Exhibit 10.1

LOGO [g31119equastone.jpg]

OFFICE LEASE

[AMBERGLEN]

by and between

EQUASTONE AMBERGLEN, LLC,

a Delaware limited liability company

as Landlord,

and

PLANAR SYSTEMS, INC.,

an Oregon corporation

as Tenant.

 

    Amberglen     Planar Systems

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[AMBERGLEN]

SUMMARY OF BASIC LEASE INFORMATION

The parties hereto agree to the following terms of this Summary of Basic Lease
Information (the “Summary”). This Summary is hereby incorporated into and made a
part of the attached Office Lease (this Summary and the Office Lease to be known
collectively as the “Lease”) which pertains to the office buildings located at
1400 NW Compton Drive, Beaverton, Oregon. Each reference in the Office Lease to
any term of this Summary shall have the meaning as set forth in this Summary for
such term. In the event of a conflict between the terms of this Summary and the
Office Lease, the terms of the Office Lease shall prevail. Any capitalized terms
used herein and not otherwise defined herein shall have the meaning as set forth
in the Office Lease.

 

TERMS OF LEASE

  

DESCRIPTION

(References are to the Office Lease)   

1.      Date:

   September 20, 2007.

2.      Landlord:

   EQUASTONE AMBERGLEN, LLC,    a Delaware limited liability company   

3.      Address of Landlord

   8910 University Center Lane, Suite 500

(Section 30.11):

   San Diego, California 92122    Attn: Ron Lack    with a copy to:    8910
University Center Lane, Suite 500    San Diego, California 92122    Attn: Senior
Counsel

4.      Tenant:

   PLANAR SYSTEMS, INC.,    an Oregon corporation.

5.      Address of Tenant

   1195 Northwest Compton Drive

(Section 30.11):

   Beaverton, Oregon 97006-1992    Attention: General Counsel

6.      Premises (Article 1):

   Approximately 37,487 rentable square feet of space located in Suite 100 on
the ground floor of the Building located and addressed at 1400 NW Compton Drive,
as set forth in Exhibit A attached hereto.

7.      Term (Article 2).

  

7.1    Lease Term:

   Five (5) years and three (3) months. If the Lease Commencement Date occurs on
a day other than the first day of the month, then the foregoing time period
shall be measured from the first day of the following month.

7.2    Lease Commencement Date:

   November 1, 2007   

7.3    Option(s) to Extend:

   One, 5 year Option to Extend.

 

    Amberglen   (i)   Planar Systems

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8.      Base Rent (Article 3):

Lease Month

   Monthly Installment of Base Rent   

Annual

Rental Rate per Rentable Square Foot

*1-12    $ 57,792.46    $ 18.50 13-24    $ 59,823.00    $ 19.15 25-36    $
61,916.03    $ 19.82 37-48    $ 64,071.53    $ 20.51 49-60    $ 66,320.75    $
21.23 61-63    $ 68,632.45    $ 21.97

*  Subject to abatement as provided in Article 3 below.

9.      Additional Rent (Article 4).

  

9.1    Expense Stop:

   $7.00 per square foot of the Premises per Calendar Year.

9.2    Tenant’s Share:

   Approximately 51.61%. Tenant’s Share was calculated by multiplying the number
of rentable square feet of the Premises by 100 and dividing the product by the
total rentable square feet in the Building, which is 72,642 (subject to
adjustment pursuant to Section 1.3 of the Lease).

10.    Prepaid Base Rent

   $57,792.46 for the first (1st ) full month of the Lease Term.

(Article 3)

  

11.    Security Deposit

(Article 22):

   $68,632.45 (Landlord will credit any unused portion of the security deposit
under the Existing Lease to this Security Deposit payable hereunder)

12.    Parking Pass Ratio

(Article 28):

   3.57 parking passes for every 1,000 rentable square feet of the Premises.

13.    Broker

   Capacity Commercial (for Landlord)

(Section 30.21):

   Cresa Partners (for Tenant)

 

    Amberglen   (ii)   Planar Systems

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TABLE OF CONTENTS

 

          Page 1.   

REAL PROPERTY, BUILDING AND PREMISES

   1 2.   

LEASE TERM

   2 3.   

BASE RENT

   4 4.   

ADDITIONAL RENT

   4 5.   

USE OF PREMISES

   7 6.   

SERVICES AND UTILITIES

   8 7.   

REPAIRS

   10 8.   

ADDITIONS AND ALTERATIONS

   11 9.   

COVENANT AGAINST LIENS

   12 10.   

INDEMNITY AND INSURANCE

   12 11.   

DAMAGE AND DESTRUCTION

   14 12.   

NONWAIVER

   15 13.   

CONDEMNATION

   15 14.   

ASSIGNMENT AND SUBLETTING

   16 15.   

SURRENDER OF PREMISES AND REMOVAL OF TENANT’S PROPERTY

   18 16.   

HOLDING OVER

   18 17.   

ESTOPPEL CERTIFICATES

   18 18.   

SUBORDINATION

   19 19.   

DEFAULTS; REMEDIES

   19 20.   

LANDLORD REMEDIES

   20 21.   

COVENANT OF QUIET ENJOYMENT

   21 22.   

SECURITY DEPOSIT

   21 23.   

INTENTIONALLY OMITTED

   22 24.   

SIGNS

   22 25.   

LATE CHARGES

   22 26.   

LANDLORD’S RIGHT TO CURE DEFAULT

   23 27.   

ENTRY BY LANDLORD

   23 28.   

TENANT PARKING

   23 29.   

HAZARDOUS MATERIALS

   24 30.   

MISCELLANEOUS PROVISIONS

   25

 

    Amberglen   (i)   Planar Systems

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         Page EXHIBITS      EXHIBIT A    OUTLINE OF FLOOR PLAN OF PREMISES  
EXHIBIT B    TENANT WORK LETTER   EXHIBIT C    RULES AND REGULATIONS  

 

    Amberglen   (ii)   Planar Systems

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INDEX

 

    Page(s)

Abatement Event

  9        

Abatement Notice

  9        

Additional Rent

  4        

Affiliate

  17        

Affiliated Assignee

  18        

Affiliated Parties

  28        

Alterations

  11        

Approved Working Drawings

  Exhibit D        

Architect

  Exhibit D        

Base Rent

  4        

Base, Shell and Core

  Exhibit B        

Blocked Parties

  28        

Brokers

  27        

Calendar Year

  4        

Code

  Exhibit D        

Common Areas

  1        

Construction Drawings

  Exhibit D        

Contamination

  24        

Contractor

  Exhibit D        

Control

  18        

Damage Termination Date

  15        

Damage Termination Notice

  15        

Election Date

  2        

Eligibility Period

  10        

Engineers

  Exhibit D        

Environmental Law

  24        

Environmental Permits

  24        

Estimate

  6        

Estimate Statement

  6        

Estimated Excess

  6        

Excess

  4        

Executive Order

  28        

Expense Stop

  4        

Expense Year

  5        

Final Retention

  Exhibit C        

Final Space Plan

  Exhibit D        

Final Working Drawings

  Exhibit D        

First Refusal Notice

  1        

First Refusal Space

  1        

Force Majeure

  26        

Hazardous Material

  24        

Holidays

  8        

HVAC

  8        

Improvement Allowance

  Exhibit D        

Improvement Allowance Items

  Exhibit D        

Indemnified Claims

  12        

Insurance Expenses

  5        

Interest Notice

  3        

Landlord

  1        

Landlord Coordination Fee

  Exhibit D        

Landlord Indemnified Parties

  12        

Lease

  1        

Lease Commencement Date

  2        

Lease Term

  2        

Lease Year

  2        

Notices

  26        

OFAC

  28        

Operating Expenses

  5        

Option Notice

  3        

Option Rent

  3        

Option Rent Notice

  3        

 

    Amberglen   (i)   Planar Systems

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    Page(s)

Option Term

  3        

Original Tenant

  1        

Outside Agreement Date

  3        

Package Units

  10        

Parking Facilities

  1        

Patriot Act Related Laws

  28        

Permits

  Exhibit D        

Premises

  1        

Real Property

  1        

Renovations

  27        

Rent

  4        

Review Period

  7        

Rules and Regulations

  7        

Security Deposit

  21        

Signage

  22        

Signage Specifications

  22        

Specifications

  Exhibit D        

Standard Improvement Package

  Exhibit D        

Statement

  6        

Subject Space

  16        

Subleasing Costs

  17        

Summary

  1        

Superior Leases

  1        

Superior Rights

  1        

Systems and Equipment

  6        

Tax Expenses

  6        

Tenant

  1        

Tenant Improvements

  1        

Tenant Parties

  12        

Tenant’s Agents

  Exhibit C        

Tenant’s Election Notice

  2        

Tenant’s Share

  6        

Terms

  1        

Transfer Notice

  16        

Transfer Premium

  17        

Transferee

  16        

Transfers

  16        

Utility Expenses

  6        

 

    Amberglen   (ii)   Planar Systems

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[AMBERGLEN]

OFFICE LEASE

This Office Lease, which includes the preceding Summary of Basic Lease
Information (the “Summary”) attached hereto and incorporated herein by this
reference (the Office Lease and Summary to be known sometimes collectively
hereafter as the “Lease”), dated as of the date set forth in Section 1 of the
Summary, is made by and between EQUASTONE AMBERGLEN, LLC, a Delaware limited
liability company (“Landlord”), and PLANAR SYSTEMS, INC., an Oregon corporation
(“Tenant”).

 

1. REAL PROPERTY, BUILDING AND PREMISES

1.1 Real Property, Building and Premises. Upon and subject to the terms,
covenants and conditions hereinafter set forth in this Lease, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises set forth
in Section 6 of the Summary (the “Premises”), which Premises are located in the
“Building,” as that term is defined in this Section 1.1. The outline of the
floor plan of the Premises is set forth in Exhibit A attached hereto. The
Premises are a part of the building(s) known as Amberglen located and addressed
at 1400 NW Compton Drive, Beaverton, Oregon (collectively, the “Building”). The
Building, the parking facilities serving the Building from time to time
(“Parking Facilities”), the outside plaza areas, land and other improvements
surrounding the Building which are designated from time to time by Landlord as
common areas appurtenant to or servicing the Building, and the land upon which
any of the foregoing are situated, are herein sometimes collectively referred to
as the “Real Property.” Tenant is hereby granted the right to the nonexclusive
use of the common corridors and hallways, stairwells, elevators, restrooms and
other public or common areas located on the Real Property (“Common Areas”).
Landlord reserves the right to make alterations or additions to or to change the
location of elements of the Real Property so long as such changes do not
materially and adversely affect Tenant’s use or occupancy of the Premises.

1.2 Condition of the Premises. Except as specifically set forth in this Lease
and in the Tenant Work Letter attached hereto as Exhibit B, if applicable,
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant also acknowledges
that Landlord has made no representation or warranty (express or implied)
regarding (i) the condition of the Premises or the Real Property except as
specifically set forth in this Lease and the Tenant Work Letter, if applicable
or (ii) the suitability or fitness of the Premises or the Real Property for the
conduct of Tenant’s business. Any existing leasehold improvements in the
Premises as of the date of this Lease, together with the Improvements (as
defined in the Tenant Work Letter) to be constructed pursuant to the Tenant Work
Letter, if any, may be collectively referred to herein as the “Tenant
Improvements.”

1.3 Verification of Rentable Square Feet of Premises and Building. For purposes
of this Lease, Landlord and Tenant hereby stipulate that the Premises contains
the number of square feet set forth in Section 6 of the Summary.

1.4 Right of First Refusal. Landlord hereby grants to the original Tenant named
in this Lease (the “Original Tenant”) or an Affiliated Assignee, during the
initial Lease Term only, a right of first refusal with respect to the remaining
space in the same Building in which the Premises are located (collectively, the
“First Refusal Space”). Notwithstanding the foregoing, (i) such first refusal
right shall commence only following the expiration or earlier termination of
(A) any existing lease pertaining to the First Refusal Space, and (B) as to any
First Refusal Space which is vacant as of the date of this Lease, the first
lease pertaining to any portion of such First Refusal Space entered into by
Landlord after the date of this Lease (collectively, the “Superior Leases”),
including any renewal or extension of such existing or future lease, whether or
not such renewal or extension is pursuant to an express written provision in
such lease, and regardless of whether any such renewal or extension is
consummated pursuant to a lease amendment or a new lease, and (ii) such first
refusal right shall be subordinate and secondary to all rights of expansion,
first refusal, first offer or similar rights granted to the tenant(s) of the
Superior Leases or any other leases in existence as of the date of this Lease
(the rights described in items (i) and (ii), above to be known collectively, for
purposes of this Section 1.4 only, as “Superior Rights”). Tenant’s right of
first refusal shall be on the terms and conditions set forth in this
Section 1.4.

1.4.1 Procedure. Landlord shall notify Tenant in writing (the “First Refusal
Notice”) from time to time when Landlord receives a proposal that Landlord would
consider for all or any portion of the First Refusal Space, where no holder of a
Superior Right desires to lease such space. The First Refusal Notice shall
describe the space which is the subject of the proposal (which may include space
outside of the First Refusal Space) and shall set forth the terms and conditions
(including the proposed lease term) set forth in the proposal (collectively, the
“Terms”). Notwithstanding the foregoing, Landlord’s obligation to deliver the
First Refusal Notice shall not apply during the last twelve (12) months of the
initial Lease Term unless Tenant has delivered an Interest Notice pursuant to
Section 2.3.2 of this Lease, nor during the period following Landlord’s delivery
of the Option Rent Notice to Tenant pursuant to Section 2.3.2 unless and until
Tenant has delivered to Landlord the Option Notice pursuant to Section 2.3 of
this Lease.

 

    Amberglen     Planar Systems

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1.4.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right of
first refusal with respect to the space described in the First Refusal Notice,
then within five (5) business days after receipt of the First Refusal Notice by
Tenant (the “Election Date”), Tenant shall deliver written notice to Landlord
(“Tenant’s Election Notice”) pursuant to which Tenant shall elect either to
(i) lease the entire space described in the First Refusal Notice upon the Terms
set forth in the First Refusal Notice or (ii) refuse to lease such space
identified in the First Refusal Notice, in which event Landlord may lease such
space to any person or entity on any terms Landlord desires and Tenant’s right
of first refusal with respect to the First Refusal Space specified in Landlord’s
First Refusal Notice shall thereupon terminate and be of no further force or
effect (provided that in the event the Terms are altered so as to reduce the Net
Effective Rental Rate (as defined below) by more than five percent (5%) of the
net effective rental rate listed in the Terms offered to Tenant, Landlord will
again be obligated to offer the First Refusal Space to Tenant on such revised
Terms and Tenant will have three (3) business days to deliver Tenant’s Election
Notice as set forth above). The term “Net Effective Rental Rate” shall mean the
rental rate, as adjusted to reflect the value of any free rent, tenant
improvement allowance or similar monetary concessions contained in the First
Refusal Notice. If Landlord does not receive a response from Tenant in writing
to Landlord’s First Refusal Notice by the Election Date, Tenant shall be deemed
to have elected the option described in clause (ii) above. Notwithstanding
anything herein to the contrary, Tenant may only exercise its right of first
refusal with respect to all of the space described in the First Refusal Notice,
and not a portion thereof.

1.4.3 Lease of First Refusal Space. If Tenant timely exercises Tenant’s right to
lease the First Refusal Space as set forth herein, Landlord and Tenant shall
execute an amendment to this Lease incorporating into this Lease the Terms
applicable to such First Refusal Space. In the event the proposed term for the
First Refusal Space is longer than the remaining Term of this Lease, then such
amendment will appropriately extend the Lease Term as to the initial Premises to
be coterminus with the First Refusal Space.

1.4.4 Termination of Right of First Refusal. The right of first refusal granted
herein shall terminate as to the First Refusal Space (either all of the First
Refusal Space if included in the First Refusal Notice or the portion of the
First Refusal Space included in the First Refusal Notice, as the case may be)
upon the failure by Tenant to exercise its right of first refusal with respect
to such First Refusal Space as offered by Landlord in the First Refusal Notice
but shall remain in effect for any subsequent availability of any portion of the
remaining First Refusal Space not included in the First Refusal Notice. Landlord
shall not have any obligation to deliver the First Refusal Notice if, as of the
date Landlord would otherwise deliver the First Refusal Notice to Tenant, Tenant
is in default under the Lease after any applicable notice and cure periods,
Tenant or an Affiliated Assignee does not physically occupy the entire Premises,
if any portion of the Premises is subject to a sublease (other than to an
Affiliate), if the Lease has been assigned (other than to an Affiliate), or if
any portion of the Premises has been recaptured pursuant to Section 14.4 of this
Lease. In addition, at Landlord’s option, if Tenant has previously delivered
Tenant’s Election Notice in accordance with Section 1.4.2 and, at any time
thereafter, (i) Tenant is in default under the Lease after the expiration of any
applicable notice and cure period, (ii) Tenant (or an Affiliate) does not
physically occupy the entire Premises, (iii) any portion of the Premises is
subject to a sublease (other than to an Affiliate), (iv) the Lease has been
assigned (other than to an Affiliate), or (v) any portion of the Premises has
been recaptured pursuant to Section 14.4 of the Lease, then Tenant shall not
have the right to lease the First Refusal Space and Landlord will be free to
lease such space to third parties.

 

2. LEASE TERM

2.1 Initial Term. The terms and provisions of this Lease shall be effective as
of the date of this Lease except for the provisions of this Lease relating to
the payment of Rent. The term of this Lease (the “Lease Term”) shall be for the
period of time set forth in Section 7.1 of the Summary and shall commence on the
date (the “Lease Commencement Date”) set forth in Section 7.2 of the Summary
(subject, however, to the terms of the Tenant Work Letter attached hereto as
Exhibit “B”, if applicable), and shall terminate upon the expiration of the
Lease Term, unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve
(12) month period during the Lease Term; provided, however, that if the Lease
Commencement Date is not the first day of the month, then the first Lease Year
shall commence on the Lease Commencement Date and end on the last day of the
twelfth month thereafter and the second and each succeeding Lease Year shall
commence on the first day of the next calendar month; and further provided that
the last Lease Year shall end on the last day of the Lease Term (for example, if
the Lease Commencement Date is April 15, the first Lease Year will be April 15
through April 30 of the following year, and each succeeding Lease Year will be
May 1 through April 30).

 

    Amberglen   -2-   Planar Systems

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2.2 Delays and Notice of Lease Term Dates. If Landlord is unable to deliver
possession of the Premises to Tenant on or before the anticipated Lease
Commencement Date as set forth in Section 7.2 of the Summary, Landlord shall not
be subject to any liability for its failure to do so and such failure shall not
affect the validity of this Lease nor the obligations of Tenant hereunder. At
any time during the Lease Term, Landlord may deliver to Tenant a notice of Lease
Term dates, confirming, among other things, the Lease Commencement Date, which
notice Tenant shall execute and return to Landlord within five (5) days of
receipt thereof; if Tenant fails to execute and return such notice within such
time period, the information contained in such notice shall be deemed correct
and binding upon Tenant.

2.3 Option Term. Landlord hereby grants to Tenant or its Affiliated Assignee,
one (1) option to extend the Lease Term for a period of five (5) years (“Option
Term”), which option shall be exercisable only by written notice (“Option
Notice”) delivered by Tenant to Landlord as provided in Section 2.3.2 below.
Tenant shall not have the rights contained in this Section 2.3 if, as of the
date of the Option Notice or, at Landlord’s option, at any time between the
delivery of the Option Notice and the commencement of the Option Term, Tenant is
in default under this Lease after any applicable notice and cure period, Tenant
or an Affiliate of Tenant does not physically occupy the entire Premises, any
portion of the Premises is subject to a sublease (other than to an Affiliate),
this Lease has been assigned (other than to an Affiliate), or any portion of the
Premises has been recaptured pursuant to Section 14.4 below).

2.3.1 Option Rent. The Rent payable by Tenant during the Option Term (the
“Option Rent”) shall be equal to the fair market rent for the Premises and the
parking passes as of the commencement date of the Option Term. The fair market
rent shall be the rental rate, including all escalations, at which tenants, as
of the commencement of the Option Term, are leasing non-sublease, non-encumbered
space comparable in size, location and quality to the Premises for a term of
five (5) years, which comparable space is located in other first-class office
buildings in the Sunset Corridor area of Beaverton.

2.3.2 Exercise of Option. The option contained in this Section 2.3 shall be
exercised by Tenant, if at all, only in the following manner: (i) Tenant shall
deliver written notice (“Interest Notice”) to Landlord no sooner than fifteen
(15) months and no later than twelve (12) months prior to the expiration of the
then current Lease Term, stating that Tenant is interested in exercising its
option; (ii) Landlord, after receipt of the Interest Notice, shall deliver
written notice (the “Option Rent Notice”) to Tenant setting forth Landlord’s
determination of the Option Rent; and (iii) if Tenant wishes to exercise such
option, Tenant shall, within thirty (30) days after Tenant’s receipt of the
Option Rent Notice, exercise the option by delivering written notice (the
“Option Notice”) to Landlord and upon, and concurrent with, such exercise,
Tenant may, at its option, object to the Option Rent determined by Landlord. If
Tenant exercises the option to extend but objects to the Option Rent contained
in the Option Rent Notice, then the Option Rent shall be determined as set forth
in Section 2.3.3 below. Failure of Tenant to deliver the Interest Notice to
Landlord on or before the date specified in (i) above or to deliver the Option
Notice to Landlord on or before the date specified in (iii) above shall be
deemed to constitute Tenant’s failure to exercise its option to extend. If
Tenant timely and properly exercises its option to extend, the Lease Term,
subject to Section 2.3.3 below, shall be extended for the Option Term upon all
of the terms and conditions set forth in this Lease, except that the Rent shall
be as indicated in the Option Rent Notice or as determined in accordance with
Section 2.3.3, as applicable, and all references herein to the Lease Term shall
include the Option Term.

2.3.3 Determination of Option Rent. In the event Tenant exercises its option to
extend but objects to Landlord’s determination of the Option Rent concurrently
with its exercise of the option to extend, Landlord and Tenant shall attempt to
agree in good faith upon the Option Rent. If Landlord and Tenant fail to reach
agreement within twenty (20) days following Landlord’s receipt of the Option
Notice (the “Outside Agreement Date”), then each party shall make a separate
determination of the Option Rent, within five (5) business days after the
Outside Agreement Date, concurrently exchange such determinations and such
determinations shall be submitted to arbitration in accordance with Sections
2.3.3.1 through 2.3.3.7 below.

2.3.3.1 Landlord and Tenant shall each appoint one arbitrator who shall by
profession be a real estate broker who shall have been active over the five
(5) year period ending on the date of such appointment in the leasing of
comparable office properties in the Sunset Corridor area of Beaverton, Oregon.
The determination of the arbitrators shall be limited solely to the issue of
whether Landlord’s or Tenant’s submitted Option Rent is the closest to the
actual fair market rent, as determined by the arbitrators, taking into account
the requirements of Section 2.3.1 of this Lease. Each such arbitrator shall be
appointed within fifteen (15) business days after the applicable Outside
Agreement Date.

2.3.3.2 The two (2) arbitrators so appointed shall within five (5) days of the
date of the appointment of the last appointed arbitrator agree upon and appoint
a third arbitrator who shall be qualified under the same criteria set forth
hereinabove for qualification of the initial two (2) arbitrators.

 

    Amberglen   -3-   Planar Systems

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2.3.3.3 The three (3) arbitrators shall within five (5) days of the appointment
of the third arbitrator reach a decision as to whether the parties shall use
Landlord’s or Tenant’s submitted Option Rent and shall notify Landlord and
Tenant thereof.

2.3.3.4 The decision of the majority of the three (3) arbitrators shall be
binding upon Landlord and Tenant.

2.3.3.5 If either Landlord or Tenant fails to appoint an arbitrator within
fifteen (15) business days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord and
Tenant thereof, and such arbitrator’s decision shall be binding upon Landlord
and Tenant.

2.3.3.6 If the two (2) arbitrators fail to agree upon and appoint a third
arbitrator, or both parties fail to appoint an arbitrator, then the appointment
of the third arbitrator or any arbitrator shall be dismissed and the Option Rent
to be decided shall be forthwith submitted to arbitration under the provisions
of the American Arbitration Association, but subject to the instruction set
forth in this Section 2.2.3.

2.3.3.7 The cost of arbitration shall be paid by Landlord and Tenant equally.

 

3. BASE RENT

Tenant shall pay, without notice or demand, to Landlord or Landlord’s agent at
the management office of the Building, or at such other place as Landlord may
from time to time designate in writing, monthly installments of base rent (“Base
Rent”) as set forth in Section 8 of the Summary, in advance on or before the
first day of each and every month during the Lease Term, without any setoff or
deduction whatsoever. Notwithstanding anything to the contrary contained herein
and provided that Tenant faithfully performs all of the terms and conditions of
this Lease, Landlord hereby agrees to abate Tenant’s obligation to pay monthly
Base Rent and Additional Rent for the first five (5) full months plus the first
two (2) weeks of month six (6) of the initial Lease Term. During such abatement
periods, Tenant shall still be responsible for the payment of all of its other
monetary obligations under this Lease. In the event of a default by Tenant under
the terms of this Lease that results in early termination pursuant to the
provisions of Section 19.1 of this Lease, then as a part of the recovery set
forth in Section 20 of this Lease, Landlord shall be entitled to the recovery of
the monthly Base Rent abated under the provisions of this Article 3. The Base
Rent for the first full month of the Lease Term (or if the first full month of
the Lease Term is within a free rent period, then the Base Rent for the first
full month which occurs after the expiration of any free rent period) shall be
paid at the time of Tenant’s execution of this Lease. If any rental or other
payment date (including the Lease Commencement Date) falls on a day of the month
other than the first day of such month or if any rental or other payment is for
a period which is shorter than one month, then the rental or other payment for
any such fractional month shall be a proportionate amount of a full calendar
month’s rental or other payment based on the proportion that the number of days
in such fractional month bears to the number of days in the calendar month
during which such fractional month occurs.

 

4. ADDITIONAL RENT

4.1 Additional Rent. In addition to paying the Base Rent specified in Article 3
of this Lease, Tenant shall pay as additional rent Tenant’s Share of the
aggregate of the annual Operating Expenses, Insurance Expenses, Utility Expenses
and Tax Expenses that are in excess of the Expense Stop (the “Excess”). Such
additional rent, together with any and all other amounts payable by Tenant to
Landlord pursuant to the terms of this Lease, shall be hereinafter collectively
referred to as the “Additional Rent.” The Base Rent and Additional Rent are
herein collectively referred to as the “Rent.” All amounts due under this
Article 4 as Additional Rent shall be payable for the same periods and in the
same manner, time and place as the Base Rent. In the event the Building is part
of a multi-building project, Landlord may allocate Operating Expenses, Insurance
Expenses, Utility Expenses and Tax Expenses applicable to the project as a whole
among the buildings within such project on an equitable basis, consistently
applied, as reasonably determined by Landlord. Without limitation on other
obligations of Tenant which shall survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.

4.2 Definitions. As used in this Article 4, the following terms shall have the
meanings hereinafter set forth:

4.2.1 “Expense Stop “ shall mean the amount set forth in Section 9.1 of the
Summary.

4.2.2 “Calendar Year” shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires.

 

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4.2.3 “Expense Year” shall mean each Calendar Year, provided that Landlord, upon
notice to Tenant, may change the Expense Year from time to time to any other
twelve (12) consecutive-month period, and, in the event of any such change,
Tenant’s Share of Operating Expenses, Insurance Expenses, Utility Expenses and
Tax Expenses shall be equitably adjusted for any Expense Year involved in any
such change.

4.2.4 “Insurance Expenses” shall mean the cost of insurance carried by Landlord,
in such amounts as Landlord may reasonably determine or as may be required by
any mortgagees or the lessor of any underlying or ground lease affecting the
Real Property, including any deductibles thereunder.

4.2.5 “Operating Expenses” shall mean all expenses, costs and amounts of every
kind and nature which Landlord incurs or which accrue during any Expense Year
because of or in connection with the ownership, management, maintenance, repair,
restoration or operation of the Real Property (other than Insurance Expenses,
Tax Expenses and Utility Expenses), and the cost of any capital improvements or
other costs (A) which are intended as a labor-saving device or to effect other
economies in the operation or maintenance of the Real Property, (B) made to the
Real Property after the Lease Commencement Date that are required under any
governmental law or regulation or (C) for the refurbishment or replacement of
Real Property improvements or amenities or to improve or enhance security at the
Real Property; provided, however, that if any such cost described in (A), (B) or
(C) above is a capital expenditure, such cost shall be amortized (including
interest on the unamortized cost) over its useful life as Landlord shall
reasonably determine. If the Building is not fully occupied during any portion
of any Expense Year, Landlord shall make an appropriate adjustment to the
variable components of Operating Expenses or Utility Expenses (as defined below)
for such year, employing sound accounting and management principles, to
determine the amount of Operating Expenses or Utility Expenses that would have
been paid had the Building been fully occupied. Notwithstanding anything above
to the contrary, Operating Expenses shall not include (1) the cost of providing
any service directly to and paid directly by any tenant (outside of such
tenant’s Operating Expenses payments); (2) the cost of any items for which
Landlord is reimbursed by insurance proceeds, condemnation awards, a tenant of
the Building, or otherwise to the extent so reimbursed; (3) any real estate
brokerage commissions or other costs incurred in procuring tenants, or any fee
in lieu of commissions; (4) ground lease payments (if any); (5) costs of items
considered capital improvements under generally accepted accounting principles
consistently applied except as expressly included in Operating Expenses pursuant
to the definition above; (6) costs incurred by Landlord due to the violation by
Landlord or any tenant of the terms and conditions of any lease of space in the
Building that would not have been incurred but for such violation;
(7) Landlord’s general corporate overhead (as opposed to overhead expenses
related to the Building or Real Property); (8) any compensation paid to clerks,
attendants or other persons in commercial concessions operated by Landlord
(other than in the parking facility for the Building); (9) bad debt expenses and
interest, principal, points and fees on debts (except in connection with the
financing of items which may be included in Operating Expenses) or amortization
on any ground lease, mortgage or mortgages or any other debt instrument
encumbering the Building (including the Real Property on which the Building is
situated); (10) marketing costs, including leasing commissions and attorneys’
fees in connection with the negotiation and preparation of letters, deal memos,
letters of intent, leases, subleases and/or assignments, space planning costs,
and other costs and expenses incurred in connection with lease, sublease and/or
assignment negotiations and transactions with present or prospective tenants or
other occupants of the Building; (11) costs, including permit, license and
inspection costs, incurred with respect to the installation of other tenants’ or
occupants’ improvements made for tenants or other occupants in the Building or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant space for tenants or other occupants in the Building;
(12) any costs expressly excluded from Operating Expenses elsewhere in this
Lease; (13) costs of any items (including, but not limited to, costs incurred by
Landlord for the repair of damage to the Building) to the extent Landlord
receives reimbursement from insurance proceeds or from a third party (except
that any deductible amount under any insurance policy shall be included within
Operating Expenses); (14) rentals and other related expenses for leasing an HVAC
system, elevators, or other items (except when needed in connection with normal
repairs and maintenance of the Building) which if purchased, rather than rented,
would constitute a capital improvement not included in Operating Expenses
pursuant to this Lease; (15) depreciation, amortization and interest payments,
except as specifically included in Operating Expenses pursuant to the terms of
this Lease and except on materials, tools, supplies and vendor-type equipment
purchased by Landlord to enable Landlord to supply services Landlord might
otherwise contract for with a third party, where such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party’s services, all as determined in accordance with generally accepted
accounting principles, consistently applied, and when depreciation or
amortization is permitted or required, the item shall be amortized over its
reasonably anticipated useful life; (16) expenses in connection with services or
other benefits which are not offered to Tenant or for which Tenant is charged
for directly but which are provided to another tenant or occupant of the
Building, without charge; (17) electric power costs or other utility costs for
which any tenant directly contracts with the local public service company (but
Landlord shall have the right to “gross up” as if such space was vacant);
(18) costs (including in connection therewith all attorneys’ fees and

 

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costs of settlement, judgments and/or payments in lieu thereof) arising from
claims, disputes or potential disputes in connection with potential or actual
claims, litigation or arbitrations pertaining to another tenant of the Building;
and (19) costs incurred in connection with the original construction of the
Building. Notwithstanding anything contained in this Lease to the contrary, the
replacement of HVAC units or systems serving the Building or Premises (other
than Package Units installed by or on behalf of Tenant) shall be treated as a
capital item and amortized (including interest on the unamortized cost) over
their useful life as reasonably determined by Landlord.

4.2.6 “Systems and Equipment” shall mean any plant, machinery, transformers,
duct work, cable, wires, and other equipment, facilities, and systems designed
to supply heat, ventilation, air conditioning and humidity or any other services
or utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or
fire/life safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment which serve the Real Property
in whole or in part.

4.2.7 “Tax Expenses” shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts, transaction privilege or any sales taxes
applicable to the receipt of rent, unless required to be paid by Tenant,
personal property taxes imposed upon the fixtures, machinery, equipment,
apparatus, Systems and Equipment, appurtenances, furniture and other personal
property used in connection with the Real Property), which Landlord shall pay
during any Expense Year because of or in connection with the ownership, leasing
and operation of the Real Property or Landlord’s interest therein. Any taxes or
assessments that may be paid over more than a one-year period shall be included
in Tax Expenses as if such payments were made in the maximum number of
installments permitted by applicable law and only the portion thereof
attributable to a given year shall be in included in Tax Expenses for that year.

4.2.8 “Utility Expenses” shall mean the cost of supplying all utilities to the
Real Property (other than utilities for which tenants of the Building are
separately metered or are otherwise paid separately by tenants of the Building),
including utilities for the heating, ventilation and air conditioning system for
the Building and Common Areas. Utilities supplied to the Premises will be
included in Utility Expenses, subject to the provisions of Section 6.2 below
regarding over-standard utility use.

4.2.9 “Tenant’s Share” shall mean the percentage set forth in Section 9.2 of the
Summary.

4.3 Payment of Additional Rent.

4.3.1 Statement of Actual Expenses and Payment by Tenant. Landlord shall give to
Tenant following the end of each Expense Year, a statement (the “Statement”)
which shall state the Operating Expenses, Insurance Expenses, Utility Expenses
and Tax Expenses incurred or accrued for such preceding Expense Year, and which
shall indicate the amount, if any, of any Excess. Upon receipt of the Statement
for each Expense Year commencing or ending during the Lease Term, if an Excess
is present, Tenant shall pay, with its next installment of Base Rent due (or
within thirty (30) days of receipt if the Lease Term has expired prior to
Tenant’s receipt of the Statement), the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year as
Estimated Excess. In the event an overpayment is made, such overpayment will be
credited against the next installments of Operating Expenses, Insurance
Expenses, Utility Expenses and Tax Expenses due, or in the event the Lease Term
has expired, then any overpayment will be refunded to Tenant within thirty
(30) days after the issuance of the Statement. The failure of Landlord to timely
furnish the Statement or the Estimated Statement for any Expense Year shall not
prejudice Landlord from enforcing its rights under this Article 4; provided that
Landlord shall not be entitled to collect any items which are not billed to
Tenant within one year after the expiration of the Expense Year to which such
items relate; and further provided that such one year limitation shall not apply
to any items which Landlord does not have notice of during such one year period
(e.g., tax bills which are late in arriving from the assessor). The provisions
of this Section 4.3.1 shall survive the expiration or earlier termination of the
Lease Term.

4.3.2 Statement of Estimated Expenses. In addition, Landlord shall endeavor to
give Tenant a yearly expense estimate statement (the “Estimate Statement”) which
shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the
total amount of Operating Expenses, Insurance Expenses, Utility Expenses and Tax
Expenses for the then-current Expense Year shall be and the estimated Excess
(the “Estimated Excess”). If pursuant to the Estimate Statement an Estimated
Excess is calculated for the then-current Expense Year, Tenant shall pay, with
its next installment of Base Rent due, a fraction of the Estimated Excess for
the then-current Expense Year (reduced by any amounts paid pursuant to the last
sentence of this

 

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Section 4.3.2). Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year to the month of such payment,
both months inclusive, and shall have twelve (12) as its denominator. Until a
new Estimate Statement is furnished, Tenant shall pay monthly, with the monthly
Base Rent installments, an amount equal to one-twelfth (1/12) of the total
Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant.

4.3.3 Audit Right. Within one hundred twenty (120) days after receipt of a
Statement by Tenant (“Review Period”), if Tenant disputes the amount set forth
in the Statement, Tenant’s employees or an independent certified public
accountant (which accountant is a member of a nationally or regionally
recognized accounting firm), designated by Tenant, may, after reasonable notice
to Landlord and at reasonable times, inspect Landlord’s records (pertaining to
Landlord’s calculation of Operating Expenses, Insurance Expenses, Utility
Expenses and Tax Expenses) at Landlord’s offices, provided that Tenant is not
then in default after expiration of all applicable cure periods and provided
further that Tenant and such accountant or representative shall, and each of
them shall cause their respective agents and employees to, maintain all
information contained in Landlord’s records in strict confidence.
Notwithstanding the foregoing, Tenant shall only have the right to review
Landlord’s records one (1) time during any twelve (12) month period. Tenant’s
failure to dispute the amounts set forth in any Statement within the Review
Period shall be deemed to be Tenant’s approval of such Statement and Tenant,
thereafter, waives the right or ability to dispute the amounts set forth in such
Statement. If after such inspection, but within thirty (30) days after the
Review Period, Tenant notifies Landlord in writing that Tenant still disputes
such amounts, a certification as to the proper amount shall be made, at Tenant’s
expense, by an independent certified public accountant selected by Landlord and
who is a member of a nationally or regionally recognized accounting firm.
Landlord shall cooperate in good faith with Tenant and the accountant to provide
Tenant and the accountant with the information upon which the certification is
to be based. However, if such certification by the accountant proves that the
total amount of Operating Expenses, Insurance Expenses, Utility Expenses and Tax
Expenses set forth in the Statement were overstated by more than five percent
(5%), then the actual, documented and reasonable cost of the accountant and such
certification shall be paid for by Landlord. Promptly following the parties
receipt of such certification, the parties shall make such appropriate payments
or reimbursements, as the case may be, to each other, as are determined to be
owing pursuant to such certification. In no event shall Landlord or its property
manager be required to (i) photocopy any accounting records or other items or
contracts, (ii) create any ledgers or schedules not already in existence,
(iii) incur any costs or expenses relative to such inspection, or (iv) perform
any other tasks other than making available such accounting records as are
described in this paragraph. Landlord shall not be liable for the payment of any
contingency fee payments to any auditor or consultant of Tenant. The provisions
of this Section shall be the sole method to be used by Tenant to dispute the
amount of Operating Expenses, Insurance Expenses, Utility Expenses and Tax
Expenses payable by Tenant under this Lease, and Tenant waives any other rights
or remedies relating thereto.

4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant
shall reimburse Landlord upon demand for any and all taxes or assessments
required to be paid by Landlord (except to the extent included in Tax Expenses
by Landlord), excluding state, local and federal personal or corporate income
taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not now customary or within the contemplation of
the parties hereto, when: (i) said taxes are measured by or reasonably
attributable to the cost or value of Tenant’s equipment, furniture, fixtures and
other personal property located in the Premises, or by the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant, to the
extent the cost or value of such leasehold improvements exceeds the cost or
value of a building standard build-out as determined by Landlord regardless of
whether title to such improvements shall be vested in Tenant or Landlord;
(ii) said taxes are assessed upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or any portion of the Real Property (including the
Parking Facilities); or (iii) said taxes are assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.

 

5. USE OF PREMISES

5.1 Permitted Use. Tenant shall use the Premises solely for general office,
research and development, warehouse uses, and light assembly and production
attendant thereto, all of which shall be consistent with the character of the
Building, and Tenant shall not use or permit the Premises to be used for any
other purpose or purposes whatsoever.

5.2 Prohibited Uses. Tenant further covenants and agrees that it shall not use,
or suffer or permit any person or persons under Tenant’s control to use, the
Premises, the Parking Facilities or any other Common Areas or any part thereof
for any use or purpose contrary to the rules and regulations reasonably
established by Landlord for the Real Property (the “Rules and Regulations”),
attached hereto as Exhibit C and made a part

 

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hereof, or in violation of any federal, state or local laws, or any recorded
covenants, conditions and restrictions or ground or underlying leases affecting
the Real Property. Tenant shall not use or allow Tenant Parties (as defined in
this Lease) to use any part of the Premises or the Real Property for the
storage, use, treatment, manufacture or sale of any hazardous or toxic material
(except as otherwise permitted in Article 29 below).

5.3 Compliance With Laws. Tenant shall not do anything or suffer anything to be
done in or about the Premises which will in any way conflict with any law,
statute, ordinance or other governmental rule, regulation or requirement now in
force or which may hereafter be enacted or promulgated. At its sole cost and
expense, Tenant shall promptly comply with all such governmental measures, other
than the making of structural changes or changes to the Systems and Equipment or
Common Areas, such changes will be made by Landlord at its expense, but subject
to reimbursement as an Operating Expense to the extent permitted by Article 4;
however, if such changes are required due to Tenant’s Alterations, the
Improvements or the particular nature of Tenant’s use of the Premises, Tenant
shall, as Additional Rent, reimburse Landlord for the cost thereof within thirty
(30) days following receipt of an invoice therefor. Tenant shall comply with the
Rules and Regulations of the Building and such other reasonable rules and
regulations (or modifications thereto) adopted by Landlord from time to time.
The Rules and Regulations will be applied in an equitable manner as determined
by Landlord. Tenant shall also cause its agents, contractors, subcontractors,
employees, customers, and subtenants to comply with all rules and regulations.

5.4 Tenant’s Security Responsibilities. Tenant shall (1) lock the doors to the
Premises and take other reasonable steps to secure the Premises and the personal
property of Tenant and any of Tenant’s transferees, contractors or licensees in
the Common Areas and parking facilities of the Building and Real Property, from
unlawful intrusion, theft, fire and other hazards; (2) keep and maintain in good
working order all security and safety devices installed in the Premises by or
for the benefit of Tenant (such as locks, smoke detectors and burglar alarms);
and (3) reasonably cooperate with Landlord and other tenants in the Building on
Building safety matters. Tenant acknowledges that (i) any security or safety
measures employed by Landlord are for the protection of Landlord’s own
interests; (ii) Landlord is not a guarantor of the security or safety of the
Tenant Parties or their property; (iii) such security and safety matters are the
responsibility of Tenant and local law enforcement authorities; and (iv) in no
event shall Landlord be liable for damages, losses, claims, injury to persons or
property or causes of action arising out of any theft, burglary, trespass or
other entry into the Premises or the Real Property.

 

6. SERVICES AND UTILITIES

6.1 Standard Tenant Services. Landlord shall provide the following services on
all days during the Lease Term, unless otherwise stated below.

6.1.1 Subject to all governmental rules, regulations and guidelines applicable
thereto, Landlord shall provide heating, ventilation and air conditioning
(“HVAC”) when necessary for normal comfort for normal office use in the
Premises, from Monday through Friday, during the period from 8:00 a.m. to 7:00
p.m., and on Saturday during the period from 8:00 a.m. to 1:00 p.m., provided
that HVAC during such Saturday hours will be supplied only in the event Tenant
notifies Landlord’s building manager by 3:00 p.m. on Friday that such HVAC
service is required. Notwithstanding the foregoing, HVAC service will not be
supplied on the date of observation of New Year’s Day, Presidents’ Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day (and the Friday following
Thanksgiving Day), Christmas Day and other locally or nationally recognized
holidays (collectively, the “Holidays”).

6.1.2 Landlord shall provide adequate electrical wiring and facilities for
normal general office use, and electricity at levels consistent with normal
general office use, as determined by Landlord.

6.1.3 Landlord shall provide city water from the regular Building outlets for
drinking, lavatory and toilet purposes.

6.1.4 Landlord shall provide janitorial services five (5) days per week, except
the date of observation of the Holidays, in and about the Premises in a manner
consistent with other comparable buildings in the vicinity of the Building;
provided that the janitorial services provided by Landlord shall not include any
clean rooms within the Premises which Tenant notifies Landlord in writing should
be excluded from the janitorial service.

6.1.5 Landlord shall provide nonexclusive automatic passenger elevator service,
if the Building has an elevator, at all times.

 

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6.1.6 Landlord shall provide window washing services for the exterior surface of
the Building’s perimeter windows only, at intervals which Landlord deems
reasonable. Tenant shall be responsible for the cleaning of all other glass
surfaces within the Premises.

6.1.7 Landlord shall provide a conference room located in the building located
at 1600 NW Compton Drive (“1600 Building”) for use by tenants of the project of
which the Building is a part on a first come, first served basis subject to
prior scheduling with the Building manager; provided that this service may be
discontinued at any time if in Landlord’s reasonable business judgment it
determines that such service is no longer desirable or in the event Landlord
ceases to own the 1600 Building.

6.2 Overstandard Tenant Use. Tenant may use heat-generating machines, machines
other than normal fractional horsepower office machines, or equipment or
lighting other than building standard lights in the Premises, which may affect
the temperature otherwise maintained by the air conditioning system or increase
the electricity or water normally furnished for the Premises by Landlord
pursuant to the terms of Section 6.1 of this Lease. In the event of such excess
use, Landlord will, at Landlord’s sole cost and expense, install a separate
meter or submeter to the Premises to measure the amount of electricity or water
used by Tenant. Landlord will read such submeter or meter on a regular basis
(e.g., monthly) and will compare Tenant’s actual use to the amount of
electricity or water typically used by other tenants of the Real Property or
tenants of similar properties in the vicinity of the Building, based upon the
number kilowatt hours used (or for water, based upon gallons consumed or some
similar measure). To the extent Tenant’s use exceeds the typical use as
reasonably determined by Landlord, the cost of such excess electricity or water
will be included in Utility Expenses payable by Tenant pursuant to Article 4
above and Tenant’s Share of such excess electricity will be 100% for purposes of
determining if any Excess is present.

6.3 Interruption of Use. Except as permitted by Section 6.5 below, Tenant agrees
that Landlord shall not be liable for any damages incurred by Tenant, by
abatement of Rent or otherwise, for failure to furnish or delay in furnishing
any utility or service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof; and such failures or
delays or diminution shall never be deemed to constitute an eviction or
disturbance of Tenant’s use and possession of the Premises or relieve Tenant
from paying Rent or performing any of its obligations under this Lease.

6.4 Additional Services. Landlord shall also have the exclusive right, but not
the obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, lamp replacement,
additional janitorial service, and additional repairs and maintenance, provided
that Tenant, as Additional Rent, shall pay to Landlord upon billing, the sum of
all costs to Landlord of such additional services plus an administration fee
(not to exceed 5% of the cost of such work).

6.5 Abatement. An “Abatement Event” shall be defined as an event that prevents
Tenant from using the Premises or any portion thereof, as a result of any
failure to provide utilities or services to the Premises, where (i) Tenant does
not actually use the Premises or such portion thereof, and (ii) such event is
caused by the negligence or willful misconduct of Landlord, its agents,
employees or contractors. Tenant shall give Landlord and any mortgagee of
Landlord (of whom Tenant is notified) notice (“Abatement Notice”) of any such
Abatement Event, and if such Abatement Event continues beyond the “Eligibility
Period” (as that term is defined below), then the Base Rent and Tenant’s Share
of Operating Expenses, Insurance Expenses, Utility Expenses and/or Tax Expenses
shall be abated entirely or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use, the Premises or a portion thereof, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using, and does not use, bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does
not use, a portion of the Premises for a period of time in excess of the
Eligibility Period and the remaining portion of the Premises is not sufficient
to allow Tenant to effectively conduct its business therein, and if Tenant does
not conduct its business from such remaining portion, then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the Base Rent and Tenant’s Share of
Operating Expenses, Insurance Expenses, Utility Expenses and/or Tax Expenses for
the entire Premises shall be abated entirely for such time as Tenant continues
to be so prevented from using, and does not use, the Premises. If, however,
Tenant reoccupies any portion of the Premises during such period, the Base Rent
and Tenant’s Share of Operating Expenses, Insurance Expenses, Utility Expenses
and/or Tax Expenses allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the Premises
bears to the total rentable area of the Premises, shall be payable by Tenant
from the date Tenant reoccupies such portion of the Premises. Notwithstanding
anything to the contrary contained herein, if Landlord is diligently pursuing
the repair of such utilities or services and Landlord provides substitute
services reasonably suitable for Tenant’s purposes as reasonably determined by
Landlord, for example bringing in portable air conditioning or heating
equipment, then there shall be no abatement of Base Rent or Tenant’s Share of
Operating Expenses, Insurance Expenses,

 

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Utility Expenses and/or Tax Expenses. The term “Eligibility Period” shall mean a
period of five (5) consecutive business days after Landlord’s and Landlord’s
mortgagee’s (if applicable), receipt of the applicable Abatement Notice
(provided that Landlord will be provided additional time as required to remedy
such event so long as Landlord is diligently attempting to remedy such Abatement
Event and pursues such remedy to completion). Such right to abate Base Rent and
Tenant’s Share of Operating Expenses, Insurance Expenses, Utility Expenses
and/or Tax Expenses shall be Tenant’s sole remedy for an Abatement Event. This
Section 6.5 shall not apply in case of damage to, or destruction of, the
Premises or the Building, or any eminent domain proceedings which shall be
governed by separate provisions of this Lease.

6.6 Package HVAC Units. Tenant shall be entitled to install, as an initial
Tenant Improvement or as an Alteration, dedicated heating, ventilation and air
conditioning units (“Package Units”) within the Premises at Tenant’s sole cost
and expense or as a charge against the Improvement Allowance. The plans and
specifications for any Package Units shall, as indicated in Article 8 below and
the Tenant Work Letter (as applicable), be subject to Landlord’s reasonable
approval. If Tenant elects to install Package Units within the Premises, Tenant
shall also install, at Tenant’s sole cost and expense, separate meters or at
Landlord’s option, submeters, in order to measure the amount of electricity
furnished to such units and Tenant shall be responsible for Landlord’s actual
cost of supplying electricity to such units as reflected by such meters or
submeters, which amounts shall be payable on a monthly basis as Additional Rent.
Tenant shall be solely responsible for maintenance and repair of the Package
Units and such units shall be considered to be a fixture within the Premises and
shall remain upon the Premises, unless Landlord requires Tenant to remove such
Package Units, upon the expiration or earlier termination of the Lease Term or
any applicable Option Term.

 

7. REPAIRS

7.1 Landlord’s Maintenance. Landlord shall (at Landlord’s cost and expense, but
subject to inclusion in Operating Expenses to the extent permitted by Article 4
above) maintain the structural portions of the Building including the
foundation, floor/ceiling slabs, roof, curtain wall, exterior glass and
mullions, columns, beams, shafts (including elevator shafts), stairs,
stairwells, elevator cabs and all Common Areas and shall also maintain and
repair the basic mechanical, electrical, VAV boxes, life safety, plumbing,
sprinkler systems (connected to the core but not any distribution throughout the
Premises) and heating ventilating and air conditioning systems (including
primary loops connected to the core but not any distribution throughout the
Premises). Notwithstanding the foregoing, if any of the foregoing repairs are
necessitated by the act or omission of Tenant Parties (as defined in
Section 10.1 below), then the cost of such repairs, together with an
administrative fee of five percent (5%) of such costs, shall be paid by Tenant
to Landlord immediately following delivery of an invoice therefor.

7.2 Tenant’s Maintenance. Tenant shall, at Tenant’s own expense, keep the
Premises, including all improvements, fixtures and furnishings therein, in good
order, repair and condition at all times during the Lease Term; provided
however, that, at Landlord’s option, or if Tenant fails to make such repairs,
Landlord may, but need not, make such repairs and replacements, and Tenant shall
pay Landlord’s costs or expenses, including Landlord’s overhead, arising from
Landlord’s involvement with such repairs and replacements forthwith upon being
billed for same. Tenant hereby waives and releases its right to make repairs at
Landlord’s expense and/or terminate this Lease or vacate the Premises under any
Oregon law, statute, or ordinance now or hereafter in effect.

7.3 Self-Help Rights. Notwithstanding any provision set forth in this Article 7
to the contrary, if Tenant provides written notice to Landlord and any mortgagee
of Landlord (of whom Tenant is notified), of an event or circumstance which
requires the action of Landlord and which if not performed will materially and
adversely prevent Tenant from operating its permitted business from the Premises
and Landlord fails to provide such action within a reasonable period of time,
given the circumstances, after the receipt of such notice (but in any event not
later than thirty (30) days after receipt of such notice, unless such repair
would normally take longer (and Landlord has commenced said repair work within
said thirty (30) day period)), then provided that Tenant’s performance of such
repair or maintenance will not void any applicable warranties covering such
repair or maintenance, Tenant may proceed to take the required action upon
delivery of an additional five (5) business days notice to Landlord and any
mortgagee of Landlord (of whom Tenant is notified) (which additional notice must
clearly specify that Tenant is taking such required action), and if such action
was required under the terms of the Lease to be taken by Landlord and was not
taken or commenced by Landlord within such five (5) business day period, then
Tenant shall be entitled to prompt reimbursement by Landlord of Tenant’s actual
reasonable costs in taking such action. In the event Tenant takes such action,
and such work will affect the Systems and Equipment or the structural integrity
of the Building, Tenant shall use only those contractors used by Landlord in the
Building for work on such Systems and Equipment or structural components unless
such contractors are unwilling or unable to perform, or timely perform, such
work, in which event Tenant may utilize the services of any other qualified
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similar work in first class buildings and who are reasonably approved by
Landlord in writing. Within thirty (30) days after receipt of a reasonably
particularized invoice from Tenant of its costs of taking action which Tenant
claims should have been taken by Landlord, Landlord shall reimburse Tenant the
amount set forth in such invoice. If, however, Landlord delivers to Tenant
within thirty (30) days after receipt of Tenant’s invoice, a written objection
to the payment of such invoice, setting forth with reasonable particularity
Landlord’s reasons for its claim that such action did not have to be taken by
Landlord pursuant to the terms of this Lease or that the charges are excessive
(in which case Landlord shall pay the amount it contends would not have been
excessive), then Tenant shall not be entitled to such reimbursement, but as
Tenant’s sole remedy, Tenant may proceed to claim a default by Landlord under
this Lease. Tenant agrees to indemnify and hold Landlord harmless from any
injury, damage, claim or cause of action which results from Tenant’s performance
of such repairs or maintenance.

 

8. ADDITIONS AND ALTERATIONS

8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises (collectively, the
“Alterations”) without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld by Landlord. The construction of the initial
improvements to the Premises, if any, shall be governed by the terms of the
Tenant Work Letter attached hereto as Exhibit “B” and not the terms of this
Article 8.

8.2 Manner of Construction. Tenant shall have obtained Landlord’s approval of
all plans, specifications, drawings, contractors and subcontractors prior to the
commencement of Tenant’s construction of the Alterations; provided, however, a
contractor of Landlord’s selection shall perform all mechanical, electrical,
plumbing, structural, and heating, ventilation and air conditioning work, and
such work shall be performed at Tenant’s cost. Tenant agrees to carry “Builder’s
All Risk” insurance in an amount approved by Landlord covering the construction
of such Alterations, and such other insurance as Landlord may require. In
addition, Landlord may, in its discretion, as to Alterations which cost in
excess of $50,000, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee. Further, Tenant shall pay to Landlord or its agent a five percent
(5%) supervision fee (provided that such supervision fee will be reduced to the
extent Landlord’s actual out of pocket cost is lower than 5%) based upon the
cost of such work. Tenant shall construct such Alterations and perform such
repairs in conformance with any and all applicable laws and pursuant to a valid
building permit, issued by the appropriate governmental authorities, in
conformance with Landlord’s construction rules and regulations and in a
diligent, good and workmanlike manner. If such Alterations trigger a legal
requirement upon Landlord to make any Alterations or improvements to the
Building or Common Areas, Tenant shall, as Additional Rent, reimburse Landlord
for the cost thereof within thirty (30) days following receipt of an invoice
therefor. Landlord’s approval of the plans, specifications and working drawings
for Tenant’s Alterations shall create no responsibility or liability on the part
of Landlord for their completeness, design sufficiency, or compliance with all
laws, rules and regulations of governmental agencies or authorities. Upon
completion of any Alterations, Tenant agrees to cause a Notice of Completion (or
equivalent) to be posted (if applicable) and recorded in the office of the
Recorder of the County in which the Building is located in accordance with all
applicable state statutes, and Tenant shall deliver to the Building management
office a reproducible copy of the “as built” drawings of the Alterations.

8.3 Landlord’s Property. All Alterations and fixtures which may be made,
installed or placed in or about the Premises from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord; however,
Landlord may, by written notice to Tenant at the time of Landlord’s consent to
such Alterations or improvements, require Tenant at Tenant’s expense to remove
any such Alterations or fixtures and/or any future improvements constructed by
or on behalf of Tenant; provided that Tenant will not be responsible for any
removal or restoration requirements as to items existing in the Premises as of
the date of this Lease, except for (i) those items set forth in Section 29.4
below and (ii) Tenant will be required to remove and repair any damage caused by
the removal of the Bruschit Cycle Chamber and all related equipment to such
chamber. Nothing herein shall be deemed to require Tenant to restore the
Premises to an office condition, but rather are intended only to require that
Tenant remove any specified items and repair damage caused by such removal.
Landlord will identify which items as depicted on the Construction Drawings (as
defined in the Tenant Work Letter), will need to be removed upon the expiration
or earlier termination of this Lease, which notice will be given at the time of
Landlord’s consent to the Final Working Drawings (as defined in the Tenant Work
Letter). In no event shall Landlord require Tenant to restore any preexisting
portion of the Premises to a general office build out. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of any
Alterations, Improvements or fixtures, Landlord may do so and may charge the
cost thereof to Tenant. This Section 8.3 shall survive the expiration or earlier
termination of this Lease.

 

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8.4 Landlord’s Liability for Alterations. Landlord’s approval of an Alteration
shall not be a representation by Landlord that the Alteration complies with
applicable laws or will be adequate for Tenant’s use. Tenant acknowledges that
Landlord is not an architect or engineer, and that the Alterations will be
designed and/or constructed using independent architects, engineers, and
contractors. Accordingly, Landlord does not guarantee or warrant that the
applicable construction documents will comply with laws or be free from errors
or omissions, or that the Alterations will be free from defects, and Landlord
will have no liability therefor.

 

9. COVENANT AGAINST LIENS

Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the Real Property, the Building or
the Premises with respect to work or services claimed to have been performed for
or materials claimed to have been furnished to Tenant or the Premises, and, in
case of any such lien attaching or notice of any lien, Tenant covenants and
agrees to cause it to be immediately released and removed of record.
Notwithstanding anything to the contrary set forth in this Lease, in the event
that such lien is not released and removed within ten (10) days after the date
notice of such lien is delivered by Landlord to Tenant, Landlord, at its sole
option, may immediately take all action necessary to release and remove such
lien, without any duty to investigate the validity thereof, and all sums, costs
and expenses, including reasonable attorneys’ fees and costs, incurred by
Landlord in connection with such lien shall be deemed Additional Rent under this
Lease and shall immediately be due and payable by Tenant.

 

10. INDEMNITY AND INSURANCE

10.1 Indemnification and Waiver. Tenant shall be liable for, and shall
indemnify, defend, protect and hold Landlord and Landlord’s partners, officers,
directors, employees, agents, successors and assigns (collectively, “Landlord
Indemnified Parties”) harmless from and against, any and all claims, damages,
judgments, suits, causes of action, losses, liabilities and expenses, including
reasonable attorneys’ fees and court costs (collectively, “Indemnified Claims”),
arising or resulting from (a) any negligent or willful act or omission of Tenant
or any of Tenant’s agents, employees, contractors, subtenants, assignees,
invitees or licensees in or about the Premises, the Building or the Real
Property (collectively, “Tenant Parties”); (b) any occurrence within the
Premises unless caused by the gross negligence or willful misconduct of
Landlord; and/or (c) any default by Tenant of any obligations on Tenant’s part
to be performed under the terms of this Lease. Except to the extent caused by
the gross negligence or willful misconduct of Landlord, Tenant hereby assumes
all risk of damage to property or injury to persons in or about the Premises,
the Building or elsewhere on the Real Property from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability occurring prior to such expiration or
termination.

10.2 Tenant’s Insurance. Tenant shall maintain the following coverages in the
following amounts.

10.2.1 Commercial general liability (CGL) and, if necessary, commercial umbrella
insurance, on an occurrence basis, with a limit of not less than $3,000,000 each
occurrence. CGL insurance shall be written on ISO occurrence form CG 00 01 01 96
(or a substitute form providing equivalent coverage) and shall cover liability
arising from premises, operations, independent contractors, products-completed
operations, personal injury and advertising injury, liability assumed under an
insured contract and the performance by Tenant of the indemnity agreements set
forth in Sections 10.1 and 29.2 of this Lease. Landlord shall be included as an
insured under the CGL policy, using ISO additional insured endorsement CG 20 11
or a substitute providing equivalent coverage, and under the commercial
umbrella, if any. This insurance shall apply as primary insurance with respect
to any other insurance or self-insurance programs afforded to Landlord. There
shall be no endorsement or modification of the CGL to make it excess over other
available insurance; alternatively, if the CGL states that it is excess or pro
rata, the policy shall be endorsed to be primary with respect to the additional
insured. Tenant waives all rights against Landlord and its agents, officers,
directors and employees for recovery of damages to the extent these damages are
covered by the commercial general liability or commercial umbrella liability
insurance maintained pursuant to this agreement.

10.2.2 Commercial property insurance covering (i) all office furniture, trade
fixtures, office equipment, merchandise and all other items of Tenant’s property
on the Premises installed by, for, or at the expense of Tenant, and (ii) the
Tenant Improvements and Alterations. Nothing in this Section 10.2.2 will be
construed or deemed to require Tenant to insure the HVAC Systems for the
Building (except that Tenant will be required to insure any Package Units
installed by or on behalf of Tenant). Such insurance shall cover the perils
insured under the ISO special causes of loss form (CP 10 30) and shall include
coverage for vandalism and malicious mischief, terrorism coverage for both
certified and non-certified acts of terrorism, water damage, sprinkler leakage
coverage, and boiler and machinery (systems breakdown) coverage. The amount
insured shall

 

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equal the full replacement cost value new without deduction for depreciation of
the covered items. Any coinsurance requirement in the policy shall be eliminated
through the attachment of an agreed amount endorsement, the activation of an
agreed value option, or as is otherwise appropriate under the particular policy
form. In no event shall Landlord be liable for any damage to or loss of personal
property sustained by Tenant, whether or not it is insured, even if such loss is
caused by the negligence of Landlord, its employees, officers, directors or
agents. Landlord and Tenant hereby waive any recovery of damages against each
other (including their employees, officers, directors, agents, or
representatives) for loss or damage to the Building, tenant improvements and
betterments, fixtures, equipment, and any other personal property to the extent
covered by the commercial property insurance required above. If the commercial
property insurance purchased by Tenant as required above does not allow the
insured to waive rights of recovery against others prior to loss, Tenant shall
cause them to be endorsed with a waiver of subrogation as required above.

10.2.3 Business income, Business interruption and extra expense insurance in
such amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Building as a
result of such perils. In no event shall Landlord be liable for any business
interruption or consequential loss sustained by Tenant, whether or not it is
insured, even if such loss is caused by the negligence of Landlord, its agents,
employees, directors officers or contractors.

10.2.4 Worker’s compensation insurance providing statutory benefits to Tenant’s
employees, employers liability insurance with limits not less than $1,000,000
each accident for bodily injury by accident or $1,000,000 each employee for
bodily injury by disease. Tenant waives all rights against Landlord and its
agents, officers, directors, and employees for recovery of damages to the extent
these damages are covered by the workers compensation and employers liability
obtained by Tenant. Tenant shall obtain an endorsement to effect this waiver.

10.2.5 Tenant shall maintain automobile liability and, if necessary, commercial
umbrella liability insurance with a limit of not less than $1,000,000 million
each accident. Such insurance shall cover liability arising out of any auto
(including owned, hired, and non-owned autos). Coverage shall be written on ISO
form CA 00 01 or a substitute form providing equivalent liability coverage. If
necessary, the policy shall be endorsed to provide contractual liability
coverage equivalent to that provided in the 1990 and later editions of CA 00 01.
Physical damage coverage, including collision and comprehensive coverage, shall
be included. Tenant shall maintain garage insurance under terms equivalent to
those of ISO form CA 00 05. Insurance as required by this Paragraph 1.2.6 shall
include coverage of the liability of Tenant for property damage to vehicles and
vehicle equipment while in the care, custody, or control of Tenant
(garagekeepers insurance). This coverage shall apply to losses caused by
collision and comprehensive perils. Tenant waives all rights against Landlord
and its agents, officers, directors and employees for recovery of damages to the
extent these damages are covered by the business auto liability or commercial
umbrella liability insurance obtained by Tenant (or under any applicable auto
physical damage coverage).

10.2.6 Pollution Legal Liability Insurance will not be required unless Tenant’s
use of Hazardous Materials increases above the level of Hazardous Materials
identified in the Hazardous Materials list initially provided pursuant to
Section 29.1 below, in which case Landlord reserves the right to require Tenant
to obtain a policy of Pollution Legal Liability Insurance with limits reasonably
acceptable to Landlord.

10.3 Form of Policies. The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease and Landlord makes no representation or guaranty that the insurance
required under this Lease shall be sufficient or adequate to protect Tenant. All
insurance shall (i) be issued by an insurance company having a rating of not
less than A-X in Best’s Insurance Guide or which is otherwise acceptable to
Landlord and licensed to do business in the State of Oregon; and (ii) provide
that said insurance shall not be canceled or coverage changed unless thirty
(30) days’ prior written notice shall have been given to Landlord and the other
additional insureds thereunder designated by Landlord. In addition, the
insurance described in Section 10.2.1 above shall (a) name Landlord, any
mortgage holder and any other party specified by Landlord, as an additional
insured; (b) specifically cover the liability assumed by Tenant under this Lease
including, but not limited to, Tenant’s obligations under Section 10.1 of this
Lease; (c) be primary insurance as to all claims thereunder and provide that any
insurance required by Landlord is excess and is non-contributing with any
insurance requirement of Tenant; and (d) contain a cross-liability endorsement
or severability of interest clause acceptable to Landlord. The insurance
described in Section 10.2.2 shall name Landlord, Landlord’s property manager and
any lender specified by Landlord as loss-payee as to all items referred to in
clause (ii) of Section 10.2.2 and the insurance described in Sections 10.2.2 and
10.2.3 shall have deductibles reasonably acceptable to Landlord. Tenant shall
deliver all policies or certificates thereof to Landlord on or before Landlord’s
delivery of the Premises to Tenant or the Lease Commencement Date, whichever
first occurs, and at least thirty (30) days before the expiration dates thereof.

 

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All certificates shall provide that such insurance will not be cancelled (or
materially changed) without at least thirty (30) days’ prior written notice (ten
(10) days for nonpayment of premiums) to Landlord. The words “endeavor to” and
“but failure to mail such notice shall impose no obligation or liability of any
kind upon the company, its agents or representatives” shall be deleted from the
certificate form’s cancellation provision. Failure of Landlord to demand such
certificate or other evidence of full compliance with these insurance
requirements or failure of Landlord to identify a deficiency from evidence that
is provided shall not be construed as a waiver of Tenant’s obligation to
maintain such insurance. In the event Tenant shall fail to procure such
insurance, or to deliver such policies or certificate, Landlord may deny Tenant
the right to occupy the Premises until such time as Tenant makes such deliveries
(which denial shall have no effect upon the Lease Commencement Date) and/or
procure such policies for the account of Tenant, and the cost thereof shall be
paid to Landlord as Additional Rent within five (5) days after delivery to
Tenant of the bills therefor.

10.4 Tenant’s Compliance with Landlord’s Fire and Casualty Insurance. Tenant
shall, at Tenant’s expense, comply with all insurance company requirements
pertaining to the use of the Premises. If Tenant’s conduct or use of the
Premises causes any increase in the premium for such insurance policies, then
Tenant shall reimburse Landlord for any such increase.

10.5 Subrogation. Landlord and Tenant agree to have their respective insurance
companies issuing property damage, worker’s compensation insurance and loss of
income and extra expense insurance waive any rights of subrogation that such
companies may have against Landlord or Tenant, as the case may be.
Notwithstanding anything in this Lease to the contrary, Landlord and Tenant
hereby waive any right that either may have against the other on account of any
loss or damage if such loss or damage is insurable under the property damage or
loss of income and extra expense insurance required to be maintained hereunder
(this waiver extends to deductibles under such insurance).

 

11. DAMAGE AND DESTRUCTION

11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas of the Building serving or
providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for
insurance adjustment or other matters beyond Landlord’s reasonable control, and
subject to all other terms of this Article 11, restore the base, shell and core
of such Common Areas and the Premises (collectively, the “Base, Shell and Core”)
to substantially the same condition as existed prior to the casualty, except for
modifications required by law, the holder of a mortgage on the Real Property,
the lessor of a ground or underlying lease, or any other modifications to the
Common Areas deemed desirable by Landlord. Notwithstanding any other provision
of this Lease, upon the occurrence of any damage to the Premises resulting from
fire or other casualty, Tenant shall assign to Landlord all insurance proceeds
payable to Tenant as to items of property described in clause (ii) of
Section 10.2.2, and Landlord shall return the Tenant Improvements and
Alterations to their original condition (provided that Tenant will have
reasonable approval of the construction drawings for such Tenant Improvements
and Alterations); provided that if the cost of such repair by Landlord exceeds
the amount of insurance proceeds received by Landlord from Tenant’s insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant
to Landlord prior to Landlord’s repair of the damage. In the event there are any
excess insurance proceeds from Tenant’s insurer, Landlord will refund such
excess to Tenant within a reasonable time after the Tenant Improvements and
Alterations are rebuilt. In the event any damage to the Building or Common Area
occurs as a result of the negligence or willful misconduct of Tenant and/or its
agents, contractors, employees and/or invitees, Tenant shall reimburse Landlord,
promptly on demand, for the costs incurred by Landlord in repairing such damage
and the provisions of Section 10.5 regarding Landlord’s deductible shall not
apply to such reimbursement obligation. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s
business resulting in any way from damage resulting from fire or other casualty
or Landlord’s repair thereof; provided however, that if such fire or other
casualty shall have damaged the Premises or Common Areas necessary to Tenant’s
occupancy, and if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant’s employees, contractors, licensees, or invitees,
Landlord shall allow Tenant a proportionate abatement of Rent, during the time
and to the extent the Premises are unfit for occupancy for the purposes
permitted under this Lease, and not occupied by Tenant as a result thereof.

11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises and/or
Building and instead terminate this Lease by notifying Tenant in writing of such
termination within sixty (60) days after the date Landlord learns of the
necessity for repairs as the result of damage, such notice to include a
termination date giving Tenant ninety (90) days to vacate the Premises, but
Landlord may so elect only if the Building shall be damaged by fire or other
casualty or cause, whether or not the Premises are affected, and one or more of
the following conditions is present: (i) repairs cannot reasonably be completed
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Landlord learns of the necessity for repairs as the result of damage (when such
repairs are made without the payment of overtime or other premiums); (ii) the
holder of any mortgage on the Real Property or ground or underlying lessor with
respect to the Real Property shall require that the insurance proceeds or any
portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be; (iii) the damage is not fully
covered, except for deductible amounts, by Landlord’s insurance policies; or
(iv) such damage occurs during the last twenty-four (24) months of the Lease
Term. Furthermore, if Landlord has not terminated this Lease, and the repairs
are not actually completed within such one hundred twenty (120) day period,
Tenant shall have the right to terminate this Lease within five (5) business
days of the end of such period and thereafter during the first five (5) business
days of each calendar month following the end of such period until such time as
the repairs are complete, by notice to Landlord (the “Damage Termination
Notice”), effective as of a date set forth in the Damage Termination Notice (the
“Damage Termination Date”), which Damage Termination Date shall not be less than
five (5) business days following the end of such period or each such month, as
the case may be. Notwithstanding the foregoing, if Tenant delivers a Damage
Termination Notice to Landlord, then Landlord shall have the right to suspend
the occurrence of the Damage Termination Date for a period ending thirty
(30) days after the Damage Termination Date set forth in the Damage Termination
Notice by delivering to Tenant, within five (5) business days of Landlord’s
receipt of the Damage Termination Notice, a certificate of Landlord’s contractor
responsible for the repair of the damage certifying that it is such contractor’s
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date. If repairs shall be
substantially completed prior to the expiration of such thirty (30) day period,
then the Damage Termination Notice shall be of no force or effect, but if the
repairs shall not be substantially completed within such thirty (30) day period,
then this Lease shall terminate upon the expiration of such thirty (30) day
period. In the event that the Premises or the Project is destroyed or damaged to
any substantial extent during the last twenty four (24) months of the Lease Term
and if such damage shall take longer than sixty (60) days to repair and if such
damage is not the result of the negligence or willful misconduct of Tenant or
Tenant’s employees, licensees, invitees or agents, then notwithstanding anything
in this Article 11 to the contrary, Tenant shall have the option to terminate
this Lease by written notice to Landlord of the exercise of such option within
sixty (60) days after Tenant learns of the necessity for repairs as the result
of such damage.

11.3 Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or any other portion of the Real Property, and any
statute, regulation or case law of the State of Oregon with respect to
termination rights arising from damage or destruction shall have no application
to this Lease or any damage or destruction to all or any part of the Premises,
the Building or any other portion of the Real Property.

 

12. NONWAIVER

No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy on account of the violation of such provision,
even if such violation shall continue or be repeated subsequently. Any waiver by
Landlord of any provision of this Lease may only be in writing, and no express
waiver shall affect any provision other than the one specified in such waiver
and then only for the time and in the manner specifically stated in such waiver.
No receipt of monies by Landlord from Tenant after the termination of this Lease
shall in any way alter the length of the Lease Term.

 

13. CONDEMNATION

If the whole or any part of the Premises, Building or Real Property shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Real Property, or if Landlord shall grant a deed or
other instrument in lieu of such taking by eminent domain or condemnation,
Landlord shall have the option to terminate this Lease upon ninety (90) days’
notice, provided such notice is given no later than one hundred eighty
(180) days after the date of such taking, condemnation, reconfiguration,
vacation, deed or other instrument. If more than twenty-five percent (25%) of
the rentable square feet of the Premises is taken, or if access to the Premises
is substantially impaired, Tenant shall have the option to terminate this Lease
upon ninety (90) days’ notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection with such taking,
except that Tenant shall have the right to file any separate claim available to
Tenant for any taking of Tenant’s personal property belonging to Tenant and
removable by Tenant upon expiration of the Lease Term pursuant to the terms of
this Lease, and for goodwill and moving expenses, so long as such claim does not
diminish the award available to Landlord, its ground lessor (if applicable) with
respect to the Real Property or its mortgagee, and such claim is payable
separately to Tenant. If any part of the

 

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Premises shall be taken, and this Lease shall not be so terminated, the Rent
shall be proportionately abated. Tenant hereby waives any and all rights it
might otherwise have pursuant to any Oregon law, statute or ordinance now or
hereafter in effect, to seek termination of this Lease in the event of a taking.

 

14. ASSIGNMENT AND SUBLETTING

14.1 Transfers. Except as set forth in Section 14.7, Tenant shall not, without
the prior written consent of Landlord, which shall not be unreasonably withheld
if Landlord does not elect to proceed under Section 14.4 below, assign or
otherwise transfer this Lease or any interest hereunder, permit any assignment
or other such foregoing transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or permit the use of
the Premises by any persons other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as “Transfers” and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a “Transferee”). If Tenant shall desire Landlord’s
consent to any Transfer, Tenant shall notify Landlord in writing, which notice
(the “Transfer Notice”) shall include (i) the proposed effective date of the
Transfer, which shall not be less than forty-five (45) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
“Subject Space”), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including a calculation of the “Transfer Premium,” as
that term is defined in Section 14.3 below, in connection with such Transfer,
the name and address of the proposed Transferee and a copy of all operative
documents to be executed to evidence such Transfer or the agreements incidental
or related to such Transfer, and (iv) current financial statements of the
proposed Transferee and such other information as Landlord may reasonably
require. If there are any changes in the terms and conditions from those
specified in the Transfer Notice (i) such that Landlord would initially have
been entitled to refuse its consent to such Transfer under this Section 14.1, or
(ii) which would cause the proposed Transfer to be more favorable to the
Transferee than the terms set forth in Tenant’s original Transfer Notice, Tenant
shall again submit the Transfer to Landlord for its approval and other action
under this Article 14 (including Landlord’s right of recapture, if any, under
Section 14.4 of this Lease). As a condition to Landlord’s consent to any
proposed assignment of this Lease, Landlord may, at Landlord’s sole option,
require the assigning Tenant to guaranty the proposed assignee’s obligations
under this Lease, as assigned; and, if Landlord so elects, the assigning Tenant
shall execute a Guaranty of Lease in a form reasonably acceptable to Landlord.
Any Transfer made without Landlord’s prior written consent shall, at Landlord’s
option, be null, void and of no effect, and shall, at Landlord’s option,
constitute a default by Tenant under this Lease. Whether or not Landlord shall
grant consent, Tenant shall pay Landlord’s review and processing fees, as well
as any reasonable legal fees incurred by Landlord, within thirty (30) days after
written request by Landlord. Notwithstanding any contrary provision of this
Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent to a proposed Transfer or otherwise
has breached its obligations under this Article 14, Tenant’s and such
Transferee’s only remedy shall be to seek a declaratory judgment and/or
injunctive relief, and Tenant, on behalf of itself and, to the extent permitted
by law, such proposed Transferee waives all other remedies against Landlord,
including without limitation, the right to seek monetary damages or to terminate
this Lease.

14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to
any proposed Transfer of the Subject Space to the Transferee on the terms
specified in the Transfer Notice. The parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply, without limitation as to other reasonable grounds for withholding
consent: (i) the Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building, or would be a
significantly less prestigious occupant of the Building than Tenant; (ii) the
Transferee intends to use the Subject Space for purposes which are not permitted
under this Lease; (iii) the Transferee is either a governmental agency or
instrumentality thereof; (iv) the Transfer will result in more than a reasonable
and safe number of occupants per floor within the Subject Space; (v) the
Transferee is not a party of reasonable financial worth and/or financial
stability in light of the responsibilities involved under the Lease on the date
consent is requested; (vi) the proposed Transfer would cause Landlord to be in
violation of another lease or agreement to which Landlord is a party, or would
give an occupant of the Building a right to cancel its lease; (vii) the terms of
the proposed Transfer will allow the Transferee to exercise a right of renewal,
right of expansion, right of first offer, or other similar right held by Tenant
(or will allow the Transferee to occupy space leased by Tenant pursuant to any
such right); (viii) either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (A) occupies space in the Building at the
time of the request for consent, (B) is negotiating with Landlord to lease space
in the Building at such time, or (C) has negotiated with Landlord during the
twelve (12)-month period immediately preceding the Transfer Notice; (ix) in the
case of a proposed sublease by Tenant, the rent to be paid Tenant by the
proposed Transferee is less than the prevailing fair market rent (as determined
by Landlord) for the Subject Space on a non-sublease basis; or (x) Landlord has
not received assurances acceptable to Landlord that all past due amounts owing
by Tenant to Landlord, if any, will be paid and all defaults on the part of
Tenant, if any, will be cured prior to the effective date of the proposed
Transfer.

 

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14.3 Transfer Premium. If Landlord consents to a Transfer, Tenant shall pay to
Landlord within thirty (30) days of Tenant’s receipt from Transferee, fifty
percent (50%) of any “Transfer Premium,” as that term is defined in this
Section 14.3, received by Tenant from such Transferee. “Transfer Premium” shall
mean all rent, additional rent or other consideration payable by such Transferee
in excess of the Rent and Additional Rent payable by Tenant under this Lease on
a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for
(i) any changes, alterations and improvements to the Premises in connection with
the Transfer, and (ii) any brokerage commissions in connection with the Transfer
(collectively, the “Subleasing Costs”). “Transfer Premium” shall also include,
but not be limited to, key money and bonus money paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer. Landlord or its authorized representatives shall
have the right at all reasonable times to audit the books, records and papers of
Tenant relating to any Transfer, and shall have the right to make copies
thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency and Landlord’s costs of such audit.

14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any Transfer
Notice, to recapture the Subject Space from Tenant. Such recapture notice shall
cancel and terminate this Lease with respect to the Subject Space as of the date
stated in the Transfer Notice as the effective date of the proposed Transfer.
However, if Landlord elects to recapture the Subject Space, Tenant may, within
ten (10) days after Tenant’s receipt Landlord’s notice thereof, deliver written
notice to Landlord indicating that Tenant is rescinding its request for consent
to the proposed Transfer, in which case such Transfer shall not be consummated
and this Lease shall remain in full force and effect as to the portion of the
Premises that was the subject of the Transfer. Tenant’s failure to so notify
Landlord in writing within said ten (10) day period shall be deemed to
constitute Tenant’s election to allow Landlord to recapture the Subject Space.
In the event of a recapture by Landlord, if this Lease shall be canceled with
respect to less than the entire Premises, the Rent reserved herein shall be
prorated on the basis of the number of rentable square feet retained by Tenant
in proportion to the number of rentable square feet contained in the Premises,
and this Lease as so amended shall continue thereafter in full force and effect,
and upon request of either party, the parties shall execute written confirmation
of the same. If Landlord declines, or fails to elect in a timely manner to
recapture the Subject Space under this Section 14.4, then, provided Landlord has
consented to the proposed Transfer, Tenant shall be entitled to proceed to
transfer the Subject Space to the proposed Transferee.

14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, and
(iv) no Transfer relating to this Lease or agreement entered into with respect
thereto, whether with or without Landlord’s consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease.

14.6 Additional Transfers. For purposes of this Lease, the term “Transfer” shall
also include a change in the ownership of twenty-five percent (25%) or more of
the ownership interests of Tenant or of any entity controlling Tenant (a “Parent
Entity”) within a twelve (12)-month period, unless Tenant or such Parent Entity
is a publicly-held company whose stock trades on a nationally-recognized
exchange. For purposes of this Section “controlling” shall mean the ability,
directly or indirectly, to direct or cause the direction of the management of
Tenant, whether through ownership of an equity interest, by contract, or
otherwise.

14.7 Affiliate Transfers. Notwithstanding anything to the contrary contained in
this Article 14, an assignment or subletting of all or a portion of the Premises
to an affiliate (“Affiliate”) of Tenant (an entity which is controlled by,
controls, or is under common control with, Tenant, or that becomes a parent,
successor or affiliate of Tenant, or is a successor of Tenant by reason of
merger, consolidation, public offering, reorganization, dissolution, or sale of
stock, membership or partnership interests or assets) shall not be deemed a
transfer under this Article 14, provided that (i) Tenant notifies Landlord of
any such assignment or sublease prior to the effective date thereof and promptly
supplies Landlord with any documents or information requested by Landlord
regarding such assignment or sublease to such Affiliate (including, in the event
of an assignment, evidence of the assignee’s assumption of Tenant’s obligations
under this Lease or, in the event of a sublease, evidence of the sublessee’s
assumption, in full, of the obligations of Tenant with respect to the portion of
the Premises so subleased, other than the payment of rent), (ii) such assignment
or sublease is not a subterfuge by

 

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Tenant to avoid its obligations under this Lease, (iii) such assignment or
sublease does not cause Landlord to be in default under any existing lease at
the Building, and (iv) the net worth of such Affiliate is not less than
reasonably required to fulfill the terms of this Lease. An assignee of Tenant’s
entire interest in this Lease pursuant to the immediately preceding sentence may
be referred to herein as an “Affiliated Assignee.” “Control,” as used in this
Article 14 shall mean the ownership, directly or indirectly, of greater than
fifty-one percent (51%) of the voting securities of, or possession of the right
to vote, in the ordinary direction of its affairs, of greater than fifty-one
percent (51%) of the voting interest in, an entity. Nothing contained in this
Section 14.7 shall be deemed to release Tenant from its obligations under this
Lease.

 

15. SURRENDER OF PREMISES AND REMOVAL OF TENANT’S PROPERTY

No act or thing done by Landlord or any agent or employee of Landlord during the
Lease Term shall be deemed to constitute an acceptance by Landlord of a
surrender of the Premises unless such intent is specifically acknowledged in a
writing signed by Landlord. Upon the expiration of the Lease Term, or upon any
earlier termination of this Lease, Tenant shall quit and surrender possession of
the Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear, casualty damage, and repairs which are specifically made the
responsibility of Landlord hereunder excepted. Upon such expiration or
termination, Tenant shall remove from the Premises all debris and rubbish, such
items of furniture, equipment, and cabling installed by or at the request of
Tenant that is not contained in protective conduit or metal raceway, other
articles of personal property owned by Tenant and any property Landlord requires
Tenant to remove pursuant to Section 8.3. To the fullest extent permitted by
applicable law, any unused portion of Tenant’s Security Deposit may be applied
to offset Landlord’s costs set forth in the preceding sentence. Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal. In addition, if Tenant fails to remove Tenant’s personal property
from the Premises within 30 days after written notice, Landlord may (but shall
not be obligated to) deem all or any part of Tenant’s personal property to be
abandoned, and title to Tenant’s personal property (except with respect to any
Hazardous Material (defined in Paragraph 29)) shall be deemed to be immediately
vested in Landlord with no obligation on the part of Landlord to compensate
Tenant for such property.

 

16. HOLDING OVER

If Tenant holds over after the expiration of the Lease Term hereof, with or
without the consent of Landlord, such tenancy shall be from month-to-month only,
and Base Rent shall be payable at a monthly rate equal to 150% of the greater
of: (A) the sum of the Base Rent and Tenant’s Share of Operating Expenses due
for the period immediately preceding the holdover; or (B) the sum of the fair
market rent for the Premises and Tenant’s Share of Operating Expenses due for
the period immediately preceding the holdover. Such month-to-month tenancy shall
be subject to every other term, covenant and agreement contained herein. Such
holdover shall not constitute a renewal or extension of the Lease Term and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease upon the expiration or
other termination of this Lease. The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law. In addition to the payment of the amounts
provided above, if Landlord is unable to deliver possession of the Premises to a
new tenant, or to perform improvements for a new tenant, as a result of Tenant’s
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord’s inability to deliver possession, or perform
improvements, such failure shall constitute a default hereunder; and
notwithstanding any other provision of this Lease to the contrary, Tenant shall
be liable to Landlord for, and shall protect Landlord from and indemnify and
defend Landlord against, all losses and damages, including any claims made by
any succeeding tenant resulting from such failure to vacate, and any
consequential damages that Landlord suffers from the holdover. Notwithstanding
the foregoing, Tenant shall have no obligation to compensate Landlord for any
consequential damages or lost profits suffered by any party in connection with
any such holdover, unless, and then only for periods after, Landlord shall have
provided written notice to Tenant that a new tenant has entered into a lease for
all or a portion of the Premises, and at least thirty (30) days have elapsed
since Landlord shall have delivered such notice to Tenant.

 

17. ESTOPPEL CERTIFICATES

Within ten (10) days following a request in writing by Landlord or Tenant,
Landlord or Tenant shall execute and deliver to the requesting party an estoppel
certificate, in such form as may be required by the requesting party or any
prospective mortgagee or purchaser of the Real Property, indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested.

 

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18. SUBORDINATION

Within thirty (30) days after the full execution and delivery of this Lease,
Landlord shall attempt to obtain a commercially reasonable subordination,
nondisturbance and attornment agreement (“SNDA”) from the current lender of the
Building. In the event Landlord is unable to obtain a SNDA within sixty
(60) days after the date of full execution and delivery of this Lease, Tenant
may, at Tenant’s option, directly contact Landlord’s lender and attempt to
negotiate for the execution and delivery of a SNDA. This Lease is subject and
subordinate to all present and future ground or underlying leases of the Real
Property and to the lien of any mortgages or trust deeds, now or hereafter in
force against the Real Property and the Building, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages or trust deeds, or the lessors
under such ground lease or underlying leases, require in writing that this Lease
be superior thereto; provided that a condition to such attornment shall be that
Tenant receives a commercially reasonable nondisturbance agreement. Tenant
covenants and agrees to attorn, without any deductions or set-offs whatsoever,
to the lender or holder of any mortgage or trust deed upon any foreclosure, to
the purchaser upon any foreclosure sale, or to the lessor of a ground or
underlying lease upon the termination thereof, as the case may be, if so
requested to do so by such lender, purchaser or lessor, and to recognize such
lender, purchaser or lessor as the lessor under this Lease. Tenant shall, within
five (5) days of request by Landlord, execute such further instruments or
assurances as Landlord may reasonably deem necessary to evidence or confirm such
attornment and/or the subordination or superiority of this Lease to any such
mortgages, trust deeds, ground leases or underlying leases.

 

19. DEFAULTS; REMEDIES

19.1 Tenant Default. The occurrence of any of the following shall constitute a
default of this Lease by Tenant:

19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, within three (3) days after notice
the same is due; or

19.1.2 Any failure by Tenant (other than a failure pursuant to Section 19.1.1 or
19.1.4) to observe or perform any other provision, covenant or condition of this
Lease to be observed or performed by Tenant where such failure continues for
fifteen (15) days after written notice thereof from Landlord to Tenant; provided
however, that if the nature of such default is such that the same cannot
reasonably be cured within a fifteen (15)-day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default as soon as
possible; or

19.1.3 The entry of an order for relief with respect to Tenant or any guarantor
of this Lease under any chapter of the Federal Bankruptcy Code, the dissolution
or liquidation of Tenant or any guarantor of this Lease, the insolvency of
Tenant or any guarantor of this Lease or the inability of Tenant or any
guarantor of this Lease to pay its debts when due, or the appointment of a
trustee or receiver to take possession of all or substantially all of Tenant’s
or any guarantor’s assets or Tenant’s interest under this Lease that is not
discharged within thirty (30) days; or

19.1.4 The failure of Tenant to execute any documents referenced in Article 17
or 18 within the time periods set forth in those Articles.

Any notice required under this Section 19.1 shall be in lieu of, and not in
addition to, any notice required under current or future Oregon statutes.

19.2 Landlord Default. Landlord shall not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice to Landlord (and any mortgagee of whom Tenant has been
notified) from Tenant specifying in detail Landlord’s failure to perform;
provided however, that if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for its performance, then Landlord shall not
be deemed in default if it commences such performance within such thirty
(30) day period and thereafter diligently pursues the same to completion. Tenant
agrees that, prior to commencing a legal action against Landlord for failure to
cure such default as provided in the preceding sentence, any mortgagee which
received notice of such default shall have an additional thirty (30) days to
cure such default (unless such cure would take longer and such mortgagee has
commenced such cure within said thirty (30) day period). Upon any such uncured
default by Landlord and any mortgagee which received notice of such default,
Tenant may exercise any of its rights provided in law or at equity; provided,
however: (a) Tenant shall have no right to offset or abate rent in the event of
any default by Landlord under this Lease, except to the extent offset rights

 

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are specifically provided to Tenant in this Lease; (b) Tenant shall have no
right to terminate this Lease; (c) Tenant’s rights and remedies hereunder shall
be limited to the extent (i) Tenant has expressly waived in this Lease any of
such rights or remedies and/or (ii) this Lease otherwise expressly limits
Tenant’s rights or remedies; and (d) Landlord will not be liable for any
consequential damages.

 

20. LANDLORD REMEDIES

20.1 Landlord’s Remedies. Upon any default, Landlord shall have the right
without notice or demand (except as provided in Article 19) to pursue any of its
rights and remedies at law or in equity, including, without limitation, any one
or more of the following remedies:

20.1.1 Without terminating this Lease, re-enter and take possession of the
Premises;

20.1.2 Without terminating this Lease, Landlord may relet the Premises as
Landlord may see fit without thereby voiding or terminating this Lease, and for
the purposes of such reletting, Landlord is authorized, at Tenant’s expense, to
make such repairs, redecorating, refurbishments or improvements to the Premises
as may be necessary in the reasonable opinion of Landlord;

20.1.3 Terminate this Lease;

20.1.4 Remove and store, at Tenant’s expense, all the property in the Premises
using such lawful force as may be necessary;

20.1.5 Cure such event of default for Tenant at Tenant’s expense (plus a 5%
administrative fee);

20.1.6 Withhold or suspend payment of sums Landlord would otherwise be obligated
to pay to Tenant under this Lease or any other agreement;

20.1.7 Require all future payments to be made by cashier’s check, money order,
or wire transfer after the first time any check is returned for insufficient
funds, or the second time any sum due hereunder is more than five days late;

20.1.8 Apply any Security Deposit as permitted under this Lease; and/or

20.1.9 Recover such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable Law, including any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease or which in the
ordinary course of events would be likely to result therefrom.

20.2 Measure of Damages.

20.2.1 Calculation. If, as a result of Tenant’s default under this Lease,
Landlord either terminates this Lease or terminates Tenant’s right to possession
of the Premises, Tenant shall immediately surrender and vacate the Premises and
pay Landlord on demand: (a) all Rent accrued through the end of the month in
which the termination becomes effective; (b) interest on all unpaid Rent from
the date due at a rate equal to the lesser of 18% per annum or the highest
interest rate permitted by applicable law; (c) all expenses reasonably incurred
by Landlord in enforcing its rights and remedies under this Lease, including all
reasonable legal expenses; (d) Costs of Reletting (defined below); and (e) all
Landlord’s Rental Damages (defined below). In the event that Landlord relets the
Premises for an amount greater than the Rent due during the Term, Tenant shall
not receive a credit for any such excess.

20.2.2 Definitions. “Costs of Reletting” shall include commercially reasonable
costs, losses and expenses incurred by Landlord in reletting all or any portion
of the Premises including, without limitation, the cost of removing and storing
Tenant’s furniture, trade fixtures, equipment, inventory, or other property,
repairing and/or demolishing the Premises, removing and/or replacing Tenant’s
signage and other fixtures, making the Premises ready for a new tenant,
including the cost of advertising, commissions, architectural fees, legal fees,
and leasehold improvements, and any allowances and/or concessions provided by
Landlord. “Landlord’s Rental Damages” shall mean the total Rent which Landlord
would have received under this Lease (had Tenant made all such Lease payments as
required) for the remainder of the Term minus the amount of such rental loss
that Tenant proves would be reasonably avoided pursuant to Section 20.4 below,
or, if the Premises are relet, the actual rental value (not to be less than the
Rent due during the Term), both discounted to present value at the Prime Rate
(defined below) in effect upon the date of determination. For purposes hereof,
the “Prime Rate” shall be the per annum interest rate publicly announced by a
federally insured bank selected by Landlord in the state in which the Building
is located as such bank’s prime or base rate.

 

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20.3 Tenant Not Relieved from Liabilities. Unless expressly provided in this
Lease, the repossession or re-entering of all or any part of the Premises shall
not relieve Tenant of its liabilities and obligations under this Lease. In
addition, Tenant shall not be relieved of its liabilities under this Lease, nor
be entitled to any damages hereunder, based upon minor or immaterial errors in
the exercise of Landlord’s remedies. No right or remedy of Landlord shall be
exclusive of any other right or remedy. Each right and remedy shall be
cumulative and in addition to any other right and remedy now or subsequently
available to Landlord at law or in equity. If Tenant fails to pay any amount
when due hereunder (after the expiration of any applicable cure period),
Landlord shall be entitled to receive interest on any unpaid item of Rent from
the date initially due (without regard to any applicable grace period) at a rate
equal to the rate set forth in Article 25 below. However, in no event shall the
charges permitted under this Section 20.3 or elsewhere in this Lease, to the
extent they are considered interest under applicable law, exceed the maximum
lawful rate of interest. If any payment by Tenant of an amount deemed to be
interest results in Tenant having paid any interest in excess of that permitted
by law, then it is the express intent of Landlord and Tenant that all the excess
amounts collected by Landlord be credited against the other amounts owing by
Tenant under this Lease. Receipt by Landlord of Tenant’s keys to the Premises
shall not constitute an acceptance or surrender of the Premises. Notwithstanding
any other provision of this Lease to the contrary, Tenant shall hold the
Landlord Indemnified Parties harmless from and indemnify and defend such parties
against, all claims that arise out of or in connection with a breach of this
Lease, specifically including any violation of applicable laws or Contamination
(defined in Article 29) caused by Tenant.

20.4 Mitigation of Damages. Upon termination of Tenant’s right to possess the
Premises, Landlord shall use commercially reasonable efforts to mitigate damages
by reletting the Premises. Landlord shall not be deemed to have failed to do so
if Landlord refuses to lease the Premises to a prospective new tenant with
respect to whom Landlord would be entitled to withhold its consent pursuant to
Article 14, or who (1) is an Affiliate, parent, or subsidiary of Tenant; (2) is
not acceptable to any Mortgagee of Landlord; or (3) is unwilling to accept
reasonable lease terms then proposed by Landlord. Notwithstanding Landlord’s
duty to mitigate its damages as provided herein, Landlord shall not be obligated
(i) to give any priority to reletting Tenant’s space in connection with its
leasing of space in the Building or any complex of which the Building is a part,
or (ii) to accept below market rental rates for the Premises or any rate that
would negatively impact the market rates for the Building. Listing the Premises
with a broker in a manner consistent with the foregoing shall constitute prima
facie evidence of reasonable efforts on the part of Landlord to relet the
Premises.

20.5 Intentionally Omitted.

20.6 Waiver of Default. No waiver by Landlord or Tenant of any violation or
breach of any of the terms, provisions and covenants herein contained shall be
deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained. Forbearance by Landlord in enforcement of one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default. The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.

 

21. COVENANT OF QUIET ENJOYMENT

Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all the
other terms, covenants, conditions, provisions and agreements herein contained
on the part of Tenant to be kept, observed and performed, shall, during the
Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to
the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons lawfully claiming by or through Landlord. The
foregoing covenant is in lieu of any other covenant express or implied.

 

22. SECURITY DEPOSIT

Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the “Security Deposit”) in the amount set forth in
Section 11 of the Summary. The Security Deposit shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the Lease
Term. If Tenant defaults with respect to any provisions of this Lease, Landlord
may use, apply or retain all or any part of the Security Deposit for the payment
of any Rent or any other sum in default, to cure Tenant’s default hereunder, or
to compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant’s default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within five (5) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount, and Tenant’s failure to do so shall be a default
under this Lease. Landlord shall return the Security Deposit (less any portion

 

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thereof used, applied or retained by Landlord as permitted herein) to Tenant
within sixty (60) days following the expiration of the Lease Term. Tenant shall
not be entitled to any interest on the Security Deposit. Tenant hereby waives
the provisions of any applicable Oregon statutes or laws, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises.

 

23. INTENTIONALLY OMITTED

 

24. SIGNS

24.1 Premises Identification and Building Directory Signage. Tenant shall be
entitled, at Landlord’s sole cost and expense, to (i) Building-standard
identification signage outside of Tenant’s Premises on the floor on which
Tenant’s Premises are located, and (ii) to one (1) line on the Building
directory to display Tenant’s name and location in the Building. The location,
quality, design, style, and size of such signage shall be consistent with the
Landlord’s Building standard signage program and will comply with all applicable
governmental requirements, codes or ordinances (including the receipt of any
necessary permits). Any change in Tenant’s signage shall be at Tenant’s sole
cost and expense.

24.2 Prohibited Signage and Other Items. Any other signs, notices, logos,
pictures, names or advertisements which are installed in the Common Areas or on
the exterior of the Building or are visible from outside the Premises and that
have not been individually approved by Landlord may be removed without notice by
Landlord at the sole expense of Tenant.

24.3 Monument Signage. Subject to this Section 24.3, Tenant shall be entitled to
install, at its sole cost and expense, a strip on the Building’s existing
monument sign (“Signage”). The graphics, materials, size, color, design,
lettering, lighting (if any), specifications and exact location of the Signage
(collectively, the “Signage Specifications”) shall be subject to the prior
written approval of Landlord, which approval shall not be unreasonably withheld.
In addition, the Signage and all Signage Specifications therefore shall be
subject to Tenant’s receipt of all required governmental permits and approvals,
and shall be subject to any covenants, conditions and restrictions affecting the
Project. In the event Tenant does not receive the necessary permits and
approvals for the Signage, Tenant’s and Landlord’s rights and obligations under
the remaining provisions of this Lease shall not be affected. The cost of
installation of the Signage, as well as all costs of design and construction of
such Signage and all other costs associated with such Signage, including,
without limitation, permits, maintenance and repair, shall be the sole
responsibility of Tenant. The rights to the Signage shall be personal to the
originally named Tenant and may not be transferred. Should the Signage require
maintenance or repairs as determined in Landlord’s reasonable judgment, Landlord
shall have the right to provide written notice thereof to Tenant and Tenant
shall cause such repairs and/or maintenance to be performed within thirty
(30) days after receipt of such notice from Landlord at Tenant’s sole cost and
expense. Should Tenant fail to perform such maintenance and repairs within the
period described in the immediately preceding sentence, Landlord shall have the
right to cause such work to be performed and to charge Tenant, as Additional
Rent, for the cost of such work. Upon the expiration or earlier termination of
this Lease, Tenant shall, at Tenant’s sole cost and expense, cause the Signage
to be removed from the Building’s monument sign and shall cause the monument
sign to be restored to the condition existing prior to the placement of such
Signage. If Tenant fails to remove such Signage and to restore the monument sign
as provided in the immediately preceding sentence within thirty (30) days
following the expiration or earlier termination of this Lease, then Landlord may
perform such work, and all costs and expenses incurred by Landlord in so
performing such work shall be reimbursed by Tenant to Landlord within ten
(10) days after Tenant’s receipt of invoice therefore. The immediately preceding
sentence shall survive the expiration or earlier termination of this Lease.

Should the name of the original Tenant change, or should this Lease be assigned
to an Affiliated Assignee, then the Signage may be modified at Tenant’s sole
cost and expense to reflect the new name, but only if the new name does not
(i) relate to an entity that is of a character, reputation, or associated with a
political orientation or a faction, that is inconsistent with the quality of the
Building or would otherwise reasonably offend a institutional landlord of a
project comparable to the Building, taking into consideration the level and
visibility of such signage or (ii) cause Landlord to be in default under any
lease or license with another tenant of the Project.

 

25. LATE CHARGES

If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord’s designee when said amount is due, then
(i) Tenant shall pay to Landlord a late charge equal to five percent (5%) of the
amount due (but in no event shall such charge be in excess of the maximum amount
permitted by applicable law) plus any attorneys’ fees incurred by Landlord by
reason of Tenant’s failure to pay

 

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Rent and/or other charges when due hereunder, and (ii) such unpaid amounts shall
thereafter bear interest until paid at a rate equal to the prime rate
established from time to time by the largest federally chartered banking
institution in the State where the Building is located plus five percent
(5%) per annum, provided that in no case shall such rate be higher than the
highest rate permitted by applicable law. The late charge and interest shall be
deemed Additional Rent and the right to require it shall be in addition to all
of Landlord’s other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord’s remedies in any
manner.

 

26. LANDLORD’S RIGHT TO CURE DEFAULT

All covenants and agreements to be kept or performed by Tenant under this Lease
shall be performed by Tenant at Tenant’s sole cost and expense and without any
reduction of Rent. If Tenant shall fail to perform any of its obligations under
this Lease, within a reasonable time after such performance is required by the
terms of this Lease, Landlord may, but shall not be obligated to, after
reasonable prior notice to Tenant, make any such payment or perform any such act
on Tenant’s part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder, in which event Tenant
shall reimburse Landlord, upon demand, for the sums incurred by Landlord in
connection therewith. Tenant’s reimbursement obligations under this Article 26
shall survive the expiration or sooner termination of the Lease Term.

 

27. ENTRY BY LANDLORD

Landlord reserves the right upon twenty-four (24) hours prior notice (except
that no notice shall be required in the case of an emergency or regularly
scheduled service (such as janitorial)) to the Tenant to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants, or to the ground or underlying lessors; (iii) post or serve notices
of nonresponsibility; or (iv) alter, improve or repair the Premises or the
Building if necessary to comply with current Building codes or other applicable
laws, or for structural alterations, repairs or improvements to the Building.
Tenant shall be permitted to have a representative of Tenant present during any
entry by Landlord and which representative may accompany Landlord during such
entry. Landlord agrees to comply with any reasonable security requirements of
Tenant and any requirements regarding any clean rooms located within the
Premises of which Landlord has been notified and which Tenant’s representative
points out during any entry by Landlord. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord; (B) take possession due to
any breach of this Lease in the manner provided herein; (C) perform any
covenants of Tenant which Tenant fails to perform; or (D) to address an
emergency. Any such entries shall be without the abatement of Rent, shall not be
deemed an unlawful entry, or an actual or constructive eviction, and shall
include the right to take such reasonable steps as required to accomplish the
stated purposes. Tenant hereby waives any claims for damages or for any injuries
or inconvenience to or interference with Tenant’s business, lost profits, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. Landlord will use commercially reasonable efforts to
minimize any interference with tenant’s business operations as a result of
Landlord’s entry pursuant to this Article 27.

 

28. TENANT PARKING

Subject to compliance with the rules and regulations reasonably prescribed by
Landlord, Tenant shall be provided parking passes on a monthly basis throughout
the Lease Term in the amount set forth in Section 12 of the Summary to park in
the Parking Facilities, on a non-exclusive basis. In the event Tenant installs
any improvements or alterations in the parking area (which items will all be
subject to Landlord’s prior consent as outlined elsewhere in this Lease), any
parking spaces blocked or covered by reason of such improvements or alterations
shall count towards the number of parking passes which Tenant is entitled to
hereunder. In no event shall Tenant use more than the number of parking passes
allocated to Tenant by Section 12 of the Summary. Landlord may, without
incurring any liability to Tenant and without any abatement of Rent under this
Lease, from time to time, close-off or restrict access to the Parking
Facilities, or relocate Tenant’s parking passes to other parking structures
and/or surface parking areas within a reasonable distance of the Premises, for
purposes of permitting or facilitating any such construction, alteration,
improvements or repairs with respect to the Parking Facilities or to accommodate
or facilitate renovation, alteration, construction or other modification of
other improvements or structures located on the Real Property. In the event
there is any parking tax or other charges imposed by governmental authorities in
connection with the use of such parking, such taxes and/or charges shall be paid
directly by Tenant or the parking users, or, if directly imposed against
Landlord, Tenant shall reimburse Landlord for all such taxes and/or charges.

 

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29. HAZARDOUS MATERIALS

29.1 Restrictions. Except for de minimis quantities of household cleaning
products and office supplies used in the ordinary course of Tenant’s business at
the Premises or materials and goods used or stored as part of Tenant’s Permitted
Use hereunder (such use and storage to which Landlord consents, subject to the
terms and conditions of this Section 29.1), Tenant shall not permit or cause any
party to bring any Hazardous Material upon the Premises or store or use any
Hazardous Material in or about the Premises without Landlord’s prior written
consent, which consent may be withheld in Landlord’s sole and absolute
discretion. Landlord’s consent to Tenant’s use of any Hazardous Materials is
given in reliance on Tenant’s representation and warranty (which Tenant hereby
gives) that the Hazardous Materials in question (1) are necessary in the
ordinary course of Tenant’s business, and (2) shall be used, kept, and disposed
of in compliance with all Environmental Laws and other applicable laws. Tenant
will (i) obtain and maintain in full force and effect all Environmental Permits
(as defined below) that may be required from time to time under any
Environmental Laws applicable to Tenant or the Premises and (ii) be and remain
in compliance with all terms and conditions of all such Environmental Permits
and with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
all Environmental Laws applicable to Tenant or the Premises. As used in this
Lease, the term “Environmental Law” means any present or future federal, state
or local statutory or common law, or any regulation, ordinance, code, plan,
order, permit, grant, franchise, concession, restriction or agreement issued,
entered, promulgated or approved thereunder, relating to (a) the environment,
human health or safety, including, without limitation, emissions, discharges,
releases or threatened releases of Hazardous Materials (as defined below) into
the environment (including, without limitation, air, surface water, groundwater
or land), or (b) the manufacture, generation, refining, processing,
distribution, use, sale, treatment, receipt, storage, disposal, transport,
arranging for transport, or handling of Hazardous Materials. “Environmental
Permits” means, collectively, any and all permits, consents, licenses, approvals
and registrations of any nature at any time required pursuant to, or in order to
comply with, any Environmental Law. Concurrently with the execution of this
Lease and upon any change in the items or quantities used or on each annual
anniversary of the Commencement Date thereafter, Tenant agrees to provide
Landlord with a list of any and all Hazardous Materials to be used or stored in
or about the Premises, which list shall include what the materials are used for,
the quantity being used or stored, any permits or other information relating to
such materials and proof of Tenant’s compliance with Environmental Laws relating
to such materials (e.g., MSDS information) and any other information reasonably
requested by Landlord, which list Tenant will update as required in the event
there are any changes to such list. In the event Landlord determines that any
Hazardous Materials which Tenant intends to use in the Premises pose a risk to
persons or property, Landlord may either impose reasonable restrictions on
Tenant’s use of such Hazardous Materials or prohibit the use of such materials,
provided that any prohibition will be accompanied by a written statement
detailing the reasons for such prohibition. Upon the expiration or earlier
termination of this Lease, Tenant agrees to promptly remove from the Premises,
the Buildings and the Real Property, at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous
Materials which are installed, brought upon, stored, used, generated or released
upon, in, under or about the Premises, the Buildings and/or the Real Property or
any portion thereof by Tenant and/or any Tenant Parties (such obligation to
survive the expiration or sooner termination of this Lease), regardless of
whether such items were brought onto the Premises, Building and/or Real Property
before, during or after the Term of this Lease.

29.2 Remediation. Tenant shall, at its expense, monitor the Premises for the
presence of Hazardous Materials or conditions which may reasonably give rise to
Contamination (defined below) and promptly notify Landlord if it suspects
Contamination in the Premises. Any remediation of Contamination caused by a
Tenant Party or its contractors or invitees which is required by law or which is
deemed necessary by Landlord, in Landlord’s opinion, shall be performed by
Landlord and Tenant shall reimburse Landlord for the cost thereof, plus a 5%
administrative fee. Tenant shall be liable for, and shall indemnify, defend,
protect and hold Landlord and the Landlord Indemnified Parties harmless from and
against, any and all claims, damages, judgments, suits, causes of action,
losses, liabilities and expenses, including testing, remediation and consultant
and reasonable attorneys’ fees and court costs, arising or resulting from
(a) any Contamination on or about the Premises, Building or Real Property caused
by Tenant or any Tenant Parties; or (b) any breach of this Article 29 by Tenant.
The terms of this Section 29 shall survive the expiration or termination of this
Lease.

29.3 Definitions. A “Hazardous Material” is any substance the presence of which
requires, or may hereafter require, notification, investigation, or remediation
under any laws or which is now or hereafter defined, listed, or regulated by any
governmental authority as a “hazardous waste”, “extremely hazardous waste”,
“solid waste”, “toxic substance”, “hazardous substance”, “hazardous material” or
“regulated substance”, or otherwise regulated under any Laws. “Contamination”
means the existence or any release or disposal of a Hazardous Material or
biological or organic contaminant, including any such contaminant which could
adversely impact air quality, such as mold, fungi, or other bacterial agents,
in, on, under, at, or from the Premises, the Building, or the Real Property
which may result in any liability, fine, use restriction, cost recovery

 

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lien, remediation requirement, or other government or private party action, or
imposition affecting any Landlord Indemnified Party. For purposes of this Lease,
claims arising from Contamination shall include diminution in value,
restrictions on use, adverse impact on leasing space, and all costs of site
investigation, remediation, removal, and restoration work, including response
costs under CERCLA and similar statutes.

29.4 Existing Hazardous Materials. Tenant was previously a Tenant in the
Building pursuant to that certain Lease dated as of March, 1996 by and between
Tenant and Science Park Limited Partnership I as landlord, (together with all
amendments to such lease, the “Existing Lease”). Landlord is the successor in
interest to Science Park Limited Partnership I. Pursuant to the Existing Lease,
Tenant is responsible for remediating, removing and otherwise cleaning up
certain Hazardous Materials located on the Real Property, including storage
tanks and related equipment attendant to such Hazardous Materials use and other
equipment installed by or on behalf of Tenant outside the Premises. This Lease
will not be construed in any way to release Tenant of such remediation
obligations and all such remediation work shall be diligently performed within
ninety (90) days after the expiration or earlier termination of this Lease (no
holdover charges will apply to Tenant’s restoration work for such exterior items
so long as such work in completed within the ninety (90) day period set forth
above).

 

30. MISCELLANEOUS PROVISIONS

30.1 Binding Effect. Landlord has delivered a copy of this Lease to Tenant for
Tenant’s review only, and the delivery of it does not constitute an offer to
Tenant or an option. This Lease shall not be effective against any party hereto
until an original copy of this Lease has been signed by such party and delivered
to the other party. An electronic or facsimile copy of the Lease shall be deemed
an original for purposes of this Section 30.1. Each of the provisions of this
Lease shall extend to and shall, as the case may require, bind or inure to the
benefit not only of Landlord and of Tenant, but also of their respective
successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions of Article 14 of this Lease.

30.2 No Air Rights. No rights to any view or to light or air over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease.

30.3 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building require a modification or modifications of this
Lease, which modification or modifications will not cause an increased cost or
expense to Tenant or in any other way materially and adversely change the rights
and obligations of Tenant hereunder, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents are
required therefor and deliver the same to Landlord within ten (10) days
following the request therefor.

30.4 Transfer of Landlord’s Interest. In the event Landlord transfers all or any
portion of its interest in the Real Property and Building and in this Lease,
Landlord shall automatically be released from all remaining liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord’s obligations hereunder after the date of transfer.

30.5 Captions. The captions of Articles and Sections are for convenience only
and shall not be deemed to limit, construe, affect or alter the meaning of such
Articles and Sections.

30.6 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

30.7 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

30.8 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord hereunder (including
any successor landlord) and any recourse by Tenant against Landlord shall be
limited solely and exclusively to the interest of Landlord in the Building, and
neither Landlord, nor any of its constituent partners, members, shareholders,
officers, directors or employees shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant.

30.9 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations,

 

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arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. This Lease and any side letter or separate agreement executed by Landlord
and Tenant in connection with this Lease and dated of even date herewith contain
all of the terms, covenants, conditions, warranties and agreements of the
parties relating in any manner to the rental, use and occupancy of the Premises.
None of the terms, covenants, conditions or provisions of this Lease can be
modified, deleted or added to except in writing signed by the parties hereto.
Any deletion of language from this Lease prior to its execution by Landlord and
Tenant shall not be construed to raise any presumption, canon of construction or
implication, including, without limitation, any implication that the parties
intended thereby to state the converse of the deleted language. The parties
hereto acknowledge and agree that each has participated in the negotiation and
drafting of this Lease; therefore, in the event of an ambiguity in, or dispute
regarding the interpretation of, this Lease, the interpretation of this Lease
shall not be resolved by any rule of interpretation providing for interpretation
against the party who caused the uncertainty to exist or against the draftsman.

30.10 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions, fire
or other casualty, and other causes beyond the reasonable control of the party
obligated to perform, except with respect to the obligations imposed with regard
to Rent and other charges to be paid by Tenant pursuant to this Lease
(collectively, the “Force Majeure”), notwithstanding anything to the contrary
contained in this Lease, shall excuse the performance of such party for a period
equal to any such prevention, delay or stoppage and, therefore, if this Lease
specifies a time period for performance of an obligation of either party, that
time period shall be extended by the period of any delay in such party’s
performance caused by a Force Majeure.

30.11 Notices. Any notice, demand or other communication given under the
provisions of this Lease (collectively, “Notices”) by either party to the other
party shall be effective only if in writing and (a) personally served,
(b) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or (c) sent by a nationally recognized courier
service (e.g., Federal Express) for next-day delivery. Notices shall be directed
to the parties at their respective addresses set forth in the Summary. In the
event that a different address is furnished by either party to the other party
in accordance with the procedures set forth in this Section 30.11, Notices shall
thereafter be sent or delivered to the new address. Notices given in the
foregoing manner shall be deemed given (a) when actually received or refused by
the party to whom sent if delivered by carrier or personally served or (b) if
mailed, on the day of actual delivery or refusal as shown by the addressee’s
registered or certified mail receipt. For purposes of this Section 30.11, a
“business day” is Monday through Friday, excluding holidays observed by the
United States Postal Service.

30.12 Joint and Several Liability. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.

30.13 Attorneys’ Fees. If either party commences litigation against the other
for the specific performance of this Lease, for damages for the breach hereof or
otherwise for enforcement of any remedy hereunder, the prevailing party shall be
entitled to recover from the other party such costs and reasonable attorneys’
fees as may have been incurred, including any and all costs incurred in
enforcing, perfecting and executing such judgment.

30.14 Governing Law; Jurisdiction and Venue. This Lease and the rights and
obligations of the parties shall be interpreted, construed, and enforced in
accordance with the laws of the state in which the Building is located. All
obligations under this Lease are performable in the County in which the Building
is located, which shall be the venue for all legal actions.

30.15 Jury Trial Waiver. TENANT, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT
COUNSEL, WAIVES, RELINQUISHES AND FOREVER FOREGOES THE RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING
TO THIS LEASE OR ANY CONDUCT, ACT OR OMISSION OF LANDLORD, TENANT, OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR
ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH LANDLORD OR TENANT, IN EACH OF
THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

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30.16 Paragraph Headings. The headings and titles to the Articles and Sections
of this Lease are for convenience only and shall have no effect on the
interpretation of any part of this Lease.

30.17 Recording. Tenant shall not record this Lease or any memorandum of lease.

30.18 Authority. Tenant covenants, warrants, and represents that each individual
executing, attesting, and/or delivering this Lease on behalf of Tenant is
authorized to do so on behalf of Tenant; this Lease is binding upon and
enforceable against Tenant; and Tenant is duly organized and legally existing in
the state of its organization and is qualified to do business in the state in
which the Premises are located.

30.19 Relationship. This Lease shall create only the relationship of landlord
and tenant between the parties, and not a partnership, joint venture, or any
other relationship.

30.20 Survival of Obligations. The expiration of the Lease Term, whether by
lapse of time or otherwise, shall not relieve Tenant of any obligations which
accrued prior to or which may continue to accrue after the expiration or early
termination of this Lease. Those terms or provisions of this Lease which this
Lease expressly states shall survive, or which by their context are clearly
intended to survive, the expiration or earlier termination of this Lease, shall
survive the expiration or earlier termination of this Lease.

30.21 Brokers. Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 13 of the Summary (the “Brokers”), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless for, from and against any and all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys’ fees) with respect
to any leasing commission or equivalent compensation alleged to be owing on
account of the indemnifying party’s dealings with any real estate broker or
agent other than the Brokers. Landlord shall pay the Brokers pursuant to a
separate agreement.

30.22 Transportation Management. Tenant shall fully comply with all mandatory
present or future programs intended to manage parking, transportation or traffic
in and around the Building and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.

30.23 Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s financial,
legal, and space planning consultants.

30.24 Landlord Renovations. Tenant acknowledges that Landlord may, but shall not
be obligated to (other than as specifically set forth herein or in the Tenant
Work Letter, if applicable), during the Lease Term renovate, improve, alter, or
modify (collectively, the “Renovations”) the Building, Premises, and/or Real
Property, including without limitation the Parking Facilities, Common Areas,
Systems and Equipment, roof, and structural portions of the same. Tenant hereby
agrees that such Renovations and Landlord’s actions in connection with such
Renovations shall in no way constitute a constructive eviction of Tenant nor
entitle Tenant to any abatement of Rent, except as may be permitted by
Section 6.5 above. Landlord shall have no responsibility or for any reason be
liable to Tenant for any direct or indirect injury to or interference with
Tenant’s business arising from the Renovations, nor shall Tenant be entitled to
any compensation or damages from Landlord for loss of the use of the whole or
any part of the Premises or of Tenant’s personal property or improvements
resulting from the Renovations or Landlord’s actions in connection with such
Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord’s actions in connection with such Renovations. Landlord
shall use commercially reasonable efforts to minimize interference with Tenant’s
business operations during any Renovations.

30.25 Financial Statements. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
that two (2) times in any calendar year), Tenant shall deliver to Landlord a
certified current financial statement of Tenant and any guarantor of this Lease.
The foregoing shall not apply if Tenant’s financial statements are publicly
available (e.g., via the internet).

30.26 Excepted Rights. Landlord shall also have the right (but not the
obligation) to temporarily close the Building if Landlord reasonably determines
that there is an imminent danger of significant damage to the Building or of
personal injury to Landlord’s employees or the occupants of the Building. The
circumstances

 

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under which Landlord may temporarily close the Building shall include, without
limitation, electrical interruptions, hurricanes, terrorist activities and civil
disturbances. A closure of the Building under such circumstances shall not
constitute a constructive eviction nor entitle Tenant to an abatement or
reduction of rent payable hereunder, except as may be permitted under
Section 6.5 above.

30.27 Interpretation of Lease Terms. Each provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law. If any provision of this
Lease or the application of such provision to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected by such
invalidity or unenforceability, unless such provision or such application of
such provision is essential to this Lease.

30.28 Counterparts. This Lease may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one
document.

30.29 OFAC Compliance. For purposes of this Section 30.29, the term “Affiliated
Parties” shall mean Tenant and any and all subsidiaries, predecessors, agents
and affiliates thereof. “Blocked Parties” mean any person or entity (A) that is
itself or an Affiliated Party of an entity listed in the Annex to, or is
otherwise subject to the provisions of, the September 24, 2001 Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism (“Executive Order”), (B) with whom a party is
prohibited from dealing or otherwise engaging in any transaction by any Patriot
Act Related Law (as defined below), (C) who commits, threatens or conspires to
commit or support “terrorism” as defined in the Executive Order, (D) that is
named as a “specially designated national and blocked person” on the most
current list published by the U.S. Department of the Treasury, Office of Foreign
Assets Control at its official website,
http://www.ustreas.gov/offices/enforcement/ofac/ or at any replacement website
or other replacement official publication of such list. The “Patriot Act Related
Laws” are defined as any regulations of the Office of Foreign Asset Control
(“OFAC”) of the Department of the Treasury (including, but not limited to,
OFAC’s Specially Designated and Blocked Persons list) or any statute or
executive order (including, but not limited to, the Executive Order) designed to
limit commercial transactions with designated countries or individuals believed
to be terrorists, narcotic dealers or otherwise engaged in activities contrary
to the interests of the U.S., including, without limitation Title III of the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56), and the
International Money Laundering Abatement and Financial Anti-Terrorism Act of
2001, as the same may be amended from time to time, and any other governmental
law, rule or regulation implementing such laws or purposes. Tenant hereby
represents and warrants that Tenant and all Affiliated Parties (i) have never
been a Blocked Party, and (ii) have been and are currently in full compliance
with all Patriot Act Related Laws. Tenant covenants that neither Tenant nor any
of its Affiliated Parties will do any of the following: (i) conduct any business
or engage in any transaction or deal with any Blocked Person, including the
making or receiving of any contribution of funds, goods or services to or for
the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate any of the prohibitions set forth in any Patriot Act Related
Law. Tenant covenants and agrees to deliver to Landlord reasonable evidence of
its compliance with the provisions of this Section 30.29. Tenant shall implement
an internal methodology for ensuring compliance with the Patriot Act Related
Laws and avoiding business transactions with Blocked Parties. If, at any time,
any of the representations set forth above in this Section 30.29 becomes false
or Tenant breaches any other provision of this Section 30.29, then it shall be
considered a default under this Lease after any applicable notice and cure
period.

[signatures on following page]

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.

 

LANDLORD:

EQUASTONE AMBERGLEN, LLC

a Delaware limited liability company

By: Equastone AmberGlen Manager, LLC

a Delaware limited liability company

Its: Manager

By:  

 

Name:  

 

Its:  

 

By:  

 

Name:  

 

Its:  

 

TENANT:

PLANAR SYSTEMS, INC.,

an Oregon corporation

*By:  

 

Name:  

 

Title:  

 

*By:  

 

Name:  

 

Title:  

 

*NOTE:

If Tenant is a California corporation, then one of the following alternative
requirements must be satisfied:

(A) This Lease must be signed by two (2) officers of such corporation: one being
the chairman of the board, the president or a vice president, and the other
being the secretary, an assistant secretary, the chief financial officer or an
assistant treasurer. If one (1) individual is signing in two (2) of the
foregoing capacities, that individual must identify the two (2) capacities.

(B) If the requirements of (A) above are not satisfied, then Tenant shall
deliver to Landlord evidence in a form reasonably acceptable to Landlord that
the signatory(ies) is (are) authorized to execute this Lease.

If Tenant is a corporation incorporated in a state other than California, then
Tenant shall deliver to Landlord evidence in a form reasonably acceptable to
Landlord that the signatory(ies) is (are) authorized to execute this Agreement.

 

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EXHIBIT A

OUTLINE OF FLOOR PLAN OF PREMISES

[see attached]

 

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LOGO [g31119graph001.jpg]

 

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EXHIBIT B

TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the Premises. This Tenant Work Letter is essentially organized
chronologically and addresses the issues of the construction of the Premises, in
sequence, as such issues will arise during the actual construction of the
Premises. All references in this Tenant Work Letter to Articles or Sections of
“this Lease” shall mean the relevant portions of the Lease to which this Tenant
Work Letter is attached as Exhibit “B”, and all references in this Tenant Work
Letter to Sections of “this Tenant Work Letter” shall mean the relevant portions
of this Tenant Work Letter.

SECTION 1

LANDLORD’S INITIAL CONSTRUCTION IN THE PREMISES

Landlord has constructed, at its sole cost and expense, the base, shell and core
(i) of the Premises and (ii) of the floor of the Building on which the Premises
are located (collectively, the “Base, Shell and Core”).

SECTION 2

IMPROVEMENTS

2.1 Improvement Allowance. Tenant shall be entitled to a one-time improvement
allowance (the “Improvement Allowance “) in the amount of Ten Dollars ($10.00)
per square foot of the Premises for the costs relating to the initial design and
construction of Tenant’s improvements that are permanently affixed to the
Premises (the “Improvements”). In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Improvement Allowance and in no event shall Tenant be entitled to
any credit for any unused portion of the Improvement Allowance, except that
Tenant may elect to use an amount equal to the lesser of (i) any unused portion
of the Improvement Allowance and (ii) $2.00 per square foot of the Premises as a
credit against Tenant’s monthly Base Rent next due under the Lease; provided
Tenant makes such election in writing to Landlord within ten (10) business days
after the date of substantial completion of the Improvements.

2.2 Disbursement of the Improvement Allowance. Except as otherwise set forth in
this Tenant Work Letter, the Improvement Allowance shall be disbursed by
Landlord (each of which disbursements shall be made pursuant to Landlord’s
disbursement process provided below) for costs related to the construction of
the Improvements and for the following items and costs (collectively, the
“Improvement Allowance Items “): (i) payment of the fees of the “Architect” and
the “Engineers,” as those terms are defined in Section 3.1 of this Tenant Work
Letter, and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord’s consultants in connection with
the preparation and review of the “Construction Drawings,” as that term is
defined in Section 3.1 of this Tenant Work Letter; (ii) the cost of permits and
construction supervision fees; (iii) the cost of any changes in the Base, Shell
and Core required by the Construction Drawings; (iv) the cost of any changes to
the Construction Drawings or Improvements required by applicable building codes
(the “Code “); and (v) the “Landlord Coordination Fee,” as that term is defined
in Section 4.3 of this Tenant Work Letter. However, in no event shall more than
$3.00 per square foot of the Improvement Allowance be used for the items
described in (i) and (ii) above; any additional amount incurred as a result of
(i) and (ii) above shall be deemed to constitute an Over-Allowance Amount.
During the construction of the Improvements, Landlord shall make monthly
disbursements of the Improvement Allowance for Improvement Allowance Items for
the benefit of Tenant and shall authorize the release of monies for the benefit
of Tenant as follows.

2.2.1 Monthly Disbursements. On or before the first day of each calendar month,
during the construction of the Improvements (or such other date as Landlord may
designate), Tenant shall deliver to Landlord: (i) a request for payment of the
“Contractor,” as that term is defined in Section 4.1 of this Tenant Work Letter,
approved by Tenant, in a form to be provided by Landlord, showing the schedule,
by trade, of percentage of completion of the Improvements in the Premises,
detailing the portion of the work completed and the portion not completed;
(ii) invoices from all of “Tenant’s Agents,” as that term is defined in
Section 4.2 of this Tenant Work Letter, for labor rendered and materials
delivered to the Premises; (iii) executed mechanic’s lien releases from all of
Tenant’s Agents which shall comply with the appropriate provisions, as
reasonably determined by Landlord, of applicable laws in the state where the
Building is located; and (iv) all other information reasonably requested by
Landlord. Tenant’s request for payment shall be deemed Tenant’s

 

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acceptance and approval of the work furnished and/or the materials supplied as
set forth in Tenant’s payment request. Thereafter, Landlord shall deliver a
check to Tenant in payment of the lesser of: (A) the amounts so requested by
Tenant, as set forth in this Section 2.2.1, above, less a ten percent
(10%) retention (the aggregate amount of such retentions to be known as the
“Final Retention”), and (B) the balance of any remaining available portion of
the Improvement Allowance (not including the Final Retention), provided that
Landlord does not dispute any request for payment based on non-compliance of any
work with the “Approved Working Drawings,” as that term is defined in
Section 3.4 below, or due to any substandard work, or for any other reason.
Landlord’s payment of such amounts shall not be deemed Landlord’s approval or
acceptance of the work furnished or materials supplied as set forth in Tenant’s
payment request.

2.2.2 Final Retention. Subject to the provisions of this Tenant Work Letter, a
check for the Final Retention payable to Tenant shall be delivered by Landlord
to Tenant following the completion of construction of the Premises, provided
that (i) Tenant delivers to Landlord properly executed mechanics lien releases
in compliance with the applicable laws in the state where the Building is
located, (ii) Landlord has determined that no substandard work exists which
adversely affects the mechanical, electrical, plumbing, heating, ventilating and
air conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant’s use of such other tenant’s leased premises in the Building and
(iii) Architect delivers to Landlord a certificate, in a form reasonably
acceptable to Landlord, certifying that the construction of the Improvements in
the Premises has been substantially completed.

2.2.3 Other Terms. Landlord shall only be obligated to make disbursements from
the Improvement Allowance to the extent costs are incurred by Tenant for
Improvement Allowance Items. All Improvement Allowance Items for which the
Improvement Allowance has been made available shall be deemed Landlord’s
property.

2.3 Standard Tenant Improvement Package. Landlord will establish specifications
(the “Specifications “) for the Building-standard components to be used in the
construction of the Improvements in the Premises (collectively, the “Standard
Improvement Package “), which Specifications are available upon request. In the
event no Specifications have been established, Tenant will use materials and
finishes reasonably approved by Landlord. The quality of Improvements shall be
equal to or of greater quality than the quality of the Specifications, provided
that Landlord may, at Landlord’s option, require the Improvements to comply with
certain Specifications. Nothing contained in this Section 2.3 shall impose any
restoration requirement on Tenant other than those contained elsewhere in the
Lease and this Tenant Work Letter.

SECTION 3

CONSTRUCTION DRAWINGS

3.1 Selection of Architect/Construction Drawings. Tenant shall retain an
architect/space planner reasonably approved by Landlord (the “Architect “) to
prepare the “Construction Drawings,” as that term is defined in this
Section 3.1; provided that Landlord hereby approves LRS Architects. Tenant shall
also retain the engineering consultants designated by Landlord (the “Engineers
“) to prepare all plans and engineering working drawings relating to the
structural, mechanical, electrical, plumbing, HVAC and lifesafety work of the
Improvements; provided that Landlord hereby approves R&W Engineering, Inc. The
plans and drawings to be prepared by Architect and the Engineers hereunder shall
be known collectively as the “Construction Drawings .” All Construction Drawings
shall comply with the drawing format and specifications as reasonably determined
by Landlord, and shall be subject to Landlord’s reasonable approval. Tenant and
Architect shall verify, in the field, the dimensions and conditions as shown on
the relevant portions of the base building plans, and Tenant and Architect shall
be solely responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord’s review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not imply
Landlord’s review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord’s
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.

3.2 Final Space Plan. Tenant and the Architect shall prepare the final space
plan for Improvements in the Premises (collectively, the “Final Space Plan”),
which Final Space Plan shall include a layout and designation of all offices,
rooms and other partitioning, their intended use, and equipment to be contained
therein, and shall deliver the Final Space Plan to Landlord for Landlord’s
approval.

 

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3.3. Final Working Drawings. Architect and the Engineers shall complete the
architectural and engineering drawings for the Premises, and the final
architectural working drawings in a form which is complete to allow
subcontractors to bid on the work and to obtain all applicable permits
(collectively, the “Final Working Drawings “) and shall submit the same to
Landlord for Landlord’s approval.

3.4 Permits. The Final Working Drawings shall be approved by Landlord (the
“Approved Working Drawings “) prior to the commencement of the construction of
the Improvements. Tenant shall cause the Architect to immediately submit the
Approved Working Drawings to the appropriate municipal authorities for all
applicable building permits necessary to allow “Contractor,” as that term is
defined in Section 4.1, below, to commence and fully complete the construction
of the Improvements (the “Permits “). No changes, modifications or alterations
in the Approved Working Drawings may be made without the prior written consent
of Landlord, which consent shall not be unreasonably withheld.

SECTION 4

CONSTRUCTION OF THE IMPROVEMENTS

4.1 Contractor. A general contractor shall be retained by the Tenant to
construct the Improvements. Such general contractor (“Contractor”) shall be
selected by the Tenant and approved by Landlord. Landlord hereby approves
Commercial Contractors, Inc. as the Contractor.

4.2 Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers
used by the Tenant (such subcontractors, laborers, materialmen, and suppliers,
and the Contractor to be known collectively as “Tenant’s Agents”) must be
approved in writing by Landlord, which approval shall not be unreasonably
withheld or delayed. If Landlord does not approve any of the Tenant’s proposed
subcontractors, laborers, materialmen or suppliers, the Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord’s
written approval. Notwithstanding the foregoing, the Tenant shall be required to
utilize subcontractors designated by Landlord for any mechanical, electrical,
plumbing, life-safety, sprinkler, structural and air-balancing work.

4.3 Construction of Improvements by Contractor. The Tenant shall independently
retain, in accordance with Section 4.1 above, Contractor to construct the
Improvements in accordance with the Approved Working Drawings. The Tenant shall
pay a logistical coordination fee (the “Landlord Coordination Fee “) to Landlord
in an amount equal to five percent (5%) of the total amount of the construction
contract and general conditions between the Tenant and the Contractor, which
amount represents Landlord’s actual, out of pocket cost of supervising the
construction of the Improvements.

4.4 Indemnification & Insurance.

4.4.1 Indemnity. Tenant’s indemnity of Landlord as set forth in Section 10.1 of
the Lease shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities related in any way to any act or omission of Tenant or
Tenant’s Agents.

4.4.2 Requirements of Tenant’s Agents. Each of Tenant’s Agents shall guarantee
to Tenant and for the benefit of Landlord that the portion of the Improvements
for which it is responsible shall be free from any defects in workmanship and
materials for a period of not less than one (1) year from the date of completion
thereof. All such warranties or guarantees as to materials or workmanship of or
with respect to the Improvements shall be contained in the contract or
subcontract and shall be written such that such guarantees or warranties shall
inure to the benefit of both Landlord and Tenant, as their respective interests
may appear, and can be directly enforced by either. Tenant covenants to give to
Landlord any assignment or other assurances which may be necessary to effect
such right of direct enforcement.

4.4.3 Insurance Requirements.

4.4.3.1 General Coverages. All of Tenant’s Agents shall carry worker’s
compensation insurance covering all of their respective employees, and shall
also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in Article 10 of the Lease.

4.4.3.2 Special Coverages. Tenant shall carry “Builder’s All Risk” insurance in
an amount approved by Landlord covering the construction of the Improvements,
and such other insurance as Landlord may require. Such insurance shall be in
amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord.

 

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4.4.3.3 General Terms. Certificates for all insurance carried pursuant to this
Section 4.4.3.3 shall be delivered to Landlord before the commencement of
construction of the Improvements and before the Contractor’s equipment is moved
onto the site. In the event that the Improvements are damaged by any cause
during the course of the construction thereof, Tenant shall immediately repair
the same at Tenant’s sole cost and expense. Landlord may, in its discretion,
require Tenant to obtain a lien and completion bond or some alternate form of
security satisfactory to Landlord in an amount sufficient to ensure the
lien-free completion of the Improvements and naming Landlord as a co-obligee.

SECTION 5

MISCELLANEOUS

5.1 Tenant’s Representative. The Tenant has designated Cresa Partners as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

5.2 Landlord’s Representative. Landlord has designated Evergreen Engineering as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

5.3 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated,
all references herein to a “number of days” shall mean and refer to calendar
days.

5.4 Tenant’s Lease Default. Notwithstanding any provision to the contrary
contained in this Lease, if an event of default as described in Section 19.1 of
the Lease or this Tenant Work Letter has occurred at any time on or before the
Substantial Completion of the Premises, then (i) in addition to all other rights
and remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Improvement Allowance
and/or Landlord may cause Contractor to cease the construction of the Premises
(in which case, Tenant shall be responsible for any delay in the Substantial
Completion of the Premises caused by such work stoppage as set forth in
Section 5.2 of this Tenant Work Letter), and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be forgiven until such
time as such default is cured pursuant to the terms of this Lease.

5.5 Occupancy by Tenant Prior to the Commencement Date. Tenant shall have access
to the Premises prior to the Commencement Date for the purpose of constructing
the improvements pursuant to this Tenant Work Letter and otherwise preparing the
Premises for Tenant’s occupancy. Notwithstanding anything to the contrary
contained herein, Tenant shall also have the right to commence business from the
Premises during the period prior to the Commencement Date, provided that
(i) Tenant shall give Landlord prior notice of any such occupancy of the
Premises, (ii) a certificate of occupancy (or its equivalent) shall have been
issued by the appropriate governmental authorities for the Premises, and
(iii) all of the terms and conditions of this Lease shall apply during such
early occupancy period (if any), except that Tenant’s obligation to pay monthly
Base Rent or Additional Rent shall not apply during such period.

 

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EXHIBIT C

[AMBERGLEN]

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Building.

1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises. Tenant shall bear the cost of any
lock changes or repairs required by Tenant. Two keys will be furnished by
Landlord for the Premises, and any additional keys required by Tenant must be
obtained from Landlord at a reasonable cost to be established by Landlord.

2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises, unless electrical hold
backs have been installed. Landlord may supply access cards for Tenant’s
employees, which cards will be furnished at a reasonable cost to be established
by Landlord. Tenant will be responsible for returning all access cards upon the
expiration or earlier termination of the Lease and will pay a reasonable
replacement fee for any lost or stolen cards.

3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. The Landlord and its agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of invasion,
mob, riot, public excitement, or other commotion, Landlord reserves the right to
prevent access to the Building during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.

4. Landlord shall have the right to prescribe the weight, size and position of
all safes and other heavy property brought into the Building. Safes and other
heavy objects shall, if considered necessary by Landlord, stand on supports of
such thickness as is necessary to properly distribute the weight. Landlord will
not be responsible for loss of or damage to any such safe or property in any
case. All damage done to any part of the Real Property, its contents, occupants
or visitors by moving or maintaining any such safe or other property shall be
the sole responsibility of Tenant and any expense of said damage or injury shall
be borne by Tenant.

5. No furniture, freight, packages, supplies, equipment or merchandise will be
brought into or removed from the Building or carried up or down in the stairs or
elevators, except upon prior notice to Landlord, and in such manner, in such
specific stairwell or elevator, and between such hours as shall be designated by
Landlord. Tenant shall provide Landlord with not less than 24 hours prior notice
of the need to utilize an elevator or stairwell for any such purpose, so as to
provide Landlord with a reasonable period to schedule such use and to install
such padding or take such other actions or prescribe such procedures as are
appropriate to protect against damage to the elevators, stairwells or other
parts of the Building. In no event shall Tenant’s use of the elevators or
stairwells for any such purpose be permitted during the hours of 7:00 a.m. -
9:00 a.m., 11:30 a.m. - 1:30 p.m. and 4:30 p.m. - 6:30 p.m.

6. Landlord shall have the right to control and operate the public portions of
the Real Property, the public facilities, the heating and air conditioning, and
any other facilities furnished for the common use of tenants, in such manner as
is customary for comparable buildings in the vicinity of the Building.

7. The requirements of Tenant will be attended to only upon application at the
Office of the Building or at such office location designated by Landlord.
Employees of Landlord shall not perform any work or do anything outside their
regular duties unless under special instructions from Landlord.

8. Tenant shall not disturb, solicit, or canvass any occupant of the Building
and shall cooperate with Landlord or Landlord’s agents to prevent same.

 

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9. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose employees or agents, shall have caused it.

10. Tenant shall not overload the floor of the Premises, nor mark, drive nails
or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord’s consent first had and
obtained.

11. Except for vending machines intended for the sole use of Tenant’s employees
and invitees, no vending machine or machines of any description other than
fractional horsepower office machines shall be installed, maintained or operated
upon the Premises without the written consent of Landlord.

12. Tenant shall not use or keep in or on the Premises or the Real Property any
kerosene, gasoline or other inflammable or combustible fluid or material.

13. Tenant shall not use any method of heating or air conditioning other than
that which may be supplied by Landlord, without the prior written consent of
Landlord.

14. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors, or vibrations, or interfere
in any way with other tenants or those having business therein.

15. Tenant shall not bring into or keep within the Building or the Premises any
animals, birds, bicycles or other vehicles.

16. No cooking shall be done or permitted by any tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for lodging or for
any improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages, provided that such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations, and does not
cause odors which are objectionable to Landlord and other Tenants.

17. Landlord will approve where and how telephone and telegraph wires are to be
introduced to the Premises. No boring or cutting for wires shall be allowed
without the consent of Landlord. The location of telephone, call boxes and other
office equipment affixed to the Premises shall be subject to the approval of
Landlord.

18. Landlord reserves the right to exclude or expel from the Real Property any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

19. Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use the same only as a means of ingress and egress for the
Premises.

20. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Building’s heating and air conditioning system, and shall refrain from
attempting to adjust any controls. This includes the closing of exterior blinds,
disallowing the sun rays to shine directly into areas adjacent to exterior
windows.

21. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the area in
which the Building is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made
only through entry-ways, stairwells and elevators provided for such purposes at
such times as Landlord shall designate.

22. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

 

  EXHIBIT C   Amberglen   -2-   Planar Systems

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23. Tenant shall assume any and all responsibility for protecting the Premises
from theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed, when the Premises are not occupied.

24. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Building.

25. No awnings or other projection shall be attached to the outside walls of the
Building without the prior written consent of Landlord. No curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord.

26. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or
other articles be placed on the windowsills.

27. The washing and/or detailing of or, the installation of windshields, radios,
telephones in or general work on, automobiles shall not be allowed on the Real
Property.

28. Food vendors shall be allowed in the Building upon receipt of a written
request from the Tenant. The food vendor shall service only the tenants that
have a written request on file in the Building Management Office. Under no
circumstance shall the food vendor display their products in a public or Common
Area including corridors and elevator lobbies. Any failure to comply with this
rule shall result in immediate permanent withdrawal of the vendor from the
Building.

29. Tenant must comply with requests by the Landlord concerning the informing of
their employees of items of importance to the Landlord.

30. Tenant shall comply with any non-smoking ordinance adopted by any applicable
governmental authority.

31. Tenant and Tenant’s employees, agents, contractors and other invitees shall
not be permitted to bring firearms onto the Real Property or surrounding areas
at any time.

32. Landlord reserves the right at any time to change or rescind any one or more
of these Rules and Regulations, or to make such other and further reasonable
Rules and Regulations as in Landlord’s judgment may from time to time be
necessary for the management, safety, care and cleanliness of the Real Property,
and for the preservation of good order thereof, as well as for the convenience
of other occupants and tenants thereof. Landlord shall not be responsible to
Tenant or to any other person for the nonobservance of the Rules and Regulations
by another tenant or other person. Tenant shall be deemed to have read these
Rules and Regulations and to have agreed to abide by them as a condition of its
occupancy of the Premises.

 

    Amberglen   -3-   Planar Systems