Exhibit
10.34


 


ABSOLUTELY
NET


BASIC LEASE
PROVISIONS


 


The following lease provisions are hereby incorporated into and made a
part of the Absolutely Net Commercial Lease to which this is attached:


 


A.            DATE OF
LEASE: January 7, 2008 (the “Effective Date”)


 


B.             NAMES AND
ADDRESSES OF PARTIES:


 


LANDLORD:                             FIVE OAKS OFFICE, LLC

621 SW Alder, Suite 605

Portland, OR 97205


 


TENANT:                                                 CREDENCE SYSTEMS CORPORATION

Attn: General Counsel

5975 NW Pinefarm Place

Hillsboro, OR 97124


 


C.             PREMISES: The land and
improvements located at 5800 NW Pinefarm Place, Hillsboro, Washington County,
Oregon, the legal description of which is Lot 2, FIVE OAKS WEST, City of
Hillsboro, Washington County, Oregon. For the purpose hereof, the term “Building”
and “Premises” shall have the same meaning.


 


D.            COMMENCEMENT DATE: January 7, 2008


 


E.             TERM: Commencement
Date through January 6, 2010, with an option of Tenant to extend the same
to January 6, 2011, upon written notice given to Landlord on or before January 6,
2009, if Tenant is not then in default.


 


F.             MINIMUM
MONTHLY RENTAL:    $82,149.10


 


Rent shall be payable to
Landlord at 621 SW Alder, Suite 605, Portland, OR 97205, or such other
address as Landlord may designate in writing. On the Commencement Date, Tenant
shall pay Landlord Minimum Monthly Rental for the period from the Commencement
Date through January 31, 2008.


 


G.            USE: Offices,
laboratory, research and development


 


H.            SECURITY DEPOSIT: $82,149.10


 


I.              TENANT’S REQUIRED INSURANCE: Commercial general liability
insurance,


with
limits of liability not less than $2,000,000.00 combined single limit.


 


BASIC LEASE
PROVISIONS


 

















 


ABSOLUTELY
NET


BASIC LEASE
PROVISIONS


 


The following lease
provisions are hereby incorporated into and made a part of the Absolutely Net
Commercial Lease to which this is attached:


 


A.            DATE OF
LEASE: January 7, 2008 (the “Effective Date”)


 


B.            NAMES AND
ADDRESSES OF PARTIES:


 


LANDLORD:                             FIVE OAKS OFFICE, LLC

621 SW Alder, Suite 605

Portland, OR 97205


 


TENANT:                                                  CREDENCE SYSTEMS CORPORATION

Attn: General Counsel 

5975 NW Pinefarm Place 

Hillsboro, OR 97124


 


C.            PREMISES: The land and
improvements located at 5800 NW Pinefarm Place, Hillsboro, Washington County,
Oregon, the legal description of which is Lot 2, FIVE OAKS WEST, City of
Hillsboro, Washington County, Oregon. For the purpose hereof, the term “Building”
and “Premises” shall have the same meaning.


 


D.            COMMENCEMENT
DATE: January 7, 2008


 


E.             TERM: Commencement
Date through December 31, 2009, with an option of Tenant to extend the
same to December 31, 2010, upon written notice given to Landlord on or
before December 31, 2008, if Tenant is not then in default.


 


F.             MINIMUM MONTHLY RENTAL:    $82,149.10


 


Rent shall be payable to Landlord at 621 SW Alder, Suite 605,
Portland, OR 97205, or such other address as Landlord may designate in writing.
On the Commencement Date, Tenant shall pay Landlord Minimum Monthly Rental for
the period from the Commencement Date through January 31,  2008.


 


G.             USE: Offices,
laboratory, research and development


 


H.            SECURITY
DEPOSIT: $82,149.10


 


I.              TENANT’S
REQUIRED INSURANCE: Commercial general liability insurance, with limits
of liability not less than $2,000,000.00 combined single limit.


 


BASIC LEASE PROVISIONS


 

















 


J.              EXHIBITS: The following Exhibit is
attached hereto and by this reference made a part hereof: None


 


K.            BROKERS: None


 


BASIC LEASE
PROVISIONS


 

















 


ABSOLUTELY
NET OFFICE LEASE


 


1.             Parties. This Lease is made between
Landlord and Tenant named in the Basic Lease


Provisions as of the date set forth therein.


 


2.             Definitions. In addition to other definitions set forth in the
Lease, unless the context otherwise specifies or requires, the terms listed
below shall have the following meanings:


 


(a)           “Building” shall mean the
office building on the Premises.


 


(b)           “CCRs” shall mean that
certain Pacific Realty Associates, L.P. Protective Covenants for Five Oaks West
Business Park dated February 22, 1996, recorded March 1, 1996, as Recorder’s
No. 96018469; amended September 8, 1997, Recorder’s No. 970835161;
October 4, 1999, Recorder’s No. 99113460; August 18, 2000,
Recorder’s No. 2000-066732 and September 21, 2000, Recorder’s No. 2000-076736,
as well as covenants, conditions and restrictions as shown on Partition Plat
1996-029, and Partition Plat 1997-083, official records of Washington County,
Oregon.


 


(c)           “Indemnified Parties” shall mean
Landlord, Landlord’s Lender, Landlord’s Landlord, Landlord’s Property Manager,
together with their respective affiliates, subsidiaries, successors, assigns,
heirs, officers, directors, shareholders, partners, managers, members,
employees, agents and contractors.


 


(d)           “Landlord’s Lender” shall mean the
holder of any loan that is secured by a lien against the Building.


 


(e)           “Landlord’s Landlord” shall mean the
holder of the Landlord’s interests in any lease that is superior to this Lease.


 


(f)            “Landlord’s Property Manager”
shall mean any real estate property manager engaged by Landlord from
time to time to manage the Building.


 


3.             Possession and Commencement.


 


(a)           Tenant is in possession as of the Commencement Date.


 


(b)           Tenant acknowledges and agrees that Tenant has been
in possession of the Premises and that the Premises shall be leased by Landlord
to Tenant in its present “AS IS” condition and that Landlord makes absolutely
no representations or warranties whatsoever with respect to the Premises or the
condition thereof. Tenant acknowledges that Landlord has not investigated and
does not warrant or represent to Tenant that the Premises are fit for the
purposes intended by Tenant or for any other purpose or purposes whatsoever.
Tenant acknowledges that Tenant shall be solely responsible for any and all
actions, repairs, permits, approvals and costs required for the rehabilitation,
renovation, use, occupancy and operation of the Premises in accordance with
applicable governmental requirements, including, without limitation, all
governmental charges and fees, if any, which may be due or payable to
applicable authorities. Tenant agrees that, by leasing the Premises,


 


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Tenant
warrants and represents that Tenant has examined and approved all things
concerning the Premises which Tenant deems material to Tenant’s leasing and use
of the Premises. Tenant further acknowledges and agrees that (i) neither
Landlord nor any agent of Landlord has made any representation or warranty,
express or implied, concerning the Premises or which have induced Tenant to
execute this Lease, and (ii) any other representations and warranties are
expressly disclaimed by Landlord.


 


4.             Rental.


 


(a)           Beginning upon the Commencement Date and continuing
during the entire Term, Tenant shall pay to Landlord the “Minimum Monthly Rental” as described in
the Basic Lease Provisions as well as all “Additional
Rental” described herein. All references to “Rent” or “Rental”
hereinafter set forth in this Lease shall mean the Minimum Monthly
Rental and Additional Rental. The Minimum Monthly Rental shall be paid in
advance, without offset, notice or demand, on or before the first day of each
calendar month during the Term, except for the first calendar month, which
shall be prorated based on the Commencement Date.


 


(b)           Tenant recognizes that late payment of Rental or
other sum due hereunder will result in additional administrative expense to
Landlord, the extent of which additional administrative expense is extremely
difficult and economically impractical to ascertain. Tenant therefore agrees
that if Rental or any sum is due and payable pursuant to this Lease, and when
such amount remains due and unpaid five (5) days after said amount is due,
such amount shall be increased by a “Late
Charge” in an amount equal to five percent (5%) of the amount due.
The amount of the Late Charge to be paid by Tenant shall be reassessed and
added to Tenant’s obligation for each successive monthly period until paid. The
provisions of this subparagraph in no way relieve Tenant of the obligation to
pay Rental or other payments on or before the date on which they are due, nor
do the terms of this subparagraph in any way affect Landlord’s remedies
pursuant to paragraph 25 of this Lease in the event said Rental or other
payment is unpaid after the date due.


 


5.             Security Deposit.  If an amount is set forth in the Basic Lease Provisions as the Security
Deposit, upon execution of this Lease, Landlord acknowledges receipt of Tenant’s
Security Deposit for the full and faithful performance by Tenant of all of the
covenants and terms of this Lease required to be performed by Tenant. Such
Security Deposit shall be returned to Tenant within thirty (30) days after the
expiration of this Lease provided Tenant has fully and faithfully carried out
all of Tenant’s obligations hereunder, including the payment of all amounts due
to Landlord hereunder and the surrender of the Premises to Landlord in the condition
required herein. However, Landlord, at Landlord’s option, may apply such sum on
account of the payment of the last month’s Minimum Monthly Rental hereunder.
Said sum may be commingled with other funds of Landlord and shall not bear
interest. Notwithstanding the above, if Tenant becomes obligated to pay a Late
Charge or upon the occurrence of any Event of Default described in paragraph 24
below, at Landlord’s option, the Security Deposit shall become immediately due
and payable in full to Landlord, to be applied against any Late Charge, damages
or losses suffered by Landlord as a result of Tenant’s failure to timely pay Rental
or an Event of Default. In the event of a sale of the Building subject to this
Lease, Landlord shall transfer the Security Deposit to the purchaser to be held
under the terms of this Lease, and Landlord shall thereupon be released from
all liability for the return of the Security Deposit; Tenant agrees to look
solely to the new Landlord for the return of the Security Deposit.


 


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6.            Taxes.


 


(a)           Tenant shall be responsible
for and pay before delinquent all taxes assessed commencing on the Commencement
Date and continuing during the Term against any leasehold or personal property
of any kind owned by or placed upon or about the Premises by Tenant.


 


(b)           During the Term, as
Additional Rental during the Term, Tenant shall pay before delinquent all real
property taxes and assessments levied, assessed or imposed against the land and
improvements in the Premises. All real property taxes and assessments payable
for a period, part of which shall be beyond the expiration of the Term, shall
be prorated between Landlord and Tenant. Tenant shall deliver evidence of
payment of all taxes and assessments to Landlord upon payment thereof by
Tenant.


 


(c)           If during the Term, the
voters or the Legislature of the state in which the Premises are located enact
any substitute taxes, in any name or form, which may be adopted to replace or
supplement real property taxes, then such substitute taxes shall be considered
the equivalent of real property taxes for the purposes of this paragraph.
Should there be in effect during the Term any law, statute or ordinance which
levies, assesses or imposes any tax (other than any income tax) upon rents,
Tenant shall pay such tax as may be attributed to the rents under this Lease or
shall reimburse Landlord for any such taxes paid by Landlord within ten (10) days
after Landlord bills Tenant for the same.


 


7.             Insurance.


 


(a)           During the Term, Tenant
shall maintain in full force a policy or policies of property insurance written
on a “special causes of loss” form (otherwise known as “all other perils”) to
the extent of at least one hundred percent (100%) percent of the replacement
cost of the Building (excluding foundations) which insurance shall also include
twelve (12) months business interruption insurance, plate glass insurance,
vandalism, malicious mischief, demolition and windstorm coverage for any additional
costs resulting from debris removal and coverage for the enforcement of any
ordinance or law regulating the reconstruction or replacement of any portion of
the Building required to be demolished, removed or modified by reason of the
enforcement of any building, zoning, safety or land use laws as a result of a
covered loss. Tenant shall also carry earthquake insurance in amounts of not
less than $25,000,000.00 covering all of Tenant’s property outside the State of
California.


 


(b)           During the Term, Tenant
shall maintain in full force a commercial general liability insurance policy of
not less than $2,000,000.00, combined single limit, insuring Landlord against
liability for bodily injury and property damage occurring in, or about the
Building.


 


(c)           Tenant shall at its own
expense during the Term also carry in full force and effect:


 


(i)            Fire and/or casualty
insurance with standard extended coverage endorsements to the extent of the
full replacement value of Tenant’s trade fixtures, inventory


 


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9044.051  Five Oaks Office Lease to Credence Lot 2
v2


 

















 


and all other personal property owned or used by
Tenant in the operation of Tenant’s business with the proceeds thereof being
used by Tenant for the replacement of Tenant’s such property in the event of
loss. Said insurance shall provide for a deductible no greater than  $100,000.00.


 


(ii)           Workmen’s Compensation and
Employer’s Liability coverage of not less than statutory limits of the state in
which the Premises is located.


 


(d)           All such insurance policy shall be with an insurance
company or companies with general policyholders’ rating of not less than “A
VIII” as rated in the most current available Best’s Key Rating Guide or “A VIII”
as then currently rated by Standard & Poor’s or Moody’s Investors
Service and which are qualified to do business in the state in which the
Premises are located. Such policies shall provide that the insurance shall not
be cancelable or reduced without at least thirty (30) days’ prior written
notice to Landlord, and shall be deemed primary and noncontributing with any
insurance available to Landlord. Tenant shall furnish Landlord with a
certificate or other acceptable evidence that such insurance is in effect.
Tenant shall also furnish Landlord with evidence that all premiums have been
paid as and when paid by Tenant.


 


(e)           If Tenant shall fail to obtain insurance as required
under this paragraph 7, Landlord may, but shall not be obligated to, obtain
such insurance for Landlord’s own benefit and not for or on behalf of Tenant,
and in such event, Tenant shall pay, as Additional Rent, the premium for such
insurance upon demand by Landlord.


 


(f)            Landlord acknowledges that Tenant may maintain the
insurance required pursuant to this paragraph 7 under what is commonly known as
a “blanket policy”.


 


8.             Intentionally Deleted.


 


9.             Intentionally Deleted.


 


10.           Use of Premises. The Premises shall be used for the Use set forth in
the Basic Lease Provisions and for no other purpose without Landlord’s prior
written consent. In connection with the Use of the Premises, Tenant shall:


 


(a)           Conform to all applicable
laws and regulations of any public authority affecting the Premises and the Use
thereof, and correct at Tenant’s own expense any failure of compliance.


 


(b)           Refrain from any activity
which would be reasonably offensive to Landlord or to owners or users of
adjoining property, or which would tend to create a nuisance or damage the
reputation of the Premises. Without limiting the generality of the foregoing,
Tenant shall not permit any objectionable noise or odor to escape or be emitted
from the Premises.


 


(c)           Refrain from loading the
floors beyond their designed capacity and the point considered safe by a
competent engineer or architect selected by Landlord.


 


(d)           Refrain from making any
marks or attaching any sign, insignia, antenna, aerial


 


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9044.051
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or other device (collectively “Signs”)  to
the exterior or interior walls, windows or roof of the Premises without the
written consent of the Landlord. Landlord hereby consents to the existing
Signs. Notwithstanding Landlord’s consent to any Signs, Tenant may remove all
such Signs upon termination of this Lease and, if removed, repair any and all
damage to the Premises caused thereby at Tenant’s own cost and expense,
including but not limited to, restoring the area under and/or around any such
removed sign to the same condition as the remainder of the exterior of the
Premises. Landlord hereby approves Tenant’s existing signs.


 


11.           Hazardous Materials.


 


(a)           As used herein, the term “Hazardous Material” means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any
federal, state, or local governmental authority including, but not limited to,
those substances, materials, and wastes listed in the United States Department
Transportation Hazardous Materials Table (49 CFR 172.101) or by the United
States Environmental Protection Agency as hazardous substances (40 CFR Part 302)
and any amendments thereto, any material or substance which is defined as a “hazardous waste” pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 USC § 6903), or
defined as a hazardous substance pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 US §
9601 et seq. (42 USC § 9601) together with petroleum products.


 


(b)          Except for Allowable
Amounts, Tenant represents and warrants to Landlord that, to the best of Tenant’s
knowledge, as of the Commencement Date, there are no Hazardous Material upon
the Premises except small quantities for Tenant’s Use normally found in similar
properties, which Hazardous Material is maintained in connection with
applicable law (“Allowable Amounts”). Except for Allowable Amounts, Tenant
shall not generate, store, use, or permit the generation, storage, or usage of
any Hazardous Material upon the Premises by Tenant, its agents, employees,
contractors, or invitees without the prior written consent of Landlord, which
consent may be withheld if Tenant does not demonstrate to Landlord’s reasonable
satisfaction that such Hazardous Material is necessary or useful to Tenant’s
business and will be used, kept, and stored in a manner that complies with all
laws regulating any such Hazardous Material so brought upon or used or kept in
or about the Premises.


 


(c)           Tenant shall not cause or
permit to be discharged into the plumbing or sewage of the Premises any
Hazardous Material.


 


(d)          Without limiting or
otherwise qualifying any provision hereof, Tenant shall, at its sole cost and
expense, comply with any and all rules, regulations, codes, ordinances,
statutes, and other requirements of any lawful governmental authority
respecting Hazardous Material, pollution, harmful chemicals, and other
materials in connection with Tenant’s activities on or about the Premises and
those of its agents, employees, contractors, or invitees. Tenant specifically
agrees to comply with such requirements relating to the handling, use, storage,
and disposal of Hazardous Material and other materials which are considered by
any governmental authority as harmful, dangerous, toxic, flammable, or
otherwise deserving special care. In the furtherance of, and not in limitation
of, Tenant’s obligations hereunder, throughout the Term, Tenant shall do or
cause to be done all things necessary to preserve and keep in full force and
effect permits required for the conduct of its business


 


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9044.051
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and operations from the time of commencement of this Lease until its
expiration or termination.


 


(e)           Tenant shall pay the full
cost of any cleanup, remedial, removal, or restoration work performed on or
about the Premises (including posting a performance bond for the estimated cost
of cleanup if required by Landlord) as required by any governmental authority
in order to remove, neutralize, or otherwise treat Hazardous Material of any
type whatsoever directly or indirectly placed by Tenant or its agents,
employees, contractors, or invitees on or about the Premises.


 


(f)            Tenant shall be solely
responsible for and shall indemnify, defend, and hold Indemnified Parties
harmless from any and all claims, judgments, damages, fines, liabilities,
demands, causes of action, proceedings, hearings, losses, including without
limitation, diminution in value of the Premises, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises, damages arising from any adverse impact on marketing of space, and
sums paid in settlement of claims, attorney’s fees, consultant fees, and expert
fees, which arise during or after the term hereof as a result of contamination
by Hazardous Material from Tenant’s Use or activities, or the use or activities
of Tenant’s agents or contractors relating to the storage, placement or use of
Hazardous Material (hereinafter collectively referred to as “Claims”).  This indemnification by
Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency
or political subdivision because of Hazardous Material present in the soil or
ground water on or under the Premises if caused by Tenant. Without limiting the
foregoing, if the presence of any Hazardous Material on the Premises caused or
permitted by Tenant or its agents or contractors results in any contamination
of the Premises, Tenant shall promptly take all actions at its sole expense as
are necessary to return the Premises to the condition existing prior to the
release of any such Hazardous Material to the Premises, provided that Landlord’s
approval of such actions shall first be obtained. The foregoing indemnity shall
survive the expiration or earlier termination of this Lease. Tenant agrees to
defend all such Claims on behalf of Indemnified Parties with counsel reasonably
acceptable to Landlord.


 


(g)           In addition to any other
right of inspection contained herein, Landlord and its agents shall have the
right, following reasonable notice (except in case of emergency), but not the
duty, to inspect the Premises at any time to determine whether Tenant is
complying with the terms of this Lease. If Tenant is not in compliance with
this Lease following notice to Tenant as required pursuant to paragraph 24(b) below,
Landlord shall have the right to immediately enter upon the Premises to remedy
any contamination caused by Tenant’s failure to comply notwithstanding any
other provision of this Lease. Landlord shall use its best efforts to minimize
interference with Tenant’s business but shall not be liable for any
interference caused thereby.


 


(h)          Any default under this paragraph shall be a material
default of this Lease enabling Landlord to exercise any of the remedies set
forth in this Lease.


 


(i)            Notwithstanding anything to the contrary provided
herein, it shall not be unreasonable for Landlord to withhold its consent to
any assignment, encumbrance, sublease, or other transfer of this Lease if a
proposed transferee’s anticipated use of the Premises involves the generation,
storage, use, treatment, or disposal of any Hazardous Material.  No consent to any


 


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9044.051 Five Oaks Office Lease to Credence Lot 2 v2


 

















 


assignment or subletting shall constitute a further
waiver of this provision. Any such assignment or subletting without such
consent shall be void and shall at Landlord’s option constitute a default
hereunder.


 


12.          Intentionally Deleted.


 


13.          Tenant Improvements and
Alterations.


 


(a)           Intentionally deleted.


 


(b)           Tenant shall not be required
to obtain the consent or approval of Landlord for any decorations, painting,
plastering, or carpeting, but Tenant shall be required to give Landlord at
least ten (10) days prior written notice thereof.


 


(c)           Tenant shall be required to
obtain the prior written approval of Landlord for any alterations or
improvements to the Premises which:


 


(i)            are not located wholly
within the Premises, the demising walls of the Premises, the entrances to
and/or exits from the Premises, or the floor or ceiling of the Premises (unless
required to connect the utility systems within the Premises to the utility
systems of the Building);


 


(ii)           decrease the value of the Building;


 


(iii)          adversely affect the
structural integrity of the Building or the operation of the HVAC, plumbing,
electricity, or water and sewer systems of the Building;


 


(iv)          require any roof penetration; or


 


(v)           which are at a cost of $25,000.00 or more.


 


(d)           Any such alterations,
additions or improvements shall be made at Tenant’s sole cost and expense. In
the event Tenant’s alterations, additions or improvements require roof
penetration, Tenant shall use Landlord’s roofing contractor or such other
contractor as Landlord reasonably approves. Landlord shall have ten (10) days
after receiving Tenant’s written notice of proposed work to respond or provide
such written consent. Tenant shall provide Landlord copies of any plans and
specifications. Tenant shall deliver to Landlord as-built plans showing all
alterations within thirty (30) days following installation of the alteration.
Tenant shall provide such construction insurance as may be reasonably required
by Landlord.


 


(e)           Landlord shall have the
right to require Tenant to furnish adequate security to insure timely payment
to the contractors and subcontractors for such work. All work performed by the
Tenant shall be done in strict compliance with all applicable building, fire,
sanitary and safety codes, and other applicable laws, statutes, regulations and
ordinances, and Tenant shall secure all necessary permits for the same. Tenant
shall keep the Premises free from all liens in connection with any such work.
All work performed by the Tenant shall be carried forward expeditiously, shall
not


 


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interfere with Landlord’s work or the work to be performed by or for
other tenants, and shall be completed within a reasonable time. Landlord or
Landlord’s agents shall have the right at all reasonable times to inspect the
quality and progress of such work.


 


(f)            Tenant shall provide its own
trash container(s) for construction debris; promptly remove all
construction and related debris from the Premises; and immediately following
completion of construction, Tenant shall repair and restore any portions of the
Premises harmed as a result of the construction activities to the condition
existing immediately prior to construction. Landlord’s review and/or approval
of any request for alterations, additions or improvements in or to the
Premises, and/or the plans and specifications with respect thereto, shall not
create responsibility or liability on the part of Landlord, nor shall such
review or approval evidence or constitute a representation or warranty by
Landlord with respect to the action or undertaking approved or the
completeness, accuracy, design sufficiency, or compliance of such plans or
specifications with laws, ordinances, rules, and /or regulations of any
governmental agency or authority. Landlord and Tenant acknowledge that such
items shall be Tenant’s exclusive responsibility.


 


(g)           All improvements,
alterations and other work performed on the Premises by either Landlord or
Tenant shall be the property of Landlord when installed, except for Tenant’s
trade fixtures, and may not be removed at the expiration of this Lease unless
the applicable Landlord’s consent specifically provides otherwise.


 


14.          Repairs and
Maintenance.


 


(a)           During the Term, Tenant
shall continue all of Tenant’s existing maintenance programs and service
contracts (either those in existence or replacements thereof). Tenant shall
maintain, replace and repair the Premises (including but not limited to
landscaping and parking lots) as well as all the structural and exterior
components of the Building including the roof during the Term. Tenant shall
repair and replace the component parts of the heating and air conditioning,
water, sewer, gas and electrical systems as necessary to maintain said systems
in the same condition as existed on the Effective Date, reasonable wear and
tear excepted. Tenant shall provide all ordinary maintenance and repairs to the
Premises, including, without limitation, replacement of broken glass,
replacement of worn or damaged flooring, repair of lighting fixtures, and
repairs and maintenance of interior walls and ceilings. On the expiration of
the Term or other termination of this Lease, Tenant shall deliver up the
Premises with all required repairs and replacements completed and with all
improvements located thereon, in good repair and condition, broom clean,
reasonable wear and tear and the provisions of paragraph 21 excepted.


 


(b)           Tenant agrees that Landlord
shall have no obligation under this Lease to make any repairs or replacements
to the Premises or improvements thereon, or any alteration, addition, change,
or improvement thereof or thereto, whether structural or otherwise. The
intention of this Lease is that the rent received by Landlord shall be “ABSOLUTELY
NET”, free and clear of any expenses to Landlord under this Lease for the
taxes, insurance, and/or construction, care, maintenance (including common area
maintenance charges and charges accruing under easements, assessments and/or
charges pursuant to the CCRs or other agreements relating to the Premises),
operation, repair, replacement, alteration, addition, change, and improvement
of or to the Premises. Upon the expiration or earlier termination of this
Lease, Tenant shall remain responsible for, and shall


 


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pay to Landlord, any cost, charge or expense for
which Tenant is otherwise responsible for hereunder attributable to any period
(prorated on a daily basis) prior to the expiration or earlier termination of
this Lease.


 


(c)           Tenant shall not enter into
any maintenance agreements that will extend beyond the Term without Landlord’s
prior written consent.


 


(d)           Upon expiration of the Term,
Tenant shall assign to Landlord any warranties relating to the Premises and
deliver to Landlord all manuals, plans, specifications, records and other
documents maintained by Tenant in connection with the maintenance of the
Building.


 


15.           Liens. Tenant shall keep the Premises and Tenant’s
leasehold interest free from all liens, including construction, mechanic’s and
materialmen’s liens, arising from any act or omission of Tenant or those
claiming under Tenant. Notwithstanding the foregoing, in the event of a lien,
Tenant shall remove said lien by applicable statutory bond procedure or
otherwise discharge such lien within ten (10) days of written notice from
Landlord. Landlord shall have the right to post and maintain on the Premises
such notices of nonresponsibility as are provided for under the lien laws of
the state in which the Premises are located.


 


16.           Utilities. Tenant shall
be solely responsible and promptly pay for all water and sewer facilities, gas
and electrical services, including heat and light, garbage collection, and all
other facilities and utility services used by Tenant in the Premises during the
Term. Tenant shall pay for all light bulbs, tubes and ballasts in the Premises.
Tenant agrees at all times to cooperate fully with Landlord and to abide by all
the regulations and requirements which Landlord may prescribe for the proper
functioning and protection of said systems. Except for Landlord’s willful
misconduct, Landlord shall not be liable for, and Tenant shall not be entitled
to, any abatement or reduction of Rental nor shall Tenant be excused from compliance
with all terms and provisions of this Lease by reason of Landlord’s failure to
furnish any of the foregoing.


 


17.           Light and
Air. This Lease does not grant
any rights of access to light or air over any part of the Premises.


 


18.           Indemnity.


 


(a)           The Indemnified Parties
shall not be liable to Tenant, or to Tenant’s employees, agents, invitees,
licensees, contractors, or visitors, or to any other person, for any injury to
person or damage to property or for consequential damages of any nature on or
about the Premises caused by any act or omission of Tenant, its agents,
servants, or employees, or of any other persons entering upon the Premises
under express or implied invitation by Tenant; provided, however, subject to
the provisions of paragraph 19 below, which provisions shall control the terms
of this paragraph 18, an Indemnified Party shall be liable for actual damages
resulting from its negligence or willful misconduct.


 


(b)          Tenant agrees to indemnify,
defend, and hold harmless Indemnified Parties of and from any and all claims,
demands, causes of action, losses, liabilities, judgments, attorney’s fees,
expenses, or damages (i) arising from any accident, incident, injury,
damage, howsoever and by


 


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whomsoever caused, to any person or property occurring in or about the
Premises, except to the extent such accident, incident, injury or damage is
caused by the negligence or willful misconduct of an Indemnified Party, (ii) arising
out of any and all defaults by Tenant or its agents, employees, or contractors
under this Lease, or (iii) arising out of the negligence or willful
misconduct of Tenant or its agents, employees, or contractors. Tenant shall, at
its own cost and expense, defend any and all suits which may be brought against
Indemnified Parties either alone or in connection with others upon any such
above-mentioned cause or claim, and shall satisfy, pay and discharge any and
all judgments that may be recovered against Indemnified Parties in any such
action or actions in which Indemnified Parties may be a party defendant.


 


(c)           The provisions of this paragraph shall survive
expiration or earlier termination of this Lease with respect to claims or
liability occurring prior to such termination.


 


19.           Waiver of
Subrogation. Notwithstanding anything to
the contrary contained in this Lease, but without limiting any other waiver set
forth herein, Landlord and Tenant hereby mutually agree that in the event
either Landlord or Tenant sustains a loss by reason of fire or any other event
or casualty and such party is then covered (or is required by the terms of this
Lease to be covered) in whole or in part by insurance with respect to such
loss, then the party sustaining the loss agrees that, to the extent (but only
to the extent) such party is compensated for such loss by its insurance (or to
the extent the insurance required to be carried under this Lease by such party
would have compensated the party for such loss), the party sustaining the loss
shall have no right to recovery against the other party, its partners,
officers, agents, contractors or employees, and waives any right of subrogation
which might otherwise exist in or accrue to any third party. Landlord and
Tenant agree that all policies of insurance obtained by them pursuant to the
terms of this Lease shall contain provisions or endorsements thereto waiving
the insurer’s rights of subrogation with respect to claims against the other
and, unless the policies permit waiver of subrogation without notice to the
insurer, each shall notify its insurance companies of the existence of the
waiver and indemnity provisions set forth in this Lease. In all events, but
subject to any other waiver set forth herein, the party sustaining any loss
which is required to be covered by insurance pursuant to the other provisions
of this Lease may recover from the other party (assuming such other party
otherwise has liability for the loss suffered) the amount of any deductible or
excess loss under any applicable policy of insurance, to the extent of the
deductible under such policy and/or such excess loss.


 


20.           Damage to
Tenant’s Property. Except for
Landlord’s willful misconduct, Landlord shall not be liable and Tenant hereby
waives all claims against Landlord for any damage to the goods, stock,
merchandise or other property of Tenant or to any person in or about the
Premises resulting from any cause whatsoever, including, but not limited to,
damage by rain, water, gas, steam, electricity or theft.


 


21.           Damage or Destruction.


 


(a)           If the Premises shall be partially damaged by fire
or other cause and subparagraph (b) below does not apply, the damage to
the Premises shall be repaired by Tenant, at Tenant’s sole cost and expense and
there shall be no abatement of Rent. The repairs shall be made at the expense
of Tenant, whether or not insurance proceeds are available and shall be
accomplished with all reasonable dispatch. Tenant, at Tenant’s expense shall
repair and/or replace all of Tenant’s


 


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property necessary for the operation of Tenant’s business.


 


(b)           If, during the last year of
the Term, the Premises are damaged by a fire or other cause to the extent of
fifty percent (50%) or more of the replacement cost thereof, either party may
elect to terminate this Lease as of the date of damage or destruction by notice
given to the other party in writing not more than sixty (60) days following the
date of damage provided, however, if Landlord has elected to terminate this
Lease, Tenant may cancel Landlord’s such election by agreeing to make all
necessary repairs. If such notice is given, all rights and obligations of the
parties shall cease as of the date of termination and Minimum Monthly Rental and
Additional Rent shall be prorated as of said date and Tenant shall pay to
Landlord one hundred percent (100%) of the replacement cost for damage to the
Building (excluding foundations and without deduction for depreciation) without
deductible. Tenant’s said obligation is not contingent on Tenant having
received insurance proceeds. Any insurance which may be carried by Landlord or
Tenant shall be for the sole benefit of the party carrying such insurance.


 


(c)           In the absence of an
election to terminate as described in subparagraph (b) above, Tenant shall
proceed to restore the Building pursuant to the provisions of subparagraph (a) above
to substantially the same form as prior to the damage or destruction and there
shall be no abatement of Rent.


 


22.           Condemnation.


 


(a)           If the entire Premises shall
be acquired or condemned by any governmental authority under its power of
eminent domain for any public or quasi-public use or purpose, this Lease shall
terminate as of the date of vesting or acquisition of title in the condemning
authority and the Rental shall be abated on that date. If less than the whole
should be so acquired or condemned, Tenant shall have the option to terminate
this Lease by notice given to Landlord within thirty (30) days of such taking.
In the event that such a notice of termination is given, this Lease shall
terminate as of the date of vesting or acquisition of title in the condemning
authority and the Minimum Monthly Rental and Additional Rent shall be prorated
as of such date.


 


(b)           If this Lease has not been
terminated as hereinabove set forth, this Lease shall continue in force and
effect, but from and after the date of the vesting of title in the condemning
authority, the Minimum Monthly Rental payable hereunder during the unexpired
portion of the Term shall be reduced proportionately and any Additional Rent
payable pursuant to the terms to reflect the diminution of the Premises.


 


(c)           In connection with any
taking of the Premises, Landlord shall be entitled to receive the entire amount
of any award which may be made or given in such taking or condemnation, without
deduction or apportionment for any estate or interest of Tenant, it being
expressly understood and agreed by Tenant that no portion of any such award
shall be allowed or paid to Tenant for any so-called bonus or excess value of
this Lease, and such bonus or excess value shall be the sole property of
Landlord. Tenant shall not assert any claim against Landlord or the taking
authority for any compensation because of such taking (including any claim for
bonus or excess value of this Lease);  provided,
however, if any portion of the Premises is taken, Tenant shall have the right,
if permitted pursuant to applicable law, to recover from the condemning
authority (but not from Landlord) any compensation as may be separately awarded
or


 


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recoverable by Tenant for the taking of Tenant’s furniture, fixtures,
equipment and other personal property within the Premises, for Tenant’s
relocation expenses, and for any loss of goodwill or other damage to Tenant’s
business by reason of such taking.


 


23.            Bankruptcy. Subject to paragraph 28, this Lease shall not be
assigned or transferred voluntarily or involuntarily by operation of law. It
may, at the option of Landlord, be terminated if Tenant be adjudged bankrupt or
insolvent, or makes an assignment for the benefit of creditors, or files or is
a party to the filing of a petition in bankruptcy, or commits an act of
bankruptcy, or in the case a receiver or a trustee is appointed to take charge
of any of the assets of Tenant or subtenants and assigns in or about the
Premises, and such receiver or trustee is not removed within thirty (30) days
after the date of his appointment, or in the event of judicial sale of the
personal property in or on the Premises upon judgment against Tenant or any
subtenant or assignee, unless such property or reasonable replacement thereof
be installed on the Premises. To the extent permitted by law, this Lease or any
sublease hereunder shall not be considered as an asset of a
debtor-in-possession, or an asset in bankruptcy, insolvency, receivership, or
other judicial proceedings.


 


24.            Tenant’s
Default. The following shall be “Events of Default” by Tenant:


 


(a)           Failure of Tenant to pay any
Rental when due or failure of Tenant to pay any other charge required hereunder
within five (5) days of written notice from Landlord to Tenant.
Notwithstanding anything to the contrary provided herein, if Landlord has given
one such notice to Tenant in a calendar year, Tenant shall be in default if
rental is not paid within five (5) days of the date due without the need
for any further notice from Landlord to Tenant.


 


(b)          Failure of Tenant to comply
with any term or condition or fulfill any obligation of this Lease (other than
the payment of Rental or other charges), within twenty (20) days after written
notice by Landlord specifying the nature of the default with reasonable
particularity. If the default is of such a nature that it cannot be completely
remedied within the twenty (20) day period, this subparagraph shall be complied
with if Tenant begins correcting the default within the twenty (20) day period
and thereafter proceeds with reasonable diligence and in good faith to effect
the remedy as soon as practicable (but in no event longer than ninety (90)
days).


 


(c)           Intentionally deleted.


 


(d)          The bankruptcy or insolvency
of Tenant or the occurrence of other acts specified in paragraph 23 of this
Lease which give Landlord the option to terminate.


 


(e)           A default pursuant to that
certain Absolute Net Office Lease of even date between Five Oaks Flex, LLC as
landlord and Tenant shall be deemed an Event of Default hereunder.


 


25.            Remedies on
Tenant’s Default. If an Event of
Default occurs, Landlord may, at

Landlord’s option, exercise any one or more of the rights and remedies
available to a landlord in the

state in which the Premises is located to redress such default, consecutively
or concurrently, including

the following:


 


(a)           Landlord may elect to terminate Tenant’s right to
possession of the Premises or


 


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any portion thereof by written notice to Tenant.
Following such notice, Landlord may re-enter, take possession of the Premises
and remove any persons or property by legal action or self-help with the use of
reasonable force. To the extent permitted by law, Landlord shall have the right
to restrain the personal property belonging to Tenant which is on the Premises
at the time of re-entry, or the right to such other security interest therein
as the law may permit, to secure all sums due or which become due to Landlord
under this Lease. Perfection of such security interest shall occur by taking
possession of such personal property or otherwise provided by law.


 


(b)           Following re-entry by
Landlord, Landlord may relet the Premises for a term longer or shorter than the
Term and upon any reasonable terms including the granting of rent concessions
to the new tenant. Landlord may alter, refurbish or otherwise change the
character or use of the Premises in connection with such reletting. Landlord
shall not be required to relet for any use or purpose which Landlord may
reasonably consider injurious to its property or to any tenant which Landlord
may reasonably consider objectionable. No such reletting by Landlord following
a default by Tenant shall be construed as an acceptance of the surrender of the
Premises. If rent received upon such reletting exceeds the rent received under
this Lease, Tenant shall have no claim to the excess.


 


(c)           Following re-entry, Landlord
shall have the right to recover from Tenant the following damages:


 


(i)            The Worth at the Time of the
Award (as hereinafter defined) of all unpaid Rental for the period prior to
re-entry; plus


 


(ii)           The Worth at the Time of the
Award (as hereinafter defined) of the amount equal to the Rental lost during
any period during which the Premises are not relet prior to the date of the award,
if Landlord uses reasonable efforts to relet the Premises; plus


 


(iii)          The Worth at the Time of the
Award (as hereafter defined) of the amount by which the unpaid Rental for the
balance of the term after the time of the award exceeds the amount Tenant
proves could be avoided; plus


 


(iv)          Any other amount necessary
to compensate Landlord for all detriment proximately caused by Tenant’s failure
to perform Tenant’s obligation under this Lease or which in the ordinary course
of things would be likely to result therefrom, including, without limitation,
the cost of clean up and repair in preparation for a new tenant, renovations,
remodeling, the cost of correcting any defaults or restoring any unauthorized
alterations, the amount of any real estate commissions or advertising expenses
and attorney’s fees; plus


 


(v)           At Landlord’s election, any
other amount in addition to or in lieu of the foregoing, as may be permitted
from time to time by applicable law; plus


 


(vi)          Reasonable attorney’s fees
and expert witness fees incurred in connection with the default, whether or not
any litigation is commenced; plus


 


(d)           If Landlord lists the
Premises with a real estate broker experienced in leasing




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commercial property in the metropolitan area in
which the Premises are located, such listing shall be conclusively presumed to
be the taking of reasonable efforts to relet the Premises; plus


 


(e)           As used in subparagraphs (c)(i) and
(c)(ii) above, the “Worth at the Time of
Award” is computed by allowing interest at a rate equal to the
published prime interest rate of the Bank of America, N.A., San Francisco,
California plus four (4%) percent, unless such rate exceeds lawful limits
permitted by the laws of the state in which the Premises are located, in which
case interest shall accrue at the highest rate permitted in such state
(hereinafter referred to as the “Default
Interest Rate”). As used in subparagraph (c)(iii) above,
the “Worth at the Time of Award” is
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award, plus one (1%) percent.


 


(f)            In the event that Tenant
remains in possession following default and Landlord does not elect to
re-enter, Landlord may recover all delinquent Rental and shall have the right
to cure any nonmonetary default and recover the cost of such cure from Tenant,
plus interest from the date of the expenditure at the Default Interest Rate. In
addition, Landlord shall be entitled to recover attorney’s fees reasonably
incurred in connection with the default, whether or not litigation is
commenced. Landlord may sue to recover such amounts as they accrue, and no one
action for accrued damages shall bar a later action for damages subsequently
accruing.


 


(g)           The foregoing remedies shall
not be exclusive but shall be in addition to all other remedies and rights
provided under applicable law, and no election to pursue one right shall
preclude resort to another consistent remedy.


 


26.           Surrender at Expiration.


 


(a)           Upon expiration of the Term
or earlier termination on account of default, Tenant shall deliver all keys to
Landlord and peaceably surrender the Premises broom clean and in the same
condition as exists on the Effective Date, reasonable wear and tear excepted.
Depreciation and wear from ordinary use for the purpose for which the Premises
were let need not be restored, but all repairs and replacements for which
Tenant is responsible shall be completed pursuant to paragraph 14 above. Tenant’s
obligations under this paragraph shall be subject to the provisions of
paragraph 21 relating to damage or destruction.


 


(b)          All improvements and
alterations placed on the Premises during the Lease term, other than Tenant’s
trade fixtures, shall, at Landlord’s option exercised at the time of granting
of its consent, become the property of Landlord. Movable furniture,
decorations, floor covering other than hard surface bonded or adhesively fixed
flooring, curtains, drapes, blinds, furnishings and trade fixtures shall remain
the property of Tenant if placed on the Premises by Tenant. Anything to the
contrary contained herein notwithstanding, in no event shall Tenant be required
to remove any improvements, alterations, or fixtures (but not trade fixtures)
that exist on the Premises as of the Commencement Date.


 


(c)           If Landlord so elects at the
time of granting its consent, Tenant shall remove any or all fixtures installed
on the Premises during the Lease term which would otherwise remain the property
of Landlord, and shall repair any physical damage resulting from the removal.
If Tenant fails


 


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to remove such fixtures, Landlord may do so and charge the cost to
Tenant with interest from the date of expenditure at the Default Interest Rate.
Tenant shall remove all furnishings, furniture and trade fixtures which remain
the property of Tenant. If Tenant fails to do so, this shall be an abandonment
of the property, and Landlord may retain the property and all rights of Tenant
with respect to it shall cease or, by notice in writing given to Tenant within
twenty (20) days after removal was required, Landlord may elect to hold Tenant
to its obligation of removal. If Landlord elects to require Tenant to remove,
Landlord may effect a removal and place the property in public or private
storage for Tenant’s account. Tenant shall be liable to Landlord for the cost
of removal, transportation to storage, and storage, with interest on all such
expenses from the date of expenditure by Landlord at the Default Interest Rate.


 


(d)          The time for removal of any property or fixtures
which Tenant is required to remove from the Premises upon termination shall be
as follows:


 


(i)            On or before the date this
Lease terminates because of expiration of the term or because of a default
under paragraphs 22 and 23.


 


(ii)           Within thirty (30) days
after notice from Landlord requiring such removal where the property to be
removed is a fixture which Tenant is not required to remove except after such
notice by Landlord, and such date would fall after the date on which Tenant
would be required to remove other property.


 


27.            Holdover.


 


(a)           If Tenant does not vacate
the Premises at the time required, Landlord shall treat Tenant as a tenant from
month-to-month, subject to all the provisions of this Lease except the Term,
except that the Rental shall be one hundred fifty (150%) percent of the Minimum
Monthly Rental due for the full calendar month immediately preceding the
expiration of the Term together with all damages (but specifically excluding
consequential damages) sustained by Landlord by said failure to vacate. Failure
of Tenant to remove fixtures, furniture, furnishings or trade fixtures which
Tenant is required to remove under this Lease shall constitute a failure to
vacate to which this paragraph shall apply if the property not removed will
substantially interfere with the occupancy of the Premises by another tenant or
with occupancy by Landlord for any purpose including preparation for a new
tenant.


 


(b)           If a month-to-month tenancy
results from a holdover by Tenant under this paragraph, the tenancy shall be
terminable at the end of any monthly rental period on written notice by either
party given not less than ten (10) days prior to the termination date
which shall be specified in the notice. Tenant waives any notice which would
otherwise be provided by law with respect to a month-to-month tenancy.


 


28.            Assignment
and Subletting.


 


(a)           Tenant shall not assign or pledge this Lease, sublet
all or any part of the Premises whether voluntarily, involuntarily or by
operation of law, or permit the use or occupancy of


 


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the Premises by anyone other than Tenant, or assign this Lease for
security purposes, without the written consent of Landlord. In the event that
Landlord shall consent to an assignment or sublease hereunder, Tenant shall pay
Landlord’s reasonable attorneys’ fees and costs, incurred in connection with
the processing of documents necessary to the giving of such consent.


 


(b)          In the event Tenant desires
to sublet the Premises, or any portion thereof, or assign this Lease, Tenant
shall give written notice thereof to Landlord at least fifteen (15) but not
more than one hundred twenty (120) days prior to the proposed commencement date
of such subletting or assignment, which notice shall set forth the name of the
proposed subtenant or assignee, the relevant terms of any such sublease and
copies of relevant financial information concerning the proposed subtenant or
assignee. Landlord shall respond to the request within fourteen (14) days of
Tenant’s notice. Tenant shall remain primarily liable, after any assignment or
sublease, for the payment of Rental and other charges hereunder and the
performance of all of Tenant’s obligations under this Lease, notwithstanding
such assignment or subletting by Tenant.


 


(c)           In addition to Landlord’s
right to approve any subtenant or assignee Landlord shall have the option, in
Landlord’s sole discretion, to terminate this Lease or in the case of a
proposed sublease of less than all of the Premises to recapture the portion of
the Premises to be sublet as of the date the subletting or assignment is to be
effective. Landlord shall exercise Landlord’s option within thirty (30) days
from the date of receipt of Tenant’s written notice. If Landlord exercises
Landlord’s option to terminate this Lease or recapture a portion of the
Premises, Tenant shall be released of all further liability hereunder from and
after the effective date of such termination or recapture as to the Premises as
a whole in connection in the case of termination or as to portion of the
Premises recaptured. If Landlord exercises Landlord’s option to recapture a
portion of the Premises, Tenant shall be released proportionately based on the
Rental as of the date immediately prior to such recapture.


 


(d)          Consent by Landlord to one (1) assignment
or sublease shall not constitute a consent to other transfers or a waiver of
Landlord’s rights pursuant to this paragraph.


 


(e)           Notwithstanding anything
contained in this paragraph 28 to the contrary, Tenant shall have the right to
assign this Lease or to sublet the Premises to any corporation or entity into
which Tenant may merge or to any corporation or entity arising out of a
consolidation of Tenant with another corporation or to a corporation or other
entity acquiring all or substantially all of the assets or stock of Tenant.
Such right to assign the Lease or to sublet the Premises shall be expressly
conditioned upon Tenant delivering to Landlord an executed copy of the
assignment wherein the corporation or entity into which Tenant may merge or the
corporation or entity arising out of a consolidation of Tenant with another
corporation or entity or such acquiring corporation or entity, as the case may
be, assumes for the benefit of Landlord all of the terms, conditions and
covenants set forth in this Lease to be observed and performed by Tenant
existing on and after the effective date of the assignment and agrees to be
bound by the terms, conditions and covenants of this Lease. Any such assignment
or subletting shall not relieve Tenant from liability for the payment of Rental
or other sums herein provided or from the obligation to keep and be bound by
the terms, conditions and covenants of this Lease.


 


(f)           No sublease shall extend beyond the Term.


 


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29.           Authority. If a party is a corporation, each of the individuals
executing this Lease on behalf of such party does hereby covenant and warrant
that the party is a duly authorized and existing corporation, that such party
has and is qualified to do business in the state in which the Building is
located, that the corporation has full right and authority to enter into this
Lease and that each and all of the individuals signing on behalf of the
corporation are authorized to do so. Upon Landlord’s request, Tenant shall
provide Landlord with evidence reasonably satisfactory to Landlord confirming
the foregoing covenants and warranties.


 


30.           Subordination. Tenant agrees that this Lease shall be subject and
subordinate to any mortgage, trust deed or like encumbrance heretofore or
hereafter placed by Landlord or its successors in interest upon its interest in
the Premises to secure the payment of monies loaned, interest thereon and other
obligations. Landlord agrees to provide Tenant a Non-Disturbance Agreement from
the holder of any future mortgage, trust deed or like encumbrance. The terms of
any Non-Disturbance Agreement provided by Landlord shall also contain such
covenants, conditions, restrictions, limitations, exceptions and the like as
are reasonably necessary and customary for the protection and balancing of the
competing interests of the Tenant, the Landlord’s Lender and Landlord. Such
Non-Disturbance Agreement shall also provide that no assignment or transfer of
Landlord’s rights hereunder to a lending institution as collateral security in
connection with such encumbrance and no foreclosure sale or transfer in lieu of
foreclosure shall affect Tenant’s right to possession, use and occupancy of the
Premises so long as Tenant is not in default hereunder. The failure by Landlord
to obtain such Non-Disturbance Agreement shall not affect the subordination of
this Lease to any such encumbrance. Tenant agrees to execute and deliver,
within ten (10) days of such request by Landlord, any and all instruments
desired by Landlord subordinating in the manner requested by Landlord to such
mortgage, trust deed or like encumbrance. Tenant further appoints Landlord as
its attorney-in-fact for the Term to execute, on behalf of Tenant, any such
instruments subordinating this Lease to such mortgage, trust deed or like
encumbrance. In the event of the sale of the real property of which the
Premises are a part upon foreclosure or upon the exercise of a power of sale,
Tenant will, upon written request of the purchaser, attorn to the purchaser and
recognize the purchaser as Landlord under this Lease.


 


31.           Estoppel Certificate.


 


(a)           Tenant shall from time to
time, upon not less than ten (10) days’ prior notice, submit to Landlord,
or to any person designated by Landlord, in a form presented by Landlord, a
statement in writing certifying: (i) that this Lease is unmodified and in
full force and effect (or if there have been modifications, identifying the
same by the date thereof and specifying the nature thereof); (ii) that to
the knowledge of Tenant no uncured default exists hereunder (or if such uncured
default does exist, specifying the same); (iii) the dates to which Rental
and other charges payable hereunder have been paid; (iv) that Tenant has
no claims against Landlord and no defenses or offsets to Rental except for the
continuing obligations under this Lease (or if Tenant has any such claims,
defenses or offsets, specifying the same); and (v) such other matters as
may be requested by Landlord.


 


(b)          If Tenant shall fail to
respond within ten (10) days of receipt by Tenant of a written request by
Landlord as herein provided, Tenant shall be deemed to have given such
certificate as above provided, without modification, and shall be deemed to
have admitted the accuracy of any


 


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information supplied by Landlord to a prospective purchaser or
mortgagee and that this Lease is in full force and effect, that there are not
uncured defaults in Landlord’s performance, that the Security Deposit is as
stated in the Basic Lease Provisions and that not more than one (1) month’s
Minimum Monthly Rental has been paid in advance.


 


(c)           Any such certificate may be relied upon by any
prospective purchaser or lender.


 


32.            Force
Majeure. Except for Tenant’s
obligation to pay Rental and other charges, neither party shall be deemed in
default for the nonperformance or for any interruption or delay in performance
of any of the terms, covenants and conditions of this Lease if the same shall
be due to any labor dispute, strike, lock-out, civil commotion or like
operation, invasion, rebellion, hostilities, war, terrorism, bio-terrorism,
military or usurped power, sabotage, governmental regulations or controls,
inability to obtain labor, services or materials, or through act of God or
causes beyond the reasonable control of such party, provided such cause is not
due to such party’s willful act or neglect.


 


33.            Landlord’s
Right of Entry. Landlord and/or
its authorized representatives may enter the Premises at all reasonable times
(but at any time in the event of emergency). Any such entry shall be in
compliance with Tenant’s reasonable access rules, including easements and
restrictions dealing with secured and/or restricted areas.


 


34.            Landlord’s
Right to Cure Default. If Tenant shall
fail to perform any of the covenants or obligations to be performed by Tenant,
Landlord, in addition to all other remedies provided herein, shall have the
option to cure such default after ten (10) days’ written notice to Tenant.
All of Landlord’s expenditures incurred to correct the default shall be
reimbursed by Tenant upon demand with interest from the date of expenditure by
Landlord at the Default Interest Rate. Landlord’s right to cure defaults is for
the full protection of Landlord and the existence of this right shall not release
Tenant from the obligation to perform all of the covenants herein provided to
be performed by Tenant, or deprive Landlord of any other right which Landlord
may have by reason of such default by Tenant.


 


35.            Intentionally deleted.


 


36.            Landlord’s
Signs and Showings. Landlord may
place on the Premises (but not on the Building) signs notifying the public that
the Premises are “for sale” or “for rent” or “for lease”. During the Term, Landlord may also show the
Premises to potential tenants, buyers and/or lenders at all reasonable times
during normal business hours and subject to the terms of paragraph 33 hereof.


 


37.            Brokers. If Tenant has
dealt with any other person or real estate broker in respect to leasing the
Building, Tenant shall be solely responsible for the payment of any such fee
due said person or firm and Tenant shall hold Landlord free and harmless
against any liability in respect thereto.


 


38.            Intentionally deleted.


 


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39.           General Provisions.


 


(a)           Complete Agreement. There are no
oral agreements between Landlord and Tenant affecting this Lease, and this
Lease may not be modified, except by written instrument by the parties or their
successors in interest. This Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and other statements, if any,
between Landlord and Tenant or displayed by Landlord to Tenant with respect to
the subject matter of this Lease or the Building. There are no representations
between Landlord and Tenant, other than those contained in this Lease, and all
reliance with respect to this Lease is fully upon such representation.
Submission of this instrument by Landlord for examination or signature by
Tenant does not constitute a reservation of or option for the Lease, and this
instrument is not effective as a Lease or otherwise until execution and
delivery by both Landlord and Tenant.


 


(b)          Exhibits and Addenda. Exhibits and
Addenda attached hereto shall be initialed by Landlord and Tenant and are
incorporated herein and made a part of this Lease.


 


(c)           Recordation. Neither
Landlord nor Tenant shall record this Lease or a memorandum hereof without the
prior consent of the other party.


 


(d)          Waiver. If either
Landlord or Tenant waives the performance of any term, covenant or condition
contained in this Lease, such waiver shall not be deemed a waiver of any
subsequent breach of the same or any other term, covenant or condition
contained in this Lease. Acceptance of Rental (in whole or part) by Landlord
shall not constitute a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease, regardless of Landlord’s knowledge of such
preceding breach at the time of Landlord’s acceptance of such Rental. Failure
by Landlord or Tenant to enforce any of the terms, covenants or conditions of
this Lease for any length of time shall not be deemed a waiver or to decrease
the right of Landlord or Tenant to insist thereafter upon the strict
performance by the party violating any of the terms, covenants or conditions of
this Lease. Waiver by Landlord or Tenant of any term, covenant or condition
contained in this Lease may only be made by an original written document signed
by the waiving party.


 


(e)           Time. Time is of
the essence of this Lease.


 


(f)           Severability. If any term
or provision of this Lease, the deletion of which would not adversely affect
the receipt of any material benefit by either party hereunder, shall be held to
be invalid or unenforceable to any extent, the remainder of this Lease shall
not be affected thereby and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.


 


(g)          Notices. All notices,
demands, consents, approvals and other communications which are required or
desired to be given by either party to the other hereunder shall be in writing
and shall be: hand delivered; transmitted by facsimile (with a duplicate copy
sent by first class mail, postage prepaid); sent by certified or registered
mail, postage prepaid, return receipt requested; or sent by reputable overnight
courier service for delivery on the next business day, delivery charges
prepaid. Notices delivered by hand or by overnight courier shall be deemed
given when actually received or when refused by their intended recipient.
Facsimile notices shall be deemed delivered when a legible copy has been
received (provided receipt has been verified by telephone confirmation


 


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or one of the other permitted means of giving notice
pursuant to this paragraph. Mail notices shall be deemed received two (2) days
following mailing. Notices shall be sent to Landlord and Tenant at the
addresses set forth in the Basic Lease Provisions. A party may change its
address for notice by giving at least ten (10) days prior notice of such
change to the other party.


 


(h)          Joint and Several Liability. If there be
more than one Tenant, the obligations hereunder imposed upon Tenant shall be
joint and several.


 


(i)            Cumulative Remedies. No remedy or
election hereunder shall be deemed exclusive, but shall, whenever possible, be
cumulative with all other remedies at law or in equity.


 


(j)            Successors and Assigns. Subject to
the provisions of paragraph 28 above, the terms, covenants and conditions
contained herein shall be binding upon and inure to the benefit of the heirs,
successors, executors, administrators and assigns of the parties.


 


(k)           Costs of Suit. In the event that any
party to this Lease institutes a suit, action, arbitration, or other legal
proceeding of any nature whatsoever, relating to this Lease or to the rights or
obligations of the parties with respect thereto, including, without limitation,
any proceeding seeking a declaration of rights, for rescission or under the
U.S. Bankruptcy Code and involving issues peculiar to federal bankruptcy law,
the prevailing party shall be entitled to recover from the losing party its
reasonable attorney, paralegal, accountant, expert witness (whether or not
called to testify at trial or other proceeding) and other professional fees and
all other fees, costs, and expenses actually incurred and reasonably necessary
in connection therewith, including but not limited to deposition transcript and
court reporter costs, as determined by the judge or arbitrator at trial or
other proceeding, and including such fees, costs and expenses incurred in any
appellate or review proceeding, or in collecting any judgment or award, or in
enforcing any decree rendered with respect thereto, in addition to all other
amounts provided for by law.


 


(l)            Sale. In the event that the
original Landlord or any successor in interest of Landlord in the Premises
shall sell or convey the Premises, all liabilities and obligations on the part
of the original Landlord or such successor under this Lease occurring
thereafter shall terminate and thereupon all such liabilities and obligations
shall be binding upon the new owner.


 


(m)          Construction. The paragraph headings of
this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any parts of this Lease. If the context so
requires, the singular pronoun shall be taken to mean and include the plural
and that generally all grammatical changes shall be made, assumed and implied
to make the provisions hereof apply equally to corporations, partnerships and
individuals.


 


(n)          Law Governing. This Lease shall be
governed by the laws of the state in which the Premises are located.


 


(o)          Consents. Any consent or approval
required under this Lease shall be valid only if granted in writing and, unless
otherwise specifically provided herein, shall not be unreasonably withheld or
conditioned by either party. The consenting party shall have the right to impose
reasonable conditions as part of any consent including reimbursement of
reasonable attorney and


 


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other professional fees and costs incurred in determining how to
respond to the request for consent or approval. In no event shall either party
have the right to terminate this Lease, and in no event shall either party be
liable for monetary damages to the other, based upon a claim arising from the
withholding or conditioning of consent or approval; the sole remedy of the
party for any withholding or conditioning of consent or approval which is
proven to be contrary to this Lease or its Exhibits shall be a court or
arbitrator order requiring the party to grant the requested consent or approval
on terms ordered by the court or arbitrator.


 


(p)           Waiver of Jury Trial. LANDLORD AND TENANT EACH
WAIVE ALL RIGHTS TO TRIAL BY JURY OF ANY SUITS, CLAIMS, COUNTERCLAIMS, ACTIONS
OR OTHER PROCEEDINGS OF ANY KIND ARISING UNDER OR RELATING TO THIS LEASE
(INCLUDING, WITHOUT LIMITATION ANY PRESENT OR FUTURE MODIFICATION HEREOF) OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO DEALINGS OF THE PARTIES
HERETO OR THE PREMISES, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND REPRESENTS TO THE OTHER
THAT THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY. LANDLORD AND TENANT EACH
AGREES THAT ALL SUCH SUITS, CLAIMS, COUNTERCLAIMS, ACTIONS OR OTHER PROCEEDINGS
SHALL BE TRIED BEFORE A JUDGE OF A COURT OF COMPETENT JURISDICTION, WITHOUT A
JURY. LANDLORD AND TENANT EACH AGREES THAT THIS PARAGRAPH CONSTITUTES WRITTEN
CONSENT THAT TRIAL BY JURY SHALL BE WAIVED IN ANY SUCH SUIT, CLAIM,
COUNTERCLAIM, ACTION OR OTHER PROCEEDING AND AGREE THAT LANDLORD AND TENANT
SHALL EACH HAVE THE RIGHT AT ANY TIME TO FILE THIS LEASE WITH A CLERK OR JUDGE
OF ANY COURT IN WHICH ANY SUCH SUIT, CLAIM, COUNTERCLAIM, ACTION OR OTHER
PROCEEDING MAY BE PENDING AS STATUTORY WAIVER OF TRIAL BY JURY.


 


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IN WITNESS WHEREOF, Landlord
and Tenant have executed this Lease in duplicate the day and year first herein
written, any corporate signature being by authority of the Board of Directors.


 


 


	
  Five
  Oaks Office, LLC

  	
  Credence
  Systems Corporation

  
	
  an
  Oregon limited liability company

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  R.
  Barry Menashe, Manager

  	
   

  	
   

  	
  Byron
  Milstead,

  
	
   

  	
   

  	
  Sr.
  Vice President and General Counsel

  
	
   

  	
   

  
	
  LANDLORD

  	
   

  	
  TENANT

  	
   

  
								



 


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