exv10w43






Exhibit 10.43









R&D Lease




AMB Lakeside Business Center

Sunnyvale, California



Headlands Realty Corporation,

a Maryland corporation,



as Landlord,



and




Omneon Video Networks, Inc.,

a Delaware corporation,



as Tenant







 









 








Table of Contents




	 	 	 	 	 
	Section	 	 	Page	 
	1. Basic Provisions
	 	 	1	 
	1.1 Parties
	 	 	1	 
	1.2 Premises
	 	 	1	 
	1.3 Term
	 	 	1	 
	1.4 Base Rent
	 	 	1	 
	1.5 Tenant’s Share of Operating Expenses
	 	 	1	 
	1.6 Tenant’s Estimated Monthly Rent Payment
	 	 	1	 
	1.7 Security Deposit
	 	 	2	 
	1.8 Permitted Use
	 	 	2	 
	1.9 Guarantor
	 	 	2	 
	1.10 Addenda
	 	 	2	 
	1.11 Exhibits
	 	 	2	 
	1.12 Address for Rent Payments
	 	 	2	 
	1.13 Brokers
	 	 	2	 
	 
	 	 	 	 
	2. Premises and Common Areas
	 	 	2	 
	2.1 Letting
	 	 	2	 
	2.2 Common Areas — Definition
	 	 	2	 
	2.3 Common Areas — Tenant’s Rights
	 	 	2	 
	2.4 Common Areas — Rules and Regulations
	 	 	3	 
	2.5 Common Area Changes
	 	 	3	 
	2.6 Parking
	 	 	3	 
	 
	 	 	 	 
	3. Term
	 	 	3	 
	3.1 Term
	 	 	3	 
	3.2 Delay in Possession
	 	 	3	 
	3.3 Commencement Date Certificate
	 	 	4	 
	 
	 	 	 	 
	4. Rent
	 	 	4	 
	4.1 Base Rent
	 	 	4	 
	4.2 Operating Expenses
	 	 	4	 
	 
	 	 	 	 
	5. Security Deposit
	 	 	6	 
	 
	 	 	 	 
	6. Use
	 	 	6	 
	6.1 Permitted Use
	 	 	6	 
	6.2 Hazardous Substances
	 	 	6	 
	6.3 Tenant’s Compliance with Requirements
	 	 	8	 
	6.4 Inspection; Compliance with Law
	 	 	8	 
	6.5 Tenant Move-in Questionnaire
	 	 	8	 
	 
	 	 	 	 
	7. Maintenance, Repairs, Trade Fixtures and Alterations
	 	 	9	 
	7.1 Tenant’s Obligations
	 	 	9	 
	7.2 Landlord’s Obligations
	 	 	9	 
	7.3 Alterations
	 	 	9	 
	7.4 Surrender/Restoration
	 	 	10	 
	 
	 	 	 	 
	8. Insurance; Indemnity
	 	 	10	 
	8.1 Payment of Premiums
	 	 	10	 
	8.2 Tenant’s Insurance
	 	 	10	 
	8.3 Landlord’s Insurance
	 	 	11	 
	8.4 Waiver of Subrogation
	 	 	11	 
	8.5 Indemnity
	 	 	11	 
	8.6 Exemption of Landlord from Liability
	 	 	12	 
	 
	 	 	 	 
	9. Damage or Destruction
	 	 	12	 
	9.1 Termination Right
	 	 	12	 
	9.2 Damage Caused by Tenant
	 	 	13	 
	 
	 	 	 	 
	10. Real Property Taxes
	 	 	13	 
	10.1 Payment of Real Property Taxes
	 	 	13	 
	10.2 Real Property Tax Definition
	 	 	13	 
	10.3 Additional Improvements
	 	 	13	 
	10.4 Joint Assessment
	 	 	13	 
	10.5 Tenant’s Property Taxes
	 	 	13	 
	 
	 	 	 	 
	11. Utilities
	 	 	13	 
	 
	 	 	 	 
	12. Assignment and Subleasing
	 	 	13	 
	12.1 Prohibition
	 	 	13	 
	12.2 Request for Consent
	 	 	14	 






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	Section	 	 	Page	 
	12.3 Criteria for Consent
	 	 	14	 
	12.4 Effectiveness of Transfer and Continuing Obligations
	 	 	14	 
	12.5 Recapture
	 	 	15	 
	12.6 Transfer Premium
	 	 	15	 
	12.7 Waiver
	 	 	16	 
	12.8 Special Transfer Prohibitions
	 	 	16	 
	12.9 Affiliates
	 	 	16	 
	 
	 	 	 	 
	13. Default; Remedies
	 	 	16	 
	13.1 Default
	 	 	16	 
	13.2 Remedies
	 	 	17	 
	13.3 Late Charges
	 	 	19	 
	 
	 	 	 	 
	14. Condemnation
	 	 	19	 
	 
	 	 	 	 
	15. Estoppel Certificate and Financial Statements
	 	 	20	 
	15.1 Estoppel Certificate
	 	 	20	 
	15.2 Financial Statement
	 	 	20	 
	 
	 	 	 	 
	16. Additional Covenants and Provisions
	 	 	20	 
	16.1 Severability
	 	 	20	 
	16.2 Interest on Past-Due Obligations
	 	 	20	 
	16.3 Time of Essence
	 	 	20	 
	16.4 Landlord Liability
	 	 	20	 
	16.5 No Prior or Other Agreements
	 	 	20	 
	16.6 Notice Requirements
	 	 	21	 
	16.7 Date of Notice
	 	 	21	 
	16.8 Waivers
	 	 	21	 
	16.9 Holdover
	 	 	21	 
	16.10 Cumulative Remedies
	 	 	21	 
	16.11 Binding Effect: Choice of Law
	 	 	21	 
	16.12 Landlord
	 	 	21	 
	16.13 Attorneys’ Fees and Other Costs
	 	 	22	 
	16.14 Landlord’s Access; Showing Premises; Repairs
	 	 	22	 
	16.15 Signs
	 	 	22	 
	16.16 Termination; Merger
	 	 	22	 
	16.17 Quiet Possession
	 	 	22	 
	16.18 Subordination; Attornment; Non-Disturbance
	 	 	22	 
	16.19 Rules and Regulations
	 	 	23	 
	16.20 Security Measures
	 	 	23	 
	16.21 Reservations
	 	 	23	 
	16.22 Conflict
	 	 	23	 
	16.23 Offer
	 	 	23	 
	116.24 Amendments
	 	 	24	 
	16.25 Multiple Parties
	 	 	24	 
	16.26 Authority
	 	 	24	 
	16.27 Recordation
	 	 	24	 
	16.28 Confidentiality
	 	 	24	 
	16.29 Landlord Renovations
	 	 	24	 
	16.30 Waiver of Jury Trial
	 	 	24	 
	16.31 Backup Generator
	 	 	24	 
	16.32 Roof Space Equipment
	 	 	26	 






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Glossary




     The following terms in the Lease are defined in the paragraphs opposite the terms.



	 	 	 
	Term	 	Defined in Paragraph
	Addendum
	 	Addendum 2
	Additional Rent
	 	4.1
	Affiliates
	 	12.9
	Alteration/Alterations
	 	7.3
	Amortized Excess TI Costs
	 	Ex. F
	Applicable Requirements
	 	6.3
	Appointment Notice
	 	Addendum 2
	Architect
	 	Ex. F
	Base Rent
	 	1.4
	Basic Provisions
	 	1
	Brokers
	 	1.13
	Building
	 	1.2
	Building Standards
	 	Ex. F
	Code
	 	12.8
	Commencement Date
	 	1.3
	Commencement Date Certificate
	 	3.3
	Common Areas
	 	2.2
	Condemnation
	 	14
	Construction Documents
	 	Ex. F
	Contractor
	 	Ex. F
	Default
	 	13.1
	Early Possession
	 	Addendum 1
	Early Possession Date
	 	1.3
	Equipment
	 	16.32
	Equipment Area
	 	16.31
	Excess Tenant Improvement Costs
	 	Ex. F
	Expiration Date
	 	1.3
	Extended Term
	 	Addendum 2
	Fair Market Rental Rate
	 	Addendum 2
	Final Preliminary Plans and Specifications
	 	Ex. F
	Generator Equipment
	 	16.31
	HVAC
	 	4.2(a)(ix)
	Hazardous Substance
	 	6.2(a)
	Landlord
	 	1.1
	Landlord Entities
	 	6.2(c)
	Landlord Response Period
	 	12.2
	Landlord’s Determination Notice
	 	Addendum 2
	Lease
	 	1.1
	Lenders
	 	6.4
	Mortgage
	 	16.18(a)
	Operating Expenses
	 	4.2
	Option
	 	Addendum 2
	Option Notice
	 	Addendum 2
	Party/Parties
	 	1.1
	Permitted Use
	 	1.8
	Plans and Specifications
	 	12.3
	Premises
	 	1.2
	Preliminary Plans and Specifications
	 	Ex. F
	Prevailing Party
	 	16.13
	Proposed Effective Date
	 	12.2
	R&D Park
	 	1.2
	Real Property Taxes
	 	10.2
	Recorded Matters
	 	7.3
	Renovations
	 	16.29
	Rent
	 	4.1
	Reportable Use
	 	6.2






iii









 






	 	 	 
	Term	 	Defined in Paragraph
	Requesting Party
	 	15.1
	Responding Party
	 	15.1
	Roof Space
	 	16.32
	Rules and Regulations
	 	2.4, 16.19
	Second Response Period
	 	12.2
	Subject Space
	 	12.2
	Tenant
	 	1.1
	Tenant Acts
	 	9.2
	Tenant Improvement Allowance
	 	Ex. F
	Tenant Improvement Costs
	 	Ex. F
	Tenant Improvements
	 	Ex. F
	Tenant Move-In Questionnaire
	 	6.5
	Tenant’s Broker
	 	Addendum 2
	Tenant’s Entities
	 	6.2(c)
	Tenant’s Notice
	 	12.2
	Tenant’s Share
	 	1.5
	Term
	 	1.3
	Transfer Premium
	 	12.6
	Transferee
	 	12.1
	Transferee Hazmat Certificate
	 	12.4
	Transfers
	 	12.1
	Utility Expenses
	 	11











iv









 








AMB Property Corporation

R&D Lease



1. Basic Provisions (“Basic Provisions”).




     1.1 Parties. This Lease (“Lease”) dated February ___, 2008, is made by and between
Headlands Realty Corporation, a Maryland corporation (“Landlord”) and Omneon Video Networks, Inc.,
a Delaware corporation (“Tenant”) (collectively, the “Parties” or individually, a “Party”).



     1.2 Premises. The premises (“Premises”), which are the subject of this Lease, are
located in the R&D park commonly known as the AMB Lakeside Business Center (the “R&D Park”). The
Premises are:



          All of the building (“Building”) identified on Exhibit A, consisting of approximately
68,608 rentable square feet and commonly known as 1237-1239 East Arques Avenue, Sunnyvale,
California.


If the Premises are all of the Building, there shall, for purposes of this Lease, be no distinction
between the words “Premises” or “Building.” Tenant shall have nonexclusive rights to the Common
Areas (as defined in Paragraph 2.2 below) but shall not have any rights to the roof (except as set
forth in Paragraph 16.32), exterior walls, or utility raceways of the Building or to any other
buildings in the R&D Park. The R&D Park consists of the Premises, the Building, the Common Areas,
the land upon which they are located, and all other improvements within the boundaries of the R&D
Park, which are identified on Exhibit A.




     1.3 Term. The “Early Possession Date” shall be February 15, 2008 if on such date
possession of the Premises is delivered to Tenant, or the first date after the Early Possession
Date on which possession is tendered to Tenant, as more particularly described in Addendum 1. The
“Commencement Date” shall be the one hundred twentieth (120th) day after the Early
Possession Date. The Term shall begin on the Commencement Date and end on the day immediately
preceding the fifth (5th) anniversary of the Commencement Date (“Term”). The last day
of the Term is referred to as the Expiration Date (“Expiration Date”).



     1.4 Base Rent. Base Monthly Rent (“Base Rent”) shall be payable as follows:



	 	 	 	 	 	 	 	 	 
	Months	Base Rent Rate/Month	Monthly Base Rent
	0-2
	 	$	0.00	 	 	$	0	 
	 
	3-12
	 	$	1.70	 	 	$	116,633.60	 
	 
	13-24
	 	$	1.75	 	 	$	120,064.00	 
	 
	25-36
	 	$	1.80	 	 	$	123,494.40	 
	 
	37-48
	 	$	1.86	 	 	$	127,610.88	 
	 
	49-60
	 	$	1.91	 	 	$	131,041.28	 
	 





     1.5 Tenant’s Share of Operating Expenses (“Tenant’s Share”). 100%



     1.6 Tenant’s Estimated Monthly Rent Payment. Following is the estimated monthly Rent
payment to Landlord pursuant to the provisions of this Lease. This estimate is made at the
inception of the Lease and is subject to adjustment pursuant to the provisions of this Lease. The
Estimated Total Monthly Payment, set forth below, shall be paid upon the execution of this Lease
for the first month of the Lease Term.



	 	 	 	 	 	 	 	 	 

	 
	 	(a)	 	Base Rent (Paragraph 4.1)	 	$	116,633.60	 
	 
	 	(b)	 	Operating Expenses (Paragraph 4.2, excluding Real Property Taxes, Landlord Insurance, and HVAC)	 	$	8,233.00	 
	 
	 	(c)	 	Landlord Insurance (Paragraph 8.3)	 	$	2,058.00	 
	 
	 	(d)	 	Real Property Taxes (Paragraph 10)	 	$	13,722.00	 
	 
	 	 	 	Estimated Total Monthly Payment	 	$	140,646.60	 






1









 








     1.7 Security Deposit. $131,041.28.



     1.8 Permitted Use (“Permitted Use”). General office, administrative, research and
development, shipping and receiving products and equipment incidental to the business of Tenant,
but only to the extent permitted by the City in which the Premises are located and all agencies and
governmental authorities having jurisdiction of the Premises.



     1.9 Guarantor. N/A



     1.10 Addenda. Attached hereto are the following Addenda, all of which constitute a
part of this Lease:




	 	(a)	 	Addendum 1: Early Possession and Inducement Recapture
	 
	 	(b)	 	Addendum 2: Option to Extend





     1.11 Exhibits. Attached hereto are the following Exhibits, all of which constitute a
part of this Lease:




	 	 	 	Exhibit A: Description of Premises and R&D Park.
	 
	 	 	 	Exhibit B: Commencement Date Certificate.
	 
	 	 	 	Exhibit C: Tenant Move-in and Lease Renewal Environmental Questionnaire
	 
	 	 	 	Exhibit D: Move Out Standards
	 
	 	 	 	Exhibit E: Rules and Regulations
	 
	 	 	 	 Exhibit F: Tenant Improvements





     1.12 Address for Rent Payments. All amounts payable by Tenant to Landlord shall,
until further notice from Landlord, be paid to Landlord at the following address:



Headlands Realty Corporation, a Maryland corporation

c/o AMB Property Corporation

P.O. Box 6156

Hicksville, NY 11802-6156




     1.13 Brokers. Tenant represents that it has not dealt with any real estate brokers or
agents other than Craig L. Fordyce and Michael L. Rosendin of Colliers International representing
Landlord and Brian McCorduck of Cushman & Wakefield and Steve Levere of Jones Lang LaSalle
representing Tenant (collectively, the “Brokers”). The Brokers shall receive commissions pursuant
to a separate listing agreement with Landlord.


2. Premises and Common Areas.




     2.1 Letting. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises upon all of the terms, covenants, and conditions, set forth in this Lease. Any
statement of square footage set forth in this Lease or that may have been used in calculating Base
Rent and/or Operating Expenses is an approximation which Landlord and Tenant agree is reasonable,
and the Base Rent and Tenant’s Share based thereon is not subject to revision whether or not the
actual square footage is more or less. Tenant accepts the Premises in its present “As-Is”
condition, state of repair and operating order, except that Landlord shall deliver the Premises to
Tenant with all Building systems, excluding the HVAC system, in good condition and repair. The
Building’s HVAC system shall be delivered in its present “AS-IS” condition, state or repair and
operating order.



     2.2 Common Areas — Definition. “Common Areas” are all areas and facilities outside
the Premises and within the exterior boundary line of the R&D Park and interior utility raceways
within the Premises that are provided and designated by the Landlord from time to time for the
general nonexclusive use of
Landlord, Tenant, and other tenants of the R&D Park and their respective employees, suppliers,
shippers, tenants, contractors, and invitees.



     2.3 Common Areas — Tenant’s Rights. Landlord hereby grants to Tenant, for the benefit
of Tenant and its employees, suppliers, shippers, contractors, customers, and invitees,



2









 




during the
term of this Lease, the nonexclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and privileges
reserved by Landlord under the terms hereof or under the terms of any rules and regulations or
covenants, conditions, and restrictions governing the use of the R&D Park.




     2.4 Common Areas — Rules and Regulations. Landlord shall have the exclusive control
and management of the Common Areas and shall have the right, from time to time, to establish,
modify, amend, and enforce reasonable Rules and Regulations with respect thereto in accordance with
Paragraph 16.19.



     2.5 Common Area Changes. Landlord shall have the right, in Landlord’s sole
discretion, from time to time:



          (a) To make changes to the Common Areas, including, without limitation, changes in the
locations, size, shape, and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways, and utility
raceways, provided that the changes to the parking spaces will be made in accordance with Paragraph
2.6;



          (b) To close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available;



          (c) To add improvements to the Common Areas;



          (d) To use the Common Areas while engaged in making additional improvements, repairs, or
alterations to the R&D Park, or any portion thereof; and



          (e) To do and perform such other acts and make such other changes in, to, or with respect to
the Common Areas and R&D Park as Landlord may, in the exercise of sound business judgment, deem to
be appropriate.



     2.6 Parking. Tenant may use 247 undesignated vehicle parking spaces, on an unreserved
and unassigned basis, on those portions of the Common Areas designated by Landlord for such parking
without additional charge. Landlord shall exercise reasonable efforts to ensure that such spaces
are available to Tenant for its use, but Landlord shall not be required to enforce Tenant’s right
to use the same. Tenant shall not use more parking spaces than such number. Such parking spaces
shall be used only for parking by vehicles no larger than full sized passenger automobiles or
pick-up trucks and, subject to Applicable Requirements, Tenant and Tenant’s Representatives may
park vehicles overnight. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated by Landlord for such activities.
If Tenant permits or allows any of the prohibited activities described herein, then Landlord shall
have the right, without notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable as additional rent upon demand by Landlord. Landlord may not reduce the number
of parking spaces but may change the configuration of the parking areas at any time, and may assign
reserved parking spaces to any tenant, in Landlord’s sole discretion.


3. Term.




     3.1 Term. The Commencement Date, Expiration Date, and Term of this Lease are as
specified in Paragraph 1.3.



     3.2 Delay in Possession. If for any reason the Early Possession Date has not occurred
on or before April 1, 2008, Tenant may terminate and cancel this Lease by written notice delivered
to Landlord no later than April 10, 2008, which notice shall be effective upon receipt. In the
event of such termination, Landlord shall promptly pay to Tenant all amounts previously paid by
Tenant to Landlord. Except as otherwise set forth in this Paragraph 3.2, Landlord shall not be
subject to any liability therefor, nor shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder. In such case, Tenant shall not, except as



3









 




otherwise provided
herein, be obligated to pay Rent or perform any other obligation of Tenant under the terms of this
Lease until Landlord delivers possession of the Premises to Tenant.




     3.3 Commencement Date Certificate. Upon Landlord’s delivery of the Premises to
Tenant, Landlord and Tenant shall execute and deliver to the other a completed certificate
(“Commencement Date Certificate”) in the form attached hereto as Exhibit B.


4. Rent.




     4.1 Base Rent. Except as set forth in Paragraph 4.2 below, Tenant shall pay to
Landlord Base Rent and other monetary obligations of Tenant to Landlord under the terms of this
Lease (such other monetary obligations are herein referred to as “Additional Rent”) in lawful money
of the United States, without offset or deduction, in advance on or before the first
(1st) day of each month of the Term; provided, however, Tenant shall not be obligated to
pay Base Rent for the first two (2) full months of the Term. Base Rent and Additional Rent for any
period during the Term hereof which is for less than one full month shall be prorated based upon
the actual number of days of the month involved. Payment of Base Rent and Additional Rent shall be
made to Landlord at its address stated herein or to such other persons or at such other addresses
as Landlord may from time to time designate in writing to Tenant. Base Rent and Additional Rent
are collectively referred to as “Rent.” All monetary obligations of Tenant to Landlord under the
terms of this Lease are deemed to be Rent. Tenant shall pay one month’s Base Rent and Additional
Rent upon Tenant’s execution and delivery of this Lease, which amount shall be credited to the Base
Rent and Additional Rent first coming due hereunder.



     4.2 Operating Expenses. In accordance with Addendum 1 to this Lease, commencing on
the earlier of the Commencement Date or the date Tenant first conducts its business upon the
Premises and thereafter on the first (1st) day of each month during the Term, Tenant
shall pay to Landlord, in addition to the Base Rent, Tenant’s Share of all Operating Expenses in
accordance with the following provisions.



          (a) “Operating Expenses” are all costs incurred by Landlord relating to the ownership and/or
operation of the R&D Park, Building, and Premises including, but not limited to, the following:



               (i) Expenses relating to the ownership, management, maintenance, repair, replacement and/or
operation of the Common Areas within the R&D Park, including, without limitation, parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways, rail
spurs, landscaped areas, striping, bumpers, irrigation systems, drainage systems, lighting
facilities, fences and gates, exterior signs, and/or tenant directories.



               (ii) Water, gas, electricity, telephone, and other utilities not paid for directly by tenants
of the R&D Park.



               (iii) Trash disposal, snow removal, janitorial, security and the management and administration
of any and all portions of the R&D Park, including, without limitation, a property management fee,
accounting, auditing, billing, postage, salaries and benefits for clerical and supervisory
employees, whether located at the R&D Park or off-site, payroll taxes and legal and accounting
costs and all fees, licenses and permits related to the operation and management of the R&D Park.



               (iv) Real Property Taxes with respect to the R&D Park.



               (v) Premiums and all applicable deductibles for the insurance policies maintained by Landlord
under Paragraph 8 below; provided, however, any deductibles for earthquake
insurance shall be amortized over the greater of the remaining months in the Term or eighty four
(84) months, and Tenant shall pay Tenant’s Share of such monthly amortized amount as follows: the
monthly amortization shall be the sum of (a) the quotient obtained by dividing the amount of the
deductible by the greater of the remaining months in the Term or eighty four (84) months, plus (b)
interest on such amount at a rate equal to the lesser of ten percent (10%) per annum or the maximum
annual interest rate permitted by law.



4









 





               (vi) Environmental monitoring and insurance programs with respect to the R&D Park.



               (vii) Monthly amortization of capital improvements to any portion of the R&D Park which are
not expensed by Landlord. The monthly amortization of any such capital improvement shall be the
sum of the (a) quotient obtained by dividing the cost of the capital improvement by the number of
months of useful life of such improvement (as determined in accordance with generally accepted
accounting principles) plus (b) an amount equal to the cost of the capital improvement times 1/12
of the lesser of 10% or the maximum annual interest rate permitted by law.



               (viii) Maintenance of the R&D Park, including, but not limited to, painting, caulking, and
repair and replacement of Building components, including, but not limited to, roof membrane,
elevators, and fire detection and sprinkler systems.



               (ix) Heating, ventilating, and air conditioning systems (“HVAC”) the costs for which are not
the sole responsibility of Tenant; provided, if any HVAC replacement is required, the provisions of
clause (vii) above shall apply to the extent such replacement constitutes a capital improvement.



          (b) Intentionally omitted.



          (c) The inclusion of the improvements, facilities, and services set forth in Subparagraph
4.2(a) shall not impose any obligation upon Landlord either to have said improvements or facilities
or to provide those services.



          (d) Tenant shall pay monthly in advance, on the same day that the Base Rent is due, Tenant’s
Share of the expenses set forth in Paragraph 1.6. Landlord shall deliver to Tenant within 90 days
after the expiration of each calendar year a reasonably detailed statement showing Tenant’s Share
of the actual expenses incurred during the preceding year. If Tenant’s estimated payments under
this Paragraph 4(d) during the preceding year exceed Tenant’s Share as indicated on said statement,
Tenant shall be credited the amount of such overpayment against Tenant’s Share of expenses next
becoming due. If Tenant’s estimated payments under this Paragraph 4.2(d) during said preceding
year were less than Tenant’s Share as indicated on said statement, Tenant shall pay to Landlord the
amount of the deficiency within 10 days after delivery by Landlord to Tenant of said statement. At
any time Landlord may adjust the amount of the estimated Tenant’s Share of expenses to reflect
Landlord’s reasonable estimate of such expenses for the year, provided that prior to the effective
date of such adjustment, Landlord shall deliver to Tenant a reasonably detailed written explanation
of such adjustment.



          (e) Notwithstanding anything to the contrary contained herein, for purposes of this Lease, the
term “Operating Expenses” shall not include the following: (i) costs (including permit, license,
and inspection fees) incurred in renovating, improving, decorating, painting, or redecorating
vacant space within the R&D Park; (ii) legal and auditing fees (other than those fees reasonably
incurred in connection with the ownership and operation of all or any portion of the R&D Park);
(iii) leasing commissions, advertising expenses, and other costs incurred in connection with the
original leasing of the R&D Park or future re-leasing of any portion of the R&D Park; (iv)
depreciation of the Building or any other improvements situated within the R&D Park; (v) any items
for which Landlord is actually reimbursed by any person including insurers; (vi) costs of repairs
or other work necessitated by fire, windstorm or other casualty (provided any deductibles shall be
an Operating Expense to the extent set forth in Section 4.2(a) above) and/or
costs of repair or other work necessitated by the exercise of the right of eminent domain to
the extent insurance proceeds or a condemnation award, as applicable, is actually received by
Landlord for such purposes; provided, such costs of repairs or other work shall be paid by the
parties in accordance with the provisions of Sections 7, 8 and 9 below; (vii) other than any
interest charges as expressly provided for in this Lease, any interest or payments on any financing
for any portion of the R&D Park, interest and penalties incurred as a result of Landlord’s late
payment of any invoice (provided that Tenant pays Tenant’s Share of expenses to Landlord when due
as set forth herein), and any bad debt loss, rent loss or reserves for same; (viii) any payments
under a ground lease or master lease; (ix) capital improvements not described in clause (a)(vii)
above; (x) fines, interest and penalties due to late payments made by



5









 




Landlord; and (xi) the cost
of investigating, removing or otherwise remediating Hazardous Substances not caused to be present
by Tenant or any of Tenant’s Entities (defined below).




          (f) After delivery to Landlord of at least thirty (30) days’ prior written notice, Tenant, at
its sole cost and expense through any accountant designated by it, shall have the right to examine
and/or audit the books and records evidencing such expenses for the previous one (1) calendar year,
during Landlord’s reasonable business hours but not more frequently than once during any calendar
year. Tenant may not compensate any such accountant on a contingency fee basis. The results of
any such audit (and any negotiations between the parties related thereto) shall be maintained
strictly confidential by Tenant, its lawyers and its accounting firm and shall not be disclosed,
published or otherwise disseminated to any other party other than to Landlord and its authorized
agents, except as otherwise required by Applicable Requirements or court order. Landlord and
Tenant each shall use its commercially reasonable efforts to cooperate in such negotiations and to
promptly resolve any discrepancies between Landlord and Tenant in the accounting of such expenses.
If through such audit it is determined that there is a discrepancy of more than five percent (5%)
in the total of actual Operating Expenses, then Landlord shall reimburse Tenant for the reasonable
accounting costs and expenses incurred by Tenant in performing such audit, including Tenant’s
in-house or outside auditors or accountants, such costs and expenses not to exceed $2,500.00.
Landlord and Tenant shall pay or reimburse, within thirty (30) days following completion of such
audit, the other for any underpayment or overpayment of Operating Expenses.


5. Security Deposit. Tenant shall deposit with Landlord upon Tenant’s execution hereof the
Security Deposit set forth in Paragraph 1.7 as security for Tenant’s faithful performance of
Tenant’s obligations under this Lease. If Tenant fails to pay Base Rent or Additional Rent or
otherwise defaults under this Lease (as defined in Paragraph 13.1), Landlord may use the Security
Deposit for the payment of any amount due Landlord or to reimburse or compensate Landlord for any
liability, cost, expense, loss, or damage (including attorneys’ fees) which Landlord may suffer or
incur by reason thereof. Tenant shall on demand pay Landlord the amount so used or applied so as
to restore the Security Deposit to the amount set forth in Paragraph 1.7. Landlord shall not be
required to keep all or any part of the Security Deposit separate from its general accounts.
Landlord shall, at the expiration or earlier termination of the Term hereof and after Tenant has
vacated the Premises, return to Tenant that portion of the Security Deposit not used or applied by
Landlord. No part of the Security Deposit shall be considered to be held in trust, to bear
interest, or to be prepayment for any monies to be paid by Tenant under this Lease.



6. Use.




     6.1 Permitted Use. Tenant shall use and occupy the Premises only for the Permitted
Use set forth in Paragraph 1.8. Tenant shall not commit any nuisance, permit the emission of any
objectionable noise or odor, suffer any waste, make any use of the Premises which is contrary to
any law or ordinance, or which will invalidate or increase the premiums for any of Landlord’s
insurance. Tenant shall not service, maintain, or repair vehicles on the Premises, Building, or
Common Areas. Tenant shall not store foods, pallets, drums, or any other materials outside the
Premises. Tenant’s use is subject to, and at all times Tenant shall comply with any
and all Applicable Requirements, defined below, related to Tenant’s specific use of the Premises.
Landlord reserves to itself the right, from time to time, to grant, without the consent of Tenant,
such easements, rights and dedications that Landlord deems reasonably necessary, and to cause the
recordation of parcel or subdivision maps and/or restrictions, so long as such easements, rights,
dedications, maps and restrictions, as applicable, do not materially and adversely interfere with
Tenant’s operations in the Premises. Tenant
agrees to sign any documents reasonably requested by Landlord to effectuate any such easements,
rights, dedications, maps or restrictions. Tenant shall not initiate, submit an application for,
or otherwise request, any land use approvals or entitlements with respect to the Premises or any
other portion of the R&D Park, including without limitation, any variance, conditional use permit
or rezoning, without first obtaining Landlord’s prior written consent thereto, which consent may be
given or withheld in Landlord’s sole discretion.



     6.2 Hazardous Substances.



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          (a) Reportable Uses Require Consent. The term, “Hazardous Substance,” as used in this
Lease, shall mean any product, substance, chemical, material, or waste whose presence, nature,
quantity, and/or intensity of existence, use, manufacture, disposal, transportation, spill,
release, or effect, either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any governmental authority; or (iii) a
basis for potential liability of Landlord to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil, or any products or by-products thereof. Tenant shall
not engage in any activity in or about the Premises which constitutes a Reportable Use (as
hereinafter defined) of Hazardous Substances without the express prior written consent of Landlord
and compliance in a timely manner (at Tenant’s sole cost and expense) with all Applicable
Requirements (as defined in Paragraph 6.3). “Reportable Use” shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect
to which a report, notice, registration, or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on, or about the Premises of a Hazardous
Substance with respect to which any Applicable Requirements require that a notice be given to
persons entering or occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Tenant may, without Landlord’s prior consent, but upon notice to Landlord and in
compliance with all Applicable Requirements, use any ordinary and customary materials reasonably
required to be used by Tenant in the normal course of the Permitted Use, so long as such use is not
a Reportable Use and does not expose the Premises or neighboring properties to any meaningful risk
of contamination or damage, or expose Landlord to any liability therefor. In addition, Landlord
may (but without any obligation to do so) condition its consent to any Reportable Use of any
Hazardous Substance by Tenant upon Tenant’s giving Landlord such additional assurances as Landlord,
in its reasonable discretion, deems necessary to protect itself, the public, the Premises, and the
environment against damage, contamination, injury, and/or liability therefor, including but not
limited to the installation (and, at Landlord’s option, removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit.



          (b) Duty to Inform Landlord. If Tenant knows that a Hazardous Substance is located
in, under, or about the Premises or the Building, Tenant shall immediately give Landlord written
notice thereof, together with a copy of any statement, report, notice, registration, application,
permit, business plan, license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill, release, discharge of, or
exposure to such Hazardous Substance. Tenant shall not cause or permit any Hazardous Substance to
be spilled or released in, on, under, or about the Premises (including, without limitation, through
the plumbing or sanitary sewer system).



          (c) Tenant Indemnification. Except to the extent caused by the gross active or gross passive
negligence or willful misconduct of Landlord or any Landlord Entity (as defined below) Tenant shall
indemnify, protect, defend, and hold Landlord, Landlord’s affiliates, Lenders, and the officers,
directors, shareholders, partners, employees, managers, independent contractors, attorneys, and
agents of the foregoing (“Landlord Entities”) and the Premises harmless from and against any and
all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits,
and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Tenant or by any of Tenant’s employees, agents, contractors, servants,
visitors, suppliers, or invitees (such employees, agents, contractors, servants, visitors,
suppliers, and invitees as herein collectively referred to as “Tenant Entities”). Tenant’s
obligations under this Paragraph 6.2(c) shall include,
but not be limited to, the effects of any contamination or injury to person, property, or the
environment created or suffered by Tenant, and the cost of investigation (including consultants’
and attorneys’ fees and testing), removal, remediation, restoration and/or abatement thereof, or of
any contamination therein involved. Tenant’s obligations under this Paragraph 6.2(c) shall survive
the Expiration Date or earlier termination of this Lease.



          (d) Tenant’s Exculpation. Tenant shall neither be liable for nor otherwise obligated
to Landlord under any provision of this Lease with respect to (i) any claim, remediation
obligation, investigation obligation, liability, cause of action, attorney’s fees, consultants’
cost,



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expense or damage resulting from any Hazardous Substance present in, on or about the
Premises, the Building or the R&D Park to the extent neither caused nor otherwise permitted,
directly or indirectly, by Tenant or the Tenant Entities; or (ii) the removal, investigation,
monitoring or remediation of any Hazardous Substance present in, on or about the Premises, the
Building or the R&D Park caused by any source, including third parties other than Tenant and the
Tenant Entities, as a result of or in connection with the acts or omissions of persons other than
Tenant or the Tenant Entities; provided, however, Tenant shall be fully liable for
and otherwise obligated to Landlord under the provisions of this Lease for all liabilities, costs,
damages, penalties, claims, judgments, expenses (including without limitation, attorneys’ and
experts’ fees and costs) and losses to the extent (A) Tenant or any of the Tenant Entities
exacerbates the conditions caused by such Hazardous Substances, or (B) Tenant and/or the Tenant
Entities allows or permits persons over which Tenant or any of the Tenant Entities has control
and/or for which Tenant or any of the Tenant Entities are legally responsible for, to cause such
Hazardous Substances to be present in, on, under, through or about any portion of the Premises, the
Building or the R&D Park, or does not take all reasonably appropriate actions to prevent such
persons over which Tenant or any of the Tenant Entities has control and/or for which Tenant or any
of the Tenant Entities are legally responsible from causing the presence of Hazardous Substances
in, on, under, through or about any portion of the Premises, the Building or the R&D Park.




     6.3 Tenant’s Compliance with Requirements. Tenant shall, at Tenant’s sole cost and
expense, fully, diligently, and in a timely manner comply with all “Applicable Requirements,” which
term is used in this Lease to mean all laws, rules, regulations, ordinances, directives, covenants,
easements, and restrictions of record, permits, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Landlord’s engineers and/or consultants,
relating in any manner to the Premises (including but not limited to matters pertaining to (a)
industrial hygiene, (b) environmental conditions on, in, under, or about the Premises, including
soil and groundwater conditions, and (c) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release of any Hazardous
Substance), now in effect or which may hereafter come into effect. Tenant shall, within 5 days
after receipt of Landlord’s written request, provide Landlord with copies of all documents and
information evidencing Tenant’s compliance with any Applicable Requirements, and shall immediately
upon receipt notify Landlord in writing (with copies of any documents involved) of any threatened
or actual claim, notice, citation, warning, complaint, or report pertaining to or involving failure
by Tenant or the Premises to comply with any Applicable Requirements.



     6.4 Inspection; Compliance with Law. In addition to Landlord’s environmental
monitoring and insurance program, the cost of which is included in Operating Expenses, Landlord and
the holders of any mortgages, deeds of trust, or ground leases on the Premises (“Lenders”) shall
have the right to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times and after giving reasonable advance notice (not to exceed 24 hours), for the
purpose of inspecting the condition of the Premises and for verifying compliance by Tenant with
this Lease and all Applicable Requirements. Landlord shall be entitled to employ experts and/or
consultants in connection therewith to advise Landlord with respect to Tenant’s installation,
operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the
Premises. The costs and expenses of any such inspections shall be paid by the party requesting
same unless a violation of Applicable Requirements by Tenant or a Tenant Entity exists or is
imminent, or the inspection is requested or ordered by a governmental authority.
Tenant shall upon request reimburse Landlord or Landlord’s Lender, as the case may be, for the
costs and expenses of such inspections in the event of a violation of Applicable Requirements by
Tenant or a Tenant Entity is found to exist.



     6.5 Tenant Move-in Questionnaire. Prior to executing this Lease, Tenant has
completed, executed and delivered to Landlord Tenant’s Move-in and Lease Renewal Environmental
Questionnaire (the “Tenant Move-in Questionnaire”), a copy of which is attached hereto as
Exhibit C and incorporated herein by this reference. Tenant covenants, represents and
warrants to Landlord that the information on the Tenant Move-in Questionnaire is true and correct
and accurately describes the use(s) of Hazardous Substances which will be made and/or used on the
Premises by Tenant.



     6.6 Landlord Indemnification. With respect to only those Hazardous Substances present
on, in or under the R&D Park as of the date of this Lease (the “Existing Hazardous



8









 




Substances”),
Landlord agrees to indemnify, defend (with counsel reasonably acceptable to Tenant) and hold Tenant
harmless from and against any and all claims, judgments, damages, penalties, fines, liabilities,
losses, suits, administrative proceedings and costs (including, but not limited to, reasonable
attorneys’ and consultant fees and court costs), arising at any time during the Term of this Lease,
to the extent arising from (1) any of the Existing Hazardous Substances and/or (2) the removal,
investigation, monitoring or remediation of any of the Existing Hazardous Substances; provided,
however, Landlord shall not indemnify, defend or hold Tenant harmless to the extent (x) Tenant or
any of the Tenant Entities contributes to or has contributed to the presence of such Existing
Hazardous Substances or Tenant and/or any of the Tenant Entities exacerbates the conditions caused
by such Existing Hazardous Substances, or (y) Tenant and/or any of the Tenant Entities allows or
permits persons over which Tenant or any of the Tenant Entities has control and/or for which Tenant
or any of the Tenant Entities are legally responsible for, to cause such Existing Hazardous
Substances to be present in, on, under, through or about any portion of the Premises, the Building
or the R&D Park, or does not take all reasonably appropriate actions to prevent such persons over
which Tenant or any of the Tenant Entities has control and/or for which Tenant or any of the Tenant
Entities are legally responsible from causing the presence of Existing Hazardous Substances in, on,
under, through or about any portion of the Premises, the Building or the R&D Park.



7. Maintenance, Repairs, Trade Fixtures and Alterations.




     7.1 Tenant’s Obligations. Subject to the provisions of Paragraph 7.2 (Landlord’s
Obligations), Paragraph 9 (Damage or Destruction), and Paragraph 14 (Condemnation), Tenant shall,
at Tenant’s sole cost and expense and at all times, keep the Premises and every part thereof in
good order, condition, and repair (whether or not such portion of the Premises requiring repair, or
the means of repairing the same, are reasonably or readily accessible to Tenant and whether or not
the need for such repairs occurs as a result of Tenant’s use, any prior use, the elements, or the
age of such portion of the Premises) including, without limiting the generality of the foregoing,
all equipment or facilities specifically serving the Premises, such as plumbing, heating,
ventilating, air conditioning, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connectors if within the Premises, fixtures, interior walls, interior surfaces
of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights, but excluding any
items which are the responsibility of Landlord pursuant to Paragraph 7.2 below. Tenant’s
obligations shall include restorations, replacements, or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition, and state of
repair. Tenant shall also be solely responsible for the cost of all repairs and replacements
caused by the negligent acts or omissions or intentional misconduct by Tenant or Tenant’s
employees, contractors, agents, guests or invitees. If Tenant refuses or neglects to perform its
obligations under this paragraph to the reasonable satisfaction of Landlord, Landlord may, but
without obligation to do so, at any time perform the same without Landlord having any liability to
Tenant for any loss or damage that may accrue to Tenant’s Property or to Tenant’s business by
reason thereof. If Landlord performs any such obligations, Tenant shall pay to Landlord, as
Additional Rent, Landlord’s costs and expenses incurred therefor.



     7.2 Landlord’s Obligations. Subject to the provisions of Paragraph 6 (Use), Paragraph
7.1 (Tenant’s Obligations), Paragraph 9 (Damage or Destruction), and Paragraph 14 (Condemnation),
Landlord, at its expense and not subject to the reimbursement requirements of Paragraph 4.2, shall
maintain and repair the roof structure, foundations and the structure of the exterior walls of the
Building. Landlord, subject to
reimbursement pursuant to Paragraph 4.2, shall maintain and repair the Building roof membrane,
Common Areas, and utility systems within the R&D Park which are outside of the Premises.



     7.3 Alterations. Tenant shall not install any signs, fixtures, improvements, nor make
or permit any other alterations or additions (individually, an “Alteration”, and collectively, the
“Alterations”) to the Premises without the prior written consent of Landlord, except for any
non-structural Alteration that, on a per project basis, costs less than Fifty Thousand Dollars
($50,000.00) and which does not affect the Building systems or the structural integrity or
structural components of the Premises or the Building. In all events, Tenant shall deliver at
least ten (10) days prior notice to Landlord, from the date Tenant intends to commence
construction, sufficient to enable Landlord to post a Notice of Non-Responsibility and Tenant shall
obtain all permits or other governmental approvals prior to commencing any of such work and deliver
a



9









 




copy of same to Landlord. All Alterations shall be at Tenant’s sole cost and expense in
accordance with plans and specifications which have been previously submitted to and approved in
writing by Landlord, and shall be installed by a licensed, insured, and bonded contractor
(reasonably approved by Landlord) in compliance with all Applicable Requirements (including, but
not limited to, the ADA), and all recorded matters (“Recorded Matters”) and rules and regulations
of the R&D Park. In addition, all work with respect to any Alterations must be done in a good and
workmanlike manner. Landlord’s approval of any plans, specifications or working drawings for
Tenant’s Alterations shall not create nor impose any responsibility or liability on the part of
Landlord for their completeness, design sufficiency, or compliance with any Applicable
Requirements. At the time of approval, if requested to do so by Tenant in writing at such time,
Landlord will inform Tenant if Landlord requires Tenant to remove such Alteration upon termination
or expiration of the Lease. In performing the work of any such Alterations, Tenant shall have the
work performed in such a manner as not to obstruct access to the R&D Park, or the Common Areas for
any other tenant of the R&D Park, and as not to obstruct the business of Landlord or other tenants
in the R&D Park, or interfere with the labor force working in the R&D Park. As Additional Rent
hereunder, Tenant shall reimburse Landlord, within ten (10) days after demand, for actual legal,
engineering, architectural, planning and other expenses incurred by Landlord in connection with
Tenant’s Alterations. If Tenant makes any Alterations, Tenant agrees to carry “Builder’s All Risk”
insurance, in an amount approved by Landlord and such other insurance as Landlord may require, it
being understood and agreed that all of such Alterations shall be insured by Tenant in accordance
with the terms of this Lease immediately upon completion thereof. Tenant shall keep the Premises
and the property on which the Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by or on behalf of Tenant. Tenant shall,
prior to construction of any and all Alterations, cause its contractor(s) and/or major
subcontractor(s) to provide insurance as reasonably required by Landlord, and Tenant shall provide
such assurances to Landlord, including without limitation, waivers of lien, surety company
performance bonds as Landlord shall require to assure payment of the costs thereof to protect
Landlord and the R&D Park from and against any loss from any mechanic’s, materialmen’s or other
liens.




     7.4 Surrender/Restoration. Tenant shall surrender the Premises by the end of the last
day of the Lease Term or any earlier termination date, clean and free of debris and in the
condition originally received from Landlord, ordinary wear and tear excepted and in accordance with
the Move Out Standards set forth in Exhibit D to this Lease. Without limiting the
generality of the above, Tenant shall remove all personal property, trade fixtures, and floor
bolts, patch all floors, and cause all lights to be in the condition delivered to Tenant. Tenant’s
obligation to remove Alterations on the expiration or earlier termination of the Term shall be
governed by the terms of Paragraph 7.3. Upon the expiration or earlier termination of the Term,
Tenant shall not be required to remove those Tenant Improvements (as defined in Exhibit F
hereto) shown on the Final Preliminary Plans and Specifications (as defined in Exhibit F
hereto); provided, however, Landlord shall have the right to require that Tenant remove any Tenant
Improvements not shown on the Final Preliminary Plans and Specifications; provided, further, in the
event Tenant requests in writing, at the time Tenant delivers to Landlord for Landlord’s approval
the Final Plans and Specifications, Construction Documents or any changes to the Construction
Documents, that Landlord specify which of the Tenant Improvements shown therein Landlord shall
require to be removed at the expiration or earlier termination of the Term, Landlord agrees to so
specify those Tenant Improvements shown therein which Landlord shall require to be removed.


8. Insurance; Indemnity.




     8.1 Payment of Premiums and Deductibles. The cost of the premiums and all applicable
deductibles, to the extent set forth in Paragraph 4.2, for the insurance policies maintained by
Landlord under this Paragraph 8 shall be an Operating Expense reimbursable pursuant to Paragraph
4.2 hereof. Premiums for policy periods commencing prior to, or extending beyond, the term of this
Lease shall be prorated to coincide with the corresponding Commencement Date and Expiration Date.



     8.2 Tenant’s Insurance.



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          (a) At its sole cost and expense, Tenant shall maintain in full force and effect during the
Term of the Lease the following insurance coverages insuring against claims which may arise from or
in connection with the Tenant’s operation and use of the Premises.



               (i) Commercial General Liability insurance with minimum limits of $1,000,000 per occurrence
and $3,000,000 general aggregate for bodily injury, personal injury, and property damage. If
required by Landlord, liquor liability coverage will be included. Such insurance shall be endorsed
to include Landlord and Landlord Entities as additional insureds, shall be primary and
noncontributory with any Landlord insurance, and shall provide severability of interests between or
among insureds.



               (ii) Workers’ Compensation insurance with statutory limits and Employers Liability with a
$1,000,000 per accident limit for bodily injury or disease.



               (iii) Automobile Liability insurance covering all owned, nonowned, and hired vehicles with a
$1,000,000 per accident limit for bodily injury and property damage.



               (iv) Property insurance against “all risks” at least as broad as the current ISO Special Form
policy (and Tenant shall not be obligated to carry flood or earthquake coverage provided Tenant
agrees that Landlord shall not be liable for any damage or loss arising from flood or earthquake
and Tenant waives and releases Landlord from all claims, losses, damages, liabilities, judgments
and costs arising from or related to Tenant’s failure to carry such flood or earthquake coverage),
for loss to any tenant improvements or betterments, floor and wall coverings, and business personal
property on a full insurable replacement cost basis with no coinsurance clause, and Business Income
insurance covering at least six months of loss of income and continuing expense.



          (b) Tenant shall deliver to Landlord certificates of all insurance reflecting evidence of
required coverages prior to initial occupancy, and annually thereafter.



          (c) If, in the opinion of Landlord’s insurance advisor, the amount or scope of such coverage
is deemed inadequate at any time during the Term, Tenant shall, within thirty (30) days of receipt
of Landlord’s written notice regarding same, increase such coverage to such reasonable amounts or
scope as Landlord’s advisor deems adequate, provided that such additional coverage shall be
consistent with coverage customarily required to be carried for similar types of buildings within
the vicinity of the R&D Park.



          (d) All insurance required under Paragraph 8.2 (i) shall be issued by insurers licensed to do
business in the state in which the Premises are located and which are rated A:VII or better by
Best’s Key Rating Guide and (ii) shall be endorsed to provide at least 30-days prior notification
of cancellation or material change in coverage to said additional insureds.



     8.3 Landlord’s Insurance. Landlord may, but shall not be obligated to, maintain risk
of direct physical loss property damage insurance coverage, including earthquake and flood,
covering the buildings within the R&D Park, Commercial General Liability insurance, and such other
insurance in such amounts and covering such other liability or hazards as deemed appropriate by
Landlord. The amount and scope of coverage of Landlord’s insurance shall be determined by Landlord
from time to time in its sole discretion and shall be subject to such deductible amounts as
Landlord may elect. Landlord shall have the right to reduce or terminate any insurance or
coverage.



     8.4 Waiver of Subrogation. To the extent permitted by law and with permission of
their insurance carriers, Landlord and Tenant each waive any right to recover against the other on
account of any and all claims Landlord or Tenant may have against the other with respect to
property insurance actually carried, or required to be carried hereunder, to the extent of the
proceeds realized from such insurance coverage.



     8.5 Indemnity. Except to the extent caused by the gross active or gross passive
negligence or willful misconduct of Landlord or Landlord’s employees or agents, Tenant shall
protect, defend, indemnify, and hold Landlord and Landlord Entities harmless from and against any
and all loss, claims, liability, or costs (including court costs and attorneys’ fees) incurred by
reason of:



11









 





          (a) any damage to any property (including but not limited to property of any Landlord Entity)
or death, bodily, or personal injury to any person occurring in or about the Premises, the
Building, or the R&D Park to the extent that such injury or damage shall be caused by or arise from
any actual or alleged act, neglect, fault, omission or misconduct by or of Tenant, its agents,
servants, employees, invitees, contractors, suppliers, subtenants, or visitors;



          (b) the conduct or management of any work or anything whatsoever done by the Tenant on or
about the Premises or from transactions of the Tenant concerning the Premises;



          (c) Tenant’s failure to comply with any and all Applicable Requirements relating to the
condition or use of the Premises or its occupancy; or



          (d) any Default on the part of Tenant in the performance of any covenant or agreement to be
performed pursuant to this Lease.



          The provisions of this Paragraph 8.5 shall, with respect to any claims or liability accruing
prior to such termination, survive the Expiration Date or earlier termination of this Lease.



     8.6 Exemption of Landlord from Liability. Except to the extent caused by the gross
active or gross passive negligence or willful misconduct of Landlord or Landlord’s employees or
agents, neither Landlord nor Landlord Entities shall be liable for and Tenant waives any claims
against Landlord and Landlord Entities for injury or damage to the person or the property of
Tenant, Tenant’s employees, contractors, invitees, customers or any other person in or about the
Premises, Building or R&D Park from any cause whatsoever, including, but not limited to, damage or
injury which is caused by or results from (i) fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, heating, ventilating, air conditioning or lighting fixtures or (ii) from the condition of
the Premises, other portions of the Building or R&D Park. Landlord shall not be liable for any
damages arising from any act or neglect (passive or active) of any other tenants of Landlord or any
subtenant or assignee of such other tenants nor from the failure by Landlord to enforce the
provisions of any other lease in the R&D Park. Notwithstanding Landlord’s negligence (active or
passive), gross negligence (active or passive), or breach of this Lease, Landlord shall under no
circumstances be liable for (a) injury to Tenant’s business, for any loss of income or profit
therefrom or any indirect, consequential or punitive damages or (b) any damage to property or
injury to persons arising from any act of God or war, violence or insurrection, including, but not
limited to, those caused by earthquakes, hurricanes, storms, drought, floods, acts of terrorism,
and/or riots.


9. Damage or Destruction.




     9.1 Termination Right. If the Premises are damaged in whole or in part by fire, the
elements, or any other cause whatsoever, then Landlord shall restore the same to substantially the
same condition existing immediately prior to such damage, unless the Lease is terminated by
Landlord or Tenant pursuant to this Paragraph 9.1. Tenant shall give Landlord immediate written
notice of any damage to the Premises. Within sixty (60) days following such damage, Landlord shall
inform Tenant in writing of Landlord’s estimate of the time required to complete repairs to the
Premises. Subject to the provisions of Paragraph 9.2, if the Premises or the Building shall be
damaged to such an extent that there is
substantial interference for a period exceeding one hundred eighty (180) consecutive days with the
conduct by Tenant of its business at the Premises, then either party, at any time prior to
commencement of repair of the Premises and following ten (10) days written notice to the other
party, may terminate this Lease effective thirty (30) days after delivery of such notice to the
other party. Further, if any portion of the Premises is damaged and is not fully covered by the
aggregate of insurance proceeds received by Landlord and any applicable deductible or if the holder
of any indebtedness secured by the Premises requires that the insurance proceeds be applied to such
indebtedness, and Tenant does not voluntarily contribute any shortfall thereof to Landlord, then
Landlord shall have the right to terminate this Lease by delivering written notice of termination
to Tenant within thirty (30) days after the date of notice to Tenant of any such event.
Additionally, if the repair of any such damage is not completed within one hundred eighty (180)
days (regardless of the time estimated for completion of the repairs), Tenant shall have the right
to terminate this Lease by delivering



12









 




written notice thereof to Landlord within thirty (30) days
after the expiration of the 180-day period, with any such termination effective thirty (30) days
after delivery of the notice of termination, unless all such repairs are completed within such
latter thirty (30) day period. Such termination shall not excuse the performance by Tenant of
those covenants which under the terms hereof survive termination. Rent shall be abated in
proportion to the degree of interference during the period that there is such substantial
interference with the conduct of Tenant’s business at the Premises. Abatement of rent and Tenant’s
right of termination pursuant to this provision shall be Tenant’s sole remedy with respect to any
such damage regardless of the cause thereof.




     9.2 Damage Caused by Tenant. Tenant’s termination rights under Paragraph 9.1 shall
not apply if the damage to the Premises or Building is the result of any act or omission of Tenant
or of any of Tenant’s agents, employees, customers, invitees, or contractors.


10. Real Property Taxes.




     10.1 Payment of Real Property Taxes. Landlord shall pay the Real Property Taxes due
and payable during the term of this Lease and, except as otherwise provided in Paragraph 10.3, such
payments shall be an Operating Expense reimbursable pursuant to Paragraph 4.2.



     10.2 Real Property Tax Definition. As used herein, the term “Real Property Taxes” is
any form of tax or assessment, general, special, ordinary, or extraordinary, imposed or levied upon
(a) the R&D Park or Building, (b) any interest of Landlord in the R&D Park or Building, (c)
Landlord’s right to rent or other income from the R&D Park or Building, and/or (d) Landlord’s
business of leasing the Premises. Real Property Taxes include (a) any license fee, commercial
rental tax, excise tax, improvement bond or bonds, levy, or tax; (b) any tax or charge which
replaces or is in addition to any of such above-described “Real Property Taxes,” and (c) any fees,
expenses, or costs (including attorneys’ fees, expert fees, and the like) incurred by Landlord in
protesting or contesting any assessments levied or any tax rate. Real Property Taxes for tax years
commencing prior to, or extending beyond, the term of this Lease shall be prorated to coincide with
the corresponding Commencement Date and Expiration Date.



     10.3 Additional Improvements. Operating Expenses shall not include Real Property
Taxes attributable to improvements placed upon the R&D Park by other tenants or by Landlord for the
exclusive enjoyment of such other tenants. Tenant shall, however, pay to Landlord at the time
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed by reason of improvements placed upon the Premises by Tenant or at Tenant’s
request.



     10.4 Joint Assessment. If the Building is not separately assessed, Real Property
Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all
of the land and improvements included within the tax parcel assessed.



     10.5 Tenant’s Property Taxes. Tenant shall pay prior to delinquency all taxes
assessed against and levied upon Tenant’s improvements, fixtures, furnishings, equipment, and all
personal property of Tenant contained in the Premises or stored within the R&D Park.


11. Utilities. Tenant shall pay directly for all utilities and services supplied to the Premises,
including but not limited to electricity, telephone, security, gas, and cleaning of the Premises,
together with any taxes thereon. For any such utility fees or services that are not billed or
metered separately to Tenant, including without limitation, water and sewer charges, and garbage
and waste disposal (collectively, “Utility Expenses”), Tenant shall pay to Landlord Tenant’s Share
of Utility Expenses. Tenant shall also pay Tenant’s Share of any assessments, charges, and fees
included within any tax bill for the lot on which the Premises are situated, including without
limitation, entitlement fees, allocation unit fees, sewer use fees, and any other similar fees or
charges.



12. Assignment and Subleasing.




     12.1 Prohibition. Tenant shall not, without the prior written consent of Landlord,
assign, mortgage, hypothecate, encumber, grant any license or concession, pledge or otherwise
transfer this Lease or any interest herein, permit any assignment or other such transfer of this
Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof, or



13









 




permit the use of the Premises by any persons other than Tenant and Tenant’s Representatives (all
of the foregoing are sometimes referred to collectively as “Transfers” and any person to whom any
Transfer is made or sought to be made is sometimes referred to as a “Transferee”). No consent to
any Transfer shall constitute a waiver of the provisions of this Section, and all subsequent
Transfers may be made only with the prior written consent of Landlord, which consent shall not be
unreasonably withheld, but which consent shall be subject to the provisions of this Section.




     12.2 Request for Consent. If Tenant seeks to make a Transfer, Tenant shall notify
Landlord, in writing, and deliver to Landlord at least thirty (30) days (but not more than one
hundred eighty (180) days) prior to the proposed commencement date of the Transfer (the “Proposed
Effective Date”) the following information and documents (the “Tenant’s Notice”): (i) a
description of the portion of the Premises to be transferred (the “Subject Space”); (ii) all of the
terms of the proposed Transfer including without limitation, the Proposed Effective Date, the name
and address of the proposed Transferee, and a copy of the existing or proposed assignment, sublease
or other agreement governing the proposed Transfer; (iii) current financial statements of the
proposed Transferee certified by an officer, member, partner or owner thereof, and any such other
information as Landlord may then reasonably require, including without limitation, audited
financial statements (if available) for the previous three (3) most recent consecutive fiscal
years; (iv) the Plans and Specifications (defined below), if any; and (v) such other information as
Landlord may then reasonably require. Tenant shall give Landlord the Tenant’s Notice by registered
or certified mail addressed to Landlord at Landlord’s Address specified in the Basic Lease
Information. Within thirty (30) days after Landlord’s receipt of the Tenant’s Notice (the
“Landlord Response Period”) Landlord shall notify Tenant, in writing, of its determination with
respect to such requested proposed Transfer and the election to recapture as set forth below. If
Landlord does not elect to recapture pursuant to the provisions hereof and Landlord does consent to
the requested proposed Transfer, Tenant may thereafter assign its interests in and to this Lease or
sublease all or a portion of the Premises to the same party and on the same terms as set forth in
the Tenant’s Notice. If Landlord fails to respond to Tenant’s Notice within Landlord’s Response
Period, then, after Tenant delivers to Landlord ten (10) days written notice (the “Second Response
Period”) and Landlord fails to respond thereto prior to the end of the Second Response Period, the
proposed Transfer shall then be deemed approved by Landlord.



     12.3 Criteria for Consent. Tenant acknowledges and agrees that, among other
circumstances for which Landlord could reasonably withhold consent to a proposed Transfer, it shall
be reasonable for Landlord to withhold its consent where (a) a Default then exists, (b) the use to
be made of the Premises by the proposed Transferee is prohibited under this Lease or differs from
the uses permitted under this Lease, (c) the proposed Transferee or its business is subject to
compliance with additional requirements of the ADA beyond those requirements which are applicable
to Tenant, unless the proposed Transferee shall (1) first deliver plans and specifications for
complying with such additional requirements (the “Plans and Specifications”) and obtain Landlord’s
written consent thereto, and (2) comply with all Landlord’s conditions contained in such consent,
(d) the proposed Transferee does not intend to occupy a substantial portion of the Premises
assigned or sublet to it, (e) Landlord reasonably disapproves of the proposed Transferee’s business
operating ability or
creditworthiness of, or use proposed by, the proposed Transferee at the Premises, (f) the proposed
Transferee is a governmental agency or unit, (g) the proposed Transfer would violate any
“exclusive” rights of any occupants in the R&D Park or cause Landlord to violate another agreement
or obligation to which Landlord is a party or otherwise subject, (h) Landlord otherwise determines
that the proposed Transfer would have the effect of decreasing the value of the Building or the R&D
Park, or increasing the expenses associated with operating, maintaining and repairing the R&D Park,
or (i) the proposed Transferee will use, store or handle Hazardous Materials (defined below) in or
about the Premises of a type, nature or quantity that could materially adversely affect the value
of the Building or R&D Park.



     12.4 Effectiveness of Transfer and Continuing Obligations. Prior to the date on which
any permitted Transfer becomes effective, Tenant shall deliver to Landlord (i) a counterpart of the
fully executed Transfer document, (ii) an executed Hazardous Materials Disclosure Certificate
substantially in the form of Exhibit C hereto (the “Transferee HazMat Certificate”), and
(iii) Landlord’s form of Consent to Assignment or Consent to Sublease, as applicable, executed by
Tenant and the Transferee in which each of Tenant and the Transferee confirms its obligations
pursuant to this Lease. Failure or refusal of a Transferee to execute any such consent instrument
shall not release or discharge the Transferee from its obligation to do so



14









 




or from any liability as
provided herein. The voluntary, involuntary or other surrender of this Lease by Tenant, or a
mutual cancellation by Landlord and Tenant, shall not work a merger, and any such surrender or
cancellation shall, at the option of Landlord, either terminate all or any existing subleases or
operate as an assignment to Landlord of any or all of such subleases. Each permitted Transferee
shall assume and be deemed to assume this Lease and shall be and remain liable jointly and
severally with Tenant for payment of Rent (or with respect to a sublease, rent in the amount set
forth in the sublease) and for the due performance of, and compliance with all the terms,
covenants, conditions and agreements herein contained on Tenant’s part to be performed or complied
with, for that portion of the Term of this Lease on and following the date of such Transfer (and if
a sublease, to the extent relating to the space so sublet). No Transfer shall affect the
continuing primary liability of Tenant (which, following assignment, shall be joint and several
with the assignee), and Tenant shall not be released from performing any of the terms, covenants
and conditions of this Lease. An assignee of Tenant shall become directly liable to Landlord for
all obligations of Tenant hereunder, but no Transfer by Tenant shall relieve Tenant of any
obligations or liability under this Lease whether occurring before or after such consent,
assignment, subletting or other Transfer. The acceptance of any or all of the Rent by Landlord
from any other person (whether or not such person is an occupant of the Premises) shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any
Transfer. If Tenant is a business entity, the direct or indirect transfer of more than fifty
percent (50%) of the ownership interest of the entity (whether in a single transaction or in the
aggregate through more than one transaction) shall be deemed a Transfer (provided, however, that
(i) issuances (in the aggregate) by Tenant of equity accounting for forty-nine percent (49%) or
less of the ownership interest of Tenant shall not be taken into account in determining if a deemed
Transfer has occurred and (ii) the initial public offering of Tenant’s stock on a nationally
recognized stock exchange shall not be deemed a Transfer under this Lease) and shall be subject to
all the provisions hereof and in such event, it shall be a condition to Landlord’s consent to such
ownership change that such entities or persons acquiring such ownership interest assume, as a
primary obligor, all rights and obligations of Tenant under this Lease (and such entities and
persons shall execute all documents reasonably required to effectuate such assumption). Any and all
options, first rights of refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly authorized in
writing by Landlord (which shall be in Landlord’s sole discretion). 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 material default by Tenant of this Lease. As Additional
Rent hereunder, Tenant shall pay to Landlord each time it requests a Transfer, an administrative
fee in the amount of one thousand dollars ($1,000) and, in addition, Tenant shall promptly
reimburse Landlord for out of pocket legal and other reasonable expenses incurred by Landlord in
connection with any actual or proposed Transfer.




     12.5 Recapture. Landlord may recapture the Subject Space described in the Tenant’s
Notice if, and only if, Tenant is seeking to sublet more than fifty percent (50%) of the Premises
for a period equal to or greater than eighty percent (80%) of the remainder of the Term, by giving
written notice of recapture to Tenant; provided any such written notice to Tenant shall be given by
Landlord within the time periods provided for such
written notice in Paragraph 12.2 of this Lease. If such written recapture notice is given, it
shall serve to terminate this Lease with respect to the proposed Subject Space, or, if the proposed
Subject Space covers all the Premises, it shall serve to terminate the entire Term of this Lease,
in either case, as of the Proposed Effective Date. However, no termination of this Lease with
respect to part or all of the Premises shall become effective without the prior written consent,
where necessary, of the holder of each deed of trust encumbering the Premises or any other portion
of the R&D Park. If this Lease is terminated pursuant to the foregoing provisions with respect to
less than the entire Premises, the Rent shall be adjusted on the basis of the proportion of
rentable square feet retained by Tenant to the rentable square feet originally demised and this
Lease as so amended shall continue thereafter in full force and effect. Notwithstanding anything
to the contrary contained in this Lease, within ten (10) business days after Tenant’s receipt of
such written recapture notice, Tenant may deliver to Landlord a written withdrawal notice which
shall negate and void for all purposes Tenant’s request for consent which shall be treated as never
having been given.



     12.6 Transfer Premium. If Landlord consents to a Transfer, as a condition thereto,
Tenant shall pay to Landlord monthly, as Additional Rent, at the same time as the monthly
installments of Rent are payable hereunder, fifty percent (50%) of any Transfer Premium. The term
“Transfer Premium” shall mean all rent, additional rent and other consideration payable by such
Transferee which either initially or over the term of the Transfer exceeds the Rent or pro



15









 




rata
portion of the Rent, as the case may be, for such space reserved in the Lease less all reasonable
and actual legal fees and leasing commissions incurred by Tenant in connection with such Transfer.




     12.7 Waiver. Notwithstanding any Transfer, or any indulgences, waivers or extensions
of time granted by Landlord to any Transferee, or failure by Landlord to take action against any
Transferee, Tenant agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such Transferee, except that Tenant shall have the benefit of any
indulgences, waivers and extensions of time granted to any such Transferee.



     12.8 Special Transfer Prohibitions. Notwithstanding anything set forth
above to the contrary, Tenant may not (a) sublet the Premises or assign this Lease to any person or
entity in which Landlord owns an interest, directly or indirectly (by applying constructive
ownership rules set forth in Section 856(d)(5) of the Internal Revenue Code (the “Code”); or (b)
sublet the Premises or assign this Lease in any other manner which could cause any portion of the
amounts received by Landlord pursuant to this Lease or any sublease to fail to qualify as “rents
from real property” within the meaning of Section 856(d) of the Code, or which could cause any
other income received by Landlord to fail to qualify as income described in Section 856(c)(2) of
the Code.



     12.9 Affiliates. The assignment or subletting by Tenant of all or any portion of
this Lease or the Premises to (i) a parent or subsidiary of Tenant, or (ii) any person or entity
which controls, is controlled by or under the common control with Tenant, or (iii) any entity which
purchases all or substantially all of the assets of Tenant, or (iv) any entity into which Tenant is
merged or consolidated (all such persons or entities described in clauses (i), (ii), (iii) and (iv)
being sometimes herein referred to as “Affiliates”) shall not be subject to obtaining Landlord’s
prior consent and no Transfer Premium shall be payable, provided in all instances that:



          (a) any such Affiliate was not formed as a subterfuge to avoid the obligations of this Article
12;



          (b) Tenant gives Landlord prior notice of any such assignment or sublease to an Affiliate,
except solely for those assignments or subleases in connection with which any applicable law
precludes Tenant’s delivery to Landlord of prior notice of said assignment or sublease then, in all
such instances, Tenant shall deliver to Landlord subsequent notice of said assignment or sublease
within ten (10) days following the first (1st) day on which Tenant is permitted by law to deliver
notice of such assignment or sublease to Landlord;



          (c) the successor of Tenant shall have, at the time of Transfer to an Affiliate, a tangible
net worth and net assets, in the aggregate, computed in accordance with generally
accepted accounting principles (but excluding goodwill as an asset), which is sufficient to
meet the obligations of Tenant under this Lease, as reasonably determined by Landlord;



          (d) any such assignment or sublease shall be subject to all of the terms and provisions of
this Lease, and such assignee or sublessee (i.e. any such Affiliate), other than in the case of an
Affiliate resulting from a merger or consolidation, shall assume, in a written document reasonably
satisfactory to Landlord and delivered to Landlord upon or prior to the effective date of such
assignment or sublease, all the obligations of Tenant under this Lease; and



          (e) Tenant and any guarantor shall remain fully liable for all obligations to be performed by
Tenant under this Lease, except in the event of a merger.


13. Default; Remedies.




     13.1 Default. The occurrence of any one of the following events shall constitute an
event of default on the part of Tenant (“Default”):



          (a) The abandonment of the Premises by Tenant (as defined in California Civil Code Section
1951.3);



          (b) Failure to pay any installment of Base Rent, Additional Rent, or any other monies due and
payable hereunder, said failure continuing for a period of 5 business days after



16









 




receipt of
Landlord’s written notice that such amount is due. Tenant agrees that any such written notice
delivered by Landlord shall, to the fullest extent permitted by law, serve as the statutorily
required notice under applicable law to the extent Tenant fails to cure such failure to pay within
such 5 business day period. In addition to the foregoing, Tenant agrees to notice and service of
notice as provided for in accordance with applicable statutory requirements;




          (c) A general assignment by Tenant or any guarantor for the benefit of creditors;



          (d) The filing of a voluntary petition of bankruptcy by Tenant or any guarantor; the filing of
a voluntary petition for an arrangement; the filing of a petition, voluntary or involuntary, for
reorganization; or the filing of an involuntary petition by Tenant’s creditors or guarantors;



          (e) Receivership, attachment, or other judicial seizure of the Premises or all or
substantially all of Tenant’s assets on the Premises;



          (f) Failure of Tenant to maintain insurance as required by Paragraph 8.2, provided Landlord
has notified Tenant of a violation of Paragraph 8.2 and Tenant has failed to cure such violation
within 10 business days of such notice;



          (g) Any breach by Tenant of its covenants under Paragraph 6.2 and such breach remains uncured
for 10 business days following written notice from Landlord;



          (h) Failure in the performance of any of Tenant’s covenants, agreements, or obligations
hereunder (except those failures specified as events of Default in other Paragraphs of this
Paragraph 13.1 which shall be governed by such other Paragraphs), which failure continues for 10
business days after written notice thereof from Landlord to Tenant; provided that, if Tenant has
exercised reasonable diligence to cure such failure and such failure cannot be cured within such 10
business-day period despite reasonable diligence, Tenant shall not be in default under this
subparagraph unless Tenant fails thereafter diligently and continuously to prosecute the cure to
completion;



          (i) Any transfer of a substantial portion of the assets of Tenant, or any incurrence of a
material obligation by Tenant, unless such transfer or obligation is undertaken or incurred in the
ordinary course of Tenant’s business, or in good faith for equivalent consideration, or with
Landlord’s consent; and



          (j) The default of any guarantors of Tenant’s obligations hereunder under any guaranty of this
Lease, or the attempted repudiation or revocation of any such guaranty.



     13.2 Remedies. In the event of any Default by Tenant, Landlord shall have any or all
of the following remedies:



          (a) Termination. In the event of any Default by Tenant, then in addition to any other
remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder by giving written
notice of such intention to terminate. In the event that Landlord shall elect to so terminate this
Lease then Landlord may recover from Tenant:



               (1) the worth at the time of award of any unpaid Rent and any other sums due and payable which
have been earned at the time of such termination; plus



               (2) the worth at the time of award of the amount by which the unpaid Rent and any other sums
due and payable which would have been earned after termination until the time of award exceeds the
amount of such rental loss Tenant proves could have been reasonably avoided; plus



               (3) the worth at the time of award of the amount by which the unpaid Rent and any other sums
due and payable for the balance of the term of this Lease after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus



17









 





               (4) 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
would be likely to result therefrom, including, without limitation, any costs or expenses incurred
by Landlord (i) in retaking possession of the Premises; (ii) in maintaining, repairing, preserving,
restoring, replacing, cleaning, the Premises or any portion thereof, including such acts for
reletting to a new lessee or lessees; (iii) for leasing commissions; or (iv) for any other costs
necessary or appropriate to relet the Premises; plus



               (5) such reasonable attorneys’ fees incurred by Landlord as a result of a Default, and costs
in the event suit is filed by Landlord to enforce such remedy; and plus



               (6) at Landlord’s election, such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable law. As used in subparagraphs (1) and (2) above,
the “worth at the time of award” is computed by allowing interest at an annual rate equal to ten
percent (10%) per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) 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
percent (1%). Tenant waives redemption or relief from forfeiture under California Code of Civil
Procedure Sections 1174 and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default of Tenant hereunder.



          (b) Continuation of Lease. In the event of any Default by Tenant, then
in addition to any other remedies available to Landlord at law or in equity and under this Lease,
Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may
continue this Lease in effect after Tenant’s Default and abandonment and recover Rent as it becomes
due, provided tenant has the right to sublet or assign, subject only to reasonable limitations).



          (c) Re-entry. In the event of any Default by Tenant, Landlord shall also have the
right, with or without terminating this Lease, in compliance with applicable law, to re-enter the
Premises and remove all persons and property from the Premises; such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for the account of Tenant.



          (d) Reletting. In the event of the abandonment of the Premises by Tenant or in the
event that Landlord shall elect to re-enter or shall take possession of the Premises pursuant to
legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph a, Landlord may from time to time, without
terminating this Lease, relet the Premises or any part thereof for such term or terms and at such
rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may
deem advisable with the right to make alterations and repairs to the Premises. In the event that
Landlord shall elect to so relet, then rentals received by Landlord from such reletting shall be
applied in the following order: (1) to reasonable attorneys’ fees incurred by Landlord as a result
of a Default and costs in the event suit is filed by Landlord to enforce such remedies; (2) to the
payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; (3) to the
payment of any costs of such reletting; (4) to the payment of the costs of any alterations and
repairs to the Premises; (5) to the payment of Rent due and unpaid hereunder; and (6) the
residue, if any, shall be held by Landlord and applied in payment of future Rent and other sums
payable by Tenant hereunder as the same may become due and payable hereunder. Should that portion
of such rentals received from such reletting during any month, which is applied to the payment of
Rent hereunder, be less than the Rent payable during the month by Tenant hereunder, then Tenant
shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not covered by the rentals
received from such reletting.



          (e) Termination. No re-entry or taking of possession of the Premises by Landlord
pursuant to this Addendum shall be construed as an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the termination thereof is decreed by
a court of competent jurisdiction. Notwithstanding any reletting without termination



18









 




by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting elect to terminate
this Lease for any such Default.




          (f) Cumulative Remedies. The remedies herein provided are not exclusive and Landlord
shall have any and all other remedies provided herein or by law or in equity.



          (g) No Surrender. No act or conduct of Landlord, whether consisting of the acceptance
of the keys to the Premises, or otherwise, shall be deemed to be or constitute an acceptance of the
surrender of the Premises by Tenant prior to the expiration of the Term, and such acceptance by
Landlord of surrender by Tenant shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects in writing that
such merger take place, but shall operate as an assignment to Landlord of any and all existing
subleases, or Landlord may, at its option, elect in writing to treat such surrender as a merger
terminating Tenant’s estate under this Lease, and thereupon Landlord may terminate any or all such
subleases by notifying the sublessee of its election so to do within five (5) days after such
surrender.



          (h) Notice Provisions Tenant agrees that any notice given by Landlord pursuant to
Paragraph 13.1 of the Lease shall satisfy the requirements for notice under California Code of
Civil Procedure Section 1161, and Landlord shall not be required to give any additional notice in
order to be entitled to commence an unlawful detainer proceeding. Should Landlord prepare any
notice to Tenant for failure to pay rent, additional rent or perform any other obligation under the
Lease, Tenant shall pay to Landlord, without any further notice from Landlord, the additional sum
of $75.00 which the parties hereby agree represents a fair and reasonable estimate of the costs
Landlord will incur by reason of preparing such notice.



     13.3 Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord
of Rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but
are not limited to, processing and accounting charges. Accordingly, if any installment of Rent or
other sum due from Tenant shall not be received by Landlord or Landlord’s designee within 4 days
after such amount shall be due, then, without any requirement for notice to Tenant, Tenant shall
pay to Landlord a late charge equal to 5% of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant’s Default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder, provided that, Landlord
will not impose any late fee upon the first late payment of Rent, if any, during each 12 month
period
following the Commencement Date unless Tenant fails to make the applicable payment within five (5)
business days after written notice of such delinquency is given by Landlord. In addition, should
Landlord be unable to negotiate any payment made by Tenant on the first attempt by Landlord and
without any notice to Tenant, Tenant shall pay to Landlord a fee of $50.00 per item which the
parties hereby agree represents a fair and reasonable estimate of the costs Landlord will incur by
reason of Landlord’s inability to negotiate such item(s).


14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of exercise of said power (all of which are herein called
“Condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than 10% of the floor area of
the Premises, or more than 25% of the portion of the Common Areas designated for Tenant’s parking,
is taken by condemnation, Tenant may, at Tenant’s option, to be exercised in writing within 10 days
after Landlord shall have given Tenant written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken possession), terminate this
Lease as of the date the condemning authority takes such possession. If Tenant does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to
the portion of the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total rentable floor area
of the Premises. No reduction of Base Rent shall occur if the condemnation does not apply to any
portion of the Premises. Any award for the taking of all or any part of the Premises under the
power of eminent domain or any payment made under threat




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of the exercise of such power shall be the
property of Landlord; provided, however, that Tenant shall be entitled to any compensation,
separately awarded to Tenant, for Tenant’s relocation expenses and/or loss of Tenant’s trade
fixtures. In the event that this Lease is not terminated by reason of such condemnation, Landlord
shall to the extent of its net severance damages in the condemnation matter, repair any damage to
the Premises caused by such condemnation authority.



15. Estoppel Certificate and Financial Statements.




     15.1 Estoppel Certificate. Each party (herein referred to as “Responding Party”)
shall within 10 days after written notice from the other Party (the “Requesting Party”) execute,
acknowledge, and deliver to the Requesting Party, to the extent it can truthfully do so, an
estoppel certificate in a form reasonably acceptable to Landlord, or any of Landlord’s lenders or
any prospective purchasers of the Premises or the R&D Park as the case may be, plus such additional
information, confirmation, and statements as be reasonably requested by the Requesting Party.
Should Tenant fail to deliver an executed and acknowledged estoppel certificate to Landlord as
prescribed herein, Tenant hereby authorizes Landlord to act as Tenant’s attorney-in-fact in
executing such estoppel certificate.



     15.2 Financial Statement. If Landlord desires to finance, refinance, or sell the
Building, R&D Park, or any part thereof, Tenant and all Guarantors shall deliver to any potential
lender or purchaser designated by Landlord such financial statements of Tenant and such Guarantors
as may be reasonably required by such lender or purchaser, including but not limited to Tenant’s
financial statements for the past 3 years. All such financial statements shall be received by
Landlord and such lender or purchaser in confidence and shall be used only for the purposes herein
set forth.


16. Additional Covenants and Provisions.




     16.1 Severability. The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall not affect the validity of any other provision hereof.



     16.2 Interest on Past-Due Obligations. Any monetary payment due Landlord hereunder
not received by Landlord within 10 days following the date on which it was due shall bear interest
from the date due at 12% per annum, but not exceeding the maximum rate allowed by law in addition
to the late charge provided for in Paragraph 13.3.



     16.3 Time of Essence. Time is of the essence with respect to the performance of all
obligations to be performed or observed by the Parties under this Lease.



     16.4 Landlord Liability. Tenant, its successors, and assigns shall not assert nor
seek to enforce any claim for breach of this Lease against any of Landlord’s assets other than
Landlord’s interest in the R&D Park. Tenant agrees to look solely to such interest for the
satisfaction of any liability or claim against Landlord under this Lease. In no event whatsoever
shall Landlord (which term shall include, without limitation, any general or limited partner,
trustees, beneficiaries, officers, directors, or stockholders of Landlord) ever be personally
liable for any such liability.



     16.5 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, 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,
shall be considered to be the only agreement between the parties hereto and their representatives
and agents, and 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. All negotiations and
oral agreements acceptable to both parties have been merged into and are included herein. There
are no other representations or warranties between the parties, and all reliance with respect to
representations is based totally upon the representations and agreements



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contained in this Lease.
The parties acknowledge that (i) each party and/or its counsel have reviewed and revised this
Lease, and (ii) no rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall be employed in the interpretation or enforcement of this Lease or
any amendments or exhibits to this Lease or any document executed and delivered by either party in
connection with this Lease.




     16.6 Notice Requirements. All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand, messenger, or courier service) or may be sent by
certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by
facsimile transmission during normal business hours, and shall be deemed sufficiently given if
served in a manner specified in this Paragraph 16.6. The addresses noted adjacent to a Party’s
signature on this Lease shall be that Party’s address for delivery or mailing of notice purposes.
Either Party may by written notice to the other specify a different address for notice purposes,
except that upon Tenant’s taking possessing of the Premises, the Premises shall constitute Tenant’s
address for the purpose of mailing or delivering notices to Tenant. A copy of all notices required
or permitted to be given to Landlord hereunder shall be concurrently transmitted to such party or
parties at such addresses as Landlord may from time to time hereafter designate by written notice
to Tenant.



     16.7 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. Notices delivered by United States Express Mail or
an overnight courier that guarantees next day delivery shall be deemed given 24 hours after
delivery of the same to the United States Postal Service or courier. If any notice is transmitted
by facsimile transmission or similar means, the same shall be deemed served or delivered upon
telephone or facsimile confirmation of receipt of the transmission thereof, provided a copy is also
delivered via hand or overnight delivery or certified mail. If notice is received on a Saturday,
Sunday, or legal holiday, it shall be deemed received on the next business day.



     16.8 Waivers. No waiver by Landlord of a Default by Tenant shall be deemed a waiver
of any other term, covenant, or condition hereof, or of any subsequent Default by Tenant of the
same or any other term, covenant, or condition hereof. In addition the acceptance by Landlord of
any rent or other payment after it is due, whether or not a notice of default has been served or
any action (including, without limitation, an unlawful detainer action) has been filed by Landlord
thereon, shall not be deemed a waiver of Landlord’s
rights to proceed on any notice of default or action which has been filed against Tenant based upon
Tenant’s breach of the Lease.



     16.9 Holdover. Tenant has no right to retain possession of the Premises or any part
thereof beyond the expiration or earlier termination of this Lease. If Tenant holds over with the
consent of Landlord: (a) the Base Rent payable shall be increased to 150% of the Base Rent
applicable during the month immediately preceding such expiration or earlier termination; (b)
Tenant’s right to possession shall terminate on 30 days notice from Landlord; and (c) all other
terms and conditions of this Lease shall continue to apply. Nothing contained herein shall be
construed as a consent by Landlord to any holding over by Tenant. Tenant shall indemnify, defend,
and hold Landlord harmless from and against any and all claims, demands, actions, losses, damages,
obligations, costs, and expenses, including, without limitation, attorneys’ fees incurred or
suffered by Landlord by reason of Tenant’s failure to surrender the Premises on the expiration or
earlier termination of this Lease in accordance with the provisions of this Lease.



     16.10 Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive
but shall, wherever possible, be cumulative with all other remedies in law or in equity.



     16.11 Binding Effect: Choice of Law. This Lease shall be binding upon the Parties,
their personal representatives, successors, and assigns, and be governed by the laws of the State
in which the Premises are located. Any litigation between the Parties hereto concerning this Lease
shall be initiated in the county in which the Premises are located.



     16.12 Landlord. The covenants and obligations contained in this Lease on the part of
Landlord are binding on Landlord, its successors, and assigns only during their respective period
of ownership of an interest in the Building. In the event of any transfer or transfers of such
title to the Building, Landlord (and, in the case of any subsequent transfers or conveyances, the
then grantor) shall be concurrently freed and relieved from and after the date of such transfer or



21









 




conveyance, without any further instrument or agreement, of all liability with respect to the
performance of any covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed, provided that the transferee, successor or assignee has agreed in
writing to assume all liabilities and obligations of the Landlord under this Lease first arising or
accruing after the date of transfer.




     16.13 Attorneys’ Fees and Other Costs. If any Party brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter defined)
in any such proceeding shall be entitled to reasonable attorneys’ fees. The term “Prevailing
Party” shall include, without limitation, a Party who substantially obtains or defeats the relief
sought. Landlord shall be entitled to attorneys’ fees, costs, and expenses incurred in the
preparation and service of notices of Default and consultations in connection therewith, whether or
not a legal action is subsequently commenced in connection with such Default or resulting breach.
Tenant shall reimburse Landlord on demand for all reasonable legal, engineering, and other
professional services expenses incurred by Landlord in connection with all requests by Tenant or
any lender of Tenant for consent, waiver or approval of any kind.



     16.14 Landlord’s Access; Showing Premises; Repairs. Landlord and Landlord’s agents
shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise
at reasonable times upon reasonable notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements, or additions
to the Premises or to the Building, as Landlord may reasonably deem necessary. Landlord may at any
time place on or about the Premises or Building any ordinary “For Sale” signs, and Landlord may at
any time during the last 180 days of the term hereof place on or about the Premises any ordinary
“For Lease” signs. All such activities of Landlord shall be without abatement of rent or liability
to Tenant.



     16.15 Signs. Tenant shall not place any signs at or upon the exterior of the Premises
or the Building, except that Tenant may, with Landlord’s prior
written consent, install (but not on the roof) such signs as are reasonably required to advertise
Tenant’s own business so long as such signs are in a location designated by Landlord and comply
with sign ordinances and the signage criteria established for the R&D Park by Landlord. Within ten
(10) days following approval of the signage criteria by applicable governmental authorities,
Landlord shall deliver to Tenant the signage criteria for the R&D Park.



     16.16 Termination; Merger. Unless specifically stated otherwise in writing by
Landlord, the voluntary or other surrender of this Lease by Tenant, the mutual termination or
cancellation hereof, or a termination hereof by Landlord for Default by Tenant, shall automatically
terminate any sublease or lesser estate in the Premises; provided, however, Landlord shall, in the
event of any such surrender, termination, or cancellation, have the option to continue any one or
all of any existing subtenancies. Landlord’s failure within 10 days following any such event to
make a written election to the contrary by written notice to the holder of any such lesser interest
shall constitute Landlord’s election to have such event constitute the termination of such
interest.



     16.17 Quiet Possession. Upon payment by Tenant of the Base Rent and Additional Rent
for the Premises and the performance of all of the covenants, conditions, and provisions on
Tenant’s part to be observed and performed under this Lease, Tenant shall have quiet possession of
the Premises for the entire term hereof, subject to all of the provisions of this Lease.



     16.18 Subordination; Attornment; Non-Disturbance.



          (a) Subordination. This Lease shall be subject and subordinate to any ground lease,
mortgage, deed of trust, or other hypothecation or mortgage (collectively, “Mortgage”) now or
hereafter placed by Landlord upon the real property of which the Premises are a part, to any and
all advances made on the security thereof, and to all renewals, modifications, consolidations,
replacements, and extensions thereof. Tenant agrees that any person holding any Mortgage shall
have no duty, liability, or obligation to perform any of the obligations of Landlord under this
Lease. In the event of Landlord’s default with respect to any such obligation, Tenant will give
any Lender, whose name and address have previously been furnished in writing to Tenant, notice of a
default by Landlord. Tenant may not exercise any remedies for default by Landlord unless and until
Landlord and the Lender shall have received



22









 




written notice of such default and a reasonable time
(not less than 90 days) shall thereafter have elapsed without the default having been cured. If
any Lender shall elect to have this Lease superior to the lien of its Mortgage and shall give
written notice thereof to Tenant, this Lease shall be deemed prior to such Mortgage. The
provisions of a Mortgage relating to the disposition of condemnation and insurance proceeds shall
prevail over any contrary provisions contained in this Lease.




          (b) Attornment. Subject to the nondisturbance provisions of subparagraph (c) of this
Paragraph 16.18, Tenant agrees to attorn to a Lender or any other party who acquires ownership of
the Premises by reason of a foreclosure of a Mortgage. In the event of such foreclosure, such new
owner shall not: (i) be liable for any act or omission of any prior landlord or with respect to
events occurring prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Tenant might have against any prior Landlord, or (iii) be liable for security deposits or be
bound by prepayment of more than one month’s rent.



          (c) Non-Disturbance. With respect to any Mortgage entered into by Landlord after the
execution of this Lease, Tenant’s subordination of this Lease shall be subject to receiving
assurance (a “nondisturbance agreement”) from the Mortgage holder that Tenant’s possession and this
Lease will not be disturbed so long as Tenant is not in default and attorns to the record owner of
the Premises. Landlord hereby discloses to Tenant that, as of the date of this Lease, no Mortgage
encumbers the R&D Park.



          (d) Self-Executing. The agreements contained in this Paragraph 16.18 shall be
effective without the execution of any further documents; provided, however, that upon written
request from Landlord or a Lender in connection with a sale, financing, or refinancing of Premises,
Tenant and Landlord shall execute such further writings as may be reasonably required to separately
document any such subordination or nonsubordination, attornment, and/or
nondisturbance agreement, as is provided for herein. Landlord is hereby irrevocably vested with
full power to subordinate this Lease to a Mortgage.



     16.19 Rules and Regulations. Tenant agrees that it will abide by, and to cause its
employees, suppliers, shippers, customers, tenants, contractors, and invitees to abide by, all
reasonable rules and regulations (“Rules and Regulations”) which Landlord may make from time to
time for the management, safety, care, and cleanliness of the Common Areas, the parking and
unloading of vehicles, and the preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the R&D Park and their invitees. The current Rules and
Regulations are attached hereto as Exhibit E. Landlord shall not be responsible to Tenant
for the noncompliance with said Rules and Regulations by other tenants of the R&D Park.



     16.20 Security Measures. Tenant acknowledges that the rental payable to Landlord
hereunder does not include the cost of guard service or other security measures. Landlord has no
obligations to provide same. Tenant assumes all responsibility for the protection of the Premises,
Tenant, its agents, and invitees and their property from the acts of third parties.



     16.21 Reservations. Landlord reserves the right to grant such easements that Landlord
deems necessary and to cause the recordation of parcel maps, so long as such easements and maps do
not unreasonably interfere with the use of the Premises by Tenant. Tenant agrees to sign any
documents reasonably requested by Landlord to effectuate any such easements or maps. Tenant
further agrees that Landlord may at any time following the execution of this Lease, either directly
or through Landlord’s agents, identify Tenant’s name in any marketing materials relating to the
Building or Landlord’s portfolio and/or make press releases or other announcements regarding the
leasing of the Premises by Tenant, and Tenant hereby waives any and all claims in connection
therewith.



     16.22 Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or handwritten
provisions.



     16.23 Offer. Preparation of this Lease by either Landlord or Tenant or Landlord’s
agent or Tenant’s agent and submission of same to Tenant or Landlord shall not be deemed an offer
to lease. This Lease is not intended to be binding until executed and delivered by all Parties
hereto.



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     16.24 Amendments. This Lease may be modified only in writing, signed by the parties
in interest at the time of the modification.



     16.25 Multiple Parties. Except as otherwise expressly provided herein, if more than
one person or entity is named herein as Tenant, the obligations of such persons shall be the joint
and several responsibility of all persons or entities named herein as such Tenant.



     16.26 Authority. Each person signing on behalf of Landlord or Tenant warrants and
represents that she or he is authorized to execute and deliver this Lease and to make it a binding
obligation of Landlord or Tenant.



     16.27 Recordation. Tenant shall not record this Lease or a short form memorandum
hereof.



     16.28 Confidentiality. Tenant acknowledges that the content of this Lease and any
related documents are confidential information. Tenant shall keep and maintain 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.



     16.29 Landlord Renovations. Tenant acknowledges that Landlord may from time to time,
at Landlord’s sole option, renovate, improve, develop, alter, or modify (collectively, the
“Renovations”) portions of the Building,
Premises, Common Areas and the R&D Park, including without limitation, systems and equipment, roof,
and structural portions of the same. In connection with such Renovations, Landlord may, among
other things, erect scaffolding or other necessary structures in the Building, limit or eliminate
access to portions of the R&D Park, including portions of the Common Areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building. 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. 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 Property, Alterations 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, provided
that Landlord has used reasonable commercial efforts to avoid interfering with Tenant’s conduct of
its business.



     16.30 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, THE PARTIES HERETO SHALL
AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY
OF THE PREMISES, THE BUILDING OR THE PARK, AND/OR ANY CLAIM OF INJURY, LOSS OR DAMAGE.



     16.31 Backup Generator. Tenant shall have the right (but only to the extent permitted
by the City of Sunnyvale and all agencies and governmental authorities having jurisdiction
thereof), at Tenant’s sole cost and expense, to construct, maintain and operate an enclosed
equipment area (the “Equipment Area”), in a location outside of the Building designated by
Landlord, to house equipment exclusively serving the Premises, including an emergency generator,
UPS battery systems and related appurtenances (collectively, the “Generator Equipment”) subject to
the following:



          (a) The precise location, size and configuration of the Equipment Area shall



               (i) be subject to Landlord’s prior written approval, not to be unreasonably withheld and



               (ii) promote the safety, aesthetics and efficiency of the Generator Equipment; provided, all
of the Generator Equipment and any maintenance or modifications



24









 




thereto or placement thereof, and
all utilities used in connection therewith shall be at Tenant’s sole cost and expense, contained
visually within a fully enclosed area, installed and operated to Landlord’s reasonable
specifications, and installed, maintained, operated and removed in accordance with the terms of the
Lease, all Applicable Requirements and all Recorded Matters, and the prior rights of any other
tenant or occupant in the R&D Park.




          (b) Tenant shall, at its sole cost and expense, obtain all licenses and permits necessary to
install and operate the Generator Equipment within the Equipment Area prior to installing or
performing any work with respect to the Generator Equipment or Equipment Area. Tenant shall obtain
Landlord’s prior written consent before making any modifications to the Equipment Area.



          (c) No additional Base Rent shall be paid by Tenant for use of the Equipment Area or Generator
Equipment; provided, Tenant shall be solely responsible to pay for all utilities, including without
limitation electricity, used in connection with the Generator Equipment or Equipment Area.



          (d) The Generator Equipment shall remain the property of Tenant and Tenant shall remove the
Generator Equipment upon the expiration or earlier termination of the Lease. Tenant shall restore
the Equipment Area and any other portion of the Building or R&D Park affected by the Generator
Equipment to its original condition upon the removal of the Generator Equipment, excepting ordinary
wear and tear. Tenant shall promptly repair any damage to the
Building and the R&D Park caused by Tenant or the use, operation, installation, repair,
maintenance, alteration or removal of the Generator Equipment. In connection with the removal of
the Generator Equipment and when required by any federal, state, or local regulatory authority,
Tenant shall perform, at its sole expense, an environmental site assessment acceptable to Landlord
to determine the extent, if any, of contamination of the Premises and R&D Park and shall, at its
sole expense, clean up, remove, and remediate all Hazardous Substances in, on, under or about the
Premises or the R&D Park that may have been caused by the Generator Equipment.



          (e) Tenant may not assign, lease, rent, sublet or otherwise transfer any of its interest in
the Equipment Area or the Generator Equipment except together with the remainder of all of the
Premises as more particularly set forth in Section 12 of the Lease.



          (f) Each of the other provisions of this Lease shall be applicable to the Equipment Area and
the use of the Generator Equipment by Tenant, including without limitation, Sections 6, 7 and 8 of
the Lease.



          (g) Anything to the contrary contained herein notwithstanding, if, during the Term, as such
Term may be extended, Landlord, in its reasonable judgment, believes that the Generator Equipment
poses a human health or environmental hazard that cannot be remediated or has not been remediated
within ten (10) days after Tenant has been notified thereof, then Tenant shall immediately cease
all operation of the Generator Equipment and Tenant shall remove all of the Generator Equipment
within thirty (30) days thereafter. To the best of Tenant’s knowledge, Tenant represents to
Landlord that the use of the Generator Equipment will not pose a human health or environmental
hazard.



          (h) Tenant shall not use the Generator Equipment, the Equipment Area or any other portion of
the Project in any way which interferes with the use of the R&D Park by Landlord, or other tenants
or licensees of Landlord or any other occupant of the R&D Park. Such interference shall be deemed
a material breach by the Tenant under the Lease, and Tenant shall, within five (5) days of written
notice from Landlord, be responsible for terminating said interference. In the event any such
interference does not cease within five (5) days of Landlord’s written notice, Tenant acknowledges
that continuing interference may cause irreparable injury and, Tenant shall immediately cease all
operation of the Generator Equipment and Tenant shall remove all of the Generator Equipment within
thirty (30) days thereafter.



          (i) Tenant shall be responsible for insuring the Generator Equipment pursuant to Section 8 of
the Lease and Landlord shall have no responsibility therefor.



          (j) Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord) and hold
harmless Landlord and all of Landlord’s Entities from any and all claims,



25









 







demands, liabilities,
damages, judgments, costs and expenses (including reasonable attorneys’ fees) any of such
Landlord’s Entities may suffer or incur arising out of or related to the installation, use,
operation, maintenance, replacement and/or removal of the Generator Equipment or any portion
thereof.



          (k) If requested by Landlord, Tenant shall obtain for the benefit of Landlord a separate
policy of environmental insurance to provide coverage against any and all damage to property or
injury or death to persons as a result of the Generator Equipment, and Tenant shall provide written
evidence of such coverage within ten (10) days after request by Landlord.



          (l) Tenant shall maintain all reports, inventory and other records, test results, permits and
all other data and information required under applicable law for the installation, use and
operation of the Generator Equipment, and upon request of Landlord, shall provide a copy of all
such reports, records, test results and other information without cost or expense to Landlord.



     16.32 Roof Space Equipment. Tenant shall have the right (but only to the extent
permitted by the City of Sunnyvale and all agencies and governmental authorities having
jurisdiction thereof), at Tenant’s sole cost and expense, to install, operate and maintain
(including roof access for such maintenance purposes) satellite or wireless communication equipment
along with any necessary cables (collectively, the “Equipment”) on a portion of the roof of the
Building to be designated by Landlord (“Roof Space”) for the Term of the Lease. The location and
size of the Equipment shall be subject to
Landlord’s written approval, not to unreasonably withheld and which best promotes the safety,
aesthetics and efficiency of the Equipment; provided, all of the Equipment and any modifications
thereto or placement thereof shall be (i) at Tenant’s sole cost and expense, (ii) contained
visually within the roof screen, (iii) installed and operated to Landlord’s reasonable
specifications, and (iv) installed, maintained, operated and removed in accordance with all
Recorded Matters and Applicable Requirements. Landlord shall cooperate reasonably with Tenant to
modify the roof screen placement (subject to all Applicable Requirements and Recorded Matters) if
required for signal quality and other reasonable considerations; provided, the cost of all such
modifications shall be the responsibility of Tenant. All modifications to the Building, including
the Roof Space, if any, shall be reasonably approved by Landlord in writing prior to commencement
of any work with respect to the Equipment. No additional rent shall be paid by Tenant for use of
the Roof Space and operation of the Equipment. The Equipment shall remain the property of Tenant
and Tenant shall remove the Equipment upon the expiration or earlier termination of the Lease.
Tenant shall restore the Roof Space and any other portion of the Buildings affected by the
Equipment to its original condition, excepting ordinary wear and tear. Tenant may not assign,
lease, rent, sublet or otherwise transfer any of its interest in the Roof Space or the Equipment.
Each of the other provisions of this Lease shall be applicable to the Equipment and the use of the
Roof Space by Tenant. The Equipment shall comply with all-non-interference rules of the Federal
Communications Commission. If applicable, Tenant shall provide to Landlord a copy of (i) the
Federal Communications Commission (or other agency) grant which has awarded frequencies to Tenant
and (ii) a list of Tenant’s frequencies. Anything to the contrary contained herein
notwithstanding, if, during the Lease Term, as such Term may be extended, Landlord, in its
reasonable judgment, believes that the Equipment poses a human health or environmental hazard that
cannot be remediated or has not been remediated within ten (10) days after Tenant has been notified
thereof, then Tenant shall immediately cease all operations of the Equipment and Tenant shall
remove all of the Equipment within thirty (30) days thereafter. To the best of Tenant’s knowledge,
Tenant represents to Landlord that the Equipment shall not emit or project any electro-magnetic
fields which pose a human health or environmental hazard. In addition, Tenant shall be responsible
for insuring the Equipment and Landlord shall have no responsibility therefor. Tenant shall
indemnify, defend (by counsel reasonably acceptable to Landlord) and hold harmless Landlord from
any and all claims, demands, losses, liabilities, damages, judgments, costs and expenses (including
reasonable attorneys’ fees) Landlord may suffer or incur arising out of or related to the
installation, use, operation, maintenance, replacement and/or removal of the Equipment or any
portion thereof or any roof access for purposes of maintaining the Equipment.


///signature page follows///





26











 




///continued from previous page///




     The parties hereto have executed this Lease at the place and on the dates specified below
their respective signatures.



	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD	 	 	 	TENANT	 	 	 
	 
	Headlands Realty
Corporation,	 	 	 	Omneon Video Networks, Inc.,	 	 
	 a Maryland Corporation	 	 	 	a Delaware corporation	 	 
	 
	By:

	 	/s/ Doug McGregor
 

Doug McGregor
	 	 
	 	
By:
	 	

/s/ Jonathan Turk
 

	 	 
	Its:

	 	Vice President
	 	 	 	Its:
	 	Vice President Operations	 	 
	 
	Date:

	 	06/24/08
	 	 	 	Date:
	 	June 18, 2008	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:

Its:
	 	/s/ Patrick Pomroy
 

Controller & Vice President
	 	 
	 
	 

	 	 	 	 	 	Date:
	 	June 19, 2008	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Landlord’s Address:	 	 	 	Tenant’s Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Headlands Realty
Corporation, a Maryland Corporation	 	 	 	After the Commencement Date	 	 
	c/o AMB Property Corporationr	 	 	 	The Premises Address	 	 
	Pier 1, Bay 1	 	 	 	 	 	 	 	 
	San Francisco, California 94111	 	 	 	Prior to the Commencement Date	 	 
		 	 	 	 	 	 	 	 
	With a copy to:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Headlands Realty
Corporation, a Maryland Corporation	 	 	 	 	 	 	 	 
	c/o AMB Property Corporation	 	 	 	 	 	 	 	 
	1360 Willow Road, Suite 100	 	 	 	 	 	 	 	 
	Menlo Park, California 94025	 	 	 	 	 	 	 	 





If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. The Lease must be executed by the chairman of the
board, president or vice-president, and the secretary, assistant secretary, chief financial officer
or any assistant treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case
may be, must be attached to this Lease.








27









 








Exhibit A

Description of Premises and R&D Park



This exhibit, entitled “Premises”, is and shall constitute Exhibit A to that certain Lease
Agreement dated February      , 2008 (the “Lease”), by and between Headlands Realty Corporation, a
Maryland Corporation (“Landlord”) and Omneon Video Networks, Inc., a Delaware corporation
(“Tenant”) for the leasing of certain premises commonly known as 1237-1239 East Arques Avenue,
Sunnyvale, California (the “Premises”).



The Premises consist of the rentable square footage of space specified in the Basic Lease
Information and has the address specified in the Basic Lease Information. The Premises are a part
of and are contained in the Building specified in the Basic Lease Information. If set forth below
(or attached), the cross-hatched area depicts the Premises within the R&D Park:




[ADD DESCRIPTION OF R&D PARK]




Exhibit A, Page 1








 









 








Exhibit B

Commencement Date Certificate




	 	 	 
	Landlord:

	 	Headlands Realty Corporation, a Maryland Corporation
	 
	 	 
	Tenant:

	 	Omneon Video Networks, Inc., a Delaware corporation
	 
	 	 
	Lease Date:

	 	February ___, 2008
	 
	 	 
	Premises:

	 	1237-1239 East Arques Avenue, Sunnyvale, California





Tenant hereby accepts the Premises as being in the condition required under the Lease.

The Commencement Date of the Lease is                     ,          .

The Expiration Date of the Lease is                ,           .






	 	 	 	 	 

	LANDLORD	 	 
	 
	 	 	 	 
	Headlands Realty Corporation,	 	 
	a Maryland Corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Its:

	 	 

	 	 
	Date:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Landlord’s Address:	 	 
	 
	 	 	 	 
	Headlands Realty Corporation, a Maryland Corporation	 	 
	c/o AMB Property Corporation	 	 
	Pier 1, Bay 1 

San Francisco, California 94111	 	 
	 
	 	 	 	 
	With a copy to:	 	 
	Headlands Realty Corporation, a Maryland Corporation	 	 
	c/o AMB Property Corporation	 	 
	1360 Willow Road, Suite 100	 	 
	Menlo Park, California 94025	 	 









	 	 	 	 	 

	TENANT	 	 
	 
	 	 	 	 
	Omneon Video Networks, Inc.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Its:

	 	 

	 	 
	Date:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Its:

	 	 

	 	 
	Date:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Tenant’s Address:	 	 
	 
	 	 	 	 
	After the Commencement Date	 	 
	The Premises Address	 	 
	 
	 	 	 	 
	Prior to the Commencement Date	 	 










If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. The document must be executed by the chairman of
the board, president or vice-president, and the secretary, assistant secretary, chief financial
officer or any assistant treasurer, unless the bylaws or a resolution of the board of directors
shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the
case may be, must be attached to this document.




Exhibit B, Page 1







 









 








Exhibit C

Tenant Move-in and Lease Renewal Environmental Questionnaire

for Commercial and Industrial Properties




Property Name: AMB Lakeside Business Center



Premises Address: 1237-1239 East Arques Avenue, Sunnyvale, California



Exhibit C to the Lease Dated February ___, 2008



Between



Headlands Realty Corporation, a Maryland Corporation

(“Landlord”)



and



Omneon Video Networks, Inc., a Delaware corporation

(“Tenant”)



Instructions: The following questionnaire is to be completed by the Tenant Representative with
knowledge of the planned/existing operations for the specified building/location. A copy of the
completed form must be attached to all new leases and renewals, and forwarded to the Owner’s Risk
Management Department. Please print clearly and attach additional sheets as necessary.





	1.0	 	Process Information
	 
	 	 	Describe planned use (new Lease) or existing operations (lease
renewal), and include brief description of manufacturing processes
employed.
	 
	 	 	 

	 
	 	 	 

	 
	 	 	 







	2.0	 	Hazardous Materials
	 
	 	 	Are hazardous materials used or stored? If so, continue with the next
question. If not, go to Section 3.0.






	 	2.1	 	Are any of the following materials handled on the property? Yes___ No___
	 
	 	 	 	(A material is handled if it is used, generated, processed, produced, packaged,
treated, stored, emitted, discharged, or disposed.) If so, complete this section.
If this question is not applicable, skip this section and go on to Section 5.0.





	 	 	 	 	 

	o Explosives

	 	o Fuels
	 	o Oils
	o Solvents

	 	o Oxidizers
	 	o Organics/Inorganics
	o Acids

	 	o Bases
	 	o Pesticides
	o Gases

	 	o PCBs
	 	o Radioactive Materials
	o Other (please specify)
	 	 	 	 







	 	2.2	 	If any of the groups of materials checked in Section 2.1, please list the
specific material(s), use(s), and quantity of each chemical used or stored on the site
in the Table below. If convenient, you may substitute a chemical inventory and list
the uses of each of the chemicals in each category separately.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Physical	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	State (Solid,	 	 	 	 	 	 	 	 	 	Number	 	 
	 	 	 	 	Liquid, or	 	 	 	 	 	Container	 	of	 	Total
	Material	 	Gas)	 	Usage	 	Size	 	Containers	 	Quantity





Exhibit C, Page 1




 









 






	 	2.3	 	Describe the planned storage area location(s) for these materials. Please
include site maps and drawings as appropriate.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 







	3.0	 	Hazardous Wastes
	 
	 	 	Are hazardous wastes generated? Yes___ No___
	 
	 	 	If yes, continue with the next question. If not, skip this section and go to Section 4.0.






	 	3.1	 	Are any of the following wastes generated, handled, or disposed of (where
applicable) on the property?





	 	 	 

	o Hazardous wastes

	 	o Industrial Wastewater
	o Waste oils

	 	o PCBs
	o Air emissions

	 	o Sludges
	o Regulated Wastes

	 	o Other (please specify)







	3.2	 	List and quantify the materials identified in Question 3-1 of this section. Attach separate
pages as necessary.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	RCRA	 	 	 	 	 	Approximate	 	 	 	 
	Waste	 	listed	 	 	 	 	 	Monthly	 	Waste	 	 
	Generated	 	Waste?	 	Source	 	Quantity	 	Characterization	 	Disposition






	 	3.3	 	Please include name, location, and permit number (e.g. EPA ID No.) for transporter
and disposal facility, if applicable). Attach separate pages as necessary.





	 	 	 	 	 	 	 	 	 	 	 	 	 
	Transporter/Disposal	 	 	 	 	 	Transporter (T) or	 	 
	Facility Name	 	Facility Location	 	Disposal (D) Facility	 	Permit Number






	 
	 
	 
	 
	 
	 	 	 	3.4     Are pollution controls
or monitoring employed
in the process to
prevent or minimize
the release of wastes
into the environment?
Yes___ No___
	 
	 	 	 	If so, please describe.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 







	4.0	 	USTS/ASTS






	 	4.1	 	Are underground
storage tanks
(USTs), aboveground
storage tanks
(ASTs), or
associated
pipelines used for
the storage of
petroleum products,
chemicals, or
liquid wastes
present on site
(lease renewals) or
required for
planned operations
(new tenants)?
	 
	 	 	 	Yes___ No___





Exhibit C, Page 2




 








 









	 	 	 	If not, continue
with section 5.0.
If yes, please
describe capacity,
contents, age, type
of the USTs or
ASTs, as well any
associated leak
detection / spill
prevention
measures. Please
attach additional
pages if necessary.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Associated Leak
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Detection / Spill
	 	 	 	 	 	 	 	 	Year	 	Type (Steel,	 	Prevention
	Capacity	 	Contents	 	Installed	 	Fiberglass, etc)	 	Measures*







 




			
	*	 	Note: The following are examples of leak detection / spill prevention measures:





	 	 	 	 	 

	Integrity testing

	 	Inventory reconciliation
	 	Leak detection system
	Overfill spill protection

	 	Secondary containment
	 	Cathodic protection







	 	4.2	 	Please provide copies of written tank integrity test results and/or monitoring
documentation, if available.
	 
	 	4.3	 	Is the UST/AST registered and permitted with the appropriate regulatory
agencies?
Yes___ No___
	 
	 	 	 	If so, please attach a copy of the required permits.
	 
	 	4.4	 	If this Questionnaire is being completed for a lease renewal, and if any of the
USTs/ASTs have leaked, please state the substance released, the media(s) impacted
(e.g., soil, water, asphalt, etc.), the actions taken, and all remedial responses to
the incident.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	4.5	 	If this
Questionnaire is
being completed for
a lease renewal,
have USTs/ASTs been
removed from the
property?
Yes___ No___
	 
	 	 	 	If yes, please
provide any
official closure
letters or reports
and supporting
documentation
(e.g., analytical
test results,
remediation report
results, etc.).
	 
	 	4.6	 	For Lease renewals,
are there any above
or below ground
pipelines on site
used to transfer
chemicals or
wastes?
Yes___ No___
	 
	 	 	 	For new tenants, are installations of this type required for the planned operations?
Yes___ No___
	 
	 	 	 	If yes to either question, please describe.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 







	5.0	 	Asbestos Containing Building Materials
	 
	 	 	Please be advised that this property participates in an Asbestos Operations and Maintenance Program, and that an asbestos
survey may have been performed at the Property. If provided, please review the information that identifies the locations
of known asbestos containing material or presumed asbestos containing material. All personnel and appropriate
subcontractors should be notified of the presence of these materials, and informed not to disturb these materials. Any
activity that involves the disturbance or removal of these materials must be done by an appropriately trained
individual/contractor.





Exhibit C, Page 3




 









 









	6.0	 	Regulatory






	 	6.1	 	For Lease Renewals,
are there any past,
current, or pending
regulatory actions by
federal, state, or
local environmental
agencies alleging
noncompliance with
regulations?
Yes___ No___
	 
	 	 	 	If so, please describe.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	6.2	 	For lease renewals, are there any past, current, or pending lawsuits or
administrative proceedings for alleged environmental damages involving the property,
you, or any owner or tenant of the property?
Yes___ No___
	 
	 	 	 	If so, please describe.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	6.3	 	Does the operation have or require a
National Pollutant Discharge Elimination
System (NPDES) or equivalent permit?

Yes___ No___
	 
	 	 	 	If so, please attach a copy of this permit.
	 
	 	6.4	 	For Lease renewals, have there been any
complaints from the surrounding community
regarding facility operations?
Yes___No___
	 
	 	 	 	Have there been any worker complaints or
regulatory investigations regarding
hazardous material exposure at the
facility?

Yes___ No___
	 
	 	 	 	If so, please describe status and any
corrective actions taken. Please attach
additional pages as necessary.
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	6.5	 	Has a Hazardous Materials Business Plan been developed for the site?
Yes___ No___
	 
	 	 	 	If so, please attach a copy.
	 
	 	6.6	 	Are any environmental
documentation, chemical
inventory, or management
plan required by the local
Fire Department or Health
Department?
Yes___ No___
	 
	 	 	 	If so, please attach a copy.





Certification



I am familiar with the real property described in this questionnaire. By signing below, I
represent and warrant that the answers to the above questions are complete and accurate to the best
of my knowledge. I also understand that the Owner will rely on the completeness and accuracy of my
answers in assessing any environmental liability risks associated with the property.




	 	 	 	 	 	 	 

	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 

	 	 






Exhibit C, Page 4




 









 








Please forward the completed questionnaire to:




Mr. Steve Campbell

AMB Property, L.P.

Pier 1, Bay 1

San Francisco, CA 94111




Exhibit C, Page 5






 









 








Exhibit D

Move Out Standards



This “Move Out Standards” (Exhibit D) is dated February ___, 2008, for the reference
purposes only and is made between Headlands Realty Corporation, a Maryland Corporation
(“Landlord”), and Omneon Video Networks, Inc., a Delaware corporation (“Tenant”), to be a part of
that certain Standard Industrial Lease (the “Lease”) concerning a portion of the Property more
commonly known as 1237-1239 East Arques Avenue, Sunnyvale, California (the “Premises”). Landlord
and Tenant agree that the Lease is hereby modified and supplemented as follows:



At the expiration or earlier termination of this Lease, and in addition to any other provisions of
the Lease regarding surrender of the Premises, Tenant shall surrender the Premises in the same
condition as they were upon delivery of possession thereto under the Lease, reasonable wear and
tear excepted, and shall deliver all keys to Landlord. Before surrendering the Premises, Tenant
shall remove all of its personal property and trade fixtures and such alterations or additions to
the Premises made by Tenant as may be specified for removal by Landlord. If Tenant fails to remove
its personal property, fixtures or alterations or additions upon the expiration or
earlier termination of the Lease, the same shall be deemed abandoned and shall become the property
of Landlord. Tenant shall be liable to Landlord for all costs and damages incurred by Landlord in
removing, storing or selling such property, fixtures, alterations or additions and in restoring the
Premises to the condition required pursuant to the Lease.



Notwithstanding anything to the contrary in the Lease, Tenant shall surrender the Premises, at the
time of the expiration or earlier termination of the Lease, in a condition that shall include, but
is not limited to, the following:




	 	 	 	 	 
	1.

	 	Lights:
	 	Office and warehouse lights will be fully operational with all bulbs
functioning.
	 
	 	 	 	 
	2.

	 	Dock Levelers & Roll-Up Doors:
	 	Should be in good working condition.
	 
	 	 	 	 
	3.

	 	Dock Seals:
	 	Free of tears and broken backboards repaired.
	 
	 	 	 	 
	4.

	 	Warehouse Floor:
	 	Free of stains and swept with no racking bolts and other protrusions left
in the floor. Cracks should be repaired with an epoxy or polymer.
	 
	 	 	 	 
	5.

	 	Tenant-Installed Equipment & Wiring:
	 	Removed and space returned to original condition when originally leased.
(Remove air lines, junction boxes, conduit, etc.)
	 
	 	 	 	 
	6.

	 	Walls:
	 	Sheetrock (drywall) damage should be patched and fire-taped so that there
are no holes in either office or warehouse.
	 
	 	 	 	 
	7.

	 	Roof:
	 	Any tenant-installed equipment must be removed and roof penetrations
properly repaired by licensed roofing contractor. Active leaks must be
fixed and latest landlord maintenance and repairs recommendation must have
been followed.
	 
	 	 	 	 
	8.

	 	Signs:
	 	All exterior signs must be removed and holes patched and paint touched up
as necessary. All window signs should likewise be removed.
	 
	 	 	 	 
	9.

	 	Heating & Air Conditioning System:
	 	A written report from a licensed HVAC contractor within the last three
months stating that all evaporative coolers and HVAC systems are
operational and in good and safe operating condition.





Exhibit D, Page 1




 









 







	 	 	 	 	 

	10.

	 	Overall Cleanliness:
	 	Clean windows, sanitize bathroom(s), vacuum carpet and remove any and all
debris from office and warehouse. Remove all pallets and debris from
exterior of Premises.
	 
	 	 	 	 
	11.

	 	Upon Completion:
	 	Contact Landlord’s property manager to coordinate date of turning off
power, turning in keys, and obtain final Landlord inspection of Premises
which, in turn, will facilitate refund of security deposit.






Exhibit D, Page 2







 









 








Exhibit E

Rules & Regulations



This Exhibit (Exhibit E) is dated February ___, 2008, for the reference purposes only and
is made between Headlands Realty Corporation, a Maryland Corporation (“Landlord”), and Omneon Video
Networks, Inc., a Delaware corporation (“Tenant”), to be a part of that certain
Standard Industrial Lease (the “Lease”) concerning a portion of the Property more commonly known as
1237-1239 East Arques Avenue, Sunnyvale, California (the “Premises”). The terms, conditions and
provisions of this Exhibit E are hereby incorporated into and are made a part of the Lease.
Any capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed
to such terms as set forth in the Lease.



1. No advertisement, picture or sign of any sort shall be displayed on or outside the Premises or
the Building without the prior written consent of Landlord. Landlord shall have the right to
remove any such unapproved item without notice and at Tenant’s expense.



2. Tenant shall not regularly park motor vehicles in designated parking areas after the conclusion
of normal daily business activity.



3. Tenant shall not use any method of heating or air conditioning other than that supplied by
Landlord without the prior written consent of Landlord.



4. All window coverings installed by Tenant and visible from the outside of the Building require
the prior written approval of Landlord.



5. Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substance or
any flammable or combustible materials on or around the Premises, the Building or the Park.



6. Tenant shall not alter any lock or install any new locks or bolts on any exterior door or
electrical room door at the Premises without the prior consent of Landlord, and as to any interior
doors, the locks and bolts of which Tenant alters, Tenant shall provide Landlord with a copy of all
keys necessary to open such locks and bolts.



7. Tenant agrees not to make any duplicate keys without the prior consent of Landlord.



8. Tenant shall park motor vehicles in those general parking areas as designated by Landlord except
for loading and unloading. During those periods of loading and unloading, Tenant shall not
unreasonably interfere with traffic flow within the Park and loading and unloading areas of other
Tenants.



9. Tenant shall not disturb, solicit or canvas any occupant of the Building or Park and shall
cooperate to prevent same.



10. No person shall go on the roof without Landlord’s permission, except those individuals
identified by Tenant and approved by Landlord in advance.



11. Business machines and mechanical equipment belonging to Tenant which cause noise or vibration
that may be transmitted to the structure of the Building, to such a degree as to be objectionable
to Landlord or other Tenants, shall be placed and maintained by Tenant, at Tenant’s expense, on
vibration eliminators or other devices sufficient to eliminate noise or vibration.



12. All goods, including material used to store goods, delivered to the Premises of Tenant shall be
immediately moved into the Premises and shall not be left in parking or receiving areas overnight
without the prior written consent of Landlord.



13. Tractor trailers which must be unhooked or parked with dolly wheels beyond the concrete loading
areas must use steel plates or wood blocks under the dolly wheels to prevent damage to the asphalt
paving surfaces. No parking or storing of such trailers will be permitted in the auto parking
areas of the Park or on streets adjacent thereto.




Exhibit E, Page 1




 









 







14. Forklifts which operate on asphalt paving areas shall not have solid rubber tires and shall
only use tires that do not damage the asphalt.



15. Tenant is responsible for the storage and removal of all trash and refuse. All such trash and
refuse shall be contained in suitable receptacles stored behind screened enclosures at locations
approved by Landlord.



16. Tenant shall not store or permit the storage or placement of goods, or merchandise or pallets
or equipment of any sort outside of the Premises nor in or around the Building, the Park or any of
the Common Areas of the foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.



17. Tenant shall not permit any animals, including, but not limited to, any household pets, to be
brought or kept in or about the Premises, the Building, the Park or any of the Common Areas of the
foregoing.



18. Tenant shall not permit any motor vehicles to be washed on any portion of the Premises or in
the Common Areas of the Park, nor shall Tenant permit mechanical work or maintenance of motor
vehicles to be performed on any portion of the Premises or in the Common Areas of the Park.




Exhibit E, Page 2






 









 








Exhibit F

Tenant Improvements



This exhibit, entitled “Tenant Improvements”, is and shall constitute Exhibit F to that
certain Lease Agreement dated February ___, 2008 (the “Lease”), by and between Headlands Realty
Corporation, a Maryland Corporation (“Landlord”), and Omneon Video Networks, Inc., a Delaware
corporation (“Tenant”), for the leasing of certain premises located at 1237-1239 East Arques
Avenue, Sunnyvale, California (the “Premises”). The terms, conditions and provisions of this
Exhibit B are hereby incorporated into and are made a part of the Lease. Any capitalized
terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms as
set forth in the Lease:



1. Tenant To Construct Tenant Improvements. Subject to the provisions below, Tenant shall
be solely responsible for the planning, construction and completion of the interior tenant
improvements (“Tenant Improvements”) to the Premises in accordance with the terms and conditions of
this Exhibit F. The Tenant Improvements shall not include any (i) of Tenant’s personal
property, furniture, trade fixtures, cabling, furnishings, equipment or similar items or costs
related thereto (except as set forth in Section 5 below with respect to cabling) or (ii) relocation
costs.



2. Tenant Improvement Plans.




     A. Preliminary Plans and Specifications. Promptly after execution of the Lease,
Tenant shall retain a licensed and insured architect (“Architect”) to prepare preliminary working
architectural and engineering plans and specifications (“Preliminary Plans and Specifications”) for
the Tenant Improvements. Tenant shall deliver the Preliminary Plans and Specifications to Landlord.
The Preliminary Plans and Specifications shall be in sufficient detail to show locations, types and
requirements for all heat loads, people loads, floor loads, power and plumbing, regular and special
HVAC needs, telephone communications, telephone and electrical outlets, lighting, lighting fixtures
and related power, and electrical and telephone switches. Landlord shall reasonably approve or
disapprove the Preliminary Plans and Specifications within five (5) days after Landlord receives
the Preliminary Plans and Specifications and, if disapproved, Landlord shall return the Preliminary
Plans and Specifications to Tenant, who shall make all necessary revisions within ten (10) days
after Tenant’s receipt thereof. This procedure shall be repeated until Landlord approves the
Preliminary Plans and Specifications. The approved Preliminary Plans and Specifications, as
modified, shall be deemed the “Final Preliminary Plans and Specifications”.



     B. Final Plans and Specifications. After the Final Preliminary Plans and
Specifications are approved by Landlord and are deemed to be the Final Preliminary Plans and
Specifications, Tenant shall cause the Architect to prepare in twenty (20) days following
Landlord’s approval of the Final Preliminary Plans and Specifications the final working
architectural and engineering plans, specifications and drawings, (“Final Plans and
Specifications”) for the Tenant Improvements. Tenant shall then deliver the Final Plans and
Specifications to Landlord. Landlord shall reasonably approve or disapprove the Final Plans and
Specifications within five (5) days after Landlord receives the Final Plans and Specifications and,
if disapproved, Landlord shall return the Final Plans and Specifications to Tenant who shall make
all necessary revisions within ten (10) days after Tenant’s receipt thereof. This procedure shall
be repeated until Landlord approves, in writing, the Final Plans and Specifications. The approved
Final Plans and Specifications, as modified, shall be deemed the “Construction Documents”.



     C. Miscellaneous. All deliveries of the Preliminary Plans and Specifications, the
Final Preliminary Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents shall be delivered by messenger service, by personal hand delivery or by
overnight parcel service. While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans and Specifications,
and the Construction Documents, Landlord’s interest in doing so is to protect the Premises, the
Building and Landlord’s interest. Accordingly, Tenant shall not rely upon Landlord’s approvals and
Landlord shall not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary Plans and
Specifications, the Final Plans and Specifications, and the Construction Documents, or the



Exhibit F, Page 1





 









 







compliance thereof with Applicable Requirements, and Landlord shall incur no liability of any kind
by reason of granting such approvals.




     D. Building Standard Work. The Construction Documents shall provide that the Tenant
Improvements to be constructed in accordance therewith must be at least equal, in quality, to
Landlord’s building standard materials, quantities and procedures then in use by Landlord
(“Building Standards”), and shall consist of improvements which are generic in nature.



     E. Construction Agreements. Tenant hereby covenants and agrees that a provision shall
be included in each and every agreement made with the Architect and the Contractor with respect to
the Tenant Improvements specifying that Landlord shall be a third party beneficiary thereof,
including without limitation, a third party beneficiary of all covenants, representations,
indemnities and warranties made by the Architect and/or Contractor.


3. Permits. Tenant at its sole cost and expense (subject to the provisions of Paragraph 5
below) shall obtain all governmental approvals of the Construction Documents to the full extent
necessary for the issuance of a building permit for the Tenant Improvements based upon such
Construction Documents. Tenant at its sole cost and expense shall also cause to be obtained all
other necessary approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Tenant Improvements in accordance with the
approved Construction Documents. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall undertake all steps necessary to insure that the construction of the
Tenant Improvements is accomplished in strict compliance with all Applicable Requirements relating
to the construction of the Tenant Improvements and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the Premises and/or the
Building.



4. Construction.




     A. Tenant shall be solely responsible for the construction, installation and completion of the
Tenant Improvements in accordance with the Construction Documents approved by Landlord and is
solely responsible for the payment of all amounts when payable in connection therewith without any
cost or expense to Landlord, except for Landlord’s obligation to contribute the Tenant Improvement
Allowance in accordance with the provisions of Paragraph 5 below. Tenant shall diligently proceed
with the construction, installation and completion of the Tenant Improvements in accordance with
the Construction Documents and the completion schedule reasonably approved by Landlord. No material
changes shall be made to the Construction Documents and the completion schedule approved by
Landlord without Landlord’s prior written consent, which consent shall not be unreasonably withheld
or delayed.



     B. Tenant at its sole cost and expense (subject to the provisions of Paragraph 5 below) shall
employ a licensed, insured and bonded general contractor (“Contractor”) to construct the Tenant
Improvements in accordance with the Construction Documents. The construction contracts between
Tenant and the Contractor and between the Contractor and subcontractors shall be subject to
Landlord’s prior written approval, which approval shall not be unreasonably withheld or delayed.
Proof that the Contractor is licensed in California, is bonded as required under California law,
and has the insurance specified in Exhibit F-1, attached hereto and incorporated herein by
this reference, shall be provided to Landlord at the time that Tenant requests approval of the
Contractor from Landlord. Tenant shall comply with or cause the Contractor to comply with all
other terms and provisions of Exhibit F-1.



     C. Prior to the commencement of the construction and installation of the Tenant Improvements,
Tenant shall provide the following to Landlord, all of which shall be to Landlord’s reasonable
satisfaction:



          (i) An estimated budget and cost breakdown for the Tenant Improvements.




          (ii) Estimated completion schedule for the Tenant Improvements.




          (iii) Copies of all required approvals and permits from governmental agencies having
jurisdiction or authority for the construction and installation of the Tenant Improvements;
provided, however, if prior to commencement of the construction and installation of Tenant
Improvements Tenant has not received the electrical, plumbing or mechanical permits, Tenant




Exhibit F, Page 2




 









 




shall
only be required to provide Landlord with evidence that Tenant has made application
therefor, and, upon receipt by Tenant of such permits, Tenant shall promptly provide Landlord with
copies thereof.




          (iv) Evidence of Tenant’s procurement of insurance required to be obtained pursuant to the
provisions of Paragraphs 4.B and 4.G.




     D. Landlord shall at all reasonable times have a right to inspect the Tenant Improvements
(provided Landlord does not materially interfere with the work being performed by the Contractor or
its subcontractors) and Tenant shall immediately cease work upon written notice from Landlord if
the Tenant Improvements are not in compliance with the Construction Documents approved by Landlord.
If Landlord shall give notice of faulty construction or any other deviation from the Construction
Documents, Tenant shall cause the Contractor to make corrections promptly. However, neither the
privilege herein granted to Landlord to make such inspections, nor the making of such inspections
by Landlord, shall operate as a waiver of any rights of Landlord to require good and workmanlike
construction and improvements constructed in accordance with the Construction Documents.



     E. Subject to Landlord complying with its obligations in Paragraph 5 below, Tenant shall pay
and discharge promptly and fully all claims for labor done and materials and services furnished in
connection with the Tenant Improvements. The Tenant Improvements shall not be commenced until five
(5) business days after Landlord has received notice from Tenant stating the date the construction
of the Tenant Improvements is to commence so that Landlord can post and record any appropriate
Notice of Non-responsibility.



     F. Tenant acknowledges and agrees that the agreements and covenants of Tenant in Sections 8 of
the Lease shall be fully applicable to Tenant’s construction of the Tenant Improvements.



     G. Tenant shall maintain, and cause to be maintained, during the construction of the Tenant
Improvements, at its sole cost and expense, insurance of the types and in the amounts specified in
Exhibit B-1 and in Section 8 of the Lease, together with builders’ risk insurance for the
amount of the completed value of the Tenant Improvements on an all-risk non-reporting form covering
all improvements under construction, including building materials, and other insurance in amounts
and against such risks as the Landlord shall reasonably require in connection with the Tenant
Improvements.



     H. No materials, equipment or fixtures shall be delivered to or installed upon the Premises
pursuant to any agreement by which another party has a security interest or rights to remove or
repossess such items, without the prior written consent of Landlord, which consent shall not be
unreasonably withheld.



     I. Landlord reserves the right to establish reasonable rules and regulations for the use of
the Building during the course of construction of the Tenant Improvements, including, but not
limited to, construction parking, storage of materials, hours of work, use of elevators, and
clean-up of construction related debris.



     J. Upon completion of the Tenant Improvements, Tenant shall deliver to Landlord the following,
all of which shall be to Landlord’s reasonable satisfaction:



          (i) Any certificates required for occupancy, including a permanent and complete Certificate of
Occupancy issued by the City of Sunnyvale.




          (ii) A Certificate of Completion signed by the Architect who prepared the Construction
Documents, reasonably approved by Landlord.




          (iii) A cost breakdown itemizing all expenses for the Tenant Improvements, together with
invoices and receipts for the same or other evidence of payment.




          (iv) Final and unconditional mechanic’s lien waivers for all the Tenant Improvements.




          (v) A Notice of Completion for execution by Landlord, which certificate once executed by
Landlord shall be recorded by Tenant in the official records of the county of where




Exhibit F, Page 3





 









 







the Premises
are located, and Tenant shall then deliver to Landlord a true and correct copy of the recorded
Notice of Completion.




          (vi) A true and complete copy of all as-built plans and drawings for the Tenant Improvements.



5. Tenant Improvement Allowance.




     A. Subject to Tenant’s compliance with the provisions of this Exhibit F, Landlord
shall provide to Tenant an allowance in the amount of $28.00 per rentable square footage of the
Premises for a total of One Million Nine Hundred Twenty One Thousand Twenty Four and 00/100 dollars
and ($1,921,024) (the “Tenant Improvement Allowance”) to construct and install only the Tenant
Improvements. The Tenant Improvement Allowance shall be used to design, prepare, plan, obtain the
approval of, construct and install the Tenant Improvements and for no other purpose; provided,
Landlord agrees that Tenant may utilize up to an amount equal to Sixty Eight Thousand Six Hundred
Eight Dollars ($68,608.00) of the Tenant Improvement Allowance for the costs of purchasing and
installing cabling in the Premises (and Tenant shall provide Landlord with written invoices from
independent vendors marked ‘paid’ in order to obtain reimbursement of such costs). Except as
otherwise expressly provided herein, Landlord shall have no obligation to contribute the Tenant
Improvement Allowance unless and until the Construction Documents have been approved by Landlord
and Tenant has complied with all requirements set forth in Paragraph 4.C. of this Exhibit
B. In addition to the foregoing, Landlord shall have no obligation to disburse all or any
portion of the Tenant Improvement Allowance to Tenant unless Tenant makes a progress payment
request pursuant to the terms and conditions of Section 5.B. below prior to that date which is six
(6) months after the Commencement Date (as such term is defined in the Basic Provisions of the
Lease). The costs to be paid out of the Tenant Improvement Allowance shall include all reasonable
costs and expenses associated with the design, preparation, approval, planning, construction and
installation of the Tenant Improvements (the “Tenant Improvement Costs”), including all of the
following:



          (i) All costs of the Preliminary Plans and Specifications, the Final Plans and Specifications,
and the Construction Documents, and engineering costs associated with completion of the State of
California energy utilization calculations under Title 24 legislation:




          (ii) All costs of obtaining building permits and other necessary authorizations from local
governmental authorities;




          (iii) All costs of interior design and finish schedule plans and specifications including
as-built drawings, if applicable;




          (iv) All direct and indirect costs of procuring, constructing and installing the Tenant
Improvements in the Premises, including, but not limited to, the construction fee for overhead and
profit and the cost of all on-site supervisory and administrative staff, office, equipment and
temporary services rendered by the Contractor in connection with the construction of the Tenant
Improvements; provided, however, that the construction fee for overhead and profit, the cost of all
on-site supervisory and administrative staff, office, equipment and temporary services shall not
exceed amounts which are reasonable and customary for such items in the local construction
industry;




          (v) All fees payable to the Architect and any engineer if they are required to redesign any
portion of the Tenant Improvements following Tenant’s and Landlord’s approval of the Construction
Documents;




          (vi) Utility connection fees;




          (vii) Inspection fees and filing fees payable to local governmental authorities, if any; and




          (viii) All costs of all permanently affixed equipment and non-trade fixtures provided for in
the Construction Documents, including the cost of installation.



The Tenant Improvement Allowance shall be the maximum contribution by Landlord for the Tenant
Improvement Costs, and the disbursement of the Tenant Improvement Allowance is subject to the terms
contained hereinbelow.




Exhibit F, Page 4





 









 








     B. Subject to Section 5.A. above, Landlord will make payments to Tenant from the
Tenant Improvement Allowance to reimburse Tenant for Tenant Improvement Costs paid or incurred
by Tenant. All payments of the Tenant Improvement Allowance shall be by progress payments not more
frequently than once per month and only after satisfaction of the following conditions precedent:
(a) receipt by Landlord of conditional mechanics’ lien releases for the work completed and to be
paid by said progress payment, conditioned only on the payment of the sums set forth in the
mechanics’ lien release, executed by the Contractor and all subcontractors, labor suppliers and
materialmen; (b) receipt by Landlord of unconditional mechanics’ lien releases from the Contractor
and all subcontractors, labor suppliers and materialmen for all work other than that being paid by
the current progress payment previously completed by the Contractor, subcontractors, labor
suppliers and materialmen and for which Tenant has received funds from the Tenant Improvement
Allowance to pay for such work; (c) receipt by Landlord of any and all documentation reasonably
required by Landlord detailing the work that has been completed and the materials and supplies used
as of the date of Tenant’s request for the progress payment, including, without limitation,
invoices, bills, or statements for the work completed and the materials and supplies used; and (d)
completion by Landlord or Landlord’s agents of any inspections of the work completed and materials
and supplies used as deemed reasonably necessary by Landlord. Tenant Improvement Allowance
progress payments shall be paid to Tenant within fourteen (14) days from the satisfaction of the
conditions set forth in the immediately preceding sentence. The preceding notwithstanding, all
Tenant Improvement Costs paid or incurred by Tenant prior to Landlord’s approval of the
Construction Documents in connection with the design and planning of the Tenant Improvements by
Architect shall be paid from the Tenant Improvement Allowance, without any retention, within
fourteen (14) days following Landlord’s receipt of invoices, bills or statements from Architect
evidencing such costs. Notwithstanding the foregoing to the contrary, Landlord shall be entitled
to withhold and retain five percent (5%) of the Tenant Improvement Allowance or of any Tenant
Improvement Allowance progress payment until the lien-free expiration of the time for filing of any
mechanics’ liens claimed or which might be filed on account of any work ordered by Tenant or the
Contractor or any subcontractor in connection with the construction and installation of the Tenant
Improvements.



     C. Landlord shall not be obligated to pay any Tenant Improvement Allowance progress payment or
the Tenant Improvement Allowance retention if on the date Tenant is entitled to receive the Tenant
Improvement Allowance progress payment or the Tenant Improvement Allowance retention a Default by
Tenant of this Lease exists. Such payments shall resume upon Tenant curing any such Default within
the time periods which may be provided for in the Lease.



     D. Should the total cost of constructing the Tenant Improvements be less than the Tenant
Improvement Allowance, the Tenant Improvement Allowance shall be automatically reduced to the
amount equal to said actual cost.



     E. The term “Excess Tenant Improvement Costs” as used herein shall mean and refer to the
aggregate of the amount by which the actual Tenant Improvement Costs exceed the Tenant Improvement
Allowance. A portion of the Excess Tenant Improvement Costs up to a maximum amount equal to five
dollars ($5.00) per rentable square footage of the Premises for a total of Three Hundred Forty
Three Thousand Forty dollars ($343,040) shall be paid by Landlord in the same manner as the Tenant
Improvement Allowance and such Excess Tenant Improvement Costs will then be amortized over the
initial term of the Lease at the rate of ten percent (10%) per annum and such amortized amount
(including interest charges) shall be paid by Tenant to Landlord with, and as part of, the Base
Rent for the Premises in accordance with the provisions and requirements of Section 4 of the Lease
(the “Amortized Excess TI Costs”). Within two (2) weeks after the Tenant Improvements have been
substantially completed and the actual Tenant Improvement Costs are known, the parties shall
execute and deliver a written amendment to the Lease, in the form acceptable to the parties,
wherein there shall be specified, inter alia, the amount of the Base Rent payable by Tenant
during the initial term of the Lease after taking into account the amount of the Amortized Excess
TI Costs. Tenant shall promptly pay any and all Excess Tenant Improvement Costs in excess of the
principal amount of the Amortized Excess TI Costs.


6. Termination. If the Lease is terminated prior to the date on which the Tenant
Improvements are completed, for any reason due to the default of Tenant hereunder, in addition to
any other remedies available to Landlord under the Lease, Tenant shall pay to Landlord as




Exhibit F, Page 5





 









 







Additional Rent under the Lease, within five (5) days of receipt of a statement therefor, any and
all costs incurred by Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned, installed
and/or constructed as of such date of termination, including, but not limited to, any costs related
to the removal of all or any portion of the Tenant Improvements and restoration costs related
thereto. Subject to the provisions of Paragraph 7.4 of the Lease, upon the expiration or earlier
termination of the Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered incorporated into
the Building.



7. T8 Light Fixtures. If Tenant removes any existing T8 light fixtures from the Premises,
Tenant agrees that such light fixtures are the property of Landlord and shall be returned to
Landlord in good condition promptly upon their removal.



8. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar as they are
applicable, in whole or in part, to this Exhibit F, are hereby incorporated herein by
reference. In the event of any conflict between the terms of the Lease and this Exhibit F,
the terms of this Exhibit F shall prevail. Any amounts payable by Tenant to Landlord
hereunder shall be deemed to be Additional Rent under the Lease and, upon any default in the
payment of same, Landlord shall have all rights and remedies available to it as provided for in the
Lease.




Exhibit F, Page 6







 









 








Exhibit F-1

Construction Insurance Requirements



Before commencing work, the contractor shall procure and maintain at its sole cost and expense
until completion and final acceptance of the work, at least the following minimum levels of
insurance.



A. Workers’ Compensation in statutory amounts and Employers Liability Insurance in the minimum
amounts of $100,000 each accident for bodily injury by accident and $100,000 each employee for
bodily injury by disease with a $500,000 policy limit, covering each and every worker used in
connection with the contract work.



B. Comprehensive General Liability Insurance on an occurrence basis including, but not limited to,
protection for Premises/Operations Liability, Broad Form Contractual Liability, Owner’s and
Contractor’s Protective, and Products/Completed Operations Liability*, in the following minimum
limits of liability.




	 	 	 

	Bodily Injury, Property Damage, and
	 	 
	Personal Injury Liability

	 	$2,000,000/each occurrence
	 

	 	$3,000,000/aggregate








 




			
	*	 	Products/Completed Operations Liability Insurance is to be provided for a period of at least
one (1) year after completion of work.





     Coverage should include protection for Explosion, Collapse and Underground Damage.


C. Comprehensive Automobile Liability Insurance with the following minimum limits of liability.




	 	 	 

	Bodily Injury and Property

	 	$1,000,000/each occurrence
	Damage Liability

	 	$2,000,000/aggregate






     This insurance will apply to all owned, non-owned or hired automobiles to be used by the
Contractor in the completion of the work.


D. Umbrella Liability Insurance in a minimum amount of three million dollars ($3,000,000),
providing excess coverage on a following-form basis over the Employer’s Liability limit in
Paragraph A and the liability coverages outlined in Paragraphs B and C.



E. Equipment and Installation coverages in the broadest form available covering Contractor’s tools
and equipment and material not accepted by Tenant. Tenant will provide Builders Risk Insurance on
all accepted and installed materials.



All policies of insurance, duplicates thereof or certificates evidencing coverage shall be
delivered to Landlord prior to commencement of any work and shall name Landlord, and its partners
and lenders as additional insureds as their interests may appear. All insurance policies shall (1)
be issued by a company or companies licensed to be business in the state of California, (2) provide
that no cancellation, non-renewal or material modification shall be effective without thirty (30)
days prior written notice provided to Landlord, (3) provide no deductible greater than $15,000 per
occurrence, (4) contain a waiver to subrogation clause in favor of Landlord, and its partners and
lenders, and (5) comply with the requirements of Section 8 of the Lease to the extent such
requirements are applicable.




Exhibit F-1, Page 1







 









 








Addendum 1

Early Possession



This Early Possession Addendum is a part of the Lease dated February ___, 2008, by and between
Headlands Realty Corporation, a Maryland Corporation (“Landlord”) and Omneon Video Networks, Inc.,
a Delaware corporation (“Tenant”) for the premises commonly known as 1237-1239 East Arques Avenue,
Sunnyvale, California.



Early Possession. Tenant may possess the Premises on the Early Possession Date (as defined in
Section 1 of this Lease), even though the Early Possession Date is prior to the Commencement Date
of the Lease (“Early Possession”), so long as Landlord and Tenant have fully executed and delivered
this Lease, Tenant has paid the Security Deposit and all advance Rent due under the Lease and
Tenant has delivered to Landlord all required insurance certificates. The obligation to pay Base
Rent shall be abated for the Early Possession Period and the obligation to pay Tenant’s Share of
Operating Expenses shall be abated to the extent set forth in the next succeeding sentence.
Notwithstanding anything to the contrary herein, Tenant shall not be obligated to pay Tenant’s
Share of Operating Expenses until the earlier of (i) the Commencement Date and (ii) the date Tenant
first conducts its business upon the Premises. All other terms of this Lease, other than those
related to the payment of Base Rent and Tenant’s Share of Operating Expenses, including, but not
limited to, the obligation to carry the insurance required by Paragraph 8 of the Lease, shall be in
effect during the Early Possession Period. Such Early Possession shall not change the Expiration
Date of the Original Term.




Addendum 1, Page 1






 









 








Addendum 2

Option to Extend



This Addendum (the “Addendum”) is incorporated as a part of that certain Lease Agreement dated
February ___, 2008 (the “Lease”), by and between Headlands Realty Corporation, a Maryland
Corporation (“Landlord”), and Omneon Video Networks, Inc., a Delaware corporation (“Tenant”), for
the leasing of those certain premises commonly known as 1237-1239 East Arques Avenue, Sunnyvale,
California, as more particularly described in Exhibit A to the Lease (the “Premises”). Any
capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to
such terms as set forth in the Lease.



1. Grant of Extension Option. Subject to the provisions, limitations and conditions set
forth in Paragraph 5 below, Tenant shall have an Option (“Option”) to extend the initial term of
the Lease for five (5) years (the “Extended Term”).



2. Tenant’s Option Notice. Tenant shall have the right to deliver written notice to
Landlord of its intent to exercise this Option (the “Option Notice”). If Landlord does not receive
the Option Notice from Tenant on a date which is neither more than twelve (12) months nor less than
nine (9) months prior to the end of the initial term of the Lease, all rights under this Option
shall automatically terminate and shall be of no further force or effect. Upon the proper exercise
of this Option, subject to the provisions, limitations and conditions set forth in Paragraph 5
below, the initial term of the Lease shall be extended for the Extended Term.



3. Establishing the Initial Monthly Base Rent for the Extended Term. The initial monthly
Base Rent for the Extended Term shall be equal to ninety five percent (95%) of the then Fair Market
Rental Rate, as hereinafter defined. As used herein, the “Fair Market Rental Rate” payable by
Tenant for the Extended Term shall mean the Base Rent for the highest and best use permitted by
Applicable Requirements for comparable space at which non-equity tenants, as of the commencement of
the lease term for the Extended Term, will be leasing non-sublease, non-equity, unencumbered space
comparable in size, location and quality to the Premises for a comparable term, which comparable
space is located in the Building and in other comparable first-class buildings in the vicinity of
the Building, taking into consideration the condition and value of existing tenant improvements in
the Premises. The Fair Market Rental Rate shall include the periodic rental increases that would
be included for space leased for the period of the Extended Term. Within thirty (30) days
following Landlord’s receipt of the Option Notice, Landlord shall inform Tenant in writing of
Landlord’s determination of the Fair Market Rental Rate for the Premises for the Extended Term
(“Landlord’s Determination Notice”). Within ten (10) business days following Tenant’s receipt of
Landlord’s Determination Notice, Tenant shall elect one of the following: (i) Tenant shall deliver
to Landlord a written notice rescinding Tenant’s Option Notice and, thereafter, Tenant shall have
no further right or ability to extend the Term of the Lease, and this Addendum shall be of no
further force or effect, (ii) Tenant shall inform Landlord in writing of the appointment by Tenant
of a broker meeting the qualifications described below (“Appointment Notice”) or (iii) Tenant shall
accept in writing Landlord’s determination of the Fair Market Rental Rate and the initial monthly
Base Rent for the Extended Term. Tenant’s failure to deliver written notice of (i), (ii) or (iii)
above shall conclusively be deemed Tenant’s election to rescind Tenant’s Option Notice.



In the event Tenant timely delivers the Appointment Notice, then within ten (10) business days of
receipt by Landlord of the Appointment Notice, Landlord shall appoint a competent and impartial
commercial real estate broker (hereinafter “broker”) with at least five (5) years’ full-time
commercial real estate brokerage experience in the geographical area of the Premises to set the
Fair Market Rental Rate for the Extended Term. If either Landlord or Tenant does not appoint a
broker within ten (10) business days after the other party has given notice of the name of its
broker, the single broker appointed shall be the sole broker and shall set the Fair Market Rental
Rate for the Extended Term. The two (2) brokers appointed by Landlord and Tenant shall meet
promptly and attempt to set the Fair Market Rental Rate. In addition, if either of the first two
(2) brokers fails to submit their opinion of the Fair Market Rental Rate within the time frames set
forth below, then the single Fair Market Rental Rate submitted shall automatically be utilized to
set the initial monthly Base Rent for the Extended Term and shall be binding upon Landlord and
Tenant. If the two (2) brokers are unable to agree within ten (10) business days




Addendum 2, Page 1





 









 







after the
Landlord appoints its broker, they shall attempt to select a third broker, meeting the
qualifications stated in this paragraph within ten (10) business days after the last day the two
(2) brokers are given to set the Fair Market Rental Rate. If the two (2) brokers are unable to
agree on the third broker, either Landlord or Tenant by giving ten (10) business days’ written
notice to the other party, can apply to the Presiding Judge of the Superior Court of the county in
which the Premises is located for the selection of a third broker who meets the qualifications
stated in this paragraph. Landlord and Tenant each shall bear the costs of their respective
brokers and each shall bear one-half (1/2) of the cost of appointing the third broker and of paying
the third broker’s fee. The third broker, however selected, shall be a person who has not
previously acted in any capacity for either Landlord or Tenant. Within fifteen (15) business days
after the selection of the third broker, the third broker shall select one of the two Fair Market
Rental Rates submitted by the first two brokers to set the Fair Market Rental Rate for the Extended
Term. The determination of the Fair Market Rental Rate by the third broker shall be binding upon
Landlord and Tenant.



In no event shall the monthly Base Rent for any period of the Extended Term be less than the
highest monthly Base Rent charged during the initial term of the Lease. Upon determination of the
initial monthly Base Rent for the Extended Term in accordance with the terms outlined above,
Landlord and Tenant shall immediately execute, at Landlord’s sole option, either the standard lease
agreement then in use by Landlord, or an amendment to this Lease. Such new lease agreement or
amendment, as the case may be, shall set forth among other things, the initial monthly Base Rent
for the Extended Term and the actual commencement date and expiration date of the Extended Term.
Tenant shall have no other right to extend the term of the Lease under this Addendum unless
Landlord and Tenant otherwise agree in writing.



4. Condition of Premises and Brokerage Commissions for the Extended Term. If Tenant timely
and properly exercises this Option, in strict accordance with the terms contained herein: (1)
Tenant shall accept the Premises in its then “As-Is” condition and, accordingly, Landlord shall not
be required to perform any additional improvements to the Premises; and (2) Tenant hereby agrees
that it will be solely responsible for any and all brokerage commissions and finder’s fees payable
to any broker now or hereafter procured or hired by Tenant or who otherwise claims a commission
(“Tenant’s Broker”) in connection with the Option. Tenant hereby further agrees that Landlord
shall in no event or circumstance be responsible for the payment of any such commissions and fees
to Tenant’s Broker, and Tenant shall indemnify, defend and hold Landlord free and harmless against
any liability, claim, judgment, or damages with respect thereto, including attorneys’ fees and
costs.



5. Limitations On, and Conditions To, Extension Option. This Option is personal to Tenant
and its Affiliate and may not be assigned, voluntarily or involuntarily, separate from or as part
of the Lease. At Landlord’s option, all rights of Tenant and its Affiliate under this Option shall
terminate and be of no force or effect if any of the following individual events occur or any
combination thereof occur with respect to Tenant or its Affiliate: (1) such party has been in
default at any time during the initial term of the Lease, or is in default of any provision of the
Lease on the date Landlord receives the Option Notice; and/or (2) such party has assigned its
rights and obligations under all or part of the Lease or such party has subleased all or part of
the Premises; and/or (3) such party’s financial condition is unacceptable to Landlord at the time
the Option Notice is delivered to Landlord; and/or (4) such party has failed to exercise properly
this Option in a timely manner in strict accordance with the provisions of this Addendum; and/or
(5) such party no longer has possession of all or any part of the Premises under the Lease, or if
the Lease has been terminated earlier, pursuant to the terms and provisions of the Lease.



6. Time is of the Essence. Time is of the essence with respect to each and every time
period described in this Addendum.




Addendum 2, Page 2