materials, equipment and equipment rental used in the
operation, maintenance, repair, replacement and preservation of the Project.

 

d.     Utilities for the Common Areas of the Project, and, if performed by
Landlord, in Landlord’s sole discretion, the separation of utilities that are
currently common between the Building, Building One and/or the Common Areas.

 

e.     All maintenance, janitorial (for the Common Areas) and service agreements
for the Project and the equipment therein, including, without limitation, window
cleaning, sidewalks, landscaping, pest control, roof maintenance, Building
exterior and service areas.

 

f.     A property management fee in an amount not to exceed the lesser of the
then-current fair market rate of property management fees for Comparable
Buildings (as defined in Section 8.1) or three and one-half percent (3.5%) of
Net Rent derived from the Project.

 

g.     Legal and accounting services for the Project, including the costs of
audits of the Project conducted by certified public accountants; provided,
however, that legal expenses shall not include the cost of lease negotiations,
termination of leases, extension of leases or legal costs incurred in
proceedings by or against any specific tenant, or for the defense of Landlord’s
legal title to the Project; and audit expenses shall not include costs
associated with audits of Basic Operating Costs conducted on behalf of Tenant
under Section 3.4(c) hereof, or by other tenants of the Project under their
leases, or on behalf of Landlord in response to such audits of Basic Operating
Costs, or by an independent auditor/arbitrator in resolving any such disputes.

 

h.     All insurance premiums and costs, including, but not limited to, the cost
of property and liability coverage and rental income and earthquake and flood
insurance applicable to the Project and Landlord’s personal property used in
connection therewith, as well as deductible amounts applicable to such
insurance; provided, however, (i) Landlord may, but shall not be obligated to,
carry earthquake or flood insurance, and (ii) Landlord agrees that the cost of
pollution insurance may not be included in Basic Operating Costs or otherwise
charged to Tenant.

 

i.     Repairs, replacements and general maintenance (except to the extent paid
by proceeds of insurance or by Tenant or other tenants of the Project or third
parties, or to the extent that the work constitutes tenant improvements for
Tenant or other tenants of the Project) for the Project, including without
limitation, the systems serving the Project (e.g., the HVAC central plant
serving the Project); provided, however, Landlord agrees that structural
replacements of portions of the Building, such as the walls and roof of the
Building, shall not be included in Basic Operating Costs or otherwise charged to
Tenant.

 

 

 
 

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j.     All real estate or personal property taxes, possessory interest taxes,
business or license taxes or fees, service payments in lieu of such taxes or
fees, annual or periodic license or use fees, excises, transit charges, housing
fund assessments, open space charges, assessments, bonds, levies, fees or
charges, general and special, ordinary and extraordinary, unforeseen as well as
foreseen, of any kind which are assessed, levied, charged, confirmed or imposed
by any public authority upon the Project (or any portion or component thereof),
its operations, this Lease, or the Rent due hereunder (or any portion or
component thereof), except: (i) inheritance or estate taxes imposed upon or
assessed against the Project, or any part thereof or interest therein, and (ii)
Landlord’s personal or corporate income, gift or franchise taxes.

 

k.     Amortized costs (together with reasonable financing charges) of capital
improvements made to the Project (that benefit the Leased Premises) subsequent
to the Term Commencement Date (i) which are designed to improve the operating
efficiency of the Project, reduce energy consumption, or attain carbon
reduction, or (ii) which may be required by governmental authorities, including
those improvements required for energy conservation or for the benefit of
individuals with disabilities (“ADA Improvements”), such amortization to be
taken in accordance with United States generally accepted accounting principles,
consistently applied.

 

12.12.4.     In the event any of the Basic Operating Costs are allocable solely
to the Building or Leased Premises, Landlord shall make a reasonable, equitable
adjustment to the relevant cost allocations to the Building or Leased Premises
and Tenant shall pay its proportionate share of such Basic Operating Costs
allocable solely to the Building and 100% of such Basic Operating Costs
allocable solely to the Leased Premises.

 

12.12.5.     Notwithstanding any other provision of this Lease to the contrary,
in the event that the Project is not fully occupied during any year of the Term,
an adjustment shall be made in computing those elements of Basic Operating Costs
which vary based on occupancy to an amount which Landlord reasonably determines
would have been incurred had the Project been 95% occupied during such year; but
in no event shall Tenant be responsible for any amount which is grossed-up in
excess of the amount that Landlord actually pays for such element of Basic
Operating Costs.

 

12.12.6.     The following items shall be excluded from Basic Operating Costs:
(i) depreciation on the Building and the Project; (ii) debt service; (iii)
rental under any ground or underlying lease; (iv) attorneys’ fees and expenses
incurred in connection with lease negotiations with prospective Project tenants
or alleged defaults with other Project tenants; (v) the cost of any improvements
or equipment which would be properly classified as capital expenditures (except
for any capital expenditures expressly included in Section 3.5(a)(9) and (11));
(vi) the cost of decorating, improving for tenant occupancy, painting or
redecorating portions of the Building or Project to be demised to tenants; (vii)
advertising expenses relating to vacant space; (viii) real estate brokers’ or
other leasing commissions; or (ix) the cost of parcelization of the buildings or
the Excess Land into separate parcels.

 

 

 
 

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Landlord’s Covenants

 

Basic Services.

 

12.12.7.     Tenant acknowledges that this Lease is a net lease, it being
understood that Landlord shall receive the Base Rent specified in the Basic
Lease Information sheet free and clear of any and all expenses, costs,
impositions, taxes, assessments, liens or charges of any nature whatsoever,
which shall be payable by Tenant unless otherwise set forth in this Lease.
Accordingly, Tenant shall be solely responsible for and promptly pay the
appropriate utility company directly for all water, gas, electricity, telephone,
and other utilities and services supplied to the Leased Premises for which there
is a separate meter or submeter to the Leased Premises (the foregoing utility
and service expenses for the Leased Premises shall be paid by Tenant separately
and shall not be part of Tenant’s Proportionate Share of Basic Operating Costs);
and Tenant shall pay Landlord for Tenant’s share, as reasonably determined by
Landlord (and documentation supporting Landlord’s determination shall be made
available to Tenant upon written request), of all utilities and services
furnished to the Leased Premises for which there is no separate meter or
submeter (e.g., the chiller plant as currently configured). Promptly after the
Term Commencement Date, Landlord shall install a private submeter in order to
determine the electrical usage of the Building. With respect to janitorial
services, Tenant shall employ its own bonded and reputable janitorial service
(and shall provide Landlord with a copy of the contract and other documentation
upon written request) to clean the Leased Premises on all business days, at
Tenant’s sole cost and expense; and with respect to refuse collection, Tenant
shall employ its own reputable refuse collection service (and shall provide
Landlord with a copy of the contract and other documentation upon written
request) to collect refuse from the Leased Premises on all business days, at
Tenant’s sole cost and expense (the foregoing janitorial expenses and refuse
collection for the Leased Premises shall be paid by Tenant separately and shall
not be part of Tenant’s Proportionate Share of Basic Operating Costs). Subject
to inclusion in Basic Operating Costs, Landlord agrees to furnish Tenant only
with the following services: (i) exterior window cleaning, (ii) parking lot
cleaning and sweeping, and (iii) the maintenance, repair, and replacement
obligations set forth in Section 4.6. Notwithstanding anything in this Lease to
the contrary, Tenant’s use of electrical service shall not exceed, either in
voltage, rated capacity, or overall load, its pro-rata share of the Building
capacity. Landlord shall not be liable for damages to either person or property,
nor shall Landlord be deemed to have evicted Tenant, nor shall there be any
abatement of Rent, nor shall Tenant be relieved from performance of any covenant
on its part to be performed under this Lease by reason of any (i) deficiency in
the provision of services; (ii) breakdown of equipment or machinery utilized in
supplying services; or (iii) curtailment or cessation of services due to causes
or circumstances beyond the reasonable control of Landlord or by the making of
the necessary repairs or improvements, unless such deficiency, breakdown,
curtailment or cessation is due to the negligence or willful misconduct of
Landlord. Landlord shall use reasonable diligence to provide services that it is
required to provide under this Lease and to make such repairs as may be required
to machinery or equipment within the Project to provide restoration of services
and, where the cessation or interruption of service has occurred due to
circumstances or conditions beyond Project boundaries, to cause the same to be
restored, by diligent application or request to the provider thereof.

 

Extra Services. Tenant shall reimburse Landlord for the cost of any extra
services requested in writing by Tenant and provided by Landlord (“Extra
Services”) as Additional Rent, together with an amount equal to five percent
(5%) of such costs to reimburse Landlord for its managerial effort. Additional
Rent shall be paid monthly by Tenant to Landlord concurrently with the payment
of Base Rent.

 

 

 
 

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Window Coverings. All window coverings for the Leased Premises shall be those
approved by Landlord. Tenant shall not place or maintain any window coverings,
blinds, curtains or drapes other than those approved by Landlord on any exterior
window without Landlord’s prior written approval, which Landlord shall not
unreasonably withhold or delay.

 

Graphics and Signage. All signs, notices, advertisements and graphics of every
kind or character, visible in or from the Common Areas or the exterior of the
Leased Premises shall be subject to the CC&R’s for the Project (if any) and
Landlord’s prior written approval, which Landlord shall not unreasonably
withhold or delay. Landlord may require Tenant to remove, or may remove at the
expense of Tenant, if Tenant fails to remove, any sign, notice, advertisement or
graphic of any kind inscribed, displayed or affixed in violation of the
foregoing requirement. Landlord shall be entitled to revise the Project graphics
and signage standards at any time. The location, design, content and size of any
signage shall be subject to Landlord’s reasonable approval as well as the
approval of the City of Fremont. Landlord shall cooperate fully with Tenant in
securing any third party consents required for the proper exercise of such
signage rights; however, the costs of design, fabrication, installation,
permitting and restoration shall be borne solely by Tenant. Notwithstanding the
foregoing provisions of this Section 4.4, Tenant may in its discretion retain
the existing signage on Building Two or replace such signage with the signage
currently installed on Building One (subject to Tenant obtaining governmental
approval). Tenant shall remove all of its signs, including without limitation,
Tenant’s currently existing exterior Building signage, and repair any damage
caused by the installation or removal of such signage (and Tenant shall restore
the installation area to the condition existing prior to installation of such
signage, normal wear and tear excepted) at the expiration or earlier termination
of this Lease. Installation, fabrication, maintenance and removal of Tenant’s
signs shall be at Tenant’s sole cost and expense. There are currently two (2)
existing sign monuments for the Project, the first sign monument is located in
front of Building One and such monument contains the Exar “X” logo (the
“Building One Sign Monument”), and the second sign monument is located in front
of Building Two and such monument contains the Exar name (the “Building Two Sign
Monument”). Landlord reserves the right to remove, alter, or replace the
Building One Sign Monument for Building One tenant identification, multi-tenant
identification, and/or Project identification. With respect to the Building Two
Sign Monument, Landlord reserves the right to alter or replace such sign
monument for Building Two tenant identification, multi-tenant identification,
and/or Project identification; provided, however, that Landlord agrees that if
the Building Two Sign Monument is altered or replaced, Tenant shall be provided
the primary position on such monument, but Landlord may place Project
identification above Tenant’s name. Tenant may relocate the current Building One
Sign Monument (containing the Exar “X” logo) to a location on Milmont Drive or
Kato Road, subject to Landlord’s prior written consent, which shall not be
unreasonably withheld or delayed; provided, however, Tenant may only utilize
such relocated monument to the extent it does not limit Landlord’s ability to
have one sign monument for each building (including any new building constructed
on the Excess Land, if applicable).   

 

Intentionally deleted.

 

 

 
 

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Repair Obligation. Landlord’s obligation under this Lease with respect to
maintenance, repair, and replacement shall be limited to (i) the structural
portions of the Building, including the foundation; (ii) the exterior walls of
the Building (including exterior glass and glazing); (iii) the roof; (iv) the
Common Areas (including the Excess Land prior to Excess Land Exclusion Date);
(v) the Project parking area; (vi) landscaped areas, if any, and (vii)
mechanical, electrical, plumbing and life safety systems serving the Project
(including, without limitation, the HVAC central plant serving the Project),
other than such systems exclusively serving the Leased Premises (including,
without limitation, the HVAC equipment exclusively serving the Leased Premises).
If Landlord fails or refuses to perform in a timely manner maintenance, repair,
and replacement that it is required to perform under this Lease after Landlord’s
receipt of Tenant’s written notice to undertake the same (except in the case of
emergency, timely manner meaning that Landlord shall commence the maintenance,
repair, or replacement not later than thirty (30) days after receipt of such
notice and thereafter shall diligently attempt to complete the maintenance,
repair, or replacement), then Tenant shall have the right, but not the
obligation, to undertake such work upon giving an additional three (3) business
days’ written notice to Landlord specifying that Tenant will undertake such work
if Landlord has not commenced the maintenance, repair, or replacement within
such additional three (3)-business day period. However, Landlord shall not have
any obligation to repair damage caused by the negligence or willful misconduct
of Tenant, its agents, employees, contractors, invitees or licensees. Landlord
shall have the right, but not the obligation, to undertake repair work which
Tenant is required to perform under this Lease and which Tenant fails or refuses
to perform in a timely and efficient manner after Tenant’s receipt of Landlord’s
written notice to undertake such repairs (except in the case of emergency,
timely manner meaning that Tenant shall commence the maintenance, repair, or
replacement not later than thirty (30) days after receipt of such notice and
thereafter shall diligently attempt to complete the maintenance, repair, or
replacement). Tenant shall reimburse Landlord upon demand, as Additional Rent,
for all costs incurred by Landlord in performing any such repair for the account
of Tenant, together with an amount equal to five percent (5%) of such costs to
reimburse Landlord for its administration and managerial effort. Except as
specifically set forth in this Lease, Landlord shall have no obligation
whatsoever to maintain or repair the Leased Premises or the Project. The parties
intend that the terms of this Lease govern their respective maintenance and
repair obligations. Tenant expressly waives the benefit of any statute now or
hereafter in effect to the extent it is inconsistent with the terms of this
Lease with respect to such obligations or which affords Tenant the right to make
repairs at the expense of Landlord or terminate this Lease by reason of the
condition of the Leased Premises or any needed repairs. All costs of Landlord in
performing the work described in this Section shall be included in Basic
Operating Costs (except for those costs that are included in Additional Rent
under the terms of this Lease).

 

Quiet Enjoyment. Landlord covenants with Tenant that upon Tenant paying the Rent
and all other charges required under this Lease and performing all of Tenant’s
covenants and agreements herein contained, Tenant shall have peaceful and quiet
enjoyment of the Leased Premises against any person claiming by, through or
under Landlord.

 

Nonresidential Building Energy Use Disclosure Program (AB 1103/AB 531). As the
prior owner of the Project, Tenant has the energy data for the Building and
Building One for the prior year. If necessary, Tenant shall reasonably cooperate
with and assist Landlord to comply with the provisions of the Nonresidential
Building Energy Use Disclosure Program, also known as AB 1103.

 

 

 
 

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Accessibility Inspection Disclosure. Pursuant to California Civil Code Section
1938, Landlord hereby advises Tenant that the Leased Premises has not been
inspected by a Certified Access Specialist.

 

Tenant’s Covenants

 

Payments by Tenant. Tenant shall pay Rent at the times and in the manner
provided in this Lease. All obligations of Tenant hereunder to make payments to
Landlord shall constitute Rent and failure to pay the same when due shall give
rise to the rights and remedies provided for in Section 7.8. If Tenant consists
of more than one person or entity, the obligations imposed under this Lease upon
all such persons or entities shall be joint and several.

 

Tenant Improvements. The Tenant Improvements, if any, shall be installed and
constructed pursuant to Exhibit B.

 

Taxes on Personal Property. In addition to, and wholly apart from its obligation
to pay Tenant’s Proportionate Share of Basic Operating Costs, Tenant shall be
responsible for, and shall pay prior to delinquency, all taxes or governmental
service fees, possessory interest taxes, fees or charges in lieu of any such
taxes, capital levies, and any other charges imposed upon, levied with respect
to, or assessed against Tenant’s personal property, and on its interest pursuant
to this Lease. To the extent that any such taxes are not separately assessed or
billed to Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord.

 

Repairs by Tenant.

 

12.12.8.     Tenant shall be obligated to maintain and repair, at Tenant’s sole
cost and expense, the Leased Premises (including all restrooms, mechanical,
electrical, plumbing and life safety systems serving the Leased Premises and
Tenant’s personal property, trade fixtures and any improvements or alterations
installed by or on behalf of Tenant), to keep the same at all times in good
order, condition and repair, and, upon expiration of the Term, to surrender the
same to Landlord in good order, condition and repair, normal wear and tear
excepted. Tenant’s obligations shall include, without limitation, the obligation
to maintain and repair all walls, floors, ceilings and fixtures and to repair
all damage caused by the negligence or willful misconduct of Tenant, its agents,
employees, contractors, invitees and others using the Leased Premises with
Tenant’s expressed or implied permission. At the request of Tenant, but without
obligation to do so, Landlord may perform the work of maintenance and repair
constituting Tenant’s obligation under this Section 5.4 at Tenant’s sole cost
and expense and as an Extra Service to be rendered pursuant to Section 4.2. Any
work of repair and maintenance in excess of $10,000.00 performed by or for the
account of Tenant by persons other than Landlord or employees of Tenant shall be
performed by contractors approved by Landlord (which approval shall not be
unreasonably withheld or delayed) and in accordance with procedures Landlord
shall from time to time reasonably establish. Tenant shall give Landlord prompt
notice of any material damage to or defective condition in any part of the
mechanical, electrical, plumbing, life safety or other system servicing or
located in the Leased Premises.

 

12.12.9.     Notwithstanding anything in this Lease to the contrary, Tenant
shall enter into and continue in force throughout the term of this Lease a
regularly scheduled (at least once every three (3) months) preventive
maintenance/service contract, with a maintenance contractor approved by Landlord
(such approval not to be unreasonably withheld or delayed), for servicing all
HVAC equipment exclusively serving the Leased Premises, and shall promptly
provide a copy of the contract to Landlord, unless Tenant has its employees
perform this regularly scheduled maintenance service. The service contract or
Tenant’s employees’ service schedule (which Tenant shall provide to Landlord)
must include, at a minimum, all services suggested by the equipment
manufacturer. If Tenant’s employees are not performing this maintenance service,
then at Landlord’s option, Landlord shall have the right to enter into such
maintenance contract (provided that any such maintenance contract that Tenant
may have entered has terminated or may be terminated by Tenant at no cost to
Tenant or unless Landlord agrees to reimburse Tenant for such cost), and Tenant
shall pay Landlord, as Basic Operating Costs hereunder, the cost thereof. Tenant
shall be responsible for any repair or replacement of such HVAC equipment
exclusively serving the Leased Premises.

 

 

 
 

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Waste. Tenant shall not commit or allow any waste or damage to be committed in
any portion of the Leased Premises or the Project.

 

Assignment or Sublease.

 

Tenant shall not voluntarily or by operation of law assign, transfer or encumber
or sublet all or any part of Tenant’s interest in this Lease or in the Leased
Premises (collectively, an “Assignment or Sublease”) without Landlord’s prior
written consent given under and subject to the terms of this Section 5.6.
Notwithstanding the foregoing, Tenant may, without Landlord’s prior written
consent, but with at least ten (10) days prior written notice to Landlord if
permitted under applicable laws, assign or otherwise transfer this Lease or
enter into a sublease of all or any portion of the Leased Premises to a “Related
Entity”, and such assignment, transfer or subleasing shall not constitute an
“Assignment or Sublease” under the terms of this Lease, and the terms of this
Section 5.6 shall not apply with respect thereto. The term “Related Entity”
means: a corporation or other entity with which Tenant merges with or
consolidates into or that acquires all or substantially all of the assets or
stock of Tenant; or any parent, affiliate or subsidiary of Tenant; or an
affiliate or subsidiary of Tenant’s parent.   

 

If Tenant desires to assign this Lease or any interest herein or sublet the
Leased Premises or any part thereof, Tenant shall give Landlord a request for
consent to such transaction in writing. Tenant’s written request for consent
shall specify the date the proposed Assignment or Sublease would be effective
and be accompanied by information pertinent to Landlord’s determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee or subtenant, including, without limitation, its name, business and
financial condition, financial details of the proposed transfer, the intended
use (including any modification) of the Leased Premises, and exact copies of all
of the proposed agreement(s) between Tenant and the proposed assignee or
subtenant. Tenant shall promptly provide Landlord with (i) such other or
additional information or documents reasonably requested (within ten (10) days
after receiving Tenant’s consent request) by Landlord, and (ii) an opportunity
to meet and interview the proposed assignee or subtenant, if requested by
Landlord.

 

Landlord shall have a period of ten (10) days following such interview and/or
receipt of all such additional information (or twenty (20) days from the date of
Tenant’s original notice if Landlord does not request additional information or
an interview) within which to notify Tenant in writing that Landlord elects
either (i) to terminate this Lease as to the space so affected as of the
effective date of the proposed Assignment or Sublease specified by Tenant, in
which event Tenant will be relieved of all further obligations hereunder as to
such space as of such date, other than those obligations which survive
termination of the Lease, or (ii) to permit Tenant to assign this Lease or
sublet such space, subject, however, to prior written approval of the proposed
assignee or sublessee by Landlord, such consent not to be unreasonably withheld
or delayed so long as the use of the Leased Premises by such proposed assignee
or sublessee would be a Permitted Use, the proposed assignee or sublessee is of
sound financial condition as determined by Landlord in its reasonable
discretion, the proposed assignee or sublessee executes such reasonable
assumption documentation as Landlord shall require, and the proposed assignee or
sublessee is not (x) already a tenant in the Project, or (y) a party with whom
Landlord has been discussing the leasing of space in the Project. Failure by
Landlord to approve a proposed subtenant or assignee shall not cause a
termination of this Lease.

 

 

 
 

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In the event Tenant shall request the consent of Landlord to any Assignment or
Sublease hereunder, Tenant shall reimburse Landlord for all of Landlord’s
reasonable out-of-pocket costs and expenses, including attorneys’ fees, incurred
in connection therewith.

 

12.12.10.     Any rent or other consideration realized by Tenant under any such
Assignment or Sublease (except for an Assignment or Sublease pursuant to Section
5.6(j) below) in excess of (i) the Rent payable hereunder, (ii) any reasonable
tenant improvement allowance or other economic concession (e.g., space planning
allowance, moving expenses, free or reduced rent periods, etc.), and (iii) any
advertising costs and brokerage commissions associated with such Assignment or
Sublease (collectively, “Profit”), shall be divided and paid as follows: fifty
percent (50%) to Tenant and fifty percent (50%) to Landlord; provided, however,
that if there exists an Event of Default hereunder (after expiration of any
applicable notice and cure periods), Landlord shall be entitled to all such
Profit that accrues during the continuance of such Event of Default.

 

Intentionally deleted.

 

The consent of Landlord to any Assignment or Sublease shall not constitute
consent to any subsequent Assignment or Sublease by Tenant or to any subsequent
or successive Assignment or Sublease by the assignee or subtenant.

 

12.12.11.     No Assignment or Sublease by Tenant shall relieve Tenant of any
obligation under this Lease. If there is an Event of Default by an assignee or
subtenant of Tenant or any successor of Tenant in the performance of any of the
terms hereof, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against such assignee, subtenant or successor. Any
Assignment or Sublease made without Landlord’s consent or which conflicts with
the provisions hereof shall be void and, at Landlord’s option, shall constitute
an Event of Default under this Lease (after expiration of any applicable notice
and cure periods).

 

12.12.12.     Notwithstanding any other provision in this Lease to the contrary,
in order to induce Landlord to enter into this Lease with Tenant, except as set
forth in Section 5.6(j) below, Tenant agrees not to sublet any part of the
Leased Premises until the earlier of (i) the second (2nd) anniversary of the
Term Commencement Date, or (ii) the date that at least seventy-five percent
(75%) of Building One is leased and occupied; provided that Landlord is
continuously marketing the unoccupied portion of Building One during such
period.

 

 

 
 

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12.12.13.     Strategic Partners. Notwithstanding anything to the contrary in
this Section 5.6, Landlord acknowledges that Tenant may allow certain strategic
partners of Tenant to sublease a portion of the Leased Premises (not to exceed
2,000 rentable square feet in each instance and not to exceed 6,000 rentable
square feet collectively) consistent with the Permitted Uses. Landlord agrees
that, notwithstanding any other provision of this Lease to the contrary, the
strategic partner shall be permitted to use and occupy the Leased Premises in
accordance with, and subject to the applicable terms and conditions of, this
Lease with no further consent of Landlord required; provided, however, Tenant
shall promptly provide Landlord in writing with the name of any such strategic
partner, a copy of the sublease, and/or the terms and conditions of the
strategic partner’s use and occupancy of the Leased Premises.

 

Alterations, Additions and Improvements.

 

Except as provided otherwise in Exhibit B for Tenant Improvements, Tenant shall
not make or allow to be made any alterations or additions in or to the Leased
Premises without first obtaining the written consent of Landlord, provided that
Tenant shall be permitted, without Landlord’s consent, to make non-structural
alterations or additions to the Leased Premises that do not adversely affect any
of the Building systems, cost less than $50,000.00 (in the aggregate per
calendar year), and are of a cosmetic nature (e.g., painting, carpeting, etc.;
any such alteration complying with all of the foregoing constituting a “Cosmetic
Alteration”). Landlord’s consent will not be unreasonably withheld or delayed
with respect to proposed alterations and additions which (i) comply with all
applicable laws, ordinances, rules and regulations; (ii) are compatible with and
does not adversely affect the Building and its mechanical, telecommunication,
electrical, HVAC and life safety systems; (iii) will not affect the structural
or exterior portions of the Building; (iv) will not interfere with the use and
occupancy of any other portion of the Building by any other tenant, its
employees or invitees; and (v) will not trigger any additional costs to
Landlord. Specifically, but without limiting the generality of the foregoing,
Landlord’s right of consent shall encompass plans and specifications for the
proposed alterations or additions, construction means and methods, the identity
of any contractor or subcontractor to be employed on the work of alterations or
additions, and the time for performance of such work. Tenant shall supply to
Landlord any additional documents and information reasonably requested by
Landlord in connection with Tenant’s request for consent hereunder.

 

Any consent given by Landlord under this Section 5.7 shall be deemed conditioned
upon: (i) Tenant’s acquiring all applicable permits required by governmental
authorities; (ii) Tenant’s furnishing to Landlord copies of such permits,
together with copies of the approved plans and specifications, prior to
commencement of the work thereon; and (iii) the compliance by Tenant with the
conditions of all applicable permits and approvals in a prompt and expeditious
manner.

 

12.12.14.     Tenant shall provide Landlord with not less than fifteen (15) days
prior written notice of commencement of the work (including a Cosmetic
Alteration) so as to enable Landlord to post and record appropriate notices of
non-responsibility. All alterations and additions permitted hereunder shall be
made and performed by Tenant without cost or expense to Landlord and, in all
material respects, in accordance with plans and specifications approved by
Landlord. Tenant shall pay the contractors and suppliers all undisputed amounts
due to them when due. Tenant shall discharge at Tenant’s sole cost, by bond or
otherwise, any and all mechanics’, materialmen’s and other liens and claims
against the Leased Premises or the Project arising out of any work performed,
materials furnished or obligations incurred by or for Tenant (whether the
amounts are disputed or not) within ten (10) days after Landlord’s written
notice to Tenant of the filing thereof (provided that Landlord shall allow
Tenant to contest a lien claim, so long as the lien is discharged by bond or
otherwise), and shall otherwise keep the Leased Premises and the Project free
from any liens arising out of work performed, materials furnished or obligations
incurred by Tenant. If Tenant fails to discharge the lien, then, in addition to
any other right or remedy of Landlord, Landlord may bond or insure over the lien
or otherwise discharge the lien, after giving seven (7) days’ written notice to
Tenant specifying that Landlord will bond or insure over the lien if Tenant
fails to commence action to discharge the lien within such seven (7) day period
and diligently pursues the discharge of such lien. Tenant shall reimburse
Landlord for any amount paid by Landlord to bond or insure over the lien or
discharge the lien, including, without limitation, reasonable attorneys’ fees,
within ten (10) days after receipt of an invoice from Landlord. Landlord may
require, at its sole option, that Tenant provide to Landlord, at Tenant’s
expense, a lien and completion bond in an amount equal to the total estimated
cost of any alterations, additions or improvements to be made in or to the
Leased Premises for any work that exceeds $10,000.00, to protect Landlord
against any liability for mechanics’, materialmen’s and other liens and claims,
and to ensure timely completion of the work. Landlord shall not charge Tenant a
supervisory fee for any alterations and additions performed by Tenant; however,
if Tenant requests that Landlord perform any alterations or additions desired by
Tenant on behalf of Tenant, and such alterations or additions to the Leased
Premises are performed by Landlord, Landlord shall be entitled to charge Tenant
a five percent (5%) administration fee in addition to the actual costs of labor
and materials provided. Such costs and fees shall be deemed Additional Rent
under this Lease, and may be charged and payable prior to commencement of the
work.

 

 

 
 

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12.12.15.     Any and all alterations, additions or improvements made to the
Leased Premises by Tenant after the Term Commencement Date (excluding the Tenant
Improvements) shall become the property of Landlord upon installation and shall
be surrendered to Landlord without compensation to Tenant upon the termination
of this Lease by lapse of time or otherwise unless (i) Landlord conditioned its
approval of such alterations, additions or improvements on Tenant’s agreement to
remove them, or (ii) if Tenant did not provide a Removal Determination Request
(as defined below), Landlord notifies Tenant prior to (or promptly after) the
Term Expiration Date that the alterations, additions and/or improvements must be
removed, in which case Tenant shall, by the Term Expiration Date, remove such
alterations, additions and improvements, repair any damage resulting from such
removal and restore the Leased Premises to their condition existing prior to the
date of installation of such alterations, additions and improvements, ordinary
wear and tear excepted. Prior to making any alterations, additions or
improvements to the Leased Premises, Tenant may make a written request that
Landlord determine in advance whether or not Tenant must remove such
alterations, additions or improvements on or prior to the Term Expiration Date
or any earlier termination of this Lease (“Removal Determination Request”).
Notwithstanding anything to the contrary set forth above, this clause shall not
apply to movable equipment or furniture owned by Tenant. Tenant shall repair at
its sole cost and expense all damage caused to the Leased Premises and the
Project by removal of Tenant’s movable equipment or furniture and such other
alterations, additions and improvements as Tenant shall be required or allowed
by Landlord to remove from the Leased Premises, reasonable wear and tear
excepted.

 

All alterations, additions and improvements permitted under this Section 5.7
shall be constructed diligently, in a good and workmanlike manner with new, good
and sufficient materials and in compliance with all applicable laws, ordinances,
rules and regulations (including, without limitation, building codes and those
related to accessibility and use by individuals with disabilities). Tenant
shall, promptly upon completion of the work, furnish Landlord with “as built”
drawings for any alterations, additions or improvements performed under this
Section 5.7.

 

 

 
 

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(f)     Tenant shall have the right to install a wireless intranet, internet,
and communications network (also known as “Wi-Fi”) within the Leased Premises
for the use of Tenant and its employees (the “Network”) subject to this
subsection and all the other clauses of this Lease as are applicable. Tenant
shall not solicit, suffer, or permit other tenants or occupants of the Building
to use the Network or any other communications service, including, without
limitation, any wired or wireless internet service that passes through, is
transmitted through, or emanates from the Leased Premises. Tenant agrees that
Tenant’s communications equipment and the communications equipment of Tenant’s
service providers located in or about the Leased Premises, including, without
limitation, any antennas, switches, or other equipment (collectively, “Tenant’s
Communications Equipment”) shall be of a type and, if applicable, a frequency
that will not cause radio frequency, electromagnetic, or other interference to
any other party or any equipment of any other party including, without
limitation, Landlord, other tenants, or occupants of the Building or any other
party. In the event that Tenant’s Communications Equipment causes or is believed
to cause any such interference, upon receipt of notice from Landlord of such
interference, Tenant will promptly take all commercially reasonable steps, at
Tenant’s sole cost and expense, to correct and eliminate the interference.

 

Compliance With Laws and Insurance Standards. Tenant shall not occupy or use, or
permit any portion of the Leased Premises to be occupied or used in a manner
that violates any applicable law, ordinance, rule, regulation, order, permit,
covenant, easement or restriction of record, or the reasonable recommendations
of Landlord’s engineers or consultants, relating in any manner to the Project,
or for any business or purpose which is unlawful or productive of fire hazard.
Tenant shall not do or permit anything to be done which would result in the
cancellation of the property insurance coverage on the Project and/or its
contents. Tenant shall, at Tenant’s sole cost and expense, comply with all laws,
ordinances, rules, regulations and orders (state, federal, municipal or
promulgated by other agencies or bodies having or claiming jurisdiction) related
to the use, condition or occupancy of the Leased Premises now in effect or which
may hereafter come into effect including, but not limited to, (a) accessibility
and use by individuals with disabilities, and (b) environmental conditions in,
on or about the Leased Premises. If anything done by Tenant in its use or
occupancy of the Leased Premises shall create, require or cause imposition of
any requirement by any public authority for structural or other upgrading of or
alteration or improvement to the Leased Premises and/or the Project, Tenant
shall, at Landlord’s option, either perform the upgrade, alteration or
improvement at Tenant’s sole cost and expense or reimburse Landlord upon demand,
as Additional Rent, for the cost to Landlord of performing such work. The final,
non-appealable judgment of any court of competent jurisdiction that Tenant has
violated any law, ordinance, rule, regulation, order, permit, covenant, easement
or restriction shall be conclusive of that fact as between Landlord and Tenant.

 

No Nuisance; No Overloading. Tenant shall use and occupy the Leased Premises,
and control its agents, employees, contractors, invitees and visitors in such
manner so as not to create any nuisance, or interfere with, annoy or disturb
(whether by noise, odor, vibration or otherwise) any other tenant or occupant of
the Project or Landlord in its operation of the Project. Tenant shall not place
or permit to be placed any loads upon the floors, walls or ceilings in excess of
the maximum designed load specified by Landlord or which might damage the Leased
Premises, the Building, or any portion thereof.

 

 

 
 

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Furnishing of Financial Statements; Tenant’s Representations. During any period
of time that the shares of Tenant’s stock are not listed or traded on a national
or international securities exchange, Tenant shall furnish to Landlord (within
ten (10) business days upon Landlord’s written request) no more than annually
(unless requested by Landlord because of a bona fide financing or sale of the
Building or a bona fide request by Landlord’s financial partners or lender, in
which case Tenant shall be required to furnish more than one time annually),
Tenant’s most recent audited financial statements (including any notes to them)
or, if no such audited statements have been prepared, such other financial
statements (and notes to them) as may have been most recently prepared by an
independent certified public accountant or, if no such statements have been
prepared, current internally prepared financial statements in form customarily
prepared by Tenant for its internal purposes, certified by Tenant’s authorized
officer or representative. If Tenant is publicly traded, Tenant shall not be
required to provide financial information directly to Landlord.

 

Entry by Landlord. Except as otherwise specifically provided for herein,
Landlord, its employees, agents and consultants, shall have the right to enter
the Leased Premises at any time in cases of an emergency, and otherwise during
normal business hours after reasonable advance notice to Tenant of at least 24
hours (which notice may be telephonic, via email, or in person, and shall be
confirmed in writing [which may be via email] if made orally) to inspect the
same, to clean, to perform such work as may be permitted or required under this
Lease, to make repairs to or alterations of the Leased Premises or other
portions of the Project or other tenant spaces therein, to deal with
emergencies, to post such notices as may be permitted or required by law to
prevent the perfection of liens against Landlord’s interest in the Project or to
show the Leased Premises to prospective tenants, purchasers, encumbrancers or
others, or for any other purpose as Landlord may deem reasonably necessary or
desirable. Tenant shall not be entitled to any abatement of Rent or damages by
reason of the exercise of any such right of entry or performance of any such
work by Landlord.

 

Nondisturbance and Attornment. This Lease and the rights of Tenant hereunder
shall be subject and subordinate to the lien of any deed of trust, mortgage,
ground lease or other hypothecation or security instrument (collectively,
“Security Device”) now or hereafter placed upon, affecting or encumbering the
Project or any part thereof or interest therein, and to any and all advances
made thereunder, interest thereon or costs incurred and any modifications,
renewals, supplements, consolidations, replacements and extensions thereof. The
holder of a Security Device in the Project or the beneficiary thereunder shall
have the right to elect to be subject and subordinate to this Lease. Tenant
agrees to attorn to and recognize as the Landlord under this Lease the holder or
beneficiary under a Security Device or any other party that acquires ownership
of the Leased Premises by reason of a foreclosure or sale under any Security
Device (or deed in lieu thereof); provided that Tenant's right to quiet
enjoyment of the Leased Premises shall not be disturbed by the holder of any
such Security Device. Tenant covenants and agrees to execute (and acknowledge if
required by Landlord, any lender or ground lessor) and deliver, within ten (10)
business days of a written demand or request by Landlord and in the form
reasonably requested by Landlord, ground lessor, mortgagee or beneficiary, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground leases or underlying leases or the lien of any such
mortgage or deed of trust; provided, however, that such subordination is
conditioned on Landlord’s obtaining assurance in a commercially reasonable form
(a “Non-Disturbance Agreement”) from the holder of or beneficiary under such
encumbrance that Tenant's quiet enjoyment of the Leased Premises will not be
disturbed, and Tenant’s rights under this Lease will be recognized, so long as
there is not in existence at such time an Event of Default under this Lease
(after expiration of any applicable notice and cure periods) and Tenant attorns
to the record owner of the Leased Premises.

 

 

 
 

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Estoppel Certificate. Within ten (10) business days following Landlord's
request, Tenant shall execute, acknowledge and deliver written estoppel
certificates addressed to (i) any mortgagee or prospective mortgagee of
Landlord, or (ii) any purchaser or prospective purchaser of all or any portion
of, or interest in, the Project, on a form specified by Landlord, certifying as
to such facts (if true) and agreeing to such notice provisions and other matters
as such mortgagee(s) or purchaser(s) may reasonably require, including, without
limitation, the following: (a) that this Lease is unmodified and in full force
and effect (or in full force and effect as modified, and stating the
modifications); (b) the amount of, and date to which Rent and other charges have
been paid in advance; (c) the amount of any Security Deposit; and
(d) acknowledging that Landlord is not in default under this Lease (or, if
Landlord is claimed to be in default, stating the nature of the alleged
default). Any such estoppel certificate may be relied upon by any such mortgagee
or purchaser.

 

Security Deposit.

 

12.12.16.     Concurrently with the execution hereof, Tenant shall pay to
Landlord the agreed upon Security Deposit as security for the full and faithful
performance of Tenant’s obligations under this Lease. If at any time during the
Term, Tenant shall be in default in the payment of Rent or in default for any
other reason (after expiration of any applicable notice and cure periods),
Landlord may use, apply or retain all or part of the Security Deposit for
payment of any amount due Landlord or to cure such default or to reimburse or
compensate Landlord for any liability, loss, cost, expense or damage (including
reasonable attorneys’ fees) which Landlord may suffer or incur by reason of
Tenant’s defaults. If Landlord uses or applies all or any part of the Security
Deposit, Tenant shall, on demand, pay to Landlord a sum sufficient to restore
the Security Deposit to the full amount required by this Lease. Upon expiration
of the Term or earlier termination of this Lease and after Tenant has vacated
the Leased Premises, Landlord shall return the Security Deposit to Tenant,
reduced by such amounts as may be reasonably required by Landlord to remedy
defaults on the part of Tenant in the payment of Rent, to repair damages to the
Leased Premises caused by Tenant and to clean the Leased Premises. The portion
of the deposit not so required shall be paid over to Tenant (or, at Landlord’s
option, to the last assignee of Tenant’s interest in this Lease) within thirty
(30) days after expiration of the Term or earlier termination hereof. Landlord
shall hold the Security Deposit for the foregoing purposes; provided, however,
that Landlord shall have no obligation to segregate the Security Deposit from
its general funds or to pay interest in respect thereof. No part of the Security
Deposit shall be considered to be held in trust, or to be prepayment of any
monies to be paid by Tenant under this Lease. Tenant hereby waives (i) the
protections of Section 1950.7 of the California Civil Code, as it may hereafter
be amended and any and all other laws, rules and regulations applicable to
security deposits in the commercial context (“Security Deposit Laws”), and (ii)
any and all rights, duties and obligations either party may now or, in the
future, will have relating to or arising from the Security Deposit Laws. 

 

12.12.17.     Instead of a cash deposit, Landlord may require at any time during
the Term, that Tenant deliver the Security Deposit to Landlord in the form of a
clean and irrevocable letter of credit (the “Letter of Credit”) issued by and
drawable upon (said issuer being referred to as the “Issuing Bank”) a financial
institution which is reasonably approved by Landlord, provided that Landlord
shall not withhold its consent to an Issuing Bank that has a net worth of at
least $3,500,000,000, and provided further that if Landlord requires Tenant to
provide the Security Deposit in the form of a Letter of Credit instead of cash,
Landlord agrees to reimburse Tenant for the reasonable out-of-pocket costs
incurred by Tenant to provide the Security Deposit in the form of a Letter of
Credit. Such Letter of Credit shall (a) name Landlord as beneficiary, (b) be in
the amount of the Security Deposit, (c) have a term of not less than one year,
(d) permit multiple drawings, (e) be fully transferable by Landlord, and (f)
otherwise be in form and content reasonably satisfactory to Landlord. If upon
any transfer of the Letter of Credit, any fees or charges shall be so imposed,
then such fees or charges shall be payable solely by Tenant and the Letter of
Credit shall so specify and if the Issuing Bank will not agree to the transfer
(or if it imposes unreasonable requirements for the transfer), Tenant shall
promptly replace such Letter of Credit. The Letter of Credit shall provide that
it shall be deemed automatically renewed, without amendment, for consecutive
periods of one year each thereafter during the Term unless the Issuing Bank
sends a notice (the “Non-Renewal Notice”) to Landlord by certified mail, return
receipt requested, not less than 30 days preceding the next expiration date of
the Letter of Credit stating that the Issuing Bank has elected not to renew the
Letter of Credit. Landlord shall have the right, upon receipt of the Non-Renewal
Notice, to draw the full amount of the Letter of Credit, by sight draft on the
Issuing Bank, and shall thereafter hold or apply the cash proceeds of the Letter
of Credit pursuant to the terms of this Section. Except as set forth in the
preceding sentence, Landlord shall only draw upon the Letter of Credit following
Tenant’s default (after expiration of any applicable notice and cure periods)
and only to the extent required to cure such default. The Issuing Bank shall
agree with all drawers, endorsers and bona fide holders that drafts drawn under
and in compliance with the terms of the Letter of Credit will be duly honored
upon presentation to the Issuing Bank at an office location in the San Francisco
Bay Area. The Letter of Credit shall be subject in all respects to the Uniform
Customs and Practice for Documentary Credits (1993 revision, or an updated
revision in Landlord’s reasonable discretion), International Chamber of Commerce
Publication No. 500. Notwithstanding the foregoing, Wells Fargo Bank, NA is
hereby approved as an Issuing Bank.

 

 

 
 

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12.12.18.     Notwithstanding anything in this Section 5.14 to the contrary, on
the last day of the sixtieth (60th) full calendar month after the Term
Commencement Date, the amount of the Security Deposit shall be reduced by
$244,703.10, such that the agreed upon Security Deposit shall be $244,703.10;
provided, however, if any monetary default beyond applicable notice and cure
periods exists or if any material non-monetary default beyond applicable notice
and cure periods exists under this Lease on the date the amount of the Security
Deposit would have been reduced, then such reduction shall not occur until the
default has been cured by Tenant. If the Security Deposit is in the form of a
Letter of Credit, Landlord and Tenant shall reasonably cooperate with each other
to effectuate such reduction.

 

Surrender.

 

12.12.19.     Subject to the provisions of Section 5.7 hereof, on the Term
Expiration Date (or earlier termination of this Lease), Tenant shall quit and
surrender possession of the Leased Premises to Landlord in as good order and
condition as they were in on the Term Commencement Date, reasonable wear and
tear, casualty damage, taking by condemnation and damage by casualty not caused
by Tenant, its agents, employees, contractors, invitees and licensees excepted.
Good order and condition includes, without limitation, replacing all light bulbs
and ballasts and replacing all broken floor tiles with substantially matching
floor tiles (but Tenant shall have no obligation to replace the floors), and
ensuring proper plumbing and HVAC operation with no deferred maintenance.
Reasonable wear and tear shall not include any damage or deterioration that
would have been prevented by Tenant performing all of its obligations under this
Lease. Tenant shall, without cost to Landlord, remove all of its signage (in the
Leased Premises, on the Building, or elsewhere in the Project), debris, articles
of personal property, and furniture, trade fixtures, specialized improvements
(but only those installed after the Term Commencement Date), and equipment
(including, if applicable, any related ducting, wiring and plumbing to a logical
point of safe-off such as a column or ceiling or in-floor location, at a circuit
panel, junction box or branch line), and shall repair any damage resulting from
such removal and Tenant shall restore the area to the condition existing prior
to installation of such item, normal wear and tear excepted. Notwithstanding
anything to the contrary in this Lease, Tenant shall have no obligation to
remove those specialized improvements existing in or serving the Leased Premises
as of the Term Commencement Date, including, without limitation, nitrogen lines,
acid waste neutralization improvements (including any related trenching),
deionized water systems, chilled water systems, and clean dry air (CDA) systems,
but Tenant shall obtain any required closure permits for such specialized
improvements on or before the Term Expiration Date (or earlier termination of
this Lease) and Tenant, at its cost, shall remove any item or improvement and
take any action required to obtain the closure permits. Tenant shall not remove
chilled water lines or compressed air lines feeding t-stats or VAVs. Not less
than thirty (30) days prior to the expiration or sooner termination of this
Lease, Tenant shall prepare and provide to Landlord for Landlord’s approval a
written plan and schedule of proposed surrender work including details
reasonably sufficient to conform with the requirements herein. Any such property
not removed by Tenant by the Term Expiration Date (or earlier termination of
this Lease) shall be considered abandoned, and Landlord may remove any or all of
such items and dispose of same in any lawful manner or store same in a public
warehouse or elsewhere for the account and at the expense and risk of Tenant. If
Tenant shall fail to pay the cost of storing any such property after storage for
thirty (30) days or more following Landlord’s written notice for payment,
Landlord may sell any or all of such property at public or private sale, in such
manner and at such times and places as Landlord may deem proper, without notice
to or demand upon Tenant. Landlord shall apply the proceeds of any such sale as
follows: first, to the costs of such sale; second, to the costs of storing any
such property; third, to the payment of any other sums of money which may then
or thereafter be due to Landlord from Tenant under any of the terms of this
Lease; and fourth, the balance, if any, to Tenant.

 

 

 
 

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12.12.20.     In addition, on the Term Expiration Date (or earlier termination
of this Lease), Tenant shall remove, at its sole cost and expense (and such work
shall be performed in a professional manner and supervised by a licensed
electrician or a licensed contractor), all of Tenant’s telecommunications lines
and cabling installed by Tenant that are no longer in use, including, without
limitation, removing any such lines and cabling installed in the plenum or
risers of the Building to the walls or junction boxes (collectively, “Wires”)
and repair all damage caused thereby and restore the Leased Premises or the
Building, as the case may be, to their condition existing prior to the
installation of the Wires, normal wear and tear excepted (“Wire Restoration
Work”). Tenant shall not remove fire alarm, fire alarm communications, security,
card access, lighting control, HVAC control/monitoring, or elevator
communications wiring, card readers, or trunk data wiring that runs from the
Building to Building One. Landlord, at its option, may perform such Wire
Restoration Work at Tenant’s sole cost and expense. In the event that Tenant
fails to perform the Wire Restoration Work or refuses to pay all costs of the
Wire Restoration Work (if performed by Landlord) within ten (10) days of
Tenant’s receipt of Landlord’s written notice requesting Tenant’s reimbursement
for or payment of such costs or otherwise fails to comply with the provisions of
this Section, Landlord may apply all or any portion of the Security Deposit
toward the payment of any costs or expenses relative to the Wire Restoration
Work or Tenant’s obligations under this Section. The retention or application of
such Security Deposit (if any) by Landlord pursuant to this Section does not
constitute a limitation on or waiver of Landlord’s right to seek further remedy
under law or equity. The provisions of this Section shall survive the expiration
or sooner termination of this Lease.

 

12.12.21.     Notwithstanding anything to the contrary in this Lease, (i) Tenant
shall not be obligated to restore to office space any manufacturing or lab space
existing in the Building or Building One as of the Term Commencement Date, and
(ii) if Tenant converts manufacturing or lab space to office space during the
term of this Lease, it shall not be required to restore such converted space
back to manufacturing or lab space, but Landlord may condition its approval of
any alterations, additions or improvements on Tenant removing at the Term
Expiration Date (or earlier termination of this Lease) those alterations,
additions or improvements that would not be considered standard office
improvements by a reasonable lessee of office space.

 

Tenant's Remedies. Landlord shall not be deemed in breach of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be
performed by Landlord. For purposes of this Section 5.16, a reasonable time
shall in no event be less than thirty (30) days after receipt by Landlord, and
by the holders of any ground lease, deed of trust or mortgage covering the
Leased Premises whose name and address shall have been furnished Tenant in
writing for such purpose, of written notice specifying wherein such obligation
of Landlord has not been performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days after such notice
are reasonably required for its performance, then Landlord shall not be in
breach of this Lease if performance is commenced within said thirty (30)-day
period and thereafter diligently pursued to completion. If Landlord fails to
cure such default within the time provided for in this Lease, the holder of any
such ground lease, deed of trust or mortgage shall have an additional thirty
(30) days to cure such default; provided that if such default cannot reasonably
be cured within that thirty (30) day period, then such holder shall have such
additional time to cure the default as is reasonably necessary under the
circumstances. The liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease shall be limited to the Project (and, if at any
time any portion of the Project has been damaged or condemned, the insurance and
condemnation proceeds thereof), and Tenant agrees to look solely to the Project
for satisfaction of any liability and shall not look to other assets of Landlord
nor seek any recourse against the assets of the individual partners, members,
directors, officers, shareholders, agents or employees of Landlord, including
without limitation, any property management or asset management company of
Landlord (collectively, the “Landlord Parties”). It is the parties’ intention
that Landlord and the Landlord Parties shall not in any event or circumstance be
personally liable, in any manner whatsoever, for any judgment or deficiency
hereunder or with respect to any default by Landlord under the terms of this
Lease. Landlord shall not be liable for any loss, injury or damage arising from
any act or omission of any other tenant or occupant of the Project, nor shall
Landlord be liable under any circumstances for damage or inconvenience to
Tenant’s business or for any loss of income or profit therefrom. The liability
of Landlord under this Lease is limited to the period of its ownership of the
Leased Premises. Except as specifically set forth herein or if Tenant obtains a
court order, Tenant shall not have the right to withhold, reduce or offset any
amount against any payments of Rent due and payable under this Lease by reason
of a breach of this Lease by Landlord.

 

 

 
 

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Rules and Regulations. Tenant shall comply with the rules and regulations for
the Project attached as Exhibit D and such reasonable amendments thereto as
Landlord may adopt from time to time with prior notice to Tenant.

 

Environmental Matters

 

Hazardous Materials Prohibited.

 

Tenant shall not cause or permit any Hazardous Material (as defined in Section
6.1(c) below) to be brought, kept, used, generated, released or disposed in, on,
under or about the Leased Premises or the Project by Tenant, its agents,
employees, contractors, licensees or invitees (collectively, “Tenant’s
Representatives”), except Tenant shall not be in breach of this Section as a
result of the presence in the Leased Premises of Hazardous Materials that are
customarily present in a building for general office use (e.g., copying machine
chemicals and kitchen cleansers), or are used in connection with Tenant’s
Permitted Use of the Leased Premises, and in either case are used, stored, and
disposed of in compliance with all applicable laws, ordinances and regulations.
Prior to the execution of this Lease, and on an annual basis thereafter, Tenant
shall complete, execute, and deliver to Landlord a Hazardous Materials
Questionnaire substantially in the form attached to this Lease as Exhibit E.
Tenant hereby agrees to indemnify and to defend and hold Landlord harmless from
and against any and all claims, liability, losses, damages, diminution in value,
fines, costs and/or expenses (including, without limitation, reasonable
attorneys’ fees and expert and consultant fees) which arise during or after the
Term that are caused by a breach by Tenant of the obligations stated in Sections
6.1(a) or 6.1(b) of this Lease or by Tenant’s use of Hazardous Materials at the
Project during the Term of this Lease. This indemnification of Landlord by
Tenant includes, without limitation, death of or injury to person, damage to any
property or the environment and costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state or local governmental agency or
political subdivision because of any Hazardous Material present in, on, under or
about the Leased Premises or the Project (including soil and ground water
contamination) which results from such a breach. Without limiting the foregoing,
if the presence of any Hazardous Material in, on, under or about the Leased
Premises or the Project caused or permitted by Tenant during the Term results in
any contamination of the Leased Premises or the Project, Tenant shall promptly
take all actions at its sole expense as are necessary to return the same to the
condition existing prior to the introduction of such Hazardous Material;
provided that Landlord’s approval of such actions, and the contractors to be
used by Tenant in connection therewith, shall first be obtained. This
indemnification of Landlord by Tenant shall survive the expiration or sooner
termination of this Lease.

 

Tenant covenants and agrees that Tenant shall at all times be responsible and
liable for, and be in compliance with, all federal, state, local and regional
laws, ordinances, rules, codes and regulations, as amended from time to time,
relating to health and safety and environmental matters, arising, directly or
indirectly, out of the use of Hazardous Materials (as defined in Section 6.1(c)
below) in the Project (“Hazardous Materials Laws”). Health and safety and
environmental matters for which Tenant is responsible under this paragraph
include, without limitation (i) notification and reporting to governmental
agencies, (ii) the provision of warnings of potential exposure to Hazardous
Materials to Landlord and Tenant’s agents, employees, licensees, contractors and
others, (iii) the payment of taxes and fees, (iv) the proper off-site
transportation and disposal of Hazardous Materials, and (v) all requirements,
including training, relating to the use of equipment. Promptly after discovery
of a release of Hazardous Materials that is reportable under Hazardous Materials
Laws, Tenant shall give written notice to Landlord. The notice shall include
information on the nature and conditions of the release and Tenant’s planned
response. Tenant shall be liable for the cost of any cleanup of the release of
any Hazardous Materials by Tenant or Tenant’s Representatives on the Project.

 

 

 
 

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As used in this Lease, the term “Hazardous Material” means any hazardous or
toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term “Hazardous Material” includes, without limitation, any substance,
material or waste which is (i) defined as a “hazardous waste” or similar term
under the laws of the jurisdiction where the Project is located; (ii) designated
as a “hazardous substance” pursuant to Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. § 1317); (iii) defined as a “hazardous waste”
pursuant to Section 1004 of the Federal Resource, Conservation and Recovery Act,
42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (iv) defined as a “hazardous
substance” pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); (v)
hydrocarbons, petroleum, gasoline, crude oil or any products, by-products or
fractions thereof; or (vi) asbestos in any form or condition.

 

As used in this Article 6, the term “Hazardous Materials Laws” means any
applicable federal, state or local laws, ordinances, rules or regulations
relating to any Hazardous Material affecting the Project, including, without
limitation, the specific laws, ordinances and regulations referred to in Section
6.1(c) above. References to specific Hazardous Materials Laws shall also be
references to any amendments thereto and to any applicable successor Hazardous
Materials Laws.

 

Limitations on Assignment and Subletting. In addition to the provisions of
Section 5.6 above, it shall not be unreasonable for Landlord to withhold its
consent to any proposed Assignment or Sublease of the Leased Premises if the
proposed transferee’s anticipated use of the Leased Premises involves the
generation, storage, use, treatment, or disposal of Hazardous Materials
(excluding standard office and janitorial supplies) to a significantly greater
extent than Tenant’s use of Hazardous Materials during the Term under the
Permitted Use of the Leased Premises.

 

Right of Entry. Landlord, its employees, agents and consultants, shall have the
right to enter the Leased Premises at any time, in case of an emergency, and
otherwise during business hours after reasonable advance notice to Tenant of at
least seventy-two (72) hours (which notice may be telephonic, via email, or in
person, and shall be confirmed in writing [which may be via email] if made
orally), in order to conduct periodic environmental inspections and tests to
determine whether any Hazardous Materials are present. The costs and expenses of
such inspections shall be paid by Landlord unless a default or breach of this
Lease, violation of Hazardous Materials Laws or contamination caused by Tenant
during the Term is found to exist. In such event, Tenant shall reimburse
Landlord upon demand, as Additional Rent, for the reasonable costs and expenses
of such inspections.

 

Notice to Landlord. Tenant shall immediately notify Landlord in writing of: (i)
any enforcement, clean-up, removal or other governmental or regulatory action
instituted or threatened in writing regarding the Leased Premises or the Project
pursuant to any Hazardous Materials Laws; (ii) any claim made or threatened in
writing by any person against Tenant or the Leased Premises relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Material; and (iii) any written reports
made to or received from any governmental agency arising out of or in connection
with any Hazardous Material in or removed from the Leased Premises or the
Project, including any complaints, notices, warnings or asserted violations in
connection therewith. Tenant shall also supply to Landlord as promptly as
possible, and in any event within three (3) business days after Tenant first
receives or sends the same, copies of all claims, reports, complaints, notices,
warnings, asserted violations or other written communications relating to
Hazardous Materials present in, on, under or about the Leased Premises or the
Project, except Tenant may redact any information in such disclosure that would
violate applicable law or would infringe upon the attorney-client privilege,
attorney work product doctrine, joint defense privilege or similar privilege or
protection.

 

 

 
 

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Disclosure as to Hazardous Materials. Landlord hereby discloses to Tenant that
previous occupants (namely Tenant, as prior owner of the Project) or others
possessed and used or may have possessed and used hazardous substances, office
supplies, cleaning products, construction and decorating materials and other
substances in or about the Building and Project or portions thereof and which
may contain or may have contained Hazardous Materials. Landlord acknowledges and
agrees that, in entering this Lease with Tenant, Landlord is not relying on any
representations, warranties, statements, promises or understandings by Tenant or
its officers, employees, agents or contractors regarding the condition of the
Leased Premises or the Project, including, but not limited to, the use, storage,
transport, generation, release or disposal of Hazardous Materials in, on, under
or about the Leased Premises or the Project, and Landlord is instead relying on
its own investigations, studies, inspections and due diligence.

 

Prior Hazardous Materials. Tenant shall have no obligation to clean up or to
indemnify, defend, or hold Landlord harmless with respect to any Hazardous
Material in, on, under or about the Leased Premises or the Project that were not
introduced into, in, on, under, or about the Leased Premises or the Project
during the Term of this Lease by Tenant or for ground water contamination from
other parcels where the source is from off the Project and not caused by Tenant
during the Term of this Lease. Under no circumstances shall Tenant be liable for
claims arising out of or in connection with any Hazardous Material present at
the Leased Premises or the Project or the soil, air, ground water or surface
water thereof, or the violation of any Hazardous Materials Laws, except to the
extent that any of the foregoing is actually caused by the bringing, keeping,
storing, using, generating, releasing or disposing of Hazardous Materials by
Tenant during the Term of this Lease.

Insurance, Indemnity, Condemnation, Damage and Default

 

Landlord’s Insurance. Landlord shall secure and maintain commercial property
insurance for the Project covering risks of direct physical loss of or damage to
the Project (known as Special Form coverage), including the Tenant Improvements,
if any, but excluding all subsequent alterations, additions and improvements to
the Leased Premises, with loss payable to Landlord and to the holders of any
deeds of trust, mortgages or ground leases on the Project. Landlord shall not be
obligated to obtain insurance for Tenant’s trade fixtures, equipment,
furnishings, machinery or other property. Such policies shall provide protection
against fire and extended coverage perils and such additional perils as Landlord
deems suitable, and with such deductible(s) as Landlord shall deem reasonably
appropriate. Landlord shall further secure and maintain commercial general
liability insurance with respect to the Project in such amount as Landlord shall
determine, such insurance to be in addition to, and not in lieu of, the
liability insurance required to be maintained by Tenant. In addition, Landlord
may secure and maintain, among other insurance, earthquake, flood, and rental
income insurance. Tenant shall not be named as an additional insured on any
policy of insurance maintained by Landlord.

 

 

 
 

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Tenant’s Liability Insurance. Tenant (with respect to the Leased Premises) shall
secure and maintain, at its own expense, at all times during the Term, a policy
or policies of commercial general liability insurance with the premiums thereon
paid on a current basis, protecting Tenant and naming Landlord, the holders of
any deeds of trust, mortgages or ground leases on the Project, and Landlord’s
representatives (which term, whenever used in this Article 7, shall be deemed to
include Landlord’s partners, trustees, ancillary trustees, officers, directors,
shareholders, beneficiaries, agents, employees and independent contractors) as
additional insureds against claims for bodily injury, personal injury,
advertising injury and property damage (including attorneys’ fees) based upon,
involving or arising out of Tenant’s operations, assumed liabilities or Tenant’s
use, occupancy or maintenance of the Leased Premises and the Common Areas of the
Project. Such insurance shall provide for a minimum amount of Two Million
Dollars ($2,000,000.00) for property damage or injury, bodily injury, or death
of one or more than one person in any one accident or occurrence, with an annual
aggregate limit of at least Five Million Dollars ($5,000,000.00). The coverage
required to be carried shall include fire legal liability, blanket contractual
liability, personal injury liability (libel, slander, false arrest and wrongful
eviction), property damage, medical payments, products liability and completed
operations coverage (as well as owned, non-owned and hired automobile liability
if an exposure exists) and the policy shall contain an exception to any
pollution exclusion which insures damage or injury arising out of heat, smoke or
fumes from a hostile fire. Such insurance shall be written on an occurrence
basis and contain an industry-standard separation of insureds provision or
cross-liability endorsement. Tenant shall provide Landlord with a certificate
evidencing such insurance coverage. The certificate shall indicate that the
insurance provided specifically recognizes the bodily injury and property damage
liability assumed by Tenant under this Lease and that Tenant’s insurance is
primary to and not contributory (and Tenant shall provide Landlord with evidence
of a primary and non-contributory coverage) with any other insurance maintained
by Landlord, whose insurance shall be considered excess insurance only. Not more
frequently than every two (2) years, if Landlord or the insurance broker
retained by Landlord or any mortgagee of Landlord reasonably determines that the
amount of liability insurance coverage at that time is not adequate, which
determination shall be based upon a review of liability insurance limits
maintained by similarly situated companies and such analysis shall be provided
to Tenant for its review, then Tenant shall increase its liability insurance
coverage to meet such requirement within thirty (30) days of receipt of the
analysis by Landlord or Landlord’s insurance broker or Landlord’s mortgagee.
Whenever, in Landlord’s reasonable judgment, good business practice or change in
conditions necessitate additional or different types of insurance, Tenant shall,
within thirty (30) days of receipt of Landlord’s request therefor, obtain the
insurance at its own expense.

 

 

 
 

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Tenant’s Additional Insurance Requirements.

 

Tenant shall secure and maintain, at Tenant's expense, at all times during the
Term, a commercial property policy, covering risks of direct physical loss
(known as Special Form coverage) including a replacement cost provision, on all
of Tenant's fixtures, furnishings, equipment, machinery, merchandise and
personal property in the Leased Premises and on any alterations, additions or
improvements made by or for Tenant upon the Leased Premises on or after the Term
Commencement Date, either for the full replacement cost thereof without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance or with coverage for a minimum
amount of Two Million Dollars ($2,000,000.00). Such insurance shall insure
against those risks customarily covered in an "all risk" policy of insurance
covering physical loss or damage. Tenant shall use the proceeds from such
insurance for the replacement of fixtures, furnishings, equipment and personal
property and for the restoration of any alterations, additions or improvements
to the Leased Premises. In addition, Tenant shall secure and maintain, at all
times during the Term, loss of income, business interruption and extra expense
insurance in such amounts as will reimburse Tenant for direct or indirect loss
of earnings and additional incurred costs attributable to perils commonly
insured against by prudent tenants (which are similarly situated to Tenant) or
attributable to prevention of access to the Leased Premises or to the Building
as a result of such perils; such insurance shall be maintained with Tenant's
property insurance carrier. Further, Tenant shall secure and maintain at all
times during the Term workers' compensation insurance in such amounts as are
required by law, employer's liability insurance in the amount of One Million
Dollars ($1,000,000.00) per occurrence, and all such other insurance as may be
required by applicable law. Except for the Tenant Improvements set forth in
Exhibit B, in the event Tenant makes any alterations, additions or improvements
to the Leased Premises and the cost of such work is One Million Dollars
($1,000,000.00) or more, then prior to commencing any such work in the Leased
Premises, Tenant shall secure "builder's all risk" insurance which shall be
maintained throughout the course of construction, such policy being an all risk
builder's risk completed value form, in an amount not less than the total
contract price for the construction of such alterations, additions or
improvements and covering the construction of such alterations, additions or
improvements, it being understood and agreed that all of such alterations,
additions or improvements shall be insured by Tenant pursuant to this Section
7.3 immediately upon completion thereof. Tenant shall provide Landlord with
certificates of all such insurance. The property insurance certificate shall
confirm that the waiver of subrogation required to be obtained pursuant to
Section 7.5 is permitted by the insurer. Tenant shall, prior to the expiration
of any policy of insurance required to be maintained by Tenant under this Lease,
furnish Landlord with a Certificate of Insurance or other satisfactory evidence
of renewal thereof.

 

12.12.22.     All policies required to be carried by Tenant under this Lease
shall be issued by and binding upon an insurance company licensed to do business
in the State of California with a rating of at least A-VIII or such other rating
as may be required by a lender having a lien on the Project, as set forth in the
most current issue of “Best’s Insurance Reports.” Notwithstanding the
requirements set forth in the previous sentence, Landlord hereby approves The
Chubb Corporation as Tenant’s insurance provider. Tenant shall not do or permit
anything to be done that would invalidate the insurance policies referred to in
this Article 7. All policies required to be carried by Tenant under this Article
7 shall contain a waiver of subrogation endorsement and shall contain an
endorsement or endorsements, if required to effect the same, providing that (i)
Landlord and its affiliated entities, the property manager for the Building, the
asset manager for the Building, and any lender with a deed of trust encumbering
the Project or any part thereof, of whom Landlord has notified Tenant, are
included as additional insureds, (ii) the insurer agrees not to cancel the
policy without at least thirty (30) days’ prior written notice to Landlord and
all named and additional insureds (except ten (10) days prior written notice in
the event of the non-payment of premium), and (iii) all such insurance
maintained by Tenant is primary, with any other insurance available to Landlord
or any other named or additional insured being excess and non-contributing.

 

 

 
 

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Tenant shall provide evidence of each of the policies of insurance which Tenant
is required to obtain and maintain pursuant to this Lease on or before the Term
Commencement Date and prior to the expiration of any policy, which evidence
shall be accompanied by a copy of the ISO Additional Insured Endorsement CG 2037
or CG 2026 (or their equivalent), as applicable, and, as to property insurance,
shall be in the form of an “ACORD 28 (10/2003)” evidence of insurance or other
form reasonably acceptable to Landlord. In the event that Tenant fails to
provide evidence of insurance required to be provided by Tenant under this
Lease, prior to commencement of the Term, and thereafter during the Term, within
ten (10) days following Landlord’s written request therefor, Landlord shall be
authorized (but not required) to procure such coverage in the amounts stated
with all costs thereof (plus a five percent (5%) administrative fee) to be
chargeable to Tenant and payable upon written invoice therefor, which amounts
shall be deemed Additional Rent hereunder.

 

The minimum limits of insurance required by this Lease, or as carried by Tenant,
shall not limit the liability of Tenant nor relieve Tenant of any obligation
hereunder.

 

Indemnity and Exoneration.

 

To the extent not prohibited by law, Landlord and Landlord’s representatives,
partners, members, agents, employees, directors, officers, successors and
assigns (“Landlord’s Representatives”) shall not be liable for any loss, injury
or damage to person or property of Tenant, Tenant’s agents, employees,
contractors, invitees or any other person, whether caused by theft, fire, act of
God, acts of the public enemy, riot, strike, insurrection, war, court order,
requisition or order of governmental body or authority or which may arise
through repair, alteration or maintenance of any part of the Project or failure
to make any such repair or from any other cause whatsoever, except to the extent
such loss, injury or damage is caused by the gross negligence or willful
misconduct of Landlord or Landlord’s Representatives or as expressly otherwise
provided in Sections 7.6 and 7.7. Landlord shall not be liable for any loss,
injury or damage arising from any act or omission of any other tenant or
occupant of the Project, nor shall Landlord be liable under any circumstances
for damage or inconvenience to Tenant’s business or for any loss of income or
profit therefrom.

 

12.12.23.     Tenant shall indemnify, protect, defend and hold the Project,
Landlord and Landlord’s Representatives, harmless of and from any and all
claims, liability, costs, penalties, fines, damages, injury, judgments,
forfeiture, losses (including without limitation diminution in the value of the
Leased Premises) or expenses (including without limitation reasonable attorneys’
fees, consultant fees, testing and investigation fees, expert fees and court
costs) arising out of or relating to (i) Tenant’s or Tenant’s Representatives’
use or occupancy of the Leased Premises, (ii) the activities of Tenant or
Tenant’s Representatives in or about the Leased Premises or the Project, (iii)
any failure by Tenant or Tenant’s Representatives to comply with any applicable
law, and (iv) any default or breach by Tenant in the performance of any
obligation of Tenant under this Lease; except to the extent such claims,
liability, costs, penalties, fines, damages, injury, judgments, forfeiture,
losses or expenses are caused by the gross negligence or willful misconduct of
Landlord or Landlord’s Representatives.

 

12.12.24.     Tenant shall indemnify, protect, defend and hold the Project,
Landlord and Landlord Representatives, harmless of and from any and all claims,
liability, costs, penalties, fines, damages, injury, judgments, forfeiture,
losses (including without limitation diminution in the value of the Leased
Premises) or expenses (including without limitation reasonable attorneys’ fees,
consultant fees, testing and investigation fees, expert fees and court costs)
arising out of or relating to work or labor performed, materials or supplies
furnished to or at the request of Tenant or in connection with obligations
incurred by or performance of any work done for the account of Tenant in the
Leased Premises or the Project; except to the extent claims, liability, costs,
penalties, fines, damages, injury, judgments, forfeiture, losses or expenses are
caused by the gross negligence or willful misconduct of Landlord or Landlord’s
Representatives.

 

 

 
 

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The provisions of this Section 7.4 shall survive the expiration or sooner
termination of this Lease. TENANT ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS
THE MEANING AND RAMIFICATIONS OF THE PROVISIONS SET FORTH IN THIS SECTION 7.4
AND FURTHER ACKNOWLEDGES THAT SUCH PROVISIONS WERE SPECIFICALLY NEGOTIATED.

 

Waiver of Subrogation. Anything in this Lease to the contrary notwithstanding,
Landlord and Tenant each waives all rights of recovery, claims, actions or
causes of action against the other, its agents, partners (both general and
limited), trustees, officers, directors, employees, contractors, successors and
assigns, for any loss or damage that may occur to the Leased Premises, or any
improvements thereto, or the Project or any personal property of such party
therein, by reason of any cause required to be insured against under this Lease
to the extent of the coverage required, regardless of cause or origin, including
negligence of the other party hereto, provided that such party’s insurance is
not invalidated thereby; and each party covenants that, to the fullest extent
permitted by law, no insurer shall hold any right of subrogation against such
other party. Tenant shall advise its insurers of the foregoing and such waiver
shall be a part of each policy maintained by Tenant which applies to the Leased
Premises, any part of the Project or Tenant’s use and occupancy of any part
thereof.

 

Condemnation. If the Leased Premises are taken under the power of eminent domain
or sold under the threat of the exercise of such power (all of which are
referred to herein as a “Taking”), this Lease shall terminate as to the part so
taken as of the date the condemning authority takes title or possession,
whichever first occurs (the “Date of Taking”). If the Leased Premises or any
portion of the Project is taken by a Taking to such an extent as to render the
Leased Premises untenantable as reasonably determined by Landlord or Tenant,
this Lease shall, at the option of either party to be exercised in writing
within thirty (30) days after receipt of written notice of such Taking,
forthwith cease and terminate as of the Date of Taking. All proceeds from any
Taking of the Leased Premises shall belong and be paid to Landlord, subject to
the rights of any mortgagee of Landlord’s interest in the Project or the
beneficiary of any deed of trust which constitutes an encumbrance thereon;
provided that Tenant shall be entitled to any compensation separately awarded to
Tenant for Tenant’s relocation expenses or loss of Tenant’s trade fixtures or
personal property. If this Lease continues in effect after the Date of Taking
pursuant to the provisions of this Section 7.6, Landlord shall proceed with
reasonable diligence to repair, at its expense, the remaining parts of the
Project and the Leased Premises to substantially their former condition to the
extent that the same is feasible (subject to reasonable changes which Landlord
shall deem desirable) and so as to constitute a complete and tenantable Project
and Leased Premises. Following a Taking, Net Rent (and the Rentable Area) shall
thereafter be equitably adjusted according to the remaining Rentable Area of the
Leased Premises. Except as hereinafter provided, in the event of any Taking,
Landlord shall have the right to all compensation, damages, income, rent or
awards made with respect thereto (collectively an “Award”), including any award
for the value of the leasehold estate created by this Lease. No Award to
Landlord shall be apportioned and, subject to Tenant’s rights specified in this
Section 7.6, Tenant hereby assigns to Landlord any right of Tenant in any Award
made for any Taking. So long as such claim will not reduce any award otherwise
payable to Landlord under this Section 7.6, Tenant may seek to recover, at its
cost and expense, as a separate claim, any damages or awards payable on a Taking
of the Leased Premises to compensate for the unamortized cost paid by Tenant for
the alterations, additions or improvements, if any, made by Tenant during the
initial improvement of the Leased Premises and for any alterations, or for
Tenant’s personal property taken, or for interference with or interruption of
Tenant’s business (including goodwill), or for Tenant’s removal and relocation
expenses.

 

 

 
 

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Damage or Destruction. In the event of a fire or other casualty in the Leased
Premises, Tenant shall immediately give notice thereof to Landlord. The
following provisions shall then apply:

 

12.12.25.     If the damage is limited solely to the Leased Premises and the
Leased Premises can, in Landlord’s reasonable opinion, be made tenantable with
all material damage repaired (excluding Tenant’s personal property, trade
fixtures, equipment and any Tenant Improvements or alterations installed by or
on behalf of Tenant) within six (6) months from the date of damage, then
Landlord shall be obligated to rebuild the same to substantially their former
condition to the extent that the same is feasible (subject to reasonable changes
which Landlord shall deem desirable and such changes as may be required by
applicable law) and shall proceed with reasonable diligence to do so and this
Lease shall remain in full force and effect.

 

If portions of the Project outside the boundaries of the Leased Premises are
damaged or destroyed (whether or not the Leased Premises are also damaged or
destroyed) and the Leased Premises and the Project can, in Landlord’s opinion,
both be made tenantable with all material damage repaired (excluding Tenant’s
personal property, trade fixtures, equipment and any Tenant Improvements or
alterations installed by or on behalf of Tenant) within six (6) months from the
date of damage or destruction, and provided that Landlord determines that it is
economically feasible, then Landlord shall be obligated to rebuild the same to
substantially their former condition to the extent that the same is feasible
(subject to reasonable changes which Landlord shall deem desirable and such
changes as may be required by applicable law) and shall proceed with reasonable
diligence to do so and this Lease shall remain in full force and effect.

 

12.12.26.     Notwithstanding anything to the contrary contained in Sections
7.7(a) or 7.7(b) above, Landlord shall not have any obligation whatsoever to
repair, reconstruct or restore the Leased Premises if (i) the cost to repair and
restore the Building is twenty-five percent (25%) or more of the replacement
cost of the entire Building prior to such damage or destruction, or (ii) when
any damage to the Building occurs during the last eighteen (18) months of the
Term, and in Landlord’s reasonable opinion, the Leased Premises cannot be made
tenantable with all material damage repaired (excluding Tenant’s personal
property, trade fixtures, equipment and any Tenant Improvements or alterations
installed by or on behalf of Tenant) within three (3) months from the date of
damage. If Landlord elects not to repair, reconstruct or restore the Leased
Premises, Landlord or Tenant may elect to terminate this Lease within thirty
(30) days of such damage upon ten (10) days written notice.

 

12.12.27.     If neither Section 7.7(a) nor 7.7(b) above applies, Landlord shall
so notify in writing Tenant within thirty (30) days after the date of the damage
or destruction, and Landlord or Tenant may terminate this Lease within thirty
(30) days of such written notice upon ten (10) days written notice. If neither
party elects to terminate this Lease, then Landlord shall proceed with
reasonable diligence to rebuild the Project and the Leased Premises to
substantially their former condition to the extent that the same is feasible
(subject to reasonable changes which Landlord shall deem desirable and such
changes as may be required by applicable law), but excluding Tenant’s personal
property, trade fixtures, equipment and any Tenant Improvements or alterations
installed by or on behalf of Tenant.

 

 

 
 

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During any period when Tenant’s use of the Leased Premises is materially
impaired by damage or destruction, Base Rent shall abate in proportion to the
degree to which Tenant’s use of the Leased Premises is impaired until such time
as the Leased Premises are made tenantable as reasonably determined by Landlord;
provided that no such rental abatement shall be permitted if the casualty is the
result of the gross negligence or willful misconduct of Tenant or Tenant’s
Representatives.

 

The proceeds from any insurance paid by reason of damage to or destruction of
the Project or any part thereof insured by Landlord shall belong to and be paid
to Landlord, subject to the rights of any mortgagee of Landlord’s interest in
the Project or the beneficiary of any deed of trust which constitutes an
encumbrance thereon. Tenant shall be responsible at its sole cost and expense
for the repair, restoration and replacement of (i) its fixtures, furnishings,
equipment, machinery, merchandise and personal property in the Leased Premises,
and (ii) its alteration, additions and improvements.

 

Landlord’s repair and restoration obligations under this Section 7.7 shall not
impair or otherwise affect the rights and obligations of the parties set forth
elsewhere in this Lease. Subject to Section 7.7(e), Landlord shall not be liable
for any inconvenience or annoyance to Tenant, its employees, agents, contractors
or invitees, or injury to Tenant’s business resulting in any way from such
damage or the repair thereof. Landlord and Tenant agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Leased
Premises or the Project with respect to the termination of this Lease and hereby
waive the provisions of any present or future statute or law to the extent
inconsistent therewith.

 

Tenant shall promptly replace or repair, at Tenant’s cost and expense and
subject to Tenant’s business needs, Tenant’s movable furniture, equipment, trade
fixtures and other personal property in the Leased Premises, which Tenant shall
be responsible for insuring during the Term of this Lease.

 

(i)     Tenant shall reimburse Landlord for the deductible amounts under the
insurance policies obtained by Landlord and Tenant under this Lease if the
proceeds are used to repair the Leased Premises. However, if other portions of
the Building or Project are also damaged by said casualty and insurance proceeds
are payable therefor, then Tenant shall only pay its Proportionate Share of the
deductible as reasonably determined by Landlord. If any material portion of the
Leased Premises is damaged and is not fully covered by the aggregate of
insurance proceeds received by Landlord and any applicable deductible, and
Tenant does not voluntarily contribute any shortfall thereof, then Landlord
shall have the right to terminate this Lease by delivering written notice of
termination to Tenant within sixty (60) days after the date of notice to Tenant
of such event, whereupon this Lease shall terminate thirty (30) days after
Tenant’s receipt of such notice, and Tenant shall immediately vacate the Leased
Premises and surrender possession thereof to Landlord in the condition required
under this Lease, normal wear and tear excepted (but Tenant shall have no
obligation to repair the damage caused by said casualty).

 

 

 
 

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The respective rights and obligations of Landlord and Tenant in the event of any
damage to or destruction of the Leased Premises, or any other portion of the
Building or the Project, are governed exclusively by this Lease. Accordingly,
Tenant hereby waives the provisions of any law to the contrary, including
California Civil Code Sections 1932(2), 1933(4), 1941 and 1942 and any similar
or successor laws and any other laws providing for the termination of a lease
upon destruction of the leased property.

 

Default by Tenant.

 

12.12.28.     Events of Default. The occurrence of any of the following shall
constitute an event of default on the part of Tenant (each an “Event of
Default”):

 

Abandonment. Vacating the Leased Premises without the intention to reoccupy
same, or abandonment of the Leased Premises, for a continuous period in excess
of ninety (90) days;

 

Nonpayment of Rent. Failure to pay any installment of Rent due and payable
hereunder on the date when payment is due, which failure has not been remedied
within five (5) days after Landlord shall have given Tenant written notice
thereof; furthermore, if Tenant shall be served with a demand for the payment of
past due Rent, any payment(s) tendered thereafter to cure any default by Tenant
shall be made only by cashier’s check, wire-transfer or direct deposit of
immediately available funds;

 

a.     Other Obligations. Failure to perform, in any material respect, any
obligation, agreement or covenant under this Lease other than those matters
specified in subsections 7.8(a)(1), 7.8(a)(2) or 7.8(a)(9), such failure
continuing for a period of thirty (30) days after written notice of such
failure, or such longer period as is reasonably necessary to remedy such
default, provided that Tenant commences the remedy within such thirty (30) day
period and diligently pursues such remedy until such default is cured;

 

General Assignment. Any general arrangement or assignment by Tenant for the
benefit of creditors;

 

Bankruptcy. The filing of any voluntary petition in bankruptcy by Tenant, or the
filing of an involuntary petition against Tenant, which involuntary petition
remains undischarged for a period of sixty (60) days. In the event that under
applicable law the trustee in bankruptcy or Tenant has the right to affirm this
Lease and continue to perform the obligations of Tenant hereunder, such trustee
or Tenant shall, within such time period as may be permitted by the bankruptcy
court having jurisdiction, cure all defaults of Tenant hereunder outstanding as
of the date of the affirmance of this Lease and provide to Landlord such
adequate assurances as may be necessary to ensure Landlord of the continued
performance of Tenant’s obligations under this Lease;

 

Receivership. The appointment of a trustee or receiver to take possession of all
or substantially all of Tenant’s assets or the Leased Premises, where possession
is not restored to Tenant within sixty (60) days;

 

 

 
 

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Attachment. The attachment, execution or other judicial seizure of all or
substantially all of Tenant’s assets or the Leased Premises, if such attachment
or other seizure remains undismissed or undischarged for a period of sixty (60)
days after the levy thereof;

 

Insolvency. The filing by Tenant of a petition seeking any liquidation,
dissolution or similar relief under any present or future statute, law or
regulation; or, if within sixty (60) days after the commencement of any
proceeding against Tenant seeking any liquidation, dissolution or similar relief
under any present or future statute, law or regulation, such proceeding shall
not have been dismissed; or

 

b.     Estoppel/SNDA. Failure to deliver the documents required to be delivered
by Tenant under Sections 5.12 and/or 5.13 within the applicable time period set
forth in such sections where such failure continues for an additional seven (7)
day period after Tenant’s receipt of an additional written notice sent by
personal delivery, by recognized same day or overnight courier service, or by
certified or registered mail, return receipt requested, that Tenant failed to
provide an estoppel or SNDA when due.

 

Remedies Upon Default:

 

c.     Termination. If an Event of Default occurs, Landlord shall have the
right, with or without notice or demand, immediately (after expiration of any
applicable notice and cure periods) to terminate this Lease, and at any time
thereafter recover possession of the Leased Premises or any part thereof and
expel and remove therefrom Tenant and any other person occupying the same, by
any lawful means, and again repossess and enjoy the Leased Premises without
prejudice to any of the remedies that Landlord may have under this Lease, or at
law or in equity by reason of Tenant’s default or of such termination. In
addition to the foregoing, if at any time, Tenant is in default, in any material
respect, of any term, condition or provision of this Lease (after expiration of
any applicable notice and cure periods), to the fullest extent permitted by law,
any express or implicit waiver by Landlord of Tenant’s requirement to pay Base
Rent shall be null and void and Tenant shall immediately pay to Landlord all
Base Rent so expressly or implicitly waived by Landlord.

 

Continuation After Default. Even though Tenant has breached this Lease and/or
abandoned the Leased Premises, this Lease shall continue in effect for so long
as Landlord does not terminate Tenant’s right to possession under subsection
7.8(b)(1) hereof in writing, and Landlord may enforce all of its rights and
remedies under this Lease, including (but without limitation) the right to
recover Rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a landlord under Section 1951.4
of the Civil Code of the State of California or any amended or successor code
section. Acts of maintenance or preservation, efforts to relet the Leased
Premises or the appointment of a receiver upon application of Landlord to
protect Landlord’s interest under this Lease shall not constitute an election to
terminate Tenant’s right to possession. If Landlord elects to relet the Leased
Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any reasonable costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Leased Premises; fourth, to the payment of Rent
due and unpaid hereunder; and the balance, if any, shall be paid to Tenant. If
that portion of rent received from the reletting which is applied against the
Rent due hereunder is less than the amount of the Rent due, Tenant shall pay the
deficiency to Landlord promptly upon demand by Landlord. Such deficiency shall
be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
determined, any reasonable costs and expenses incurred by Landlord in connection
with such reletting or in making alterations and repairs to the Leased Premises,
which are not covered by the rent received from the reletting.

 

 

 
 

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12.12.29.     Damages Upon Termination. Should Landlord terminate this Lease
pursuant to the provisions of subsection 7.8(b)(1) hereof, Landlord shall have
all the rights and remedies of a landlord provided by Section 1951.2 of the
Civil Code of the State of California. Upon such termination, in addition to any
other rights and remedies to which Landlord may be entitled under applicable
law, Landlord shall be entitled to recover from Tenant: (i) the worth at the
time of award of the unpaid Rent and other amounts which had been earned at the
time of termination; (ii) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; (iii) the worth at the time of award of the amount by which
the unpaid Rent for the balance of the Term after the time of award exceeds the
amount of such Rent loss that Tenant proves could be reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be likely to result
therefrom and subject to Landlord’s duty to reasonably mitigate its damages in
compliance with California law. The “worth at the time of award” of the amounts
referred to in clauses (i) and (ii) shall be computed with interest at the
lesser of ten percent (10%) per annum or the maximum rate then allowed by law.
The “worth at the time of award” of the amount referred to in clause (iii) shall
be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one percent (1%).

 

Computation of Rent for Purposes of Default. For purposes of computing unpaid
Rent which would have accrued and become payable under this Lease pursuant to
the provisions of Section 7.8(c), unpaid Rent shall consist of the total Base
Rent for the balance of the Term.

 

Late Charge. If any payment required to be made by Tenant under this Lease is
not received by Landlord on or before the date the same is due, Tenant shall pay
to Landlord an amount equal to five percent (5%) of the delinquent amount. The
parties agree that Landlord would incur costs not contemplated by this Lease by
virtue of such delinquencies, including without limitation administrative,
collection, processing and accounting expenses, the amount of which would be
extremely difficult to compute, and the amount stated herein represents a
reasonable estimate thereof. Acceptance of such late charge by Landlord shall in
no event constitute a waiver of Tenant’s breach or default with respect to such
delinquency, or prevent Landlord from exercising any of Landlord’s other rights
and remedies. Notwithstanding the foregoing, Landlord will not assess a late
charge until Landlord has given written notice of such late payment for the
first (1st) late payment in any calendar year and after Tenant has not cured
such late payment within five (5) days from receipt of such notice. No other
notices will be required during the remainder of the applicable calendar year
for a late charge to be assessed to Tenant.

 

Interest on Past-Due Obligations. Except as expressly otherwise provided in this
Lease, any Rent due Landlord hereunder, other than late charges, which is not
received by Landlord on or before the date on which it was due, shall bear
interest from the day after it was due at the lesser of ten percent (10%) per
annum or the maximum rate then allowed by law, in addition to the late charge
provided for in Section 7.8(e).

 

 

 
 

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Landlord’s Right to Perform. Notwithstanding anything to the contrary set forth
elsewhere in this Lease, in the event Tenant fails to perform any affirmative
duty or obligation of Tenant under this Lease, then Landlord may (but shall not
be obligated to) perform such duty or obligation on Tenant’s behalf without
waiving any of Landlord’s rights in connection therewith or releasing Tenant
from any of its obligations or such default, including, without limitation, the
obtaining of insurance policies or governmental licenses, permits or approvals.
Tenant shall reimburse Landlord upon demand for the costs and expenses of any
such performance (including penalties, interest and reasonable attorneys’ fees
incurred in connection therewith). Such costs and expenses incurred by Landlord
shall be deemed Additional Rent hereunder.

 

Remedies Cumulative. All rights, privileges, elections or remedies of Landlord
are cumulative and not alternative with all other rights and remedies at law or
in equity to the fullest extent permitted by law.

 

12.12.30.     Waiver. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179 and
California Civil Code Section 3275, or under any other present or future law in
the event Tenant is evicted and Landlord takes possession of the Leased Premises
by reason of an Event of Default.

 

Tenant Options

 

Option to Renew.

 

(a)     Landlord hereby grants to Tenant two (2) options (individually, the
“Option,” collectively, the “Options”) to extend the term of this Lease for an
additional period of five (5) years each (individually, the “Option Term,”
collectively, the “Option Terms”), all on the following terms and conditions:

 

(1)     The Option must be exercised, if at all, by written notice exercising
the Option (“Option Notice”) delivered by Tenant to Landlord not later than ten
(10) months and not earlier than thirteen (13) months prior to the Term
Expiration Date or the expiration of the first Option Term, as applicable.
Further, at Landlord’s option, the Option shall not be deemed to be properly
exercised if, as of the date of the Option Notice or at the Term Expiration Date
or the expiration of the first Option Term, as applicable, (i) there is an Event
of Default under this Lease (after expiration of any applicable notice and cure
periods), or (ii) Tenant has assigned this Lease or sublet more than fifty
percent (50%) of the Leased Premises (other than to a Related Entity). Provided
Tenant has properly and timely exercised the Option, the term of this Lease
shall be extended for the period of the Option Term, and all terms, covenants
and conditions of this Lease shall remain unmodified and in full force and
effect, except that (i) the improvements and tenant improvement allowances set
forth in Exhibit B shall not apply to the applicable Option Term (Tenant shall
accept the Leased Premises in its AS IS condition existing prior to the
applicable Option Term), and (ii) the Base Rent shall be modified as set forth
in subsection 8.1(a)(2) below.

 

 

 
 

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(2)     The Base Rent payable for the initial year of the applicable Option Term
shall be the greater of (i) the Base Rent payable on the last month of the
initial Term or the last month of first Option Term, as applicable, or (ii) the
then-current fair market value rental rate per rentable square foot (as further
defined below, “FMRR”) being agreed to (with annual market increases) in new and
renewal leases by the Landlord and other landlords of office buildings in
Fremont, California which are comparable in quality, location and prestige to
the Building (“Comparable Buildings”) and tenants leasing space in the Building
or Comparable Buildings. As used herein, “FMRR” shall mean the rental rate per
rentable square foot for which Landlord and/or other landlords are entering into
leases with tenants leasing from Landlord and other landlords office space in
the Building and/or Comparable Buildings (“Comparative Transactions”), taking
into consideration fair market annual increases and the value of existing tenant
improvements or tenant allowances in the Leased Premises and the Comparable
Buildings. Landlord shall provide its determination of the FMRR, along with
information it has assembled on the Comparative Transactions, to Tenant within
twenty (20) days after Landlord receives the Option Notice. Tenant shall have
twenty (20) days (“Tenant’s Review Period”) after receipt of Landlord’s notice
of the FMRR within which to accept such FMRR or to object thereto in writing. In
the event Tenant objects to the FMRR submitted by Landlord, Landlord and Tenant
shall attempt to agree upon such FMRR. If Landlord and Tenant fail to reach
agreement on such FMRR within ten (10) days following Tenant’s Review Period
(the “Outside Agreement Date”), and Tenant has not revoked its Option Notice on
or before the Outside Agreement Date (in which case the Option Notice shall
become irrevocable after the Outside Agreement Date), then each party shall
place in a separate sealed envelope its final proposal as to FMRR and such
determination shall be submitted to arbitration in accordance with subparagraph
8.1(b) below.

 

(b)     Landlord and Tenant shall meet with each other within three (3) business
days of the Outside Agreement Date and exchange the sealed envelopes and then
open such envelopes in each other’s presence. If Landlord and Tenant do not
mutually agree upon the FMRR within three (3) business days of the exchange and
opening of envelopes, then within ten (10) business days of the exchange and
opening of envelopes, Landlord and Tenant shall agree upon and jointly appoint
one arbitrator who shall be by profession a real estate broker who shall have
been active over the ten (10) year period ending on the date of such appointment
in the leasing of comparable commercial properties in Fremont, California and
who shall not have acted as a real estate broker for Landlord or Tenant or
partners (whether general or limited), officers, directors, or affiliates of
either of them during the seven (7) year period ending on the date of such
appointment or have any other conflict of interest in arbitrating this matter.
Neither Landlord nor Tenant shall consult with such broker as to his or her
opinion as to FMRR prior to the appointment. The determination of the arbitrator
shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted
FMRR for the Leased Premises is the closer to the actual fair market value
rental rate per rentable square foot for new leases for Comparative
Transactions. Such arbitrator may hold such hearings and require such briefs as
the arbitrator, in his or her sole discretion, determines is necessary. In
addition, Landlord or Tenant may submit to the arbitrator with a copy to the
other party within two (2) business days after the appointment of the arbitrator
any data and additional information that such party deems relevant to the
determination by the arbitrator (“Data”) and the other party may submit a reply
in writing within two (2) business days after receipt of such Data.

 

(1)      The arbitrator shall, within thirty (30) days of his or her
appointment, reach a decision as to whether the parties shall use Landlord’s or
Tenant’s submitted FMRR, and shall notify Landlord and Tenant of such
determination.

 

 

 
 

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(2)     The decision of the arbitrator shall be binding upon Landlord and
Tenant.

 

(3)     If Landlord and Tenant fail to agree upon and appoint such arbitrator,
then the appointment of the arbitrator shall be made by the American Arbitration
Association.

 

(4)     The cost of arbitration shall be paid by Landlord and Tenant equally.

 

(5)     The arbitration proceeding and all evidence given or discovered pursuant
thereto shall be maintained in confidence by all parties.

 

Right of First Offer as to Building One Space. During the initial Term of this
Lease, before entering into a new lease for space in Building One with a party
other than the then-current tenant of the applicable space (each time, a
“Building One New Tenant Lease”), Landlord shall notify Tenant in writing of the
terms and conditions upon which Landlord is willing to lease such space (the
“Offer Notice”). If Tenant wishes to exercise its right of first offer to lease
the applicable Building One space, Tenant, shall, within ten (10) days after
receipt of the Offer Notice, deliver written notice to Landlord of Tenant’s
irrevocable exercise of its option to lease such space on the terms set forth in
the Offer Notice. If Tenant fails to exercise the Offer Notice within the ten
(10) day period, the right of first offer set forth in this Section 8.2 for the
applicable Building One space shall be null and void and of no further force or
effect as to that Building One New Tenant Lease, and Landlord shall be free to
lease such space to any other persons or entities, free of any restrictions set
forth herein. This right of first offer shall only be exercisable by the
originally named Tenant under this Lease (or a Related Entity to which the lease
has been assigned or sublet under Section 5.6) and only if Tenant has not
entered a Sublease for any portion of the Leased Premises and has no present
intention to Sublease the applicable Building One space. This right of first
offer shall be suspended during any period in which Tenant is in default (after
expiration of any applicable notice and cure periods) until said default has
been cured. The period of time within which this right of first offer may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to
exercise such rights because of the foregoing provisions. Time is of the
essence.

 

Miscellaneous Matters

 

Parking. Provided Tenant is not in default of any term or provision of this
Lease, Landlord agrees to provide Tenant for use by the employees, agents,
customers and invitees of Tenant the number of parking spaces designated on the
Basic Lease Information sheet on an unreserved and unassigned basis on those
portions of the Project designated by Landlord for parking. Tenant shall not use
more parking spaces than said number of parking spaces. The parking spaces will
not be separately identified and Landlord shall have no obligation to monitor
the use of the parking area. If a parking density problem occurs during the
Term, Landlord may address the problem, in its reasonable discretion, which
solution may include initiating a parking permit system or a reserved parking
system and any costs associated therewith (including, without limitation, costs
of patrolling the parking lot for compliance with the parking system) shall
constitute a Basic Operating Costs. All parking shall be subject to any and all
rules and regulations adopted by Landlord in its discretion from time to time.
Only automobiles no larger than full size passenger automobiles or pick-up
trucks or standard business use vehicles (which do not require parking spaces
larger than full size passenger automobiles) may be parked in the Project
parking area. Tenant shall not permit or allow any vehicles that belong to or
are controlled by Tenant or Tenant’s employees, agents, customers or invitees to
be loaded, unloaded or parked in areas other then those designated by Landlord
for such activities. A failure by Tenant or any of its employees, agents,
customers or invitees to comply with the foregoing provisions shall afford
Landlord the right, but not the obligation, without notice, in addition to any
other rights and remedies available under this Lease, to remove and to tow away
the vehicles involved and to charge the cost to Tenant, which cost shall be
immediately due and payable upon demand by Landlord. If Tenant relinquishes in
writing any such parking rights during the Term, Tenant shall no longer have a
right to the parking relinquished and may obtain future parking solely on a
space-available basis. In the event the Building Two parcel is separated from
the Building One parcel and/or the Excess Land, Landlord reserves the right to
have Building Two and parking areas for Building Two fenced in an aesthetical
manner.

 

 

 
 

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No Brokers. Tenant hereby agrees to indemnify, defend and hold Landlord free and
harmless from and against liability for compensation or charges which may be
claimed by any agent, broker, finder or other similar party by reason of any
dealings with or actions of Tenant in connection with the negotiation of this
Lease and the consummation of this Lease, including any costs, expenses and
reasonable attorneys’ fees incurred with respect thereto. Landlord hereby agrees
to indemnify, defend and hold Tenant free and harmless from and against
liability for compensation or charges which may be claimed by any agent, broker,
finder or other similar party by reason of any dealings with or actions of
Landlord in connection with the negotiation of this Lease and the consummation
of this Lease, including any costs, expenses and reasonable attorneys’ fees
incurred with respect thereto.

 

No Waiver. No waiver by either party of the default or breach of any term,
covenant or condition of this Lease by the other shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent default or breach
by the other of the same or of any other term, covenant or condition hereof.
Landlord’s consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Landlord’s consent to, or approval of, any
subsequent or similar act by Tenant, or be construed as the basis of an estoppel
to enforce the provision or provisions of this Lease requiring such consent.
Regardless of Landlord’s knowledge of a default or breach at the time of
accepting Rent, the acceptance of Rent by Landlord shall not be a waiver of any
preceding default or breach by Tenant of any provision hereof, other than the
failure of Tenant to pay the particular Rent so accepted. Any payment given
Landlord by Tenant may be accepted by Landlord on account of monies or damages
due Landlord, notwithstanding any qualifying statements or conditions made by
Tenant in connection therewith, which statements and/or conditions shall be of
no force or effect whatsoever unless specifically agreed to in writing by
Landlord at or before the time of deposit of such payment.

 

Recording. Neither this Lease nor a memorandum thereof shall be recorded without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. In the event a memorandum of lease is recorded, Tenant
shall, within ten (10) days after Landlord’s request, execute and deposit with
Landlord, in recordable form, a quitclaim deed or other instrument sufficient to
release the memorandum of lease from record title, to be held by Landlord until
the expiration or earlier termination of this Lease.

 

 

 
 

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Holding Over. If Tenant fails to surrender possession of the Leased Premises in
the condition required under this Lease or holds over after expiration or
termination of this Lease without the written consent of Landlord, Tenant shall
pay for each month of hold-over tenancy one hundred fifty percent (150%) times
the Base Rent which Tenant was obligated to pay for the month immediately
preceding the end of the Term for each month or any part thereof of any such
hold-over period, together with such other amounts as may become due hereunder.
No holding over by Tenant after the Term shall operate to extend the Term. In
the event of any unauthorized holding over, Tenant shall indemnify, defend and
hold Landlord harmless from and against all claims, demands, liabilities,
losses, costs, expenses (including reasonable attorneys’ fees), injury and
damages including any lost profits incurred by Landlord as a result of Tenant’s
delay in vacating the Leased Premises.

 

Transfers by Landlord. The term “Landlord” as used in this Lease shall mean the
owner(s) at the time in question of the fee title to the Leased Premises or, if
this is a sublease, of the Tenant’s interest in the master lease. If Landlord
transfers, in whole or in part, its rights and obligations under this Lease or
in the Project, upon its transferee’s assumption of Landlord’s obligations
hereunder and delivery to such transferee of any unused Security Deposit then
held by Landlord, no further liability or obligations shall thereafter accrue
against the transferring or assigning person as Landlord hereunder. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Landlord after the date of such transfer of Landlords rights and obligations
under this Lease shall be binding only upon such transferee under this Section
9.6.

 

Attorneys’ Fees. In the event either party seeks the enforcement of this Lease,
or any part of it, or the collection of any Rent due, or to become due,
hereunder, or recovery of the possession of the Leased Premises in an action at
law or in equity, the prevailing party shall recover its reasonable attorneys’
fees, costs and expenses as a cost of suit incurred and not as damages,
including those which may be incurred on appeal. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not suit is filed or any
suit that may be filed is pursued to decision or judgment. The term “prevailing
party” shall include, without limitation, a party who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other party of its claim or
defense. The attorneys’ fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys’ fees
reasonably incurred.

 

Termination; Merger. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Leased Premises, shall constitute an
acceptance of the surrender of the Leased Premises by Tenant before the
scheduled Term Expiration Date. Only a written notice from Landlord to Tenant
shall constitute acceptance of the surrender of the Leased Premises and
accomplish a termination of this Lease. Unless specifically stated otherwise in
writing by Landlord, the voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof, or a termination hereof by
Landlord for default by Tenant, shall automatically terminate any sublease or
lesser estate in the Leased Premises; provided, however, Landlord shall, in the
event of any such surrender, termination or cancellation, have the option to
continue any one or all of any existing subtenancies. Landlord’s failure within
thirty (30) days following any such event to make any written election to the
contrary by written notice to the holder of any such lesser interest, shall
constitute Landlord’s election to have such event constitute the termination of
such interest.

 

 

 
 

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Amendments; Interpretation. This Lease may not be altered, changed or amended,
except by an instrument in writing signed by the parties in interest at the time
of the modification. The captions of this Lease are for convenience only and
shall not be used to define or limit any of its provisions.

 

Severability. If any term or provision of this Lease, or the application thereof
to any person or circumstances, shall to any extent be invalid or unenforceable,
the remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of this Lease shall be valid and
shall be enforceable to the fullest extent permitted by law.

 

Notices. All notices, demands, consents and approvals which are required or
permitted by this Lease to be given by either party to the other shall be in
writing and shall be deemed to have been fully given by personal delivery or by
recognized same day or overnight courier service or when deposited in the United
States mail, certified or registered, with postage prepaid, and addressed to the
party to be notified at the address for such party specified on the Basic Lease
Information sheet, or to such other place as the party to be notified may from
time to time designate by at least fifteen (15) days’ notice to the notifying
party given in accordance with this Section 9.11, except that upon Tenant’s
taking possession of the Leased Premises, the Leased Premises shall constitute
Tenant’s address for notice purposes. A copy of all notices given to Landlord
under this Lease shall be concurrently transmitted to such party or parties at
such addresses as Landlord may from time to time hereafter designate by notice
to Tenant.

 

Any notice sent by registered or certified mail, return receipt requested, shall
be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. Notices delivered by recognized
overnight courier shall be deemed given on the next business day after the day
upon which delivery of the same was made to the courier. If notice is received
on a Saturday, Sunday or legal holiday, it shall be deemed received on the next
business day.

 

Force Majeure. Any prevention, delay or stoppage of work to be performed by
Landlord or Tenant which is due to strikes, labor disputes, inability to obtain
labor, materials, equipment or reasonable substitutes therefor, acts of God,
governmental restrictions or regulations or controls, judicial orders, enemy or
hostile government actions, civil commotion, or other causes beyond the
reasonable control of the party obligated to perform hereunder, shall excuse
performance of the work by that party for a period equal to the duration of that
prevention, delay or stoppage. Nothing in this Section 9.12 shall excuse or
delay Tenant’s obligation to pay amounts of Rent or other charges due under this
Lease.

 

Guarantor. None.

 

Successors and Assigns. This Lease shall be binding upon and inure to the
benefit of Landlord, its successors and assigns (subject to the provisions
hereof, including, without limitation, Section 5.15), and shall be binding upon
and inure to the benefit of Tenant, its successors, and, pursuant to the terms
for assignment or subletting under Section 5.6, Tenant’s permitted assigns or
subtenants.

 

 

 
 

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Further Assurances. Landlord and Tenant each agree to promptly sign all
documents reasonably requested to give effect to the provisions of this Lease.

 

Incorporation of Prior Agreements. This Lease, including the exhibits and
addenda attached to it, contains all agreements of Landlord and Tenant with
respect to any matter referred to herein. No prior agreement or understanding
pertaining to such matters shall be effective.

 

Applicable Law. This Lease shall be governed by, construed and enforced in
accordance with the laws of the State of California, without giving effect to
principles of conflict of laws.

 

Time of the Essence. Time is of the essence of each and every covenant of this
Lease. Each and every covenant, agreement or other provision of this Lease on
Tenant’s part to be performed shall be deemed and construed as a separate and
independent covenant of Tenant, not dependent on any other provision of this
Lease or on any other covenant or agreement set forth herein.

 

No Joint Venture. This Lease shall not be deemed or construed to create or
establish any relationship of partnership or joint venture or similar
relationship or arrangement between Landlord and Tenant hereunder.

 

Authority. If Tenant is a corporation, limited liability company, trust or
general or limited partnership, each individual executing this Lease on behalf
of Tenant represents and warrants that he or she is duly authorized to execute
and deliver this Lease on Tenant’s behalf and that this Lease is binding upon
Tenant in accordance with its terms. If Tenant is a corporation, limited
liability company, trust or partnership, Tenant shall, upon request by Landlord,
deliver to Landlord evidence reasonably satisfactory to Landlord of such
authority.

 

Landlord Renovations. It is specifically understood and agreed that Landlord has
no obligation and has made no promises to alter, remodel, improve, renovate,
repair or decorate the Leased Premises, Building, Project, or any part thereof
and that no representations or warranties respecting the condition of the Leased
Premises, the Building or the Project have been made by Landlord to Tenant,
except as specifically set forth in this Lease. However, Tenant acknowledges
that Landlord may from time to time, at Landlord’s sole option, renovate,
improve, alter, or modify (collectively, the “Renovations”) the Building, the
Leased Premises, the Project, Common Areas, and systems and equipment, roof, and
structural portions of the same, which Renovations may include, without
limitation, (i) modifying the Common Areas and tenant spaces to, among other
things, comply with applicable laws, including regulations relating to the
physically disabled, seismic conditions, and building safety and security, and
(ii) installing new carpeting, lighting, and wall coverings in the Building
common areas, and in connection with such Renovations. Landlord may, among other
things, erect scaffolding or other necessary structures in the Building, limit
or eliminate access to portions of the Project, including eliminating portions
of the Common Areas, or perform work in the Building, which work may create
noise, dust or leave debris in the Building. Tenant acknowledges that Landlord
plans to improve the Excess Land with an office building(s) or other structures
during the Term of this Lease and some noise, dust or other nuisance will be
unavoidable. Provided that Landlord uses commercially reasonable efforts to
minimize interference with Tenant’s business operations in the Leased Premises
as a result of the improvement of the Excess Land or Landlord’s performance of
other Renovations, Tenant agrees that such Renovations and Landlord’s actions in
connection with such Renovations shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent.

 

 

 
 

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Security. Landlord shall not be required to provide, operate or maintain alarm
or surveillance systems or security services for the Building, the Project, or
the Common Areas. Tenant shall provide such security services and shall install
within the Leased Premises such security equipment, systems and procedures as
may reasonably be required for the protection of its employees and invitees,
provided that Tenant shall coordinate such services and equipment with Landlord
and the Building rules and regulations. The determination of the extent to which
such security equipment, systems and procedures are reasonably required shall be
made in the sole judgment, and shall be the sole responsibility, of Tenant.
Tenant acknowledges that it has neither received nor relied upon any
representation or warranty made by or on behalf of Landlord with respect to the
safety or security of the Leased Premises or the Project or any part thereof,
and further acknowledges that Tenant is currently in possession of the Project
and has made its own independent determinations with respect to all such
matters.

 

Offer. Preparation of this Lease by Landlord or Landlord’s agent and submission
of same to Tenant shall not be deemed an offer to lease to Tenant. This Lease is
not intended to be binding and shall not be effective until fully executed by
both Landlord and Tenant.

 

No Easement For Light, Air and View. This Lease conveys to Tenant no rights for
any light, air or view. No diminution of light, air or view, or any impairment
of the visibility of the Leased Premises from inside or outside the Building, by
any structure or other object that may hereafter be erected (whether or not by
Landlord) shall entitle Tenant to any reduction of Rent under this Lease,
constitute an actual or constructive eviction of Tenant, result in any liability
of Landlord to Tenant, or in any other way affect this Lease or Tenant’s
obligations hereunder.

 

OFAC Compliance.

 

(a)     Tenant represents and warrants that (i) Tenant and each person or entity
owning an interest in Tenant is (A) not currently identified on the Specially
Designated Nationals and Blocked Persons List maintained by the Office of
Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other
similar list maintained by OFAC pursuant to any authorizing statute, executive
order or regulation (collectively, the “List”), and (B) not a person or entity
with whom a citizen of the United States is prohibited to engage in transactions
by any trade embargo, economic sanction, or other prohibition of United States
law, regulation, or Executive Order of the President of the United States, (ii)
none of the funds or other assets of Tenant constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person (as
hereinafter defined), (iii) no Embargoed Person has any interest of any nature
whatsoever in Tenant (whether directly or indirectly), (iv) none of the funds of
Tenant have been derived from any unlawful activity with the result that the
investment in Tenant is prohibited by law or that the Lease is in violation of
law, and (v) Tenant has implemented procedures, and will consistently apply
those procedures, to ensure the foregoing representations and warranties remain
true and correct at all times. The term “Embargoed Person” means any person,
entity or government subject to trade restrictions under U.S. law, including but
not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701
et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated thereunder with the result that the
investment in Tenant is prohibited by law or Tenant is in violation of law.

 

 

 
 

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(b)     Tenant covenants and agrees (i) to comply with all requirements of law
relating to money laundering, anti-terrorism, trade embargos and economic
sanctions, now or hereafter in effect, (ii) to promptly notify Landlord in
writing if any of the representations, warranties or covenants set forth in this
paragraph or the preceding paragraph are no longer true or have been breached or
if Tenant has a reasonable basis to believe that they may no longer be true or
have been breached, except if such disclosure would violate applicable law or
would infringe upon the attorney-client privilege, attorney work product
doctrine, joint defense privilege or similar privilege or protection, (iii) not
to use funds from any “Prohibited Person” (as such term is defined in the
September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
to make any payment due to Landlord under the Lease and (iv) at the request of
Landlord, to provide such information as may be reasonably requested by Landlord
to determine Tenant’s compliance with the terms hereof.

 

(c)     Tenant hereby acknowledges and agrees that Tenant’s inclusion on the
List at any time during the Term shall be a material default of the Lease.
Notwithstanding anything herein to the contrary, Tenant shall not permit the
Leased Premises or any portion thereof to be used or occupied by any person or
entity on the List or by any Embargoed Person (on a permanent, temporary or
transient basis), and any such use or occupancy of the Leased Premises by any
such person or entity shall be a material default of the Lease.

 

Mortgagee Protection. Tenant will give written notice of a material default
under this Lease on the part of Landlord by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Leased
Premises who has provided Tenant with notice of their interest together with an
address for receiving notice, and shall offer such beneficiary or mortgagee a
reasonable opportunity to cure the default, including time to obtain possession
of the Leased Premises by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure. If such default cannot be cured within
such time period, then such additional time as may be necessary will be given to
such beneficiary or mortgagee to effect such cure so long as such beneficiary or
mortgagee has commenced the cure within the original time period and thereafter
diligently pursues such cure to completion, in which event this Lease shall not
be terminated while such cure is being diligently pursued. Tenant agrees that
each lender to whom this Lease has been assigned by Landlord is an express
third-party beneficiary hereof. Tenant shall not make any prepayment of Rent
more than one (1) month in advance without the prior written consent of each
such lender. Tenant agrees to make all payments under this Lease to the lender
with the most senior encumbrance upon receiving a direction, in writing, to pay
said amounts to such lender. Tenant shall comply with such written direction to
pay without determining whether an event of default exists under such lender’s
loan to Landlord.

 

[intentionally deleted].

 

Waiver of Jury Trial. To the extent permitted by applicable law, Landlord and
Tenant each hereby waive trial by jury in any action, proceeding or counterclaim
brought by either party against the other on any matter whatsoever arising out
of or in any way connected with this Lease, the relationship of Landlord and
Tenant created hereby, Tenant's use or occupancy of the Leased Premises or any
claim or injury or damage.

 

 

 
 

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Counterparts; Signatures. This Lease may be executed in counterparts. All
executed counterparts shall constitute one agreement, and each counterpart shall
be deemed an original. The parties hereby acknowledge and agree that facsimile
signatures or signatures transmitted by electronic mail in so-called “pdf”
format shall be legal and binding and shall have the same full force and effect
as if an original of this Lease had been delivered. Landlord and Tenant (i)
intend to be bound by the signatures on any document sent by facsimile or
electronic mail, (ii) are aware that the other party will rely on such
signatures, and (iii) hereby waive any defenses to the enforcement of the terms
of this Lease based on the foregoing forms of signature.

 

Use of the Excess Land. Tenant acknowledges that the use of the Excess Land by
Tenant or other parties shall be in the sole and absolute discretion of Landlord
and that Landlord may restrict use of the Excess Land altogether and that
Landlord shall have no liability to Tenant if it is unable to use the Excess
Land for any reason whatsoever. Landlord shall maintain or not maintain the
Excess Land in Landlord’s sole and absolute discretion, including, without
limitation, allowing the grass to grow in the current soccer field so that the
soccer field will be unusable for such purpose; provided, however, Landlord
shall not allow the Excess Land to become a blight or a hazard or a nuisance as
a result of Landlord’s maintenance or non-maintenance of the Excess Land.

 

Short-Term License of Building One.

 

12.12.31.     Tenant is currently in possession of Building One. Concurrently
with the Term Commencement Date (the “Short-Term License Commencement Date”),
Tenant shall have a short-term license to enter and occupy Building One for the
conduct of Tenant’s business as presently conducted in Building One and for
Tenant’s orderly relocation of its business from Building One to Building Two.
Tenant agrees that it has accepted Building One in its AS IS, WITH ALL FAULTS
condition existing on the date Tenant executes this Lease. Landlord shall have
no obligation to make any improvements, alterations or repairs to Building One
at any time during the short-term license. Tenant agrees that Landlord, its
employees, agents and consultants, shall have the right to enter Building One at
any time in cases of an emergency, and otherwise at reasonable times to inspect
the same, to perform such work as may be required, and to make repairs to
Building One, to post such notices as may be permitted or required by law to
prevent the perfection of liens against Landlord’s interest in the Project or to
show Building One to prospective tenants, purchasers, encumbrances or others, or
for any other purpose as Landlord may deem necessary or desirable; provided,
however, that Landlord shall use reasonable efforts to minimize interference
with Tenant’s business operations in Building One. Tenant shall not transfer,
assign or sublet Building One or the short-term license or any portion thereof
other than to a Related Entity, without first obtaining the written consent of
Landlord, which consent may be given or withheld in Landlord’s sole and absolute
discretion. Tenant shall not make or allow to be made any alterations, additions
or improvements in or to Building One without first obtaining the written
approval and consent of Landlord, and any alterations, additions or improvements
approved by Landlord shall be made at Tenant’s sole cost. Tenant shall, at its
sole cost and expense, comply with all laws and other requirements now in force
and which may hereafter be enacted with respect to Tenant’s use and possession
of Building One, and repair, replace and maintain in its current condition,
Building One and every part thereof during its occupancy of Building One, normal
wear and tear excepted. To the extent applicable, all provisions of this Lease,
including without limitation, the insurance and indemnity provisions of this
Lease, shall apply to Tenant’s use and occupancy of Building One.

 

 

 
 

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(b)     The term of the short-term license for Building One shall commence on
the Short-Term License Commencement Date and shall expire sixty (60) days later
(the “License Expiration Date”). Tenant shall have two (2) options to extend the
term of the short-term license for thirty (30) days each (as extended, an
“Extended License Expiration Date”) by giving Landlord notice of Tenant’s
exercise of such option at least fifteen (15) days before the initial License
Expiration Date or the first Extended License Expiration Date, as the case may
be. Tenant shall pay a license fee of $0.00 per month during the initial sixty
(60) day term, and $46,822.25 per month for each of the two (2) 30-day extended
terms (with no proration for partial months); provided, however, during the
entire term of the short-term license, Tenant shall be responsible for paying
Tenant’s Proportionate Share of Basic Operating Costs and other expenses with
respect to Building One, and for, among other things, the payment of all
utilities, janitorial services, and refuse removal for Building One.

 

(c)     On or before the License Expiration Date (or as applicable, the Extended
License Expiration Date), Tenant shall quit and surrender possession of Building
One to Landlord broom-clean and with all of Tenant’s furniture, trade fixtures,
equipment and other personal property removed (but Tenant shall have no
obligation to remove specialized improvements existing in or serving Building
One as of the Term Commencement Date, however, Tenant shall obtain any required
closure permits for such specialized improvements and Tenant, at its cost, shall
remove any item or improvement and take any action required to obtain the
closure permits), and otherwise in compliance with the provisions set forth in
Section 5.15 (replacing “Term Expiration Date” with “License Expiration Date” or
as applicable, “the Extended License Expiration Date”), and, in addition, Tenant
shall remove all of its Building One signage, shall repair any damage resulting
from such removal, and shall restore the area to the condition existing prior to
installation of such signage, normal wear and tear excepted. If Tenant holds
over after the License Expiration Date (or as applicable, the Extended License
Expiration Date), Tenant shall pay for each month of hold-over tenancy one
hundred fifty percent (150%) of the license fee which Tenant was obligated to
pay during the extended term, together with such other amounts as may become due
hereunder. No holding over by Tenant with respect to the short-term license
shall operate to extend the term. In the event of any unauthorized holding over,
Tenant shall indemnify, defend and hold Landlord harmless from and against all
claims, demands, liabilities, losses, costs, expenses (including reasonable
attorneys’ fees), injury and damages incurred by Landlord as a result of
Tenant’s delay in vacating Building One (including without limitation, damages
that Landlord might sustain as a consequence of its inability to fulfill its
obligations under a new lease by virtue of such hold over).

 

(d)     The termination of the short-term license shall not relieve Tenant of
any license fee or other obligations or indemnities due or owing under the
short-term license that accrue prior to or arise from events occurring prior to
the date Tenant vacates and surrenders Building One as required under the
short-term license. Such obligations and liabilities shall remain outstanding
until they are satisfied.

 

“As Built” Drawings. Landlord and Tenant agree that the original “as built”
drawings for the Project, which are owned by Tenant, shall remain at the Project
at all times in a room jointly designated by Landlord and Tenant, and shall be
available for review at all times by Tenant, Landlord, and the property manager
for the Project. Landlord and Tenant may each make copies of the “as built”
drawings and hereby grant each other a license to use such drawings.

 

Exhibits; Addenda. The following Exhibits and addenda are attached to,
incorporated in and made a part of this Lease: Exhibit A Floor Plan of the
Leased Premises and Site Plan of the Project; Exhibit B Initial Improvement of
the Leased Premises; Exhibit C Confirmation of Term of Lease; Exhibit D Building
Rules and Regulations; and Exhibit E Hazardous Materials Questionnaire.

 

 

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

 

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

 

“LANDLORD”:

 

_____________,

a ___________

 

 

By:                                                                              
         

Printed Name:                                                          
           

Title:                                                                          
          

 

“TENANT”:

 

EXAR CORPORATION,

a Delaware corporation

 

 

By:                                                                                        

Printed Name:                                                             
        

Title:                                                                           
         

 

 

 

 
 

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EXHIBIT A

 

FLOOR PLAN OF THE LEASED PREMISES

AND SITE PLAN OF THE PROJECT   

 

 

 
 

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EXHIBIT B

 

INITIAL IMPROVEMENT OF THE LEASED PREMISES 

 

1.     Tenant Improvements. Tenant shall select a contractor or design-builder
(the “Contractor/DB”) to construct and install the Tenant Improvements (as
defined below). The Contractor/DB shall be approved by Landlord, which approval
shall not be unreasonably withheld or delayed. In addition, Tenant shall provide
Landlord a copy of the construction budget for Landlord’s review. The
Contractor/DB shall construct and install the tenant improvements (the "Tenant
Improvements") in the Leased Premises, substantially in accordance with plans,
working drawings and specifications (“Tenant's Plans”) prepared by Tenant's
architect or design-builder (the “Architect/DB”), and Tenant's Plans shall be
approved by Landlord, which approval shall not be unreasonably withheld or
delayed. Tenant shall deliver Tenant’s Plans to Landlord via hard copy and via
an electronic CAD file. Tenant acknowledges that Landlord may condition its
approval of the Tenant Improvements on Tenant’s agreement to remove them prior
to the Term Expiration Date (or earlier termination of this Lease), repair any
damage resulting from such removal and restore the Leased Premises to their
condition existing prior to the date of the installation of such improvements,
normal wear and tear excepted; provided, however, Landlord shall have the right
to approve the Tenant Improvements made to the entry, lobby, and exterior façade
of the Building (which approval shall not be unreasonably withheld or delayed),
but Landlord shall not condition its approval on the removal of such
improvements at the Term Expiration Date (or earlier termination of this Lease).
The Architect/DB shall prepare the construction documents (the “Construction
Documents”), which shall be consistent with Tenant’s Plans (and, if there are
material portions that are inconsistent with Tenant’s Plans, such portions shall
be subject to Landlord’s written approval, which approval shall not be
unreasonably withheld or delayed). Tenant and Landlord shall cooperate with and
diligently assist the Architect/DB in completing the Construction Documents.
Tenant shall deliver a copy of the Construction Documents to Landlord.

 

2.     Construction Documents. The Construction Documents shall comply with all
applicable codes, laws, ordinances, rules and regulations, shall not adversely
affect the Building shell or core or any systems, components or elements of the
Building, shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the Building, and shall be otherwise
satisfactory to Landlord in Landlord's reasonable discretion. The Construction
Documents shall be complete plans, working drawings and specifications for the
layout, improvement and finish of the Leased Premises consistent with the design
and construction of the Building, including mechanical and electrical drawings
and decorating plans, showing as many of the following as possible:

 

(a)     Location and type of all partitions;

 

(b)     Location and type of all doors, with hardware and keying schedule;

 

(c)     Ceiling plans, including light fixtures;

 

(d)     Location of telephone equipment room, with all special electrical and
cooling requirements;

 

 

 
 

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(e)     Location and type of all electrical outlets, switches, telephone
outlets, and lights;

 

(f)     Location of all fire/life safety systems, including, without limitation,
location of all sprinklers;

 

(g)     Location and type of all equipment requiring special electrical
requirements;

 

(h)     Location, weight per square foot and description of any heavy equipment
or filing system exceeding fifty (50) pounds per square foot live and dead load;

 

(i)     Requirements for air conditioning or special ventilation;

 

(j)     Type and color of floor covering;

 

(k)     Location, type and color of wall covering;

 

(l)     Location, type and color of paint or finishes;

 

(m)     Location and type of plumbing;

 

(n)     Location and type of kitchen equipment;

 

(o)     Indicate critical dimensions necessary for construction;

 

(p)     Details showing all millwork with verified dimensions and dimensions of
all equipment to be built in, corridor entrances, bracing or support of special
walls or glass partitions, and any other items or information requested by
Landlord; and

 

(q)     Location of all cabling.

 

3.     Landlord's Review. Landlord's review and approval of Tenant's Plans or
the Construction Documents shall not constitute, and Landlord shall not be
deemed to have made, any representation or warranty as to the compliance of the
Tenant Improvements with any laws or as to the suitability of the Leased
Premises or the Tenant Improvements for Tenant's needs.

 

4.      Construction.      The Tenant Improvements in the Leased Premises shall
be completed substantially in accordance with the Construction Documents by the
Contractor/DB in a good and workmanlike manner. Tenant shall promptly pay when
due the entire cost of all of the Tenant Improvements (including the cost of all
utilities, permits, fees, taxes, and property and liability insurance in
connection therewith) required by the Construction Documents.

 

 

 
 

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5.     Landlord's Contribution; Liens; Fee. As Landlord's contribution for the
costs of Tenant Plans and for the costs of constructing the Tenant Improvements,
Landlord shall give Tenant an allowance in the maximum amount of Five and NO/100
Dollars ($5.00) per rentable square foot of the Leased Premises, which equals
$479,810.00 based upon 95,962 rentable square feet (“Landlord's Contribution”).
Landlord's Contribution may be used only for construction costs (hard costs) for
constructing the Tenant Improvements. Landlord shall pay Landlord's Contribution
to Tenant within thirty (30) days of Landlord's receipt of a written request for
payment accompanied by copies of written invoices, completion lien waivers with
respect to the Tenant Improvements, all required governmental approvals with
respect to the Tenant Improvements, other written evidence reasonably
satisfactory to Landlord showing the costs incurred, and the Tenant Improvements
Close-Out Items (as defined below). Tenant shall indemnify and protect Landlord
against any liability for mechanics, materialmen's and other liens or claims
with respect to the Tenant Improvements and equipment installed in the Leased
Premises and shall obtain releases to liens as payments are made relating to
such liens. Tenant shall pay to Landlord (or Landlord may deduct from Landlord’s
Contribution) a construction management fee not to exceed the lesser of two
percent (2%) of the total construction costs (soft costs and hard costs) for
constructing the Tenant Improvements or $20,000.00. The “Tenant Improvements
Close-Out Items” shall consist of (i) a letter from the Contractor/DB stating
that there are no outstanding change orders to be signed, invoiced, or paid, and
that the final invoice amount covers all monies due on project, (ii) a copy of
the warranty from the Contractor/DB, (iii) a certificate of completion from the
Architect/DB stating that the Tenant Improvements are in compliance with the
Construction Documents and all punch-list items have been completed, (iv) a
complete and final budget for all construction costs (hard and soft costs) with
respect to the Tenant Improvements (including, without limitation, costs for
architects, consultants, and permits), (v) a subcontractor list by trade with
contact information, (vi) an air balance report, (vii) as-built drawings (in
both CAD and PDF), (viii) Building plans, MEP plans, electrical panel schedules,
FLS plans (fire alarm & fire sprinkler), process piping (if applicable), and a
permit set (hard copy), (viii) schedule of finish selections and copies of each,
(ix) manuals and/or manufacturer’s product information, (x) an unconditional
lien release upon final payment to the Contractor/DB and subcontractors and
primary suppliers, (xi) warranties (if applicable) for
roofing/waterproofing/exterior envelope, and major equipment (including a
warranty log), (xii) a close-out letter from each of the following (if
applicable): geotechnical, concrete/steel, and waterproofing, and (xiii) a
temporary and final certificate of occupancy from the applicable city, and a
signed-off final building permit (and other project related permits) from the
applicable city and other applicable governmental entities.

 

6.      Changes. Except for minor or immaterial changes, Tenant shall submit
material changes in the Construction Documents in writing to Landlord for its
approval, which approval shall not be unreasonably withheld or delayed.

 

7.     Requirements for Work Performed by Tenant. All work performed at the
Building or in the Project by Tenant or Tenant’s Contractor/DB or subcontractors
shall be subject to the following additional requirements:

 

(a)     Such work shall not proceed until Landlord has approved in writing
(which approval shall not be unreasonably withheld or delayed): (i) the amount
and coverage of public liability and property damage insurance, with Landlord
named as an additional insured, on such liability coverage carried by Tenant’s
Contractor/DB, (ii) complete and detailed plans and specifications for such
work, and (iii) a schedule for the work.

 

(b)     All work shall be done in conformity with a valid permit when required,
a copy of which shall be furnished to Landlord before such work is commenced. In
any case, all such work shall be performed in accordance with all applicable
laws. Notwithstanding any failure by Landlord to object to any such work,
Landlord shall have no responsibility for Tenant’s failure to comply with
applicable laws.

 

(c)     Tenant shall be responsible for cleaning the Leased Premises, the
Building and the Project and removing all debris in connection with its work.
All completed work shall be subject to inspection and acceptance by Landlord.
Tenant shall reimburse Landlord for its reasonable out-of pocket costs for all
extra expense incurred by Landlord to repair faulty work done by Tenant or
Tenant’s Contractor/DB or to clean the Leased Premises or Project due to
inadequate cleanup by Tenant or Tenant’s Contractor/DB.

 

 

 
 

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EXHIBIT C

 

CONFIRMATION OF TERM OF LEASE

 

 

This Confirmation of Term of Lease is made by and between _________, a
_________, as Landlord, and _______, a ________________, as Tenant, who agree as
follows:

 

1.     Landlord and Tenant entered into a Lease dated _____, ____ (the “Lease”),
in which Landlord leased to Tenant and Tenant leased from Landlord the Leased
Premises described in the Basic Lease Information sheet of the Lease (the
“Leased Premises”).

 

2.     Pursuant to Section 3.1 of the Lease, Landlord and Tenant hereby confirm
as follows:

 

a.     _____, ____ is the Term Commencement Date;

 

b.     _____, ____ is the Term Expiration Date; and

 

c.     _____, ____ is the commencement date of Rent under the Lease.

 

3.     Tenant hereby confirms that the Lease is in full force and effect and:

 

a.     The Lease has not been modified, altered or amended, except as follows:
_______________________________________________________ and

 

b.     There are no setoffs or credits against Rent and no security deposit has
been paid except as expressly provided by the Lease.

 

4.     The provisions of this Confirmation of Term of Lease shall inure to the
benefit of, or bind, as the case may require, the parties and their respective
successors, subject to the restrictions on assignment and subleasing contained
in the Lease.

 

///signature page follows///

 

 

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///continued from previous page///

 

DATED: _______________, _______

 

“LANDLORD”:

 

_______________________,

a ______________________

 

 

By:                                                                              
         

Printed Name:                                                       
              

Title:                                                                            
        

 

 

“TENANT”:

 

_______________________,

a ______________________

 

 

By:                                                                                        

Printed
Name:                                                                      

Title:                                                                         
           

 

 

 

 
 

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EXHIBIT D

 

BUILDING RULES AND REGULATIONS

 

The following rules and regulations shall apply to the Leased Premises and the
Project:

 

1.     No signs, advertisements or notices (except for those pre-existing the
Term Commencement Date) shall be painted or affixed on or to any windows or
doors or other part of the Building visible from the exterior of the Leased
Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed. Except as reasonably consented to in writing
by Landlord or in accordance with Tenant’s building standard improvements, no
draperies, curtains, blinds, shades, screens or other devices shall be hung at
or used in connection with any window or exterior door or doors of the Leased
Premises. No awning shall be permitted on any part of the Building. Tenant shall
not place anything against or near glass partitions or doors, or windows which
appears unsightly from outside the Leased Premises.

 

2.     Tenant, at its expense, shall be responsible for providing all door locks
in the Leased Premises and shall provide to Landlord, at Tenant’s expense,
contemporaneously with the installation of such devices, a master key, card
keys, access codes or other means to allow Landlord access to all areas within
the Leased Premises.

 

3.     Landlord may prescribe reasonable weight limitations and determine the
locations for safes and other heavy equipment or items, which shall in all cases
be placed in the Building so as to distribute weight in a manner reasonably
acceptable to Landlord, which may include the use of such supporting devices as
Landlord may require. All damage to the Building caused by the installation or
removal of any property of a tenant, or done by a tenant’s property while in the
Building, shall be repaired at the expense of such tenant, reasonable wear and
tear excepted.

 

4.     Plumbing (including outside drains and sump pumps), fixtures and
appliances shall be used only for the purposes for which designed, and no
sweepings, rubbish, rags or other unsuitable material shall be thrown or
deposited therein. Damage resulting to any such fixtures or appliances from
misuse by a tenant or its agents, employees or invitees, shall be paid by such
tenant.

 

5.     Sidewalks, doorways, hallways, loading areas and associated overhead
doors, and other similar areas shall not be obstructed by tenants or used by any
tenant for purposes other than ingress and egress to and from their respective
leased premises and for going from one to another part of the Building.

 

6.     No birds or animals (other than service animals) shall be brought into or
kept in, on or about the Leased Premises. No portion of the Leased Premises
shall at any time be used or occupied as sleeping or lodging quarters.

 

7.     Tenant shall not make or permit any vibration or improper, objectionable
or unpleasant noises or odors in the Leased Premises or otherwise interfere in
any way with other tenants of the Building or persons having business with them.
Tenant shall not introduce, disturb or release asbestos or PCB’s into or from
the Leased Premises.

 

 

 
 

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8.     Tenant shall not keep in the Leased Premises any flammable or explosive
fluid or substance, except for substances that are used, stored and/or disposed
in compliance with all applicable laws, ordinances and regulations and are
customarily present in a building for general office use (e.g., copying machine
chemicals and kitchen cleansers) or are used in connection with Tenant’s
Permitted Use of the Leased Premises.

 

9.     Landlord will not be responsible for lost or stolen personal property,
money or jewelry from the Leased Premises or the Project regardless of whether
such loss occurs when the area is locked against entry or not.

 

10.     Tenant shall not conduct any activity on or about the Leased Premises or
the Project which will draw pickets, demonstrators, or the like.

 

11.     All vehicles are to be currently licensed, in good operating condition,
parked for business purposes having to do with Tenant’s business operated in the
Leased Premises, parked within designated parking spaces, one vehicle to each
space. No vehicle shall be parked as a “billboard” vehicle in the parking lot.
Any vehicle parked improperly may be towed away. Tenant, Tenant’s agents,
employees, vendors and customers who do not operate or park their vehicles as
required shall subject the vehicle to being towed at the expense of the owner or
driver.

 

12.     Tenant shall not park or operate any semi-trucks or semi-trailers in the
parking areas associated with the Leased Premises.

 

13.     No party shall wash and/or detail automobiles or perform automobile
repair work (except in the event of an emergency) at the Project.

 

14.     Canvassing, soliciting or peddling in or about the Leased Premises or
the Project is prohibited and Tenant shall cooperate to prevent same.

 

15.     Tenant shall not permit storage outside the Leased Premises, including
outside storage of trucks and other vehicles, or dumping of waste or refuse or
permit any harmful materials to be placed in any drainage system or sanitary
system in or about the Leased Premises.

 

16.     [intentionally deleted].

 

17.     Tenant shall not install or operate on the Leased Premises any machinery
or mechanical devices of a nature not directly related to Tenant’s Permitted Use
of the Leased Premises.

 

18.     Tenant will not permit any party related to Tenant to bring onto the
Project any handgun, firearm or other weapons of any kind or illegal drugs.

 

19.     Tenant shall not permit its employees, invitees or guests to smoke in
the Building, or permit its employees, invitees or guests to loiter at the
Building entrances for the purposes of smoking. Landlord may, but shall not be
required to, designate an area for smoking outside the Building.

 

20.     Landlord reserves the right to rescind any of these rules and
regulations and to make future rules and regulations required for the safety,
protection and maintenance of the Project, the operation and preservation of the
good order thereof, and the protection and comfort of the tenants and their
employees and visitors. Such rules and regulations, when made and written notice
thereof given to Tenant, shall be binding as if originally included herein.
Landlord shall not be responsible to Tenant for the non-observance or violation
of these rules and regulations by any other tenant of the Building. Landlord
reserves the right to ask any person to leave the Project area who, in
Landlord’s reasonable judgment, is under the influence of drugs or impaired by
alcohol, or who shall in any manner do any act that is a material violation of
any of these rules and regulations.

 

 

 
 

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EXHIBIT E

 

HAZARDOUS MATERIALS QUESTIONNAIRE

 

 

Landlord:

___________

 

Tenant:

EXAR CORPORATION

 

Leased Premises:

Approximately 95,962 rentable square feet consisting of the entire Building
located at 48760 Kato Road, Fremont, California               

 

Date of Lease:

______, 2013

 

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):

 

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Length of initial Term:

One hundred twenty (120) months

 

Any and all capitalized terms used herein, which are not otherwise defined
herein, shall have the same respective meanings ascribed to such terms in
Tenant’s Lease for the Leased Premises.

 

1.             General Information:

 

Describe the operations to take place in, on or about the Leased Premises,
including, without limitation, principal products processed, manufactured or
assembled services and activities to be provided or otherwise conducted. If this
Questionnaire is an update delivered by an existing tenant, tenant should
describe any proposed changes to on-going operations.

 

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2.             Use, Storage and Disposal of Hazardous Materials

 

2.1     Will any Hazardous Materials be used, generated, stored or disposed of
in, on or about the Leased Premises? Existing tenants should describe any
Hazardous Materials which continue to be used, generated, stored or disposed of
in, on or about the Leased Premises.

 

Wastes                             Yes [  ]          No [  ]

Chemical Products          Yes [  ]          No [  ]

Other                                 Yes [  ]          No [  ]

 

If Yes is marked, please
explain:                                                                                                                                                 

 

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2.2     If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Leased Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household or office cleaners and janitorial supplies which
are not prohibited by any Hazardous Materials Laws); and the proposed
location(s) and method of disposal for each Hazardous Material, including, the
estimated frequency, and the proposed contractors or subcontractors. Existing
tenants should attach a list setting forth the information requested above and
such list should include actual data from on-going operations and the
identification of any variations in such information from the prior year’s
certificate.

 

3.             Storage Tanks and Sumps

 

3.1     Is any above or below ground storage of gasoline, diesel, petroleum, or
other Hazardous Materials in tanks or sumps proposed in, on or about the Leased
Premises? Existing tenants should describe any such actual or proposed
activities.

 

Yes [  ]                                   No [  ]

 

If Yes, please explain:
                                                                                                                                                           

 

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4.             Waste Management

 

4.1     Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing tenants should describe any additional identification numbers
issued since the previous certificate.

 

Yes [  ]                                   No [  ]

 

If Yes, provide the
number(s):                                                                                                                                              

 

4.2     Has your company filed a biennial or quarterly reports as a hazardous
waste generator? Existing tenants should describe any new reports filed.

 

Yes [  ]                                   No [  ]

 

 

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If Yes, attach a copy of the most recent report filed.

 

5.             Wastewater Treatment and Discharge

 

5.1     Will your company discharge wastewater or other wastes to:

 

         storm drain?                 sewer?

         surface water?              no wastewater or other wastes discharged.

 

 

 
 

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Existing tenants should indicate any actual discharges. If so, describe the
nature of any proposed or actual discharge(s).

 

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5.2     Will any such wastewater or waste be treated before discharge?

 

Yes [  ]                                   No [  ]

 

If Yes, describe the type of treatment proposed to be conducted. Existing
tenants should describe the actual treatment conducted.

 

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6.             Air Discharges

 

6.1     Do you plan for any air filtration systems or stacks to be used in your
company’s operations in, on or about the Leased Premises that will discharge
into the air; and will such air emissions be monitored? Existing tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Leased Premises which discharge into the air and whether
such air emissions are being monitored.

 

Yes [  ]                                   No [  ]

 

If Yes, please
describe:                                                                                                                                                           

 

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6.2     Do you propose to operate any of the following types of equipment, or
any other equipment requiring an air emissions permit? Existing tenants should
specify any such equipment being operated in, on or about the Leased Premises.

 

         Spray booth(s)              Incinerator(s)

         Dip tank(s)                     Other (please describe)

         Drying oven(s)              No equipment requiring air permits

 

If Yes, please
describe:                                                                                                                                                           

 

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7.             Hazardous Materials Disclosures

 

7.1     Has your company prepared or will it be required to prepare a Hazardous
Materials management plan (“Management Plan”) pursuant to Fire Department or
other governmental or regulatory agencies’ requirements? Existing tenants should
indicate whether or not a Management Plan is required and has been prepared.

 

Yes [  ]                                   No [  ]

 

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If Yes, attach a copy of the Management Plan. Existing tenants should attach a
copy of any required updates to the Management Plan.

 

7.2     Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations, in on or about the Leased Premises
regulated under Proposition 65? Existing tenants should indicate whether or not
there are any new Hazardous Materials being so used which are regulated under
Proposition 65.

 

Yes [  ]                                   No [  ]

 

If Yes, please explain:
                                                                                                                                
                            

 

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8.             Enforcement Actions and Complaints

 

8.1     With respect to Hazardous Materials or Hazardous Materials Laws, has
your company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations at the Leased Premises? Existing tenants should indicate whether or
not any such actions, orders or decrees have been, or are in the process of
being, undertaken or if any such written requests have been received.

 

Yes [  ]                                   No [  ]

 

If Yes, describe the actions, orders or decrees and any continuing compliance
obligations imposed as a result of these actions, orders or decrees and also
describe any requests, notices or demands, and attach a copy of all such
documents. Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord.

 

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8.2     Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety concerns with
respect to the Leased Premises?

 

Yes [  ]                                   No [  ]

 

If Yes, describe any such lawsuits and attach copies of the complaint(s),
cross-complaint(s), pleadings and all other documents related thereto as
requested by Landlord. Existing tenants should describe and attach a copy of any
new complaint(s), cross-complaint(s), pleadings and other related documents not
already delivered to Landlord.

 

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8.3     Have there been any problems or complaints from adjacent tenants, owners
or other neighbors at the Leased Premises with regard to environmental or health
and safety concerns? Existing tenants should indicate whether or not there have
been any such problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Leased Premises.

 

Yes [  ]          No [  ]

 

If Yes, please describe. Existing tenants should describe any such problems or
complaints not already disclosed to Landlord under the provisions of the Lease.

 

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9.             Permits and Licenses

 

9.1     Attach copies of all Hazardous Materials permits and licenses including
a Transporter Permit number issued to your company with respect to its proposed
operations in, on or about the Leased Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new permits and licenses
as well as any renewals of permits or licenses previously issued.

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

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The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Questionnaire is being delivered to Landlord in accordance with, and as required
by, the provisions of Section 6.1(a) of the Lease, and (B) that Tenant shall
have and retain full and complete responsibility and liability with respect to
any of the Hazardous Materials disclosed in this Questionnaire notwithstanding
Landlord’s/Tenant’s receipt and/or approval of this Questionnaire. Tenant
further agrees that none of the following described acts or events shall be
construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant’s indemnification of Landlord and compliance with all
Hazardous Materials Laws, or (b) imposing upon Landlord, directly or indirectly,
any duty or liability with respect to any such Hazardous Materials, including,
without limitation, any duty on Landlord to investigate or otherwise verify the
accuracy of the representations and statements made therein or to ensure that
Tenant is in compliance with all Hazardous Materials Laws: (i) the delivery of
such Questionnaire to Landlord and/or Landlord’s acceptance of such
Questionnaire, (ii) Landlord’s review and approval of such Questionnaire, (iii)
Landlord’s failure to obtain such Questionnaire from Tenant at any time, or (iv)
Landlord’s actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Leased Premises by Tenant or Tenant’s representatives.
Notwithstanding the foregoing or anything to the contrary contained herein, the
undersigned acknowledges and agrees that Landlord and its partners, lenders,
agents and representatives may, and will, rely upon the statements,
representations, warranties and certifications made herein and the truthfulness
thereof in entering into the Lease and the continuance thereof throughout the
Term of the Lease, and any renewals thereof.

 

I, (print name) ____________________________, acting with full authority to bind
Tenant and on behalf of Tenant, hereby certify, represent and warrant that the
information contained in this Questionnaire is true and correct.

 

Tenant:

 

EXAR CORPORATION,

a Delaware corporation

 

 

By:                                                                
                   

Name:                                                               
               

Title:                                                                          
      

Date:                                                                  , 20____

 

 

 
 

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EXHIBIT E

 

Affidavit of Non-Foreign Status

 

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
To inform the transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by _________________________
(“Seller”), the undersigned hereby certifies the following on behalf of Seller:

 

1.     Seller is not a foreign person, foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);

 

2.     Seller is not a disregarded entity as defined in §1.1445-2(b)(2)(iii) of
the Income Tax Regulations.

 

3.     Seller’s Tax Identification Number is _________________; and

 

4.     Seller’s address is ________________________________.

 

Seller understands that this certification may be disclosed to the Internal
Revenue Service by the transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

 

 

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Under penalty of perjury I declare that I have examined this certificate and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of Seller.

 

Dated: ____________, 2013.

 

SELLER:

 

Exar Corporation,

a Delaware corporation

 

 

By:                                                         

 

Name:                                                    

 

Title:                                                      

 

 

 
 

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EXHIBIT F

 

GENERAL ASSIGNMENT

 

For Valuable Consideration, receipt of which is hereby acknowledged, the
undersigned, Exar Corporation, a Delaware corporation ("Seller"), hereby sells,
transfers, assigns and conveys to _________________, a _________________
(“Purchaser”), all of Seller's right, title and interest in the following, to
the extent owned by Seller and relating to the real property described on
Schedule A attached hereto (the "Property"):

 

(a)     All rights, privileges, interests, licenses, claims, easements,
benefits, covenants, conditions and servitudes of any type or nature which are
appurtenant to or otherwise benefiting the Property, including all minerals,
oil, gas and other hydrocarbon substances on and under the Property, as well as
all development rights, air rights, water, water rights and water stock relating
to the Property, and any other easements, rights of way or appurtenances owned
by Seller and used in connection with the beneficial operation, use and
enjoyment of the Property, or any other appurtenance, together with all rights
of Seller, if any, in and to streets, sidewalks, alleys, gores, strips,
driveways, parking areas and areas adjacent thereto or used in connection
therewith;

 

(b)     Any warranties or guarantees owned by Seller from any contractors,
subcontractors, suppliers or materialmen in connection with any construction,
repairs or alterations of the buildings, structures, and other improvements
existing upon the Property, all licenses, permits, approvals, certificates of
occupancy, dedications, subdivision maps and entitlements now or hereafter
issued, approved or granted by any governmental entity in connection with the
Property; and

 

(c)     All right, title and interest of Seller in, to and under the contracts
assigned to Purchaser (the “Assigned Contracts”) described in Schedule B
attached hereto and made a part hereof.

 

By its acceptance hereof, Assignee hereby accepts the foregoing assignment. This
General Assignment shall be governed by and be construed in accordance with the
laws of the State of California.

 

Dated:     ______________, 2013

 

SELLER:

 

Exar Corporation,

a Delaware corporation

 

 

By:                                                       

 

Name:                                                  

 

Title:                                                    

 

 

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Schedule A to General Assignment

 

Property Description

 

LOTS 9, 10 AND 17 OF TRACT 4642, FILED MARCH 10, 1981, MAP BOOK 126, PAGE 30,
ALAMEDA COUNTY RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 9, TRACT 4642, HEREINABOVE
DESCRIBED, SAID POINT BEING ON THE EASTERLY LINE OF KATO ROAD AS SHOWN ON SAID
MAP; THENCE ALONG SAID EASTERLY LINE, SOUTH 21° 45' 17" EAST 70.60 FEET TO THE
BEGINNING OF A CURVE CONCAVE TO THE NORTHEAST HAVING A RADIUS OF 356.02 FEET;
THENCE SOUTHEASTERLY A LENGTH OF 556.91 FEET ALONG SAID CURVE THROUGH A CENTRAL
ANGLE OF 89° 37' 33"; THENCE NORTH 68° 37' 10" EAST 259.34 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 40.00 FEET; THENCE
NORTHEASTERLY ALONG SAID CURVE A LENGTH OF 62.83 FEET THROUGH A CENTRAL ANGLE OF
90° 00' 00" TO THE WESTERLY LINE OF MILMONT DRIVE; THENCE ALONG SAID WESTERLY
LINE, NORTH 21° 22' 50“ WEST 160.47 FEET TO THE BEGINNING OF A CURVE CONCAVE TO
THE EAST HAVING A RADIUS OF 532.00 FEET; THENCE NORTHERLY ALONG SAID CURVE A
LENGTH OF 258.91 FEET; THENCE NORTH 6° 30' 15" EAST 183.35 FEET TO THE BEGINNING
OF A CURVE CONCAVE TO THE WEST HAVING A RADIUS OF 468.00 FEET; THENCE NORTHERLY
ALONG SAID CURVE A LENGTH OF 215.65 FEET THROUGH A CENTRAL ANGLE OF 26° 24' 03“
TO THE NORTHERLY LINE OF SAID LOT 10; THENCE ALONG SAID NORTHERLY LINE, SOUTH
68° 37' 10" WEST 398.01 FEET; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 17,
SOUTH 69° 23' 28" WEST 460.78 FEET TO THE EASTERLY LINE OF KATO ROAD; THENCE
ALONG SAID EASTERLY LINE, SOUTH 20° 36' 32" EAST 29.68 FEET TO THE BEGINNING OF
A CURVE CONCAVE TO THE EAST HAVING A RADIUS OF 3960.23 FEET; THENCE SOUTHERLY
ALONG SAID CURVE A LENGTH OF 79.20 FEET THROUGH A CENTRAL ANGLE OF 1° 08' 45";
THENCE SOUTH 21° 45' 17" EAST 291.15 FEET TO THE SAID POINT OF BEGINNING OF THIS
DESCRIPTION.

 

PURSUANT TO THE "DECLARATION OF MERGER" RECORDED JANUARY 12, 1995 AS INSTRUMENT
NO. 95-7233 OF OFFICIAL RECORDS.

 

 

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Schedule B to General Assignment

 

Schedule of Assigned Contracts

 

(To be attached)

 

 

 
 

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EXHIBIT G

 

ASSIGNMENT OF PURCHASE AND SALE AGREEMENT

 

 

This ASSIGNMENT OF PURCHASE AND SALE AGREEMENT is entered into as of
_______________, 2013, by and between ELLIS PARTNERS LLC, a California limited
liability company (“Assignor”), and ___________________________, a
__________________________ (“Assignee”).

 

In consideration of the mutual covenants of the parties herein contained and
other valuable consideration, Assignor hereby assigns to Assignee all of
Assignor’s rights, title and interest in and to that certain Purchase and Sale
Agreement, dated July 9, 2013, between Assignor, as Purchaser, and Exar
Corporation, a Delaware corporation, as Seller (the “Agreement”), relating to
real property with street addresses of 48720 and 48760 Kato Road, Fremont,
California, and related property assets, all as more particularly described
therein. Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement, receipt of a copy of which is hereby
acknowledged by the Assignee.

 

Assignee hereby accepts said assignment and agrees to be bound by, and to assume
and timely perform Assignor’s obligations under, the Agreement. Without limiting
the generality of the foregoing, Assignee acknowledges and agrees that, in
entering this Assignment, it is agreeing to be bound by and is assuming the
obligations of Assignor under Article 3 of the Agreement to pay Liquidated
Damages to Seller if required under the terms and conditions stated therein, and
under Section 12.8 of the Agreement restricting assignments of the Agreement.
Assignee further acknowledges and agrees that at the closing of the purchase and
sale evidenced by the Agreement, it shall become the Landlord under the
Leaseback Lease, as defined in the Agreement.

 

Assignee hereby represents and warrants for the benefit of Seller and Assignor
that, as of the effective date of this Assignment and as of the Closing Date,
each of the representations and warranties applicable to Purchaser under Section
7.3 of the Agreement are true and correct as to the Assignee (provided, that
with respect to this Assignment, the representations and warranties in the first
sentence of Section 7.3.1 of the Agreement are hereby modified to reflect that
Assignee is a ___________________ duly formed and organized, and validly
existing under the laws of _______________ and is qualified to transact business
in California).

 

Assignee hereby agrees to the terms set forth in Annex 1 (“AS IS” Purchase Terms
and Release of Seller), which are incorporated herein by reference and made a
part of this Assignment as if set forth herein in full, and Assignee makes, as
of the effective date of this Assignment and as of the Closing Date, the
representations, warranties and covenants contained in Annex 1 for the benefit
of Seller and Assignor.

 

Assignee agrees to be bound by the Nondisclosure Agreement, which is attached
hereto as Annex 2 and made a part hereof, between it and Seller, and represents
and warrants that it has delivered an executed copy of the Nondisclosure
Agreement to Seller.

 

 

 
 

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This Assignment does not release or discharge Assignor from any liability,
whether past, present or future, under the Agreement, or alter the primary
liability of Assignor to perform and comply with all of the obligations of
Purchaser under the Agreement.

 

Assignor and Assignee agree that Seller under the Agreement is an express
third-party beneficiary of this Assignment with full rights to enforce the terms
of this Assignment.

 

Assignor and Assignee represent and acknowledge that, pursuant to Section 12.8
of the Agreement, this Assignment does not require Seller’s consent, but such
waiver of consent by Seller is conditioned upon, and only effective if, a fully
executed copy of this Assignment is delivered to Seller, and this Assignment
shall not become effective until such delivery has been made. Seller’s execution
of the acknowledgment below shall evidence its receipt of a fully executed copy
of this Assignment.

 

This Assignment shall be governed by, construed and interpreted in accordance
with the laws of the State of California, without giving effect to principles of
conflict of laws.

 

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
effective as of the date first set forth above.

 

ASSIGNOR:

ELLIS PARTNERS LLC,

a California limited liability company

 

 

By:                                                               

 

Name:                                                          

 

Title:                                                            

 

 

 

 

ASSIGNEE:

 

 

By:                                                                

 

Name:                                                           

 

Title:                                                             

 

ACKNOWLEDGMENT OF RECEIPT PURSUANT TO AGREEMENT SECTION 12.8:

 

Dated: ________________

SELLER: Exar Corporation, a Delaware corporation

 

By: _______________________

 

Name: _____________________

 

Title: ______________________

 

 

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Annex 1 to Assignment of Purchase and Sale Agreement

 

“AS IS” Purchase Terms and Release of Seller

 

Capitalized terms used but not defined herein shall have the meanings given to
them in the Purchase and Sale Agreement, dated July 9, 2013, between Ellis
Partners LLC, a California limited liability company, as Purchaser, and Exar
Corporation, a Delaware corporation, as Seller (the “Agreement”).

 

1.1     “AS IS” Purchase. Assignee hereby represents, warrants, and agrees that,
as of the date of this Assignment and as of the Closing Date: (i) it is buying
and accepting the Property on an “AS IS” basis, with all patent, latent, and
hidden defects; (ii) it has had the opportunity to make or will have made prior
to the Closing its own investigations, studies, and inspections of the Property
as it deems necessary or appropriate, including, without limitation, the
physical aspects and condition of the Property and the Property’s compliance
with all laws and regulations applicable to the Property’s current or intended
use or development; (iii) in connection with its investigations, studies and
inspections of the Property it has contracted or had the opportunity to contract
with certain advisors and consultants, including, but not limited to,
environmental consultants, engineers and geologists, to conduct such
environmental, hazardous material, geological, soils, hydrology, seismic,
endangered species, archeological, physical, structural, mechanical and other
inspections of the Property as Assignee deemed to be necessary, including
without limitation those items described in the Natural Hazard Disclosure
Statement; (iv) it is relying solely on its and its advisors’ and consultants’
investigations, studies and inspections as to the Property, its condition and
other characteristics and compliance with laws and regulations; (v) it is
relying solely on its own review and analysis of the Due Diligence Materials,
and it acknowledges and agrees that, except for the express representations and
warranties in Section 7.2 of the Agreement, Seller has not made any
representation or warranty whatsoever concerning the completeness or the
accuracy of information contained in the Due Diligence Materials; (vi) it has
not received from Seller any accounting, tax legal, architectural, engineering,
property management, environmental or other advice with respect to this
transaction and is relying solely upon the advice of its own accounting, tax,
legal, architectural, engineering, property management, environmental and other
advisors; and (vii) it is not relying on any implied or express warranty or
representation by Seller (except for the express representations and warranties
in Section 7.2 of the Agreement), and Seller shall have no liability, with
respect to the value, uses, habitability, physical or environmental condition,
design, operation, financial condition or prospects, or fitness for purpose or
use of the Property (or any portion thereof), or any other aspect, portion or
component of the Property. Without limiting the generality of the foregoing,
except for the express representations and warranties of Seller contained in
Section 7.2 of the Agreement, Seller disclaims the making of any representations
or warranties, express or implied, regarding the Property, its condition, or
matters affecting the Property, including, without limitation, title to or the
boundaries of the Property, topography, climate, air, water rights, utilities,
leases, water, present and future zoning, physical condition, soil condition,
pest control matters, engineering characteristics, traffic patterns, purposes to
which the Property may be suited, value, potential for development, hazardous
materials, contamination, flood hazard areas, drainage, access to public roads,
proposed routes of roads or extensions thereof, the square footage of the
Property or the Improvements, compliance with building, health and safety laws,
environmental laws, land use laws and regulations to which the Property may be
subject and all other matters in any way affecting the Property, or the use or
ownership thereof. The provisions of this Section 1.1 shall survive Closing.

 

 

 
 

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1.2     Release of Seller. The acknowledgments and agreements contained in this
Annex 1 constitute a conclusive admission that Assignee, as a sophisticated,
knowledgeable investor in commercial property, has relied upon its own judgment
as to any matter germane to the Property, or its purchase or contemplated use
thereof, and that any other statement with respect thereto, whether oral,
written, constructive, express or implied, is immaterial to Assignee. Effective
as of the Closing Date, Assignee, on behalf of itself and its affiliates,
subsidiaries, partners, limited partners, shareholders, directors, officers,
employees, agents, contractors, attorneys, lenders, representatives,
administrators, trustees, successors and assigns, hereby releases and forever
discharges Seller and its affiliates, subsidiaries, partners, limited partners,
shareholders, directors, officers, employees, agents, contractors, attorneys,
lenders, representatives, administrators, trustees, successors, and assigns from
any and all claims, causes of action, derivative actions, administrative
actions, actions at law or in equity, demands, damages, fees, costs, losses,
expenses and liabilities of any nature – whether known or unknown, suspected or
unsuspected, contingent or fixed – that Assignee has or may have in the future,
arising out of the physical, environmental, economic or legal condition of the
Property, its compliance with applicable laws and regulations or its fitness for
Assignee’s intended purpose; provided, however, that the foregoing release shall
not apply to (i) any obligations of Seller arising under the Leaseback Lease
during the term thereof, (ii) Seller’s obligations under Section 10.9 or Article
11 of the Agreement, or (iii) claims for contribution to or indemnity of cleanup
and remediation costs that are incurred due to an order issued by, or legal
action brought by, any applicable governmental authority for a release of
hazardous materials, hazardous waste, or other contaminants in violation of
applicable environmental laws, but only to the extent of those cleanup and
remediation costs that are caused by Seller’s release of hazardous materials,
hazardous waste, or other contaminants in violation of applicable environmental
laws prior to the Closing Date. In giving the foregoing release, Assignee hereby
acknowledges that it has read and does hereby waive the provisions of §1542 of
the California Civil Code, which reads as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

The provisions of this Section 1.2 shall survive Closing.

 

1.3     Natural Hazards Disclosures. The parties acknowledge that the
“Disclosure Statutes” (as defined below) provide that a seller of real property
must make certain disclosures regarding certain natural hazards potentially
affecting the property, as more particularly provided therein. As used in this
Agreement, “Disclosure Statutes” means, collectively, California Government Code
Sections 8589.3, 8589.4 and 51183.5, California Public Resources Code Sections
2621.9, 2694 and 4136 and any other California statutes that require Seller to
make disclosures concerning the Property. Seller shall order a Natural Hazard
Disclosure Report for the Property (the “Report”) from the Title Company or
another reputable company and shall deliver the Report to Purchaser promptly
upon Seller’s receipt thereof, and in no event later than five (5) days prior to
the expiration of the Inspection Period (and Purchaser shall make it available
to Assignee upon request). Assignee hereby agrees as follows with respect to the
Disclosure Statutes and the Report:

 

 

 
 

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

 

 

(a)     The delivery of the Report to Purchaser as provided above shall be
deemed to satisfy all obligations and requirements of Seller under the
Disclosure Statutes;

 

(b)     Seller shall not be liable for any error or inaccuracy in, or omission
from, the information in the Report; and

 

(c)     The Report is being provided by Seller for purposes of complying with
the Disclosure Statutes and shall not be deemed to constitute an implied or
express representation or warranty by Seller as to the presence or absence in,
at or around the Property of the conditions that are the subject of the
Disclosure Statutes.

 

1.4     Nonresidential Building Energy Use Disclosure Program. The parties
acknowledge and agree that the California Energy Commission has suspended its
regulations implementing the Nonresidential Building Energy Use Disclosure
Program (AB 1103/AB 531) until September 1, 2013, and accordingly they are
inapplicable to the sale of the Property, but Seller has made available to
Purchaser on the Box Site information on energy use by Seller at the Property
for at least the last 12 months (and Purchaser shall make it available to
Assignee upon request). Assignee hereby agrees that these disclosures satisfy
all obligations and requirements of Seller under the Nonresidential Building
Energy Use Disclosure Program (assuming that any such requirements are
applicable), that Seller shall not be liable for any error or inaccuracy in, or
omission from, such disclosures, and that such disclosures shall not be deemed
to constitute an implied or express representation or warranty by Seller as to
the energy use at Building One and Building Two.

 

1.5     Leaseback Lease Prevails. Notwithstanding the foregoing provisions of
this Annex 1, in the event of any conflict arising out of the provisions of this
Annex 1 and the respective rights and obligations of the parties as landlord and
tenant under the Leaseback Lease following the Closing, the provisions of the
Leaseback Lease shall prevail as to the parties’ Lessor-Lessee relationship.