LEASE

DATED April 15, 2008

BY AND BETWEEN

OA OAKCREEK, LLC, a Delaware Limited Liability Company

as Landlord

and

Proxim Wireless Corporation, a Delaware corporation

as Tenant

AFFECTING PREMISES COMMONLY KNOWN AS

804 Buckeye Court

Milpitas, California

 
 

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LEASE
TABLE OF CONTENTS
               
PAGE:
ARTICLE  1 - DEFINITIONS
       
1.1
General
1
1.2
Additional Rent
1
1.3
Address for Notices
1
1.4
Agents
1
1.5
Agreed Interest Rate
1
1.6
Base Monthly Rate
1
1.7
Building
1
1.8
Commencement Date
1
1.9
Common Area
1
1.10
Common Operating Expense
1
1.11
Consumer Price Index
1
1.12
Effective Date
1
1.13
Event of Tenant's Default
1
1.14
Hazardous Materials
1
1.15
Insured and Uninsured Peril
1
1.16
Law
1
1.17
Lease
1
1.18
Lease Term
1
1.19
Lender
1
1.20
Permitted Use
1
1.21
Premises
1
1.22
Project
1
1.23
Private Restrictions
2
1.24
Real Property Taxes
2
1.25
Scheduled Commencement Date
2
1.26
Security Instrument
2
1.27
Summary
2
1.28
Tenant's Alterations
2
1.29
Tenant's Share
2
1.30
Trade Fixtures
2
           
ARTICLE 2 - DEMISE, CONSTRUCTION, AND ACCEPTANCE
2
     
2.1
Demise of Premises
2
2.2
Commencement Date
2
2.3
Construction of Improvements
2
2.4
Delivery and Acceptance of Possession
2
2.5
Early Occupancy
2
           
ARTICLE 3 - RENT
3
     
3.1
Base Monthly Rent
3
3.2
Additional Rent
3
3.3
Payment of Rent
3
3.4
Late Charge and Interest on Rent in Default
3
3.5
Security Deposit
3
           
ARTICLE 4 - USE OF PREMISES
3
     
4.1
Limitation on Use
3
4.2
Compliance with Regulations
3
4.3
Outside Areas
4
4.4
Signs
4
4.5
Parking
4
4.6
Rules and Regulations
4

 
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LEASE
TABLE OF CONTENTS
(continued)

   
PAGE:
     
ARTICLE 5 - TRADE FIXTURES AND ALTERATIONS
4
     
5.1
Trade Fixtures
4
5.2
Tenant's Alterations
4
5.3
Alterations Required by Law
5
5.4
Amortization of Certain Capital Improvements
5
5.5
Mechanic's Liens
5
5.6
Taxes on Tenant's Property
5
     
ARTICLE 6 - REPAIR AND MAINTENANCE
5
     
6.1
Tenant's Obligation to Maintain
5
6.2
Landlord's Obligation to Maintain
  6
6.3
Control of Common Area
6
           
ARTICLE 7 - WASTE DISPOSAL AND UTILITIES
6
     
7.1
Waste Disposal
6
7.2
Hazardous Materials
6
7.3
Utilities
7
7.4
Compliance with Governmental Regulations
7
           
ARTICLE 8 - COMMON OPERATING EXPENSES
7
     
8.1
Tenant's Obligation to Reimburse
7
8.2
Common Operating Expenses Defined
8
8.3
Real Property Taxes Defined
8
           
ARTICLE 9 - INSURANCE
9
     
9.1
Tenant's Insurance
9
9.2
Landlord's Insurance
9
9.3
Tenant's Obligation to Reimburse
9
9.4
Release and Waiver of Subrogation
9
           
ARTICLE 10 - LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
10
     
10.1
Limitation on Landlord's Liability
10
10.2
Limitation on Tenant's Recourse
10
10.3
Indemnification of Landlord
10
           
ARTICLE 11 - DAMAGE TO PREMISES
10
     
11.1
Landlord's Duty to Restore
10
11.2
Landlord's Right to Terminate
10
11.3
Tenant's Right to Terminate
11
11.4
Abatement of Rent
11

 
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LEASE
TABLE OF CONTENTS
(continued)

   
Page:
     
ARTICLE 12 - CONDEMNATION
11
     
12.1
Landlord's Termination Right
11
12.2
Tenant's Termination Right
11
12.3
Restoration and Abatement of Rent
11
12.4
Temporary Taking
11
12.5
Division of Condemnation Award
12
           
ARTICLE 13 - DEFAULT AND REMEDIES
12
     
13.1
Events of Tenant's Default
12
13.2
Landlord's Remedies
13
13.3
Waiver
13
13.4
Limitation on Exercise of Rights
13
13.5
Waiver by Tenant of Certain Remedies
13
           
ARTICLE 14 - ASSIGNMENT AND SUBLETTING
13
     
14.1
Transfer by Tenant
13
14.2
Transfer by Landlord
15
           
ARTICLE 15 - GENERAL PROVISIONS
15
     
15.1
Landlord's Right to Enter
15
15.2
Surrender of the Premises
15
15.3
Holding Over
16
15.4
Subordination
16
15.5
Mortgagee Protection and Attornment
16
15.6
Estoppel Certificates and Financial Statements
16
15.7
Reasonable Consent
16
15.8
Notices
16
15.9
Attorney's Fees
17
15.10
Corporate Authority
17
15.11
Miscellaneous
17
15.12
Termination by Exercise of Right
17
15.13
Brokerage Commissions
17
15.14
Force Majeure
17
15.15
Entire Agreement
17
     
EXHIBITS
         
Exhibit A -   Site plan of the Project
       
Exhibit B -   Intentionally Deleted
       
Exhibit C -   Approved Floor Plan and Specifications
       
Exhibit D -   Acceptance Agreement
       
Exhibit E -   Description of Private Restrictions
       
Exhibit F -   Intentionally Deleted
       
Exhibit G -   Form of Subordination Agreement
       
Exhibit H -   Hazardous Materials Questionnaire
       
Exhibit I -     Rooftop Terms and Conditions
 

 
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  SUMMARY OF BASIC LEASE TERMS

TERMS

SECTION
         
(LEASE REFERENCE)
                     
A.
 
Lease Reference Date:  April 15, 2008
   
(Introduction)
                     
B.
 
Landlord:
OA OAKCREEK, LLC, a Delaware Limited Liability Company
(Introduction)
                     
C.
 
Tenant:
Proxim Wireless Corporation, a Delaware corporation
(Introduction)
                     
D.
 
Premises:
That area consisting of  44,815 square feet of gross leasable
(§1.21)
   
area, the address of which is 804 Buckeye Court, Milpitas, California,
comprising 100% of the Building as shown on Exhibit A.
           
E.
 
Project:
The land and improvements shown on Exhibit A
(§ 1.22)
   
consisting of the Building.
           
F.
 
Building:
The building in which the Premises are located commonly known as 804 Buckeye
Court, Milpitas, California containing 44,815 square feet of gross leasable
area.
           
G.
 
Tenant’s Share:
One Hundred Percent (100%) of the Building; One Hundred Percent (100%) of the
Project
(§ 1.29)
                     
H.
 
Tenant’s Allocated Parking Stalls:  161 stalls.
(§ 4.5)
                     
I.
 
Commencement Date:   July 1, 2008
(§ 1.26)
                     
J.
 
Lease Term:
Sixty three (63) calendar months.
           
K.
 
Base Monthly Rent:
Months 1 -3
$0.00
(§ 3.1)
     
Months 4-12
$56.019.00
       
Months 13-24
$57,699.57
       
Months 25-36
$59,430.56
       
Months 37-48
$61,213.47
       
Months 49-60
$63,049.88
       
Months 61-63
$64,941.37
           
L.
 
Prepaid Rent:
One  month’s rent in the sum of $56,019.00 shall be paid on Lease execution and
credited against Month 4 of the Lease.
(§ 3.3)
                     
M.
 
Security Deposit:
$250,000.00 paid in cash or by letter of credit, per the terms and provisions
set forth hererin, at time of Lease signature (see Section 3.5 of Lease for
conditional reduction in Security Deposit)
(§ 3.5)
                                 
N.
 
Permitted Use:
General office, R&D, engineering, warehousing, light assembly, and
administrative support in conformity with the municipal requirements of the City
of Milpitas.
(§ 4.1)
                     
O.
 
Permitted Tenant’s Alterations Limit: $10,000.00
(§ 5.2)
                     
P.
 
Tenant’s Liability Insurance Minimum:  $5,000,000.00
(§ 9.1)
         

 
 

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LEASE

Q.
 
Landlord’s Address:
C/o Orchard Partners, LLC
(§ 1.3)
     
Michael Biggar, Managing Member
       
2665 N. First St., Suite 310
       
San Jose, CA 95134
         
R.
(§ 1.3)
 
Tenant’s Address:
The Premises, after the Lease Commencement Date.  Prior to Lease Commencement:
                 
2115 O’Nel Dr.
       
San Jose, CA 95131
         
S.
(§ 15.13)
 
Retained Real Estate Brokers:
Wayne Mascia exclusively as broker for Tenant; CB Richard Ellis, exclusively as
broker for the Landlord
         
T.
(§ 1.17)
 
Lease:
This Lease includes the summary of the Basic Lease Terms, the Lease, and the
following exhibits and addenda:  First Addendum to Lease; Exhibit A (Site Plan
of the Project), Exhibit B (Intentionally Deleted), Exhibit C (Approved Floor
Plan and Specifications), Exhibit D (Acceptance Agreement), Exhibit E
(Description of Private Restrictions), Exhibit F (intentionally deleted),
Exhibit G (Form of Subordination Agreement), Exhibit H (Hazardous Materials
Questionnaire), and Exhibit I  (Rooftop Terms and Conditions).

The foregoing Summary is hereby incorporated into and made part of this
Lease.  Each reference in this Lease to any term of the Summary shall mean the
respective information set forth above shall be construed to incorporate all of
the terms provided under the particular paragraph pertaining to such
information.  In the event of any conflict between the Summary and the Lease,
the Summary shall control.

LANDLORD:
 
TENANT:
     
OA OAKCREEK, LLC, a Delaware limited liability company
 
Proxim Wireless Corporation, a Delaware corporation
     
By:   Orchard AEW Fund I, LLC, a Delware limited
 
By: /s/ Pankaj S. Manglik
liability company, its sole member
       
Pankaj S. Manglik, CEO
By:  Orchard A Investor, LLC, a California limited
   
liability company, its Operating Manager
   
It’s:___________________________________
         
By:  /s/ Michael Biggar
 
By:  /s/ Brian J. Sereda
     
______________________________________
 
Brian J. Sereda
     
It’s: Manager   4/28/08
 
It’s:  CFO

 
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 LEASE
This Lease is dated as of the lease reference date specified in Section A of the
Summary and is made by and between the party identified as Landlord in Section B
of the Summary and the party identified as Tenant in Section C of the Summary.

ARTICLE 1

DEFINITIONS

   1.1  General:  Any initially capitalized term that is given a special meaning
by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.

   1.2  Additional Rent:  The term "Additional Rent" is defined in §3.2.

   1.3  Address for Notices:  The term "Address for Notices" shall mean the
addresses set forth in Sections Q and R of the Summary; provided, however, that
after the Commencement Date, Tenant's Address for Notices shall be the address
of the Premises.

   1.4  Agents:  The term "Agents" shall mean the following: (i) with respect to
Landlord or Tenant, the agents, employees, contractors, and invitees of such
party; and (ii) in addition with respect to Tenant, Tenant's subtenants and
their respective agents, employees, contractors, and invitees.

   1.5  Agreed Interest Rate:  The term "Agreed Interest Rate" shall mean that
interest rate determined as of the time it is to be applied that is equal to the
lesser of (i) 5% in excess of the discount rate established by the Federal
Reserve Bank of San Francisco as it may be adjusted from time to time, or (ii)
the maximum interest rate permitted by Law.

   1.6  Base Monthly Rent:  The term "Base Monthly Rent" shall mean the fixed
monthly rent payable by Tenant pursuant to §3.1 which is specified in Section K
of the Summary.

   1.7  Building:  The term "Building" shall mean the building in which the
Premises are located which Building is identified in Section F of the Summary,
the gross leasable area of which is referred to herein as the "Building Gross
Leasable Area."

   1.8  Commencement Date:  The term "Commencement Date" is the date the Lease
Term commences, which term is defined in §2.2.

   1.9  Common Area:  The term "Common Area" shall mean all areas and facilities
within the Project that are not designated by Landlord for the exclusive use of
Tenant or any other lessee or other occupant of the Project, including the
parking areas, access and perimeter roads, pedestrian sidewalks, landscaped
areas, trash enclosures, recreation areas and the like.

   1.10  Common Operating Expenses:  The term "Common Operating Expenses" is
defined in §8.2.

   1.11  Consumer Price Index:  The term "Consumer
 
Price Index" shall refer to the Consumer Price Index, All Urban Consumers,
subgroup "All Items", for the San Francisco-Oakland-San Jose metropolitan area
(base year 1982-84 equals 100), which is presently being published monthly by
the United States Department of Labor, Bureau of Labor Statistics.  However, if
this Consumer Price Index is changed so that the base year is altered from that
used as of the commencement of the initial term of this Lease, the Consumer
Price Index shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics
to obtain the same results that would have been obtained had the base year not
been changed.  If no conversion factor is available, or if the Consumer Price
Index is otherwise changed, revised or discontinued for any reason, there shall
be substituted in lieu thereof and the term "Consumer Price Index" shall
thereafter refer to the most nearly comparable official price index of the
United States government in order to obtain substantially the same result as
would have been obtained had the original Consumer Price Index not been
discontinued, revised or changed, which alternative index shall be selected by
Landlord and shall be subject to Tenant's written approval.

  1.12  Effective Date:  The term "Effective Date" shall mean the date the last
signatory to this Lease whose execution is required to make it binding on the
parties hereto shall have executed this Lease.

   1.13  Event of Tenant's Default:  The term "Event of Tenant's Default" is
defined in §13.1.

   1.14  Hazardous Materials:  The terms "Hazardous Materials" and "Hazardous
Materials Laws" are defined in §7.2E.

   1.15  Insured and Uninsured Peril:  The terms "Insured Peril" and "Uninsured
Peril" are defined in §11.2E.

   1.16  Law:  The term "Law" shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal or other government
agency or authority having jurisdiction over the parties to this Lease or the
Premises, or both, in effect either at the Effective Date or any time during the
Lease Term.

   1.17  Lease:  The term "Lease" shall mean the Summary and all elements of
this Lease identified in Section T of the Summary, all of which are attached
hereto and incorporated herein by this reference.

   1.18  Lease Term:  The term "Lease Term" shall mean the term of this Lease
which shall commence on the Commencement Date and continue for the period
specified in Section J of the Summary.

   1.19  Lender:  The term "Lender" shall mean any beneficiary, mortgagee,
secured party, lessor, or other holder of any Security Instrument.

   1.20  Permitted Use:  The term "Permitted Use" shall mean the use specified
in Section N of the Summary.

   1.21  Premises:  The term "Premises" shall mean that building area described
in Section D of the Summary that is within the Building.

 
 
1

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LEASE 
   1.22  Project:  The term "Project" shall mean that real property and the
improvements thereon which are specified in Section E of the Summary, the
aggregate gross leasable area of which is referred to herein as the "Project
Gross Leasable Area."

   1.23  Private Restrictions:  The term "Private Restrictions" shall mean all
recorded covenants, conditions and restrictions, private agreements, reciprocal
easement agreements, and any other recorded instruments affecting the use of the
Premises which (i) exist as of the Effective Date, or (ii) are recorded after
the Effective Date and are approved by Tenant.

   1.24  Real Property Taxes:  The term "Real Property Taxes" is defined in
§8.3.

   1.25  Scheduled Commencement Date:  The term "Scheduled Commencement Date"
shall mean the date specified in Section I of the Summary.

   1.26  Security Instrument:  The term "Security Instrument" shall mean any
underlying lease, mortgage or deed of trust which now or hereafter affects the
Project, and any renewal, modification, consolidation, replacement or extension
thereof.

   1.27  Summary:  The term "Summary" shall mean the Summary of Basic Lease
Terms executed by Landlord and Tenant that is part of this Lease.

   1.28  Tenant's Alterations:  The term "Tenant's Alterations" shall mean all
improvements, additions, alterations, and fixtures installed in the Premises by
Tenant at its expense which are not Trade Fixtures.

   1.29  Tenant's Share:  The term "Tenant's Share" shall mean the percentage
obtained by dividing Tenant's Gross Leasable Area by the Building Gross Leasable
Area, which as of the Effective Date is the percentage identified in Section G
of the Summary.

   1.30  Trade Fixtures:  The term "Trade Fixtures" shall mean (i) Tenant's
inventory, furniture, signs, and business equipment, and (ii) anything affixed
to the Premises by Tenant at its expense for purposes of trade, manufacture,
ornament or domestic use (except replacement of similar work or material
originally installed by Landlord) which can be removed without material injury
to the Premises unless such thing has, by the manner in which it is affixed,
become an integral part of the Premises.

ARTICLE 2

DEMISE, CONSTRUCTION, AND ACCEPTANCE

   2.1  Demise of Premises:  Landlord hereby leases to Tenant, and Tenant leases
from Landlord, for the Lease Term upon the terms and conditions of this Lease,
the Premises for Tenant's own use in the conduct of Tenant's business together
with (i) the right to use all of the Parking Stalls on the Property  (subject to
the limitations set forth in §4.5), and (ii) the non-exclusive right to use the
Common Area for ingress to and egress from the Premises.  Landlord reserves the
use of the exterior walls, the roof and the area beneath and above the Premises,
together with the right to install, maintain, use, and replace ducts, wires,
conduits and pipes leading through the Premises in locations which will not
 
materially interfere with Tenant's use of the Premises.

   2.2  Commencement Date:  If Landlord is not obligated to construct
improvements prior to the Commencement Date pursuant to §2.3, then on the
Scheduled Commencement Date Landlord shall deliver possession of the Premises to
Tenant and the Lease Term shall commence, and such date shall be referred to
herein as the "Commencement Date".  If Landlord is required to construct
improvements to the Premises prior to the Commencement Date, then the Scheduled
Commencement Date shall be only an estimate of the actual Commencement Date, and
the term of this Lease shall begin on the first to occur of the following, which
shall be the "Commencement Date": (i) the date Landlord offers to deliver
possession of the Premises to Tenant following substantial completion of all
improvements to be constructed by Landlord pursuant to §2.3 except for punchlist
items which do not prevent Tenant from using the Premises for the Permitted Use
and such work as Landlord is required to perform but cannot complete until
Tenant performs necessary portions of construction work it has elected or is
required to do; or (ii) the date Tenant enters into occupancy of the Premises.

   2.3  Construction of Improvements:  At Landlord’s sole cost and expense,
Landlord shall provide “turn key” interior improvements for the Premises as
follows:

A.           Landlord will construct interior improvements to the Premises as
specified and described in the floor plan and specifications attached as Exhibit
C. In performing this construction, Landlord will comply with all applicable
laws and regulations.

B.           The interior improvements to the Premises will include offices,
conference rooms, manufacturing area, warehouse area, and restrooms, located and
sized as set forth in Exhibit C.

Tenant will cooperate with Landlord in regard to any needed decisions relating
to the design and construction of the interior improvements.  If Tenant delays
any needed decisions or cooperation, and this causes the delivery of the
Premises with interior improvements substantially complete to be delayed beyond
July 1, 2008, all Rent payments hereunder shall nonetheless commence on that
date.

Landlord warrants for 120 days from delivery of the interior improvements that
they will be constructed in a good and workmanlike manner of new materials, and
will be free from defects in materials and workmanship.  Said warranty applies
only to matters of which Landlord is given written notice within the 120 day
warranty period.  If timely notified, Landlord shall promptly make any repairs
and/or replacements at its own cost and expense.  Repair/replacement by Landlord
is Tenant’s sole remedy for breach of this warranty.  Landlord’s warranty
excludes damages or defects caused by the acts or omissions of Tenant.  Landlord
will assign (on a non-exclusive basis until the expiration of Landlord's
warranty), any and all vendor’s and manufacturer’s warranties applicable to the
Premises and the fixtures and equipment therein to Tenant.

   2.4  Delivery and Acceptance of Possession:  If this Lease provides that
Landlord must deliver possession of the Premises to Tenant on a certain date,
then if Landlord is unable to deliver possession of the Premises
 

 
 
2

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LEASE 
to Tenant on or before such date for any reason whatsoever, this Lease shall not
be void or voidable for a period of 180 days thereafter, and Landlord shall not
be liable to Tenant for any loss or damage resulting therefrom.  Tenant shall
accept possession and enter into good faith occupancy of the entire Premises and
commence the operation of its business therein within 30 days after the
Commencement Date.  Tenant acknowledges that it has had an opportunity to
conduct, and has conducted, such inspections of the Premises as it deems
necessary to evaluate its condition.  Except as otherwise specifically provided
herein, Tenant agrees to accept possession of the Premises in its then existing
condition, "as-is", including all patent and latent defects.  Except as
otherwise specifically provided herein, Tenant's taking possession of any part
of the Premises shall be deemed to be an acceptance by Tenant of any work of
improvement done by Landlord in such part as complete and in accordance with the
terms of this Lease except for defects of which Tenant has given Landlord
written notice prior to the time Tenant takes possession or within one hundred
twenty  (120) days thereafter.  At the time Landlord delivers possession of the
Premises to Tenant, Landlord and Tenant shall together execute an acceptance
agreement in the form attached as Exhibit D, appropriately completed.  Landlord
shall have no obligation to deliver possession, nor shall Tenant be entitled to
take occupancy, of the Premises until such acceptance agreement has been
executed, and Tenant's obligation to pay Base Monthly Rent and Additional Rent
shall not be excused or delayed because of Tenant's failure to execute such
acceptance agreement.

   2.5  Early Occupancy:    Starting as soon as feasible on or after June 1,
2008, Landlord will make reasonable efforts to make selected portions of the
Premises available for Tenant to move in its furniture, fixtures, and
equipment.  The time from the first such occupancy to the Commencement Date
shall be referred to as the “Early Occupancy Period.”

Landlord will provide such portions of the Premises when they can reasonably be
provided within Landlord’s construction schedule, and without disturbing
Landlord’s construction progress.  Tenant understands and agrees that the space
to be made available will largely or entirely be space identified on the plans
as “manufacturing” or “warehouse”, and that the portions of the Premises which
Landlord is finishing as office and meeting space will likely be the last
completed and the least available prior to July 1, 2008.  Although Landlord will
make reasonable efforts to make space available, both parties understand that
Landlord is on a tight construction schedule to meet all of Tenant’s needs, and
that such may not allow for as much availability of space or as early
availability, as needed by Tenant, and it is understood and agreed that Landlord
shall not under any circumstances have any liability to Tenant for holdover rent
paid by tenant or any other form of damages suffered by Tenant in regard to any
failure to provide space prior to the Commencement Date.

Occupancy during the Early Occupancy Period shall be subject to all of the
terms, covenants and conditions of the Lease provided, however, that the Rent
shall not be charged nor payable during the Early Occupancy Period, so long as
Tenant does not commence operations in the Premises (i.e., begin stationing
employees in the Premises for their regular
 
work, as opposed to a move-in function).  Once operations are commenced,
however, Tenant will commence to make all payments required hereunder, and in
such event, the “Commencement Date” shall be moved up from July 1, 2008 to the
date on which Tenant commences operations.  The Expiration Date of the Lease
shall remain the same, however, notwithstanding this earlier Commencement Date.

 Prior to entering for Early Occupancy, Tenant will provide Landlord with
documentation of insurance required under the Lease.  All indemnity obligations
of the parties will apply to the Early Occupancy Period.

Tenant agrees to and will cooperate with construction personnel completing the
interior improvements in the Premises and not to cause any delay in the
completion of these improvements.   Any delay in construction  caused by
Tenant’s early occupancy of the Premises will not delay the Commencement Date.

Tenant waives any claims, and will indemnify, defend, and hold harmless Landlord
against any claims of injury or death to person or damage to property resulting
from Tenant’s entry into the Premises prior to the completion of Landlord’s
construction work.

ARTICLE 3

RENT

   3.1  Base Monthly Rent:  Commencing on the Commencement Date and continuing
throughout the Lease Term, Tenant shall pay to Landlord the Base Monthly Rent
set forth in Section K of the Summary.

   3.2  Additional Rent:  Commencing on the Commencement Date and continuing
throughout the Lease Term, Tenant shall pay the following as additional rent
(the "Additional Rent"): (i) any late charges or interest due Landlord pursuant
to §3.4; (ii) Tenant's Share of Common Operating Expenses as provided in §8.1;
(iii) Landlord's share of any Subrent received by Tenant upon certain
assignments and sublettings as required by §14.1; (iv) any legal fees and costs
due Landlord pursuant to §15.9; and (v) any other charges due Landlord pursuant
to this Lease.

   3.3  Payment of Rent:  Concurrently with the execution of this Lease by both
parties, Tenant shall pay to Landlord the amount set forth in Section L of the
Summary as prepayment of rent for credit against the first installment(s) of
Base Monthly Rent.  All rent required to be paid in monthly installments shall
be paid in advance on the first day of each calendar month during the Lease
Term.  If Section K of the Summary provides that the Base Monthly Rent is to be
increased during the Lease Term and if the date of such increase does not fall
on the first day of a calendar month, such increase shall become effective on
the first day of the next calendar month.  All rent shall be paid in lawful
money of the United States, without any abatement, deduction or offset
whatsoever (except as specifically provided in §11.4 and §12.3), and without any
prior demand therefor.  Rent shall be paid to Landlord at its address set forth
in Section Q of the Summary, or at such other place as Landlord may designate
from time to time.  Tenant's obligation to pay Base Monthly Rent and Tenant's
Share of Common Operating Expenses shall be prorated at the commencement and
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of the Lease Term.

   3.4  Late Charge and Interest on Rent in Default:  If any Base Monthly Rent
or Additional Rent is not received by Landlord from Tenant within ten (10)
calendar days after Landlord has notified Tenant in writing that payment of such
rent has not been received by Landlord, then Tenant shall immediately pay to
Landlord a late charge equal to 5% of such delinquent rent as liquidated damages
for Tenant's failure to make timely payment.  In no event shall this provision
for a late charge be deemed to grant to Tenant a grace period or extension of
time within which to pay any rent or prevent Landlord from exercising any right
or remedy available to Landlord upon Tenant's failure to pay any rent due under
this Lease in a timely fashion, including any right to terminate this Lease
pursuant to §13.2C.  If any rent remains delinquent for a period in excess of 30
days then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
following the date such amount became due until paid.

   3.5  Security Deposit:  On the Effective Date, Tenant shall deposit with
Landlord the amount set forth in Section M of the Summary as security for the
performance by Tenant of its obligations under this Lease, and not as prepayment
of rent (the "Security Deposit").  Landlord may from time to time apply such
portion of the Security Deposit as is reasonably necessary for the following
purposes: (i) to remedy any default by Tenant in the payment of rent or any
other sum due from Tenant to Landlord; (ii) to repair damage to the Premises
caused by Tenant; (iii) to clean the Premises upon termination of the Lease; and
(iv) to remedy any other default of Tenant to the extent permitted by Law and,
in this regard, Tenant hereby waives any restriction on the uses to which the
Security Deposit may be put contained in California Civil Code Section
1950.7.  In the event the Security Deposit or any portion thereof is so used,
Tenant agrees to pay to Landlord promptly upon demand (not later than seven (7)
days after such demand is made) an amount in cash sufficient to restore the
Security Deposit to the full original amount (or at Tenant’s election, to
increase the letter of credit used as a Security Deposit to the requisite
amount.  Landlord shall not be deemed a trustee of the Security Deposit, may use
the Security Deposit in business, and shall not be required to segregate it from
its general accounts.  Tenant shall not be entitled to any interest on the
Security Deposit.  If Landlord transfers the Premises during the Lease Term,
Landlord may pay the Security Deposit to any transferee of Landlord's interest
in conformity with the provisions of California Civil Code Section 1950.7 and/or
any successor statute, in which event the transferring Landlord will be released
from all liability for the return of the Security Deposit.  The Security Deposit
is not an advance payment of Rent or a measure or limit of Landlord’s damages
upon an Event of Default.  If Tenant (a) has not committed any Event of Tenant’s
Default under the Lease, nor any act which, with the passage of time or the
giving of notice or both would be an Event of Tenant’s Default: and (b) Tenant
has achieved two consecutive fiscal quarters wherein Tenant’s reviewed and
publicly available income and expense statement shows a  positive net income as
determined according to generally accepted accounting principals, consistently
applied, as reviewed by Tenant’s certified public accountants, the letter of
credit or cash security deposit, as the case may  be, shall be
 
reduced to the amount of the base rent for the last month of the Lease Term.  If
Landlord is holding a cash deposit, Landlord shall refund the balance of the
Security Deposit to Tenant, or if Landlord is holding a letter of credit,
Landlord shall authorize the bank on which the letter of credit is drawn to
reduce the amount of the letter of credit, in either case within fifteen (15)
days after Tenant makes written request for such refund/reduction, accompanied
by adequate proof that the above standards have been achieved.  Under no
circumstances shall the Security Deposit be less than the base rent for the last
month of the Lease Term.

   3.6  Optional Use of Letter of Credit.   In lieu of a cash deposit in
satisfaction of all or any part of the Security Deposit required by the Lease,
Tenant may provide all or any portion of the Security Deposit, at Tenant's sole
cost and option, by way of the deposit of an irrevocable letter of credit (the
“Letter of Credit”) in favor of Landlord, to be held, applied, and returned
subject to the provisions of this Lease and the following additional provisions.

A.   Terms.   The Letter of Credit shall be: (i) for an initial term which ends
at least one (1) year after the Commencement Date and shall provide on its face
that it will be automatically renewed unless the bank on which it is drawn gives
written notice to Landlord at least thirty (30) days before expiration that it
will not be renewed; (ii) drawn upon a local commercial bank reasonably
acceptable to Landlord and payable when presented at a location within Santa
Clara County, California; (iii) in an amount elected by Tenant (provided that if
the amount is less than the total Security Deposit, Tenant provides the
remainder by a cash deposit); (iv) in a form satisfactory to Landlord in
Landlord’s sole discretion; and (v) drafted such that it may be drawn on by
Landlord solely upon submission of a written certification of Landlord that
there exists an Event of Tenant's Default (as defined in this Lease), that
Tenant has not cured such Event of Tenant’s Default, and that the amount drawn
on the Letter of Credit is the net amount due Landlord as a result of such Event
of Tenant’s Default.   The Letter of Credit shall (vi) name Landlord (or
Landlord’s agent, as Landlord shall direct) as beneficiary; and (vii) allow
Landlord to make partial and multiple draws thereunder up to the face amount, as
determined by Landlord.

B.   Keeping Letter of Credit In Force.   Unless and solely to the extent that
Tenant elects to and does replace part or all of the Letter of Credit with a
further cash deposit, Tenant shall keep the Letter of Credit in effect during
the entire Lease term plus a period of sixty (60) days thereafter.

C.   Notice of Cancellation of Letter of Credit.   If the bank on which the
Letter of Credit is drawn gives written notice that the Letter of Credit will
not be renewed, this shall be deemed an Event of Tenant's Default under this
Lease, without Landlord being required to give any notice or opportunity to
cure.  Upon such an Event of Tenant’s Default, Landlord shall be immediately
entitled to draw all of the funds available under the Letter of Credit;
provided, that Landlord shall give Tenant five (5) days written notice of its
intent to draw the Letter of Credit because of non-renewal, and shall not draw
on the Letter of Credit for this particular Event of Tenant’s Default if, within
such five (5) day period, Tenant cures such Event of Tenant’s Default by
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Credit with another meeting all the requirements hereof and providing
documentation thereof as required hereunder or providing a cash security deposit
in the amount of the required Security Deposit, or some combination of the two,
in each event sufficient to restore the Security Deposit to the amount set forth
herein as required at that time.

D.   Expiration of Letter of Credit.   If Tenant shall allow the Letter of
Credit to expire at any time when it is required to be maintained hereunder,
this shall constitute an independent Event of Tenant’s Default, without Landlord
being required to give any notice or formal opportunity to cure (but reserving
the Tenant’s right, prior to the time Landlord takes action on the Event of
Tenant’s Default, to cure it by putting up some combination of letter of credit
and cash sufficient to restore the Security Deposit to the amount set forth
herein as required at that time).

E.   Failure to Replenish Cash Security Deposit. Tenant's failure to replenish
any cash Security Deposit which is applied by Landlord, within ten (10) days
after notice that it has been applied, shall be an immediate independent and
separate Event of Tenant's Default, without further notice or opportunity to
cure, which shall entitle Landlord to resort to and draw on  the Letter of
Credit to replenish the cash portion of the Security Deposit.

F.   Effect of Draw on Letter of Credit.   When a draw is made on the Letter of
Credit, the sum received shall become and remain a part of the Security Deposit
until and unless applied by Landlord pursuant to the provisions of the
Lease.  Any proceeds received by Landlord by drawing upon the Letter of Credit
shall be applied in accordance with the provisions of this Lease relating to the
Security Deposit.  Tenant waives the provisions of California Code §1950.7
(which restricts application of a security deposit only to those sums reasonably
necessary to remedy defaults in the payment of rent, to repair damage caused by
Tenant, or to clean premises) and all similar Laws now in force or subsequently
adopted which restrict application of security deposits to specific purposes.

G.   Replenishing Security Deposit After Draw. If Landlord draws upon the Letter
of Credit, Tenant shall, within ten (10) days after receiving notice of such
draw, provide Landlord with an increased cash Security Deposit or a further
Letter of Credit (which meets all requirements hereof) in the amount of the
draw.  Failure to do so shall constitute an independent and separate Event of
Tenant’s Default without notice or opportunity to cure.

H.   Transfer of Premises by Landlord.   If Landlord transfers the Premises
during the Lease Term, and if a Letter of Credit is still posted as part of the
Security Deposit, Tenant agrees to take such actions as are necessary to have
the Letter of Credit redrawn in favor of the new owner of the Premises, at
Tenant's sole cost and expense.

I.    Transfer of Lease by Tenant.   If there is any Transfer of the Lease by
Tenant (as defined herein), Tenant shall take such action, at Tenant’s sole cost
and expense, as Landlord shall reasonably request in writing to cause the Letter
of Credit to be reissued or amended or otherwise handled such that Landlord’s
interests are protected, and Landlord may reasonably make
 
compliance with this provision a condition of Landlord’s approval of a Transfer.

J.    Payment of Landlord’s Costs and Expenses.  All additional costs and
expenses incurred by Landlord in regard to the Letter of Credit, including but
not limited to any reasonable attorney’s fees incurred by Landlord in the
administration of this Paragraph, shall be paid by Tenant to Landlord as
Additional Rent within ten (10) days after Landlord provides its written invoice
for such costs and expenses.  It is the intent of the parties that the use of a
Letter of Credit should not increase Landlord’s expenses or obligations at any
time, in any way.

K.    Lender’s Rights.   At Landlord’s option, Landlord may require that the
Letter of Credit be made in favor of Landlord’s Lender, directly or
conditionally, in order to satisfy Landlord’s Lender’s requirements.  If any
Lender requires that the Letter of Credit be in favor of Lender or otherwise
demands changes in the Letter of Credit, at any time, Tenant agrees that it
will, at its sole cost and expense, cause the Letter of Credit to be so reissued
or amended that this is accomplished, or if unable to accomplish same within
thirty (30) days, to replace the Letter of Credit with an equal amount of cash
Security Deposit.

ARTICLE 4

USE OF PREMISES

   4.1  Limitation on Use:  Tenant shall use the Premises solely for the
Permitted Use specified in Section N of the Summary.  Tenant shall not do
anything in or about the Premises which will (i) cause structural injury to the
Building, or (ii) cause damage to any part of the Building except to the extent
reasonably necessary for the installation of Tenant's Trade Fixtures and
Tenant's Alterations, and then only in a manner which has been first approved by
Landlord in writing.  The population density within the Premises as a whole
shall at no time exceed four people for each one thousand (1,000) rentable
square feet in the Premises.  Tenant shall not operate any equipment within the
Premises which will (i) materially damage the Building or the Common Area, (ii)
overload existing electrical systems or other mechanical equipment servicing the
Building, (iii) impair the efficient operation of the sprinkler system or the
heating, ventilating or air conditioning ("HVAC") equipment within or servicing
the Building, or (iv) damage, overload or corrode the sanitary sewer
system.  Tenant shall not attach, hang or suspend anything from the ceiling,
roof, walls or columns of the Building or set any load on the floor in excess of
the load limits for which such items are designed nor operate hard wheel
forklifts within the Premises except on concrete or VCT floors.  Any dust,
fumes, or waste products generated by Tenant's use of the Premises shall be
contained and disposed so that they do not (i) create an unreasonable fire or
health hazard, (ii) damage the Premises, or (iii) result in the violation of any
Law.  Except as approved by Landlord, Tenant shall not change the exterior of
the Building or install any equipment or antennas on or make any penetrations of
the exterior or roof of the Building; provided that Tenant shall be permitted to
install its radios, antennas, and related equipment on the roof of the Building
so long as Tenant complies with applicable laws and regulations, including the
Regulations attached hereto as Exhibit I.  Tenant shall not commit any waste in
or about the Premises, and
 

 
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Tenant shall keep the Premises in an neat, clean, attractive and orderly
condition, free of any nuisances.  If Landlord designates a standard window
covering for use throughout the Building, Tenant shall use this standard window
covering to cover all windows in the Premises.  Tenant shall not conduct on any
portion of the Premises or the Project any sale of any kind, including any
public or private auction, fire sale, going out-of-business sale, distress sale
or other liquidation sale.  Notwithstanding anything in this Lease to the
contrary but conditioned upon the accuracy of the last sentence of this Section
4.1 and subject to Landlord’s obligations under Section 6.2 below, as between
Landlord and Tenant: (a) Tenant shall bear the risk of complying with Title III
of the Americans With Disabilities Act of 1990, any state laws governing
handicapped access or architectural barriers, and all rules, regulations, and
guidelines promulgated under such laws, as amended from time to time (the
“Disabilities Acts”) in the Premises; and (b) Landlord shall bear the risk of
complying with the Disabilities Acts in the Common Areas (subject to
reimbursement as set forth in Article 8, other than compliance that is
necessitated by the use of the Premises for other than the Permitted Use or as a
result of any alterations or additions made by Tenant (which risk and
responsibility shall be borne by Tenant).  Tenant shall indemnify and hold
harmless Landlord and Landlord’s Agents and associated parties from and against
any and all claims which result from Tenant’s failure to comply with its
obligations under this Paragraph.  Landlord hereby represents and warrants that
the Premises, as of the Lease Reference Date and as of the Commencement Date
(after completion of the improvements contemplated by Section 2.3), fully
complies with the Disabilities Acts as in effect on those dates according to the
interpretation and approval of the City of Milpitas.

   4.2  Compliance with Regulations:  Tenant shall not use the Premises in any
manner which violates any Laws or Private Restrictions which affect the
Premises.  Tenant shall abide by and promptly observe and comply with all Laws
and Private Restrictions.  Tenant shall not use the Premises in any manner which
will cause a cancellation of any insurance policy covering Tenant's Alternations
or any improvements installed by Landlord at its expense or which poses an
unreasonable risk of damage or injury to the Premises.  Tenant shall not sell,
or permit to be kept, used, or sold in or about the Premises any article which
may be prohibited by the standard form of fire insurance policy.  Tenant shall
comply with all reasonable requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain the
insurance coverage carried by either Landlord or Tenant pursuant to this Lease.

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

   4.4  Signs:  Tenant shall not place on any portion of the Premises any sign,
placard, lettering in or on windows, banner, displays or other advertising or
communicative material which is visible from the
 
exterior of the Building without the prior written approval of Landlord.  All
such approved signs shall strictly conform to all Laws, Private Restrictions,
and shall be installed at the expense of Tenant. Tenant shall maintain such
signs in good condition and repair.  Notwithstanding the foregoing, Landlord
shall designate and approve a location on the Premises for one (1) monument sign
for Tenant.  The size, design and graphics of any permitted signage shall be
subject to Landlord’s approval and compliance with Landlord’s signage program
for the three adjacent buildings owned by Landlord, and approval by the City of
Milpitas. The cost of the signage, installation, maintenance and ultimate
removal shall be the responsibility of Tenant.  Tenant shall remove the sign at
the expiration or earlier termination of the Lease, if Landlord shall so request
at any time before or after the Lease comes to an end.

   4.5  Parking:  Tenant is allocated and shall have the right to use all of the
Parking Stalls contained within the Property for its use and the use of Tenant's
Agents, the location of which may be designated from time to time by
Landlord.  Tenant shall not at any time use more parking spaces than the number
so allocated to Tenant or park its vehicles or the vehicles of others in any
portion of the Project not designated by Landlord as a non-exclusive parking
area. Tenant shall not have the exclusive right to use any specific parking
space.  If Landlord grants to any other tenant the exclusive right to use any
particular parking space(s), Tenant shall not use such spaces.  Landlord
reserves the right, after having given Tenant reasonable notice, to have any
vehicles owned by Tenant or Tenant's Agents utilizing parking spaces in excess
of the parking spaces allowed for Tenant's use to be towed away at Tenant's
cost.  All trucks and delivery vehicles shall be (i) parked at the rear of the
Building, (ii) loaded and unloaded in a manner which does not interfere with the
businesses of other occupants of the Project, and (iii) permitted to remain on
the Project only so long as is reasonably necessary to complete loading and
unloading.  In the event Landlord elects or is required by any Law to limit or
control parking in the Project, whether by validation of parking tickets or any
other method of assessment, Tenant agrees to participate in such validation or
assessment program under such reasonable rules and regulations as are from time
to time established by Landlord.

   4.6  Rules and Regulations:  Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees.  Such rules and regulations shall be
binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees
to abide by such rules and regulations.  If there is a conflict between the
rules and regulations and any of the provisions of this Lease, the provisions of
this Lease shall prevail.  Landlord shall not be responsible for the violation
by any other tenant of the Project of any such rules and regulations.

ARTICLE 5

TRADE FIXTURES AND ALTERATIONS

   5.1  Trade Fixtures:  Throughout the Lease Term, Tenant may provide and
install, and shall maintain in good condition, any Trade Fixtures required in
the conduct of its business in the Premises.  All Trade
 

 
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Fixtures shall remain Tenant's property.

   5.2   Tenant's Alterations:  Construction by Tenant of Tenant's Alterations
shall be governed by the following:

A.  Tenant shall not construct any Tenant's Alterations or otherwise alter the
Premises without Landlord's prior written approval.  Tenant shall be entitled,
without Landlord's prior approval, to make Tenant's Alterations (i) which do not
affect the structural or exterior parts or water tight character of the
Building, and (ii) the reasonably estimated cost of which, plus the original
cost of any part of the Premises removed or materially altered in connection
with such Tenant's Alterations, together do not exceed the Permitted Tenant
Alterations Limit specified in Section O of the Summary per work of
improvement.  In the event Landlord's approval for any Tenant's Alterations is
required, Tenant shall not construct the Leasehold Improvement until Landlord
has approved in writing the plans and specifications therefore, and such
Tenant's Alterations shall be constructed substantially in compliance with such
approved plans and specifications by a licensed contractor first approved by
Landlord.  All Tenant's Alterations constructed by Tenant shall be constructed
by a licensed contractor in accordance with all Laws using new materials of good
quality.

B.  Tenant shall not commence construction of any Tenant's Alterations until (i)
all required governmental approvals and permits have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied,
(iii) Tenant has given Landlord at least five days' prior written notice of its
intention to commence such construction, and (iv) if reasonably requested by
Landlord, Tenant has obtained contingent liability and broad form builders' risk
insurance in an amount reasonably satisfactory to Landlord if there are any
perils relating to the proposed construction not covered by insurance carried
pursuant to Article 9.

C.  All Tenant's Alterations shall remain the property of Tenant during the
Lease Term but shall not be altered or removed from the Premises.  At the
expiration or sooner termination of the Lease Term, all Tenant's Alterations
shall be surrendered to Landlord as part of the realty and shall then become
Landlord's property, and Landlord shall have no obligation to reimburse Tenant
for all or any portion of the value or cost thereof; provided, however, that if
Landlord requires Tenant to remove any Tenant's Alterations, Tenant shall so
remove such Tenant's Alterations prior to the expiration or sooner termination
of the Lease Term.  Notwithstanding the foregoing, Tenant shall not be obligated
to remove any Tenant's Alterations with respect to which the following is true:
(i) Tenant was required, or elected, to obtain the approval of Landlord to the
installation of the Leasehold Improvement in question; (ii) at the time Tenant
requested Landlord's approval, Tenant requested of Landlord in writing that
Landlord inform Tenant of whether or not Landlord would require Tenant to remove
such Leasehold Improvement at the expiration of the Lease Term; and (iii) at the
time Landlord granted its approval, it did not inform Tenant that it would
require Tenant to remove such Leasehold Improvement at the expiration of the
Lease Term.

   5.3   Alterations Required by Law:  Tenant shall make any alteration,
addition or change of any sort to the
 
Premises that is required by any Law because of (i) Tenant's particular use or
change of use of the Premises; (ii) Tenant's application for any permit or
governmental approval; or (iii) Tenant's construction or installation of any
Tenant's Alterations or Trade Fixtures.  Any other alteration, addition, or
change required by Law which is not the responsibility of Tenant pursuant to the
foregoing shall be made by Landlord (subject to Landlord's right to
reimbursement from Tenant specified in §5.4).

   5.4   Amortization of Certain Capital Improvements: Tenant shall pay
Additional Rent in the event Landlord reasonably elects or is required to make
any of the following kinds of capital improvements to the Project and the cost
thereof is not reimbursable as a Common Operating Expense: (i) capital
improvements required to be constructed in order to comply with any Law
(excluding any Hazardous Materials Law) not in effect or applicable to the
Project as of the Effective Date; (ii) modification of existing or construction
of additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Common Operating Expenses of
the Project; (iii) replacement of capital improvements or building service
equipment existing as of the Effective Date when required because of normal wear
and tear; and (iv) restoration of any part of the Project that has been damaged
by any peril to the extent the cost thereof is not covered by insurance proceeds
actually recovered by Landlord up to a maximum amount per occurrence of 10% of
the then replacement cost of the Project.  The amount of Additional Rent Tenant
is to pay with respect to each such capital improvement shall be determined as
follows:

           A.  All costs paid by Landlord to construct such improvements
(including financing costs) shall be amortized over the useful life of such
improvement (as reasonably determined by Landlord in accordance with generally
accepted accounting principles) with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it borrowed funds to construct
such improvements from an institutional lender, and Landlord shall inform Tenant
of the monthly amortization payment required to so amortize such costs, and
shall also provide Tenant with the information upon which such determination is
made.

           B.  As Additional Rent, Tenant shall pay at the same time the Base
Monthly Rent is due an amount equal to Tenant's Share of that portion of such
monthly amortization payment fairly allocable to the Building (as reasonably
determined by Landlord) for each month after such improvements are completed
until the first to occur of (i) the expiration of the Lease Term (as it may be
extended), or (ii) the end of the term over which such costs were amortized.

   5.5   Mechanic's Liens:  Tenant shall keep the Project free from any liens,
and shall pay when due all bills, arising out of any work performed, materials
furnished, or obligations incurred by Tenant or Tenant's Agents relating to the
Project.  If any claim of lien is recorded (except those caused by Landlord or
Landlord's Agents), Tenant shall bond against or discharge the same within 10
days after the same has been recorded against the Project.  Should any lien be
filed against the Project or any action be commenced affecting title to the
Project, the party receiving notice of such lien or action shall immediately
give the other party written
 

 
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notice thereof.

   5.6  Taxes on Tenant's Property:  Tenant shall pay before delinquency any and
all taxes, assessments, license fees and public charges levied, assessed or
imposed against Tenant or Tenant's estate in this Lease or the property of
Tenant situated within the Premises which become due during the Lease Term.  If
any tax or other charge is assessed by any governmental agency because of the
execution of this Lease, such tax shall be paid by Tenant.  On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments.
ARTICLE 6

REPAIR AND MAINTENANCE

   6.1  Tenant's Obligation to Maintain:  Except as otherwise provided in §6.2,
§11.1, and §12.3, Tenant shall be responsible for the following during the Lease
Term (provided, however, that any items which are stated to be Tenant’s
responsibility under this Section 6.1 where replacement is required and which
replacement is a capital expense under generally accepted accounting principles,
and where the need for such replacement did not result from Tenant’s failure to
carry out its maintenance and repair duties under this Lease, will be replaced
by Landlord rather than Tenant and will be amortized as set forth in Section 5.4
and Tenant will pay the amortized cost thereof during the Term as set forth in
Section 5.4):

           A. Tenant shall clean and maintain in good order, condition, and
repair and replace when necessary the Premises and every part thereof, through
regular inspections and servicing, including, but not limited to: (i) all
plumbing and sewage facilities (including all sinks, toilets, faucets and
drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing
system; (ii) all fixtures, interior walls, floors, carpets and ceilings; (iii)
all windows, doors, entrances, plate glass, showcases and skylights (including
cleaning both interior and exterior surfaces); (iv) all electrical facilities
and all equipment (including all lighting fixtures, lamps, bulbs, tubes, fans,
vents, exhaust equipment and systems); and (v) any automatic fire extinguisher
equipment in the Premises

           B.  With respect to utility facilities serving the Premises
(including electrical wiring and conduits, gas lines, water pipes, and plumbing
and sewage fixtures and pipes), Tenant shall be responsible for the maintenance
and repair of any such facilities which serve only the Premises, including all
such facilities that are within the walls or floor, or on the roof of the
Premises, and any part of such facility that is not within the Premises, but
only up to the point where such facilities join a main or other junction (e.g.,
sewer main or electrical transformer) from which such utility services are
distributed to other parts of the Project as well as to the Premises.  Tenant
shall replace any damaged or broken glass in the Premises (including all
interior and exterior doors and windows) with glass of the same kind, size and
quality.  Tenant shall repair any damage to the Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry.

           C. Tenant shall (i) maintain, repair and replace when necessary all
HVAC equipment which services only the Premises, and shall keep the same in good
 
condition through regular inspection and servicing, and (ii) maintain
continuously throughout the Lease Term a service contract for the maintenance of
all such HVAC equipment with a licensed HVAC repair and maintenance contractor
approved by Landlord, which contract provides for the periodic inspection and
servicing of the HVAC equipment at least once every 60 days during the Lease
Term.  Notwithstanding the foregoing, Landlord may elect at any time to assume
responsibility for the maintenance, repair and replacement of such HVAC
equipment which serves only the Premises.  Tenant shall maintain continuously
throughout the Lease Term a service contract for the washing of all windows
(both interior and exterior surfaces) in the Premises with a contractor approved
by Landlord, which contract provides for the periodic washing of all such
windows at least once every 6 months during the Lease Term.  Upon Landlord’s
written request, Tenant shall furnish Landlord with copies of all such service
contracts, which shall provide that they may not be cancelled or changed without
at least 30 days' prior written notice to Landlord, and shall provide Landlord
with the written inspection report(s) upon written request by Landlord.

           D.  All repairs and replacements required of Tenant shall be promptly
made with new materials of like kind and quality.  If the work affects the
structural parts of the Building or if the estimated cost of any item of repair
or replacement is in excess of the Permitted Tenant's Alterations Limit, then
Tenant shall first obtain Landlord's written approval of the scope of the work,
plans therefore, materials to be used, and the contractor.

E.           It is understood that mold spores are present essentially
everywhere and that mold can grow in any moist location.  To prevent mold as
best possible, requires prevention of moisture and good housekeeping and
ventilation practices.  Tenant acknowledges the necessity of housekeeping,
ventilation, and moisture control (especially in kitchens, janitor’s closets,
bathrooms, break rooms and around outside walls) for mold prevention, all to be
conducted by Tenant.  In signing this Lease, Tenant has first inspected the
Premises and certifies that it has not observed mold, mildew or moisture within
the Premises.  Tenant agrees to immediately notify Landlord if it observes
mold/mildew and/or moisture conditions (from any source, including leaks), and
allow Landlord to evaluate and make recommendations and/or take appropriate
corrective action if required hereunder.  Tenant relieves Landlord from any
liability for any bodily injury or damages to property or any other damage
whatsoever caused by, alleged to be caused by, or associated with moisture or
the growth of or occurrence of mold or mildew on the Premises.  In addition,
execution of this Lease constitutes acknowledgement by Tenant that control of
moisture and mold prevention are integral to its Lease obligations.

   6.2   Landlord'’s Obligation to Maintain:  Landlord shall repair, maintain
and operate the Common Area and repair and maintain the roof, exterior and
structural parts of the building(s) located on the Project so that the same are
kept in good order and repair.  If there is central HVAC or other building
service equipment and/or utility facilities serving portions of the Common Area
and/or both the Premises and other parts of the Building, Landlord shall
maintain and operate (and replace when necessary) such equipment.  Landlord
 

 
 
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shall not be responsible for repairs required by an accident, fire or other
peril or for damage caused to any part of the Project by any act or omission of
Tenant or Tenant's Agents except as otherwise required by Article 11.  Landlord
may engage contractors of its choice to perform the obligations required of it
by this Article, and the necessity of any expenditure to perform such
obligations shall be at the sole discretion of Landlord.

   6.3   Control of Common Area:  Landlord shall at all times have exclusive
control of the Common Area.  Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any abatement of rent, to: (i) close any part of the Common Area to whatever
extent required in the opinion of Landlord's counsel to prevent a dedication
thereof or the accrual of any prescriptive rights therein; (ii) temporarily
close the Common Area to perform maintenance or for any other reason deemed
sufficient by Landlord; (iii) change the shape, size, location and extent of the
Common Area; (iv) eliminate from or add to the Project any land or improvement,
including multi-deck parking structures; (v) make changes to the Common Area
including, without limitation, changes in the location of driveways, entrances,
passageways, doors and doorways, elevators, stairs, restrooms, exits, parking
spaces, parking areas, sidewalks or the direction of the flow of traffic and the
site of the Common Area; (vi) remove unauthorized persons from the Project;
and/or (vii) change the name or address of the Building or Project.  Tenant
shall keep the Common Area clear of all obstructions created or permitted by
Tenant.  If in the opinion of Landlord unauthorized persons are using any of the
Common Area by reason of the presence of Tenant in the Building, Tenant, upon
demand of Landlord, shall restrain such unauthorized use by appropriate
proceedings.  In exercising any such rights regarding the Common Area, (i)
Landlord shall make a reasonable effort to minimize any disruption to Tenant's
business, and (ii) Landlord shall not exercise its rights to control the Common
Area in a manner that would materially interfere with Tenant's use of the
Premises without first obtaining Tenant's consent.  Landlord shall have no
obligation to provide guard services or other security measures for the benefit
of the Project.  Tenant assumes all responsibility for the protection of Tenant
and Tenant's Agents from acts of third parties; provided, however, that nothing
contained herein shall prevent Landlord, at its sole option, from providing
security measures for the Project.

ARTICLE 7

WASTE DISPOSAL AND UTILITIES

   7.1   Waste Disposal:  Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are fully fenced and screened
in compliance with all Private Restrictions, and designed for such purpose.  All
entrances to such outside trash enclosures shall be kept closed, and waste shall
be stored in such manner as not to be visible from the exterior of such outside
enclosures.  Tenant shall cause all of its waste to be regularly removed from
the Premises at Tenant's sole cost.  Tenant shall keep all fire corridors and
mechanical equipment rooms in the Premises free and clear of all obstructions at
all times.

   7.2   Hazardous Materials:  Tenant acknowledges receipt of Landlord’s
environmental study by SECOR
 
International, Inc. dated December 5, 2006, as Landlord’s disclosure of the
environmental condition of the Property.  Landlord and Tenant agree as follows
with respect to the existence or use of Hazardous Materials on the Project:

A.  Any handling, transportation, storage, treatment, disposal or use of
Hazardous Materials by Tenant and Tenant's Agents after the Effective Date in or
about the Project shall strictly comply with all applicable Hazardous Materials
Laws.  Tenant shall indemnify, defend upon demand with counsel reasonably
acceptable to Landlord, and hold harmless Landlord from and against any
liabilities, losses, claims, damages, lost profits, consequential damages,
interest, penalties, fines, monetary sanctions, attorneys' fees, experts' fees,
court costs, remediation costs, investigation costs, and other expenses which
result from or arise in any manner whatsoever out of the use, storage,
treatment, transportation, release, or disposal of Hazardous Materials on or
about the Project by Tenant or Tenant's Agents after the Effective Date.

           B.  If the presence of Hazardous Materials on the Project caused or
permitted by Tenant or Tenant's Agents after the Effective Date results in
contamination or deterioration of water or soil resulting in a level of
contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Tenant
shall promptly take any and all action necessary to investigate and remediate
such contamination if required by Law or as a condition to the issuance or
continuing effectiveness of any governmental approval which relates to the use
of the Project or any part thereof.  Tenant shall further be solely responsible
for, and shall defend, indemnify and hold Landlord and its agents harmless from
and against, all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with any investigation and remediation
required hereunder to return the Project to its condition existing prior to the
appearance of such Hazardous Materials.

C.  Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any governmental
authority concerning Hazardous Materials which relates to the Project, and (ii)
any contamination of the Project by Hazardous Materials which constitutes a
violation of any Hazardous Materials Law.  Tenant may use small quantities of
household chemicals such as adhesives, lubricants, and cleaning fluids in order
to conduct its business at the Premises and such other Hazardous Materials as
are necessary for the operation of Tenant's business of which Landlord receives
notice prior to such Hazardous Materials being brought onto the Premises and
which Landlord consents in writing may be brought onto the Premises.  At any
time during the Lease Term, Tenant shall, within five days after written request
therefor received from Landlord, disclose in writing all Hazardous Materials
that are being used by Tenant on the Project, the nature of such use, and the
manner of storage and disposal.

D  Landlord may cause testing wells to be installed on the Project, and may
cause the ground water to be tested to detect the presence of Hazardous Material
by the use of such tests as are then customarily used for such purposes.  If
Tenant so requests, Landlord
 

 
 
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shall supply Tenant with copies of such test results.  The cost of such tests
and of the installation, maintenance, repair and replacement of such wells shall
be paid by Tenant if such tests disclose the existence of facts which give rise
to liability of Tenant pursuant to its indemnity given in §7.2A and/or §7.2B.

E.  As used herein, 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,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) 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), or (iii) 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).  As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.

F.  The obligations of Landlord and Tenant under this §7.2 shall survive the
expiration or earlier termination of the Lease Term.  The rights and obligations
of Landlord and Tenant with respect to issues relating to Hazardous Materials
are exclusively established by this §7.2.  In the event of any inconsistency
between any other part of this Lease and this §7.2, the terms of this §7.2 shall
control.

   7.3   Utilities:  Tenant shall promptly pay, as the same become due, all
charges for water, gas, electricity, telephone, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, and water service available to the Premises as of the
Commencement Date), and (ii) penalties for discontinued or interrupted
service.  If any utility service is not separately metered to the Premises, then
Tenant shall pay its pro rata share of the cost of such utility service with all
others served by the service not separately metered.  However, if Landlord
determines that Tenant is using a disproportionate amount of any utility service
not separately metered, then Landlord at its election may (i) periodically
charge Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate
of the cost of Tenant's excess use of such utility service, or (ii) install a
separate meter (at Tenant's expense) to measure the utility service supplied to
the Premises.

   7.4  Compliance with Governmental Regulations:  Landlord and Tenant shall
comply with all rules, regulations and requirements promulgated by national,
state or local governmental agencies or utility suppliers
 
concerning the use of utility services, including any rationing, limitation or
other control.  Tenant shall not be entitled to terminate this Lease nor to any
abatement in rent by reason of such compliance.

ARTICLE  8

COMMON OPERATING EXPENSES

   8.1   Tenant's Obligation to Reimburse:  As Additional Rent, Tenant shall pay
Tenant's Share (specified in Section G of the Summary) of all Common Operating
Expenses; provided, however, if the Project contains more than one building,
then Tenant shall pay Tenant's Share of all Common Operating Expenses fairly
allocable to the Building, including (i) all Common Operating Expenses paid with
respect to the maintenance, repair, replacement and use of the Building, and
(ii) a proportionate share (based on the Building Gross Leasable Area as a
percentage of the Project Gross Leasable Area) of all Common Operating Expenses
which relate to the Project in general are not fairly allocable to any one
building that is part of the Project.  Tenant shall pay such share of the actual
Common Operating Expenses incurred or paid by Landlord but not theretofore
billed to Tenant within 10 days after receipt of a written bill therefor from
Landlord, on such periodic basis as Landlord shall designate, but in no event
more frequently than once a month.  Alternatively, Landlord may from time to
time require that Tenant pay Tenant's Share of Common Operating Expenses in
advance in estimated monthly installments, in accordance with the following: (i)
Landlord shall deliver to Tenant Landlord's reasonable estimate of the Common
Operating expenses it anticipates will be paid or incurred for the Landlord's
fiscal year in question; (ii) during such Landlord's fiscal year Tenant shall
pay such share of the estimated Common Operating Expenses in advance in monthly
installments as required by Landlord due with the installments of Base Monthly
Rent; and (iii) within 90 days after the end of each Landlord's fiscal year,
Landlord shall furnish to Tenant a statement in reasonable detail of the actual
Common Operating Expenses paid or incurred by Landlord during the just ended
Landlord's fiscal year and thereupon there shall be an adjustment between
Landlord and Tenant, with payment to Landlord or credit by Landlord against the
next installment of Base Monthly Rent, as the case may require, within 10 days
after delivery by Landlord to Tenant of said statement, so that Landlord shall
receive the entire amount of Tenant's Share of all Common Operating Expenses for
such Landlord's fiscal year and no more.  Tenant shall have the right at its
expense, exercisable upon reasonable prior written notice to Landlord, to
inspect at Landlord's office during normal business hours Landlord's books and
records as they relate to Common Operating Expenses.  Such inspection must be
within 60 days of Tenant's receipt of Landlord's annual statement for the same,
and shall be limited to verification of the charges contained in such
statement.  Tenant may not withhold payment of such bill pending completion of
such inspection.

   8.2   Common Operating Expenses Defined:  The term "Common Operating
Expenses" shall mean the following:

A.  All costs and expenses paid or incurred by Landlord in doing the following
(including payments to independent contractors providing services related to
 

 
 
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the performance of the following): (i) maintaining, cleaning, repairing and
resurfacing the roof (including repair of leaks) and the exterior surfaces
(including painting) of all buildings located on the Project; (ii) maintenance
of the liability, fire and property damage insurance covering the Project
carried by Landlord pursuant to 9.2 (including the prepayment of premiums for
coverage of up to one year); (iii) maintaining, repairing, operating and
replacing when necessary HVAC equipment, utility facilities and other building
service equipment; (iv) providing utilities to the Common Area (including
lighting, trash removal and water for landscaping irrigation); (v) complying
with all applicable Laws and Private Restrictions; (vi) operating, maintaining,
repairing, cleaning, painting, restriping and resurfacing the Common Area; (vii)
replacement or installation of lighting fixtures, directional or other signs and
signals, irrigation systems, trees, shrubs, ground cover and other plant
materials, and all landscaping in the Common Area; and (viii) providing
security;

B.  The following costs: (i) Real Property Taxes as defined in §8.3; (ii) the
amount of any "deductible" paid by Landlord with respect to damage caused by any
Insured Peril; (iii) the cost to repair damage caused by an Uninsured Peril up
to a maximum amount in any 12 month period equal to 2% of the replacement cost
of the buildings or other improvements damaged; and (iv) that portion of all
compensation (including benefits and premiums for workers' compensation and
other insurance) paid to or on behalf of employees of Landlord but only to the
extent they are involved in the performance of the work described by §8.2A that
is fairly allocable to the Project;

C.  Fees for management services rendered by either Landlord or a third party
manager engaged by Landlord (which may be a party affiliated with Landlord),
except that the total amount charged for management services and included in
Tenant's Share of Common Operating Expenses shall not exceed the monthly rate of
four percent (4%) of the Base Monthly Rent.

D.  All additional costs and expenses incurred by Landlord with respect to the
operation, protection, maintenance, repair and replacement of the Project which
would be considered a current expense (and not a capital expenditure) pursuant
to generally accepted accounting principles; provided, however, that Common
Operating Expenses shall not include any of the following: (i) payments on any
loans or ground leases affecting the Project; (ii) depreciation of any buildings
or any major systems of building service equipment within the Project; (iii)
leasing commissions; (iv) the cost of tenant improvements installed for the
exclusive use of other tenants of the Project; and (v) any cost incurred in
complying with Hazardous Materials Laws, which subject is governed exclusively
by §7.2.

Notwithstanding any of the foregoing, to the extent that Landlord is required to
replace any items which are a capital expense under generally accepted
accounting principles, the cost of such replacement will be amortized and paid
for during the term of the Lease on an amortized basis by Tenant under the
provisions of  Section 5.4, and such expenses by Landlord will not be made part
of Common Operating Expenses; provided,
 
however, that this does not apply if the need for such replacement resulted from
Tenant’s failure to carry out its maintenance and repair duties under this
Lease, in which case, such expense shall be a Common Operating Expense.

   8.3  Real Property Taxes Defined:  The term "Real Property Taxes" shall mean
all taxes, assessments, levies, and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments resulting from a change in
ownership, new construction, or any other cause), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any
portion of the Project (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein, the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located on the Project, the gross receipts, income, or
rentals from the Project, or the use of parking areas, public utilities, or
energy within the Project, or Landlord's business of leasing the Project.  If at
any time during the Lease Term the method of taxation or assessment of the
Project prevailing as of the Effective Date shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlord's interest therein, or (ii) on or measured by the gross receipts,
income or rentals from the Project, on Landlord's business of leasing the
Project, or computed in any manner with respect to the operation of the Project,
then any such tax or charge, however designated, shall be included within the
meaning of the term "Real Property Taxes" for purposes of this Lease.  If any
Real Property Tax is based upon property or rents unrelated to the Project, then
only that part of such Real Property Tax that is fairly allocable to the Project
shall be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
estate, inheritance, transfer, gift or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all sources.

ARTICLE 9

INSURANCE

   9.1 Tenant's Insurance:  Tenant shall maintain insurance complying with all
of the following:

A.   Tenant shall procure, pay for and keep in full force and effect the
following:

(1).  Commercial general liability insurance, including property damage, against
liability  for personal injury, bodily injury, death and damage to property
occurring in or about, or resulting from an occurrence in or about, the Premises
with combined single limit coverage of not less than the amount of
 

 
 
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Tenant's Liability Insurance Minimum specified in Section P of the Summary,
which insurance shall contain a "contractual liability" endorsement insuring
Tenant's performance of Tenant's obligation to indemnify Landlord contained in
§10.3;

(2).  Fire and property damage insurance in so-called "all risk" form insuring
Tenant's Trade Fixtures and Tenant's Alterations for the full actual replacement
cost thereof;

(3).  Such other insurance that is either (i) required by any Lender, or (ii)
reasonably required by Landlord and customarily carried by tenants of similar
property in similar businesses.

B.  Where applicable and required by Landlord, each policy of insurance required
to be carried by Tenant pursuant to this §9.1: (i) shall name Landlord and such
other parties in interest as Landlord reasonably designates as additional
insured; (ii) shall be primary insurance which provides that the insurer shall
be liable for the full amount of the loss up to and including the total amount
of liability set forth in the declarations without the right of contribution
from any other insurance coverage of Landlord; (iii) shall be in a form
satisfactory to Landlord; (iv) shall be carried with companies reasonably
acceptable to Landlord; (v) shall provide that such policy shall not be subject
to cancellation, lapse or change except after at least 30 days prior written
notice to Landlord so long as such provision of 30 days notice is reasonably
obtainable, but in any event not less than 10 days prior written notice; (vi)
shall not have a "deductible" in excess of such amount as is approved by
Landlord; (vii) shall contain a cross liability endorsement; and (viii) shall
contain a "severability" clause.  If Tenant has in full force and effect a
blanket policy of liability insurance with the same coverage for the Premises as
described above, as well as other coverage of other premises and properties of
Tenant, or in which Tenant has some interest, such blanket insurance shall
satisfy the requirements of this §9.1.

C.   A copy of each paid-up policy evidencing the insurance required to be
carried by Tenant pursuant to this §9.1 (appropriately authenticated by the
insurer) or a certificate of the insurer, certifying that such policy has been
issued, providing the coverage required by this §9.1, and containing the
provisions specified herein, shall be delivered to Landlord prior to the time
Tenant or any of its Agents enters the Premises and upon renewal of such
policies, but not less than 5 days prior to the expiration of the term of such
coverage.  Landlord may, at any time, and from time to time, inspect and/or copy
any and all insurance policies required to be procured by Tenant pursuant to
this §9.1. If any Lender or insurance advisor reasonably determines at any time
that the amount of coverage required for any policy of insurance Tenant is to
obtain pursuant to this §9.1 is not adequate, then Tenant shall increase such
coverage for such insurance to such amount as such Lender or insurance advisor
reasonably deems adequate, not to exceed the level of coverage for such
insurance commonly carried by comparable businesses similarly situated.

   9.2   Landlord's Insurance:  Landlord shall have the following obligations
and options regarding insurance:
 
A.   Landlord shall maintain a policy or policies of fire and property damage
insurance in so-called "all risk" form insuring Landlord (and such others as
Landlord may designate) against loss of rents for a period of not less than 12
months and from physical damage to the Project with coverage of not less than
the full replacement cost thereof.  Landlord may so insure the Project
separately, or may insure the Project with other property owned by Landlord
which Landlord elects to insure together under the same policy or
policies.  Such fire and property damage insurance (i) may be endorsed to cover
loss caused by such additional perils against which Landlord may elect to
insure, including earthquake and/or flood, and to provide such additional
coverage as Landlord reasonably requires, and (ii) shall contain reasonable
"deductibles" which, in the case of earthquake and flood insurance, may be up to
15% of the replacement value of the property insured or such higher amount as is
then commercially reasonable.  Landlord shall not be required to cause such
insurance to cover any Trade Fixtures or Tenant's Alterations of Tenant.

B.  Landlord may maintain a policy or policies of commercial general liability
insurance insuring Landlord (and such others as are designated by Landlord)
against liability for personal injury, bodily injury, death and damage to
property occurring or resulting from an occurrence in, on or about the Project,
with combined single limit coverage in such amount as Landlord from time to time
determines is reasonably necessary for its protection.

   9.3   Tenant's Obligation to Reimburse:  If Landlord's insurance rates for
the Building are increased at any time during the Lease Term as a result of the
nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for the
full amount of such increase immediately upon receipt of a bill from Landlord
therefore.

   9.4   Release and Waiver of Subrogation:  The parties hereto release each
other, and their respective agents and employees, from any liability for injury
to any person or damage to property that is caused by or results from any risk
insured against under any valid and collectible insurance policy carried by
either of the parties which contains a waiver of subrogation by the insurer and
is in force at the time of such injury or damage; subject to the following
limitations: (i) the foregoing provision  shall not apply to the commercial
general liability insurance described by subparagraphs §9.1A and §9.2B; (ii)
such release shall apply to liability resulting from any risk insured against or
covered by self-insurance maintained or provided by Tenant to satisfy the
requirements of §9.1 to the extent permitted by this Lease; and (iii) Tenant
shall not be released from any such liability to the extent any damages
resulting from such injury or damage are not covered by the recovery obtained by
Landlord from such insurance, but only if the insurance in question permits such
partial release in connection with obtaining a waiver of subrogation from the
insurer.  This release shall be in effect only so long as the applicable
insurance policy contains a clause to the effect that this release shall not
affect the right of the insured to recover under such policy.  Each party shall
use reasonable efforts to cause each insurance policy obtained by it to provide
that the insurer waives all right of recovery by way of subrogation against the
other party and its agents and employees in connection with
 

 
 
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any injury or damage covered by such policy.  However, if any insurance policy
cannot be obtained with such a waiver of subrogation, or if such waiver of
subrogation is only available at additional cost and the party for whose benefit
the waiver is to be obtained does not pay such additional cost, then the party
obtaining such insurance shall notify the other party of that fact and thereupon
shall be relieved of the obligation to obtain such waiver of subrogation rights
from the insurer with respect to the particular insurance involved.

ARTICLE 10

LIMITATION ON LANDLORD'S
LIABILITY AND INDEMNITY

   10.1   Limitation on Landlord's Liability:  Landlord shall not be liable to
Tenant, nor shall Tenant be entitled to terminate this Lease or to any abatement
of rent (except as expressly provided otherwise herein), for any injury to
Tenant or Tenant's Agents, damage to the property of Tenant or Tenant's Agents,
or loss to Tenant's business resulting from any cause, including without
limitation any: (i) failure, interruption or installation of any HVAC or other
utility system or service; (ii) failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by fire or other
peril, the elements, labor disturbances of any character, or any other accidents
or other conditions beyond the reasonable control of Landlord; (iii) limitation,
curtailment, rationing or restriction on the use of water or electricity, gas or
any other form of energy or any services or utility serving the Project; (iv)
vandalism or forcible entry by unauthorized persons or the criminal act of any
person; or (v) penetration of water into or onto any portion of the Premises or
the Building through roof leaks or otherwise.  Notwithstanding the foregoing but
subject to §9.4, the provision above under which it is stated that Landlord
shall not be liable shall not apply in case of any any such injury, damage or
loss which is proximately caused by Landlord's willful misconduct or gross
negligence or active negligence where Landlord has had actual notice of the
cause and a reasonable time to cure, but does not cure..

   10.2   Limitation on Tenant's Recourse:  If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association or other form of business
entity: (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity; and (ii) Tenant shall not have recourse to the assets of such
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, principals or representatives except to the extent of their
interest in the Project.  Tenant shall have recourse only to the interest of
Landlord in the Project for the satisfaction of the obligations of Landlord and
shall not have recourse to any other assets of Landlord for the satisfaction of
such obligations.

   10.3   Indemnification of Landlord:  Tenant shall hold harmless, indemnify
and defend Landlord, and its employees, agents and contractors, with competent
counsel reasonably satisfactory to Landlord (and Landlord agrees to accept
counsel that any insurer requires be used), from all liability, penalties,
losses, damages, costs, expenses, causes of action, claims
 
and/or judgments arising by reason of any death, bodily injury, personal injury
or property damage resulting from (i) any cause or causes whatsoever (other than
the willful misconduct or gross negligence of Landlord or Landlord’s active
negligence where Landlord has had actual notice of the cause and a reasonable
time to cure, but does not cure) occurring in or about or resulting from an
occurrence in or about the Premises during the Lease Term; (ii) the negligence
or willful misconduct of Tenant or its agents, employees and contractors,
wherever the same may occur; or (iii) an Event of Tenant's Default.  The
provisions of this §10.3 shall survive the expiration or sooner termination of
this Lease.

ARTICLE 11

DAMAGE TO PREMISES

   11.1   Landlord's Duty to Restore:  If the Premises are damaged by any peril
after the Effective Date, Landlord shall restore the Premises unless the Lease
is terminated by Landlord pursuant to §11.2 or by Tenant pursuant to §11.3.  All
insurance proceeds available from the fire and property damage insurance carried
by Landlord pursuant to §9.2 shall be paid to and become the property of
Landlord.  If this Lease is terminated pursuant to either §11.2 or §11.3, then
all insurance proceeds available from insurance carried by Tenant which covers
loss to property that is Landlord's property or would become Landlord's property
on termination of this Lease shall be paid to and become the property of
Landlord.  If this Lease is not so terminated, then upon receipt of the
insurance proceeds (if the loss is covered by insurance) and the issuance of all
necessary governmental permits, Landlord shall commence and diligently prosecute
to completion the restoration of the Premises, to the extent then allowed by
Law, to substantially the same condition in which the Premises were immediately
prior to such damage.  Landlord's obligation to restore shall be limited to the
Premises and interior improvements constructed by Landlord as they existed as of
the Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant in the Premises.  Tenant
shall forthwith replace or fully repair all Tenant's Alterations and Trade
Fixtures installed by Tenant and existing at the time of such damage or
destruction, and all insurance proceeds received by Tenant from the insurance
carried by it pursuant to §9.1A(2) shall be used for such purpose.

   11.2   Landlord's Right to Terminate:  Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within 30 days after the date of such damage:

A.  Either the Project or the Building is damaged by an Insured Peril to such an
extent that the estimated cost to restore exceeds 33% of the then actual
replacement cost thereof;

B.  Either the Project or the Building is damaged by an Uninsured Peril to such
an extent that the estimated cost to restore exceeds 2% of the then actual
replacement cost thereof; provided, however, that Landlord may not terminate
this Lease pursuant to this §11.2B if one or more tenants of the Project agree
in
 

 
 
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writing to pay the amount by which the cost to restore the damage exceeds such
amount and subsequently deposit such amount with Landlord within 30 days after
Landlord has notified Tenant of its election to terminate this Lease;

C.  The Premises are damaged by any peril within 12 months of the last day of
the Lease Term to such an extent that the estimated cost to restore equals or
exceeds an amount equal to six times the Base Monthly Rent then due; provided,
however, that Landlord may not terminate this Lease pursuant to this §11.2C if
Tenant, at the time of such damage, has a then valid express written option to
extend the Lease Term and Tenant exercises such option to extend the Lease Term
within 15 days following the date of such damage; or

D.  Either the Project or the Building is damaged by any peril and, because of
the Laws then in force, (i) cannot be restored at reasonable cost to
substantially the same condition in which it was prior to such damage, or (ii)
cannot be used for the same use being made thereof before such damage if
restored as required by this Article.

E.  As used herein, the following terms shall have the following meanings: (i)
the term "Insured Peril" shall mean a peril actually insured against for which
the insurance proceeds actually received by Landlord are sufficient (except for
any "deductible" amount specified by such insurance) to restore the Project
under then existing building codes to the condition existing immediately prior
to the damage; and (ii) the term "Uninsured Peril" shall mean any peril which is
not an Insured Peril.  Notwithstanding the foregoing, if the "deductible" for
earthquake or flood insurance exceeds 2% of the replacement cost of the
improvements insured, such peril shall be deemed an "Uninsured Peril".

   11.3   Tenant's Right to Terminate:  If the Premises are damaged by any peril
and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to §11.2, then as soon as reasonably practicable,
Landlord shall furnish Tenant with the written opinion of Landlord's architect
or construction consultant as to when the restoration work required of Landlord
may be completed.  Tenant shall have the right to terminate this Lease in the
event any of the following occurs, which right may be exercised only by delivery
to Landlord of a written notice of election to terminate within 10  days after
Tenant receives from Landlord the estimate of the time needed to complete such
restoration.

A.  The Premises are damaged by any peril and, in the reasonable opinion of
Landlord's architect or construction consultant, the restoration of the Premises
cannot be substantially completed within 180 days after the date of such damage;
or

B.  The Premises are damaged by any peril within 12 months of the last day of
the Lease Term and, in the reasonable opinion of Landlord's architect or
construction consultant, the restoration of the Premises cannot be substantially
completed within 90 days after the date of such damage and such damage renders
unusable more than 30% of the Premises.

   11.4   Abatement of Rent:  In the event of damage to
 
the Premises which does not result in the termination of this Lease, the Base
Monthly Rent and the Additional Rent shall be temporarily abated during the
period of restoration in proportion to the degree to which Tenant's use of the
Premises is impaired by such damage.  Tenant shall not be entitled to any
compensation or damages from Landlord for loss of Tenant's business or property
or for any inconvenience or annoyance caused by such damage or
restoration.  Tenant hereby waives the provisions of California Civil Code
Sections 1932(2) and 1933(4) and the provisions of any similar law hereinafter
enacted.

ARTICLE 12

CONDEMNATION

   12.1   Landlord's Termination Right:  Landlord shall have the right to
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to a
condemnor under threat of condemnation), (i) all or any part of the Premises is
so taken, (ii) more than 10% of the Building Leasable Area is so taken, or (iii)
more than 50% of the Common Area is so taken.  Any such right to terminate by
Landlord must be exercised within a reasonable period of time, to be effective
as of the date possession is taken by the condemnor.

   12.2   Tenant's Termination Right:  Tenant shall have the right to terminate
this Lease if, as a result of any taking by means of the exercise of the power
of eminent domain (including any voluntary sale or transfer by Landlord to any
condemnor under threat of condemnation), (i) 10% or more of the Premises is so
taken and that part of the Premises that remains cannot be restored within a
reasonable period of time and thereby made reasonably suitable for the continued
operation of the Tenant's business, or (ii) there is a taking affecting the
Common Area and, as a result of such taking, Landlord cannot provide parking
spaces within reasonable walking distance of the Premises equal in number to at
least 80% of the number of spaces allocated to Tenant by §2.1, whether by
rearrangement of the remaining parking areas in the Common Area (including
construction of multi-deck parking structures or restriping for compact cars
where permitted by Law) or by alternative parking facilities on other
land.  Tenant must exercise such right within a reasonable period of time, to be
effective on the date that possession of that portion of the Premises or Common
Area that is condemned is taken by the condemnor.

   12.3   Restoration and Abatement of Rent:  If any part of the Premises or the
Common Area is taken by condemnation and this Lease is not terminated, then
Landlord shall restore the remaining portion of the Premises and Common Area and
interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant.  Thereafter, except in the
case of a temporary taking, as of the date possession is taken the Base Monthly
Rent shall be reduced in the same proportion that the floor area of that part of
the Premises so taken (less any addition thereto by reason of any
reconstruction) bears to the original floor area of the Premises.

   12.4   Temporary Taking:  If any portion of the
 

 
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Premises is temporarily taken for one year or less, this Lease shall remain in
effect.  If any portion of the Premises is temporarily taken by condemnation for
a period which exceeds one year or which extends beyond the natural expiration
of the Lease Term, and such taking materially and adversely affects Tenant's
ability to use the Premises for the Permitted Use, then Tenant shall have the
right to terminate this Lease, effective on the date possession is taken by the
condemnor.

   12.5   Division of Condemnation Award:  Any award made as a result of any
condemnation of the Premises or the Common Area shall belong to and be paid to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided, however, that Tenant shall be entitled to
receive any condemnation award that is made directly to Tenant for the following
so long as the award made to Landlord is not thereby reduced: (i) for the taking
of personal property or Trade Fixtures belonging to Tenant; (ii) for the
interruption of Tenant's business or its moving costs; (iii) for loss of
Tenant's goodwill; or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking.  The rights of Landlord and Tenant
regarding any condemnation shall be determined as provided in this Article, and
each party hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 and the provisions of any similar law hereinafter enacted
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.

ARTICLE 13

DEFAULT AND REMEDIES

   13.1   Events of Tenant's Default:  Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):

A.  Tenant shall have failed to pay Base Monthly Rent or Additional Rent when
due, and such failure is not cured within 3 days after delivery of written
notice from Landlord specifying such failure to pay; or

B.  Tenant shall have failed to perform any term, covenant, or condition of this
Lease except those requiring the payment of Base Monthly Rent or Additional
Rent, and Tenant shall have failed to cure such breach within 30 days after
written notice from Landlord specifying the nature of such breach where such
breach could reasonably be cured within said 30 day period, or if such breach
could not be reasonably cured within said 30 day period, Tenant shall have
failed to commence such cure within said 30 day period and thereafter continue
with due diligence to prosecute such cure to completion within such time period
as is reasonably needed but not to exceed 90 days from the date of Landlord's
notice; or

C.  Tenant shall have sublet the Premises or assigned its interest in the Lease
in violation of the provisions contained in Article 14; or

D.  Tenant shall have abandoned the Premises or left the Premises substantially
vacant; or

E.  The occurrence of the following: (i) the
 
making by Tenant of any general arrangements or assignments for the benefit of
creditors; (ii) Tenant becomes a "debtor" as defined in 11 USC 101 or any
successor statute thereto (unless, in the case of a petition filed against
Tenant, the same is dismissed within 60 days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within 30 days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within 30 days; provided, however, in the event that any provision of
this Section 13.1E is contrary to any applicable Law, such provision shall be of
no force or effect; or

F.  Tenant shall have failed to deliver documents required of it pursuant to
§15.4 or §15.6 within the time periods specified therein.

   13.2   Landlord's Remedies:  If an Event of Tenant's Default occurs, 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:

A.  Landlord may 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 with interest at
the Agreed Interest Rate from the date the sum is paid by Landlord until
Landlord is reimbursed by Tenant; and (iii) the remedies of injunctive relief
and specific performance to compel Tenant to perform its obligations under this
Lease.  Notwithstanding anything contained in this Lease, in the event of a
breach of an obligation by Tenant which results in a condition which poses an
imminent danger to safety of persons or damage to property, an unsightly
condition visible from the exterior of the Building, or a threat to insurance
coverage, then if Tenant does not cure such breach within 3 days after delivery
to it of written notice from Landlord identifying the breach, Landlord may cure
the breach of Tenant and be reimbursed by Tenant for the cost thereof with
interest at the Agreed Interest Rate from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant.

B.  Landlord may enter the Premises and release them to third parties for
Tenant's account for any period, whether shorter or longer than the remaining
Lease Term.  Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in releasing the Premises, including brokers' commissions,
expenses of altering and preparing the Premises required by the
releasing.  Tenant shall pay to Landlord the rent and other sums due under this
Lease on the date the rent is due, less the rent and other sums Landlord
received from any releasing.  No act by Landlord allowed by this subparagraph
shall terminate this Lease unless Landlord notifies Tenant in writing that
Landlord elects to terminate this Lease.  Notwithstanding any releasing without
termination, Landlord may later elect to terminate this Lease because of the
default by Tenant.

 
 
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C.  Landlord may 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 termination under this §13.2C shall not relieve
Tenant from its obligation to pay sums then due Landlord or from any claim
against Tenant for damages or rent previously accrued or then accruing.  In no
event shall any one or more of the following actions  by Landlord, in the
absence of a written election by Landlord to terminate this Lease, constitute a
termination of this Lease: (i) appointment of a receiver or keeper in order to
protect Landlord's interest hereunder; (ii) consent to any subletting of the
Premises or assignment of this Lease by Tenant, whether pursuant to the
provisions hereof or otherwise; or (iii) any other action by Landlord or
Landlord's Agents intended to mitigate the adverse effects of any breach of this
Lease by Tenant, including without limitation any action taken to maintain and
preserve the Premises or any action taken to relet the Premises or any portions
thereof to the extent such actions do not affect a termination of Tenant's right
to possession of the Premises.

D.  In the event Tenant breaches this Lease and abandons the Premises, this
Lease shall not terminate unless Landlord gives Tenant written notice of its
election to so terminate this Lease.  No act by or on behalf of Landlord
intended to mitigate the adverse effect of such breach, including those
described by §13.C, shall constitute a termination of Tenant's right to
possession unless Landlord gives Tenant written notice of termination.  Should
Landlord not terminate this Lease by giving Tenant written notice, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover the rent as it becomes due under the Lease as provided in California
Civil Code Section 1951.4.

E.  In the event Landlord terminates this Lease, Landlord shall be entitled, at
Landlord's election, to damages in an amount as set forth in California Civil
Code Section 1951.2 as in effect on the Effective Date.  For purposes of
computing damages pursuant to California Civil Code Section 1951.2, (i) an
interest rate equal to the Agreed Interest Rate shall be used where permitted,
and (ii) the term "rent" includes Base Monthly Rent and Additional Rent.  Such
damages shall include:

(1).  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
rental loss that Tenant proves 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

(2).  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
therefrom, including the following: (i) expenses for cleaning, repairing or
restoring the Premises; (ii) expenses for altering, remodeling or otherwise
improving the Premises for the purpose of reletting, including installation of
leasehold improvements (whether such installation be funded by a reduction of
rent, direct
 
payment or allowance to a new tenant, or otherwise); (iii) broker's fees,
advertising costs and other expenses of reletting the Premises; (iv) costs of
carrying the Premises, such as taxes, insurance premiums, utilities and security
precautions; (v) expenses in retaking possession of the Premises; and (vi)
attorneys' fees and court costs incurred by Landlord in retaking possession of
the Premises and in releasing the Premises or otherwise incurred as a result of
Tenant's default.

F.   Nothing in this §13.2 shall limit Landlord's right to indemnification from
Tenant as provided in §7.2 and §10.3.  Any notice given by Landlord in order to
satisfy the requirements of §13.1A or §13.1B above shall also satisfy the notice
requirements of California Code of Civil Procedure Section 1161 regarding
unlawful detainer proceedings.

   13.3   Waiver:  One party's consent to or approval of any act by the other
party requiring the first party's consent or approval shall not be deemed to
waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party.  The receipt by Landlord of any rent
or payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach unless such waiver is in writing
and signed by Landlord.  No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any such
breach theretofore or thereafter occurring.  The waiver by either party of any
breach of any provision of this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or of any other provisions herein contained.

   13.4   Limitation On Exercise of Rights:  At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give, and (ii)
Tenant may not exercise any option to extend, right to terminate this Lease, or
other right granted to it by this Lease which would otherwise be available to
it.

   13.5   Waiver by Tenant of Certain Remedies:  Tenant waives the provisions of
Sections 1932(1), 1941 and 1942 of the California Civil Code and any similar or
successor law regarding Tenant's right to terminate this Lease or to make
repairs and deduct the expenses of such repairs from the rent due under this
Lease.  Tenant hereby waives any right of redemption or relief from forfeiture
under the laws of the State of California, or under any other present or future
law, including the provisions of Sections 1174 and 1179 of the California Code
of Civil Procedure.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

   14.1  Transfer By Tenant:  The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this §14.1 as "Tenant"):

A.  Tenant shall not do any of the following (collectively referred to herein as
a "Transfer"), whether

 
 
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voluntarily, involuntarily or by operation of law, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned, or delayed: (i) sublet all or any part of the Premises or allow it
to be sublet, occupied or used by any person or entity other than Tenant; (ii)
assign its interest in this Lease; (iii) mortgage or encumber the Lease (or
otherwise use the Lease as a security device) in any manner; or (iv) materially
amend or modify an assignment, sublease or other transfer that has been
previously approved by Landlord.  Tenant shall reimburse Landlord for all
reasonable costs and attorneys' fees incurred by Landlord in connection with the
evaluation, processing, and/or documentation of any requested Transfer, whether
or not Landlord's consent is granted.  Landlord's reasonable costs shall include
the cost of any review or investigation performed by Landlord or consultant
acting on Landlord's behalf of (i) Hazardous Materials (as defined in Section
7.2E of this Lease) used, stored, released, or disposed of by the potential
Subtenant or Assignee, and/or (ii) violations of Hazardous Materials Law (as
defined in Section 7.2E of this lease) by the Tenant or the proposed Subtenant
or Assignee.  Any Transfer so approved by Landlord shall not be effective until
Tenant has delivered to Landlord an executed counterpart of the document
evidencing the Transfer which (i) is in a form reasonably approved by Landlord;
(ii) contains the same terms and conditions as stated in Tenant's notice given
to Landlord pursuant to §14.1B; and (iii) in the case of an assignment of the
Lease, contains the agreement of the proposed transferee to assume all
obligations of Tenant under this Lease arising after the effective date of such
Transfer and to remain jointly and severally liable therefore with Tenant. Any
attempted Transfer without Landlord's consent shall constitute an Event of
Tenant's Default and shall be voidable at Landlord's option.  Landlord's consent
to any one Transfer shall not constitute a waiver of the provisions of this
§14.1 as to any subsequent Transfer or a consent to any subsequent Transfer.  No
Transfer, even with the consent of Landlord, shall relieve Tenant of its
personal and primary obligation to pay the rent and to perform all of the other
obligations to be performed by Tenant hereunder.  The acceptance of rent by
Landlord from any person shall not be deemed to be a waiver by Landlord of any
provision of this Lease nor to be a consent to any Transfer.

B.  At least 30 days before a proposed Transfer is to become effective, Tenant
shall give Landlord written notice of the proposed terms of such Transfer and
request Landlord's approval, which notice shall include the following: (i) the
name and legal composition of the proposed transferee; (ii) a current financial
statement of the transferee, financial statements of the transferee covering the
preceding three years if the same exist, and (if available) an audited financial
statement of the transferee for a period ending not more than one year prior to
the proposed effective date of the Transfer, all of which statements are
prepared in accordance with generally accepted accounting principles; (iii) the
nature of the proposed transferee's business to be carried on in the Premises;
(iv) all consideration to be given on account of the Transfer; (v) a current
financial statement of Tenant; and (vi) an accurately filled out response to
Landlord's standard Hazardous Materials Questionnaire.  Tenant shall provide to
Landlord such other information as may be reasonably requested by Landlord
within seven days after Landlord's receipt of such notice from Tenant.
 
Landlord shall respond in writing to Tenant's request for Landlord's consent to
a Transfer within the later of (i) 15 days of receipt of such request together
with the required accompanying documentation, or (ii) seven days after
Landlord's receipt of all information which Landlord reasonably requests within
seven days after it receives Tenant's first notice regarding the Transfer in
question.  If Landlord fails to respond in writing within said period, Landlord
will be deemed to have withheld its consent  to such Transfer.  Tenant shall
immediately notify Landlord of any material modification to the proposed terms
of such Transfer.

C.  In the event that Tenant seeks to make any Transfer of the Lease by
assignment, or by a Sublease of all or substantially all of the Premises for all
or substantially all of the  remaining term of the Lease, then, Landlord shall
have the right to terminate this Lease, either (i) on the condition that the
proposed transferee immediately enter into a direct lease of the Premises with
Landlord on the same terms and conditions contained in Tenant's notice, or (ii)
so that Landlord is thereafter free to lease the Premises to whomever it pleases
on whatever terms are acceptable to Landlord.  In the event Landlord elects to
so terminate this Lease, then (i) if such termination is conditioned upon the
execution of a lease between Landlord and the proposed transferee, Tenant's
obligations under this Lease shall not be terminated until such transferee
executes a new lease with Landlord, enters into possession and commences the
payment of rent, and (ii) if Landlord elects simply to terminate this Lease, the
Lease shall so terminate in its entirety fifteen (15) days after Landlord has
notified Tenant in writing of such election.  Upon such termination, Tenant
shall be released from any further obligation under this Lease.  Landlord and
Tenant shall execute a cancellation and release with respect to the Lease to
effect such termination.  If Landlord elects to terminate the Lease under the
provisions of this Section 14.1C, it shall give Tenant written notice of such
election; upon receipt of such notice, Tenant shall have the right to rescind
it’s proposed Transfer by a notice in writing to Landlord given within seven (7)
days of receipt of Landlord’s notice, and if Tenant gives such notice of
rescission, Landlord shall not have a right to terminate as to the rescinded
Transfer.

C1.           If Tenant sells its business and satisfies the conditions of
Section 14.1F(3), the foregoing recapture provision of Section 14.1C shall not
be applicable.

D.  If Landlord consents to a Transfer proposed by Tenant, Tenant may enter into
such Transfer, and if Tenant does so, the following shall apply:

(1).  Tenant shall not be released of its liability for the performance of all
of its obligations under the Lease.

(2).  If Tenant assigns its interest in this Lease, then Tenant shall pay to
Landlord 50% of all Subrent (as defined in §14.1D(5)) received by Tenant over
and above (i) the assignee's agreement to assume the obligations of Tenant under
this Lease, and (ii) all Permitted Transfer Costs related to such
assignment.  In the case of assignment, the amount of Subrent owed to Landlord
shall be paid to Landlord on the same basis, whether periodic or in lump sum,
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paid to Tenant by the assignee.

(3).  If Tenant sublets any part of the Premises, then with respect to the space
so subleased, Tenant shall pay to Landlord 50% of the positive difference, if
any, between (i) all Subrent paid by the subtenant to Tenant, less (ii) the sum
of all Base Monthly Rent and Additional Rent allocable to the space sublet and
all Permitted Transfer Costs related to such sublease.  Such amount shall be
paid to Landlord on the same basis, whether periodic or in lump sum, that such
Subrent is paid to Tenant by its subtenant.  In calculating Landlord's share of
any periodic payments, all Permitted Transfer Costs shall be first recovered by
Tenant.

(4).  Tenant's obligations under this §14.1D shall survive any Transfer, and
Tenant's failure to perform its obligations hereunder shall be an Event of
Tenant's Default.  At the time Tenant makes any payment to Landlord required by
this §14.1D, Tenant shall deliver an itemized statement of the method by which
the amount to which Landlord is entitled was calculated, certified by Tenant as
true and correct.  Landlord shall have the right at reasonable intervals to
inspect Tenant's books and records relating to the payments due hereunder.  Upon
request therefor, Tenant shall deliver to Landlord copies of all bills, invoices
or other documents upon which its calculations are based.  Landlord may
condition its approval of any Transfer upon obtaining a certification from both
Tenant and the proposed transferee of all Subrent and other amounts that are to
be paid to Tenant in connection with such Transfer.

(5).  As used in this §14.1D, the term "Subrent" shall mean any consideration of
any kind received, or to be received, by Tenant as a result of the Transfer, if
such sums are related to Tenant's interest in this Lease or in the Premises,
including payments from or on behalf of the transferee (in excess of the book
value thereof) for Tenant's assets, fixtures, leasehold improvements, inventory,
accounts, goodwill, equipment, furniture, and general intangibles.  As used in
this §14.1D, the term "Permitted Transfer Costs" shall mean (i) all reasonable
leasing commissions paid to third parties not affiliated with Tenant in order to
obtain the Transfer in question; and (ii) all reasonable attorneys' fees
incurred by Tenant with respect to the Transfer in question.

E.  If Tenant is a corporation, the following shall be deemed a voluntary
assignment of Tenant's interest in this Lease: (i) any dissolution, merger,
consolidation, or other reorganization of or affecting Tenant if Tenant is not
the surviving corporation; and (ii) if the capital stock of Tenant is not
publicly traded, the sale or transfer to one person or entity (or to any group
of related persons or entities) stock possessing more than 50% of the total
combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors.  If Tenant is a
partnership, any withdrawal or substitution (whether voluntary, involuntary or
by operation of law, and whether occurring at one time or over a period of time)
of any partner owning 25% or more (cumulatively) of any interest in the capital
or profits of the partnership, or the dissolution of the partnership, shall be
deemed a voluntary assignment of Tenant's interest in this Lease.

 
F.  Notwithstanding anything contained in §14.1, so long as Tenant otherwise
complies with the provisions of §14.1 Tenant may enter into any of the following
transfers (a "Permitted Transfer") without Landlord's prior written consent, and
Landlord shall not be entitled to terminate the Lease pursuant to §14.1C or to
receive any part of any Subrent resulting therefrom that would otherwise be due
it pursuant to §14.1D:

(1).  Tenant may sublease all or part of the Premises or assign its interest in
this Lease to any corporation which controls, is controlled by, or is under
common control with the original Tenant to this Lease by means of an ownership
interest of more than 50%;

(2).  Tenant may assign its interest in the Lease to a corporation which results
from a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation, so long as the surviving corporation has a net worth at
the time of such assignment that is equal to or greater than the net worth of
Tenant immediately prior to such transaction; and

(3).  Tenant may assign this Lease to a corporation which purchases or otherwise
acquires all or substantially all of the assets of Tenant, so long as such
acquiring corporation has a net worth at the time of such assignment that is
equal to or greater than the net worth of Tenant immediately prior to such
transaction.

   14.2  Transfer By Landlord:  Landlord and its successors in interest shall
have the right to transfer their interest in this Lease and the Project at any
time and to any person or entity.  In the event of any such transfer, the
Landlord originally named herein (and, in the case of any subsequent transfer,
the transferror) from the date of such transfer, shall be automatically
relieved, without any further act by any person or entity, of all liability for
the performance of the obligations of the Landlord hereunder which may accrue
after the date of such transfer.  After the date of any such transfer, the term
"Landlord" as used herein shall mean the transferee of such interest in the
Premises.

ARTICLE 15

GENERAL PROVISIONS

   15.1  Landlord's Right to Enter:  Landlord and its agents may enter the
Premises at any reasonable time after giving at least 24 hours' prior notice to
Tenant (and immediately in the case of emergency) for the purpose of: (i)
inspecting the same; (ii) posting notices of non-responsibility; (iii) supplying
any service to be provided by Landlord to Tenant; (iv) showing the Premises to
prospective purchasers, mortgagees or tenants; (v) making necessary alterations,
additions or repairs; (vi) performing Tenant's obligations when Tenant has
failed to do so after written notice from Landlord; (vii) placing upon the
Premises ordinary "for lease" signs or "for sale" signs; and (viii) responding
to an emergency.  Landlord shall have the right to use any and all means
Landlord may deem necessary and proper to enter the Premises in an
emergency.  Any entry into the Premises obtained by Landlord in accordance with
this §15.1 shall not be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction, actual or constructive, of Tenant from the Premises.

   15.2  Surrender of the Premises:  Upon the expiration
 

 
 
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or sooner termination of this Lease, Tenant shall vacate and surrender the
Premises to Landlord in the same condition as existed at the Commencement Date,
except for (i) reasonable wear and tear, (ii) damage caused by any peril or
condemnation, and (iii) contamination by Hazardous Materials for which Tenant is
not responsible pursuant to §7.2A or §7.2B.  In this regard, normal wear and
tear shall be construed to mean wear and tear caused to the Premises by the
natural aging process which occurs in spite of prudent application of the best
standards for maintenance, repair and janitorial practices, and does not include
items of neglected or deferred maintenance.  In any event, Tenant shall cause
the following to be done prior to the expiration or the sooner termination of
this Lease: (i) all interior walls shall be painted or cleaned so that they
appear freshly painted; (ii) all tiled floors shall be cleaned and waxed; (iii)
all carpets shall be cleaned and shampooed; (iv) all broken, marred, stained or
nonconforming acoustical ceiling tiles shall be replaced; (v) all windows shall
be washed; (vi) the HVAC system shall be serviced by a reputable and licensed
service firm and left in good operating condition and repair as so certified by
such firm; and (vii) the plumbing and electrical systems and lighting shall be
placed in good order and repair (including replacement of any burned out,
discolored or broken light bulbs, ballasts, or lenses).  Tenant shall be excused
from  the foregoing duties if and to the extent they require Tenant to perform
capital expense replacements which this Lease requires Landlord to perform and
which would, if Landlord had performed them, have been subject to the
amortization and payment during the Lease Term provisions of Section 5.4.  If
Landlord so requests, Tenant shall, prior to the expiration or sooner
termination of this Lease, (i) remove any Tenant's Alterations which Tenant is
required to remove pursuant to §5.2 and repair all damage caused by such
removal, and (ii) return the Premises or any part thereof to its original
configuration existing as of the time the Premises were delivered to Tenant to
the extent required under Section 5.2.  If the Premises are not so surrendered
at the termination of this Lease, Tenant shall be liable to Landlord for all
costs incurred by Landlord in returning the Premises to the required condition,
plus interest on all costs incurred at the Agreed Interest Rate.  Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
so surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant or losses to Landlord due to lost opportunities to lease
to succeeding tenants.  Notwithstanding any other provision of this Lease to the
contrary, Tenant shall not be required to remove, upon expiration or sooner
termination of the Lease, any Ethernet or telephone cables previously installed
or installed by it.

   15.3  Holding Over:  This Lease shall terminate without further notice at the
expiration of the Lease Term.  Any holding over by Tenant after expiration of
the Lease Term shall not constitute a renewal or extension of the Lease or give
Tenant any rights in or to the Premises except as expressly provided in this
Lease.  Any holding over after such expiration with the written consent of
Landlord shall be construed to be a tenancy from month to month on the same
terms and conditions herein specified insofar as applicable except that Base
Monthly Rent shall be increased to an amount equal to 150% of the Base Monthly
Rent payable during the last full calendar month of the Lease Term.
 
   15.4  Subordination:  The following provisions shall govern the relationship
of this Lease to any Security Instrument:

A.  The Lease is subject and subordinate to all Security Instruments existing as
of the Effective Date.  However, if any Lender so requires, this Lease shall
become prior and superior to any such Security Instrument.

B.  At Landlord's election, this Lease shall become subject and subordinate to
any Security Instrument created after the Effective Date.  Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed so long as Tenant is not in default and performs all of its
obligations under this Lease, unless this Lease is otherwise terminated pursuant
to its terms.

C.  Tenant shall upon request execute any document or instrument reasonably
required by any Lender to make this Lease either prior or subordinate to a
Security Instrument, which may include such other matters as the Lender
customarily and reasonably requires in connection with such agreements,
including provisions that the Lender not be liable for (i) the return of any
security deposit unless the Lender receives it from Landlord, and (ii) any
defaults on the part of Landlord occurring prior to the time the Lender takes
possession of the Project in connection with the enforcement of its Security
Instrument.  Tenant's failure to execute any such document or instrument within
10 days after written demand therefore shall constitute an Event of Tenant's
Default.  Tenant approves as reasonable the form of subordination agreement
attached to this Lease as Exhibit G.

   15.5  Mortgagee Protection and Attornment:  In the event of any default on
the part of the Landlord, Tenant will use reasonable efforts to give notice by
registered mail to any Lender whose name has been provided to Tenant and shall
offer such Lender a reasonable opportunity to cure the default, including time
to obtain possession of the Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings, if such should prove necessary to effect a
cure.  Tenant shall attorn to any purchaser of the Premises at any foreclosure
sale or private sale conducted pursuant to any Security Instrument encumbering
the Premises, or to any grantee or transferee designated in any deed given in
lieu of foreclosure.

   15.6  Estoppel Certificates and Financial Statements:  At all times during
the Lease Term, each party agrees, following any request by the other party,
promptly to execute and deliver to the requesting party within 10 days following
delivery of such request an estoppel certificate: (i) certifying that this Lease
is unmodified and in full force and effect or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in full
force and effect, (ii) stating the date to which the rent and other charges are
paid in advance, if any, (iii) acknowledging that there are not, to the
certifying party's knowledge, any uncured defaults on the part of any party
hereunder or, if there are uncured defaults, specifying the nature of such
defaults, and (iv) certifying such other information about the Lease as may be
reasonably required by the requesting party.  A failure to deliver an estoppel
certificate within 10 days after delivery of a request therefor shall be a
conclusive admission that, as of the
 

 
 
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date of the request for such statement: (i) this Lease is unmodified except as
may be represented by the requesting party in said request and is in full force
and effect, (ii) there are no uncured defaults in the requesting party's
performance, and (iii) no rent has been paid more than 30 days in advance.  At
any time during the Lease Term Tenant shall, upon 10 days' prior written notice
from Landlord, provide Tenant's most recent financial statement and financial
statements covering the 24 month period prior to the date of such most recent
financial statement to any existing Lender or to any potential Lender or buyer
of the Premises.  Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant.  Unless
otherwise required by Landlord’s Lender or a prospective purchaser or mortgagee
of the Building, the initial form of estoppel certificate to be signed by Tenant
is attached hereto as Exhibit I.

   15.7  Reasonable Consent:  Whenever any party's approval or consent is
required by this Lease before an action may be taken by the other party, such
approval or consent shall not be unreasonably withheld, conditioned, or delayed.

   15.8  Notices:  Any notice required or desired to be given regarding this
Lease shall be in writing and may be given by personal delivery, by facsimile
telecopy, by courier service, or by mail.  A notice shall be deemed to have been
given (i) on the third business day after mailing if such notice was deposited
in the United States mail, certified or registered, postage prepaid, addressed
to the party to be served at its Address for Notices specified in Section Q or
Section R of the Summary (as applicable), (ii) when delivered if given by
personal delivery, and (iii) in all other cases when actually received at the
party's Address for Notices.  Either party may change its address by giving
notice of the same in accordance with this §15.8, provided, however, that any
address to which notices may be sent must be a California address.

   15.9  Attorneys' Fees:  In the event either Landlord or Tenant shall bring
any action or legal proceeding for an alleged breach of any provision of this
Lease, to recover rent, to terminate this Lease or otherwise to enforce, protect
or establish any term or covenant of this Lease, the prevailing party shall be
entitled to recover as a part of such action or proceeding, or in a separate
action brought for that purpose, reasonable attorneys' fees, court costs, and
experts' fees as may be fixed by the court.

   15.10  Corporate Authority:  If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of such
corporation in accordance with the by-laws of such corporation (or partnership
in accordance with the partnership agreement of such partnership) and that this
Lease is binding upon such corporation (or partnership) in accordance with its
terms.  Each of the persons executing this Lease on behalf of a corporation does
hereby covenant and warrant that the party for whom it is executing this Lease
is a duly authorized and existing corporation, that it is qualified to do
business in California, and that the corporation has full right and authority to
enter into this Lease.
 
   15.11  Miscellaneous:  Should any provision of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect.  Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.  The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision
hereof.  Any executed copy of this Lease shall be deemed an original for all
purposes.  This Lease shall, subject to the provisions regarding assignment,
apply to and bind the respective heirs, successors, executors, administrators
and assigns of Landlord and Tenant.  "Party" shall mean Landlord or Tenant, as
the context implies.  If Tenant consists of more than one person or entity, then
all members of Tenant shall be jointly and severally liable hereunder.  This
Lease shall be construed and enforced in accordance with the laws of the State
of California.  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.  When the context of this Lease requires, the
neuter gender includes the masculine, the feminine, a partnership or corporation
or joint venture, and the singular includes the plural.  The terms "shall",
"will" and "agree" are mandatory.  The term "may" is permissive.  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 a provision
of this Lease expressly requires reimbursement.  Landlord and Tenant agree that
(i) the gross leasable area of the Premises includes any atriums, depressed
loading docks, covered entrances or egresses, and covered loading areas, (ii)
each has had an opportunity to determine to its satisfaction the actual area of
the Project and the Premises, (iii) all measurements of area contained in this
Lease are conclusively agreed to be correct and binding upon the parties, even
if a subsequent measurement of any one of these areas determines that it is more
or less than the amount of area reflected in this Lease, and (iv) any such
subsequent determination that the area is more or less than shown in this Lease
shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a
factor.  Where a party hereto is obligated not to perform any act, such party is
also obligated to restrain any others within its control from performing said
act, including the Agents of such party.  Landlord shall not become or be deemed
a partner or a joint venturer with Tenant by reason of the provisions of this
Lease.

   15.12  Termination by Exercise of Right:  If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease shall
terminate 30 days after the date the right to terminate is properly exercised
(unless another date is specified in that part of the Lease creating the right,
in which event the date so specified for termination shall prevail), the rent
and all other charges due hereunder shall be prorated as of the date of
termination, and neither Landlord nor Tenant shall have any further rights or
obligations under this Lease except for those that have accrued prior to the
date of termination or those obligations which this Lease specifically provides
are to survive termination.  This §15.12 does not apply to a
 

 
 
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termination of this Lease by Landlord as a result of an Event of Tenant's
Default.

   15.13  Brokerage Commissions:  Each party hereto (i) represents and warrants
to the other that it has not had any dealings with any real estate brokers,
leasing agents or salesmen, or incurred any obligations for the payment of real
estate brokerage commissions or finder's fees which would be earned or due and
payable by reason of the execution of this Lease, other than to the Retained
Real Estate Brokers described in Section S of the Summary, and (ii) agrees to
indemnify, defend, and hold harmless the other party from any claim for any such
commission or fees which result from the actions of the indemnifying
party.  Landlord shall be responsible for the payment of any commission owed to
the Retained Real Estate Brokers if there is a separate written commission
agreement between Landlord and the Retained Real Estate Brokers for the payment
of a commission as a result of the execution of this Lease.

   15.14  Force Majeure:  Any prevention, delay or stoppage due to strikes,
lock-outs, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefore, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other acts
of God, and other causes beyond the reasonable control of the party obligated to
perform (except financial inability) shall excuse the performance, for a period
equal to the period of any said prevention, delay or stoppage, of any obligation
hereunder except the obligation of Tenant to pay rent or any other sums due
hereunder.

   15.15  Entire Agreement:  This Lease constitutes the entire agreement between
the parties, and there are no binding agreements or representations between the
parties except as expressed herein.  Tenant acknowledges that neither Landlord
nor Landlord's Agents has made any legally binding representation or warranty as
to any matter except those expressly set forth herein, including any warranty as
to (i) whether the Premises may be used for Tenant's intended use under existing
Law, (ii) the suitability of the Premises or the Project for the conduct of
Tenant's business, or (iii) the condition of any improvements.  There are no
oral agreements between Landlord and Tenant affecting this Lease, and this Lease
supercedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between Landlord and Tenant or
displayed by Landlord to Tenant with respect to the subject matter of this
Lease.  This instrument shall not be legally binding until it is executed by
both Landlord and Tenant.  No subsequent change or addition to this Lease shall
be binding unless in writing and signed by Landlord and Tenant.

15.16  USA Patriot Act and Anti-Terrorism Laws.

(j)           Tenant represents and warrants to, and covenants with, Landlord
that neither Tenant nor any of its respective constituent owners or affiliates
currently are, or shall be at any time during the Term hereof, in violation of
any laws relating to terrorism or money laundering (collectively, the
“Anti-Terrorism Laws”), including without limitation Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 and relating to Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (the
  “Executive Order”) and/or the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Public Law 107-56) (the “USA Patriot Act”).

(k)           Tenant covenants with Landlord that neither Tenant nor any of its
respective constituent owners or affiliates is or shall be during the Term
hereof a “Prohibited Person,” which is defined as follows:  (i) a person or
entity that is listed in the Annex to, or is otherwise subject to, the
provisions of the Executive Order; (ii) a person or entity owned or controlled
by, or acting for or on behalf of, any person or entity that is listed in the
Annex to, or is otherwise subject to the provisions of, the Executive Order;
(iii) a person or entity with whom Landlord is prohibited from dealing with or
otherwise engaging in any transaction by any Anti-Terrorism Law, including
without limitation the Executive Order and the USA Patriot Act; (iv) a person or
entity who commits, threatens or conspires to commit or support “terrorism” as
defined in Section 3(d) of the Executive Order; (v) a person or entity that is
named as a “specially designated national and blocked person” on the then-most
current list published by the U.S. Treasury Department Office of Foreign Assets
Control at its official website,
http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement
website or other replacement official publication of such list; and (vi) a
person or entity who is affiliated with a person or entity listed in items (i)
through (v) above.

(l)           At any time and from time to time during the Term, Tenant shall
deliver to Landlord, within ten (10) days after receipt of a written request
therefor, a written certification or such other evidence reasonably acceptable
to Landlord evidencing and confirming Tenant’s compliance with this Section
15.16.

    IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the
intent to be legally bound thereby, to be effective as of the Effective Date.
 
LANDLORD:

OA OAKCREEK, LLC, a Delaware limited liability company

By:   Orchard AEW Fund I, LLC, a Delware limited
liability company, its sole member

By:  Orchard A Investor, LLC, a California limited
liability company, its Operating Manager
By:  /s/ Michael Biggar

It’s:  Manager

Dated: 4/28/08

TENANT:

Proxim Wireless Corporation, a Delaware corporation

By: /s/ Pankaj S. Manglik

Pankaj Manglik
Typed or printed name

Title: CEO

By: /s/ Brian J. Sereda

Brian Sereda
 

 
 
 
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Typed or printed name

Title: CFO

Dated: April 25, 2008

 
 
 
 
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FIRST ADDENDUM TO LEASE

THIS FIRST ADDENDUM is dated for reference purposes as April 15, 2008, and is
made a part of that Lease Agreement (the "Lease") dated April 15, 2008, by and
between OA OAKCREEK, L.L.C., a Delaware limited liability company ("Landlord")
and Proxim Wireless Corporation, a Delaware corporation ("Tenant") affecting
certain real property commonly known as 804 Buckeye Court, Milpitas, California.
Capitalized terms used in this First Addendum to Lease without definition shall
have the meanings given to those terms in the Lease.  Landlord and Tenant agree
to the following Addendum to the Lease, which shall be a part of the Lease:

1.           Condition of Premises:   Landlord shall deliver the Premises and
building systems (including, without limitation, all HVAC equipment and other
utility facilities, and fire extinguisher equipment) in good working condition,
including the roof in watertight condition.  All mechanical, electrical, HVAC,
plumbing, and other utility equipment and roll up doors shall be in good working
condition and operable. Tenant’s sole remedy and Landlord’s sole responsibility
under this warranty shall be to rectify any defective item of which Tenant
supplies written notification, specifying the manner in which this warranty has
been breached, within 120  days after the Commencement Date, at Landlord’s sole
cost and expense (and not as a part of Common Operating Expenses).  Except as
otherwise provided in the Lease, Landlord makes no other warranties regarding
condition of the Premises, and requiring Landlord to repair defects to return
the said matters to the represented condition shall be Tenant’s sole remedy for
any breach of this provision.  Notwithstanding the foregoing, the warranty on
the watertight condition of the roof shall extend until the later of 120 days
after the Commencement Date or five (5) days after the first significant rain of
2008 occuring after the Commencement Date, but not in any event after December
31, 2008.  A “significant” rain shall be a day during which sufficient rain
falls that it would be reasonably likely that any existing leaks would result in
water penetration of the roof membrane, provided further, that no roof leak or
other failure of condition of any system or equipment which occurs due to the
acts or omissions of the Tenant shall be covered under this warranty.

2.           Landlord Default.  Without limiting its other rights set forth in
the Lease, if Landlord shall have failed to perform any term, covenant, or
condition of the Lease and Landlord shall have failed to cure such breach within
30 days after written notice from Tenant specifying the nature of such breach
where such breach could reasonably be cured within said 30 day period, or if
such breach could not be reasonably cured within said 30 day period, Landlord
shall have failed to commence such cure within said 30 day period and thereafter
continue with due diligence to prosecute such cure to completion within such
time period as is reasonably needed, Tenant shall have the right to pursue legal
remedies for damages.  At Tenant’s option before pursuing a damage remedy,
Tenant may give Landlord a second notice after the time for performance of the
initial notice has run out, in which Tenant shall notify Landlord that it
intends to use self-help to cure Landlord’s failure to perform identified in the
initial notice, shall specify what it is that Tenant proposes to do to cure the
failure to perform, and states the cost thereof.  Tenant shall have the right to
perform such self help to cure Landlord’s failure to perform if Landlord fails
to perform within fifteen (15) days after said second notice (or if Landlord’s
failure to perform cannot reasonably be cured within said 15 day period,
Landlord shall have failed to commence such cure within said 15 day period and
thereafter continue with due diligence to prosecute such cure to completion
within such time period as is reasonably needed, not to exceed a further thirty
(30) days.

3.           Tenant Payment for Items listed in Section B of Exhibit C:  Section
B of Exhibit C contains a list of items which are excluded from Landlord’s scope
of work but may nevertheless be desired by Tenant.  Landlord will obtain costs
for each of these items from Landlord’s general contractor and present the list
of costs to Tenant.  In the event that Tenant requests that Landlord have its
contractor construct and/or provide any of these items, Tenant shall do so in
writing, agree in writing to pay the cost thereof, and pay to Landlord, at the
time of the request, the cost of each additional item requested.  Upon receipt
of such request and of advance payment of the costs thereof, Landlord shall
cause same to be constructed.  Landlord shall not be obligated to construct any
of the Section B items unless payment is received from Tenant in advance.
 
 
 
 
 

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4.           Additional HVAC Capacity in Room Labeled “Manufacturing Area” on
Exhibit C-1.  Under Heading “B” in Exhibit C, Tenant and Landlord have listed
items which, upon Tenant’s request, Landlord will provide costs for and then
construct if Tenant agrees to pay such costs.  Tenant and Landlord have already
agreed that No. 11 under Heading B will be constructed by Landlord for Tenant on
the following basis:  The “Manufacturing Area” will be supplied with a total of
35 tons of HVAC capacity.  As indicated in Exhibit C, Landlord, at Landlord’s
cost, will pay for 25 tons of capacity.  Tenant, at Tenant’s cost, shall pay for
10 tons of capacity at a fixed cost of $25,000.  Tenant’s payment of $25,000 for
this additional capacity shall be tendered to Landlord within five (5) business
days of execution of this Lease.

LANDLORD:
TENANT:
   
OA OAKCREEK, LLC, a Delaware limited
Proxim Wireless Corporation, a
liability company
Delaware corporation
   
By:   Orchard AEW Fund I, LLC, a Delware limited
By:  /s/ Pankaj S. Manglik
liability company, its sole member
   
Pankaj S. Manglik, CEO
By:  Orchard A Investor, LLC, a California limited
 
liability company, its Operating Manager
By:  /s/ Brian J. Sereda
   
By:  /s/ Michael Biggar
Brian J. Sereda, CFO
   
Manager
     
It’s: 4/28/08