Exhibit 10.124


 


LEASE


 


(SINGLE TENANT)


 


 


 


BETWEEN


 


 


 


THE IRVINE COMPANY LLC


 


 


 


AND


 


 


MEADE INSTRUMENTS CORP.


 

















 


LEASE


 


THIS LEASE is made as of
the 10 day of February, 2009, by and between THE
IRVINE COMPANY LLC, hereafter called “Landlord,”
and MEADE INSTRUMENTS CORP., a Delaware
corporation, hereafter called “Tenant.”


 


ARTICLE
1. BASIC LEASE PROVISIONS


 


Each reference in this
Lease to the “Basic Lease Provisions” shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.


 


1.                    Tenant’s Trade Name: Meade Instruments Corp.


 


2.                    Premises: The Premises are more particularly
described in Section 2.1.


 


Address
of Building: 27
Hubble, Irvine, CA


 


Project
Description: Hubble
Industrial Park (as shown on Exhibit Y
to this Lease)


 


3.                    Use of Premises: General office, warehouse and
distribution.


 


4.                    Commencement Date: February 15, 2009


 


5.                     Expiration Date: February 28, 2014


 


6.                    Basic Rent:


 


	
  Months of Term

  or Period

  	
   

  	
  Monthly Rate Per

  Rentable Square Foot

  	
   

  	
  Monthly Basic Rent (rounded to

  the nearest dollar)

  
	
  1-12

  	
   

  	
  $.84

  	
   

  	
  $21,114.00

  
	
  13-24

  	
   

  	
  $.87

  	
   

  	
  $21,868.00

  
	
  25-36

  	
   

  	
  $.89

  	
   

  	
  $22,371.00

  
	
  37-48

  	
   

  	
  $.92

  	
   

  	
  $23,125.00

  
	
  49-60

  	
   

  	
  $.95

  	
   

  	
  $23,879.00

  



 


Basic Rent is subject to
adjustment pursuant to the provision of Section II.F of the attached Work
Letter


 


7.                       Expense Recovery Period: Every twelve month period during the
Term (or portion thereof during the first and last Lease years) ending June 30.


 


8.                    Floor Area of Premises: approximately 25,136 rentable square
feet


 


Floor
Area of Building:
approximately 25,136 rentable square feet


 


9.                    Security Deposit: $65,000.00


 


10.               Broker(s): Irvine Realty Company (“Landlord’s Broker”) and N/A (“Tenant’s
Broker”)


 


11.                 Parking: 50-unreserved vehicle parking spaces in
accordance with the provisions set forth in Exhibit F
to this Lease.


 


1

















 


12.              Address for Payments and Notices:


 


	
  LANDLORD

  	
  TENANT

  
	
   

  Payment Address:

   

  THE IRVINE
  COMPANY LLC

  550 Newport
  Center Drive

  Newport Beach,
  CA 92660

  Attn: Senior
  Vice President, Property Operations 

  Irvine Office Properties

   

  Notice Address:

   

  THE IRVINE
  COMPANY LLC

  550 Newport
  Center Drive

  Newport Beach,
  CA 92660

  Attn: Senior
  Vice President, Property Operations 

  Irvine Office Properties

   

  with a copy of
  notices to:

   

  THE IRVINE
  COMPANY LLC

  550 Newport
  Center Drive

  Newport Beach,
  CA 92660

  Attn: Vice
  President Operations 

  Irvine Office Properties, Technology Portfolio

  	
   

   

  MEADE INSTRUMENTS CORP.

  27 Hubble

  Irvine, CA 92618

  



 


13.               Additional Provisions. The provisions of EXHIBIT G
attached hereto are hereby incorporated into and made a part of this Lease.


 


LIST
OF LEASE EXHIBITS:


 


	
  Exhibit A

  	
  Description
  of Premises

  
	
  Exhibit B

  	
  Operating Expenses

  
	
  Exhibit C

  	
  Utilities and Services

  
	
  Exhibit D

  	
  Tenant’s Insurance

  
	
  Exhibit E

  	
  Rules and Regulations

  
	
  Exhibit F

  	
  Parking

  
	
  Exhibit G

  	
  Additional Provisions

  
	
  Exhibit H

  	
  Landlord’s Disclosures

  
	
  Exhibit I

  	
  [Intentionally
  Deleted]

  
	
  Exhibit J

  	
  Environmental Questionnaire

  
	
  Exhibit Y

  	
  Project Description

  



 


 


2

















 


ARTICLE 2. PREMISES


 


2.1.   LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the Premises shown in Exhibit A
(the “Premises”), containing approximately
the floor area set forth in Item 8 of the Basic Lease Provisions (the “Floor Area”). The Premises consist of all of the Floor Area
of the building identified in Item 2 of the Basic Lease Provisions (the “Building”), which is a portion of the project described in
Item 2 (the “Project”). Landlord
and Tenant stipulate and agree that the Floor Area of Premises set forth in
Item 8 of the Basic Lease Provisions is correct. The Lease includes the
warehouse racking system installed in the Premises as of the Commencement Date,
which is leased to Tenant in an “as is” condition.


 


2.2.   ACCEPTANCE OF PREMISES. Tenant’s lease of the Premises shall be
on an “as is” basis without further alteration, addition or improvement to the
Premises whatsoever, except Landlord shall repaint the painted wall surfaces in
the office area of the Premises utilizing building standard paint, and shall
shampoo the carpet in the office area of the Premises. Tenant acknowledges that
neither Landlord nor any representative of Landlord has made any representation
or warranty with respect to the Premises, the Building or the Project or the
suitability or fitness of either for any purpose, except as set forth in this
Lease. Tenant acknowledges that the flooring materials which may be installed
within portions of the Premises located on the ground floor of the Building may
be limited by the moisture content of the Building slab and underlying soils. The
taking of possession or use of the Premises by Tenant shall conclusively
establish that the Premises and the Building were in satisfactory condition and
in conformity with the provisions of this Lease in all respects.


 


2.3.   LANDLORD’S RESPONSIBILITIES.


 


(a)        Landlord
shall correct, repair and/or replace any non-compliance of the Building and/or
the Common Areas with all building permits and codes in effect and applicable
as of the execution of this Lease, including without limitation, the provisions
of Title III of the Americans With Disabilities Act (“ADA”).
Said costs of compliance shall be Landlord’s sole cost and expense and shall
not be part of Project Costs.  Landlord
shall correct, repair or replace any non-compliance of the Building and the
Common Areas with any revisions or amendments to applicable building codes,
including the ADA, becoming effective after the execution of this Lease, provided
that the amortized cost of such repairs or replacements (amortized over the
useful life thereof) shall be included as Project Costs payable by Tenant.  All other ADA compliance issues which pertain
to the Premises, including without limitation, in connection with Tenant’s
construction of any Alterations or other improvements in the Premises (and any
resulting ADA compliance requirements in the Common Areas if Landlord shall
consent to same as more particularly provided in Section 7.3 of this
Lease) and the operation of Tenant’s business and employment practices in the
Premises, shall be the responsibility of Tenant at its sole cost and
expense.  The repairs, corrections or
replacements required of Landlord or of Tenant under the foregoing provisions
of this Section 2.3(a) shall be made promptly following notice of
non-compliance from any applicable governmental agency.


 


(b)        Landlord warrants to Tenant that the
plumbing, fire sprinkler system, lighting, heating, ventilation and air
conditioning systems and electrical systems serving the Premises shall be in
good operating condition on the Commencement Date of this Lease.  Provided that Tenant shall notify Landlord of
a non-compliance with the foregoing warranty not later than thirty (30) days
following the Commencement Date, then Landlord shall, except as otherwise
provided in this Lease, promptly after receipt of written notice from Tenant
setting forth the nature and extent of such non-compliance, rectify same at
Landlord’s sole cost and expense (and not as a Project Cost).


 


(c)        During the initial 60-month Term of this
Lease, Landlord agrees to repair and/or replace, at its sole cost and expense
and not as a “Project Cost”, the structural components of the roof, the
load-bearing walls and the foundations and footings of the Building.  Notwithstanding the foregoing, Landlord’s
obligation contained in this Section 2.3(c) to bear such costs and
expenses shall not apply:  (i) to
the costs and expenses of periodic maintenance of the roof, walls, foundations
and footings of the Building, nor (ii) to the extent of the negligence or
willful misconduct by Tenant, its employees, agents, contractors, licensees or
invitees (in which case Tenant shall be responsible for the reasonable costs of
such repairs and/or replacements).  The
repairs or replacements required of Landlord pursuant to this Section 2.3(c) shall
be made promptly following notice from Tenant.


 


ARTICLE 3. TERM


 


3.1.   GENERAL. The Term of this Lease (“Term”)
shall commence (“Commencement Date”) on the date set
forth in Item 4 of the Basic Lease Provisions, and shall expire on the date
(the “Expiration Date”) set forth in Item 5
of the Basic Lease Provisions.


 


3.2.   DELAY IN POSSESSION. If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant on or before the
Commencement Date set forth in Item 4 of the Basic Lease Provisions, this
Lease shall not be void or voidable nor shall Landlord be liable to Tenant for
any resulting loss or damage. However, Tenant shall not be liable for any rent
until the Premises are actually delivered to Tenant, except that if Landlord’s
failure to deliver possession of the Premises to Tenant is attributable to any
action or inaction by Tenant, then the Premises shall be deemed ready for
occupancy, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent), as of the date Landlord would have been able
to deliver the Premises to Tenant but for Tenant’s delay(s).


 


ARTICLE 4. RENT AND OPERATING
EXPENSES


 


4.1.   BASIC RENT. From and after the Commencement Date, Tenant shall
pay to Landlord without deduction or offset a Basic Rent for the Premises in
the total amount shown (including subsequent adjustments, if any) in
Item 6 of the Basic Lease Provisions (the “Basic Rent”).
If the Commencement Date is other than the first day of a calendar month, any
rental adjustment shown in Item 6 shall be deemed to occur on the first
day of the next calendar month following the specified monthly anniversary of
the Commencement Date. The Basic Rent shall be due and payable in advance
commencing on the Commencement Date and continuing thereafter on the first day
of each successive calendar month of the Term, as prorated for any partial
month. No demand, notice or invoice shall be required. An installment in the
amount of 1 full month’s Basic Rent at the initial rate specified in
Item 6 of the Basic Lease Provisions and 1 month’s estimated Tenant’s
Share of Operating Expenses shall be delivered to Landlord concurrently with
Tenant’s execution of this Lease and shall be applied against the Basic Rent
and Operating Expenses first due hereunder; the next installment of Basic Rent
shall be due on the first day of the second calendar month of the Term, which
installment shall, if applicable, be appropriately prorated to reflect the
amount prepaid for that calendar month.


 


4.2.   OPERATING EXPENSES. Tenant shall pay Tenant’s Share  of Operating Expenses in accordance with Exhibit B of this Lease.


 


4.3.   SECURITY DEPOSIT. Subject to the provisions of Section 4
of Exhibit G attached to this Lease,
Tenant shall deposit with Landlord the sum stated in Item 9 of the Basic
Lease Provisions (the “Security Deposit”),
to be held by Landlord as security for the full and faithful performance of
Tenant’s obligations under this Lease, to pay any rental sums, including
without limitation such additional rent as may be owing under any provision
hereof, and to maintain the Premises as required by Sections 7.1 and 15.3
or any other provision of this Lease. Upon any breach of the foregoing
obligations by Tenant, Landlord may apply all or part of the Security Deposit
as full or partial compensation. If any portion of the Security Deposit is so
applied,


 


 


3

















 


Tenant shall within 5 days
after written demand by Landlord deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount. Landlord
shall not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on the Security Deposit. In
no event may Tenant utilize all or any portion of the Security Deposit as a
payment toward any rental sum due under this Lease. Any unapplied balance of
the Security Deposit shall be returned to Tenant or, at Landlord’s option, to
the last assignee of Tenant’s interest in this Lease within 30 days following
the termination of this Lease and Tenant’s vacation of the Premises. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code,
or any similar or successor laws now or hereafter in effect, in connection with
Landlord’s application of the Security Deposit to prospective rent that would
have been payable by Tenant but for the early termination due to Tenant’s
Default (as defined herein).


 


ARTICLE 5. USES


 


5.1.   USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions and for no other use
whatsoever. The uses prohibited under this Lease shall include, without
limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; or (iii) schools, temporary employment agencies or
other training facilities which are not ancillary to corporate, executive or
professional office use. Tenant shall not do or permit anything to be done in
or about the Premises which will in any way interfere with the rights or quiet
enjoyment of other occupants of the Building or the Project, or use or allow
the Premises to be used for any unlawful purpose, nor shall Tenant permit any
nuisance or commit any waste in the Premises or the Project. Tenant shall not
perform any work or conduct any business whatsoever in the Project other than
inside the Premises. Tenant shall comply at its expense with all present and
future laws, ordinances and requirements of all governmental authorities that
pertain to Tenant or its use of the Premises, including without limitation all
federal and state occupational health and safety and handicap access
requirements, whether or not Tenant’s compliance will necessitate expenditures
or interfere with its use and enjoyment of the Premises, provided, however, that if: (i) such compliance would
apply to all similar buildings and is not due to Tenant’s particular manner of
use of the Premises, and (ii) such improvements have a useful life that
extends beyond the Term, then Landlord shall construct such improvements and
Tenant shall only be obligated to pay an amortized portion on a monthly basis
based on that portion of the useful life that occurs during the Term.


 


5.2.   SIGNS. Except for one (1) exterior “building top” sign
and Landlord’s standard suite signage, identifying Tenant’s name and/or logo
and installed in locations designated by Landlord, Tenant shall have no right
to maintain signs in any location in, on or about the Premises, the Building or
the Project and shall not place or erect any signs that are visible from the
exterior of the Building. The size, design, graphics, material, style, color
and other physical aspects of any permitted sign shall be subject to Landlord’s
written determination, as determined solely by Landlord, prior to installation,
that signage is in compliance with any covenants, conditions or restrictions
encumbering the Premises and Landlord’s signage program for the Project, as in
effect from time to time and approved by the City in which the Premises are
located (“Signage Criteria”). Prior to placing or
erecting any such signs, Tenant shall obtain and deliver to Landlord a copy of
any applicable municipal or other governmental permits and approvals, except to
Landlord’s standard suite signage. Tenant shall be responsible for all costs of
any permitted sign, including, without limitation, the fabrication,
installation, maintenance and removal thereof and the cost of any permits
therefor, except that Landlord shall pay for the initial installation costs
only of the standard suite signage. If Tenant fails to maintain its sign in
good condition, or if Tenant fails to remove same upon termination of this
Lease and repair and restore any damage caused by the sign or its removal,
Landlord may do so at Tenant’s expense. Landlord shall have the right to
temporarily remove any signs in connection with any repairs or maintenance in
or upon the Building. The term “sign” as used
in this Section shall include all signs, designs, monuments, displays,
advertising materials, logos, banners, projected images, pennants, decals,
pictures, notices, lettering, numerals or graphics.


 


5.3.   HAZARDOUS MATERIALS.


 


(a)        For purposes of this Lease, the term “Hazardous Materials” means (i) any “hazardous material”
as defined in Section 25501(o) of the California Health and Safety
Code, (ii) hydrocarbons, polychlorinated biphenyls or asbestos, (iii) any
toxic or hazardous materials, substances, wastes or materials as defined
pursuant to any other applicable state, federal or local law or regulation, and
(iv) any other substance or matter which may result in liability to any
person or entity as a result of such person’s possession, use, storage, release
or distribution of such substance or matter under any statutory or common law
theory.


 


(b)        Tenant shall not cause or permit any
Hazardous Materials to be brought upon, stored, used, generated, released or
disposed of on, under, from or about the Premises (including without limitation
the soil and groundwater thereunder) without the prior written consent of
Landlord, which consent may be given or withheld in Landlord’s sole and
absolute discretion. Notwithstanding the foregoing, Tenant shall have the
right, without obtaining prior written consent of Landlord, to utilize within
the Premises a reasonable quantity of standard office products that may contain
Hazardous Materials (such as photocopy toner, “White Out”, and the like), provided


 


 


4

















 


however, that (i) Tenant shall maintain such products in
their original retail packaging, shall follow all instructions on such
packaging with respect to the storage, use and disposal of such products, and
shall otherwise comply with all applicable laws with respect to such products,
and (ii) all of the other terms and provisions of this Section 5.3
shall apply with respect to Tenant’s storage, use and disposal of all such
products. Landlord may, in its sole and absolute discretion, place such
conditions as Landlord deems appropriate with respect to Tenant’s use, storage
and/or disposal of any Hazardous Materials requiring Landlord’s consent. Tenant
understands that Landlord may utilize an environmental consultant to assist in
determining conditions of approval in connection with the storage, use,
release, and/or disposal of Hazardous Materials by Tenant on or about the
Premises, and/or to conduct periodic inspections of the storage, generation,
use, release and/or disposal of such Hazardous Materials by Tenant on and from
the Premises, and Tenant agrees that any costs incurred by Landlord in connection
therewith shall be reimbursed by Tenant to Landlord as additional rent
hereunder upon demand.


 


(c)        Prior to the execution of this Lease,
Tenant shall complete, execute and deliver to Landlord an Environmental
Questionnaire and Disclosure Statement (the “Environmental
Questionnaire”) in the form of Exhibit J
attached hereto. The completed Environmental Questionnaire shall be deemed
incorporated into this Lease for all purposes, and Landlord shall be entitled
to rely fully on the information contained therein. On each anniversary of the
Commencement Date until the expiration or sooner termination of this Lease,
Tenant shall disclose to Landlord in writing the names and amounts of all
Hazardous Materials (excluding
those allowed without Landlord’s consent pursuant to Section 5.3(b) above)
which were stored,
generated, used, released and/or disposed of on, under or about the Premises
for the twelve-month period prior thereto, and which Tenant desires to store,
generate, use, release and/or dispose of on, under or about the Premises for
the succeeding twelve-month period. In addition, to the extent Tenant is
permitted to utilize Hazardous Materials upon the Premises, Tenant shall
promptly provide Landlord with complete and legible copies of all the following
environmental documents relating thereto: reports filed pursuant to any
self-reporting requirements; permit applications, permits, monitoring reports,
emergency response or action plans, workplace exposure and community exposure
warnings or notices and all other reports, disclosures, plans or documents
(even those which may be characterized as confidential) relating to water
discharges, air pollution, waste generation or disposal, and underground
storage tanks for Hazardous Materials; orders, reports, notices, listings and
correspondence (even those which may be considered confidential) of or
concerning the release, investigation, compliance, cleanup, remedial and
corrective actions, and abatement of Hazardous Materials; and all complaints,
pleadings and other legal documents filed by or against Tenant related to
Tenant’s storage, generation, use, release and/or disposal of Hazardous
Materials.


 


(d)        Landlord and its agents shall have the
right, but not the obligation, to inspect, sample and/or monitor the Premises
and/or the soil or groundwater thereunder at any time to determine whether
Tenant is complying with the terms of this Section 5.3, and in connection
therewith Tenant shall provide Landlord with full access to all facilities,
records and personnel related thereto. If Tenant is not in compliance with any
of the provisions of this Section 5.3, or in the event of a release of any
Hazardous Material on, under, from or about the Premises caused or permitted by
Tenant, its agents, employees, contractors, licensees or invitees, Landlord and
its agents shall have the right, but not the obligation, without limitation
upon any of Landlord’s other rights and remedies under this Lease, to
immediately enter upon the Premises without notice and to discharge Tenant’s
obligations under this Section 5.3 at Tenant’s expense, including without
limitation the taking of emergency or long-term remedial action. Landlord and
its agents shall endeavor to minimize interference with Tenant’s business in
connection therewith, but shall not be liable for any such interference. In
addition, Landlord, at Tenant’s expense, shall have the right, but not the
obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims arising out of the storage, generation,
use, release and/or disposal by Tenant or its agents, employees, contractors,
licensees or invitees of Hazardous Materials on, under, from or about the
Premises.


 


(e)        If the presence of any Hazardous
Materials on, under, from or about the Premises or the Project caused or
permitted by Tenant or its agents, employees, subtenants, contractors,
licensees or invitees results in (i) injury to any person, (ii) injury
to or any contamination of the Premises or the Project, or (iii) injury to
or contamination of any real or personal property wherever situated, Tenant, at
its expense, shall promptly take all actions necessary to return the Premises
and the Project and any other affected real or personal property owned by
Landlord to the condition existing prior to the introduction of such Hazardous
Materials and to remedy or repair any such injury or contamination, including
without limitation, any cleanup, remediation, removal, disposal, neutralization
or other treatment of any such Hazardous Materials. Notwithstanding the
foregoing, Tenant shall not, without Landlord’s prior written consent, which
consent may be given or withheld in Landlord’s sole and absolute discretion,
take any remedial action in response to the presence of any Hazardous Materials
on, under, from or about the Premises or the Project or any other affected real
or personal property owned by Landlord or enter into any similar agreement,
consent, decree or other compromise with any governmental


 


 


5

















 


agency with respect to any Hazardous Materials claims;
provided however, Landlord’s prior written consent shall not be necessary in
the event that the presence of Hazardous Materials on, under, from or about the
Premises or the Project or any other affected real or personal property owned
by Landlord (i) imposes an immediate threat to the health, safety or
welfare of any individual and (ii) is of such a nature that an immediate
remedial response is necessary and it is not possible to obtain Landlord’s
consent before taking such action. To the fullest extent permitted by law,
Tenant shall indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and any successors to all or any portion of
Landlord’s interest in the Premises and the Project and any other real or
personal property owned by Landlord from and against any and all liabilities,
losses, damages, diminution in value, judgments, fines, demands, claims,
recoveries, deficiencies, costs and expenses (including without limitation
attorneys’ fees, court costs and other professional expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the use,
generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building or the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
subtenants, contractors, licensees or invitees. Such indemnity obligation shall
specifically include, without limitation, the cost of any required or necessary
repair, restoration, cleanup or detoxification of the Premises, the Building
and the Project and any other real or personal property owned by Landlord, the
preparation of any closure or other required plans, whether such action is
required or necessary during the Term or after the expiration of this Lease and
any loss of rental due to the inability to lease the Premises or any portion of
the Building or Project as a result of such Hazardous Materials, the
remediation thereof or any repair, restoration or cleanup related thereto. If
it is at any time discovered that Tenant or its agents, employees, subtenants,
contractors, licensees or invitees may have caused or permitted the release of
any Hazardous Materials on, under, from or about the Premises, the Building or
the Project or any other real or personal property owned by Landlord, Tenant
shall, at Landlord’s request, immediately prepare and submit to Landlord a
comprehensive plan, subject to Landlord’s approval, specifying the actions to
be taken by Tenant to return the Premises, the Building or the Project or any
other real or personal property owned by Landlord to the condition existing
prior to the introduction of such Hazardous Materials. Upon Landlord’s approval
of such plan, Tenant shall, at its expense, and without limitation of any
rights and remedies of Landlord under this Lease or at law or in equity,
immediately implement such plan and proceed to cleanup, remediate and/or remove
all such Hazardous Materials in accordance with all applicable laws and as
required by such plan and this Lease. The provisions of this Section 5.3(e) shall
expressly survive the expiration or sooner termination of this Lease.


 


(f)         Landlord hereby discloses to Tenant,
and Tenant hereby acknowledges, certain facts relating to Hazardous Materials
at the Project known by Landlord to exist as of the date of this Lease, as more
particularly described in Exhibit H
attached hereto. Tenant shall have no liability or responsibility with respect
to the Hazardous Materials facts described in Exhibit H,
nor with respect to any Hazardous Materials, including, without limitation
those Hazardous Materials at the Project which pre-existed the date of this
Lease, which Tenant proves were not caused or permitted by Tenant, its agents,
employees, subtenants, contractors, licensees or invitees. Notwithstanding the
preceding two sentences, Tenant agrees to notify its agents, employees, subtenants,
contractors, licensees, and invitees of any exposure or potential exposure to
Hazardous Materials at the Premises that Landlord brings to Tenant’s attention.
Tenant hereby acknowledges that this disclosure satisfies any obligation of
Landlord to Tenant pursuant to California Health & Safety Code Section 25359.7,
or any amendment or substitute thereto or any other disclosure obligations of
Landlord. Landlord shall take
responsibility, at its sole cost and expense, for any governmentally-ordered
clean-up, remediation, removal, disposal, neutralization or other treatment of
those Hazardous Materials conditions described in this Section 5.3(f) for
which Tenant has no liability or responsibility.  The foregoing obligation on the part of
Landlord shall include the reasonable costs (including, without limitation,
reasonable attorney’s fees) of defending Tenant 
from and against any legal action or proceeding instituted by any
governmental agency in connection with such clean-up, remediation, removal,
disposal, neutralization or other treatment of such conditions, provided that
Tenant promptly tenders such defense to Landlord.  Tenant agrees to notify its agents,
employees, contractors, licensees, and invitees of any exposure or potential
exposure to Hazardous Materials at the Premises that Landlord brings to
Tenant’s attention.


 


ARTICLE 6. LANDLORD SERVICES


 


6.1.   UTILITIES AND SERVICES. Landlord and Tenant shall be
responsible to furnish those utilities and services to the Premises to the
extent provided in Exhibit C,
subject to the conditions and payment obligations and standards set forth in
this Lease. Landlord shall not be liable for any failure to furnish any
services or utilities when the failure is the result of any accident or other
cause beyond Landlord’s reasonable control, nor shall Landlord be liable for
damages resulting from power surges or any breakdown in telecommunications
facilities or services. Landlord’s temporary inability to furnish any services
or utilities shall not entitle Tenant to any damages, relieve Tenant of the
obligation to pay rent or constitute a constructive or other eviction of
Tenant, except that Landlord shall diligently attempt to restore the service or
utility promptly. Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the provision of services and utilities,
and shall cooperate with all reasonable conservation practices established by
Landlord. Landlord shall at all reasonable times have free access to all
electrical and mechanical installations of Landlord.


 


6.2.   OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term, Landlord shall operate
all Common Areas within the Building and the Project. The term “Common Areas” shall mean all areas within the Building and
other buildings in the Project which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and improvements
provided by Landlord for the common use of Landlord and


 


 


6

















 


tenants and their
respective employees and invitees, including without limitation parking areas
and structures, driveways, sidewalks, landscaped and planted areas, hallways
and interior stairwells not located within the premises of any tenant, common
electrical rooms, entrances and lobbies, elevators, and restrooms not located
within the premises of any tenant.


 


6.3.   USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with Rules and Regulations
described in Article 17 below. Landlord shall at all times during the Term
have exclusive control of the Common Areas, and may restrain or permit any use
or occupancy, except as otherwise provided in this Lease or in Landlord’s rules and
regulations. Tenant shall keep the Common Areas clear of any obstruction or
unauthorized use related to Tenant’s operations. Landlord may temporarily close
any portion of the Common Areas for repairs, remodeling and/or alterations, to
prevent a public dedication or the accrual of prescriptive rights, or for any
other reasonable purpose. Landlord’s temporary closure of any portion of the
Common Areas for such purposes shall not deprive Tenant of reasonable access to
the Premises.


 


6.4.   CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right to make
alterations or additions to the Building or the Project or to the attendant
fixtures, equipment and Common Areas, and such change shall not entitle Tenant
to any abatement of rent or other claim against Landlord. No such change shall
deprive Tenant of reasonable access to or use of the Premises nor of the Common
Areas adjacent to the Premises.


 


ARTICLE 7. REPAIRS AND MAINTENANCE


 


7.1.   TENANT’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12 and
Section 7.2 below. Tenant at its sole expense shall make all repairs necessary
to keep the Premises and all improvements and fixtures therein in good
condition and repair, excepting ordinary wear and tear. Tenant’s maintenance
obligation shall include without limitation all appliances, interior glass,
doors, door closures, hardware, fixtures, electrical, plumbing, fire
extinguisher equipment and other equipment installed in the Premises and all
Alterations constructed by Tenant pursuant to Section 7.3 below, together
with any supplemental HVAC equipment servicing only the Premises. All repairs
and other work performed by Tenant or its contractors shall be subject to the
terms of Sections 7.3 and 7.4 below. Alternatively, should Landlord or its
management agent agree to make a repair on behalf of Tenant and at Tenant’s
request, Tenant shall promptly reimburse Landlord as additional rent for all
reasonable costs incurred (including the standard supervision fee not to exceed
5%) upon submission of an invoice.


 


7.2.   LANDLORD’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12,
Landlord shall provide service, maintenance and repair with respect to the heating,
ventilating and air conditioning (“HVAC”)
equipment of the Building (exclusive of any supplemental HVAC equipment
servicing only the Premises) and shall maintain in good repair the Common Areas
(including all landscaping,
exterior walkways, lighting and/or exterior improvements), the roof, foundations, footings and the
exterior surfaces of the exterior walls of the Building (including exterior
glass), and the structural, electrical, mechanical and plumbing systems of the
Building (including elevators, if any, serving the Building). Landlord shall
have the right to employ or designate any reputable person or firm, including
any employee or agent of Landlord or any of Landlord’s affiliates or divisions,
to perform any service, repair or maintenance function. Landlord need not make
any other improvements or repairs except as specifically required under this
Lease, and nothing contained in this Section 7.2 shall limit Landlord’s
right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease. Notwithstanding any
provision of the California Civil Code or any similar or successor laws to the
contrary, Tenant understands that it shall not make repairs at Landlord’s
expense or by rental offset. Except as provided in Section 11.1 and Article 12
below, there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant’s business arising from the
making of any repairs, alterations or improvements to any portion of the
Building, including repairs to the Premises, nor shall any related activity by
Landlord constitute an actual or constructive eviction; provided, however, that
in making repairs, alterations or improvements, Landlord shall interfere as
little as reasonably practicable with the conduct of Tenant’s business in the
Premises. Tenant hereby waives any and all rights under and benefits of
subsection 1 of Section 1932, and Sections 1941 and 1942 of the
California Civil Code, or any similar or successor laws now or hereafter in
effect. Except as expressly provided in Section 2.3 above, all costs of any
maintenance, repairs and replacements on the part of Landlord provided
hereunder shall be considered part of Project Costs.


 


7.3.   ALTERATIONS. Tenant shall make no alterations, additions,
decorations, or improvements (collectively referred to as “Alterations”)
to the Premises without the prior written consent of Landlord. Landlord’s
consent shall not be unreasonably withheld as long as the proposed Alterations
do not affect the structural, electrical or mechanical components or systems of
the Building, are not visible from the exterior of the Premises, do not change
the basic floor


 


 


7

















 


plan of the Premises, and
utilize only Landlord’s building standard materials (“Standard
Improvements”). Landlord may impose, as a condition to its consent,
any requirements that Landlord in its discretion may deem reasonable or
desirable, including but not limited to a requirement that all work in excess
of $200,000.00 be covered by a lien and completion bond satisfactory to
Landlord and requirements as to the manner, time, and contractor for
performance of the work. Without limiting the generality of the foregoing,
Tenant shall use Landlord’s designated mechanical and electrical contractors
for all Alterations work affecting the mechanical or electrical systems of the
Building. Should Tenant perform any Alterations work that would necessitate any
ancillary Building modification or other expenditure by Landlord, then Tenant
shall promptly fund the cost thereof to Landlord. Tenant shall obtain all
required permits for the Alterations and shall perform the work in compliance
with all applicable laws, regulations and ordinances with contractors
reasonably acceptable to Landlord, and except for cosmetic Alterations not
requiring a permit, Landlord shall be entitled to a supervision fee in the
amount of 5% of the cost of the Alterations. In no event shall Tenant prosecute
any work that results in picketing or labor demonstrations in or about the
Building or Project. Any request for Landlord’s consent shall be made in
writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Landlord may elect to cause its architect
to review Tenant’s architectural plans, and the reasonable cost of that review
shall be reimbursed by Tenant. Should the Alterations proposed by Tenant and
consented to by Landlord change the floor plan of the Premises, then Tenant
shall, at its expense, furnish Landlord with as-built drawings and CAD disks
compatible with Landlord’s systems. Alterations shall be constructed in a good
and workmanlike manner using materials of a quality reasonably approved by
Landlord, and Tenant shall ensure that no Alteration impairs any Building
system or Landlord’s ability to perform its obligations hereunder. Unless
Landlord otherwise agrees in writing, all Alterations affixed to the Premises,
including without limitation all Tenant Improvements constructed pursuant to
the Work Letter (except as otherwise provided in the Work Letter), but
excluding moveable trade fixtures and furniture, shall become the property of
Landlord and shall be surrendered with the Premises at the end of the Term, except
that Landlord may, by notice to Tenant given at
the time of its consent thereto, and for all Alterations not consented to by
Landlord by notice given at least 30 days prior to the Expiration Date, require Tenant to remove
by the Expiration Date, or sooner termination date of this Lease, all or any
Alterations (including without limitation all telephone and data cabling)
installed either by Tenant or by Landlord at Tenant’s request (collectively,
the “Required Removables”), and to replace
any non-Standard Improvements with the applicable Standard Improvements. In
connection with its removal of Required Removables, Tenant shall repair any
damage to the Premises arising from that removal and shall restore the affected
area to its pre-existing condition, reasonable wear and tear excepted.


 


7.4.   MECHANIC’S LIENS. Tenant shall keep the Premises free
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant. Upon request by Landlord, Tenant shall
promptly cause any such lien to be released by posting a bond in accordance
with California Civil Code Section 3143 or any successor statute. In the
event that Tenant shall not, within 15 days following the imposition of any
lien, cause the lien to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other available remedies, the
right to cause the lien to be released by any means it deems proper, including
payment of or defense against the claim giving rise to the lien. All expenses
so incurred by Landlord, including Landlord’s attorneys’ fees, shall be
reimbursed by Tenant promptly following Landlord’s demand, together with
interest from the date of payment by Landlord at the maximum rate permitted by
law until paid. Tenant shall give Landlord no less than 20 days’ prior notice
in writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.


 


7.5.   ENTRY AND INSPECTION. Landlord shall at all reasonable times
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to make repairs and renovations as reasonably
deemed necessary by Landlord, and to submit the Premises to
prospective or actual purchasers or encumbrance holders (or, during the final
twelve months of the Term or when an uncured Default exists, to prospective
tenants), all without
being deemed to have caused an eviction of Tenant and without abatement of rent
except as provided elsewhere in this Lease. If reasonably necessary, Landlord
may temporarily close all or a portion of the Premises to perform repairs,
alterations and additions. Except in emergencies or to provide Building
services, Landlord shall provide Tenant with reasonable prior verbal notice of
entry and shall use reasonable efforts to minimize any interference with Tenant’s
use of the Premises.


 


ARTICLE 8.


 


[Intentionally Deleted]


 


8

















 


ARTICLE 9. ASSIGNMENT AND SUBLETTING


 


9.1.   RIGHTS OF PARTIES.


 


(a)        Except as otherwise specifically
provided in this Article 9, Tenant may not, either voluntarily or by
operation of law, assign, sublet, encumber, or otherwise transfer all or any
part of Tenant’s interest in this Lease, or permit the Premises to be occupied
by anyone other than Tenant (each, a “Transfer”),
without Landlord’s prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1(b). For
purposes of this Lease, references to any subletting, sublease or variation
thereof shall be deemed to apply not only to a sublease effected directly by
Tenant, but also to a sub-subletting or an assignment of subtenancy by a
subtenant at any level. Except as otherwise specifically provided in this Article 9,
no Transfer (whether voluntary, involuntary or by operation of law) shall be
valid or effective without Landlord’s prior written consent and, at Landlord’s
election, such a Transfer shall constitute a material default of this Lease. Landlord
shall not be deemed to have given its consent to any Transfer by any other
course of action, including its acceptance of any name for listing in the
Building directory.


 


(b)        Except as otherwise specifically
provided in this Article 9, if Tenant or any subtenant hereunder desires
to transfer an interest in this Lease, Tenant shall first notify Landlord in
writing and shall request Landlord’s consent thereto. Tenant shall also submit
to Landlord in writing: (i) the name and address of the proposed
transferee; (ii) the nature of any proposed subtenant’s or assignee’s
business to be carried on in the Premises; (iii) the material terms and
provisions of any proposed sublease or assignment (including without limitation
the rent and other economic provisions, term, improvement obligations and
commencement date); (iv) evidence that the proposed assignee or subtenant
will comply with the requirements of Exhibit D
to this Lease; and (v) any other information requested by Landlord and
reasonably related to the Transfer. Landlord shall not unreasonably withhold
its consent, provided: (1) the use of the Premises will be consistent with
the provisions of this Lease and will not violate Landlord’s commitment to
other tenants of the Building and Project; (2) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including, but not limited to, a balance sheet
of the proposed subtenant or assignee as of a date within 90 days of the
request for Landlord’s consent and statements of income or profit and loss of
the proposed subtenant or assignee for the two-year period preceding the
request for Landlord’s consent; (3) the proposed assignee or subtenant is
neither an existing tenant or occupant of the Building or Project nor a
prospective tenant with whom Landlord has been actively negotiating (within the
6 month period prior to Tenant’s request for consent) to become a tenant at the
Building or Project; and (4) the proposed transferee is not an SDN (as
defined below) and will not impose additional burdens or security risks on
Landlord. If Landlord consents to the proposed Transfer, then the Transfer may
be effected within 90 days after the date of the consent upon the terms
described in the information furnished to Landlord; provided that any material
change in the terms shall be subject to Landlord’s consent as set forth in this
Section 9.1(b). Landlord shall approve or disapprove any requested
Transfer within 30 days following receipt of Tenant’s written notice and the
information set forth above. Except in connection with a Permitted Transfer (as
defined below), if Landlord approves the Transfer Tenant shall pay a transfer
fee of $1,000.00 to Landlord concurrently with Tenant’s execution of a Transfer
consent prepared by Landlord.


 


(c)        Notwithstanding the provisions of
Subsection (b) above, and except in connection with a “Permitted Transfer” (as defined below), in lieu of
consenting to a proposed assignment of this lease or to any subletting of 50%
or more of the Floor Area of the Premises, Landlord may elect to terminate this
Lease in its entirety in the event of an assignment, or terminate this Lease as
to the portion of the Premises proposed to be so subleased with a proportionate
abatement in the rent payable under this Lease, such termination to be
effective on the date that the proposed sublease or assignment would have
commenced. Landlord may thereafter, at its option, assign or re-let any space
so recaptured to any third party, including without limitation the proposed
transferee identified by Tenant.


 


9
















 


(d)        Should any Transfer occur, Tenant shall,
except in connection with a Permitted Transfer, promptly pay or cause to be
paid to Landlord, as additional rent, 50% of any amounts paid by the assignee
or subtenant, however described and whether funded during or after the Lease
Term, to the extent such amounts are in excess of the sum of (i) the
scheduled Basic Rent payable by Tenant hereunder (or, in the event of a
subletting of only a portion of the Premises, the Basic Rent allocable to such
portion as reasonably determined by Landlord) and (ii) the direct
out-of-pocket costs, which
Tenant certifies to Landlord have been paid to provide occupancy related
services of a nature commonly provided by it for similar space, incurred by Tenant to effect the
Transfer, which costs shall be amortized over the remaining Term of this Lease
or, if shorter, over the term of the sublease.


 


(e)        The sale of all or substantially all of
the assets of Tenant (other than bulk sales in the ordinary course of
business), the merger or consolidation of Tenant, a “Change in Control” (as
herinafter defined) of Tenant or Tenant’s parent company or a merger by Tenant
or its parent company, shall be deemed a Transfer within the meaning and
provisions of this Article. 
Notwithstanding the foregoing, Tenant may assign this
Lease to a successor to Tenant by merger, consolidation or the purchase of
substantially all of Tenant’s assets, or assign this Lease or sublet all or a
portion of the Premises to an Affiliate (defined below), without the consent of
Landlord but subject
to the provisions of Section 9.2, provided that all of the
following conditions are satisfied (a “Permitted
Transfer”):  (i) Tenant
is not then in Default hereunder; (ii) Tenant gives Landlord written
notice at least 10 business days before such Permitted Transfer; and (iii) 
the successor entity
resulting from any merger or consolidation of Tenant or the sale of all or
substantially all of the assets of Tenant, has a net worth (computed in
accordance with generally accepted accounting principles, except that
intangible assets such as goodwill, patents, copyrights, and trademarks shall
be excluded in the calculation (“Net Worth”)) at the time of the Permitted
Transfer that is at least equal to the Net Worth of Tenant immediately before
the Permitted Transfer.  Tenant’s
notice to Landlord shall include reasonable information and documentation
evidencing the Permitted Transfer and showing that each of the above conditions
has been satisfied.  If requested by
Landlord, Tenant’s successor shall sign and deliver to Landlord a commercially
reasonable form of assumption agreement. 
“Affiliate” shall mean an
entity controlled by, controlling or under common control with Tenant.  “Change in Control” shall mean a transaction whereby a person
or entity becomes the beneficial owner of 75% of Tenant’s outstanding voting
stock.


 


9.2.   EFFECT OF TRANSFER. 
No subletting or assignment, even with the consent of Landlord, shall
relieve Tenant, or any successor-in-interest to Tenant hereunder, of its
obligation to pay rent and to perform all its other obligations under this
Lease.  Moreover, Tenant shall indemnify
and hold Landlord harmless, as provided in Section 10.3, for any act or
omission by an assignee or subtenant. 
Each assignee, other than Landlord, shall be deemed to assume all
obligations of Tenant under this Lease and shall be liable jointly and
severally with Tenant for the payment of all rent, and for the due performance
of all of Tenant’s obligations, under this Lease.  Such joint and several liability shall not be
discharged or impaired by any subsequent modification or extension of this
Lease.  No transfer shall be binding on
Landlord unless any document memorializing the transfer is delivered to
Landlord, both the assignee/subtenant and Tenant deliver to Landlord an
executed consent to transfer instrument prepared by Landlord and consistent
with the requirements of this Article, and the assignee/subtenant independently
complies with all of the insurance requirements of Tenant as set forth in Exhibit D and evidence thereof is delivered to
Landlord.  The acceptance by Landlord of
any payment due under this Lease from any other person shall not be deemed to
be a waiver by Landlord of any provision of this Lease or to be a consent to
any transfer.  Consent by Landlord to one
or more transfers shall not operate as a waiver or estoppel to the future
enforcement by Landlord of its rights under this Lease.  In addition to the foregoing, no change in
the status of Tenant or any party jointly and severally liable with Tenant as
aforesaid (e.g., by conversion to a limited liability company or partnership)
shall serve to abrogate the liability of any person or entity for the
obligations of Tenant, including any obligations that may be incurred by Tenant
after the status change by exercise of a pre-existing right in this Lease.


 


9.3.  
SUBLEASE REQUIREMENTS.  Any sublease,
license, concession or other occupancy agreement entered into by Tenant shall
be subordinate and subject to the provisions of this Lease, and if this Lease
is terminated during the term of any such agreement, Landlord shall have the
right to:  (i) treat such agreement
as cancelled and repossess the subject space by any lawful means, or (ii) require
that such transferee attorn to and recognize Landlord as its landlord (or
licensor, as applicable) under such agreement. 
Landlord shall not, by reason of such attornment or the collection of
sublease rentals, be deemed liable to the subtenant for the performance of any
of Tenant’s obligations under the sublease. If Tenant is in Default
(hereinafter defined), Landlord is irrevocably authorized to direct any
transferee under any such agreement to make all payments under such agreement
directly to Landlord (which Landlord shall apply towards Tenant’s obligations
under this Lease) until such Default is cured. 
Tenant hereby irrevocably authorizes and directs any transferee, upon
receipt of a written notice from Landlord stating that a Default exists in the
performance of Tenant’s obligations under this Lease, to pay to Landlord all
sums then and thereafter due under the sublease.  No collection or acceptance of rent by
Landlord from any transferee shall be deemed a waiver of any provision of Article 9
of this 


 


10

















 


Lease, an approval of any transferee, or a release of Tenant from any
obligation under this Lease, whenever accruing. 
In no event shall Landlord’s enforcement of any provision of this Lease
against any transferee be deemed a waiver of Landlord’s right to enforce any
term of this Lease against Tenant or any other person.


 


ARTICLE 10.  INSURANCE AND INDEMNITY


 


10.1.   TENANT’S INSURANCE. 
Tenant, at its sole cost and expense, shall provide and maintain in
effect the insurance described in Exhibit D.  Evidence of that insurance must be delivered
to Landlord prior to the Commencement Date.


 


10.2.   LANDLORD’S INSURANCE. 
Landlord shall provide the following types of insurance, with or without
deductible and in amounts and coverages as may be determined by Landlord in its
discretion:  property insurance, subject
to standard exclusions (such as, but not limited to, earthquake and flood
exclusions), covering the Building or Project. 
In addition, Landlord may, at its election, obtain insurance coverages
for such other risks as Landlord or its Mortgagees may from time to time deem
appropriate, including earthquake and commercial general liability
coverage.  Landlord shall not be required
to carry insurance of any kind on any tenant improvements or Alterations in the
Premises installed by Tenant or its contractors or otherwise removable by
Tenant (collectively, “Tenant Installations”),
or on any trade fixtures, furnishings, equipment, interior plate glass, signs
or items of personal property in the Premises, and Landlord shall not be
obligated to repair or replace any of the foregoing items should damage
occur.  All proceeds of insurance
maintained by Landlord upon the Building and Project shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any
repairs.


 


10.3.   TENANT’S INDEMNITY. 
To the fullest extent permitted by law, but subject to Section 10.5
below, Tenant shall defend, indemnify and hold harmless Landlord, its agents,
lenders, and any and all affiliates of Landlord, from and against any and all
claims, liabilities, costs or expenses arising either before or after the
Commencement Date from Tenant’s use or occupancy of the Premises, the Building
or the Common Areas, or from the conduct of its business, or from any activity,
work, or thing done, permitted or suffered by Tenant or its agents, employees,
subtenants, vendors, contractors, invitees or licensees in or about the
Premises, the Building or the Common Areas, or from any Default in the
performance of any obligation on Tenant’s part to be performed under this
Lease, or from any act or negligence of Tenant or its agents, employees,
subtenants, vendors, contractors, invitees or licensees.  Landlord may, at its option, require Tenant
to assume Landlord’s defense in any action covered by this Section 10.3
through counsel reasonably satisfactory to Landlord.  Notwithstanding the
foregoing, Tenant shall not be obligated to indemnify Landlord against any
liability or expense to the extent it is ultimately determined that the same
was caused by the sole negligence or willful misconduct of Landlord, its
agents, contractors or employees.


 


10.4.   LANDLORD’S NONLIABILITY. 
Landlord shall not be liable to Tenant, its employees, agents and
invitees, and Tenant hereby waives all claims against Landlord, its employees
and agents for loss of or damage to any property, or any injury to any person,
resulting from any condition including, but not limited to, acts or omissions
(criminal or otherwise) of third parties and/or other tenants of the Project,
or their agents, employees or invitees, fire, explosion, falling plaster,
steam, gas, electricity, water or rain which may leak or flow from or into any
part of the Premises or from the breakage, leakage, obstruction or other defects
of the pipes, sprinklers, wires, appliances, plumbing, air conditioning,
electrical works or other fixtures in the Building, whether the damage or
injury results from conditions arising in the Premises or in other portions of
the Building, except to the extent of the gross negligence or willful
misconduct of Landlord, its agents or any and all affiliated of Landlord in
connection with the foregoing (but subject to Section 10.5 below).  It is understood that any such condition may
require the temporary evacuation or closure of all or a portion of the
Building.  Should Tenant elect to receive
any service from a concessionaire, licensee or third party tenant of Landlord,
Tenant shall not seek recourse against Landlord for any breach or liability of
that service provider.  Notwithstanding
anything to the contrary contained in this Lease, in no event shall Landlord be
liable for Tenant’s loss or interruption of business or income (including
without limitation, Tenant’s consequential damages, lost profits or opportunity
costs), or for interference with light or other similar intangible
interests.  Tenant shall immediately
notify Landlord in case of fire or accident in the Premises, the Building or
the Project and of defects in any improvements or equipment.


 


10.5.   WAIVER OF SUBROGATION. 
Landlord and Tenant each hereby waives all rights of recovery against
the other on account of loss and damage occasioned to the property of such
waiving party to the extent that the waiving party is entitled to proceeds for
such loss and damage under any property insurance policies carried or otherwise
required to be carried by this Lease; provided however, that the foregoing
waiver shall not apply to the extent of Tenant’s obligation to pay deductibles
under any such policies and this Lease. 
By this waiver it is the intent of the parties that neither Landlord nor
Tenant shall be liable to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage insured against
under any property insurance policies, even though such loss or damage might be
occasioned by the 


 


11

















 


negligence of such party,
its agents, employees, contractors or invitees. 
The foregoing waiver by Tenant shall also inure to the benefit of
Landlord’s management agent for the Building.


 


ARTICLE 11.  DAMAGE OR DESTRUCTION


 


11.1.   RESTORATION.


 


(a)        If the Building of which the Premises
are a part is damaged as the result of an event of casualty, then subject to
the provisions below, Landlord shall repair that damage as soon as reasonably
possible unless Landlord reasonably determines that:  (i) the Premises have been materially
damaged and there is less than 1 year of the Term remaining on the date of the
casualty; (ii) any Mortgagee (defined in Section 13.1) requires that
the insurance proceeds be applied to the payment of the mortgage debt; or (iii) proceeds
necessary to pay the full cost of the repair are not available from Landlord’s
insurance, including without limitation earthquake insurance, unless Tenant
pays any shortfall to Landlord prior to commencement of the repair of the damage.  Should Landlord elect not to repair the
damage for one of the preceding reasons, Landlord shall so notify Tenant in the
“Casualty Notice” (as defined below), and this Lease shall terminate as of the
date of delivery of that notice.


 


(b)        As soon as reasonably practicable
following the casualty event but not later than 60 days thereafter, Landlord
shall notify Tenant in writing (“Casualty Notice”)
of Landlord’s election, if applicable, to terminate this Lease.  If this Lease is not so terminated, the
Casualty Notice shall set forth the anticipated period for repairing the
casualty damage.  If the anticipated
repair period exceeds 270 days and if the damage is so extensive as to
reasonably prevent Tenant’s substantial use and enjoyment of the Premises, then
either party may elect to terminate this Lease by written notice to the other
within 30 days following delivery of the Casualty Notice.


 


(c)        In the event that neither Landlord nor
Tenant terminates this Lease pursuant to Section 11.1(b), Landlord shall
repair all material damage to the Premises or the Building as soon as
reasonably possible and this Lease shall continue in effect for the remainder
of the Term.  Upon notice from Landlord,
Tenant shall assign or endorse over to Landlord (or to any party designated by
Landlord) all property insurance proceeds payable to Tenant under Tenant’s
insurance with respect to any Tenant Installations; provided if the estimated
cost to repair such Tenant Installations exceeds the amount of insurance
proceeds received by Landlord from Tenant’s insurance carrier, the excess cost
of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement
of repairs.  Within 15 days of demand,
Tenant shall also pay Landlord for any additional excess costs that are
determined during the performance of the repairs to such Tenant Installations.


 


(d)        From and after the date of the casualty
event, the rental to be paid under this Lease shall be abated in the same
proportion that the Floor Area of the Premises that is rendered unusable by the
damage from time to time bears to the total Floor Area of the Premises.


 


(e)        Notwithstanding the provisions of subsections (a),
(b) and (c) of this Section 11.1(e), but subject to Section 10.5,
the cost of any repairs shall be borne by Tenant, and Tenant shall not be
entitled to rental abatement or termination rights, if the damage is due to the
fault or neglect of Tenant or its employees, subtenants, contractors, invitees
or representatives.  In addition, the
provisions of this Section 11.1(e) shall not be deemed to require
Landlord to repair any Tenant Installations, fixtures and other items that
Tenant is obligated to insure pursuant to Exhibit D
or under any other provision of this Lease.


 


11.2.   LEASE GOVERNS.  Tenant agrees
that the provisions of this Lease, including without limitation Section 11.1,
shall govern any damage or destruction and shall accordingly supersede any
contrary statute or rule of law.


 


ARTICLE 12. EMINENT DOMAIN


 


Either party may
terminate this Lease if any material part of the Premises or of the Common
Areas (if Tenant’s allocated parking spaces are diminished by such taking) is
taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a “Taking”).  Landlord shall also have the right to
terminate this Lease if there is a Taking of any portion of the Building or
Project which would have a material adverse effect on Landlord’s ability to
profitably operate the remainder of the Building.  The terminating party shall provide written
notice of termination to the other party within 45 days after it first receives
notice of the Taking.  The termination
shall be effective as of the effective date of any order granting possession
to, or vesting legal title in, the condemning authority.  If this Lease is not terminated, Basic Rent
and Tenant’s Share of Operating Expenses shall be appropriately adjusted to
account for any reduction in the square footage of the Building or Premises.
All compensation awarded for a Taking shall be the property of Landlord and the
right to receive compensation or proceeds in connection with a Taking are
expressly waived by Tenant; provided, however, Tenant may file a separate claim
for Tenant’s personal property, any improvements paid for by Tenant, Tenant’s
reasonable relocation expenses, 


 


12

















 


provided the filing of the
claim does not diminish the amount of Landlord’s award.  If only a part of the Premises is subject to
a Taking and this Lease is not terminated, Landlord, with reasonable diligence,
will restore the remaining portion of the Premises as nearly as practicable to
the condition immediately prior to the Taking. 
Tenant agrees that the provisions of this Lease shall govern any Taking
and shall accordingly supersede any contrary statute or rule of law.


 


ARTICLE 13.  SUBORDINATION; ESTOPPEL CERTIFICATE


 


13.1.   SUBORDINATION.  Tenant accepts this Lease subject and subordinate to
any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now
or, subject to the execution of a commercially reasonable subordination and
attornment agreement, subsequently arising upon the Premises, the Building or
the Project, and to renewals, modifications, refinancings and extensions
thereof (collectively referred to as a “Mortgage”). The
party having the benefit of a Mortgage shall be referred to as a “Mortgagee”. Upon request from a Mortgagee, Tenant shall
execute a commercially reasonable subordination and attornment agreement in
favor of the Mortgagee, provided such agreement provides a non-disturbance
covenant benefiting Tenant.  Alternatively,
a Mortgagee shall have the right at any time to subordinate its Mortgage to
this Lease.  Upon request, Tenant,
without charge, shall attorn to any successor to Landlord’s interest in this
Lease in the event of a foreclosure of any mortgage.  Tenant agrees that any purchaser at a foreclosure
sale or lender taking title under a deed in lieu of foreclosure shall not be
responsible for any act or omission of a prior landlord, shall not be subject
to any offsets or defenses Tenant may have against a prior landlord, and shall
not be liable for the return of the Security Deposit not actually recovered by
such purchaser nor bound by any rent paid in advance of the calendar month in
which the transfer of title occurred; provided that the foregoing shall not
release the applicable prior landlord from any liability for those
obligations.  Tenant acknowledges that
Landlord’s Mortgagees and their successors-in-interest are intended third party
beneficiaries of this Section 13.1. Nothing
contained in the foregoing, however, shall relieve any Mortgagee from
responsibility for those obligations of “Landlord” under this Lease which are
to be performed subsequent to such Mortgagee taking title to or possession of
the Premises, provided that Tenant shall give a “new” notice of default to such
Mortgagee in connection with any default of such obligations, and that such
Mortgagee shall be thereafter afforded the benefit of the applicable “cure”
rights pursuant to Section 14.5 of this Lease.


 


13.2.   ESTOPPEL CERTIFICATE. 
Tenant shall, within 20 days after receipt of a written request from
Landlord, execute and deliver a commercially reasonable estoppel certificate in
favor of those parties as are reasonably requested by Landlord (including a
Mortgagee or a prospective purchaser of the Building or the Project). Without
limitation, such estoppel certificate may include a certification as to the
status of this Lease, the existence of any Defaults and the amount of rent that
is due and payable.


 


ARTICLE 14.  DEFAULTS AND REMEDIES


 


14.1.   TENANT’S DEFAULTS. 
In addition to any other event of default set forth in this Lease, the
occurrence of any one or more of the following events shall constitute a “Default” by Tenant:


 


(a)        The failure by Tenant to make any
payment of rent required to be made by Tenant, as and when due, where the
failure continues for a period of 3 days after written notice from Landlord to
Tenant.  For purposes of these default
and remedies provisions, the term “additional rent”
shall be deemed to include all amounts of any type whatsoever other than Basic
Rent to be paid by Tenant pursuant to the terms of this Lease.


 


(b)        The assignment, sublease, encumbrance or
other Transfer of the Lease by Tenant, either voluntarily or by operation of
law, whether by judgment, execution, transfer by intestacy or testacy, or other
means, without the prior written consent of Landlord unless otherwise
authorized in Article 9 of this Lease.


 


(c)        The discovery by Landlord that any
financial statement provided by Tenant, or by any affiliate, successor or
guarantor of Tenant, was intentionally and materially false.


 


(d)        Except where a specific time period is
otherwise set forth for Tenant’s performance in this Lease (in which event the
failure to perform by Tenant within such time period shall be a Default), the
failure or inability by Tenant to observe or perform any of the covenants or
provisions of this Lease to be observed or performed by Tenant, other than as
specified in any other subsection of this Section 14.1, where the failure
continues for a period of 30 days after written notice from Landlord to
Tenant.  However, if the nature of the
failure is such that more than 30 days are reasonably required for its cure,
then Tenant shall not be deemed to be in Default if Tenant commences the cure
within 30 days, and thereafter diligently pursues the cure to completion.


 


(e)        Tenant or any Guarantor becomes
insolvent, makes a transfer in fraud of creditors, makes an assignment for the
benefit of creditors, admits in writing its inability to pay its debts when due
or forfeits or loses its right to conduct business.


 


The notice periods provided herein are in lieu of, and not in addition
to, any notice periods provided by law, and Landlord shall not be required to
give any additional notice under 


 


13

















 


California Code of Civil Procedure Section 1161,
or any successor statute, in order to be entitled to commence an unlawful
detainer proceeding.


 


14.2.   LANDLORD’S
REMEDIES.


 


(a)        Upon the occurrence of any Default by
Tenant, then in addition to any other remedies available to Landlord, Landlord
may exercise the following remedies:


 


                             (i)      Landlord
may terminate Tenant’s right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. 
Such termination shall not affect any accrued obligations of Tenant
under this Lease.  Upon termination,
Landlord shall have the right to reenter the Premises and remove all persons
and property.  Landlord shall also be
entitled to recover from Tenant:


 


                                       (1)     The worth at the time of award of the unpaid Rent which had been
earned at the time of termination;


 


                                       (2)     The worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award
exceeds the amount of such loss that Tenant proves could have been reasonably
avoided;


 


                                       (3)     The worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of
such loss that Tenant proves could be reasonably avoided;


 


                                       (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 of things would be likely to
result from Tenant’s default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration
of the Premises for a new tenant, reasonable attorneys’ fees, and any other
reasonable costs; and


 


                                       (5)     At Landlord’s election, all other amounts in addition to or in
lieu of the foregoing as may be permitted by law.  The term “Rent”
as used in this Lease shall be deemed to mean the Basic Rent and all other sums
required to be paid by Tenant to Landlord pursuant to the terms of this Lease,
including without limitation any sums that may be owing from Tenant pursuant to
Section 4.3 of this Lease.  Any sum,
other than Basic Rent, shall be computed on the basis of the average monthly
amount accruing during the 24 month period immediately prior to Default, except
that if it becomes necessary to compute such rental before the 24 month period
has occurred, then the computation shall be on the basis of the average monthly
amount during the shorter period.  As
used in subparagraphs (1) and (2) above, the “worth at the time of
award” shall be computed by allowing interest at the rate of 10% per
annum.  As used in subparagraph (3) above,
the “worth at the time of award” shall be computed by discounting the amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus 1%.


 


                             (ii)     Landlord
may elect not to terminate Tenant’s right to possession of the Premises, in
which event Landlord may continue to enforce all of its rights and remedies
under this Lease, including the right to collect all rent as it becomes
due.  Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment of a receiver to protect the
Landlord’s interests under this Lease, shall not constitute a termination of
the Tenant’s right to possession of the Premises.  In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord’s consent as are
contained in this Lease.


 


(b)        The various rights and remedies reserved
to Landlord in this Lease or otherwise shall be cumulative and, except as
otherwise provided by California law, Landlord may pursue any or all of its
rights and remedies at the same time.  No
delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any breach or Default by
Tenant.  The acceptance by Landlord of
rent shall not be a (i) waiver of any preceding breach or Default by
Tenant of any provision of this Lease, other than the failure of Tenant to pay
the particular rent accepted, regardless of Landlord’s knowledge of the
preceding breach or Default at the time of acceptance of rent, or (ii) a
waiver of Landlord’s right to exercise any remedy available to Landlord by
virtue of the breach or Default.  The
acceptance of any payment from a debtor in possession, a trustee, a receiver or
any other person acting on behalf of Tenant or Tenant’s estate shall not waive
or cure a Default under Section 14.1. 
No payment by Tenant or receipt by Landlord of a lesser amount than the
rent required by this Lease shall be deemed to be other than a partial payment
on account of the earliest due stipulated rent, nor shall any endorsement or
statement on any check or letter be deemed an accord and satisfaction and 


 


14

















 


Landlord shall accept the
check or payment without prejudice to Landlord’s right to recover the balance
of the rent or pursue any other remedy available to it.  Tenant hereby waives any right of redemption
or relief from forfeiture under California Code of Civil Procedure Section 1174
or 1179, or under any successor statute, in the event this Lease is terminated
by reason of any Default by Tenant.  No
act or thing done by Landlord or Landlord’s agents during the Term shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept
a surrender shall be valid unless in writing and signed by Landlord.  No employee of Landlord or of Landlord’s
agents shall have any power to accept the keys to the Premises prior to the
termination of this Lease, and the delivery of the keys to any employee shall
not operate as a termination of the Lease or a surrender of the Premises.


 


14.3.   LATE PAYMENTS.


 


(a)        Any Rent due under this Lease that is
not paid to Landlord within 5 days of the date when due shall bear interest at
the maximum rate permitted by law from the date due until fully paid.  The payment of interest shall not cure any
Default by Tenant under this Lease.  In
addition, Tenant acknowledges that the late payment by Tenant to Landlord of
rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult and impracticable to
ascertain.  Those costs may include, but
are not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. 
Accordingly, if any rent due from Tenant shall not be received by
Landlord or Landlord’s designee within 5 days after the date due, then Tenant
shall pay to Landlord, in addition to the interest provided above, a late
charge for each delinquent payment equal to the greater of (i) 5% of that
delinquent payment or (ii) $100.00. 
Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant’s Default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.


 


(b)        Following each second consecutive
installment of Basic Rent that is not paid within 5 days following notice of
nonpayment from Landlord, Landlord shall have the option to require that
beginning with the first payment of Basic Rent next due, Basic Rent shall no
longer be paid in monthly installments but shall be payable quarterly 3 months
in advance Tenant deliver to Landlord, at any time during the Term, 2 or more
insufficient checks, the Landlord may require that all monies then and
thereafter due from Tenant be paid to Landlord by cashier’s check.


 


14.4.   RIGHT OF LANDLORD TO PERFORM. 
If Tenant is in Default of any of its obligations under the Lease,
Landlord shall have the right to perform such obligations.  Tenant shall reimburse Landlord for the cost
of such performance upon demand together with an administrative charge equal to
10% of the cost of the work performed by Landlord.


 


14.5.   DEFAULT BY LANDLORD. 
Landlord shall not be deemed to be in default in the performance of any
obligation under this Lease unless and until it has failed to perform the
obligation within 30 days after written notice by Tenant to Landlord specifying
in reasonable detail the nature and extent of the failure; provided, however,
that if the nature of Landlord’s obligation is such that more than 30 days are
required for its performance, then Landlord shall not be deemed to be in
default if it commences performance within the 30 day period and thereafter
diligently pursues the cure to completion. Tenant hereby waives any right to
terminate or rescind this Lease as a result of any default by Landlord
hereunder or any breach by Landlord of any promise or inducement relating
hereto, and Tenant agrees that its remedies shall be limited to a suit for
actual damages and/or injunction and shall in no event include any
consequential damages, lost profits or opportunity costs.


 


14.6.   EXPENSES AND LEGAL FEES. 
Should either Landlord or Tenant bring any action in connection with
this Lease, the prevailing party shall be entitled to recover as a part of the
action its reasonable attorneys’ fees, and all other reasonable costs.  The prevailing party for the purpose of this
paragraph shall be determined by the trier of the facts.


 


14.7.   WAIVER OF JURY
TRIAL/JUDICIAL REFERENCE.


 


(a)        LANDLORD
AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF
COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY, AND EACH
PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY
HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF
THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.


 


15

















 


(b)        In the event that the jury waiver
provisions of Section 14.7(a) are not enforceable under California
law, then the provisions of this Section 14.7(b) shall apply.  It is the desire and intention of the parties
to agree upon a mechanism and procedure under which controversies and disputes
arising out of this lease or related to the Premises will be resolved in a prompt
and expeditious manner.  Accordingly,
except with respect to actions for unlawful or forcible detainer or with
respect to the prejudgment remedy of attachment, any action, proceeding or
counterclaim brought by either party hereto against the other (and/or against
its officers, directors, employees, agents or subsidiary or affiliated
entities) on any matters whatsoever arising out of or in any way connected with
this Lease, Tenant’s use or occupancy of the Premises and/or any claim of
injury or damage, shall be heard and resolved by a referee under the provisions
of the California Code of Civil Procedure, Sections 638 - 645.1, inclusive
(as same may be amended, or any successor statute(s) thereto) (the “Referee Sections”).  Any fee to initiate the judicial reference
proceedings shall be paid by the party initiating such procedure; provided
however, that the costs and fees, including any initiation fee, of such
proceeding shall ultimately be borne in accordance with Section 14.6
above.  The venue of the proceedings
shall be in the county in which the Premises are located.  Within 10 days of receipt by any party of a
written request to resolve any dispute or controversy pursuant to this Section 14.7(b),
the parties shall agree upon a single referee who shall try all issues, whether
of fact or law, and report a finding and judgment on such issues as required by
the Referee Sections.  If the parties are
unable to agree upon a referee within such 10 day period, then any party may
thereafter file a lawsuit in the county in which the Premises are located for
the purpose of appointment of a referee under California Code of Civil
Procedure Sections 639 and 640, as same may be amended or any successor
statute(s) thereto.  If the referee
is appointed by the court, the referee shall be a neutral and impartial retired
judge with substantial experience in the relevant matters to be determined,
from Jams/Endispute, Inc., the American Arbitration Association or similar
mediation/arbitration entity.  The
proposed referee may be challenged by any party for any of the grounds listed
in Section 641 of the California Code of Civil Procedure, as same may be
amended or any successor statute(s) thereto.  The referee shall have the power to decide
all issues of fact and law and report his or her decision on such issues, and
to issue all recognized remedies available at law or in equity for any cause of
action that is before the referee, including an award of attorneys’ fees and
costs in accordance with California law. 
The referee shall not, however, have the power to award punitive
damages, nor any
other damages which are not permitted by the express provisions of this lease, and the parties hereby waive any right to
recover any such damages.  The referee
shall oversee discovery and may enforce all discovery orders in the same manner
as any trial court judge, with rights to regulate discovery and to issue and
enforce subpoenas, protective orders and other limitations on discovery
available under California law; provided, however, that the referee shall limit
discovery to that which is essential to the effective prosecution or defense of
the action, and in no event shall discovery by either party include more than
one non-expert witness deposition unless both parties otherwise agree. The reference
proceeding shall be conducted in accordance with California law (including the rules of
evidence), and in all regards, the referee shall follow California law
applicable at the time of the reference proceeding.  In accordance with Section 644 of the
California Code of Civil procedure, the decision of the referee upon the whole
issue must stand as the decision of the court, and upon the filing of the
statement of decision with the clerk of the court, or with the judge if there
is no clerk, judgment may be entered thereon in the same manner as if the
action had been tried by the court.  The
parties shall promptly and diligently cooperate with one another and the
referee, and shall perform such acts as may be necessary to obtain a prompt and
expeditious resolution of the dispute or controversy in accordance with the
terms of this Section 14.7(b).  To
the extent that no pending lawsuit has been filed to obtain the appointment of
a referee, any party, after the issuance of the decision of the referee, may
apply to the court of the county in which the Premises are located for
confirmation by the court of the decision of the referee in the same manner as
a petition for confirmation of an arbitration award pursuant to Code of Civil
Procedure Section 1285 et seq. (as same may be amended or any successor
statute(s) thereto).


 


14.8   SATISFACTION OF JUDGMENT.  The obligations of Landlord do not constitute
the personal obligations of the individual partners, trustees, directors,
officers, members or shareholders of Landlord or its constituent partners or
members. Should Tenant recover a money judgment against Landlord, such judgment
shall be satisfied only from the interest of Landlord in the Project and out of
the rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or
any part of Landlord’s right, title or interest in the Project, and no action
for any deficiency may be sought or obtained by Tenant.


 


ARTICLE 15.  END OF TERM


 


15.1.   HOLDING OVER.  If Tenant
holds over for any period after the Expiration Date (or earlier termination of
the Term) without the prior written consent of Landlord, such tenancy shall
constitute a tenancy at sufferance only and a Default by Tenant; such holding
over with the prior written consent of Landlord shall constitute a
month-to-month tenancy commencing on the 1st day 


 


16

















 


following the termination
of this Lease and terminating 30 days following delivery of written notice of
termination by either Landlord or Tenant to the other.  In either of such events, possession shall be
subject to all of the terms of this Lease, except that the monthly rental shall
be 200% of the total monthly rental for the month immediately preceding the
date of termination, subject to Landlord’s right to modify same upon 30 days
notice to Tenant.  The acceptance by
Landlord of monthly hold-over rental in a lesser amount shall not constitute a
waiver of Landlord’s right to recover the full amount due unless otherwise
agreed in writing by Landlord.  If Tenant
fails to surrender the Premises upon the expiration of this Lease despite
demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless
from all loss or liability, including without limitation, any claims made by
any succeeding tenant relating to such failure to surrender.  The foregoing provisions of this Section 15.1
are in addition to and do not affect Landlord’s right of re-entry or any other
rights of Landlord under this Lease or at law.


 


15.2.   MERGER ON TERMINATION. 
The voluntary or other surrender of this Lease by Tenant, or a mutual
termination of this Lease, shall terminate any or all existing subleases unless
Landlord, at its option, elects in writing to treat the surrender or
termination as an assignment to it of any or all subleases affecting the
Premises.


 


15.3.   SURRENDER OF PREMISES; REMOVAL OF PROPERTY. 
Upon the Expiration Date or upon any earlier termination of this Lease,
Tenant shall quit and surrender possession of the Premises to Landlord in as
good order, condition and repair as when received or as hereafter may be
improved by Landlord or Tenant, reasonable wear and tear and repairs which are
Landlord’s obligation excepted, and shall remove or fund to Landlord the cost
of removing all wallpapering and voice and/or data transmission cabling
installed by or for Tenant, together with all personal property and debris,
except for any items that Landlord may by written authorization allow to remain, and shall perform all work required under Section 7.3 of this
Lease, including, without limitation removal of the Required Removables subject
to the terms and conditions of said Section 7.3. 
Not by way of limitation of the foregoing, upon the Expiration Date or
sooner termination of this Lease, Tenant shall remove the warehouse racking
system installed in the Premises at the Commencement Date.  Tenant shall repair all damage to the
Premises resulting from the removal and restore the affected area to its
pre-existing condition, reasonable wear and tear excepted, including without
limitation, any damage to the slab and Premises resulting from removal of the
racking system, provided that Landlord may instead elect to repair any
structural damage at Tenant’s expense. 
If Tenant shall fail to comply with the provisions of this Section 15.3,
Landlord may effect the removal and/or make any repairs, and the cost to
Landlord shall be additional rent payable by Tenant upon demand.  If requested by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord an instrument in writing releasing
and quitclaiming to Landlord all right, title and interest of Tenant in the
Premises.


 


ARTICLE 16.  PAYMENTS AND NOTICES


 


All sums payable by
Tenant to Landlord shall be paid, without deduction or offset, in lawful money
of the United States to Landlord at its address set forth in Item 12 of
the Basic Lease Provisions, or at any other place as Landlord may designate in
writing.  Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1,
all payments shall be due and payable within 5 days after demand.  All payments requiring proration shall be
prorated on the basis of the number of days in the pertinent calendar month or
year, as applicable.  Any notice,
election, demand, consent, approval or other communication to be given or other
document to be delivered by either party to the other may be delivered to the
other party, at the address set forth in Item 12 of the Basic Lease
Provisions, by personal service or electronic facsimile transmission, or by any
courier or “overnight” express mailing service. 
Either party may, by written notice to the other, served in the manner
provided in this Article, designate a different address.  The refusal to accept delivery of a notice,
or the inability to deliver the notice (whether due to a change of address for
which notice was not duly given or other good reason), shall be deemed delivery
and receipt of the notice as of the date of attempted delivery.  If more than one person or entity is named as
Tenant under this Lease, service of any notice upon any one of them shall be
deemed as service upon all of them.


 


ARTICLE 17.  RULES AND REGULATIONS


 


Tenant agrees to comply
with the Rules and Regulations attached as Exhibit E,
and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order, or cleanliness of the
Premises, Building, Project and/or Common Areas.  Landlord shall not be liable to Tenant for
any violation of the Rules and Regulations or the breach of any covenant
or condition in any lease or any other act or conduct by any other tenant, and
the same shall not constitute a constructive eviction hereunder.  One or more waivers by Landlord of any breach
of the Rules and Regulations by Tenant or by any other tenant(s) shall
not be a waiver of any subsequent breach of that rule or any other.  Tenant’s failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease.  In the case of any conflict between the Rules and
Regulations and this Lease, this Lease shall be controlling.


 


17

















 


ARTICLE 18.  BROKER’S COMMISSION


 


The parties recognize as
the broker(s) who negotiated this Lease the firm(s) whose name(s) is
(are) stated in Item 10 of the Basic Lease Provisions, and agree that
Landlord shall be responsible for the payment of brokerage commissions to those
broker(s) unless otherwise provided in this Lease.  It is understood that Landlord’s Broker
represents only Landlord in this transaction and Tenant’s Broker (if any)
represents only Tenant.  Each party
warrants that it has had no dealings with any other real estate broker or agent
in connection with the negotiation of this Lease, and agrees to indemnify and
hold the other party harmless from any cost, expense or liability (including
reasonable attorneys’ fees) for any compensation, commissions or charges
claimed by any other real estate broker or agent employed or claiming to
represent or to have been employed by the indemnifying party in connection with
the negotiation of this Lease.  The
foregoing agreement shall survive the termination of this Lease.


 


ARTICLE 19.  TRANSFER OF LANDLORD’S INTEREST


 


In the event of any
transfer of Landlord’s interest in the Premises, the transferor shall be
automatically relieved of all obligations on the part of Landlord accruing
under this Lease from and after the date of the transfer, provided that Tenant
is duly notified of the transfer.  Any
funds held by the transferor in which Tenant has an interest, including without
limitation, the Security Deposit, shall be turned over, subject to that
interest, to the transferee.  No
Mortgagee to which this Lease is or may be subordinate shall be responsible in
connection with the Security Deposit unless the Mortgagee actually receives the
Security Deposit.  It is intended that
the covenants and obligations contained in this Lease on the part of Landlord
shall, subject to the foregoing, be binding on Landlord, its successors and
assigns, only during and in respect to their respective successive periods of
ownership.


 


ARTICLE 20.  INTERPRETATION


 


20.1.   NUMBER.  Whenever the
context of this Lease requires, the words “Landlord” and “Tenant” shall include
the plural as well as the singular.


 


20.2.   HEADINGS.  The captions
and headings of the articles and sections of this Lease are for convenience only,
are not a part of this Lease and shall have no effect upon its construction or
interpretation.


 


20.3.   JOINT AND SEVERAL LIABILITY. 
If more than one person or entity is named as Tenant, the obligations
imposed upon each shall be joint and several and the act of or notice from, or
notice or refund to, or the signature of, any one or more of them shall be
binding on all of them with respect to the tenancy of this Lease, including,
but not limited to, any renewal, extension, termination or modification of this
Lease.


 


20.4.   SUCCESSORS.  Subject to
Sections 13.1 and 22.3 and to Articles 9 and 19 of this Lease, all rights
and liabilities given to or imposed upon Landlord and Tenant shall extend to
and bind their respective heirs, executors, administrators, successors and
assigns.  Nothing contained in this Section 20.4
is intended, or shall be construed, to grant to any person other than Landlord
and Tenant and their successors and assigns any rights or remedies under this
Lease.


 


20.5.   TIME OF ESSENCE. 
Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.


 


20.6.   CONTROLLING LAW/VENUE. 
This Lease shall be governed by and interpreted in accordance with the
laws of the State of California.  Should
any litigation be commenced between the parties in connection with this Lease,
such action shall be prosecuted in the applicable State Court of California in
the county in which the Building is located.


 


20.7.   SEVERABILITY.  If any term
or provision of this Lease, the deletion of which would not adversely affect
the receipt of any material benefit by either party or the deletion of which is
consented to by the party adversely affected, shall be held invalid or
unenforceable to any extent, the remainder of this Lease shall not be affected
and each term and provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.


 


20.8.   WAIVER.  One or more
waivers by Landlord or Tenant of any breach of any term, covenant or condition
contained in this Lease shall not be a waiver of any subsequent breach of the
same or any other term, covenant or condition. 
Consent to any act by one of the parties shall not be deemed to render
unnecessary the obtaining of that party’s consent to any subsequent act.  No breach of this Lease shall be deemed to
have been waived unless the waiver is in a writing signed by the waiving party.


 


18

















 


20.9.   INABILITY TO PERFORM. 
In the event that either party shall be delayed or hindered in or
prevented from the performance of any work or in performing any act required
under this Lease by reason of any cause beyond the reasonable control of that
party, then the performance of the work or the doing of the act shall be
excused for the period of the delay and the time for performance shall be
extended for a period equivalent to the period of the delay.  The provisions of this Section 20.9
shall not operate to excuse Tenant from the prompt payment of Rent.


 


20.10.   ENTIRE AGREEMENT. 
This Lease and its exhibits and other attachments cover in full each and
every agreement of every kind between the parties concerning the Premises, the
Building, and the Project, and all preliminary negotiations, oral agreements,
understandings and/or practices, except those contained in this Lease, are
superseded and of no further effect. 
Tenant waives its rights to rely on any representations or promises made
by Landlord or others which are not contained in this Lease.  No verbal agreement or implied covenant shall
be held to modify the provisions of this Lease, any statute, law, or custom to
the contrary notwithstanding.


 


20.11.   QUIET ENJOYMENT. 
Upon the observance and performance of all the covenants, terms and conditions
on Tenant’s part to be observed and performed, and subject to the other
provisions of this Lease, Tenant shall have the right of quiet enjoyment and
use of the Premises for the Term without hindrance or interruption by Landlord
or any other person claiming by or through Landlord.


 


20.12.   SURVIVAL.  All covenants
of Landlord or Tenant which reasonably would be intended to survive the
expiration or sooner termination of this Lease, including without limitation
any warranty or indemnity hereunder, shall so survive and continue to be
binding upon and inure to the benefit of the respective parties and their
successors and assigns.


 


ARTICLE 21.  EXECUTION AND RECORDING


 


21.1.   COUNTERPARTS.  This Lease
may be executed in one or more counterparts, each of which shall constitute an
original and all of which shall be one and the same agreement.


 


21.2.   CORPORATE AND PARTNERSHIP AUTHORITY. 
If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of the entity represents and
warrants that he is duly authorized to execute and deliver this Lease and that
this Lease is binding upon the corporation, limited liability company or
partnership in accordance with its terms. 
Tenant shall, at Landlord’s request, deliver a certified copy of its
organizational documents or an appropriate certificate authorizing or
evidencing the execution of this Lease.


 


21.3.   EXECUTION OF LEASE; NO OPTION OR OFFER. 
The submission of this Lease to Tenant shall be for examination purposes
only, and shall not constitute an offer to or option for Tenant to lease the
Premises.  Execution of this Lease by
Tenant and its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed and
delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.


 


21.4.   RECORDING.  Tenant shall
not record this Lease without the prior written consent of Landlord.  Tenant, upon the request of Landlord, shall
execute and acknowledge a “short form” memorandum of this Lease for recording
purposes.


 


21.5.   AMENDMENTS.  No amendment
or mutual termination of this Lease shall be effective unless in writing signed
by authorized signatories of Tenant and Landlord, or by their respective
successors in interest.  No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.


 


21.6.   ATTACHMENTS.  All exhibits,
riders and addenda attached to this Lease are hereby incorporated into and made
a part of this Lease.


 


ARTICLE 22.  MISCELLANEOUS


 


22.1.   NONDISCLOSURE OF LEASE TERMS. 
Tenant acknowledges that the content of this Lease and any related
documents are confidential information. 
Except to the extent disclosure is required by law, Tenant shall keep
such confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s financial,
legal and space-planning consultants, provided, however, that Tenant may
disclose the terms to prospective subtenants or assignees under this Lease, or
to an entity contemplating a merger with Tenant or the acquisition of all or a
substantial portion of Tenant’s assets, stock or membership interests, or
pursuant to legal requirement.


 


22.2.   TENANT’S FINANCIAL STATEMENTS. 
The application, financial statements and tax returns, if any, submitted
and certified to by Tenant as an accurate representation of its financial
condition have been prepared, certified and submitted to Landlord as an
inducement and 


 


19

















 


consideration to Landlord
to enter into this Lease.  The
application and statements are represented and warranted by Tenant to be
correct and to accurately and fully reflect Tenant’s true financial condition
as of the date of execution of this Lease by Tenant.  Tenant shall during the Term furnish Landlord
with current annual financial statements accurately reflecting Tenant’s
financial condition upon written request from Landlord within 10 days following
Landlord’s request; provided, however, that so long as Tenant is a publicly
traded corporation on a nationally recognized stock exchange, the foregoing
obligation to deliver the statements shall be waived.


 


22.3.   MORTGAGEE PROTECTION. 
No act or failure to act on the part of Landlord which would otherwise
entitle Tenant to be relieved of its obligations hereunder or to terminate this
Lease shall result in such a release or termination unless (a) Tenant has
given notice by registered or certified mail to any  Mortgagee of a Mortgage covering the Building
whose address has been furnished to Tenant and (b) such Mortgagee is
afforded a reasonable opportunity to cure the default by Landlord (which shall
in no event be less than 60 days), including, if necessary to effect the cure,
time to obtain possession of the Building by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued.  Tenant shall comply with any written
directions by any Mortgagee to pay Rent due hereunder directly to such
Mortgagee without determining whether a default exists under such Mortgagee’s
Mortgage.


 


22.4.   SDN LIST.  Tenant hereby
represents and warrants that neither Tenant nor any officer, director,
employee, partner, member or other principal of Tenant (collectively, “Tenant Parties”) is listed as a Specially Designated
National and Blocked Person (“SDN”) on the
list of such persons and entities issued by the U.S. Treasury Office of Foreign
Assets Control (OFAC).  In the event
Tenant or any Tenant Party is or becomes listed as an SDN, Tenant shall be
deemed in breach of this Lease and Landlord shall have the right to terminate
this Lease immediately upon written notice to Tenant.


 




	
  LANDLORD:

   

  THE IRVINE
  COMPANY LLC 

  a Delaware
  limited liability company

  	
  TENANT:

   

  MEADE
  INSTRUMENTS CORP.,

  a Delaware
  corporation

  






 




	
  By:

  	
  /s/E. Valjean
  Wheeler

  	
   

  	
  By:

  	
  /s/Paul E. Ross

  	
   

  
	
   

  	
  E. Valjean
  Wheeler

  	
   

  	
   

  	
  Paul E. Ross

  	
   

  
	
   

  	
  President,
  Office Properties

  	
   

  	
   

  	
  Senior Vice President — Finance

  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Christopher
  J. Popma

  	
   

  	
  By:

  	
  /s/Steven G.
  Murdock

  	
   

  
	
   

  	
  Christopher J.
  Popma

  	
   

  	
   

  	
  Steven G.
  Murdock

  	
   

  
	
   

  	
  Vice President Operations,

  Office Properties

  	
   

  	
   

  	
  President & Chief Executive

  Officer

  	
   

  






 


20
















 





 


 


27 Hubble


 


 





 


 


 


EXHIBIT
A


 
















 


EXHIBIT B


 


Operating
Expenses


(Net)


 


(a)           From and after the Commencement Date,
Tenant shall pay to Landlord, as additional rent, Tenant’s Share of all
Operating Expenses, as defined in Section (f) below, incurred by
Landlord in the operation of the Building and the Project.  The term “Tenant’s
Share” means 100% of the Operating Expenses determined by Landlord
to benefit or relate substantially to the Building, plus that portion of any
Operating Expenses determined by multiplying the cost of such item by a fraction,
the numerator of which is the Floor Area and the denominator of which is the
total rentable square footage, as determined from time to time by Landlord, of
all or some of the buildings in the Project, for expenses determined by
Landlord to benefit or relate substantially to all or some of the buildings in
the Project rather than any specific building. 
Landlord reserves the right to allocate to the entire Project any
Operating Expenses which may benefit or substantially relate to a particular
building within the Project in order to maintain greater consistency of
Operating Expenses among buildings within the Project, provided the same
results in an overall fair, representative allocation of Operating Expenses.  In the event that Landlord determines that
the Premises or the Building incur a non-proportional benefit from any expense,
or is the non-proportional cause of any such expense, Landlord may allocate a
greater percentage of such Operating Expense to the Premises or the Building.  In the event that any management and/or
overhead fee payable or imposed by Landlord for the management of Tenant’s
Premises is calculated as a percentage of the rent payable by Tenant and other
tenants of Landlord, then the full amount of such management and/or overhead
fee which is attributable to the rent paid by Tenant shall be additional rent
payable by Tenant, in full, provided, however, that Landlord may elect to
include such full amount as part of Tenant’s Share of Operating Expenses.


 


(b)           Commencing prior to the start of the
first full “Expense Recovery Period” of the
Lease (as defined in Item 7 of the Basic Lease Provisions), and prior to the
start of each full or partial Expense Recovery Period thereafter, Landlord
shall give Tenant a written estimate of the amount of Tenant’s Share of
Operating Expenses for the applicable Expense Recovery Period.  Tenant shall pay the estimated amounts to
Landlord in equal monthly installments, in advance, concurrently with payments
of Basic Rent.  If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time set
forth above, Tenant shall continue to pay monthly the estimated Tenant’s Share
of Operating Expenses in effect during the prior Expense Recovery Period;
provided that when the new estimate is delivered to Tenant, Tenant shall, at
the next monthly payment date, pay any accrued estimated Tenant’s Share of
Operating Expenses based upon the new estimate. 
Landlord may from time to time change the Expense Recovery Period to
reflect a calendar year or a new fiscal year of Landlord, as applicable, in
which event Tenant’s Share of Operating Expenses shall be equitably prorated
for any partial year.


 


(c)           Within 180 days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement (a “Reconciliation Statement”) showing in
reasonable detail the actual or prorated Tenant’s Share of Operating Expenses
incurred by Landlord during such Expense Recovery Period, and the parties shall
within 30 days thereafter make any payment or allowance necessary to adjust
Tenant’s estimated payments of Tenant’s Share of Operating Expenses, if any, to
the actual Tenant’s Share of Operating Expenses as shown by the Reconciliation
Statement.  Any delay or failure by
Landlord in delivering any Reconciliation Statement shall not constitute a
waiver of Landlord’s right to require Tenant to pay Tenant’s Share of Operating
Expenses pursuant hereto.  Any amount due
Tenant shall be credited against installments next coming due under this Exhibit B,
and any deficiency shall be paid by Tenant together with the next installment.  If Tenant has any question in good faith
regarding a particular item of expenses, Landlord shall cooperate with Tenant
to make reasonable supporting information available.  Should Tenant fail to object in writing to
Landlord’s determination of Tenant’s Share of Operating Expenses within 60 days
following delivery of Landlord’s Reconciliation Statement, Landlord’s
determination of Tenant’s Share of Operating Expenses for the applicable
Expense Recovery Period shall be conclusive and binding on Tenant for all
purposes and any future claims by Tenant to the contrary shall be barred.


 


(d)           Even though this Lease has terminated
and the Tenant has vacated the Premises, when the final determination is made
of Tenant’s Share of Operating Expenses for the Expense Recovery Period in
which this Lease terminates, Tenant shall within 30 days of written notice pay
the entire increase over the estimated Tenant’s Share of Operating Expenses
already paid.  Conversely, any
overpayment by Tenant shall be rebated by Landlord to Tenant not later than 30
days after such final determination. 
However, in lieu thereof, Landlord may deliver a reasonable estimate of
the anticipated reconciliation amount to Tenant prior to the Expiration Date of
the Term, in which event the appropriate party shall fund the amount by the
Expiration Date.


 


1

















 


(e)           If, at any time during any Expense
Recovery Period, any one or more of the Operating Expenses are increased to a
rate(s) or amount(s) in excess of the rate(s) or amount(s) used
in calculating the estimated Tenant’s Share of Operating Expenses for the year,
then the estimate of Tenant’s Share of Operating Expenses may be increased by
written notice from Landlord for the month in which such rate(s) or amount(s) becomes
effective and for all succeeding months by an amount equal to the estimated
amount of Tenant’s Share of the increase. 
Landlord shall give Tenant written notice of the amount or estimated
amount of the increase, the month in which the increase will become effective,
Tenant’s Share thereof and the months for which the payments are due.  Tenant shall pay the increase to Landlord as
part of the Tenant’s monthly payments of estimated expenses as provided in
paragraph (b) above, commencing with the month in which effective.


 


(f)            The term “Operating
Expenses” shall mean and include all Project Costs, as defined in Section (g) below,
and Property Taxes, as defined in Section (h) below.


 


(g)           The
term “Project Costs” shall mean all costs of
operation, management, repair, replacement and maintenance of the Building and
the Project, including without limitation all appurtenant Common Areas (as
defined in Section 6.2 of the Lease), and shall include the following
charges by way of illustration but not limitation:  water and sewer charges; insurance premiums,
deductibles, or reasonable premium equivalents or deductible equivalents should
Landlord elect to self insure any risk that Landlord is authorized to insure
hereunder (provided that a pro-rata share of earthquake premiums or premium
equivalents shall only be Project Costs if earthquake insurance coverage is
obtained or a formal self-insurance program for earthquake risks is established
for all, or substantially all, of Landlord’s commercial/industrial portfolio);
license, permit, and inspection fees; light; power; window washing; trash
pickup; janitorial services to any interior Common Areas; heating, ventilating
and air conditioning; supplies; materials; equipment; tools; reasonable fees
for consulting services; access control/security costs, inclusive of the
reasonable cost of improvements made to enhance access control systems and
procedures; establishment of reasonable reserves for replacements and/or
repairs; costs incurred in connection with compliance with any laws or changes
in laws applicable to the Building or the Project (provided that, except for
laws or changes in laws that pertain particularly to Tenant or to Tenant’s
particular manner of use of the Premises and/or only to the interior of the
Premises [which shall be the sole responsibility of Tenant at its cost], to the
extent such laws or change in laws require expenditures of a “capital” nature,
then such “capital” expenditure shall be amortized [using a market cost of
funds as reasonably determined by Landlord] over the useful life of such asset
and only the amortized cost thereof shall be includable in Project Costs during
the remaining Term of the Lease); the cost of any capital improvements or
replacements (other than tenant improvements for specific tenants) to the
extent of the amortized amount thereof over the useful life of such capital
improvements or replacements (or, if such capital improvements or replacements
are anticipated to achieve a cost savings as to the Operating Expenses, any
shorter estimated period of time over which the cost of the capital
improvements or replacements would be recovered from the estimated cost
savings) calculated at a market cost of funds, all as determined by Landlord,
for each year of useful life or shorter recovery period of such capital
expenditure whether such capital expenditure occurs during or prior to the
Term; (provided, however, that Landlord shall not simultaneously both reserve
for, and amortize the cost of, the same component of Operating Expenses),
provided that such capital expenditures shall be limited to (1) improvements
which are reasonably intended to increase or enhance building security and/or
safety (such as lighting, life/fire safety systems, etc.), (2) repairs or
replacements of the Building structure, Building systems or Common Areas for
functional (and not aesthetic) reasons, (3) improvements required to
comply with any law or change in law becoming effective as to the Building
after the Commencement Date; and/or (4) expenditures incurred as a cost or
labor saving measure or to affect other economies in the operation or
maintenance of the Building or the Common Areas (collectively, “Permitted Capital Items”);costs associated with the
maintenance of an air conditioning, heating and ventilation service agreement,
and maintenance of an intrabuilding network cable service agreement for any
intrabuilding network cable telecommunications lines within the Project, and
any other maintenance, repair and replacement costs associated with such lines;
capital costs associated with a requirement related to demands on utilities by
Project tenants, including without limitation the cost to obtain additional
phone connections; labor; reasonably allocated wages and salaries, fringe
benefits, and payroll taxes for administrative and other personnel directly
applicable to the Building and/or Project, including both Landlord’s personnel
and outside personnel; any cost incurred pursuant to Sections 6.1, 6.2, 7.2,
10.2, and Exhibits C and F of the Lease; and reasonable overhead and/or
management fees for the professional operation of the Project.  It is understood and agreed that Project Costs
may include competitive charges for direct services (including, without
limitation, management and/or operations services) provided by any subsidiary,
division or affiliate of Landlord.


 


(h)           The term “Property
Taxes” as used herein shall include any form of federal, state,
county or local government or municipal taxes, fees, charges or other
impositions of every kind (whether general, special, ordinary or extraordinary)
related to the ownership, leasing or operation of the Premises, Building or
Project, including without limitation, the following:  (i) all real estate taxes or personal
property taxes levied against the Premises, the Building or Project, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, (iii) all
assessments and fees for public improvements, services, and facilities and impacts
thereon, including without limitation arising out of any Community Facilities
Districts, “Mello Roos” districts, similar assessment districts, and any
traffic impact mitigation assessments or fees; (iv) any tax, surcharge or
assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes, and (v) taxes based on the receipt of rent
(including gross receipts or sales taxes applicable to the receipt of rent),
and (vi) costs and expenses incurred in contesting the amount or validity
of any Property Tax by appropriate proceedings. 
Notwithstanding the foregoing, general net income or franchise taxes
imposed against Landlord shall be excluded.


 


2

















 


(i)            Notwithstanding
anything to the contrary contained in this Exhibit B, in no event shall
Operating Expenses include any of the following:


 


(1)           Any
ground lease rental;


 


(2)           Except
as expressly provided in Section (g) above, costs of capital
improvements, alterations, repairs replacements, equipment and other capital
expenditures (including, without limitation, rentals for items which if
purchased, rather than rented, would constitute a capital item);


 


(3)           Expenses
incurred with respect to the installation of tenant or other occupants
improvements made for tenants or other occupants in the Project or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space exclusively for tenants or other occupants of the Project;


 


(4)           Except
as expressly provided in this Lease, depreciation, amortization and interest
payments;


 


(5)           Marketing
costs including leasing commissions, attorneys’ fees and other consultant fees
in connection with the negotiation and preparation of leases and related
agreements;


 


(6)           Expenses
in connection with services or other benefits which are not provided to Tenant
or for which Tenant is charged directly by Landlord or an independent
contractor or a utility, but which are provided to another tenant or occupant
of the Project the cost of which is included as Operating Expenses;


 


(7)           Expenses
incurred by Landlord due to the violation of its obligations under this Lease,
and penalties incurred as a result of Landlord’s inability or unwillingness to
make payments and/or to file any tax or informational returns when due;


 


(8)           Overhead
and profit increment paid to Landlord or to subsidiaries or affiliates of
Landlord for goods and/or services in the Project to the extent the overhead
and profit increment exceeds the costs of such goods and/or services rendered
by unaffiliated third parties on a competitive basis for similar Projects;


 


(9)           Landlord’s
general corporate overhead and general and administrative expenses, and costs
associated with the operation of the business of the Landlord entity, including
partnership accounting and legal matters, and any compensation paid to clerks,
attendants or other persons in commercial concessions operated by or through
Landlord;


 


(10)         Costs
incurred by Landlord for the repair of damage to the Project, to the extent
that Landlord is actually reimbursed by insurance proceeds;


 


(11)         All
assessments of Property Taxes which can be paid by Landlord in installments,
shall be paid by Landlord in the maximum number of installments permitted by
law and not included as Operating Expenses except in the year in which the
assessment installment is actually paid;


 


(12)         Costs
arising from the presence of Hazardous Materials, except (a) for costs
arising due to the presence of mold (or similar substances), and (b) to
the extent Tenant is responsible for such costs as provided in Section 5.3
of this Lease;


 


(13)         Costs
incurred in connection with the original construction of the Project;


 


(14)         Any
bad debt loss, rent loss, or reserves for bad debts or rent loss;


 


(15)         Costs
arising from the gross negligence or willful misconduct of Landlord or its
agents, employees or contractors;


 


(16)         Any
finders fees, brokerage commissions or the like; and


 


(17)         Legal
fees and costs, settlements, judgments or awards paid or incurred because of
disputes between Landlord and any tenant or service vendors (except to the
extent Tenant’s actions or obligations are involved).


 


3
















 


EXHIBIT C


 


UTILITIES AND SERVICE


 


Tenant
shall be responsible for and shall pay promptly, directly to the appropriate
supplier, all charges for electricity metered to the Premises, telephone,
telecommunications service, janitorial service, interior landscape maintenance
and all other utilities, materials and services furnished directly to Tenant or
the Premises or used by Tenant in, on or about the Premises during the Term,
together with any taxes thereon. 
Landlord shall make a reasonable determination of Tenant’s proportionate
share of the cost of water, gas, sewer, refuse pickup and any other utilities
and services that are not separately metered to the Premises and services, and
Tenant shall pay such amount to Landlord, as an item of additional rent, within
30 days after delivery of Landlord’s statement or invoice therefor.  Alternatively, Landlord may elect to include
such cost in the definition of Project Costs in which event Tenant shall pay
Tenant’s proportionate share of such costs in the manner set forth in Section 4.2.  Tenant shall also pay to Landlord as an item
of additional rent, within 30 days after delivery of Landlord’s statement or
invoice therefor, Landlord’s “standard charges” (as hereinafter defined, which
shall be in addition to the electricity charge paid to the utility provider)
for “after hours” usage by Tenant of each HVAC unit servicing the
Premises.  “After hours”
shall mean more than 66 hours of usage during any week during the Term.  “After hours” usage shall be determined based
upon the operation of the applicable HVAC unit during each week of he Term on a
“non-cumulative” basis (that is, without regard to Tenant’s usage or nonusage
of other unit(s) serving the Premises, or of the applicable unit during
other weeks of the Term).  As used
herein, “standard charges” shall mean the
following charges for each hour of “after hours” use (in addition to the
applicable electricity charges paid to the utility provider) of the following
described HVAC units: (i) $1.00 per hour for 1-5 ton HVAC units, and (ii) $5.00
per hour for 6-10 ton HVAC units.


 


1
















 


EXHIBIT
D


 


TENANT’S
INSURANCE


 


The following
requirements for Tenant’s insurance shall be in effect at the Building, and
Tenant shall also cause any subtenant to comply with the requirements.  Landlord reserves the right to adopt
reasonable nondiscriminatory modifications and additions to these
requirements.  Tenant agrees to obtain
and present evidence to Landlord that it has fully complied with the insurance
requirements.


 


1.    Tenant shall, at its sole cost and expense,
commencing on the date Tenant is given access to the Premises for any purpose
and during the entire Term, procure, pay for and keep in full force and
effect:  (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
coverage for personal injury, contractual liability, independent contractors,
broad form property damage, fire legal liability, products liability (if a
product is sold from the Premises), and liquor law liability (if alcoholic
beverages are sold, served or consumed within the Premises), which policy(ies)
shall be written on an “occurrence” basis and for not less than $2,000,000
combined single limit (with a $50,000 minimum limit on fire legal liability)
per occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii) workers’
compensation insurance coverage as required by law, together with employers’
liability insurance coverage of at least $1,000,000; (iii) with respect to
improvements, alterations, and the like required or permitted to be made by
Tenant under this Lease, builder’s risk insurance, in an amount equal to the
replacement cost of the work; (iv) insurance against fire, vandalism,
malicious mischief and such other additional perils as may be included in a
standard “special form” policy, insuring all Tenant Installations, trade fixtures,
furnishings, equipment and items of personal property in the Premises, in an
amount equal to not less than 90% of their actual replacement cost (with
replacement cost endorsement), which policy shall also include business
interruption coverage in an amount sufficient to cover 1 year of loss.  In no event shall the limits of any policy be
considered as limiting the liability of Tenant under this Lease.


 


2.    All policies of insurance required to be
carried by Tenant pursuant to this Exhibit D
shall be written by responsible insurance companies authorized to do business
in the State of California and with a general policyholder rating of not less
than “A-” and financial rating of not less than “VIII” in the most current Best’s
Insurance Report.  The deductible or
other retained limit under any policy carried by Tenant shall be commercially
reasonable, and Tenant shall be responsible for payment of such retained limit
with full waiver of subrogation in favor of Landlord.  Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy.  A certificate of insurance,
certifying that the policy has been issued, provides the coverage required by
this Exhibit and contains the required provisions, together with
endorsements acceptable to Landlord evidencing the waiver of subrogation and
additional insured provisions required below, shall be delivered to Landlord
prior to the date Tenant is given the right of possession of the Premises.  Proper evidence of the renewal of any
insurance coverage shall also be delivered to Landlord not less than thirty
(30) days prior to the expiration of the coverage.  In the event of a loss covered by any policy
under which Landlord is an additional insured, Landlord shall be entitled to
review a copy of such policy.


 


3.    Each policy evidencing insurance required
to be carried by Tenant pursuant to this Exhibit shall contain the
following provisions and/or clauses satisfactory to Landlord:  (i) with respect to Tenant’s commercial
general liability insurance, a provision that the policy and the coverage
provided shall be primary and that any coverage carried by Landlord shall be
excess of and noncontributory with any policies carried by Tenant, together
with a provision including Landlord and any other parties in interest
designated by Landlord as additional insureds; (ii) except with respect to
Tenant’s commercial general liability insurance, a waiver by the insurer of any
right to subrogation against Landlord, its agents, employees, contractors and
representatives which arises or might arise by reason of any payment under the
policy or by reason of any act or omission of Landlord, its agents, employees,
contractors or representatives; and (iii) a provision that the insurer
will not cancel or change the coverage provided by the policy without first
giving Landlord 30 days prior written notice. 
Tenant shall also name Landlord as an additional insured on any excess
or umbrella liability insurance policy carried by Tenant.


 


4.    In the event that Tenant fails to procure,
maintain and/or pay for, at the times and for the durations specified in this Exhibit D, any insurance required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs 


 


1

















 


or expenses incurred by
Landlord, within 10 days following Landlord’s written demand to Tenant.


 


NOTICE
TO TENANT:  IN ACCORDANCE WITH THE TERMS
OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO
LANDLORD’S MANAGEMENT AGENT PRIOR TO BEING AFFORDED ACCESS TO THE PREMISES.


 


2
















 


EXHIBIT
E


 


RULES
AND REGULATIONS


 


This Exhibit sets
forth the rules and regulations governing Tenant’s use of the Premises
leased to Tenant pursuant to the terms, covenants and conditions of the Lease
to which this Exhibit is attached and therein made part thereof.  In the event of any conflict or inconsistency
between this Exhibit and the Lease, the Lease shall control.


 


          1.       Tenant shall
not place anything or allow anything to be placed near the glass of any window,
door, partition or wall, which may appear unsightly from outside the Premises.


 


          2.       The walls,
walkways, sidewalks, entrance passages, elevators, stairwells, courts and
vestibules shall not be obstructed or used for any purpose other than ingress
and egress of pedestrian travel to and from the Premises, and shall not be used
for smoking, loitering or gathering, or to display, store or place any
merchandise, equipment or devices, or for any other purpose.  The walkways, sidewalks, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the Building
and its tenants, provided that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant normally deals in the ordinary
course of Tenant’s business unless such persons are engaged in illegal
activities.  Smoking is permitted outside
the building and within the Project only in areas designated by Landlord.  Neither Tenant nor its employees, agents,
contractors, invitees or licensees shall bring any firearm, whether loaded or unloaded,
into the Project at any time.  No tenant
or employee or invitee or agent of any tenant shall be permitted upon the roof
of the Building without prior written approval from Landlord.


 


          3.       No awnings or
other projection shall be attached to the outside walls of the Building.  No security bars or gates, curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord.  Neither the interior nor
exterior of any windows shall be coated or otherwise sunscreened without the
express written consent of Landlord.


 


          4.       Tenant shall
not mark, nail, paint, drill into, or in any way deface any part of the
Premises or the Building except to affix standard pictures or other wall
hangings on the interior walls of the premises so long as they are not visible
from the exterior of the building. 
Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord in writing.  The expense of repairing any damage resulting
from a violation of this rule or removal of any floor covering shall be
borne by Tenant.


 


          5.       The toilet
rooms, urinals, wash bowls and other plumbing apparatus shall not be used for
any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein.  Any pipes or tubing used by Tenant to
transmit water to an appliance or device in the Premises must be made of copper
or stainless steel, and in no event shall plastic tubing be used for that
purpose.  The expense of any breakage,
stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose employees or invitees, caused it.


 


          6.       Landlord
shall direct electricians as to the manner and location of any future telephone
wiring.  No boring or cutting for wires
will be allowed without the prior consent of Landlord.  The locations of the telephones, call boxes
and other office equipment affixed to the Premises shall be subject to the
prior written approval of Landlord.


 


          7.       The Premises
shall not be used for manufacturing.  No
exterior storage shall be allowed at any time without the prior written
approval of Landlord.  The Premises shall
not be used for cooking or washing clothes without the prior written consent of
Landlord, or for lodging or sleeping or for any immoral or illegal purposes.


 


          8.       Tenant shall
not make, or permit to be made, any unseemly or disturbing noises or disturb or
interfere with occupants of this or neighboring buildings or premises or those
having business with them, whether by the use of any musical instrument, radio,
phonograph, noise, or otherwise.  Tenant
shall not use, keep or permit to be used, or kept, any foul or obnoxious gas or
substance in the Premises or permit or suffer the Premises to be used or
occupied in any manner offensive or objectionable to Landlord or other
occupants of this or neighboring buildings or premises by reason of any odors,
fumes or gases.


 


1

















 


          9.       No animals,
except for seeing eye dogs, shall be permitted at any time within the Premises.


 


          10.     Tenant shall
not use the name of the Building or the Project in connection with or in
promoting or advertising the business of Tenant, except as Tenant’s address,
without the written consent of Landlord. 
Landlord shall have the right to prohibit any advertising by any Tenant
which, in Landlord’s reasonable opinion, tends to impair the reputation of the
Project or its desirability for its intended uses, and upon written notice from
Landlord any Tenant shall refrain from or discontinue such advertising.


 


          11.     Canvassing,
soliciting, peddling, parading, picketing, demonstrating or otherwise engaging
in any conduct that unreasonably impairs the value or use of the Premises or
the Project are prohibited and each Tenant shall cooperate to prevent the
same.  Landlord shall have full and
absolute authority to regulate or prohibit the entrance to the Premises of any
vendor, supplier, purveyor, petitioner, proselytizer or other similar person
if, in the good faith judgment of Landlord, such person will be involved in
general solicitation activities, or the proselytizing, petitioning, or disturbance
of other tenants or their customers or invitees, or engaged or likely to engage
in conduct which may in Landlord’s opinion distract from the use of the
Premises for its intended purpose. 
Notwithstanding the foregoing, Landlord reserves the absolute right and
discretion to limit or prevent access to the Buildings by any food or beverage
vendor, whether or not invited by Tenant, and Landlord may condition such
access upon the vendor’s execution of an entry permit agreement which may
contain provisions for insurance coverage and/or the payment of a fee to
Landlord.


 


          12.     No equipment
of any type shall be placed on the Premises which in Landlord’s opinion exceeds
the load limits of the floor or otherwise threatens the soundness of the
structure or improvements of the Building.


 


          13.     [Intentionally
Omitted]


 


          14.     The entire
Premises, including vestibules, entrances, parking areas, doors, fixtures,
windows and plate glass, shall at all times be maintained in a safe, neat and
clean condition by Tenant.  All trash,
refuse and waste materials shall be regularly removed from the Premises by
Tenant and placed in the containers at the locations designated by Landlord for
refuse collection.  All cardboard boxes
must be “broken down” prior to being placed in the trash container.  All styrofoam chips must be bagged or
otherwise contained prior to placement in the trash container, so as not to
constitute a nuisance.  Pallets must be
immediately disposed of by tenant and may not be disposed of in the Landlord
provided trash container or enclosures. 
Pallets may be neatly stacked in an exterior location on a temporary
basis (no longer than 5 days) so long as Landlord has provided prior written
approval.  The burning of trash, refuse
or waste materials is prohibited.


 


          15.     Tenant shall
use at Tenant’s cost such pest extermination contractor as Landlord may direct
and at such intervals as Landlord may reasonably require.


 


          16.     All keys for
the Premises shall be provided to Tenant by Landlord and Tenant shall return to
Landlord any of such keys so provided upon the termination of the Lease.  Tenant shall not change locks or install
other locks on doors of the Premises, without the prior written consent of
Landlord.  In the event of loss of any
keys furnished by Landlord for Tenant, Tenant shall pay to Landlord the costs
thereof.  Upon the termination of its
tenancy, Tenant shall deliver to Landlord all the keys to lobby(s), suite(s) and
telephone & electrical room(s) which have been furnished to
Tenant or which Tenant shall have had made.


 


          17.     No person
shall enter or remain within the Project while intoxicated or under the
influence of liquor or drugs.  Landlord
shall have the right to exclude or expel from the Project any person who, in
the absolute discretion of Landlord, is under the influence of liquor or drugs.


 


          18.     [Intentionally
Omitted]


 


          19.     [Intentionally Omitted]


 


          20.     Landlord may
from time to time grant other tenants of the Project individual and temporary
variances from these Rules, provided that any variance does not have a material
adverse effect on the use and enjoyment of the Premises by Tenant.


 


          21.     Landlord
reserves the right to amend or supplement the foregoing Rules and
Regulations and to adopt and promulgate additional reasonable rules and
regulations applicable to the Premises. 
Notice of such rules and regulations and amendments and supplements
thereto, if any, shall be given to the Tenant. 
Notwithstanding the foregoing, rules and regulations shall not be
amended or supplemented in a manner which unreasonably interferes with Tenant’s
use of the Premises or which materially increases Tenant’s obligations or
materially decreases Tenant’s rights under the Lease.


 


2
















 


EXHIBIT F


 


PARKING


 


Tenant
shall be entitled to the number of vehicle parking spaces set forth in
Item 11 of the Basic Lease Provisions, which spaces shall be unreserved
and unassigned, on those portions of the Common Areas designated by Landlord
for parking.  Tenant shall not use more
parking spaces than such number.  No
additional parking charges shall be assessed for Tenant’s parking rights during
the initial 60-month Term of this Lease. 
All parking spaces shall be used only for parking of vehicles no larger
than full size passenger automobiles, sport utility vehicles or pickup
trucks.  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 above, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that Landlord may
have, to remove or tow away the vehicle involved and charge the costs to
Tenant.  Parking within the Common Areas
shall be limited to striped parking stalls, and no parking shall be permitted
in any driveways, access ways or in any area which would prohibit or impede the
free flow of traffic within the Common Areas. 
There shall be no parking of any vehicles for longer than a forty-eight
(48) hour period unless otherwise authorized by Landlord, and vehicles which
have been abandoned or parked in violation of the terms hereof may be towed
away at the owner’s expense.  Nothing
contained in this Lease shall be deemed to create liability upon Landlord for
any damage to motor vehicles of visitors or employees, for any loss of property
from within those motor vehicles, or for any injury to Tenant, its visitors or
employees, unless ultimately determined to be caused by the sole active
negligence or willful misconduct of Landlord. 
Landlord shall have the right to establish, and from time to time amend,
and to enforce against all users all reasonable rules and regulations
(including the designation of areas for employee parking) that Landlord may
deem necessary and advisable for the proper and efficient operation and
maintenance of parking within the Common Areas. 
Landlord shall have the right to construct, maintain and operate
lighting facilities within the parking areas; to change the area, level,
location and arrangement of the parking areas and improvements therein; to
restrict parking by tenants, their officers, agents and employees to employee
parking areas; to enforce parking charges (by operation of meters or
otherwise); and to do and perform such other acts in and to the parking areas
and improvements therein as, in the use of good business judgment, Landlord
shall determine to be advisable (provided such other acts do not materially and
adversely affect Tenant’s parking rights hereunder).  Any person using the parking area shall
observe all directional signs and arrows and any posted speed limits.  In no event shall Tenant interfere with the
use and enjoyment of the parking area by other tenants of the Project or their
employees or invitees.  Parking areas shall
be used only for parking vehicles. 
Washing, waxing, cleaning or servicing of vehicles, or the storage of
vehicles for longer than 48-hours, is prohibited unless otherwise authorized by
Landlord.  Tenant shall be liable for any
damage to the parking areas caused by Tenant or Tenant’s employees, suppliers,
shippers, customers or invitees, including without limitation damage from
excess oil leakage.  Tenant shall have no
right to install any fixtures, equipment or personal property in the parking
areas.


 


1
















 


EXHIBIT
G


 


ADDITIONAL
PROVISIONS


 


The
following additional provisions shall be binding on Landlord and Tenant:


 


1.   EARLY
OCCUPANCY.  Landlord agrees that Tenant shall be
permitted to occupy the Premises not earlier than February 1, 2009  (the “Early Occupancy
Date”), subject to the following terms and conditions:  (a) concurrently with the execution and
delivery of this Lease, and prior to any such early occupancy by Tenant, Tenant
shall deliver to Landlord (i) the first installment of Basic Rent and Operating
Expenses due under the Lease (ii) the Security Deposit set forth in Item 9
of the Basic Lease Provisions, and (iii) the required certificate(s) of
insurance and a completed Environmental Questionnaire (see Exhibit C
attached hereto); (b) Tenant’s occupancy of the Premises prior to the
Commencement Date shall be subject to all of the covenants and conditions on
Tenant’s part contained in this Lease (including, without limitation, the
covenants contained in Sections 5.3, 6.1, 7.1, 7.3, 7.4, 10.1 and 10.3 of the
Lease), except for the obligation to pay Basic Rent and Operating Expenses, and
(c) Tenant’s occupancy prior to the Commencement Date shall be subject to
Landlord’s improvement and/or installation obligations described in Section 2.2
above, and Tenant acknowledges that disruptions to Tenant’s business operations
may occur as a result thereof.


 


2.   RIGHT
TO EXTEND THIS LEASE.   Provided that no Default has occurred under
any provision of this Lease, either at the time of exercise of the extension right
granted herein or at the time of the commencement of such extension, and
provided further that Tenant is occupying at least 50% of the Floor Area of the
Premises and has not assigned its interest in this Lease nor sublet 50% or more
of the Floor Area of the Premises, then Tenant may extend the Term of this
Lease for 1 extension period of 60-months. 
Tenant shall exercise its right to extend the Term by and only by
delivering to Landlord, not less than 9 months or more than 12 months prior to
the Expiration Date of the Term, Tenant’s irrevocable written notice of its
commitment to extend (the “Commitment Notice”).  The Basic Rent payable under the Lease during
any extension of the Term shall be determined as provided in the following
provisions.


 


If Landlord and Tenant
have not by then been able to agree upon the Basic Rent for the extension of
the Term, then not less than 90 days or more than 120 days prior to the
Expiration Date of the Term, Landlord shall notify Tenant in writing of the
Basic Rent that would reflect the prevailing market rental rate for a 60-month
renewal of comparable space in the Project or in similarly improved space owned
by Landlord in the Irvine Spectrum (together with any increases thereof during
the extension period) as of the commencement of the extension period (“Landlord’s Determination”). 
Should Tenant disagree with the Landlord’s Determination, then Tenant
shall, not later than 20 days following the delivery of the Landlord’s
Determination, notify Landlord in writing of Tenant’s determination of those
rental terms (“Tenant’s Determination”). Should
Tenant fail to timely deliver the Tenant’s Determination, then Landlord’s
Determination shall be deemed to constitute the fair market rental for the
extension period.  Within 10 days
following delivery of the Tenant’s Determination, the parties shall attempt to
agree on an appraiser to determine the fair market rental.  If the parties are unable to agree in that
time, then each party shall designate an appraiser within 10 days thereafter.  Should either party fail to so designate an
appraiser within that time, then the appraiser designated by the other party
shall determine the fair market rental. 
Should each of the parties timely designate an appraiser, then the two
appraisers so designated shall appoint a third appraiser who shall, acting
alone, determine the fair market rental for the extension period.  Any appraiser designated hereunder shall have
an MAI certification with not less than 5 years experience in the valuation of
commercial industrial buildings in the vicinity of the Project.


 


Within 30 days following
the selection of the appraiser and such appraiser’s receipt of the Landlord’s
Determination and the Tenant’s Determination, the appraiser shall determine
whether the Landlord’s Determination or Tenant’s Determination more accurately
reflects the fair market rental rate for the 60-month renewal of the Lease for
the Premises, as reasonably extrapolated to the commencement of the extension
period.  Accordingly, either the Landlord’s
Determination or the Tenant’s Determination shall be selected by the appraiser
as the fair market rental rate for the extension period.   In making such determination, the appraiser
shall consider rental comparables for the Project together with rental
comparables for similarly improved space owned by Landlord in the vicinity of
the Project with appropriate adjustment for location and quality of project,
but the appraiser shall not attribute any factor for brokerage commissions in
making its determination of the fair market rental rate.  At any time before the decision of the
appraiser is rendered, either party may, by written notice to the other party,
accept the rental terms submitted by the other party, in which event such terms
shall be deemed adopted as the agreed fair market rental.  The fees of the appraiser(s) shall be
borne 


 


1

















 


entirely by the party
whose determination of the fair market rental rate was not accepted by the
appraiser.


 


Within 20 days
after the determination of the fair market rental, Landlord shall prepare an
appropriate amendment to this Lease for the extension period, and Tenant shall
execute and return same to Landlord within 10 days after Tenant’s receipt of
same.  Should the fair market rental not
be established by the commencement of the extension period, then Tenant shall
continue paying rent at the rate in effect during the last month of the initial
Term, and a lump sum adjustment shall be made promptly upon the determination
of such new rental.


 


If Tenant fails to timely
exercise the extension right granted herein within the time period expressly
set forth for exercise by Tenant in the initial paragraph of this Section,
Tenant’s right to extend the Term shall be extinguished and the Lease shall
automatically terminate as of the Expiration Date of the Term, without any
extension and without any liability to Landlord.  Tenant’s rights under this Section shall
belong solely to Meade Instruments Corp, a Delaware corporation and its
Affiliates, and any attempted assignment or transfer of such rights (other than
to an Affiliate) shall be void and of no force and effect.  Tenant shall have no other right to extend
the Term beyond the single 60-  month
extension period created by this Section.. 
Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment to this Lease or by a
holdover of the Premises by Tenant, or otherwise, shall be deemed a part of,
and not in addition to, any duly exercised extension period permitted by this
Section.


 


3.   CONTINGENCY.  Landlord and
Tenant are currently parties to a lease dated December 20, 1996 (the “Existing Lease”) for space located at 6001 Oak Canyon,
Irvine, California (the “Existing Premises”).  Tenant understands and agrees that the
effectiveness of this Lease is contingent upon the mutual execution by and
between Landlord and Tenant of a lease surrender and termination agreement for
the termination of the Existing Lease.


 


4.   SECURITY DEPOSIT. 
Tenant’s obligation to fund the Security Deposit under this Lease in the
amount set forth in Item 9 of the Basic Lease Provisions, shall be satisfied by
Landlord’s retention of a portion, in like amount, of the “Security Deposit”
under the Existing Lease.


 


2
















 


EXHIBIT
H


 


LANDLORD’S
DISCLOSURES


 


 


SPECTRUM


 


The capitalized
terms used and not otherwise defined in this Exhibit shall have the same
definitions as set forth in the Lease. 
The provisions of this Exhibit shall supersede any inconsistent or
conflicting provisions of the Lease.


 


1.      Landlord has been informed that the El
Toro Marine Corps Air Station (MCAS) has been listed as a Federal Superfund
site as a result of chemical releases occurring over many years of
occupancy.  Various chemicals including
jet fuel, motor oil and solvents have been discharged in several areas
throughout the MCAS site.  A regional
study conducted by the Orange County Water District has estimated that
groundwaters beneath more than 2,900 acres have been impacted by
Trichloroethlene (TCE), an industrial solvent. 
There is a potential that this substance may have migrated into the
ground water underlying the Premises. 
The U.S. Environmental Protection Agency, the Santa Ana Region Quality
Control Board, and the Orange County Health Care Agency are overseeing the
investigation/cleanup of this contamination. 
To the Landlord’s current actual knowledge, the ground water in this
area is used for irrigation purposes only, and there is no practical impediment
to the use or occupancy of the Premises due to the El Toro discharges.


 


1
















 


EXHIBIT J


 


THE IRVINE COMPANY
— INVESTMENT PROPERTIES GROUP


 


HAZARDOUS MATERIAL
SURVEY FORM


 


          The purpose of this form is to obtain information regarding
the use of hazardous substances on Investment Properties Group (“IPG”)
property.  Prospective tenants and
contractors should answer the questions in light of their proposed activities
on the premises.  Existing tenants and
contractors should answer the questions as they relate to ongoing activities on
the premises and should update any information previously submitted.


 


          If additional space is needed to answer the questions, you
may attach separate sheets of paper to this form.  When completed, the form should be sent to
the following address:


 


THE IRVINE COMPANY
MANAGEMENT OFFICE


111 Innovation
Drive


Irvine, CA  92617


 


          Your cooperation in this matter is appreciated.  If you have any questions, please call your
property manager at (949) 720-4400 for assistance.


 


	
  1.

  	
  GENERAL INFORMATION.

  
	
   

  	
   

  
	
   

  	
  Name of Responding
  Company:

  	
   

  	
   

  	
   

  
	
   

  	
  Check all that apply:

  	
  Tenant

  	
  (   )

  	
  Contractor          

  	
  (   )

  	
   

  
	
   

  	
   

  	
  Prospective

  	
  (   )

  	
  Existing

  	
  (   )

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address:

  	
   

  
	
   

  	
  Contact person &
  Title:

  	
   

  
	
   

  	
  Telephone Number:  (   )

  	
   

  
	
   

  	
   

  
	
   

  	
  Current TIC Tenant(s):

  
	
   

  	
   

  
	
   

  	
  Address of Lease
  Premises:

  	
   

  
	
   

  	
   

  
	
   

  	
  Length of Lease or
  Contract Term:

  	
   

  
	
   

  	
   

  
	
   

  	
  Prospective TIC
  Tenant(s):

  
	
   

  	
   

  
	
   

  	
  Address of Leased
  Premises:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of Current
  Operations:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Describe the proposed
  operations to take place on the property, including principal products
  manufactured or services to be conducted. 
  Existing tenants and contractors should describe any proposed changes
  to ongoing operations.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  HAZARDOUS MATERIALS. 
  For the purposes of this Survey Form, the term “hazardous material”
  means any raw material, product or agent considered hazardous under any state
  or federal law.  The term does not
  include wastes which are intended to be discarded.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
  Will any hazardous
  materials be used or stored on site?

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chemical Products

  	
  Yes  (   )

  	
  No  (   )

  
	
   

  	
   

  	
   

  	
  Biological Hazards/

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Infectious
  Wastes

  	
  Yes  (   )

  	
  No  (   )

  
	
   

  	
   

  	
   

  	
  Radioactive Materials

  	
  Yes  (   )

  	
  No  (   )

  
	
   

  	
   

  	
   

  	
  Petroleum Products

  	
  Yes  (   )

  	
  No  (   )

  
																



 


1

















 


	
   

  	
   

  	
  2.2

  	
  List any hazardous
  materials to be used or stored, the quantities that will be on-site at any given
  time, and the location and method of storage (e.g., bottles in storage closet
  on the premises).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Location
  and Method

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Hazardous
  Materials

  	
   

  	
  of
  Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.3

  	
  Is any underground
  storage of hazardous materials proposed or currently conducted on the
  premises?  Yes (   )  
  No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If yes, describe the
  materials to be stored, and the size and construction of the tank.  Attach copies of any permits obtained for
  the underground storage of such substances.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  HAZARDOUS WASTE. 
  For the purposes of this Survey Form, the term “hazardous waste” means
  any waste (including biological, infectious or radioactive waste) considered
  hazardous under any state or federal law, and which is intended to be
  discarded.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
  List any hazardous
  waste generated or to be generated on the premises, and indicate the quantity
  generated on a monthly basis.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Location
  and Method

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Hazardous
  Materials

  	
   

  	
  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.2

  	
  Describe the method(s) of
  disposal (including recycling) for each waste.  Indicate where and how often disposal will
  take place.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Location
  and Method

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Hazardous
  Materials

  	
   

  	
  of
  Storage

  	
   

  	
  Disposal
  Method

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3

  	
  Is any treatment or
  processing of hazardous, infectious or radioactive wastes currently conducted
  or proposed to be conducted on the premise?

  Yes  (  
  )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If yes, please describe
  any existing or proposed treatment methods.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4

  	
  Attach copies of any
  hazardous waste permits or licenses issued to your company with respect to
  its operations on the premises.

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  SPILLS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  During the past year,
  have any spills or releases of hazardous materials occurred on the premises?   Yes  (   )   No  (   )

  



 


2

















 


	
   

  	
   

  	
   

  	
            If so, please describe the spill and attach the results
  of any testing conducted to determine the extent of such spills.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2

  	
  Were any agencies
  notified in connection with such spills?  
  Yes  (  
  )   No  (  
  )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, attach copies of any spill reports or other
  correspondence with regulatory agencies.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.3

  	
  Were any clean-up
  actions undertaken in connection with the spills?

            Yes  (  
  )   No  (  
  )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, briefly describe the actions taken.  Attach copies of any clearance letters
  obtained from any regulatory agencies involved and the results of any final
  soil or groundwater sampling done upon completion of the clean-up work.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  WASTEWATER
  TREATMENT/DISCHARGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
  Do you discharge
  industrial wastewater to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  storm drain?

  	
   

  	
  sewer?

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  surface water?

  	
   

  	
  no industrial discharge

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.2

  	
  Is your industrial
  wastewater treated before discharge?  
  Yes  (  
  )   No  (  
  )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If yes, describe the type of treatment conducted.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.3

  	
  Attach copies of any
  wastewater discharge permits issued to your company with respect to its
  operations on the premises.

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  AIR DISCHARGES.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
  Do you have any air
  filtration systems or stacks that discharge into the air?

  Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.2

  	
  Do you operate any
  equipment that requires air emissions permits?

  Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.3

  	
  Attach copies of any
  air discharge permits pertaining to these operations.

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  HAZARDOUS MATERIALS
  DISCLOSURES.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1

  	
  Does your company
  handle an aggregate of at least 500 pounds, 55 gallons or 200 cubic feet of
  hazardous material at any given time?  
  Yes  (  
  )   No  (  
  )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.2

  	
  Has your company
  prepared a Hazardous Materials Disclosure — Chemical Inventory and Business
  Emergency Plan or similar disclosure document pursuant to state or county
  requirements?   Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, attach a copy.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.3

  	
  Are any of the
  chemicals used in your operations regulated under Proposition 65?

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, describe the procedures followed to comply with
  these requirements.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


3

















 


	
   

  	
   

  	
  7.4

  	
  Is your company subject
  to OSHA Hazard Communication Standard Requirements?   Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, describe the procedures followed to comply with
  these requirements.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  ANIMAL TESTING.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.1

  	
  Does your company bring
  or intend to bring live animals onto the premises for research or development
  purposes?

  Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, describe the activity.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.2

  	
  Does your company bring
  or intend to bring animal body parts or bodily fluids onto the premises for
  research or development purposes? 
  Yes   (   )  
  No   (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, describe the activity.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  ENFORCEMENT ACTIONS,
  COMPLAINTS.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1

  	
  Has your company ever
  been subject to any agency enforcement actions, administrative orders,
  lawsuits, or consent orders/decrees regarding environmental compliance or
  health and safety?  
  Yes  (  
  )   No  (  
  )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
            If so, describe the actions and any continuing
  obligations imposed as a result of these actions.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.2

  	
  Has your company ever
  received any request for information, notice of violation or demand letter,
  complaint, or inquiry regarding environmental compliance or health and
  safety?   Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.3

  	
  Has an environmental
  audit ever been conducted which concerned operations or activities on
  premises occupied by you?   Yes  (   )   No  (   )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.4

  	
  If you answered “yes”
  to any questions in this section, describe the environmental action or
  complaint and any continuing compliance obligation imposed as a result of the
  same.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
   

  



 


4
















 


Hubble Industrial Park


 


 


 





 


 


 


EXHIBIT Y


 


1