EXHIBIT 10.12
 
SVTC - PDF SOLUTIONS LEASE

 
THIS LEASE ("Lease") is entered into between SVTC Technologies, LLC, a Delaware
limited liability company, with principal offices at 3901 North First Street,
San Jose, CA 95134, USA, ("Landlord" or “SVTC”), and PDF Solutions, Inc., a
Delaware corporation, with principal offices at 333 W. San Carlos St., Ste. 700,
San Jose, CA 95110, USA, ("Tenant"), with an effective date of September 1, 2009
(the “Effective Date”).  Landlord and Tenant may individually be referred to
herein as a “Party”, and collectively as the “Parties”.

 
RECITALS

WHEREAS SVTC is a company providing semiconductor process technology development
and commercialization services to global customers, and Tenant is the leading
provider of process-design integration technologies to enhance semiconductor
manufacturability to the same customer base;
 
WHEREAS the Parties desire to collaborate to provide mutual customers a more
comprehensive solution, including by promoting each other’s services to their
respective clients and working together to seek new mutual customers that can
benefit from the analytical and process development strengths of both companies;
and
 
WHEREAS the collaborative effort and, thus, both Parties can benefit from
co-locating Tenant’s test lab within SVTC’s facilities in San Jose.
 
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Parties agree as follows:

 
1.
Premises.

 
1.1            Landlord owns the premises commonly known as 3901 North First
Street, San Jose, California (the "Building").  Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, upon the terms and conditions
set forth herein, certain premises located in the Building consisting of the
following:  (a) approximately one thousand four hundred twenty (1,420) square
feet of rentable area labeled as “Premises A” (“Premises A”) on Exhibit A
attached hereto and made a part hereof (the “Site Plan”), (b) approximately
three hundred forty-four (344) square feet of rentable area labeled as “Premises
B-1” on the Site Plan (“Premises B-1”), and (c) approximately four hundred
thirty-two (432) square feet of rentable area labeled as “Premises B-2” on the
Site Plan (“Premises B-2”).  Premises A, Premises B-1 and Premises B-2, or
portion thereof, as applicable, shall be referred to herein as the
“Premises”.  Premises A shall be subject to adjustment pursuant to Section 1.2
below.  In connection with its use of the Premises, Tenant shall also have the
non-exclusive right to use, subject to Landlord's reasonable rules and
regulations as provided, published or otherwise made available to Tenant by
Landlord from time to time during the Term (which rules and regulations shall be
subject to Section 7.3 below), the hallways, restrooms and other public areas of
the Building (the "Shared Areas").  For the purposes of exercising the foregoing
rights and Tenant’s obligations under this Lease, the word “Tenant” shall
include all employees, contractors, and agents of Tenant and any others brought
onto SVTC premises by or at the behest of Tenant, who are therefore subject to
provisions of this Lease in the same manner as Tenant’s employees.  Tenant shall
have the right to use no less than six (6) unassigned parking spaces in the
Building’s parking lot during the Term.
 
1.2            Tenant’s Right to Expand Premises.  So long as Landlord has not
leased all of the First Refusal Space (defined in Section 9.1 below) to Tenant
or a third-party pursuant to Section 9 below, Tenant shall have the right from
time to time to elect to expand Premises A, B-1, or B-2 (at Tenant’s option) to
include all or any portion of the First Refusal Space (the “Expansion Space”)
with thirty (30) days written notice to Landlord.  If Tenant exercises its
option to expand pursuant to this Section1.2, such Expansion Space shall be
deemed a part of Premises A, B-1, or B-2, as applicable, for purposes of this
Lease (including, without limitation, the renewal options set forth in Section
2.3.1 below), Tenant shall pay Base Rent in connection with such Expansion Space
as set forth in Section 3.1 below, and Landlord shall have no right to lease
such Expansion Space to a third party pursuant to Section 9 below.
 
 
 

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2.
Term.

 
2.1            Commencement Date.  The Term (defined below) and Tenant’s
obligation to pay Rent shall commence on the date that is the day Tenant takes
actual possession, which date will be no more than ten (10) business days after
the date on which the Tenant Improvement Work (as defined in the Work Letter)
has been Substantially Completed (as defined below) (the “Commencement
Date.  Landlord shall cause the Tenant Improvement Work to be completed pursuant
to the work letter attached hereto as Exhibit C (the “Work Letter”), and shall
use best efforts to cause the completion of the Final Plans and the Tenant
Improvement Work to be done in a timely manner, as contemplated in the Work
Letter, including, without limitation, Substantial Completion of the Tenant
Improvement Work within eight weeks of the completion of the Final Plans (as
defined in the Work Letter).  “Substantially Complete” or “Substantial
Completion” or “Substantially Completed” mean the date that the Parties agree in
writing that the Tenant Improvement Work is all but complete, except that final
permits may not have been signed by the city, whereby Tenant may take possession
and use the Premises as contemplated herein. If, at any time after the Parties
agree that the Tenant Improvement Work is Substantially Complete and the date
that the final permits are signed by the city, Tenant’s use of the Premises is
encumbered in any manner that prevents Tenant from the normal operation of its
business within the Premises as contemplated herein as a result of any work
performed by Landlord, its agents, employees or contractors, Tenant shall be
entitled to an equitable abatement of Rent during such period until such time
when the Premises are suitable for Tenant's unimpeded use.  During the first
twelve (12) months of the Term of this Lease, Landlord shall, at Landlord's sole
cost and expense, repair any defects in the construction of the Tenant
Improvement Work.
 
2.2            Term.  The initial term of this Lease with respect to the
Premises ("Premises Initial Term") shall commence on the Commencement Date and
end on the date immediately preceding the date that is five (5) years after the
Commencement Date (the “Premises Expiration Date”), unless this Lease is sooner
terminated pursuant to its terms.  The word “Term” means the Premises Initial
Term as applicable, plus any extensions or renewals provided for herein or
otherwise mutually agreed upon by the Parties.
 
2.3            Renewal Options.
 
2.3.1           Premises.  Tenant shall have the option to extend the Term with
respect to the Premises for renewal terms of one (1) year each (the "Premises
Renewal Term"), following the expiration of the Premises Initial Term, by giving
written notice of Tenant’s exercise of such option no later than six (6) months
prior to the end of the Premises Initial Term or no later than three (3) months
prior to the end of the then-current Premises Renewal Term.  The Base Rent for
the Premises Renewal Term shall be equal to the Base Rent of such Premises
during the Premises Initial Term, plus $0.05/square foot, per each renewal
period (provided, however, that in the event of an unexpected and substantial
increase in the rate of utilities charged by the utility companies furnishing
such utilities, Landlord shall have a right to request from Tenant a reasonable
increase in the Base Rent solely for purposes of capturing the unexpected and
substantial increase in the rate of such utilities, and Tenant agrees to
cooperate in good faith with Landlord to determine the appropriate amount of the
increase).
 
3.           Rent. Tenant shall pay Landlord base rent for the Premises,
inclusive of services as set forth herein ("Base Rent"), for each month during
the Term.
 
3.1         The monthly Base Rent shall be as follows:
 

Premises A  $2.125/square foot Premises B-1  $1.625/square foot Premises B-2    
$1.875/square foot

 
 
 

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Base Rent shall include, with respect to the Premises, access to all Shared
Areas, security monitoring twenty-four hours a day / seven days a week, Premises
access twenty-four hours a day / seven days a week, daily disposal and
janitorial maintenance service, and provision and maintenance of HVAC/electrical
systems, utilities, sprinkler, air conditioning, heating, electric and plumbing
utilities for the intended use of the Premises and to supply all lab equipment,
including without limitation, the services/materials, and in the amounts and on
the availability, set forth on Exhibit B attached hereto and made a part hereof
(collectively, the “Base Utilities”).  Not included in Base Rent is the Tenant
Improvement Work and any utility requirements in excess of the estimates in
Exhibit B regarding the Base Utilities.
 
3.2            Base Rent shall be paid on the first day of each calendar month
during the Term. The Base Rent for partial calendar months shall be prorated
based on the number of days in such month. Landlord acknowledges and agrees that
this Lease is intended to be a gross lease and, except as expressly provided in
this Lease, Tenant shall in no event have any obligation to perform or to pay
directly, or to reimburse Landlord for, all or any portion of any premiums,
claims, losses, fees, charges, costs and expenses for taxes, insurance premiums,
operating expenses, common area charges, utilities or any other expenses for the
operation, management, maintenance and repair of the Premises or the Building.
All amounts required to be paid by Tenant for the Premises under this Lease,
other than Base Rent, shall be deemed "Additional Rent" (which, collectively
with Base Rent, shall be deemed "Rent").  Except as otherwise provided herein,
Rent shall be due and payable without any deduction or offset and without prior
notice or demand, at the address indicated by Landlord from time to time in
writing.
 
3.3            Notwithstanding anything to the contrary set forth in this Lease,
if the Commencement Date fails to occur on or before November 13, 2009 (the
“Target Completion Date”), for one or more reasons that are primarily within the
control of Landlord, then Rent on and after the Commencement Date shall be
abated as follows: for every week (or part thereof) of delay, Rent will be
reduced by Five Thousand Eight Hundred and Twenty Dollars ($5,820).

 
4.           Storage Space.

 
4.1            During the Storage Space Rental Term and for the Storage Space
Fee (as such terms are defined herein), Landlord hereby agrees to provide to
Tenant, and Tenant hereby accepts from Landlord no less than seven hundred (700)
square feet of Storage Space.  “Storage Space” means space on premises owned or
leased by Landlord, comparable in size and condition to the First Refusal Space
(as defined below) or otherwise acceptable to Tenant in its sole and absolute
discretion, reasonably accessible by Tenant, its agents, employees, contractors
and representatives, accessible by fork-lift for freight-loading and unloading,
and located within five hundred (500) yards of the Building. Subject to the
foregoing, the exact location of the Storage Space is at Landlord’s sole
discretion and may be in an area in which property of others is located and not
walled off from Tenant stored property.  Tenant shall have the right to use the
Storage Space for warehouse and storage use.  Access to the Storage Space shall
require accompaniment by someone from SVTC facilities or security staff but
access shall be available at all times. Storage Space may not be used to perform
work of any kind other than the loading, unloading, storage or inventorying of
stored property.  Notwithstanding anything to the contrary set forth herein, if
Landlord is unable to provide Storage Space to Tenant for any reason during the
Storage Space Rental Term, Landlord shall use reasonable efforts to provide
Tenant with no less than thirty (30) days written notice of such unavailability,
this Lease shall terminate solely with respect to the Storage Space as of the
date immediately preceding the date that such Storage Space is unavailable,
Tenant shall have no further obligation to pay the Storage Space Fee (defined
below), and Tenant shall have the right to deduct the Storage Space Fee from the
Rent for the remainder of the Term.  If this Lease is terminated with respect to
the Storage Space pursuant to the immediately preceding sentence, Landlord shall
from time to time immediately notify Tenant in writing of the availability of
any Storage Space in any building owned or leased by Landlord of which it
becomes aware, and Tenant shall have the right in its sole and absolute
discretion to elect to lease such space from Landlord for the Storage Space Fee
(or the prorata portion thereof).
 
 
 

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4.2            The initial term during which Landlord shall provide Storage
Space shall commence promptly after the Effective Date and end on the date
immediately preceding the date that is one (1) year after the Commencement Date
unless this Lease is sooner terminated pursuant to its terms (“Initial Storage
Space Rental Term”). Tenant shall have the option to extend the Initial Storage
Space Rental Term with respect to the Storage Space for renewal terms of one (1)
year each (each, a "Storage Space Renewal Term", and together with the Initial
Storage Space Rental Term, the “Storage Space Rental Term”), following the
expiration of the Initial Storage Space Rental Term, by giving written notice of
Tenant’s exercise of such option no later than sixty (60) days prior to the end
of the Initial Storage Space Rental Term or Storage Space Renewal Term, as
applicable.  Notwithstanding anything to the contrary set forth herein, the
Storage Space Rental Term shall automatically terminate upon the expiration or
earlier termination of the Term.  Tenant shall pay a  fee of three hundred sixty
four dollars ($364) per month for use of the Storage Space, which is equal to
$0.52/square foot assuming 700 square feet (subject to increases as set forth
hereinafter, “Storage Space Fee”). If, at the written request of Tenant and the
acceptance of Landlord, the amount of Storage Space exceeds 700 square feet,
then the fee applicable to any time of such increase space shall be increased at
the same rate of $0.52/square foot.   The Storage Space Fee for each Storage
Space Renewal Term shall be equal to one hundred three percent (103%) of the
Storage Space Fee for the year immediately preceding the applicable Storage
Space Renewal Term. The Storage Space Fee shall include, with respect to the
Storage Space, security monitoring twenty-four hours a day / seven days a week,
access (including, without limitation, freight loading/unloading access)
twenty-four hours a day / seven days a week, provision and maintenance of
electrical systems, utilities, sprinkler,  and electric utilities as applicable
for the intended use of the Storage Space.
 
4.3            Notwithstanding anything to the contrary set forth in this Lease,
in the event that the Storage Space is located in a building that is not owned
by the Landlord, Landlord hereby indemnifies, defends, and holds harmless Tenant
and Tenant’s agents, employees, officers, directors, and shareholders from any
loss, cost, liability, claim, damage, expense (including reasonable attorneys’
fees and disbursements) incurred in connection with or arising from Tenant’s
use, occupancy or possession of such Storage Space without the consent of the
owner of the Building.  Landlord’s obligations under this Section 4.3 shall
survive the expiration or earlier termination of this Lease.
 
4.4            The Storage Space Fee shall be paid on the first day of each
calendar month during the Storage Space Rental Term. The Storage Space Fee for
partial calendar months shall be prorated based on the number of days in such
month. Except as expressly provided in this Lease, Tenant shall in no event have
any obligation to perform or to pay directly, or to reimburse Landlord for, all
or any portion of any premiums, claims, losses, fees, charges, costs and
expenses for taxes, insurance premiums, operating expenses, common area charges,
utilities or any other expenses for the operation, management, maintenance and
repair of the Storage Space or any building in which such Storage Space is
located.  Except as otherwise provided herein, the Storage Space Fee shall be
due and payable without any deduction or offset and without prior notice or
demand, at the address indicated by Landlord from time to time in writing.

 
5.           Security Deposit. Tenant shall, concurrently with the execution
hereof, pay to Landlord a sum equal to two (2) months of Base Rent for the
Premises Initial Term as security for the performance of the terms hereof by
Tenant (the "Security Deposit").  In no instance shall the Security Deposit be
considered a measure of liquidated damages.  If Tenant defaults with respect to
any provision of this Lease, including but not limited to, the provisions
relating to the payment of Rent and the Storage Space Fee or the surrender of
the Premises and the Storage Space in accordance with the terms hereof upon the
termination of the Lease, Landlord may, after the expiration of any applicable
notice and cure period and after delivery of written notice to Tenant, but shall
not be required to, use, apply or retain all or any part of this Security
Deposit for the payment of any Rent or Storage Space Fee or any other sum in
default, or for the payment of any other reasonable amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default including, without limitation, reasonable costs and
attorneys' fees incurred by Landlord and payable by Tenant pursuant hereto. If
any portion of the Security Deposit is so used or applied, Tenant shall, upon
written demand from Landlord, deposit cash with Landlord in an amount sufficient
to restore the Security Deposit to its original amount and Tenant's failure to
do so within thirty (30) days after receipt of written notice from Landlord
shall constitute a default hereunder by Tenant.  If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit, or any balance thereof, shall be returned to Tenant (or to its
transferee, as applicable) within thirty (30) days following the expiration of
the Term and after Tenant has vacated and delivered possession of the Premises
to Landlord in accordance with the provisions of this Lease.  In the event of
bankruptcy or other debtor-creditor proceeding against Tenant, such Security
Deposit shall be deemed to have been applied first to the payment of Rent, the
Storage Space Fee and other charges due Landlord for all periods prior to filing
of such proceedings.  If Landlord sells or otherwise transfers Landlord’s right
or interest under this Lease, Landlord shall deliver the security deposit to the
transferee.

 
 

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6.           [Intentionally Omitted].
 
7.           Use; Compliance with Laws; Rules.

 
7.1            Tenant may use the Premises only for the purpose of research and
development, office, laboratory (including, without limitation, testing of
silicon wafers and assembly, Q/A, and repairs of test systems), warehouse and
storage use.  Tenant acknowledges that unless mutually agreed by the Parties,
Tenant shall have no right to make any changes to the Building or other premises
owned or leased by SVTC except within the Premises.
 
7.2            Tenant shall promptly observe and comply with all laws with
respect to Tenant's use of the Premises; provided, however, that Tenant shall
not be required to comply with any laws requiring the construction of
alterations in the Premises, unless due to alterations made by Tenant to the
Premises after the Commencement Date. Tenant shall not do or permit anything to
be done in, about or with respect to the Premises which would (a) injure the
Premises or (b) unreasonably vibrate, shake, or overload the efficient operation
of the Premises or the building systems located therein.
 
7.3            Tenant shall comply with all rules and regulations for the
Building promulgated by Landlord, including but not limited to environmental,
health, security, and safety policies and procedures, as long as:  (i) the rules
and regulations do not require Tenant to pay additional rent or incur additional
fees; (ii) no rules and regulations or amendments or additions thereto are
binding on Tenant until the tenth (10th) business day (or such shorter period as
a particular safety rule or regulation may require) after provided, posted, or
otherwise made available to Tenant, and no rules and regulations or amendments
or additions thereto apply retroactively; (iii) the rules and regulations or
amendments or additions thereto do not materially decrease Tenant's rights or
materially increase Tenant's obligations under the terms and conditions of this
Lease, and (iv) the rules and regulations are applied equitably to all tenants
of the Building.  Since the Building is shared by others, if any employee of
Tenant, or anyone else who is in the Building at the invitation of Tenant, fails
to materially comply with the safety, security, confidentiality, or other
applicable conditions in this Lease, its attachments, or in other mutually
agreed documents or publically available SVTC rules and regulations (as
described herein above), then, after reasonable notice delivered to Tenant ,
SVTC may order such individuals off the Premises and their continued presence
may be considered that of a trespasser.
 
8.           Insurance.  Landlord shall obtain and keep in full force and
effect, at Landlord's sole cost, a policy of "all risk" property insurance in an
amount equal to the full replacement cost of the Building and any other building
owned by Landlord in which the Storage Space is located.  Tenant shall obtain
and keep in full force and effect, at Tenant's sole cost, a commercial general
liability policy of insurance protecting Tenant against claims for bodily
injury, personal injury and property damage based upon, involving or arising out
of Tenant's use or occupancy of the Premises and all areas appurtenant
thereto.  Such insurance shall be on an occurrence basis providing single limit
coverage in an amount not less than $1,000,000 per occurrence.  The policy shall
include coverage for liability assumed under this Lease as an "insured contract"
for the performance of Tenant's indemnity obligations under this Lease, and
shall name Landlord and any lender to Landlord designated by Landlord, as an
additional insured.  In addition, Tenant shall obtain and keep in full force and
effect, at Tenant's sole cost, a policy of "all risk" property insurance
insuring Tenant's personal property including specifically all of its equipment
located in the Premises or Building. Tenant shall deliver certificates
evidencing such insurance to Landlord upon request.
 
 
 

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9.           Right of First Refusal.
 
9.1            Tenant shall have the right of first refusal to lease
approximately seven hundred forty-eight (748) square feet of rentable area
labeled as “Premises C” on the Site Plan (the “First Refusal Space"). Tenant’s
right of first refusal shall be on the terms and conditions set forth in this
Section 9.

 
9.2            Upon receipt of a bona fide offer from a third party (“Third
Party Offer"), Landlord shall give Tenant written notice (the “First Refusal
Notice") that the First Refusal Space shall or has become available for lease by
Tenant pursuant to the terms of Tenant’s right of first refusal. Pursuant to
such First Refusal Notice, Landlord shall offer to lease to Tenant the then
available First Refusal Space at a rental rate equal to (the “First Refusal
Space Rent”) the lesser of (a) the net effective rent (which shall take into
account, without limitation, any rent concessions, reimbursements, tenant
improvement allowances, or other similar concessions) set forth in the First
Refusal Notice, and (b) One and 625/1000 Dollars ($1.625) per square foot if
Tenant elects to use the First Refusal Space for office use, One and 875/1000
Dollars ($1.875) per square foot if Tenant elects to use the First Refusal Space
for workshop use, or Two and 125/1000 Dollars ($2.125) per square foot if Tenant
elects to use the First Refusal Space for laboratory use.
 
9.3            If Tenant wishes to exercise Tenant’s right of first refusal with
respect to the space described in the First Refusal Notice, then within ten (10)
business days after receipt of the First Refusal Notice by Tenant, Tenant shall
deliver notice to Landlord of Tenant’s exercise of its right of first refusal
with respect to the First Refusal Space at the First Refusal Space Rent.  If
Tenant does not exercise its right of first refusal within such twenty (20)
business day period, then Landlord shall be free to lease the space described in
the First Refusal Notice on the terms set forth in the First Refusal Notice,
whereupon Tenant’s right of first refusal shall terminate with respect to such
First Refusal Space.

 
9.4            If Tenant timely exercises Tenant’s right to lease the First
Refusal Space, Landlord and Tenant shall within fifteen (15) days thereafter
execute an amendment to this Lease to increase the Premises to include the First
Refusal Space at the First Refusal Space Rent, and Tenant shall have the same
renewal rights for the First Refusal Space as set forth in Section 2.3.1.

10.           Waiver of Claims.  Landlord shall not be liable to Tenant, or its
employees, agents, contractors, invitees, or visitors for any damages to
personal property or injuries to persons in or about the Premises or the
Building, from any cause whatsoever arising at any time, including without
limitation all injuries that would be covered by Tenant's workers compensation
insurance, except to the extent caused by the gross negligence or willful
misconduct of Landlord.  Tenant, as a material part of the consideration to be
rendered to Landlord under this Lease, for itself and on behalf of its insurers
and all employees, agents, contractors, invitees or visitors of Tenant, waives
all claims against Landlord, and its officers, directors, employees, agents and
contractors for all such damage to personal property or injuries to persons.

 
11.           Indemnity. Each Party shall defend, indemnify, protect and hold
harmless the other from and against any and all liability, loss, claim
(including bodily injury), damages and costs (including reasonable attorneys'
fees) to the extent due to the negligence or willful misconduct of the
indemnifying Party or its agents, employees or contractors, the indemnifying
Party's violation of the terms of this Lease or the rules and regulations of the
Building, or claims from third parties where liability lies with the
indemnifying Party. This indemnification shall survive the termination of this
Lease.

 
 
 

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12.           Hazardous Materials.  No hazardous or toxic materials may be
brought onto SVTC premises without SVTC’s prior written consent; provided,
however, that notwithstanding the foregoing, Tenant is permitted to use and
store the following materials on the Premises during the Term:  silicon wafers,
tin-lead solder, probe station coolant (as of signing of the Lease, Flourinert
FC-77 brand) and antifreeze, and electronics grade isopropyl alcohol
(IPA). Notwithstanding anything to the contrary herein, normal quantities and
use of those Hazardous Materials customarily used in a general office use, may
be used and stored at the Premises and the Storage Space without Landlord’s
prior written consent.  All materials to be used in the SVTC cleanroom, whether
or not toxic or otherwise hazardous, must be pre-approved by Landlord.  Tenant
at its sole cost, shall comply with all laws relating to its use of Hazardous
Materials.  If Hazardous Materials stored, used, disposed of, emitted, or
released on or about the Building by Tenant or its agents, employees or
contractors result in contamination of the Building or the water or soil, then
Tenant shall promptly take any and all action necessary to clean up such
contamination to the extent required by applicable law. Tenant shall indemnify,
defend, protect and hold Landlord and its officers, directors, employees,
successors and assigns harmless from and against, all reasonable losses,
damages, claims, costs and liabilities, including reasonable attorneys' fees and
costs (collectively, “Claims”), to the extent arising out of Tenant's use,
discharge, disposal, storage, transport, release or emission of Hazardous
Materials on or about the Building during the Term by Tenant in violation of
applicable law. "Hazardous Materials" shall mean any material or substance that
is now or hereafter designated by any applicable governmental authority to be,
or regulated by any applicable governmental authority as, radioactive, toxic,
hazardous or otherwise a danger to health, reproduction or the
environment.  Notwithstanding anything to the contrary contained in this Lease,
Tenant shall have no obligation to remediate, clean up, abate, or to comply with
any law regarding, or to reimburse, release, indemnify, or defend Landlord with
respect to any Hazardous Materials which Tenant did not store, dispose of, or
transport, use, or cause to be on the Premises.  If any Hazardous Materials are
present in the Premises or the Storage Space and such presence was not caused by
Tenant, Landlord shall protect, indemnify, defend, and hold Tenant harmless from
and against any and all Claims arising therefrom. Landlord supports the
reclamation and recycling of discarded wafers and scrap silicon and agrees that,
to the extent any wafers or scrap silicon is discarded by Tenant in Landlord's
silicon disposal designated area/location, such wafers and silicon will be
destroyed and disposed or reclaimed/recycled by Landlord (at no additional
charge to Tenant).  For the avoidance of doubt, Landlord shall not, and shall
not permit any third party to, access, read, or reverse engineer any information
included on any portion of such wafers or silicon discarded by Tenant, and shall
use commercially reasonable efforts to prevent the same.
 
13.           Repairs.  Upon the Commencement Date, Landlord shall deliver the
Premises and Storage Space in good order, condition and repair.  Landlord
represents and warrants to Tenant that, as of the date of this Lease, the
Premises and all operating systems serving the Premises and Storage Space are in
compliance with all legal requirements (including, without limitation, the
Americans with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et
seq.).  Tenant shall maintain the Premises and Storage Space in a neat and tidy
condition.  Except for Tenant's obligations to keep the Premises and Storage
Space neat and tidy, Landlord shall maintain the Premises, the Storage Space and
the Building in good, working order.

14.           Alterations. No alterations or improvements shall be made to the
Premises or Storage Space after the Commencement Date without the prior written
consent of Landlord; provided, that Tenant shall have the right to make
non-structural changes to the Premises or Storage Space at Tenant's sole cost
and expense with the prior consent of Landlord.  Landlord shall have the right
to approve all construction contractors prior to Tenant committing contractually
for alterations to be performed; provided, however, that Landlord shall not
unreasonably withhold such consent.  All work performed in connection with
alterations shall comply with all laws and applicable requirements of insurance
carriers and shall be performed in a good and workmanlike manner by a licensed
contractor reasonably approved by Landlord.  Tenant shall keep the Building free
of any liens arising out of work performed by or for Tenant.  Landlord shall
have the right to require Tenant to remove any alterations if and only if
Landlord notifies Tenant of such requirement at the time it consents to such
alteration.  Notwithstanding the foregoing, Tenant shall not be required to
remove any of the Tenant Improvement Work upon the expiration or earlier
termination of this Lease.

15.          Landlord's Work / Condition of Premises. Landlord agrees to deliver
the Premises to Tenant on the Commencement Date in the following condition:

15.1            Premises A shall be delivered to Tenant in vacant, carpet-free,
build-out ready condition with all external walls and outlets (including,
without limitation, for dry air, vacuum and nitrogen) constructed and installed
pursuant to the specifications set forth on the Site Plan.

 
 

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15.2            Premises B-1 and Premises B-2 shall be delivered to Tenant in
clean condition, with the cubicles and furniture agreed by the Parties and set
forth on the Site Plan.

16.           Services. Landlord shall provide such services and utilities
included in Base Rent and the Storage Space Fee as described in Sections 3.1 and
4.2 above.  If Tenant requires water, gas or electric current in excess of the
Base Utilities and the utilities described in Section 4.2 above, Tenant agrees
to pay to Landlord for all such excess water, gas and electric current consumed
by Tenant at the rates charged for such services by the provider of such utility
to Landlord as Additional Rent.  Landlord shall also maintain in good, sanitary
order, condition and repair and keep lighted the common stairs, common entries
and toilet rooms in the Building.  Landlord shall not, however, be liable for
the interruption of any such services or utilities for causes beyond Landlord's
reasonable control.  Notwithstanding anything to the contrary contained in this
Lease, if the Premises and/or Storage Space should become unsuitable for
Tenant's use as a consequence of the cessation of utilities or other services
and the interference with Tenant's intended use of the Premises and/or Storage
Space continues for a period of five (5) consecutive days or more, Tenant shall
be entitled to an equitable abatement of Rent (and Storage Space Fee, if
applicable) from the date of the first occurrence through the time in which the
Premises and/or Storage Space are suitable for Tenant's intended use, and in the
event such cessation continues for a period of thirty (30) consecutive days,
Tenant shall have the right to terminate this Lease.

 
17.           Damage. If the Premises are damaged by any casualty or peril,
Landlord shall restore the Premises to substantially the same condition as
existed immediately prior to such damage, unless this Lease is terminated by
Landlord or Tenant as set forth below. Landlord and Tenant shall each have the
right to terminate this Lease upon the occurrence of damage by any casualty or
peril that cannot be repaired or reasonably restored within ninety (90) days
after the occurrence of such damage.  If the Storage Space is damaged by any
casualty or peril, Landlord shall provide Tenant with alternative Storage Space
within fifteen (15) days after the occurrence of such damage, and if alternative
Storage Space is unavailable, Landlord shall notify Tenant in writing within
such fifteen (15) day period and Tenant shall have the right to terminate this
Lease with respect to the Storage Space and deduct the Storage Space Fee from
Rent pursuant to Section 4.1 above.  If the Premises and/or Storage Space are
damaged due to any peril, Tenant shall be entitled to an abatement of all Rent
(and Storage Space Fee, if applicable) to the extent of the interference with
Tenant's use of the Premises and/or Storage Space occasioned thereby.   If the
Lease is not terminated pursuant to the terms hereof, Landlord shall diligently
prosecute any such repairs required to restore the Premises and the Building to
substantially the same condition as prior to the casualty or peril, in which
event this Lease shall continue in full force and effect and the Rent shall be
reduced by a proportionate amount based upon the extent to which such damage
interfered with the business carried on by Tenant in the Premises during such
period of repair.  If Landlord commences any repair under this paragraph but has
not restored the Premises to a tenantable condition by the date which is ninety
(90) days after the casualty or peril, Tenant may terminate this Lease upon ten
(10) days written notice to Landlord.  Landlord and Tenant hereby waive any
right that each may have against the other on account of any loss or damage
arising in any manner which is covered by policies of insurance (or which
policies are required to be maintained) for fire and extended coverage, public
liability, workers’ compensation and other insurance existing during the Term of
this Lease.  Landlord and Tenant agree that neither party’s insurers shall hold
any right of subrogation against the other party, and Landlord and Tenant agree
to have their respective insurers include such waiver in any policy of insurance
that applies to the Building, the Premises or the Storage Space, the contents
therein or the use and occupancy thereof.

 
18.           Condemnation. If all or any material part of the Premises is taken
by the exercise of the power of eminent domain or a voluntary transfer in lieu
thereof (a "Condemnation"), then either Party shall have the right to terminate
this Lease by delivery of written notice to the other within thirty (30) days of
such Condemnation. The proceeds of any condemnation award shall be the property
of Landlord. Tenant shall be entitled to maintain its own, separate proceeding
for the value of alterations installed in the Premises at Tenant's expense,
Tenant's Property, Tenant's relocation costs, the interruption of or damage to
Tenant’s business, and lost goodwill.  If this Lease is not terminated, the Base
Rent shall be proportionately adjusted to reflect the reduction in the use and
size of the Premises.  If any portion of the Storage Space is taken by
Condemnation, Landlord shall provide Tenant with alternative Storage Space
within fifteen (15) days after the occurrence of such taking.  If alternative
Storage Space is unavailable, Landlord shall notify Tenant in writing within
such fifteen (15) day period and Tenant shall have the right to terminate this
Lease with respect to the Storage Space and deduct the Storage Space Fee from
Rent pursuant to Section 4.1 above.

 
 

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19.           Assignment and Subletting. Tenant may not assign this Lease or any
portion of it, voluntarily or by operation of law, nor may Tenant sublet the
Premises or Storage Space or permit any use of the Premises or Storage Space by
another party (collectively, "Transfer"), without the written consent of
Landlord, which consent may be withheld in Landlord's reasonable
discretion.  Notwithstanding the foregoing, Tenant shall have the right without
consent of Landlord but with prior written notice to Landlord to assign this
Lease or to sublet all or a portion of the Premises or Storage Space to a person
or entity which is an Affiliate of Tenant or which results (whether through
operation of law or otherwise) from a merger or consolidation with Tenant, or to
any person or entity which acquires all of the assets of Tenant as a going
concern in the business that is being conducted on the Premises (a "Permitted
Transfer"), provided such entity, in the case of an assignment, (i) assumes all
the obligations of Tenant under the Lease; (ii) is not a competitor of Landlord,
as reasonably determined by Landlord; and, (iii) does not propose to change the
use of the Premises or Storage Space contemplated herein.  For purposes hereof,
"Affiliate" shall mean any person, entity, firm or corporation which shall be
controlled by, under the control of, or under common control with Tenant, and
"control" shall mean the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person, entity, firm
or corporation, whether through the ownership of voting securities, by contract
or otherwise.
 
20.           Default. Tenant shall be in default of its obligations under this
Lease if any of the following events occur: (a) Tenant fails to pay any Rent or
the Storage Space Fee when due, when such failure continues for three (3)
business day after written notice from Landlord to Tenant of a delinquency; (b)
Tenant fails to perform any term, covenant or condition of this Lease (except
those requiring payment of Rent and the Storage Space Fee) and fails to cure
such breach within thirty (30) days after delivery of a written notice
specifying the nature of the breach; provided, however, that if more than thirty
(30) days are reasonably required to remedy the failure, then Tenant shall not
be in default if Tenant commences the cure within the thirty (30) day period and
thereafter diligently endeavors to complete the cure; (c) Tenant makes a general
assignment of its assets for the benefit of its creditors, including attachment
of, execution on, or the appointment of a custodian or receiver with respect to
a substantial part of Tenant's property or any property essential to the conduct
of its business; (d) a petition is filed by or against Tenant under the
bankruptcy laws of the United States or any other debtors' relief law or
statute, unless such petition is dismissed within sixty (60) days after filing;
or (e) the Premises are completely abandoned or vacated for a continuous period
exceeding thirty (30) days, and such abandonment or vacation continues for three
(3) business day after written notice from Landlord to Tenant.

Landlord shall be in default if Landlord fails to perform any term, covenant or
condition of this Lease and fails to cure such breach within thirty (30) days
after delivery of a written notice specifying the nature of the breach;
provided, however, that if more than thirty (30) days are reasonably required to
remedy the failure, then Landlord shall not be in default if Landlord commences
the cure within the thirty (30) day period and thereafter diligently endeavors
to complete the cure.  In the event that Landlord fails to complete such
performance (or to commence performance, as applicable) or fails to diligently
prosecute the same to completion within such thirty (30) day period, Tenant may,
at any time thereafter, cure the default and any amounts paid by Tenant in
connection therewith shall be due from Landlord to Tenant within five (5) days
after receipt of written demand therefor.
 
21.           Remedies. In the event of any default by Tenant, Landlord shall
have the following remedies, in addition to all other rights and remedies
provided by any law or otherwise provided in this Lease, to which Landlord may
resort cumulatively or in the alternative:

21.1           Landlord may, at Landlord's election, keep this Lease in effect
and enforce by an action at law or in equity all of its rights and remedies
under this Lease, including (i) the right to recover the Rent and other sums as
they become due by appropriate legal action, (ii) the right to make payments
required of Tenant or perform Tenant's obligations and be reimbursed by Tenant
for the cost thereof as provided herein, and (iii) the remedies of injunctive
relief and specific performance to compel Tenant to perform its obligations
under this Lease.  Landlord shall have the remedy described in California Civil
Code Section 1951.4 (landlord may continue lease in effect after tenant's breach
and abandonment and recover rent as is becomes due, if tenant has the right to
sublet or assign, subject only to reasonable limitations).

 
 
 

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21.2           Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice. Any such
termination shall not relieve Tenant from its obligation to pay sums then due
Landlord or from any claim against Tenant for damages or Rent (and Storage Space
Fee, if applicable) previously accrued or then accruing. In the event Landlord
terminates this Lease, Landlord shall be entitled, at Landlord's election, to
damages in an amount as permitted under applicable law, including, without
limitation: (i) the worth at the time of award of the amount by which the unpaid
Rent (and Storage Space Fee, if applicable) for the balance of the term after
the time of award exceeds the amount of such rental loss that could be
reasonably avoided, computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%); and (ii) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result from Tenant’s such failure; provided however, that in no event shall
Landlord be entitled to damages from Tenant in an amount exceeding the remaining
amount of unpaid Rent (and Storage Space Fee, if applicable) for the balance of
the term and other sums that would be due hereunder at the termination hereof
(i.e., removal, restoration, etc.).
 
22.           Right to Cure Defaults. If Tenant fails to pay any sum of money to
Landlord, or fails to perform any other action to be performed hereunder, then
Landlord may, but shall not be obligated to, after passage of any applicable
notice and cure periods and delivery of written notice to Tenant (except in the
case of an emergency, in which case no cure period or notice is required), make
such payment or perform such act. All such sums paid, and all reasonable costs
and expenses of performing any such act, shall be deemed Additional Rent payable
by Tenant to Landlord upon demand.

 
23.           Surrender; Holdover. Prior to expiration of this Lease, Tenant
shall remove all of its personal property and shall surrender the Premises and
the Storage Space (upon the expiration of the Storage Space Rental Term) to
Landlord broom clean, in the same condition as exists on the Commencement Date
(subject to Tenant's removal of Tenant's Property as provided in Section 25
below), reasonable wear and tear, the Tenant Improvement Work, alterations made
after the Commencement Date that Landlord agrees in writing may be surrendered,
casualty and condemnation, excepted. If the Premises are not so surrendered,
then Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Premises and the Storage Space to the required condition. In the
event that Tenant does not surrender the Premises and the Storage Space upon the
expiration or earlier termination of this Lease (or the Storage Space Rental
Term, as applicable) as required above, Tenant shall indemnify, defend, protect
and hold harmless Landlord from and against all loss, cost, claim, damage and
liability resulting from Tenant's delay in surrendering the Premises and/or the
Storage Space and pay Landlord holdover rent in an amount equal to one hundred
fifty percent (150%) of the Base Rent and the Storage Space Fee (if applicable)
payable under this Lease during the last month of the Term. In no event shall
Tenant be required to remove any alterations or improvements existing in the
Premises on the Commencement Date, or the Tenant Improvement Work.

 
24.           Landlord's Right to Enter. Provided Landlord complies with all of
Tenant's reasonable security measures, Landlord or its agents may, upon at least
twenty-four (24) hours notice (except in the case of emergency), enter the
Premises and the Storage Space at any reasonable time for the purpose of
inspecting the same, supplying any service to be provided by Landlord to Tenant,
safety or health activities, making necessary alterations or repairs or for any
other purpose permitted under this Lease, provided that the business of Tenant
shall not be unreasonably interfered with and the confidentiality of all Tenant
materials and information in the Premises and the Storage Space shall be
strictly observed by Landlord.

 
25.           Tenant's Property. Landlord acknowledges that all of the trade
fixtures, furniture, cubicles, equipment and other personal property brought
onto and installed in the Premises and the Storage Space by Tenant ("Tenant's
Property") shall at all times be and remain Tenant's property. At any time
Tenant may remove Tenant's Property from the Premises and the Storage Space,
provided that Tenant repairs all damage caused by such removal. Without limiting
any other provision of this Lease, Landlord agrees to cooperate with Tenant to
accommodate Tenant's removal of Tenant's Property and to permit Tenant access to
such areas of the Building as may be necessary or convenient to permit Tenant to
remove Tenant's Property.  Although installation of new lab equipment and other
Tenant property will be the responsibility of the Tenant, such installation must
be coordinated with Landlord prior to installation to ensure that potential
damage or disruptions to others from installation is mitigated.  By way of
example, prior coordination is required before any heavy equipment is rolled
down a hallway or where an installation may damage walls.

 
 

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26.           Notices. Any notice given under this Lease shall be in writing and
shall be hand delivered, sent by overnight delivery, or mailed (by registered
mail, return receipt requested, postage prepaid), addressed as set forth below.
Any notice shall be deemed to have been given when hand delivered, one (1) day
after delivery when sent by overnight delivery, and three (3) days after
delivery when sent by registered mail.  Notices should be addressed as follows,
or to such other address as designated by either Party by proper notice
hereunder:
 
If to Landlord:
SVTC Technologies, LLC
3833 N. First Street
San Jose, CA 95134
Attn:  Legal Department

 
If to Tenant:
PDF Solutions, Inc.
333 W. San Carlos St., Ste. 700
San Jose, CA 95110
Attn:  Legal Department

 
27.           Non-solicitation.  During the Term of this Lease, (i) neither
Party shall, directly or indirectly, without the prior written consent of the
other Party, solicit or take any other action that is intended to induce any
employee of the other Party to terminate his or her employment with the other
Party; and, (ii) Tenant shall not, directly or indirectly, without the prior
written consent of the applicable customer of Landlord, solicit or take any
other action that is intended to induce any employee of a customer of Landlord
working on Landlord’s premises to terminate his or her employment.

 
28.           Security.

28.1            Tenant acknowledges that the security of SVTC’s facilities
generally and of SVTC’s computer systems and networks in particular are of
paramount importance to SVTC and to all of SVTC’s customers. Unless authorized
by SVTC, Tenant is not authorized to enter any zone of SVTC’s facilities other
than the Premises, the Storage Space, Shared Areas and the Building’s parking
lot unless they are accompanied by an authorized employee of SVTC.  For security
purposes, SVTC will require all Tenant personnel to wear a security badge at all
times on SVTC property and to conform with all rules and regulations pursuant to
Section 7.3 above.
 
28.2           Tenant’s personnel shall not access any SVTC computer or
networking equipment except as agreed upon by SVTC on a case-by-case basis. If
provided access, each one of the Tenant’s personnel shall be assigned his or her
own individual password by SVTC in order to obtain any such access, and such
individual may not share that password with any other Tenant personnel or with
others.
 
28.3            SVTC shall keep and maintain logs of access to its network and
systems by Tenant personnel, and in the event SVTC discovers that any Tenant
personnel have intentionally gained unauthorized access to any portion of SVTC’s
systems or network or has removed, used or disclosed any confidential
information of SVTC or of any other parties, or if any Tenant personnel have
otherwise failed to comply with SVTC’s rules and regulations, after reasonable
notice delivered to Tenant, such persons may have their access badge and
passwords canceled and may be physically barred from SVTC premises.
 
 
 

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29.           Estoppel Certificates.  From time to time upon not less than
twenty (20) days prior written notice from either party (the “Requesting
Party”), the other party (the “Certifying Party”) will execute, acknowledge and
deliver to the Requesting Party and, at the Requesting Party’s request, to any
prospective purchasers, subtenant, ground or underlying Landlord or mortgagee of
any part of or interest in the Building, a certificate of the Certifying Party
stating (to the extent requested by the Requesting Party):  (a) that this Lease
is unmodified and in full force and effect (or, if there have been
modifications, that same is in full force and effect as modified and stating the
modifications), (b) whether or not there are then existing any defenses against
the enforcement of any of the obligations of the Certifying Party under this
Lease (and, if so, specifying same), (c) whether or not there are then existing
any defaults by the Requesting Party in the performance of its obligations under
this Lease (and, if so, specifying same), (d) the dates, if any, to which the
Base Rent (and Storage Space Fee, if applicable) under this Lease have been
paid, and (e) any other information that may reasonably be required by any of
such persons.  It is intended that any such certificate of the Certifying Party
delivered pursuant to this Section 29 may be relied upon by the Requesting Party
and any prospective purchaser, subtenant, ground or underlying landlord or
mortgagee of any part of the Building.  The Certifying Party’s failure to
execute and deliver such certificate to the Requesting Party within twenty (20)
days of the Requesting Party’ written notice shall constitute a certification by
the Certifying Party (i) that there are no existing defenses against the
enforcement of the obligations of the Certifying Party under the Lease, and (i)
that there are no existing defaults by the Requesting Party in the performance
of its obligations under the Lease.
 
30.           Brokers.  Landlord and Tenant each warrant to the other party that
it has had no dealings with any real estate broker or agent in connection with
the negotiation of this Lease and it knows of no real estate broker or agent who
is entitled to a commission in connection with this Lease.  Each party (the
“Indemnifying Party”) agrees to indemnify the other party (the “Indemnified
Party”) and hold the Indemnified Party harmless from and against any and all
claims, demands, losses, liabilities, lawsuits, judgments, costs and expense
(including reasonable attorneys’ fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of the Indemnifying
Party’s dealings with any real estate broker or agent.
 
31.           Authority.  If either Landlord or Tenant signs as a corporation or
a partnership, each person executing this Lease on behalf of such entity does
hereby covenant and warrant that (i) Landlord or Tenant (as applicable) is a
duly authorized and existing entity, (ii) Landlord or Tenant (as applicable) has
and is qualified to do business in California, (iii) Landlord or Tenant (as
applicable) has full right and authority to enter into this Lease, (iv) each
person signing on behalf of Landlord or Tenant (as applicable) is authorized to
do so and (v) this Lease is a valid and binding obligation of and enforceable
against Landlord or Tenant (as applicable).  Upon either party’s request, the
other party shall provide the requesting party with evidence reasonably
satisfactory to the requesting party confirming the foregoing covenants and
warranties.
 
32.           Miscellaneous. This Lease shall in all respects be governed by and
construed in accordance with the laws of the State of California. If any term of
this Lease is held to be invalid or unenforceable by any court of competent
jurisdiction, then the remainder of this Lease shall remain in full force and
effect to the fullest extent possible under the law, and shall not be affected
or impaired. This Lease may not be amended except by the written agreement of
all Parties hereto. Any executed copy of this Lease or copy transmitted by fax
or e-mail shall be deemed an original for all purposes. This Lease shall,
subject to the provisions regarding assignment and subletting, apply to and bind
the respective heirs, successors, executors, administrators and assigns of
Landlord and Tenant. The language in all parts of this Lease shall in all cases
be construed as a whole according to its fair meaning, and not strictly for or
against either Landlord or Tenant. The captions used in this Lease are for
convenience only and shall not be considered in the construction or
interpretation of any provision hereof. When a Party is required to do something
by this Lease, it shall do so at its sole cost and expense without right of
reimbursement from the other Party unless specific provision is made therefor.
If either Party brings any action or legal proceeding with respect to this
Lease, the prevailing Party shall be entitled to recover reasonable attorneys'
and experts' fees and court costs.  Any such court costs and counsel fees
incurred by the prevailing party in enforcing a judgment in its favor under this
Lease shall be recoverable separately from and in addition to any other amount
included in any judgment or award, and such obligation is intended to be
severable from the other provisions of this Lease and to survive and not be
merged into any such judgment or award.  Whenever one Party's consent or
approval is required to be given as a condition to the other Party's right to
take any action pursuant to this Lease, unless another standard is expressly set
forth, such consent or approval shall not be unreasonably withheld or delayed.
This Lease may be executed in counterparts.  Tenant may peacefully and quietly
enjoy the Premises and the Storage Space during the Term as against all persons
or entities lawfully claiming by or through Landlord.  Time is of the essence of
all provisions of this Lease in which a definite time for performance is
specified.  The waiver by a Party of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant or condition
on any subsequent breach of the same or any other term, covenant or condition
herein contained.
 
 
 

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33.           Force Majeure.  Neither Party shall be liable to the other for any
failure or delay in performance of any of the obligations under this Lease
(other than obligations to make payments), arising out of any event or
circumstances beyond the reasonable control of such Party; provided, however, in
no event shall the Tenant’s right to terminate this Lease pursuant to Section 17
above be affected or modified by any such force majeure delays.  If a force
majeure event occurs that will adversely affect the performance of this Lease,
the Party experiencing the event shall promptly notify the other Party.
 
34.           No Joint Venture or Partnership.  Nothing in this Lease shall be
construed as creating a partnership or joint venture between Landlord, Tenant,
or any other party, or cause Tenant to be responsible for the debts or
obligations of Landlord or any other party.
 
35.           Entire Agreement. This Lease, together with any attachments, all
of which are hereby incorporated into this Lease by reference, supersedes any
arrangements, understandings, promises or agreements made or existing between
the Parties hereto prior to or simultaneously with this Lease and constitutes
the entire understanding between the Parties hereto concerning the subject
matter. It is acknowledged that the terms of this Lease have been negotiated
between the Parties.

 

 
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IN WITNESS WHEREOF, the Parties have executed this Lease as of the day first
above written.

 
TENANT:

 
PDF SOLUTIONS, INC., a Delaware corporation
 
By:  /s/  Keith Jones
Name: Keith Jones
Its: CFO and VP, Finance
Date: September 8, 2009

 
LANDLORD:

 
SVTC TECHNOLOGIES, LLC, a Delaware limited liability company

 
By:  /s/ Brian Stein
Name: Brian A. Stein
Its: CFO
Date: September 3, 2009
 
 
 
 
 

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EXHIBIT A
 
SITE PLAN

 
 
 

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EXHIBIT B
 
BASE UTILITIES
 
 
·
Average Electrical load = 62KVA

 
 
o
37 KVA (Lab hardware)

 
 
o
3 KVA (IT servers)

 
 
§
Note: Total KVA = 62KVA but feed will be separate

 
 
o
details on 220V and 110V outlets to be set forth in Final Plans (defined in Work
Letter)

 
 
o
Maximum downtime: 0.01%

 
 
·
HVAC = sufficient Tons of AC to keep temperature in Premises A at 70-73F given
above electrical load + average of 3 occupants

 
 
o
driers in HVAC to maintain <= max humidity 45% in Premises A

 
 
o
Maximum downtime: 1%

 
 
·
“Basic IT”

 
 
o
Telephone = 9 extensions (6 in office area, 1 in workshop, 2 in lab)

 
 
§
Includes voicemail and DID numbers for all extensions

 
 
o
Internet = 3Mb/s synchronous throughput for connection to PDF SJC office with
max 20ms packet latency. (Note: the forgoing capacity is shared among SVTC
customers and is not dedicated exclusively to Tenant.  If Tenant later desires
greater capacity, Tenant may request that SVTC increase the capacity with
installation charges, if any, and increased monthly charges to be borne entirely
by Tenant.)

 
 
§
Require at least three (3) IP addresses for inbound network connections

 
 
§
for main incoming connection, expect one primary and one redundant line

 
 
o
Maximum downtime: 0.01%

 
 
·
Clean Dry Air = 460 Liters/min at 0.9 MPa

 
 
o
Maximum downtime: 0.01%

 
 
·
Vacuum = 140 Liters/min at -0.08 MPa

 
 
o
Maximum downtime: 0.01%

 
 
·
Nitrogen = 5 SCFM at 10 PSI

 
 
o
Maximum downtime: 0.01%

 
 
 

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EXHIBIT C
 
WORK LETTER
 
This Work Letter (“Work Letter”) is attached to and made a part of the SVTC -
PDF Solutions Lease (the “Lease”) by and between SVTC Technologies, LLC, a
Delaware limited liability company ("Landlord" or “SVTC”), and PDF Solutions,
Inc., a Delaware corporation (“Tenant”) for space in the Building commonly known
as 3901 North First Street, San Jose, California.
 
1.
General.

 
1.1          The purpose of this Work Letter is to set forth how certain Tenant
Improvement Work (defined in Paragraph 2.1 below) in the Premises are to be
constructed, who will undertake the construction of the Tenant Improvement Work,
and who will pay for the construction of the Tenant Improvement Work.
 
1.2          Except as defined in this Work Letter to the contrary, all terms
utilized in this Work Letter shall have the same meaning ascribed to them in the
Lease.  The provisions of the Lease, except where clearly inconsistent or
inapplicable to this Work Letter, are incorporated into this Work Letter.
 
2.
Cost of Tenant Improvement Work.

 
“Tenant Improvement Work” shall include those improvements which are depicted on
the Final Plans (defined below), as the same may be amended or revised.  “Tenant
Improvement Work” shall specifically exclude any costs associated with causing
the Premises to be delivered in the condition required pursuant to Section 15 of
the Lease.  Tenant shall pay the entire cost of the Tenant Improvement Work as
the work progresses and is billed by the contractors, with Landlord paying such
bills after reimbursement by Tenant, according to the following procedure:  (1)
when Landlord receives an invoice, Landlord shall within three business days
send a copy of that invoice to Tenant along with Landlord’s invoice for the same
amount to Tenant, (2) when Landlord receives Tenant’s payment, it will then pay
the contractor’s invoice, (3) Tenant’s payment to Landlord shall be due on or
before the due date in the contractor’s invoice, (4) and, if any late charges,
interest or penalties are applied by the contractor to Landlord for late payment
and if the lateness is due to Tenant’s not paying Landlord in time for Landlord
to pay the contractor in a timely manner then Tenant shall be liable for same.
 
3.
Construction Drawings and Changes

 
3.1          The basic layout drawings for the Tenant Improvement Work
(“Tenant’s Plans”) as agreed by the Parties, is as set forth in Exhibit A.
 
3.2          Landlord shall cause its architect to produce the construction and
mechanical (sprinkler, air conditioning, heating, electric and plumbing)
drawings for the Tenant Improvement Work (together, the “Drawings”).  Landlord
shall submit the Drawings to Tenant for Tenant’s approval no later than five (5)
business days after Landlord’s receipt of Tenant’s Plans, together with an
itemized budget (the “Budget”) for the cost of the Tenant Improvement
Work.  Tenant shall approve or disapprove the Drawings and Budget within five
(5) business days of their receipt.
 
3.3          If the Drawings and/or Budget are disapproved, Tenant shall have
two (2) business days to submit a copy of the revised Tenant’s Plans to Landlord
and Landlord shall then have five (5) business days to submit revised Drawings
and a revised Budget.  Landlord shall not unreasonably refuse to satisfy any
reasonable objections of Tenant to the Drawings and Budget.  The review and
revision of the Drawings and Budget and/or statement shall continue until
approved by Tenant (such final Drawings approved by Tenant shall be referred to
herein as the “Final Plans”).  Notwithstanding anything to the contrary or
termination of this Lease prior to any Commencement Date, in any event, Tenant
shall be liable for the costs and fees for the Drawings.
 
 
 

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3.4          Upon completion of the Final Plans, Landlord shall submit the Final
Plans to all government authorities having approval rights over the Tenant
Improvement Work and shall apply for all governmental approvals and building
permits.  Upon receipt of such approval(s) and permit(s), and subject to the
provisions of this Work Letter, Landlord shall thereafter commence and proceed
to complete construction of the Tenant Improvement Work.
 
4.
Change Orders.

 
In the event Tenant desires to change the Final Plans, Tenant shall deliver
notice (the “Drawing Change Notice”) of the same to Landlord, setting forth in
detail the changes (the “Tenant Change”) Tenant desires to make to the Final
Plans.  Landlord shall, promptly following receipt of a Drawing Change Notice
either (i) approve the Tenant Change, or (ii) disapprove the Tenant Change and
deliver a notice to Tenant specifying in sufficient detail the reasons for
Landlord’s disapproval.  Landlord shall not unreasonably withhold its approval
of any Drawing Change Notice.
 
5.
Construction of the Tenant Improvement Work

 
5.1          Construction of Tenant Improvement Work.  Landlord shall, through a
contractor(s) designated by Landlord and reasonably approved by Tenant in
writing, use commercially reasonable efforts to Substantially Complete the
Tenant Improvement Work within eight weeks of the completion of the Final Plans
and in conformance with all applicable laws.
 
5.2          Punch List.  As soon as possible following Substantial Completion
of the Tenant Improvement Work, Landlord and Tenant shall inspect and jointly
prepare a “punch list” of agreed items of construction remaining to be
completed.  Landlord shall complete the items set forth in the punch list as
soon as reasonably possible but no later than thirty (30) days after the
Commencement Date.
 
5.3          Coordination Fee and CAD Fee.  Upon the Substantial Completion of
the Tenant Improvement Work, and provided that the Lease has not been terminated
pursuant to Section 2.2 of the Lease, Tenant shall pay a logistical coordination
fee (the “Coordination Fee”) to Landlord in an amount equal to Ten Thousand
Dollars ($10,000), which Coordination Fee shall be for services by Landlord
relating to the coordination and construction of the Tenant
Improvements.  Tenant shall pay the Coordination Fee in two equal installments
of Five Thousand Dollars ($5,000) each, one on the Commencement Date and one on
the date that is sixty (60) days thereafter. Tenant shall also pay Landlord,
notwithstanding Tenant’s early termination a flat non-refundable fee of Two
Hundred and Fifty Dollars ($250) in connection with any CAD drawings prepared by
Landlord in connection with the Tenant Improvement Work.
 
5.4          Meetings.  Following written request by either Party, the other
Party shall participate in periodic meetings at reasonable times regarding the
progress of the preparation of the Final Plans and the construction of the
Tenant Improvement Work, which meetings shall be held at a location reasonably
agreed to by Landlord and Tenant.
 
6.
Miscellaneous

 
6.1          Tenant’s Representative.  Tenant has designated Dennis Ciplikas as
its representative with respect to the matters set forth in this Work Letter,
who shall have full authority and responsibility to act on behalf of the Tenant
as required in this Work Letter, except with respect to approval of Final Plans,
Budget, and Tenant Changes, in which case only the signatory to the Lease may
approve on behalf of Tenant.
 
 
 

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6.2          Landlord’s Representative.  Landlord has designated Kevin Kassekert
as its representative with respect to the matters set forth in this Work Letter,
who shall have full authority and responsibility to act on behalf of the
Landlord as required in this Work Letter.
 
6.3          Landlord hereby acknowledges and agrees that at Landlord’s request,
Landlord is acting as the project manager in connection with the construction of
the Tenant Improvement Work and that Tenant shall approve but shall have no
direct contractual relationship with any third-parties hired by Landlord in
connection with the construction or design of the Tenant Improvement
Work.  Landlord shall to the fullest extent permitted by law, indemnify, defend
with counsel acceptable to Tenant, and hold Tenant and Tenant’s employees,
agents, partners, officers, directors and shareholders harmless from and against
any and all claims, damages, losses, liabilities, penalties, judgments, and
costs and expenses (including, without limitation, reasonable attorneys’ fees)
and any suit, action or proceeding brought pursuant thereto (collectively,
“Claims”), including, without limitation, Claims for property damage, or
personal injury including death, arising out of the construction of the Tenant
Improvement Work, except to the extent directly caused by Tenant’s negligence or
misconduct.