exv10w30






exhibit 10.30




STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE

MODIFIED NET



1. Basic Provisions (“Basic Provision”).




     1.1 Parties: This Lease (“Lease”), dated for reference purposes only, September 15, 2008, is
made by and between Fremont Ventures LLC (“Landlord”) and Opnext, Inc. (“Tenant”), (collectively
the “Parties,” or individually a “Party”).



     1.2 (a) Premises: That certain portion of the Building, consisting of approximately 30,574
rentable square feet, including all improvements therein or to be provided by Landlord under the
terms of this Lease, commonly known by the street address of 46429 Landing Parkway, located in the
City of Fremont, County of Alameda, State of California, as outlined on Exhibit A
attached hereto (“Premises”). The “Building” is that certain building containing the Premises and
generally described as a multi tenant R&D Facility. In addition to Tenant’s rights to use and
occupy the Premises as hereinafter specified, Tenant shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights
to the roof, exterior walls or utility raceways of the Building or to any other buildings in the
Industrial Center. The Premises, the Building, the Common Areas, the land upon which they are
located, along with all other buildings and improvements thereon, are herein collectively referred
to as the “Industrial Center.” Landlord believes that the Premises contains 30,574 rentable square
feet as determined pursuant to the Standard Method for Measuring Floor Area in Office Buildings
published by the Building Owners and Managers Association International (“BOMA”) as revised and
readopted June 7, 1996 (the “Standard Measure”). Tenant reserves the right to measure the Premises
to confirm that the measurement provided by Landlord is accurate and conforms to the Standard
Measure. Any discrepancy shall be promptly resolved by the parties through good faith negotiations
and, if relevant, all items in this Lease which are based upon the square footage of the Premises
(e.g., Base Rent and Tenant’s Share) shall be promptly adjusted in proportion to the change in
square footage. (Also see Paragraph 2.)



           (b) Parking: 120 unreserved vehicle parking spaces (“Unreserved Parking Spaces”); and no
reserved vehicle parking spaces (“Reserved Parking Spaces”). (Also, see Paragraph 2.6)




     1.3 Term: Five years and -0- months (“Original Term”) commencing on the later of (i) December
1, 2008 or (ii) substantial completion of the Tenant Improvement by Landlord (“Commencement Date”)
and ending November 30, 2013 (“Expiration Date”). (Also Paragraph 3.)



     1.4 Early Possession: Upon completion of TI’s (“Early Possession Date”). (Also Paragraphs 3.2
and 3.3.)



     1.5 Base rent: $27,516.60 per month (“Base Rent”), payable on the first day of each
month commencing December 1, 2008 (Also see Paragraph 4. ) Monthly Base Rent to be adjusted
yearly upwards by 3%.



 









 





     1.6 (a) Base Rent Paid Upon Execution: $27,516 as Base Rent for the period 12-1-08 through
12-31-08.



           (b) Tenant’s Share of Common Area Operating Expenses: 19.67% (“Tenant’s Share”) as determined
by prorata square footage of the Premises as compared to the total square footage of the Building.




     1.7 Security Deposit: $30,970 (“Security Deposit”). (Also see Paragraph 5)



     1.8 Permitted Use: office, R&D, storage and warehousing and other legal related uses
(“Permitted Use”) (Also see Paragraph 5.)



     1.9 Insuring Party. Landlord is the “Insuring Party.” (Also see Paragraph 8)



     1.10 (a) Real Estate Brokers. The following real estate broker(s) (collectively, the
“Brokers”) and brokerage relationships exist in this transaction and are consented to by the
Parties (check applicable boxes):



          o      ***** represents Landlord exclusively (“Landlord’s Broker”);




          o      ***** represents Tenant exclusively (“Tenant’s Broker”); or




          þ      CBRE represents both Landlord and Tenant (“Dual Agency”). (/also see Par. 15.)




          (b) Payment to Brokers. Upon the execution of this Lease by both Parties, Landlord shall pay
to said Broker(s) according to separate written agreement between Landlord and said Broker(s).




     1.11 Guarantor. The obligations of the Tenant under this Lease are to be guaranteed by
***** (“Guarantor”). (Also see Paragraph 37.)



     1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda consisting of Exhibits A
and B, C, and D all of which constitute a part of this Lease.


2. Premises, Parking and Common Areas.




     2.1 Letting. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set
forth in this Lease. The leaseable area is measured to the outside edge of the outside walls and
drip lines to the centerline of any demising walls, including a pro rata share of the electrical
room and other common spaces. Unless otherwise provided herein, any statement of square footage
set forth in this Lease, or that may have been used in calculating rental and/or Common Area
Operating Expenses, is an approximation which Landlord and Tenant agree is reasonable and the
rental and Tenant’s Share (as defined in Paragraph 1.6(b) based thereon is not subject to revision
whether or not the actual square footage is more or less.



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     2.2 Condition. Landlord shall deliver the Premises to Tenant clean and free of debris on the
Commencement Date and warrants to Tenant that the existing plumbing, electrical systems, fire
sprinkler system, lighting, air conditioning and heating systems and loading doors, if any, in the
Premises, other than those constructed by Tenant, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of the Commencement Date,
Landlord shall, except as otherwise provided in this Lease, promptly after receipt of written
notice from Tenant setting forth with specificity the nature and extent of such non-compliance,
rectify same at Landlord’s expense. If Tenant does not give Landlord written notice of a
non-compliance with this warranty within thirty (30) days after the Commencement Date, correction
of that non-compliance shall be the obligation of Tenant at Tenant’s sole cost and expense.



     2.3 Warranties. Tenant acknowledges that neither landlord nor any of its agents made any
representations or warranties respecting the project, the buildings, or the leased premises, upon
which tenant relied in entering into this lease, which are not expressly set forth in this lease.
Tenant further acknowledges that neither Landlord nor any of its agents made any representations as
to (i) whether the leased premises may be used for tenant’s intended use under existing law or;
(ii) the suitability of the leased premises for the conduct of tenant’s business or; (iii) the
exact square footage of the leased premises; that tenant relied solely upon its own investigations
respecting said premises (including but not limited to the electrical and fire sprinkler systems,
security, environmental aspects, seismic and earthquake requirements, and compliance with the
American with Disabilities Act and applicable zoning, municipal, county, state and federal laws,
ordinances and regulations and any covenants or restrictions of record (collectively, “Applicable
Laws”) and that upon its execution of this lease, accepts the leaseable area as specified herein.
Tenant expressly waives any and all claims for damage by reason of any statement, representation,
warranty, promise or other agreement of landlord or landlord’s agent(s), if any, not contained in
this lease or in any addenda hereto.



     2.4 Tenant as Prior Owner/Occupant. The warranties made by Landlord in this Paragraph 2.2
shall be of no force or effect if immediately prior to the date set forth in Paragraph 1.1 Tenant
was the owner or occupant of the Premises. In such event, Tenant shall, at Tenant’s sole cost and
expense, correct any non-compliance of the Premises with said warranties.



     2.5 Vehicle Parking. Tenant shall be entitled to use the number of Unreserved Parking Spaces
and Reserved Parking Spaces specified in Paragraph 1.2(b) on those portions of the Common Areas
designated from time to time by Landlord for parking. Tenant shall not use more parking spaces
than said number. Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehicles.”
Vehicles other than Permitted Size Vehicles shall be parked and loaded or unloaded as directed by
Landlord in the Rules and Regulations (as defined in Paragraph 40) issued by Landlord. (Also see
Paragraph 2.9.)



          (a) Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant
or Tenant’s employees, suppliers, shippers, customers, contractors or invitees to be loaded,
unloaded, or parked in areas other than those designated by Landlord for such activities.




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          (b) If Tenant permits or allows any of the prohibited activities described in this Paragraph
2.6, then Landlord shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord.




          (c) Landlord shall at the Commencement Date of this Lease, provide the parking facilities
required by Applicable Law.




     2.6 Common Areas — Definition. The term “Common Areas” is defined as all areas and facilities
outside the Premises and within the exterior boundary line of the Industrial Center and Interior
utility raceways within the Premises that are provided and designated by the Landlord from time to
time for the general non-exclusive use of Landlord, Tenant and other tenants of the Industrial
Center and their respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas.



     2.7 Common Areas — Tenant’s Rights. Landlord hereby grants to Tenant, for the benefit of
Tenant and its employees, suppliers, shippers, contractors, customers and invitees, during the term
of this Lease, the non-exclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and privileges
reserved by Landlord under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no circumstances shall the right
herein granted to use the Common Areas be deemed to include the right to store any property,
temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the
prior written consent of Landlord or Landlord’s designated agent, which consent may be revoked at
any time. In the event that any unauthorized storage shall occur then Landlord shall have the
right, without notice, in addition to such other rights and remedies that it may have, to remove
the property and charge the cost to Tenant, which cost shall be immediately payable upon demand by
Landlord.



     2.8 Common Areas — Rules and Regulations. Landlord or such other person(s) as Landlord may
appoint shall have the exclusive control and management of the Common Areas and shall have the
right, from time to time, to establish, modify, amend and enforce reasonable Rules and Regulations
with respect thereto in accordance with Paragraph 40. Tenant agrees to abide by and conform to all
such Rules and Regulations and to cause its employees, suppliers, shippers, customers, contractors
and invitees to so abide and conform. Landlord shall not be responsible to Tenant for the
non-compliance with said rules and regulations by other tenants of the Industrial Center.



     2.9 Common Areas — Changes. Landlord shall have the right, in Landlord’s sole discretion,
from time to time:



          (a) To make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility
raceways;




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




          (c) To designate other land outside the boundaries of the Industrial Center to be a part of
the Common Areas;




          (d) To add additional buildings and improvements to the Common Areas;




          (e) To use the Common Areas while engaged in making additional improvements, repairs or
alterations to the Industrial Center, or any portion thereof; and




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



3. Term.




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



     3.2 Early Possession. If an Early Possession Date is specified in Paragraph 1.4 and if Tenant
totally or partially occupies the Premises after the Early Possession Date but prior to the
Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early
occupancy. All other terms of this Lease, however, (including but not limited to the obligations
to pay Tenant’s Share of Common Area Operating Expenses and to carry the insurance required by
Paragraph 8) shall be in effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.



     3.3 Delay in Possession. If for any reason Landlord cannot deliver possession of the Premises
to Tenant by the Early Possession Date, if one is specified in Paragraph 1.4, or if no Early
Possession Date is specified, by the Commencement Date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or the obligations of
Tenant hereunder, or extend the term hereof, but in such case, Tenant shall not, except as
otherwise provided herein, be obligated to pay rent or perform any other obligation of Tenant under
the terms of this Lease until Landlord delivers possession of the Premises to Tenant. If
possession of the Premises is not delivered to Tenant within thirty (30) days after the
Commencement Date, Tenant shall be entitled to one (1) days of rent abatement for each one (1) day
of delay in delivery of the Premises. If possession of the Premises is not delivered within sixty
(60) days after the Commencement Date, Tenant may, at its option, by notice in writing to Landlord
within ten (10) days after the end of sixty (60) day period, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder; provided further, however, that if such
written notice of Tenant is not received by Landlord within said ten (10) day period, Tenant’s
right to cancel this Lease hereunder shall terminate and be of no further force or effect.


4. Rent.




     4.1 Base Rent. Tenant shall pay Base Rent and other rent or charges, as the same may be
adjusted from time to time, to Landlord in lawful money of the United States, without



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offset or deduction, on or before the 1st day of each month. Base Rent and all other rent and
charges for any period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of Base Rent and
other charges shall be made to Landlord at its address stated herein or to such other persons or at
such other addresses as Landlord may from time to time designate in writing to Tenant.



     4.2 Common Area Operating Expenses. Tenant shall pay to Landlord during the term hereof, in
addition to the Base Rent, Tenant’s Share (as specified in Paragraph 1.6(b)) of all Common Area
Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:



          (a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as all costs
incurred by Landlord relating to the ownership and operation of the Industrial Center, including,
but not limited to, the following:




               (i) The operation, repair and maintenance, in neat, clean, good order and condition, of the
following:



                    (aa) The Common Areas, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, Common Area lighting facilities, fences and gates, elevators and roof.



                    (bb) Exterior signs and any tenant directories.



                    (cc) Fire detection and sprinkler systems.



               (ii) The cost of water, gas, electricity and telephone to service the Common Areas.



               (iii) Trash disposal, property management fees of 4% of the gross monthly rental and security
services and the costs of any environmental inspections.



               (iv) Reserves set aside for maintenance and repair of Common Areas.



               (v) Real Property Taxes (as defined in Paragraph 10.2) to be paid by Landlord for the Building
and the Common Areas under Paragraph 10 hereof.



               (vi) The cost of the premiums for the insurance policies maintained by Landlord under
Paragraph 8 hereof.



               (vii) Any deductible portion of an insured loss concerning the building or the Common Areas.



               (viii) Any other services to be provided by Landlord that are stated elsewhere in this Lease
to be a Common Area Operating Expense.



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          (b) Any common Area Operating Expenses and Real Property Taxes that are specifically
attributable to the Building or to any other building in the industrial Center or to the operation,
repair and maintenance thereof, shall be allocated entirely to the Building or to such other
building. However, any Common Area Operating Expenses and Real Property Taxes that are not
specifically attributable to the Building or to any other building or to the operation, repair and
maintenance thereof, shall be equitably allocated by Landlord to all buildings in the Industrial
Center. Notwithstanding anything in the Lease to the contrary, Common Area Operating Expenses
shall not include any of the following:




                    (aa) legal fees, brokerage commissions, advertising costs or related expenses in connection
with the leasing of the Industrial Center;



                    (bb) costs incurred in connection with damage or repairs which are covered under any insurance
policy carried by Landlord in connection with the Industrial Center or Common Areas;



                    (cc) expenses for repair or replacement paid by condemnation awards;



                    (dd) costs associated with damage or repairs to the Industrial Center or the Common Areas
necessitated by the negligence or willful misconduct of Landlord or Landlord’s employees, agents,
contractors or invitees;



                    (ee) increases in insurance premiums over those in effect on the Commencement Date to the
extent any other tenant causes Landlord’s insurance premiums to increase or obligates Landlord to
purchase additional insurance;



                    (ff) reserves for Landlord’s repair, replacement or improvement of the Industrial Center or
any portion thereof;



                    (gg) executive salaries or salaries of service personnel to the extent that such salaries are
payable in connection with services other than in connection with the management, operation, repair
or maintenance of the Industrial Center or Common Areas;



                    (hh) the cost of offsite service personnel to the extent that such personnel are not engaged
in the management, operation, repair or maintenance of the Industrial Center or Common Areas;



                    (ii) charitable or political contributions or fees paid to trade associates;



                    (jj) Landlord’s general overhead expenses not related to the Industrial Center or Common
Areas;



                    (kk) all principal, interest, loan fees, and other carrying costs related to any mortgage or
deed of trust encumbering the Industrial Center and all rental and other payable due under any
ground or underlying lease, unless such costs are directly



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attributable to Tenant’s, its agents’ or employees’ activities in, on or about the Industrial
Center, or as a result of a Tenant’s breach or default under this Lease;



                    (ll) legal fees, accountant fees and other expenses incurred in disputes with other tenants or
occupants of the Industrial Center or associated with the enforcement of any other leases or
defense of Landlord’s title to or interest in the Industrial Center or any part thereof;



                    (mm) costs (including permit, license and inspection fees) incurred in renovating or otherwise
improving, decorating, painting, expanding or altering space for tenants or other occupants of
vacant space in the Industrial Center;



                    (nn) any costs, fines, or penalties incurred due to violations by Landlord or any tenant of
the Project (other than Tenant) of any governmental rule or authority, this Lease or any other
lease in the Industrial Center, or due to Landlord’s negligence or willful misconduct;



                    (oo) payments for rented equipment, the cost of which equipment would be a capital expenditure
if such equipment were purchased by Landlord;



                    (pp) services or installations furnished to any tenant in the Project which are not furnished
to Tenant or quantities of such services furnished to any tenant in the Industrial Center which are
also furnished to Tenant, but are furnished to other tenants in an amount materially in excess of
that which would represent a fair proportion of such services;



                    (qq) the cost of any service provided to Tenant or other occupants of the Industrial Center
for which Landlord is entitled to be reimbursed;



                    (rr) any management or supervision fee greater than the management or supervision fee of 4%
outlined above; and



                    (ss) the costs of repairs and/or replacements of the roof, foundation, and structural supports
of the Premises unless such costs are amortized over the useful life of the item.



          (c) The inclusion of the improvements, facilities and services set forth in subparagraph
4.2(a) shall not be deemed to impose an obligation upon Landlord to either have said improvements
or facilities or to provide those services unless the Industrial Center already has the same,
Landlord already provides the services, or Landlord has agreed elsewhere in this Lease to provide
the same or some of them.




          (d) Tenant’s Share of Common Area Operating Expenses shall be payable by Tenant within ten
(10) days after a reasonably detailed statement of actual expenses is presented to Tenant by
Landlord. At Landlord’s option, however, an amount may be estimated by Landlord from time to time
of Tenant’s Share of annual Common Area Operating Expenses and the same shall be payable monthly or
quarterly, as Landlord shall designate, during each 12-month period of the Lease term, on the same
day as the Base Rent is due hereunder. Landlord shall deliver to Tenant within sixty (60) days
after the expiration of each calendar year a



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reasonably detailed statement showing Tenant’s Share of the actual Common Area Operating
Expenses incurred during the preceding year. If Tenant’s payments under this Paragraph 4.2(d)
during said preceding year exceed Tenant’s Share as indicated on said statement, Landlord shall be
credited the amount of such over-payment against Tenant’s Share of Common Area Operating Expenses
next becoming due. If Tenant’s payments under this Paragraph 4.2(d) during said preceding year
were less than Tenant’s Share as indicated on said statement, Tenant shall pay to Landlord the
amount of the deficiency within ten (10) days after delivery by Landlord to Tenant of said
statement.



5. Security Deposit. Tenant shall deposit with Landlord upon Tenant’s execution hereof the Security
Deposit set forth in Paragraph 1.7 as security for Tenant’s faithful performance of Tenant’s
obligations under this Lease. If Tenant fails to pay Base Rent or other rent or charges due
hereunder, or otherwise Defaults under this Lease (as defined in Paragraph 13.1), Landlord may use,
apply or retain all or any portion of said Security Deposit, Tenant shall within ten (10) days
after written request therefore deposit monies with Landlord sufficient to restore said Security
Deposit to the full amount required by this Lease. Any time the Base Rent increases during the
term of this Lease, Tenant shall, upon written request from Landlord, deposit additional monies
with Landlord as an addition to the Security Deposit so that the total amount of the Security
Deposit shall at all times bear the same proportion to the then current Base Rent as the initial
Security Deposit bears to the initial Base Rent set forth in Paragraph 1.5. Landlord shall not be
required to keep all or any part of the Security Deposit separate from its general accounts.
Landlord shall, at the expiration or earlier termination of the term hereof and after Tenant has
vacated the Premises, return to Tenant (or, at Landlord’s option, to the last assignee, if any, of
Tenant’s interest herein), that portion of the Security Deposit not used or applied by Landlord.
Unless otherwise expressly agreed in writing by Landlord, no part of the Security Deposit shall be
considered to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Tenant under this Lease.Use.




     6.1 Permitted Use.



          (a) Tenant shall use and occupy the Premises only for the Permitted Use set forth in Paragraph
1.8, or any other legal use which is reasonably comparable thereto, and for no other purpose.
Tenant shall not use or permit the use of the Premises in a manner that is unlawful, creates waste
or a nuisance, or that disturbs owners and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.




          (b) Landlord hereby agrees to not unreasonably withhold or delay its consent to any written
request by Tenant, Tenant’s assignees or subtenants, and by prospective assignees and subtenants of
Tenant, its assignees and subtenants, for a modification of said Permitted Use, so long as the same
will not impair the structural integrity of the improvements on the Premises or in the Building or
the mechanical or electrical systems therein, does not conflict with uses by other Tenants, is not
significantly more burdensome to the Premises or the Building and the improvements thereon, and is
otherwise permissible pursuant to this Paragraph 6. If Landlord elects to withhold such consent,
Landlord shall within five (5) business days after such request give a written notification of same, which notice shall include an explanation of Landlord’s
reasonable objections to the change in use.



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     6.2 Hazardous Substances.



          (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, chemical, material or waste whose presence, nature, quantity
and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or
effect, either by itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the environment, or the
Premises; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential
liability of Landlord to any governmental agency or third party under any applicable statute or
common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof. Tenant shall not engage in
any activity in or about the Premises which constitutes a Reportable Use (as hereinafter defined)
of Hazardous Substances without the express prior written consent of Landlord and compliance in a
timely manner (at Tenant’s sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). “Reportable Use” shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of
a Hazardous Substance that requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any governmental authority, and (iii)
the presence in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Tenant may, without Landlord’s prior
consent, but upon notice to Landlord and in compliance with all Applicable requirements, use any
ordinary and customary materials reasonably required to be used by Tenant in the normal course of
the Permitted Use, so long as such use is not a Reportable Use and does not expose the Premises or
neighboring properties to any meaningful risk of contamination or damage or expose Landlord to any
liability therefor. In addition, Landlord may (but without any obligation to do so) condition its
consent to any Reportable Use of any Hazardous Substance by Tenant upon Tenant’s giving Landlord
such additional assurances as Landlord, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at Landlord’s option,
removal on or before Lease expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.




          (b) Duty to Inform Landlord. If Tenant knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises or the Building,
other than as previously consented to by Landlord, Tenant shall immediately give Landlord written
notice thereof, together with a copy of any statement, report, notice, registration, application,
permit, business plan, license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill, release, discharge of, or
exposure to, such Hazardous Substance including but not limited to all such documents as may be
involved in any Reportable Use involving the Premises. Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about
the Premises (including, without limitation, through the prompting or sanitary sewer system).




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          (c) Indemnification. Tenant shall indemnify, protect, defend and hold Landlord, its agents,
employees, lenders and ground lessor, if any, and the Premises, harmless from and against any and
all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits and
attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto
the Premises by or for Tenant or by anyone under Tenant’s control. Tenant’s obligations under this
paragraph 6.2(c) shall include, but not be limited to, the effects of any contamination or injury
to person, property or the environment created or suffered by Tenant, and the cost of investigation
(including consultants’ and attorneys’ fees and testing), removal, remediation, restoration and/or
abatement thereof, or of any contamination therein involved, and shall survive the expiration or
earlier termination of this Lease. No termination, cancellation or release agreement entered into
by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Landlord in writing at the time of such
agreement.




          (d) Landlord’s Representation and Warranty Regarding Hazardous Substances. Notwithstanding
any other provision of this Lease, Landlord represents that it is unaware of any Hazardous
Substances, including but not limited to any solvents, metals, petroleum, lead-based paint, PCBs,
or asbestos in, on or about the Building or Premises. Notwithstanding this representation,
Landlord shall (i) cause, at its sole cost and expense, any or all such Hazardous Substances
discovered in, on or about the Building or Premises to be removed and (ii) indemnify and hold
Tenant harmless against and from all liability and claims of any kind for loss or damage to Tenant,
its employees or agents, and for expenses and fees of Tenant (including but not limited to costs,
expenses and attorneys’ fees), incurred, directly or indirectly, as a result of (a) the existence
of such Hazardous Substances in the Premises as of the commencement of this Lease, (b) a release of
Hazardous Substances by Tenant resulting from or exacerbated by leaks, breaks, obstructions or
defects in pipes, plumbing, sewers, or other systems on, in or under the Premises maintained by
Landlord, or (c) any acts or omissions of Landlord, or other tenants (past or future), or their
officers, employees, agents or subcontractors with respect to their use, generation, disposal,
storage, or transportation of Hazardous Substances on or about the Industrial Center.




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



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Premises to comply with any Applicable Requirements. Tenant’s obligations under this Paragraph 6.3
shall not require Tenant to comply with Applicable Requirements with respect to any Hazardous
Substances or environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, which existed prior to the Commencement Date or which were caused by
Landlord or any other lessee of the Industrial Center, their respective agents, employees or
contractors.



     6.4 Inspection; Compliance with Law. Landlord, Landlord’s agents, employees, contractors and
designated representatives, and the holders of any mortgages, deeds of trust or ground leases on
the Premises (“Lenders”) shall have the right to enter the Premises at any time in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the
Premises and for verifying compliance by Tenant with this Lease and all Applicable Requirements (as
defined in Paragraph 6.3), and Landlord shall be entitled to employ experts and/or consultants in
connection therewith to advise Landlord with respect to Tenant’s activities, including but not
limited to Tenant’s installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance on or from the Premises. The costs and expenses of any such inspections shall
be paid by the party requesting same, unless a Default or Breach of this Lease by Tenant or a
violation of Applicable Requirements or a contamination, caused or materially contributed to by
Tenant, is found to exist or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation or contamination.
In such case, Tenant shall upon request reimburse Landlord or Landlord’s Lender, as the case may
be, for the costs and expenses of such inspections.


7. Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations.




     7.1 Tenant’s Obligations.



          (a) Subject to the provision of Paragraphs 2.2 (Condition), 7.2 (Landlord’s Obligations), 9
(Damage or Destruction), and 14 (Condemnation), Tenant shall, at Tenant’s sole cost and expense and
at all times, keep non-structural components of the Premises and every part thereof in good order,
condition and repair (whether or not such portion of the Premises requiring repair, or the means of
repairing the same, are reasonably or readily accessible to Tenant, and whether or not the need for
such repairs occurs as a result of Tenant’s use, any prior use, the elements or the age of such
portion of the Premises), including, without limiting the generality of the foregoing, all
equipment or facilities specifically serving the Premises, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connections if within the Premises, fixtures, interior walls, interior surfaces
of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights, but excluding any
items which are the responsibility of Landlord pursuant to Paragraph 7.2 below. Tenant, in keeping
the Premises in good order, condition and repair, shall exercise and perform good maintenance
practices. Tenant’s obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in good order,
condition and state of repair.




          (b) Tenant shall, at Tenant’s sole cost and expense, procure and maintain a contract, with
copies to Landlord, in customary form and substance for and with a contractor



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specializing and experienced in the inspection, maintenance and service of the heating, air conditioning and
ventilation system for the Premises. However, Landlord reserves the right, upon notice to Tenant,
to procure and maintain the contract for the heating, air conditioning and ventilating systems, and
if Landlord so elects, Tenant shall reimburse Landlord, upon demand, for the cost thereof.




          (c) If Tenant fails to perform Tenant’s obligations under this Paragraph 7.1, Landlord may
enter upon the Premises after ten (10) days’ prior written notice to Tenant (except in the case of
an emergency, in which case no notice shall be required), perform such obligations on Tenant’s
behalf, and put the Premises in good order, condition and repair, in accordance with Paragraph 13.2
below.




     7.2 Landlord’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 4.2
(Common Area Operating Expenses ), 7 (Use), 7.1 (Tenant’s Obligations), 9 (Damage or Destruction)
and 14 (Condemnation), Landlord, subject to reimbursement pursuant to Paragraph 4.2, shall keep in
good order, condition and repair the foundations, exterior walls, structural condition of interior
bearing walls, exterior roof, fire sprinkler and/or standpipe and hose (if located in the Common
Areas) or other automatic fire extinguishing system including fire alarm and/or smoke detection
systems and equipment, fire hydrants, parking lots, walkways, parkways, driveways, landscaping,
fences, signs and utility systems serving the Common Areas and all parts thereof, as well as
providing the services for which there is a Common Area Operating Expense pursuant to Paragraph
4.2. Landlord shall not be obligated to paint the exterior or interior surfaces of exterior walls
nor shall Landlord be obligated to maintain, repair or replace windows, doors or plate glass of the
Premises. Tenant expressly waives the benefit of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord’s expense or terminate this
Lease because of Landlord’s failure to keep the Building, Industrial Center or Common Areas in good
order, condition and repair.



     7.3 Utility Installations, Trade Fixtures, Alterations.



          (a) Definitions; Consent Required. The term “Utility Installations” is used in this Lease to
refer to all air lines, power panels, electrical distribution, security, fire protections systems,
communications systems, lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term “Trade Fixtures” shall mean Tenant’s
machinery and equipment which can be removed without doing material damage to the Premises. The
term “Alterations” shall mean any modification of the improvements on the Premises which are
provided by Landlord under the terms of this Lease, other than Utility Installations or Trade
Fixtures. “Tenant-Owned Alterations and/or Utility Installations” are defined as Alterations
and/or Utility Installations made by Tenant that are not yet owned by Landlord pursuant to
Paragraph 7.4(a). Tenant shall not make nor cause to be made any Alterations or Utility
Installations in, on, under or about the Premises without Landlord’s prior written consent. Tenant
may, however, make non-structural Utility Installations to the interior of the Premises (excluding
the roof) without Landlord’s consent but upon notice to Landlord, so long as they are not visible
from the outside of the Premises, do not involve puncturing, relocating or removing the roof or any
existing walls, or changing or interfering with the fire sprinkler or fire detection systems and the cumulative cost thereof during the term
of this Lease as extended does not exceed $2,500.00.




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          (b) Consent. Any Alterations or Utility Installations that Tenant shall desire to make and
which require the consent of the Landlord shall be presented to Landlord in written form with
detailed plans. All consents given by Landlord, whether by virtue of Paragraph 7.3(a) or by
subsequent specific consent, shall be deemed conditioned upon: (i) Tenant’s acquiring all
applicable permits required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration or Utility
Installation to Landlord prior to commencement of the work thereon; and (iii) the compliance by
Tenant with all conditions of said permits in a prompt and expeditious manner. Landlord shall
approve or disapprove such request within ten (10) business days of Landlord’s receipt of Tenant’s
request. Landlord shall, at the time of granting consent to such Alterations (s) provide to Tenant
in writing its determination of whether removal of any fixture, improvements or alteration is
required. If notification is not received in this timeframe, Landlord’s consent shall be
irrevocably deemed to be granted and removal shall not be required. Any Alterations of Utility
Installations by Tenant during the term of this Lease shall be done in a good and workmanlike
manner, with good and sufficient materials, and be in compliance with all Applicable Requirements.
Tenant shall promptly upon completion thereof furnish Landlord with as-built plans and
specifications therefor. Landlord may (but without obligation to do so) condition its consent to
any requested Alteration or Utility Installation that costs $2,500.00 or more upon Tenant’s
providing Landlord with a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation.




          (c) Lien Protection. Tenant shall pay when due all claims for labor or materials furnished or
alleged to have been furnished to or for Tenant at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest
therein. Tenant shall give Landlord not less than ten (10) days’ notice prior to the commencement
of any work in, on, or about the Premises, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Tenant shall, in good faith,
contest the validity of any such lien, claim or demand, then Tenant shall, at its sole expense,
defend and protect itself, Landlord and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement thereof against the
Landlord or the Premises. If Landlord shall require, Tenant shall furnish to Landlord a surety
bond satisfactory to Landlord in an amount equal to one and one-half times the amount of such
contested lien claim or demand, indemnifying Landlord against liability for the same, as required
by law for the holding of the Premises free from the effect of such lien or claim. In addition,
Landlord may require Tenant to pay Landlord’s attorneys’ fees and costs in participating in such
action if Landlord shall decide it is to its best interest to do so.




     7.4 Ownership, Removal, Surrender, and Restoration.



          (a) Ownership. Subject to Landlord’s right to require their removal and to cause Tenant to
become the owner thereof as hereinafter provided in this Paragraph 7.4, all Alterations and Utility
Installations made to the Premises by Tenant shall be the property of and owned by Tenant, but
considered a part of the Premises. Landlord may, at any time and at its option, elect in writing
to Tenant to be the owner of all or any specified part of the Tenant-Owned Alterations and Utility Installations. Unless otherwise instructed per Subparagraph
7.4(b) hereof, all Tenant-Owned Alterations and Utility Installations shall, at the expiration or



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earlier termination of this Lease, become the property of Landlord and remain upon the Premises and
be surrendered with the Premises by Tenant.




          (b) Removal. Unless otherwise agreed in writing, Landlord may require at the time it consents
of such Alterations or Utility Installations that any or all Tenant-Owned Alterations or Utility
Installations be removed by the expiration or earlier termination of this Lease, notwithstanding
that their installation may have been consented to by Landlord. Landlord may require the removal
at any time of all or any part of any Alterations or Utility Installations made without the
required consent of Landlord.




          (c) Surrender/Restoration. The voluntary or other surrender of this lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord,
terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate
as an assignment to Landlord of any or all such subleases or subtenancies. Immediately prior to
the expiration or sooner termination of this Lease, Tenant shall remove all of Tenant’s signs from
the exterior of the Building and shall remove all of Tenant’s equipment, trade fixtures, furniture,
supplies, wall decorations and other personal property from the Leased Premises, and shall vacate
and surrender the Leased Premises to Landlord in the same condition, broom clean and freshly
repainted, as existed at the Lease Commencement Date. Landlord, at Tenant’s expense shall retain a
mechanical contractor to service all heating, ventilation and air conditioning equipment, and
Tenant shall pay the cost to restore (or replace as required), said equipment to good working
order. Tenant shall repair all damage to the Leased Premises caused by Tenant or by Tenant’s
removal of Tenant’s property and all damage to the exterior of the Building caused by Tenant’s
removal of Tenant’s signs. Tenant shall patch and refinish, to Landlord’s reasonable
satisfaction, all penetrations made by Tenant or its employees to the floor, walls or ceiling of
the Leased Premises, whether such penetrations were made with Landlord’s approval or not. Tenant
shall replace all stained or damaged ceiling tiles and shall repair or replace, as necessary, all
wall coverings and clean or replace, as may be required, floor coverings to the reasonable
satisfaction of Landlord. Tenant shall replace all burned out light bulbs and damaged or stained
light lenses, and shall repaint all painted walls. Tenant shall repair all damage caused by Tenant
to the exterior surface of the Building and the paved surfaces of the outside areas adjoining the
Leased Premises and, where necessary, replace or resurface same. Additionally, Tenant shall, prior
to the expiration or sooner termination of this Lease, remove any improvements, constructed or
installed by Tenant which Landlord requests be so removed by Tenant and repair all damage caused by
such removal. If the Leased Premises are not surrendered to Landlord in the condition required by
this Article at the expiration or sooner termination of this Lease, Landlord may, at Tenant’s
expense, so remove Tenant’s signs, property and/or improvements not so removed and make such
repairs and replacements not so made or hire, at Tenant’s expenses, independent contractors to
perform such work. Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises to the required condition and Tenant shall be deemed to have
impermissibly held over until such time as such required work is completed. Tenant shall pay Base
Monthly Rent and Additional Rent in accordance with the terms of the Holding Over paragraph until
such work is completed.



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8. Insurance; Indemnity.




     8.1 Payment of Premiums. The cost of the premiums for the insurance policies maintained by
Landlord under this Paragraph 8 shall be a Common Area Operating Expense pursuant to Paragraph 4.2
hereof. Premiums for policy periods commencing prior to, or extending beyond, the term of this
Lease shall be prorated to coincide with the corresponding Commencement Date or Expiration Date.



     8.2 Liability Insurance.



          (a) Carried by Tenant. Tenant shall obtain and keep in force during the term of this Lease a
Commercial General Liability policy of insurance protecting Tenant, Landlord and any Lender(s)
whose names have been provided to Tenant in writing (as additional insureds) against claims for
bodily injury, personal injury and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single limit coverage in an amount not less
than $1,000,000 per occurrence with an “Additional Insured-Managers or Landlords of Premises:
endorsement and contain the “Amendment of the Pollution Exclusion” endorsement for damage caused by
heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include coverage for liability
assumed under this Lease as an “insured contract” for the performance of Tenant’s indemnity
obligations under this Lease. The limits of said insurance required by this Lease or as carried
by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation
hereunder. All insurance to be required by this Lease or as carried by Tenant shall not, however,
limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All insurance to be
carried by Tenant shall be primary to and not contributory with any similar insurance carried by
Landlord, whose insurance shall be considered excess insurance only.




          (b) Carried by Landlord. Landlord shall also maintain liability insurance described in
Paragraph 8.2(a) above, in addition to and not in lieu of, the insurance required to be maintained
by Tenant. Tenant shall not be named as an additional insured therein.




     8.3 Property Insurance-Building, Improvements and Rental Value.



          (a) Building and Improvements. Landlord shall obtain and keep in force during the term of
this Lease a policy or policies in the name of Landlord, with loss payable to Landlord and to any
Lender(s), insuring against loss or damage to the Premises. Such insurance shall be for full
replacement cost, as the same shall exist from time to time, or the amount required by any
Lender(s), but in no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved, such latter amount
is less than full replacement cost. Tenant-Owned Alterations and Utility Installations, Trade
Fixtures and Tenant’s personal property shall be insured by Tenant pursuant to Paragraph 8.4. If
the coverage is available and commercially appropriate, Landlord’s policy or policies shall insure
against all risks of direct physical loss or damage (and at Landlord’s option the perils of flood
and/or earthquake), including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any



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ordinance or law regulating the reconstruction or replacement of any undamaged sections of the
Building required to be demolished or removed by reason of the enforcement of any building, zoning,
safety or land use laws as the result of a covered loss, but not including plate glass insurance.
Said policy or policies shall also contain an agreed valuation provision in lieu of any
co-insurance clause, waiver of subrogation, and inflation guard protection causing an increase in
the annual property insurance coverage amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the
Premises are located.




          (b) Rental Value. Landlord shall also obtain and keep in force during the term of this Lease
a policy or policies in the name of Landlord, with loss payable to Landlord and any Lender(s),
insuring the loss of the full rental and other charges payable by all tenants of the Building to
Landlord for at least one year (including all Real Property Taxes, insurance costs, all Common Area
Operating Expenses and any scheduled rental increases). Said insurance may provide that in the
event the Lease is terminated by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of repairs or replacement of the
Premises, to provide for one full year’s loss of rental revenues from the date of any such loss.
Said insurance shall contain an agreed valuation provision in lieu of any co-insurance clause, and
the amount of coverage shall be adjusted annually to reflect the projected rental income, Real
Property Taxes, insurance premium costs and other expenses, if any, otherwise payable, for the next
12-month period. Common Area Operating Expenses shall include any deductible amount in the event
of such loss.




          (c) Adjacent Premises. Tenant shall pay for any increase in the premiums for the property
insurance of the Building and for the Common Areas or other buildings in the Industrial Center if
said increase is caused by Tenant’s acts, omissions, use or occupancy of the Premises.




          (d) Tenant’s Improvements. Since Landlord is the Insuring Party, Landlord shall not be
required to insure Tenant-Owned Alterations and Utility Installations unless the item in question
has become the property of Landlord under the terms of this Lease.




     8.4 Tenant’s Property Insurance. Subject to the requirements of Paragraph 8.5, Tenant at its
cost shall either by separate policy or, at Landlord’s option, by endorsement to a policy already
carried, maintain insurance coverage on all of Tenant’s personal property, Trade Fixtures and
Tenant-Owned Alterations and Utility Installations in, on, or about the Premises similar in
coverage to that carried by Landlord as the Insuring Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Tenant for the replacement of personal property
and the restoration of Trade Fixtures and Tenant-Owned Alterations and Utility Installations. Upon
request from Landlord, Tenant shall provide Landlord with written evidence that such insurance is
in force.



     8.5 Insurance Policies. Insurance required hereunder shall be in companies duly licensed to
transact business in the state where the Premises are located, and maintaining during the policy
term a “General Policyholders Rating” of at least B+, V, or such other rating as may be required by
a Lender, as set forth in the most current issue of “Best’s Insurance Guide.”



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Tenant shall not do or permit to be done anything which shall invalidate the insurance
policies referred to in this Paragraph 8. Tenant shall cause to be delivered to Landlord, within
seven (7) days after the earlier of the Early Possession Date or the Commencement Date, certified
copies of, or certificates evidencing the existence and amounts of, the insurance required under
Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or subject to modification except
after thirty (30) days’ prior written notice to Landlord. Tenant shall at least thirty (30) days
prior to the expiration of such policies, furnish Landlord with evidence of renewals or “insurance
binders” evidencing renewal thereof, or Landlord may order such insurance and charge the cost
thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand.



     8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Tenant and
Landlord each hereby release and relieve the other, and waive their entire right to recover damages
(whether in contract or in tort) against the other, for loss or damage to their property arising
out of or incident to the perils required to be insured against under Paragraph 8. The effect of
such releases and waivers of the right to recover damages shall not be limited by the amount of
insurance carried or required, or by any deductibles applicable thereto. Landlord and Tenant agree
to have their respective insurance companies issuing property damage insurance waive any right to
subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as
the insurance is not invalidated thereby.



     8.7 Indemnity. Tenant, shall, during the term of this lease, indemnify and save harmless
Landlord and any agents of Landlord from any and all loss, damage, claims of damage, obligations,
cause or causes of action, or liabilities of any kind or nature (including reasonable costs of
attorney’s fees if Landlord is made a party to any action which Tenant’s indemnity runs hereunder)
by reason of injury or death of any person or persons or damage to any property of any kind and to
whomsoever belonging, including injury or death to the person or damage to the property of Tenant,
Tenant’s officers, directors, employees, agents, guests, subtenants and assignees, concessionaires
and licensees, and any other person, firm or corporation selling or manufacturing merchandise or
services upon or from the demised premises, or any part thereof, from any cause or cause whatsoever
which result from Tenant’s use or from any other activity done, permitted or suffered by Tenant.
As a material part of the consideration to Landlord, Tenant hereby assumes all risk of damage to
property or injury to persons in or about the Premises from any cause whatsoever (except that which
is cause by the sole active negligence or willful misconduct by Landlord or its Agents or by the
failure of Landlord to observe any of the terms and conditions of this lease, if such failure has
persisted for an unreasonable period after written notice of such failure). . Tenant’s obligations
under this paragraph shall survive the termination of this lease. Notwithstanding anything to the
contrary set forth herein, Landlord shall, with counsel reasonably acceptable to Tenant, indemnify,
defend and hold harmless Tenant as well as Tenant’s employees, agents and invitees (collectively,
“Tenant Parties”) from and against all liability and claims (i) for damage to property outside the
Premises to the extent that such liabilities and claims are covered by such insurance (or would
have been covered had Landlord carried the insurance required under this Lease), (ii) resulting
from the negligent acts, omissions or willful misconduct of Landlord or Landlord’s employee’s
agents or invitees (collectively, “Landlord Parties”) in connection with Landlord Parties’
activities in, on or about the Project except to the extent that such liability or claim is for
damage to Tenant’s personal property, fixtures or furniture in the Premises and is covered by
insurance that Tenant is required



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to obtain under this Lease (or would have been covered had Tenant carried the insurance
required under this Lease) and (iii) Landlord’s breach of this Lease.



     8.8 Exemption of Landlord from Liability. Landlord shall not be liable for injury or damage
which may be sustained by Tenant or to the person or goods, wares, merchandise or other property of
Tenant, Tenant’s employees, contractors, invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire, earthquake, steam,
electricity, gas, water or rain, which may leak or from or into any part of the premises or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether said injury or damage results
from conditions arising upon the Premises or upon other portions of the Building of which the
Premises are a part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of preparing the same is accessible or not. Landlord shall not be
liable for any damages arising from any act or neglect of any other tenant of Landlord nor from the
failure by Landlord to enforce the provisions of any other lease in the Industrial Center.
Notwithstanding Landlord’s negligence or breach of this Lease, Landlord shall under no
circumstances be liable for injury to Tenant’s business or for any loss of income or profit
therefrom.


9. Damage or Destruction.




     9.1 Definitions.



          (a) “Premises Partial Damage” shall mean damage or destruction to the Premises, other than
Tenant-Owned Alterations and Utility Installations, the repair cost of which damage or destruction
is less than fifty percent (50%) of the then Replacement Cost (as defined in Paragraph 9.1(d) of
the Premises (excluding the Tenant-Owned Alterations and Utility Installations and Trade Fixtures)
immediately prior to such damage or destruction.




          (b) “Premises Total Destruction” shall mean damage or destruction to the Premises, other than
Tenant-Owned Alterations and Utility Installations, the repair cost of which damage or destruction
is fifty percent (50%) or more of the then Replacement Cost of the Premises (excluding Tenant-Owned
Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction. In addition, damage or destruction to the Building, other than Tenant-Owned
Alterations and Utility Installations and Trade Fixtures of any tenants of the Building, the cost
of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost
(excluding Tenant-Owned Alterations and Utility Installations and Trade Fixtures of any Tenants of
the Building) of the Building shall, at the option of Landlord, be deemed to be Premises total
Destruction.




          (c) “Industrial Center Total Destruction” shall mean damage or destruction to the Industrial
Center or the Building in which the premises are located, regardless of the damage to the premises.
The cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost
of the Industrial Center or the Building (excluding Tenant-Owned Alterations and Utility
Installations and Trade Fixtures) immediately prior to such damage or destruction.




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          (d) “Insured Loss” shall mean damage or destruction to the Premises, other than Tenant-Owned
Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to
be covered by the insurance described in Paragraph 8.3(a) irrespective of any deductible amounts or
coverage limits involved.




          (e) “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by
Landlord at the time of the occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by the operation of applicable building
codes, ordinances or laws, and without deduction for depreciation.




          (f) “Hazardous Substance Condition” shall mean the occurrence or discovery of a condition
involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph
6.2(a), in, on, or under the Premises.




     9.2 Premises Partial or Total Damage — Insured or Uninsured Loss. If Premises Partial or
Total Damage that is an Insured or Uninsured Loss occurs, unless caused by a negligent or willful
act of Tenant (in which event Tenant shall make the repairs at Tenant’s expense and this Lease
shall continue in full force and effect), then Landlord shall, at Landlord’s expense, repair such
damage (but not Tenant’s Trade Fixtures or Tenant-Owned Alterations and Utility Installations) as
soon as reasonably possible, but only to the extent of the available insurance proceeds, if any,
and this Lease shall continue in full force and effect. In the event, however, that there is a
shortage of insurance proceeds and such shortage is due to any reason including the fact that some
but not all of which may include the fact that, by reason of the unique nature of the improvements
in the Premises, full replacement cost insurance coverage was not commercially reasonable and
available, then Landlord shall have no obligation to pay for the shortage in insurance proceeds or
to fully restore the unique aspects of the Premises unless Tenant provides Landlord with the funds
to cover same, or adequate assurance thereof, within ten (10) days following receipt of written
notice of such shortage and request therefor. If Landlord receives said funds or adequate
assurance thereof within said ten (10) day period, Landlord shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If Landlord does not
receive such funds or assurance within said period, Landlord may nevertheless elect by written
notice to Tenant within ten (10) days thereafter to make such restoration and repair as is
commercially reasonable with Landlord paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect. If Landlord does not receive such funds or assurance within
such ten (10) day period, and if Landlord does not so elect to restore and repair, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or destruction. Unless
otherwise agreed, Tenant shall in no event have any right to reimbursement from Landlord for any
funds contributed by Tenant to repair any such damage or destruction.



     9.3 Intentionally Deleted.



     9.4 Industrial Center Destruction. Notwithstanding any other provision hereof, if the
Industrial Center in which the Premises are located suffers Total Destruction (including any
destruction required by any authorized public authority), this Lease at Landlord’s option shall
terminate sixty (60) days following the date of such Total Destruction, whether or not the



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damage or destruction affected the premises. In the event, however, that the damage or
destruction was caused by Tenant, Landlord shall have the right to recover Landlord’s damages from
Tenant except as released and waived in Paragraph 9.7.



     9.5 Damage Near End of Term. If at any time during the last six (6) months of the term of
this Lease there is damage for which the cost to repair exceeds one month’s Base Rent, whether or
not an Insured Loss, Landlord may, at Landlord’s option, terminate this Lease effective sixty (60)
days following the date of occurrence of such damage by giving written notice to Tenant of
Landlord’s election to do so within thirty (30) days after the date of occurrence of such damage.
Provided, however, if Tenant at that time has an exercisable option to extend this Lease, then
Tenant may preserve this Lease by (a) exercising such option, and (b) providing Landlord with any
shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or
before the earlier of (i) the date which is ten (10) days after Tenant’s receipt of Landlord’s
written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which
such option expires. If Tenant duly exercises such option during such period and provides Landlord
with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Landlord
shall, at Landlord’s expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Tenant fails to exercise such option and provide such funds
or assurance during such period, then this Lease shall terminate as of the date set forth in the
first sentence of this Paragraph 9.5.



     9.6 Abatement of Rent; Tenant’s Remedies.



          (a) In the event of (i) Premises Partial Damage or (ii) Hazardous Substance Condition for
which Tenant is not legally responsible, the Base Rent, Common Area Operating Expenses and other
charges, if any, payable by Tenant hereunder for the period during which such damage or condition,
its repair, remediation or restoration continues, shall be abated in proportion to the degree to
which Tenant’s use of the Premises is impaired, but not in excess of proceeds from insurance
required to be carried under Paragraph 8.3(b). Except for abatement of Base Rent, Common Area
Operating Expenses and other charges, if any, as aforesaid, all other obligations of Tenant
hereunder shall be performed by Tenant, and Tenant shall have no claim against Landlord for any
damage suffered by reason of any such damage, destruction, repair, remediation or restoration.




          (b) If Landlord shall be obligated to repair or restore the Premises under the provisions of
this Paragraph 9 and shall not commence, in a substantial and meaningful way, the repair or
restoration of the Premises within ninety (90) days after such obligation shall accrue, Tenant may,
at any time prior to the commencement of such repair or restoration, give written notice to
Landlord and to any Lenders of which Tenant has actual notice of Tenant’s election to terminate
this Lease on a date not less than sixty (60) days following the giving of such notice. If Tenant
gives such notice to Landlord and such Lenders and such repair or restoration is not commenced
within thirty (30) days after receipt of such notice, this Lease shall terminate as of the date
specified in said notice. If Landlord or a Lender commences the repair or restoration of the
Premises within thirty (30) days after the receipt of such notice, this Lease shall continue in
full force and effect. “Commence” as used in this Paragraph 9.6 shall mean either the
unconditional authorization of the preparation of the required plans, or the beginning of the
actual work on the Premises, whichever occurs first.




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     9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition occurs, unless Tenant
is legally responsible therefor (in which case Tenant shall make the investigation and remediation
thereof required by Applicable Requirements and this Lease shall continue in full force and effect,
but subject to Landlord’s rights under Paragraph 6.2(c) and Paragraph 13), Landlord may at
Landlord’s option either (i) investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible at Landlord’s expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate and remediate such
condition exceeds twelve (12) times the then monthly Base Rent or $50,000, whichever is greater,
give written notice to Tenant within thirty (30) days after receipt by Landlord of knowledge of the
occurrence of such Hazardous Substance Condition of Landlord’s desire to terminate this Lease as of
the date sixty (60) days following the date of such notice. In the event Landlord elects to give
such notice of Landlord’s intention to terminate this Lease, Tenant shall have the right within ten
(10) days after receipt of such notice to give written notice to Landlord of Tenant’s commitment to
pay for the excess costs of (a) investigation and remediation of such Hazardous Substance Condition
to the extent required by Applicable Requirements, over (B) an amount equal to twelve (12) times
the then monthly Base Rent or $50,000 whichever is greater. Tenant shall provide Landlord with the
funds required of Tenant or satisfactory assurance thereof within thirty (30) days following said
commitment by Tenant. In such event this Lease shall continue in full force and effect, and
Landlord shall proceed to make such investigation and remediation as soon as reasonably possible
after the required funds are available. If Tenant does not give such notice and provide the
required funds or assurance thereof within the time period specified above, this Lease shall
terminate as of the date specified in Landlord’s notice of termination.



     9.8 Termination — Advance Payments. Upon termination of this Lease pursuant to this Paragraph
9, Landlord shall return to Tenant any advance payment made by Tenant to Landlord and so much of
Tenant’s Security Deposit as has not been, or is not then required to be, used by Landlord under
the terms of this Lease.



     9.9 Waiver of Statutes. Landlord and Tenant agree that the terms of this Lease shall govern
the effect of any damage to or destruction of the Premises and the Building with respect to the
termination of this Lease and hereby waive the provisions of any present or future statute to the
extent it is inconsistent herewith.


10. Real Property Taxes.




     10.1 Payment of Taxes. Landlord shall pay the Real Property Taxes, as defined in Paragraph
10.2, applicable to the Industrial Center, and except as otherwise provided in Paragraph 10.3, any
such amounts shall be included in the calculation of Common Area Operating Expenses in accordance
with the provisions of Paragraph 4.2.



     10.2 Real Property Tax Definition. As used herein, the term “Real Property Taxes” shall
include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and
any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed upon the Industrial Center by any authority
having the direct or indirect power to tax, including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage, or other improvement



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district thereof, levied against any legal or equitable interest of Landlord in the Industrial
Center or any portion thereof, Landlord’s right to rent or other income therefrom, and/or
Landlord’s business of leasing the Premises. The term “Real Property Taxes” shall also include any
tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in Applicable Law taking effect, during the term of this Lease, including but
not limited to a change in the ownership of the Industrial Center or in the improvements thereon,
the execution of this Lease, or any modification, amendment or transfer thereof, and whether or not
contemplated by the Parties. In calculating Real Property Taxes for any calendar year, the Real
Property Taxes for any real estate tax year shall be included in the calculation of Real Property
Taxes for such calendar year based upon the number of days which such calendar year and tax year
have in common.



     10.3 Additional Improvements. Tenant shall pay to Landlord the Common Area Operating Expenses
as payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed
solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises
by Tenant or at Tenant’s request.



     10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes
allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of
the land and improvements included within the tax parcel assessed or the industrial center, such
proportion to be determined by Landlord from the respective valuations assigned in the assessor’s
work sheets or such other information as may be reasonably available. Landlord’s reasonable
determination thereof, in good faith, shall be conclusive.



     10.5 Tenant’s Property Taxes. Tenant shall pay prior to delinquency all taxes assessed
against and levied upon Tenant-Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Tenant contained in the Premises or stored
within the Industrial Center. When possible, Tenant shall cause its Tenant-Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord. If any of Tenant’s said
property shall be assessed with Landlord’s real property, Tenant shall pay Landlord the taxes
attributable to Tenant’s property within ten (10) days after receipt of a written statement setting
forth the taxes applicable to Tenant’s property.


11. Utilities. Tenant shall pay directly for all utilities and services supplied to the Premises,
including but not limited to electricity, water, telephone, security, gas, sewer, trash removal and
cleaning of the Premises, together with any taxes thereon. If any such utilities or services are
not separately metered to the Premises or separately billed to the Premises, Tenant shall pay to
Landlord a reasonable proportion to be determined by Landlord of all such charges jointly metered
or billed with other premises in the Building, in the manner and within the time periods set forth
in Paragraph 4.2(d). Landlord shall not be liable to Tenant for injury, damage, loss of Tenant’s
business or profits, from any failure, interruption, rationing or other curtailment in the supply
of electric, gas, water or other utilities from whatever cause. Tenant shall not consume water in
excess of that usually furnished or supplied for reasonable and normal drinking and lavatory use
in connection with an office environment (as determined by Landlord), without first procuring the
written consent of Landlord, which Landlord may refuse, and in the event of consent, Landlord may
have installed a water meter in the Premises to measure the amount of


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water consumed. The cost of any such meter and of its installation, maintenance and repair shall be
paid for by the Tenant, and Tenant agrees to pay to Landlord promptly upon demand for all such
water consumed as shown by said meters, at the rates charged for such services by the local public
utility plus any additional expense incurred in keeping account of the water so consumed. If a
separate meter is not installed, the excess cost for such water shall be established by an estimate
made by a utility company or electrical engineer hired by Landlord at Tenant’s expense.



12. Assignment and Subletting.




     12.1 Landlord’s Consent Required.



          (a) Except as provided in Section 12.4, Tenant shall not assign this lease, nor any right
hereunder, nor sublet the premises, nor any part thereof, without the prior written consent of
Landlord. In exercising its reasonable discretion Landlord may consider all commercially relevant
factors involved in the leasing of the premises including but not limited to the a) the
creditworthiness and financial stability of the prospective assignee or subtenant; b) references of
prior landlords; c) the past history of such subtenant, with respect to involvement in litigation
and bankruptcy proceedings; d) the impact of said subtenant or assignee and proposed use of the
premises on pedestrian and vehicular traffic, other tenants, and parking; e) the use, generation or
disposal of Hazardous Substances. The presence of one negative factor enumerated above shall be
deemed reasonable justification for Landlord’s withholding consent.




          (b) A change in the control of Tenant shall constitute an assignment requiring Landlord’s
consent. The transfer, on a cumulative basis, of twenty-five percent (25%) or more of the voting
control of Tenant shall constitute a change in control for this purpose. Tenant shall have the
right to sublease/assign all or any portion of the leased premises to a related entity or affiliate
without Landlord’s approval or consent, by providing notice of such to Landlord as long as Tenant
remains liable.




          (c) The involvement of Tenant or its assets in any transaction, or series of transactions (by
way of merger, sale, acquisition, financing, refinancing, transfer, leveraged buy-out or
otherwise), whether or not a formal assignment or hypothecation of this Lease or Tenant’s assets
occurs, which results or will result in a reduction of the Net Worth of Tenant, as hereinafter
defined, by an amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Tenant as it was represented to Landlord at the time of full execution and delivery of this Lease
or at the time of the most recent assignment to which Landlord has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, at whichever
time said Net Worth of Tenant was or is greater, shall be considered an assignment of this Lease by
Tenant to which Landlord may reasonably withhold its consent. “Net Worth of Tenant” for purposes
of this Lease shall be the net worth of Tenant (excluding any Guarantors) established under
generally accepted accounting principles consistently applied.




          (d) Except as provided in Section 12.4, an assignment or subletting of Tenant’s interest in
this Lease without Landlord’s specific prior written consent shall, at Landlord’s option, be a
Default curable after notice per Paragraph 13.1, or a non-curable Breach without the necessity of
any notice and grace period. If Landlord elects to treat such unconsented to assignment or
subletting as a non-curable Breach, Landlord shall have the right



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to either: (i) terminate this Lease, or (ii) upon thirty (30) days’ written notice
(“Landlord’s Notice”), increase the monthly Base Rent for the Premises to the greater of the then
fair market rental value of the Premises, as reasonably determined by Landlord, or one hundred ten
percent (110%) of the Base Rent then in effect. Pending determination of the new fair market
rental value, if disputed by Tenant, Tenant shall pay the amount set forth in Landlord’s Notice,
with any overpayment credited against the next installment(s) of Base Rent coming due, and any
underpayment for the period retroactively to the effective date of the adjustment being due and
payable immediately upon the determination thereof. Further, in the event of such Breach and
rental adjustment, (i) the purchase price of any option to purchase the Premises held by Tenant
shall be subject to similar adjustment to the then fair market value as reasonably determined by
Landlord (without the Lease being considered an encumbrance or any deduction for depreciation or
obsolescence, and considering the Premises at its highest and best use and in good condition) or
one hundred ten percent (110%) of the price previously in effect, (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require that the base index
be determined with reference to the index applicable to the time of such adjustment, and (iii) any
fixed rental adjustments scheduled during the remainder of the Lease term shall be increased in the
same ratio as the new rental bears to the Base Rent in effect immediately prior to the adjustment
specified in Landlord’s Notice.




          (e) Tenant’s remedy for any breach of this Paragraph 12.1 by Landlord shall be limited to
compensatory damages and/or injunctive relief.




     12.2 Terms and Conditions Applicable to Assignment and Subletting.



          (a) Regardless of Landlord’s consent, any assignment or subletting shall not (i) be effective
without the express written assumption by such assignee or subtenant of the obligations of Tenant
under this Lease, (ii) release Tenant of any obligations hereunder, nor (iii) alter the primary
liability of Tenant for the payment of Base Rent and other sums due Landlord hereunder or for the
performance of any other obligations to be performed by Tenant under this Lease.




          (b) Landlord may accept any rent or performance of Tenant’s obligations from any person other
than Tenant pending approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of any rent for performance shall constitute a
waiver or estoppel of Landlord’s right to exercise its remedies for the Default or Breach by Tenant
of any of the terms, covenants or conditions of this Lease.




          (c) The consent of Landlord to any assignment or subletting shall not constitute a consent to
any subsequent assignment or subletting by Tenant or to any subsequent or successive assignment or
subletting by the assignee or subtenant. However, Landlord may consent to subsequent or successive
assignment or subletting by the assignee or subtenant. However, Landlord may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications thereto without
notifying Tenant or anyone else liable under this Lease or the sublease and without obtaining their
consent, and such action shall not relieve such persons from liability under this Lease or the
sublease.




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          (d) In the event of any Default or Breach of Tenant’s obligation under this Lease, Landlord
may proceed directly against Tenant, any guarantors or anyone else responsible for the performance
of the Tenant’s obligations under this Lease, including any subtenant, without first exhausting
Landlord’s remedies against any other person or entity responsible therefor to Landlord, or any
security held by Landlord.




          (e) Each request for consent to an assignment or subletting shall be in writing, accompanied
by information relevant to Landlord’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or subtenant, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a
non-refundable deposit of $1,000 or ten percent (10%) of the monthly Base Rent applicable to the
portion of the Premises which is the subject of the proposed assignment or sublease, whichever is
greater, as reasonable consideration for Landlord’s considering and processing the request for
consent. Tenant agrees to provide Landlord with such other or additional information and/or
documentation as may be reasonably requested by Landlord.




          (f) Any assignee of, or subtenant under, this Lease shall, by reason of accepting such
assignment or entering into such sublease, be deemed, for the benefit of Landlord, to have assumed
and agreed to conform and comply with each and every term, covenant, condition and obligation
herein to be observed or performed by Tenant during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or
sublease to which Landlord has specifically consented in writing.




          (g) If Tenant desires to Sublet or Assign the premises prior to the expiration of the term of
the lease and obtains an acceptable subtenant or assignee, then the Landlord shall have the option
prior to the execution of the sublease or assignment agreement to cancel this lease. Landlord, in
Landlord’s sole discretion, may then enter into a new lease with any prospective subtenant as the
substitute Tenant. If Landlord exercises this option, then this present lease shall be terminated
by mutual agreement as of that time. The original Tenant agrees to pay all leasing commissions for
the new lease payable to third party brokers according to their standard schedules of lease
commissions for that period of time applicable to the remaining period of this lease at the present
rental rate. Landlord shall pay all additional commissions for periods of time extending beyond
this original lease.




          (h) The occurrence of a transaction described in Paragraph 12.2(c) shall give Landlord the
right (but not the obligation) to require that the Security Deposit be increased by an amount equal
to six (6) times the then monthly Base Rent, and Landlord may make the actual receipt by Landlord
of the Security Deposit increase a condition to Landlord’s consent to such transaction.




          (i) Landlord, as a condition to giving its consent to any assignment or subletting, may
require that the amount and adjustment schedule of the rent payable under this Lease be adjusted to
what is then the market value and/or adjustment schedule for property similar to the Premises as
then constituted, as determined by Landlord.




     12.3 Additional Terms and Conditions Applicable to Assignment and Subletting. The following
terms and conditions shall apply to any subletting or assignment by Tenant of all or



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any part of the Premises and shall be deemed included in all subleases and assignments under
this Lease whether or not expressly incorporated therein:



          (a) Tenant hereby assigns and transfers to Landlord all of Tenant’s interest in all rentals,
income or other consideration arising from any sublease or assignment of all or a portion of the
Premises heretofore or hereafter made by Tenant, and Landlord may collect such sums and apply same
toward Tenant’s obligations under this Lease. Landlord shall not, by reason of the foregoing
provision or any other assignment of such sublease to Landlord, nor by reason of the collection of
the rents from a subtenant, be deemed liable to the subtenant for any failure of Tenant to perform
and comply with any of Tenant’s obligations to such subtenant under such Sublease. Tenant hereby
irrevocably authorizes and directs any such subtenant, upon receipt of a written notice from
Landlord, to pay to Landlord the rents and other charges due and to become due under the sublease.
Subtenant shall rely upon any such statement and request from Landlord and shall pay such rents and
other charges to Landlord without any obligation or right to inquire as to whether any Breach
exists and notwithstanding any notice from or claim from Tenant to the contrary. Tenant shall have
no right or claim against such subtenant, or, until the Breach has been cured, against Landlord,
for any such rents and other charges so paid by said subtenant to Landlord.




          (b) In the event of a Breach by Tenant in the performance of its obligations under this Lease,
Landlord, at its option and without any obligation to do so, may require any subtenant to attorn to
Landlord, in which event Landlord shall undertake the obligations of the sub landlord under such
sublease from the time of the exercise of said option to the expiration of such sublease; provided,
however, Landlord shall not be liable for any prepaid rents or security deposit paid by such
subtenant to such sub landlord or for any other prior defaults or breaches of such sub landlord
under such sublease.




          (c) Any matter or thing requiring the consent of the sub landlord under a sublease shall also
require the consent of Landlord herein.




          (d) No subtenant under a sublease or assignee approved by Landlord shall further assign or
sublet all or any part of the Premises without Landlord’s prior written consent.




          (e) Landlord shall deliver a copy of any notice of Default or Breach by Tenant to the
subtenant, who shall have the right to cure the Default of Tenant within the grace period, if any,
specified in such notice. The subtenant shall have a right of reimbursement and offset from and
against Tenant for any such Defaults cured by the subtenant.




     12.4 Permitted Transfers. Any provision in this Lease to the contrary notwithstanding, Landlord’s
consent shall not be required for an assignment or subletting to: (i) any entity who controls, is
controlled by or is under common control with Tenant, (ii) any successor corporation resulting from
a merger, acquisition, consolidation or reorganization or (iii) to any person or legal entity which
acquires all or substantially all of the assets of Tenant as a going concern of the business being
conducted on the Premises (each of the foregoing is hereinafter referred to as a “Permitted
Transferee”), provided that before such assignment shall be effective (i) said Permitted Transferee
shall assume, in full, the obligations of Tenant under this Lease, (ii) Landlord shall be given
written notice of such assignment and assumption and



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(iii) the use of the Premises by the Permitted Transferee shall be for the Permitted Use only.
For purposes of this paragraph, the term “control” means possession, directly or indirectly, of the
power to direct or cause the direction of the management, affairs and policies of anyone, whether
through the ownership of voting securities, by contract or otherwise. For purposes of this Lease,
the sale or transfer of Tenant’s capital stock, including without limitation a private or public
offering or a transfer in connection with a merger, consolidation or reorganization of Tenant,
shall not be deemed an assignment, subletting or other transfer or encumbrance of the Lease or the
Premises. An assignment or subletting to a Permitted Transferee shall not release the assigning
Tenant from any of its duties and obligations hereunder.



13. Default; Breach; Remedies.




     13.1 Default; Breach. Landlord and Tenant agree that if any attorney is consulted by Landlord
in connection with a Tenant Default or Breach (as hereinafter defined), $350.00 is a reasonable
minimum sum per such occurrence for legal services and costs in the preparation and service of a
notice of Default, and that Landlord may include the cost of such services and costs in said notice
as rent due and payable to cure said default. a “Default” by Tenant is defined as a failure by
Tenant to observe, comply with or perform any of the terms, covenants, conditions or rules
applicable to Tenant under this Lease. A “Breach” by Tenant is defined as the occurrence of any
one or more of the following Defaults, and, where a grace period for cure after notice is specified
herein, the failure by Tenant to cure such Default prior to the expiration of the applicable grace
period, and shall entitle Landlord to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3.



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




          (b) Except as expressly otherwise provided in this Lease, the failure by Tenant to make any
payment of Base Rent, Tenant’s Share of Common Area Operating Expenses, or any other monetary
payment required to be made by Tenant hereunder as and when due, the failure by Tenant to provide
Landlord with reasonable evidence of insurance or surety bond required under this Lease, or the
failure of Tenant to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of three (3) days following written notice
thereof by or on behalf of Landlord to Tenant.




          (c) Except as expressly otherwise provided in this Lease, the failure by Tenant to provide
Landlord with reasonable written evidence (in duly executed original form, if applicable) of (i)
compliance with Applicable Requirements per Paragraph 6.3, (ii) the inspection, maintenance and
service contracts required under Paragraph 7.1(b), (iii) the rescission of an unauthorized
assignment or subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37, (v)
the subordination or non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the
performance of Tenant’s obligations under this Lease if required under Paragraphs 1.11 and 37,
(vii) the execution of any document requested under Paragraph 42 (easements), or (viii) any other
documentation or information which Landlord may reasonably require of Tenant under the terms of
this lease, where any such failure continues for a period of five (5) days following written notice
by or on behalf of Landlord to Tenant.




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          (d) A Default by Tenant as to the terms covenants, conditions or provisions of this Lease, or
of the rules adopted under Paragraph 40 hereof that are to be observed, complied with or performed
by Tenant, other than those described in Subparagraphs 13.1(a), (b), or (c), above, where such
Default continues for a period of thirty (30) days after written notice thereof by or on behalf of
Landlord to Tenant; provided however, that if the nature of Tenant’s Default is such that more than
thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach
of this Lease by Tenant if Tenant commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.




          (e) The occurrence of any of the following events: (i) the making by Tenant of any general
arrangement or assignment for the benefit of creditors; (ii) Tenant’s becoming a “debtor” as
defined in 11 U.S. Code Section 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all
of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the event that any
provision of this Subparagraph 13.1(e) is contrary to any applicable law, such provision shall be
of no force or effect, and shall not affect the validity of the remaining provisions.




          (f) The discovery by Landlord that any financial statement of Tenant or of any Guarantor,
given to Landlord by Tenant or any Guarantor, was materially false.




          (g) If the performance of Tenant’s obligations under this Lease is guaranteed: (i) the death
of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other
than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a
Guarantor’s breach of its guaranty obligation on an anticipatory breach basis, and Tenant’s
failure, within sixty (60) days following written notice by or on behalf of Landlord to Tenant of
any such event, to provide Landlord with written alternative assurances of security, which, when
coupled with the then existing resources of Tenant, equals or exceeds the combined financial
resources of Tenant and the Guarantors that existed at the time of the execution of this Lease.




     13.2 Remedies. If Tenant fails to perform any affirmative duty or obligation of Tenant under
this Lease, within ten (10) days after written notice to Tenant (or in case of an emergency,
without notice), Landlord may at its option (but without obligation to do so), perform such duty or
obligation on Tenant’s behalf, including but not limited to the obtaining of reasonably required
bonds, insurance policies, or governmental licenses, permits or approvals. The costs and expenses
of any such performance by Landlord shall be due and payable by Tenant to Landlord upon invoice
therefor. If any check given to Landlord by Tenant shall not be honored by the bank upon which it
is drawn, Landlord, at its own option, may require all future payments to be made under this Lease
by Tenant to be made only by cashier’s check. In the event of a Breach of this Lease by Tenant (as
defined in Paragraph 13.1), with or without further notice or demand, and without limiting Landlord
in the exercise of any right or remedy which Landlord may have by reason of such Breach, Landlord
may:



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          (a) Terminate Tenant’s right to possession of the Premises by any lawful means, in which case
this Lease and the term hereof shall terminate and Tenant shall immediately surrender possession of
the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant: (i) the
worth at the time of the award of the unpaid rent which had been earned at the time of termination;
(ii) 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 rental loss that the
Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that the Tenant proves could be reasonably avoided; and (iv) any other
amount necessary to compensate Landlord for all the detriment proximately caused by the Tenant’s
failure to perform its obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom, including but not limited to the cost of recovering possession of
the Premises, expenses of reletting, including necessary renovation and alteration of the Premises,
reasonable attorneys’ fees, and that portion of any leasing commission paid by Landlord in
connection with this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately preceding sentence shall
be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco or the Federal Reserve Bank District in which the Premises are located at the time of
award plus one percent (1%). Efforts by Landlord to mitigate damages caused by Tenant’s Default or
Breach of this Lease shall not waive Landlord’s right to recover damages under this Paragraph 13.2.
If termination of this Lease is obtained through the provisional remedy of unlawful detainer,
Landlord shall have the right to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Landlord may reserve the right to recover all or any part thereof in a
separate suit for such rent and/or damages. If a notice and grace period required under
Subparagraph 13.1 (b), (c) or (d) was not previously given, a notice to pay rent or quit, or to
perform or quit, as the case may be, given to Tenant under any statute authorizing the forfeiture
of leases for unlawful detainer shall also constitute the applicable notice for grace period
purposes required by Subparagraph 13.1 (b), (c) or (d). In such case, the applicable grace period
under the unlawful detainer statue shall run concurrently after the one such statutory notice, and
the failure of Tenant to cure the Default within the greater of the two (2) such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling Landlord to the
remedies provided for in this Lease and/or by said statute.




          (b) Continue the Lease and Tenant’s right to possession in effect (in California under
California Civil Code Section 1951.4) after Tenant’s Breach and recover the rent as it becomes due,
provided Tenant has the right to sublet or assign, subject only to reasonably limitations.
Landlord and Tenant agree that the limitations on assignment and subletting in this Lease are
reasonable. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment
of a receiver to protect the Landlord’s interest under this Lease, shall not constitute a
termination of the Tenant’s right to possession.




          (c) Pursue any other remedy now or hereafter available to Landlord under the laws or judicial
decisions of the state wherein the Premises are located.




          (d) The expiration or termination of this Lease and/or the termination of Tenant’s right to
possession shall not relieve Tenant from liability under any indemnity



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provisions of this Lease as to matters occurring or accruing during the term hereof or by
reason of Tenant’s occupancy of the Premises.




     13.3 Inducement Recapture in Event of Breach. Any agreement by Landlord for free or abated
rent or other charges applicable to the Premises, or for the giving or paying by Landlord to or for
Tenant of any cash or other bonus, inducement or consideration for Tenant’s entering into this
Lease, all of which concessions are hereinafter referred to as “Inducement Provisions” shall be
deemed conditioned upon Tenant’s full and faithful performance of all of the terms, covenants and
conditions of this Lease to be performed or observed by Tenant, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or effect, and any rent,
other charge, bonus, inducement or consideration theretofore abated, given or paid by Landlord
under such an Inducement Provision shall be immediately due and payable by Tenant to Landlord, and
recoverable by Landlord, as additional rent due under this Lease, notwithstanding any subsequent
cure of said Breach by Tenant. The acceptance by Landlord of rent or the cure of the Breach which
initiated the operation of this Paragraph 13.3 shall not be deemed a waiver by Landlord of the
provisions of this Paragraph 13.3 unless specifically so stated in writing by Landlord at the time
of such acceptance.



     13.4 Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent
and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may be imposed upon Landlord
by the terms of any ground lease, mortgage or deed of trust covering the Premises. Accordingly, if
any installment of rent or other sum due from Tenant shall not be received by Landlord or
Landlord’s designee within five (5) days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to ten percent
(10%) of such overdue amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge be Landlord shall in no event constitute a waiver of Tenant’s
Default or Breach with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the contrary, Base Rent
shall, at Landlord’s option, become due and payable quarterly in advance.



     13.5 Breach by Landlord. Landlord shall not be deemed in breach of this Lease unless Landlord
fails within a reasonable time to perform an obligation required to be performed by Landlord. For
purposes of this Paragraph 13.5, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord, and by any Lender(s) whose name and address shall have been furnished to
Tenant in writing for such purpose, of written notice specifying wherein such obligation of
Landlord has not been performed; provided, however, that if the nature of Landlord’s obligation is
such that more than thirty (30) days after such notice are reasonably required for its performance,
then Landlord shall not be in breach of this Lease if performance is commenced within such thirty
(30) day period and thereafter diligently pursued to completion.



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14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain
or sold under the threat of the exercise of said power (all of which are herein called
“condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than twenty five percent
(25%) of the floor area of the Premises, or more than twenty-five percent (25%) of the portion of
the Common Areas designated for Tenant’s parking, is taken by condemnation, Tenant may, at Tenant’s
option, to be exercised in writing within ten (10) days after Landlord shall have given Tenant
written notice of such taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Tenant does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in the same proportion as the
rentable floor area of the Premises taken bears to the total rentable floor area of the Premises.
No reduction of the Base Rent shall occur if the condemnation does not apply to any portion of the
Premises. Any award for the taking of all or any part of the Premises under the power of eminent
domain or any payment made under threat of the exercise of such power shall be the property of
Landlord, whether such award shall be made as compensation for diminution of value of the leasehold
or for the taking of the fee, or as severance damages; provided, however, that Tenant shall be
entitled to any compensation, separately awarded to Tenant for Tenant’s relocation expenses and/or
loss of Tenant’s Trade Fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall to the extent of its net severance damages received, over and above
Tenant’s Share of the legal and other expenses incurred by Landlord in the condemnation matter,
repair any damage to the Premises caused by such condemnation authority. Tenant shall be
responsible for the payment of any amount in excess of such net severance damages required to
complete such repair.Broker’s Fees.




     15.1 Procuring Cause. The Broker(s) named in Paragraph 1.10 is/are the procuring cause of
this Lease.



     15.2 Additional Terms. Unless Landlord and Broker(s) have otherwise agreed in writing,
Landlord agrees that: (a) if Tenant exercises any Option (as defined in Paragraph 39.1) granted
under this Lease or any Option subsequently granted, or (b) if Tenant acquires any rights to the
Premises or other premises in which Landlord has an interest, or (c) if Tenant remains in
possession of the Premises with the consent of Landlord after the expiration of the term of this
Lease after having failed to exercise an Option, or (d) if said Brokers are the procuring cause of
any other lease or sale entered into between the Parties pertaining to the Premises and/or any
adjacent property in which Landlord has an interest, or (e) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then as to any of said transactions,
Landlord shall not be liable to said Broker(s) to pay a fee.



     15.3 Assumption of Obligations. Any buyer or transferee of Landlord’s interest in this Lease,
whether such transfer is by agreement or by operation of law, shall be deemed to have assumed
Landlord’s obligation under this Paragraph 15.



     15.4 Representations and Warranties. Tenant and Landlord each represent and warrant to the
other that it has had no dealings with any person, firm, broker or finder other than as named in
Paragraph 1.10(a) in connection with the negotiation of this Lease and/or the



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consummation of the transaction contemplated hereby, and that no broker or other person, firm or entity other than said
named Broker(s) is entitled to any commission or finder’s fee in connection with said transaction.
Tenant and Landlord do each hereby agree to indemnify, protect, defend and hold the other harmless
from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying
Party, including any costs, expenses, and/or attorneys’ fees reasonably incurred with respect
thereto.


16. Tenancy and Financial Statements.




     16.1 Tenancy Statement. Each Party (as “Responding Party”) shall within ten (10) days after
written notice from the other Party (the “Requesting Party”) execute, acknowledge and deliver to
the Requesting Party a statement in writing in a form similar to the then most current “Tenancy
Statement” form published by the American Industrial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by the Requesting Party.



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


17. Landlord’s Liability. The term “Landlord” as used herein shall mean the owner or owners at the
time in question of the fee title to the Premises. In the event of a transfer of Landlord’s title
or interest in the Premises or in this Lease, Landlord shall deliver to the transferee or assignee
(in cash or by credit) any unused Security Deposit held by Landlord at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or assignment and delivery of
the Security Deposit, as aforesaid, the prior Landlord shall be relieved of all liability with
respect to the obligations and/or covenants under this Lease thereafter to be performed by
Landlord. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed
by the Landlord shall be binding only upon the Landlord as herein above defined. Notwithstanding
any other terms or provisions of this lease, Tenant agrees that in the event of any default or
breach by Landlord with respect to any of the terms of the Lease to be observed and performed by
Landlord (a) Tenant shall look solely to the estate and property (which is the subject of this
lease) of Landlord or any successor in interest in the property and the Building, for the
satisfaction of Tenant’s remedies for the collection of a judgment (or other judicial process)
requiring the payment of money by Landlord; (b) no other property or assets of Landlord, its
partners, members, shareholders, officers or any successor in interest shall be subject to levy,
execution or other enforcement procedure for the satisfaction if Tenant’s remedies;(c) no personal
liability shall at any time be asserted or enforceable against Landlord, it’s partner’s, members or
successors in interest (except to the extent permitted in (a) above), and no judgment will be taken against any partner, member, shareholder, officer or director
of Landlord. The provisions of this section shall apply only to the Landlord and the parties herein
described, and shall not be for the benefit of any insurer nor any other third party.




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18. Severability. The invalidity of any provision of this Lease, as determined by a court of competent
jurisdiction, shall in no way affect the validity of any other provision hereof.



19. Interest on Past-Due Obligations. Any monetary payment due Landlord hereunder, other than late
charges, not received by Landlord within ten (10) days following the date on which it was due,
shall bear interest from the date due at the prime rate charged by the largest state chartered bank
in the state in which the Premises are located plus four percent (4%) per annum, but not exceeding
the maximum rate allowed by law, in addition to the potential late charge provided for in Paragraph
13.4.



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



21. Rent Defined. All monetary obligations of Tenant to Landlord under the terms of this Lease are
deemed to be rent.



22. No Prior or other Agreements; Broker Disclaimer. This Lease contains all agreements between the
Parties with respect to any matter mentioned herein, and no other prior or contemporaneous
agreement or understanding shall be effective. Landlord and Tenant each represents and warrants to
the Brokers that it has made, and is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other Party to this Lease and as to the
nature, quality and character of the Premises. Brokers have no responsibility with respect thereto
or with respect to any default or breach hereof by either Party. Each Broker shall be an intended
third party beneficiary of the provisions of this Paragraph 22.



23. Notices.




     23.1 Notice Requirements. All notices required or permitted by this Lease shall be in writing
and may be delivered in person (by hand or by messenger or courier service) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission during normal business hours, and shall be deemed sufficiently given if
served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s
signature on this Lease shall be that Party’s address for delivery or mailing of notice purposes.
Either Party may by written notice to the other specify a different address for notice purposes,
except that upon Tenant’s taking possession of the Premises, the Premises shall constitute Tenant’s
address for the purpose of mailing or delivering notices to Tenant. A copy of all notices required
or permitted to be given to Landlord hereunder shall be concurrently transmitted to such party or
parties at such addresses as Landlord may from time to time hereafter designate by written notice
to Tenant.



     23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail, the notice shall be deemed
given forty-eight (48) hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If any notice is transmitted by facsimile



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transmission or similar means, the same shall be deemed served or delivered upon telephone or
facsimile confirmation of receipt of the transmission thereof, provided a copy is also delivered
via delivery or mail. If notice is received on a Saturday or a Sunday or a legal holiday, it shall
be deemed received on the next business day.


24. Waivers. No waiver by Landlord of the Default or Breach of any term covenant or condition hereof
by Tenant, shall be deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent Default or Breach by Tenant of the same or any other term, covenant or condition hereof.
Landlord’s consent to, or approval of, any such act shall not be deemed to render unnecessary the
obtaining of Landlord’s consent to, or approval of, any subsequent or similar act by Tenant, or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. Regardless of Landlord’s knowledge of a Default or Breach at the time of
accepting rent, the acceptance of rent by Landlord shall not be a waiver of any Default or Breach
by Tenant of any provision hereof. Any payment given Landlord by Tenant may be accepted by
Landlord on account of moneys or damages due Landlord, notwithstanding any qualifying statements or
conditions made by Tenant in connection therewith, which such statements and/or conditions shall be
of no force or effect whatsoever unless specifically agreed to in writing by Landlord at or before
the time of deposit of such payment.



25. Recording. Either Landlord or Tenant shall, upon request of the other, execute, acknowledge and
deliver to the other a short form memorandum of this Lease for recording purposes. The Party
requesting recordation shall be responsible for payment of any fees or taxes applicable thereto.



26. No Right To Holdover. Tenant has no right to retain possession of the Premises or any part thereof
beyond the expiration or earlier termination of this Lease. In the event that Tenant holds over in
violation of this Paragraph 26 then the Base Rent payable from and after the time of the expiration
or earlier termination of this Lease shall be increased to one hundred fifty percent (150%) of the
Base Rent applicable during the month immediately preceding such expiration or earlier termination.
Nothing contained herein shall be construed as a consent by Landlord to any holding over by
Tenant.



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



28. Covenants and Conditions. Al provisions of this Lease to be observed or performed by Tenant are
both covenants and conditions.



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



30. Subordination; Attornment; Non-Disturbance.




     30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security



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device (collectively, “Security Device”), now or hereafter placed by Landlord upon the real property of
which the Premises are a part, to any and all advances made on the security thereof, and to all
renewals, modifications, consolidations, replacements and extensions thereof. Tenant agrees that
the Lenders holding any such Security Device shall have no duty, liability or obligation to perform
any of the obligations of Landlord under this Lease, but that in the event of Landlord’s default
with respect to any such obligation, Tenant will give any Lender whose name and address have been
furnished Tenant in writing for such purpose notice of Landlord’s default pursuant to Paragraph
13.5. If any Lender shall elect to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device and shall give written notice thereof to Tenant, this Lease and
such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of
the documentation or recordation thereof.



     30.2 Attornment. Subject to the non-disturbance provisions of Paragraph 30.3, Tenant agrees
to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a
foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall
not: (i) be liable for any act or omission of any prior Landlord or with respect to events
occurring prior to acquisition of ownership, (ii) be subject to any offsets or defenses which
Tenant might have against any prior Landlord, or (iii) be bound by prepayment of more than one
month’s rent.



     30.3 Non-Disturbance. With respect to Security Devices entered into by Landlord after the
execution of this lease, Tenant’s subordination of this Lease shall be subject to receiving
assurance (a “non-disturbance agreement”) from the Lender that Tenant’s possession and this Lease,
including any options to extend the term hereof, will not be disturbed so long as Tenant is not in
Breach hereof and attorns to the record owner of the Premises.



     30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without
the execution of any further documents; provided, however, that upon written request from Landlord
or a Lender in connection with a sale, financing or refinancing of Premises, Tenant and Landlord
shall execute such further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement as is provided for
herein.



31. Attorneys’ Fees. If any Party brings an action or proceeding to enforce the terms hereof or
declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys’ fees, costs and expenses.
Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such
action or proceeding is pursued to decision or judgment. The term “Prevailing Party” shall
include, without limitation, a Party who substantially obtains or defeats the relief sought, as the
case may be whether by compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys’ fee award shall not be computed in accordance with
any court fee schedule, but shall be such as to full reimburse all attorneys fees, cost and
expenses reasonably incurred. Landlord shall be entitled to attorneys’ fees, costs and
expenses incurred in preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection with such Default
or resulting Breach.




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32. Landlord’s Access; Showing Premises; Repairs. Landlord and Landlord’s agents shall have the right
to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times
for the purpose of showing the same to prospective purchasers, lenders, or during the final 8
months of the term tenants, and make such alterations, repairs, improvements or additions to the
Premises or to the Building, as Landlord may reasonably deem necessary; provided Landlord and its
agents or employees comply with Tenant’s risk management policies (which may include having such
person escorted at all times by an employee of Tenant). Landlord may at any time place on or about
the Premises or Building any ordinary “For Sale” signs and Landlord may at any time during the last
one hundred eighty (180) days of the term hereof place on or about the Premises any ordinary “For
Lease” signs. All such activities of Landlord shall be without abatement of rent or liability to
Tenant.



33. Auctions. Tenant shall not conduct, nor permit to be conducted, either voluntarily or
involuntarily, any auction upon the Premises without first having obtained Landlord’s prior written
consent. Notwithstanding anything to the contrary in this Lease, Landlord shall not be obligated
to exercise any standard of reasonableness in determining whether to grant such consent.



34. Signs. Tenant shall not place any sign upon the exterior of the Premises or the Building, except
that Tenant may, with Landlord’s prior written consent, install (but not on the roof) such signs as
are reasonably required to advertise Tenant’s own business so long as such signs are in a location
designated by Landlord and comply with Applicable Requirements and the signage criteria established
for the Industrial Center by Landlord. The installation of any sign on the Premises by or for
Tenant shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs, Utility
Installations, Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, Landlord
reserves all rights to the use of the roof of the Building and the right to install advertising
signs on the Building, including the roof, which do not unreasonably interfere with the conduct of
Tenant’s business; Landlord shall be entitled to all revenues from such advertising signs.



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



36. Consents.




          (a) Except for Paragraph 12 (subleases) and Paragraph 33 (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed.
Landlord’s actual reasonable costs and expenses (including but not limited to architects’.
attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response
to, a request by Tenant for any Landlord consent pertaining to this Lease or the Premises,
including but not



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limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Tenant to Landlord upon receipt of an invoice and supporting
documentation therefor. In addition to the deposit described in Paragraph 12.2(e), Landlord may,
as condition to considering any such request by Tenant, require that Tenant deposit with Landlord
an amount of money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Landlord to represent the cost Landlord will incur in considering and responding to
Tenant’s request. Any unused portion of said deposit shall be refunded to Tenant without interest.
Landlord’s consent to any act, assignment of this Lease or subletting of the Premises by Tenant
shall not constitute an acknowledgment that no Default or Breach by Tenant of this Lease exists,
nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Landlord at the time of such consent.




          (b) All conditions to Landlord’s consent authorized by this Lease are acknowledged by Tenant
as being reasonable. The failure to specify herein any particular condition to Landlord’s consent
shall not preclude the impositions by Landlord at the time of consent of such further or other
conditions as are then reasonable with reference to the particular matter for which consent is
being given.



37. Guarantor.




     37.1 Form of Guaranty. If there are to be any Guarantors of this Lease per Paragraph 1.11,
the form of the guaranty to be executed by each such Guarantor shall be in the form most recently
published by the American Industrial Real Estate Association, and each such Guarantor shall have
the same obligations as Tenant under this lease, including but not limited to the obligation to
provide the Tenancy Statement and information required in Paragraph 16.



     37.2 Additional Obligations of Guarantor. It shall constitute a Default of the Tenant under
this Lease if any such Guarantor fails or refuses, upon reasonable request by Landlord to give: (a)
evidence of the due execution of the guaranty called for by this Lease, including the authority of
the Guarantor (and of the party signing on Guarantor’s behalf) to obligate such Guarantor on said
guaranty, and resolution of its board of directors authorizing the making of such guaranty,
together with a certificate of incumbency showing the signatures of the persons authorized to sign
on its behalf, (b) current financial statements of Guarantor as may from time to time be requested
by Landlord, (c) a Tenancy Statement, or (d) written confirmation that the guaranty is still in
effect.


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



39. Options.




     39.1 Definition. As used in this Lease, the word “Option” has the following meaning: (a) the
right to extend the term of this Lease or to renew this Lease or to extend or renew any lease that
Tenant has on other property of Landlord.



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     39.2 Options Personal to Original Tenant. Each Option granted to Tenant in this Lease is
personal to the original Tenant named in Paragraph 1.1 hereof and its Permitted Transferees as set
forth in Section 12.4, and cannot be voluntarily or involuntarily assigned or exercised by any
person or entity other than said original Tenant or such Permitted Transferee while the original
Tenant or such Permitted Transferee is in full and actual possession of the Premises and without
the intention of thereafter assigning or subletting. Except to a Permitted Transferee, the
Options, if any, herein granted to Tenant are not assignable, either as a part of an assignment of
this Lease or separately or apart therefrom, and no Option may be separated from this Lease in any
manner, by reservation or otherwise.



     39.3 Multiple Options. In the event that Tenant has any multiple Options to extend or renew
this Lease, a later option cannot be exercised unless the prior Options to extend or renew this
Lease have been validly exercised.



     39.4 Effect of Default on Options.



          (a) Tenant shall have no right to exercise an Option, notwithstanding any provision in the
grant of Option to the contrary: (i) during the period commencing with the giving of any notice of
Default under Paragraph 13.1 and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Landlord from Tenant is unpaid (without regard to
whether notice thereof is given Tenant), or (iii) during the time Tenant is in Breach of this
Lease, or (iv) in the event that Landlord has given to Tenant three (3) or more notices of separate
Defaults under Paragraph 13.1 during the twelve (12) month period immediately preceding the
exercise of the Option, whether or not the Defaults are cured.




          (b) The period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant’s inability to exercise an Option because of the provisions of
Paragraph 39.4(a)




          (c) All rights of Tenant under the provisions of an Option shall terminate and be of no
further force or effect, notwithstanding Tenant’s due and timely exercise of the Option, if, after
such exercise and during the term of this Lease, (i) Tenant fails to pay to Landlord a monetary
obligation of Tenant for a period of thirty (30) days after such obligation becomes due (without
any necessity of Landlord to give notice thereof to Tenant), or (ii) Landlord gives to Tenant three
(3) or more notices of separate Defaults under Paragraph 13.1 during any twelve (12) month period,
whether or not the Defaults are cured, or (iii) if Tenant commits a Breach of this Lease.



40. Rules and Regulations. Tenant agrees that it will abide by, and keep and observe all reasonable
rules and regulations (“Rules and Regulations”) which Landlord may make from time to time for the
management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the Industrial Center and their invitees.



41. Security Measures. Tenant hereby acknowledges that the rental payable to Landlord hereunder does
not include the cost of guard service or other security measures, and that Landlord shall have no
obligation whatsoever to provide same. Tenant assumes all responsibility



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for the protection of the Premises, Tenant, its agents and invitees and their property from the acts of third parties.



42. Reservations. Landlord reserves the right, from time to time, to grant, without the consent or
joinder of Tenant, such easements, rights of way, utility raceways, and dedications that Landlord
deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Tenant. Tenant agrees to sign any documents reasonably
requested by Landlord to effectuate any such easement rights, dedication, map or restrictions.



43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money
to be paid by one Party to the other under the provisions hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to make payment “under protest” and
such payment shall not be regarded as a voluntary payment and there shall survive the right on the
part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there
was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party
shall be entitled to recover such sum or so much thereof as it was not legally required to pay
under the provisions of this Lease.



44. Authority. If either Party hereto is a corporation, trust, limited liability company, or general
or limited partnership, each individual executing this Lease on behalf of such entity represents
and warrants that he or she is duly authorized to execute and deliver this Lease on it’s behalf and
that such entity is duly authorized and existing and qualified to do business in California and
that Tenant has the full right and legal authority to enter into this lease.



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



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



47. Amendments. This Lease may be modified only in writing, signed by the parties in interest at the
time of the modification. The Parties shall amend this Lease from time to time to reflect any
adjustments that are made to the Base Rent or other rent payable under this Lease. As long as they
do not materially change Tenant’s obligations hereunder, Tenant agrees to make such reasonable
non-monetary modification to this Lease as may be reasonably required by an institutional insurance
company or pension plan Lender in connection with the obtaining of normal financing or refinancing
of the property of which the Premises are a part.



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



49. Tenant Improvements. Landlord, at Landlord’s sole cost and expense shall deliver the Premises to
Tenant on or before December 1, 2008, clean and free of debris with all items of



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Landlord’s work, including without limitation, the installation of the Tenant Improvements completed in accordance
with the terms of the attached Exhibit B.



50. Furniture. Landlord hereby leases to Tenant at no additional cost the furniture and cubicles
currently in the Premises as set forth on Exhibit C (the “Furniture”).




          (a) The term of this lease for the Furniture shall commence on the Commencement Date and shall
be co-terminus with the Lease. Possession of the Furniture shall be delivered to Tenant on the
Commencement Date and shall be returned to Landlord upon the expiration or earlier termination of
this lease.




          (b) Tenant accepts the Furniture in its “as is” “where is” condition and Tenant acknowledges
that Landlord makes no warranty as to the condition of the Furniture or its present or future
suitability for Tenant’s purposes.




          (c) This lease of Furniture is a net lease, and as such, Tenant shall pay maintenance,
insurance and taxes on all Furniture leased hereunder. The Furniture shall be held at all times
during the term hereof at the sole risk of Tenant from injury, loss or destruction with the
obligation of restoration or reimbursement to Landlord.




          (d) Upon the termination of this Lease, Tenant shall return the Furniture to Landlord in the
same condition as when received, ordinary wear and tear excepted, conditioned on the obligations
set forth in the next sentence having been accomplished. Tenant is responsible for performing all
maintenance, repair and cleaning of the Furniture, which may be necessary to maintain the Furniture
in the condition in which it was initially provided to Tenant. Tenant shall use the Furniture in a
careful and proper manner, and shall comply with all laws and regulations relating to the
possession and use of the Furniture. Landlord shall have the right to inspect the Furniture during
business hours upon prior notice.




          (e) Tenant covenants that: (i) Tenant will not, without the prior written consent of Landlord,
assign (other than pursuant to an approved transfer under Section 12 hereof), pledge, loan,
mortgage, or part with possession of any of the Furniture, or in any other manner attempt to
dispose of it, or permit its use by others or suffer any liens or legal process to be incurred or
levied thereon; (ii) Tenant will not make any alterations or permit any alternations to be made on
or to the Furniture without the written consent of the Landlord and (iii) Tenant will keep and
maintain Furniture at the Premises and will not permit any of the Furniture to be removed from such
location without Landlord’s prior written consent.




          (f) In addition to any other obligations of Tenant hereunder, Tenant shall indemnify and hold
harmless Landlord from and against any and all claims arising from Tenant’s use of the Furniture,
and from and against all costs, attorneys’ fees, expenses and liabilities incurred in the defense of such claim or any action or proceeding brought thereon; and in case
any action or proceeding be brought against Landlord by reason of any such claim, Tenant, upon
written notice from Landlord, shall defend the same at Tenant’s expense and by counsel satisfactory
to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk
of damage to property or injury to persons arising from any cause connected with Furniture and
waives all claims in respect there of against Landlord.




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          (g) In addition to any other obligation of Tenant hereunder, Tenant agrees that Landlord shall
not be liable for injury to Tenant’s business or any loss of income therefrom or for damage to the
goods, wares, merchandise or other property of Tenant, Tenant’s employees, invitees, customers or
any other person occasioned by in or connection with Tenant’s possession of use of any of the
Furniture, nor shall Landlord be liable for injury to the person of Tenant, Tenant’s employees,
agents or contractors occasioned by or in connection with Tenant’s possession or use of any of the
Leased Furniture.




          (h) The Furniture shall at all times be and remain the exclusive property of Landlord, and
Tenant shall have no title therein. Tenant shall, at its sole cost and expense, at all times
protect and defend the title of t Landlord in the Furniture from and against all liens, claims and
legal processes of the creditors of Tenant and keep the Furniture free of such liens, claims and
encumbrances,. The Furniture or any of Tenant’s rights under this Lease shall not be assigned or
transferred by Tenant to any person, firm or corporation without the prior written consent of
Landlord other than to a Permitted Transferee as set forth in Section 12.4 hereof, and any
attempted assignment or transfer in violation hereof shall, at the option of Landlord, be void.
Nothing contained herein, however, shall be deemed to limit or otherwise restrict Landlord’s right
to transfer in any manner its interest in any or all of the Furniture or in this Lease.




          (i) Tenant shall, during the term of this Lease, pay and discharge all license fees,
assessments and sales, use property and other tax or taxes now or hereafter imposed by any state,
Federal or local government upon the ownership, leasing, renting, sale, possession or use of the
Furniture whether the same be assessed to Landlord or Tenant, together with any penalties or
interest in connection therewith, excepting Federal, state or local governmental taxes, or payments
in lieu thereof, imposed upon or measured by the income of Landlord. If any tax is, by law, to be
assessed or billed to Landlord, Tenant at is expense will do any and all things required to be done
by Landlord in connection with the levy, assessment, billing or payment of such taxes and is hereby
authorized by Landlord to act for and on behalf of Landlord in any and all respects. Tenant will
cause all billings of such taxes to Landlord to be made to it in care of Tenant and will from time
to time, on request of Landlord, submit written evidence of the payment of all of the governmental
obligations mentioned in this paragraph.




          (j) Tenant is Responsible for wiring of the Furniture.




          (k) Landlord represents and warrants that Landlord has full power, right and authority to
lease the Furniture to Tenant and Landlord is lawfully possessed of good title thereto free and
clear of all liens, encumbrances and creditors’ rights.



51. Option to Extend. Subject to the terms and conditions set forth below, Tenant may at its option
extend the Terms of this Lease for One (1) period of Three (3) years. Such period is
called the “Renewal Term.” The Renewal Term shall be upon the same terms contained in this Lease,
except that (i) Landlord shall have no obligation to provide Tenant with any Tenant Improvement
Allowance or demolition in connection with the Renewal Term, (ii) the Base Rental during the
Renewal Term shall be calculated as set forth below, and (iii) any reference in the Lease to the
“Term” of the Lease shall be deemed to include the Renewal Term and apply thereto, unless it is
expressly provided otherwise. Tenant shall have no additional extension options. The Base Rent
during the Renewal Term shall be at the then fair market rate (defined



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hereinafter) for such space for a term commencing of the first day of the Renewal Term. “Market Rate” shall mean the then
prevailing market rate for a comparable term commencing on the first day of the Renewal Term for
tenants of comparable size and creditworthiness for comparable space in the same geographic
location as the Bayside Business Park. In no event shall the rent be less than the 60th
Month’s rent and shall increase a minimum of 3% per year. To exercise any option, Tenant must
deliver a binding written notice to Landlord not sooner than nine (9) months nor later than six (6)
months prior to the expiration of the initial Term of this Lease. Thereafter, the Market Rate for
the Renewal Term shall be calculated pursuant to the prior sentences above and Landlord shall
inform Tenant of the Market Rate. If the parties cannot agree on the Market Rate, the parties
shall each appoint a real estate broker or appraiser (with at least 10 years experience in R&D
leasing in Silicon Valley) to determine the Market Rate. If the lower of the two is within 90% of
the higher of the two valuations, then the Market Rent shall be the average of the two. If the
lower of the two valuations is less than 90% of the higher valuation, then the two
brokers/appraisers originally selected by the parties shall select a third appraiser who shall
present their final determination of Market Rate to the third broker/appraiser, and the third
appraiser shall pick one of those two as being the Market Rate. The determination of the third
appraiser shall be binding on the parties. Each party shall bear the cost of its appraiser and the
cost of the third appraiser, if required, such be shared equally. The market rent shall be
determined within 60 days of the date of Tenant’s exercise of its option. In no event shall the
rent be less than the 60th month’s rent and shall increase by a minimum of 3% per year.
Notwithstanding anything to the contrary contained herein, in the event market rent is determined
to be less than rent due in the 60th month of the term hereof, Tenant shall have the
right, but not the obligation in its sole and absolute discretion to rescind its exercise of the
option to extend granted herein by written notice to Landlord and thereafter either Landlord nor
Tenant shall have any obligation to extend the initial term of this Lease. If Tenant fails to
timely give its notice of exercise, Tenant will be deemed to have waived its option to extend.



LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION
CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT
THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS
LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH
RESPECT TO THE PREMISES.



THIS LEASE PREPARED FOR YOUR ATTORNEY’S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO THE PRESENCE OF ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE
BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY
UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY
IS LOCATED SHOULD BE CONSULTED.




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




	 	 	 	 	 	 	 	 	 
	Executed at:

	 	 	 	 	 	Executed at:	 	 
	 

	 	 

	 	 	 	 	 	 







	 	 	 	 	 	 	 	 	 
	on:

	 	 	 	 	 	on:	 	 
	 

	 	 

	 	 	 	 	 	 







	 	 	 
	By Landlord:

	 	By Tenant:
	 
	 	 
	Fremont Ventures LLC

	 	Opnext, Inc.
	by D&M Ventures LP
	 	 
	its Managing Member
	 	 
	by David Dollinger Living Trust
	 	 
	its General Partner
	 	 
	 
	 	 
	By:

	 	By:
	 

	 	 


	David Dollinger, Trustee

	 	Name Printed: Gilles Bouchard

	 

	 	Title: Chief Operating Officer

	 
	 	 
	Address: 555 Twin Dolphin Dr. #600

	 	Address: 940 Auburn Court
	                 Redwood City, Ca. 94065

	 	                 Fremont, CA 94538
	Telephone: (650) 508-8666

	 	Telephone:(510) 580-8828
	Facsimile: (650) 508-8686

	 	Facsimile:(510) 580-8819







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