Prepared by R.R. Donnelley Financial -- Third Amendment to the Lease Agreement, dated as of August 2003




 Exhibit 10.26 
  
 THIRD AMENDMENT TO LEASE 
  
 This Third Amendment to Lease (the “Third Amendment”), is made and entered into this [12th] day of August, 2003 by and between Mission West Properties, L.P. II, a Delaware limited partnership (“Lessor”) and Photon Dynamics, a California
Corporation (“Lessee”). 
  
 RECITALS 
  

	A.	Lessee currently leases from Lessor approximately 52,000 square feet of space located at 6325 San Ignacio Avenue, San Jose, California (the “Original Premises”) pursuant
to that certain lease dated August 6, 1996, First Amendment To Lease dated February 5, 2001, and Second Amendment To Lease dated July 3, 2003 (the “Lease”). 

  

	B.	Lessee’s space requirements have expanded and Lessee needs more space than is contained in the Original Premises. 

  

	C.	Lessor is the owner of a building located at 5970 Optical Court consisting of approximately 109,800 square feet and Lessor will expand the existing second deck of the building by
approximately 18,720 square feet for a total of approximately 128,520 square feet in San Jose, California (the “Expansion Premises”). 

  

	D.	Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the Expansion Premises on the terms set out below. 

  

	E.	Lessor will construct certain improvements in the Expansion Premises. Lessor has agreed that Lessee may continue to occupy the Original Premises for a sixty day period after the
Expansion Premises Commencement Date, as hereinafter defined, in order that Lessee may make an orderly transition from the Original Premises to the Expansion Premises. 

  

	F.	Upon expiration of the sixty day period after the Expansion Premises Commencement Date, the term for the Original Premises shall expire. 

  

	G.	Lessee has elected and Lessor has agreed to amend the Lease to reflect the agreements described above, subject to the terms and conditions set forth herein.


  
 NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the parties hereto agree to amend the Lease as follows: 
  

	 	1.	Second Amendment To Lease (the “Second Amendment”): Lessor and Lessee hereby agree that the Second Amendment is hereby null and void, and has no further force or effect.


  

	 	2.	Premises: 

  

	 	A.	Original Premises. The “Original Premises” means the “Premises” as defined in the Original Lease. 

  

	 	B.	Expansion Premises. The “Expansion Premises” means approximately 128,520 square feet (subject to final determination of the size of the to be expanded existing
second deck) at 5970 Optical Court, San Jose, California (the “Expansion Premises”) as shown on Exhibit A, including the right to use 450 unreserved parking spaces as shown on Exhibit A.1. 










	 	C.	Premises Definition. The Lease is hereby amended to provide that the term “Premises” shall mean: (i) until the Expansion Premises Commencement Date, the Original
Premises; and (ii) beginning on the Expansion Premises Commencement Date, both the Original Premises and the Expansion Premises; and (iii) beginning on the 61st day following the Expansion Premises Commencement Date, the Expansion Premises. 

  

	 	3.	Term: The Lease is hereby amended as follows: 

  

	 	A.	Original Premises Term. The term for the Original Premises shall expire on the 60th day following the Expansion Premises Commencement Date. 

  

	 	B.	Expansion Premises Commencement Date. The Expansion Premises Term shall be for eighty four (84) months unless extended pursuant to this Third Amendment (the “Lease
Term”), commencing on the Expansion Premises Commencement Date, as hereinafter defined, and ending eighty four (84) months thereafter. The “Expansion Premises Commencement Date” shall be the later of (i) January 1, 2004 or (ii) the
date the Lessee’s and Lessor’s Improvements in the Expansion Premises are Substantially Complete (as defined in section 1, of the Lease). 

  

	 	4.	Rent: Commencing on the Expansion Premises Commencement Date, the Rent is hereby amended to provide that Rent for the Expansion Premises shall be paid by Lessee in
monthly installments as follows: 

  

	 	  	Base Rent

	  	Additional
Rent*

	  	CAC**

	  	Total Rent


	 January 1, 2004 through December 31, 2004
	  	$	106,672	  	$	35,829	  	$	39,396	  	$	181,897
	 January 1, 2005 through December 31, 2005
	  	$	113,098	  	$	35,829	  	$	40,578	  	$	189,505
	 January 1, 2006 through December 31, 2006
	  	$	119,524	  	$	35,829	  	$	41,795	  	$	197,148
	 January 1, 2007 through December 31, 2007
	  	$	125,950	  	$	35,829	  	$	43,049	  	$	204,828
	 January 1, 2008 through December 31, 2008
	  	$	132,376	  	$	35,829	  	$	44,340	  	$	212,545
	 January 1, 2009 through December 31, 2009
	  	$	138,802	  	$	35,829	  	$	45,670	  	$	220,301
	 January 1, 2010 through December 31, 2010
	  	$	145,228	  	$	35,829	  	$	47,040	  	$	228,097



	*	Additional Rent includes in excess of $3,009,601 in Rent due on the Original Premises for 35 months (1/1/04-11/30/06) amortized over the new eighty four (84) month Lease Term.



	**	Estimated Common Area Charges. 

  
 If the Expansion Premises Commencement Date occurs after January 1, 2004, then all the dates described above shall be adjusted by adding to each date the number of days
after January 1, 2004 that Lessee’s obligation to pay Rent hereunder actually commences. 
  

	 	5.	Security Deposit: Lessee shall increase the security deposit from Fifty Four Thousand Eight Hundred Sixty Dollars ($54,860) to Two Hundred Twenty Eight Thousand Ninety
Seven Dollars ($228, 097) upon execution of this Third Amendment. 

  

	 	6.	Commencement Date Memorandum: The reference to the Commencement Date Memorandum in the Lease is hereby deleted. 

  

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	 	7.	Possession: Section 1. Possession, the last sentence of the first paragraph of Section 1 is hereby deleted and the new sentence shall read as follows:


  
 “It is the intention of the Lessee and
Lessor that January 1, 2004, shall be the Expansion Premises Commencement Date. Lessor shall grant Lessee early occupancy at least fifteen (15) days before the Expansion Premises Commencement Date in order for Lessee to commence its wiring and
cabling work.” 
  
 The second paragraph of Section 1 is
hereby amended by the addition of a new item as follows: 
  
 “and (v) the issuance by the City of San Jose of a certificate of occupancy.” 
  

	 	8.	Lessee’s and Lessor’s Improvements: Section 2. Lessee’s Improvements in the Lease is hereby deleted and shall read as follows:


  
 Lessee’s Improvements:
“Lessee’s Improvements” are defined as all improvements not included in Lessor Improvements. Lessee shall be solely responsible for the cost of the Lessee’s Improvements, subject to Lessor’s “not to exceed”
cost shown on Exhibit B. Lessor shall construct Lessee’s Improvements pursuant to final construction plans and specifications that have been approved in writing by Lessee. Within five (5) business days following the execution of this Third
Amendment, Lessor shall cause its architect to prepare and deliver to Lessee proposed construction plans and specifications for the Lessee’s and Lessor’s Improvements to be added after Lessee’s approval as Exhibit C. Within five (5)
business days following delivery to Lessee of the proposed construction plans, Lessee shall approve the proposed construction plans or deliver to Lessor its written proposal for changes that must be made to said plans to conform the improvements to
be constructed pursuant thereto, with respect to design, materials, quality, layout, and the like, to improvements reasonably suitable for Lessee’s intended purpose. If Lessee fails to approve or disapprove the proposed construction plans
within the allowed time period, the construction plans proposed by Lessor shall be deemed to be approved by Lessee. If Lessee disapproves the proposed construction plans in any respect, the parties shall promptly meet and confer and negotiate in
good faith to reach agreement on the construction plans. If Lessee’s Improvements exceed budget, Lessor will immediately notify Lessee as to amount of the overruns and the source of overruns and Lessee can reduce the cost by deleting items,
agree to pay the overruns or ask Lessor to amortize the overruns or choose any combination of the above or if Lessee’s Improvements exceed $5,000,000, by written notice to Lessor, Lessee may terminate this Lease. 
  
 Lessor’s Improvements: Lessor at Lessor’s sole cost shall
be responsible to complete all of the required improvements as shown below “Lessor’s Improvements”: 
  
 A, All improvements on 2nd floor and all improvements contained within the cross hatched portion of first floor (as shown on Exhibit D) in a “turn key” condition, ready for occupancy, less the carpet allowance in Exhibit B of $141,250. The
Lessor’s Improvements shall be substantially similar to the improvements in Lessor’s building at 6331 San Ignatio, San Jose, California.  
  
 B. 65% of Main Electrical Switchgear. 
  
 C. Overhead sprinklers (not including drops) in area of Lessee Improvements 
  
 D. Exterior painting and landscaping. 
  
 E. Lessor to provide 4000 amps electrical power at the transformer. 
  
 F. Insulate roof structure. 
  
 All bids and quotes will be based on division of Lessee’s and
Lessor’s Improvements. 
  

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 Lessor shall be responsible for ensuring that the Lessee’s and Lessor”s Improvements conform to
the approved plans and specifications, and all applicable statutes, rules, regulations, ordinances, and City of San Jose Building Department. Lessee’s approval of the plans for the Lessee’s and Lessor’s Improvements shall not relieve
Lessor of its obligations under this Lease nor make Lessee liable to Lessor or its contractors. Lessor shall be responsible for paying for any improvements that are required by the City of San Jose as a condition to approving plans for Lessee’s
or Lessor’s Improvements to comply with: (i) the Americans With Disabilities Act or (ii) any seismic modifications not related to or as a result of Lessee’s Improvements. 
  
 Lessor has prepared and Lessee has approved a budget for the completion of Lessee’s Improvements which is described on
Exhibit B (“Lessee’s Improvements Costs Analysis”), including all “hard” and “soft” costs, permits and a management fee of 6% of the “hard” costs to Lessor. Lessor shall bid each major line item on
the Lessee’s Improvement Costs Analysis that exceed $100,000 (the “Major Cost Line Item”) with at least three contractors acceptable to Lessee and shall provide Lessee a list of proposed contractors for Lessee’s approval prior to
bidding. Prior to accepting a bid for a Major Cost Line Item, Lessor is responsible to provide a written summary of each of the Major Cost Line Item bids to Lessee. Within three (3) business days following the Lessor’s delivery to Lessee of the
written summary of each of the Major Cost Line Item bids, Lessee shall approve the lowest bid to perform the work described in the bid. If Lessee fails to approve the lowest bid within the allowed time period, the lowest bid presented by the Lessor
shall be deemed to be approved by Lessee. Lessor shall deliver an invoice to Lessee by the fifteenth (15th) of each
calendar month for the cost of construction (including equipment purchases) for Lessee’s Improvements and a pro rata portion of Lessor’s management fee. Lessee will wire all funds due Lessor by no later than the twenty fourth
(24th) day of the calendar month for the Lessor’s progress billing from the fifteenth (15th) of the same calendar month. 
  
 Change Orders: No change made to the approved construction plans for the Lessee’s and Lessor’s Improvements and the Lessee’s Improvements
cost statement after the final approval by the parties thereof shall be effective, unless such change is approved in writing by Lessor and Lessee, which approval shall not be unreasonably withheld. In this regard, Lessor shall not be required to
approve any change that will structurally impair the Expansion Premises, or materially and adversely effect the outside appearance of the Building, interfere with the conduct of Lessee’s business, or materially detract from the inside
appearance of the Expansion Premises. Change orders shall be written and shall describe the nature of the change and the reasonably determined increase or decrease in each line item of the approved cost statement for the Lessee’s Improvements
occasioned by the change. If Lessee requests a change which will delay the Substantial Completion of the Lessee’s or Lessor’s Improvements beyond the Scheduled Completion Date, as hereinafter defined, the maximum amount of Lessee Delay, as
hereinafter defined, that can be attributed to the change shall also be specified in the change order, including but not limited to, any Rent for any Lessee Delays that effect the Expansion Premises Commencement Date. 
  
 Inability to Obtain Materials: If Lessor notifies Lessee that any fittings,
finishes or other materials specified by Lessee for the Lessee’s or Lessor’s Improvements for the Expansion Premises cannot be obtained within ten (10) days after placing an order therefore and Lessor reasonably determines that such
extended delivery time will prohibit Lessor from Substantially Completing the Lessee’s Improvements by the Scheduled Completion Date, Lessor shall notify Lessee of such fact, the expected delay in the Scheduled Completion Date, and information
that will permit Lessee to reasonably select an alternative fitting, finish, or material, including, without limitation any expected delays in the then Scheduled Completion Date associated with each alternative. Within three (3) business days,
Lessee shall either (i) execute a change order in accordance with the foregoing requirements selecting an alternative presented by Lessor or developed by Lessee and approved by Lessor, which approval shall not be unreasonably withheld, or (ii) agree
that any delay in the Substantial Completion of the Lessee’s or Lessor’s Improvements as a consequence of the inability to obtain the item will be a Lessee Delay. 
  

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 Lessor shall use its best efforts to cause the Expansion Premises Commencement Date to occur not later
than January 1, 2004 (the “Scheduled Completion Date”). If the Expansion Premises Commencement Date has not occurred by the Scheduled Completion Date, Lessee shall receive one day of Rent abatement for each day (up to fifteen days) between
the Scheduled Completion Date, and the Expansion Premises Commencement Date. If the Expansion Premises Commencement Date has not occurred by the fifteenth day following the Scheduled Completion Date, Lessee shall receive two days of Rent abatement
for each day after the fifteenth day between the Scheduled Completion Date, and the Expansion Premises Commencement Date. Lessor and Lessee agree that having an Expansion Premises Commencement Date after the Scheduled Completion Date, will cause
Lessee to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Accordingly, the parties hereby agree that Lessee’s right to the abatement of Rent specified herein represents a fair and
reasonable settlement for both parties and neither party shall have further liability to the other for any damages. Notwithstanding anything to the contrary herein, all dates stated herein shall be extended for the number of days Lessor is unable to
Substantially Complete the Lessee’s or Lessor’s Improvements as a result of delays (i) due to failure of the City of San Jose to issue a building permit for the deck in 30 days after submission of all required documents in final form and
payment of all fees, through no fault of Lessor or its contractors, (ii) due to failure of the City of San Jose to issue a building permit for the Lessor’s Improvements (except the deck) and the Lessee’s Improvements in 30 days after
submission of all required documents in final form and payment of all fees, through no fault of Lessor or its contractors, (iii) due to acts of God, and (iv) due to Lessee Delays. “Lessee Delays” means a delay in Substantial Completion
resulting from (a) Lessee’s failure (through no fault of Lessor or its contractors or consultants) to meet Lessee’s deadlines for approval as described in this Section 2, (b) delays due to change orders requested by Lessee, but only to the
extent that the amount of the delay is set forth in a change order approved in writing by Lessee, (c) delays due to Lessee’s failure (through no fault of Lessor or its contractors or consultants) to meet the deadlines for approving any plans or
change orders, and (d) delays because of the inability to obtain any product, materials, design, color, fitting, or finish pursuant to the provisions of Section 8 herein. Lessee shall have a minimum of five (5) business days to approve or disapprove
any preliminary plans, change orders or any final plans. If Lessee does not disapprove any plans or change orders within the time period set forth herein in writing, Lessor may proceed on the basis that the plans or change orders are approved by
Lessee. If plans or change orders are disapproved, Lessee shall state the reason for disapproval and Lessor and Lessee shall promptly meet and confer and act in good faith to resolve any issues. To the extent that the Expansion Premises Commencement
Date is delayed beyond the Scheduled Completion Date, solely as a result of a Lessee Delay, then Lessee shall be responsible to pay Rent for each day of delay beyond the Scheduled Completion Date caused by such Lessee Delay. 
  
 During the first ninety (90) days following the Expansion Premises
Commencement Date, Lessor at Lessor’s sole cost and expense shall be responsible to repair or replace any defects in Lessee’s or Lessor’s Improvements that are not caused by Lessee’s negligence. Lessee is responsible to notify
Lessor in writing immediately upon the discovery of a defect in the Lessee’s or Lessor’s Improvements. Lessor is responsible to commence repairs or to replace any defect in the Lessee’s or Lessor’s Improvements immediately upon
receipt of written notification from Lessee during the first ninety (90) days following Expansion Premises Commencement Date. Notwithstanding the foregoing, Lessor shall not be responsible for any failure of equipment that is moved from the Original
Premises to the Expansion Premises. Lessor will assign to Lessee all construction warranties with regard to the Expansion Premises. 
  
 Lessor agrees to improve the Expansion Premises as described on Exhibits B, C and D by January 1, 2004, subject to receipt of an executed Third Amendment
by August 8, 2003. 
  

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	 	9.	Alterations and Additions: Section 4. Alterations and Additions the following sentences shall be added to the end of the Section 4: 

  
 “Notwithstanding the foregoing, any non-structural alteration or
addition to the interior of the Expansion Premises with a total cost of less than $25,000 shall not require the written approval of the Lessor. However, Lessee will be required to notify Lessor in writing and be responsible to provide Lessor with
all drawings and permits required in connection with the non-structural alteration or addition with a total cost less than $25,000.” 
  
 In section 4, add the following sentence after the fifth sentence: “Notwithstanding any provision in this Lease, Lessee shall have no obligation to
remove at the end of the Term any Lessee Improvements for the Expansion Premises described on Exhibit C or any Lessor Improvements.” 
  

	 	10.	Notices: Section 17. Notices in the Lease shall be amended as follows: 

  

	 (a)    
	  	 to the Lessor at:
	  	 10050 Bandley Drive

	 	  	 	  	 Cupertino, CA 95014

	 	  	 	  	 Attention: Carl E. Berg

	 	  	 	  	                    Raymond V.
Marino

	 	  	 	  	 Fax No: 408-725-1626

			
	 (b)
	  	 to the Lessee at:        
	  	 5970 Optical Court (after January 1, 2004)

	 	  	 	  	 San Jose, CA 95138

	 	  	 	  	 Attention: Steve Chase, Facilities Manager

	 	  	 	  	 Fax No: (408)


  

	 	11.	Assignment and Subletting: Section 20. Assignment and Subletting in the Lease is hereby deleted and shall read as follows: 

  
 Assignment and Subletting: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Expansion Premises or any part thereof, or any right or privilege appurtenant thereto, or cause any other person or entity, to occupy or use the Expansion Premises, or any portion thereof, without the
advance written consent of Lessor, which consent shall not be unreasonably withheld and shall be given or withheld within ten (10) days following Lessee’s request for such consent and delivery of the items required by this Section to be
delivered to Lessor. Notwithstanding the above, Lessee may, without the consent of Lessor and without application of any of the other rights granted to the Lessor under this Section 20, assign this Lease or sublet all or any part of the Expansion
Premises to (A) a bona fide subsidiary or affiliate of Lessee (provided the Lessee remains liable on the Lease as a surety or guarantor), (B) an entity in which or with which Lessee merges (provided the net worth of the resulting entity is not less
than the net worth of the Lessee immediately prior to such transaction), or (C) an entity which acquires all or substantially all of the assets of Lessee located at the Expansion Premises (provided the Lessee remains liable on the Lease as a surety
or guarantor) (in any such case an “Excepted Party”). Any such assignment or subletting requiring Lessor’s consent made without Lessor’s consent shall be void, and shall, at the option of the Lessor, terminate this Lease. This
Lease shall not, nor shall any interest herein, be assignable, as to the interest of Lessee, by operation of law, without the written consent of Lessor, except to an Excepted Party. The sale of Lessee’s capital stock through a public exchange
shall not be deemed a conveyance of this Lease, the Expansion Premises or any portion thereof or interest therein. 
  

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 If Lessee desires to assign its rights under this Lease or to sublet all or any part of the Expansion
Premises to a party other than an Excepted Party for less than the remaining term of the Lease, Lessee and Lessor shall split (50/50) the Bonus Rent actually received by the Lessee in connection with such transaction. As used herein “Bonus
Rent” shall mean the consideration received by the Lessee for the subleasing of the sublet premises or the assignment of this Lease, less the amounts that remain payable by the Lessee under this Lease with respect to the affected portions of
the Expansion Premises, less reasonable broker and attorney costs associated with the transaction, and less the cost that Lessee is required to incur to perform its obligations under such sublease or assignment, including without limitation, any
improvement costs. 
  
 If Lessee desires to assign its rights
under this Lease or to sublet all of the Expansion Premises for the remainder of the Lease Term or for a period including the last year of the Lease Term (other than to an Excepted Party), Lessee shall first notify Lessor of the proposed terms and
conditions of such assignment or subletting. Lessor, at its sole option, shall have the right to terminate the Lease and relieve Lessee of all Lease obligations occurring after the termination of the Lease. Whether or not Lessor’s consent to a
sublease or assignment is required, in the event of any sublease or assignment, Lessee shall be and shall remain primarily liable for the performance of all conditions, covenants, and obligations of Lessee hereunder and, in the event of a default by
an assignee or sublessee, Lessor may proceed directly against the original Lessee hereunder and/or any other predecessor of such assignee or sublessee without the necessity of exhausting remedies against said assignee or sublessee. 
  

	 	12.	Expansion Right: Lessor shall grant Lessee a right of first refusal until January 1, 2008, to lease the 5981 Optical Court building. Upon receiving written notice from Lessor
that Lessor plans to enter into a lease for all, or a portion of the space in the building at 5981 Optical Court and of the proposed lease terms , Lessee shall have five (5) days to deliver written acceptance of Lessor’s offer. The term for any
space leased by Lessee hereunder shall be conterminous with the term of this Third Amendment, but not less than for a period of 60 months. Lessee’s failure to deliver a written acceptance to Lessor within five (5) days of receiving
Lessor’s offer shall constitute a rejection of Lessor’s offer. 

  

	 	13.	Furniture in Expansion Premises: Lessor shall provide Lessee with the use of up to 175 8’x8’ pre-owned wired (electrical & CAT5 wiring, 2 lines each for voice
and 2 lines each for data) partition furniture (Herman Miller brand or equivalent quality) (the “Partition Furniture”) in the Expansion Premises for a fully installed cost not to exceed Two Hundred Thousand Dollars ($200,000) (the
“Lessor’s Partition Furniture Allowance”). The quality and appearance of the Partition Furniture that Lessor offers shall be subject to the reasonable approval of Lessee. If Lessee accepts Partition Furniture the total installed cost
of which exceeds the Lessor’s Partition Furniture Allowance, prior to procuring the Partition Furniture, Lessor will deliver written notification to Lessee of the cost of the Partition Furniture in excess of the Lessor’s Partition
Furniture Allowance (the “Lessor’s Partition Furniture Purchase Notice”). Within five (5) days of receipt of Lessor’s Partition Furniture Purchase Notice, Lessee is required to provide a written response to Lessor to reduce the
quantity of Partition Furniture in order to reduce the total cost to the amount of the Lessor’s Partition Furniture Allowance, or Lessor will proceed with the procurement and installation of the approved Partition Furniture. Lessee shall be
responsible for all costs of the approved Partition Furniture in excess of the Lessor’s Partition Furniture Allowance, and upon Lessee delivering a written request to Lessor at least thirty 

  

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 (30) days prior to the Expansion Premises Commencement Date, Lessor will amortize the cost of the
Partition Furniture in excess of the Lessor’s Partition Furniture Allowance over the initial term of the Lease at zero interest cost. Upon the Lease termination, Lessee shall leave the Partition Furniture in its then condition “As Is”
“Where Is” with clear title free of any liens or encumbrances. Lessee may designate furniture other than 175 partitions (such as for instance conference room furniture) to be acquired by Lessor so long as the total cost to Lessor does not
exceed Lessor’s Partition Furniture Allowance. At Lessee’s option, Lessee may elect to locate the Partition Furniture in which case Lessor shall acquire the Lessee located Partition Furniture provided Lessor shall be obligated to pay not
more than Lessor’s Partition Furniture Allowance (with Lessee to pay any excess as described above). 
  

	 	14.	Earthquake Insurance: Section 31. Earthquake Insurance. The amount that the Lessor could charge for earthquake insurance shall be increased from $20,800 per year to
$51,408 per year.  

  

	 	15.	Transition of Occupancy from Original Premises to Expansion Premises: Lessor will grant Lessee a two (2) month period from the Expansion Premises Commencement Date to the
60th day thereafter to allow Lessee to continue to occupy the Original Premises for Lessee’s transition to the
Expansion Premises (the “Transition Period”). During the Transition Period Lessee will not be required to pay Base Rent or CAC for the Original Premises; provided Lessee will pay all utility charges for the Original Premises. Lessee will
be required to deliver the Original Premises to the Lessor in accordance with the terms and conditions of the Lease no later than the sixtieth (60th) day following the Expansion Premises Commencement Date or be subject to the Holding Over provisions of Section 25 of the Lease. 

  

	 	16.	Brokers: Section 34. Brokers in the Lease is hereby deleted and shall read as follows: 

  
 Each party represents and warrants to the other party that it has not
utilized or contacted a real estate broker or finder with respect to this Third Amendment other than Colliers International (“Colliers”) and each party agrees to indemnify and hold each other harmless against any claim, cost, liability or
cause of action asserted by any broker or finder claiming through either party other than Colliers. Lessor and Lessee agree that Lessor shall be responsible for a commission owed to Colliers in accordance with Lessor’s commission agreement with
Colliers International dated June 13, 2003. In addition, Lessor and Lessee agree that Lessor shall not be responsible for the payment of any other consulting fees, finder’s fees or any other fees or commissions arising out of the negotiation
and execution of this Third Amendment. Lessor may adjust commission based on June 13, 2003 agreement to reflect any changes in base rent as a result of this Amendment. 
  

	 	17.	Option to Extend: Section 35. Option to Extend A. Option The first sentence in the Lease is hereby deleted and shall read as follows:


  
 “Lessor hereby grants to Lessee two (2)
options to extend the Lease Term for five (5) year periods, on the following terms and conditions:” 
  
 B. Extended Term Rent – Option Period: The first sentence in the Lease Section 35B is hereby deleted and shall read as follows: 
  
 “The monthly rent for the Building during the extended term shall equal
ninety-five percent (95%) of the fair market monthly rent for the Building as of the commencement date of the extended term.” 
  

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 The fourth sentence in Section 35B, that reads “Annual base rent increases during the extended term
shall be three percent (3%) per year”, is hereby deleted. The following is hereby added in its place: “Rent increases shall be at then “market” as agreed by the parties, or as determined by appraisal.” 
  
 Add the following sentence to the end of B. Extended Term Rent –
Option Period: 
  
 “Notwithstanding the foregoing, the
Appraisers shall value the Building based on it being a standard Research and Development (R&D) and a manufacturing building (and without considering the increase, or decrease, in rental value resulting from the installation of the Lessee’s
Improvements or any other Lessee Additions or Alterations installed during the Lease Term or any extensions thereof). Appraiser may use the allocation of 
  
 the cost of Lessor’s and Lessee’s Improvements set forth herein in determining what items should be included in rental value and shall not
include in the rental value that portion related to the cost of Lessee’s Improvement in evaluating the Premises. The appraiser shall determine the rental value as though the Lessee’s Improvements were absent from the Premises (without any
replacement). 
  

	 	18.	Lessee Option to Terminate: 

  

	 	18.1	Lessee may terminate this Agreement on written notice to Lessor if Lessor fails to obtains a building permit from the City of San Jose for the deck or Lessor fails to obtain a
building permit from the City of San Jose for the Lessee Improvements and the Lessor Improvements on or before the 49th day following the date both parties have signed this Third Amendment. 

  

	 	18.2	Subject to the uncontrollable delay’s and Lessee Delay’s provisions set forth in the first paragraph of Page 5 of this Amendment Lessee may terminate this lease if Lessor
is more than 30 days behind the completion schedule attached as Exhibit E. Notwithstanding the above, this termination right will be null and void if Lessor can based on reasonable evidence show that Lessor can make up any delay in excess of 30 day
prior to Adjusted Completion Date. “Adjusted Completion Date” is February 1, 2004 plus allowance for uncontrollable delay’s and Lessee Delay’s set forth herein. If Lessee and Lessor cannot agree that it is reasonable that Lessor
can meet the Adjusted Completion Date, an independent contractor with substantial recent experience in building R&D facilities will be hired to determine if the assumptions of Lessor on completion date are reasonable. If contractor determines
assumptions are reasonable, then Lessor shall have until the Adjusted Completion Date to Substantially Complete before Lessee would have an option to terminate the Lease. 

  

	 	19.	Ratification of Lease: Except as modified herein, the Lease is hereby ratified, approved and confirmed upon all the terms, covenants, and conditions.


  

	 	20.	Authority: Each party executing this Third Amendment represents and warrants that he or she is duly authorized to execute and deliver this Third Amendment. If executed
on behalf of a corporation, that this Third Amendment is executed in accordance with the by-laws of said corporation (or a partnership that this Third Amendment is executed in accordance with the partnership agreement of such partnership), that no
other party’s approval or consent to such execution and delivery is required, and that this Third Amendment is binding upon said individual, corporation (or partnership) as the case may be in accordance with its terms. 


 

 9 









 IN WITNESS WHEREOF, the parties have executed this Third Amendment, by their duly authorized signatories, as of the day
first above written. 
  

	 LESSOR:
	 	 LESSEE:

	 MISSION WEST PROPERTIES, L.P. II
	 	 PHOTON DYNAMICS, INC.

	 a Delaware limited partnership
	 	 
	 By: Mission West Properties, Inc.
	 	 
	 Its General Partner
	 	 
				
	 By:
	 	 /s/ CARL E. BERG

	 	 By:
	 	 /s/ Richard Okumoto


				
	 Print Name:
	 	 Carl E. Berg
	 	 Print Name:
	 	 Richard Okumoto

				
	 Title:
	 	 Chief Executive Officer
	 	 Title:
	 	 Chief Financial Officer

				
	 Date:
	 	 August 13, 2003
	 	 Date:
	 	 August 12, 2003


  

 10 










	 Lessee’s Improvements
	 	EXHIBIT B
	 Tenant: Photon Dynamics - 6331 San Ignacio
	 	 
	    Estimated Cost Analysis            Square Feet – 131320	 	 

  

	 Item

	  	Description

	  	Units

	  	 Type

	  	 Unit
 Cost

	  	Estimated
Amount

	  	Estimated
$/SF Of
Bldg Tot


	 Engineering
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
	 AIA
	  	 	  	65660	  	sq ft	  	 	0.35	  	$	22,981	  	$	0.18
	 HVAC Engineering
	  	 	  	65660	  	sq ft	  	 	0.30	  	$	19,698	  	$	0.15
	 Electrical Engineering
	  	 	  	65660	  	sq ft	  	 	0.35	  	$	22,981	  	$	0.18
	 Structural Engineering
	  	 	  	32830	  	sq ft	  	 	0.15	  	$	4,925	  	$	0.04
	 Sprinkler Engineering
	  	 	  	30000	  	sq ft	  	 	0.05	  	$	1,500	  	$	0.01
	 Interior Design
	  	 	  	 	  	lump sum	  	 	 	  	$	—  	  	$	—  
	 Plumbing Design (included in plumbing)
	  	 	  	 	  	lump sum	  	 	 	  	$	—  	  	$	—  
	 Title 24
	  	 	  	2.00	  	lump sum	  	 	800.00	  	$	1,600	  	$	0.01
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	  	 	total>>>>>	  	$	73,685	  	$	0.56
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
							
	 General Construction
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
	 General Conditions
	  	 	  	43773.33333	  	sq.ft..	  	 	0.30	  	$	13,132	  	$	0.10
	 Construction Utilities
	  	 	  	65660	  	sq.ft..	  	 	0.22	  	$	14,445	  	$	0.11
	 Clean Up
	  	 	  	65660	  	sq.ft..	  	 	0.40	  	$	26,264	  	$	0.20
	 Supervision
	  	 	  	2.00	  	lump sum	  	 	20,000.00	  	$	40,000	  	$	0.30
	 Final Janitorial
	  	 	  	 	  	 	  	 	 	  	 	 	  	$	—  
	 Reproduction
	  	 	  	 	  	lump sum	  	 	 	  	$	2,000	  	$	0.02
	 Demolition (included in Drywall)
	  	 	  	1	  	lump sum	  	 	 	  	 	 	  	$	—  
	 Construction Security
	  	 	  	 	  	sq.ft..	  	 	0.25	  	$	0	  	$	—  
	 Construction Insurance
	  	 	  	131,320	  	sq.ft..	  	$	10:$1,000	  	$	25,000	  	$	0.19
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	  	 	total>>>>>	  	$	120,841	  	$	0.92
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
							
	 Permits & Fees
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
	 Plan Check & Permits
	  	 	  	 	  	sq.ft..	  	 	 	  	$	0	  	$	—  
	 Interior Plan Check Fee
	  	 	  	131320	  	sq.ft..	  	 	0.13	  	$	17,072	  	$	0.13
	 Interior Building Permit
	  	 	  	131320	  	sq.ft..	  	 	0.83	  	$	32,000	  	$	0.24
	 Sewer Usage Fees
	  	 	  	 	  	sq.ft..	  	 	0.70	  	$	0	  	$	—  
	 Health Dept. Permit
	  	 	  	 	  	sq.ft..	  	 	 	  	$	0	  	$	—  
	 Fire Department Permit
	  	 	  	 	  	sq.ft..	  	 	 	  	$	750	  	$	0.01
	 Telephone Main Service
	  	 	  	 	  	lump sum	  	 	 	  	$	0	  	$	—  
	 Utilities-PG&E Service
	  	 	  	 	  	lump sum	  	 	 	  	$	0	  	$	—  
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	  	 	total>>>>>	  	$	49,822	  	$	0.38
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
							
	 Plumbing & Accessories
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 
	 Plumbing
	  	 	  	 	  	lump sum	  	 	 	  	$	474,875	  	$	3.62
	 Concrete dowel and patch
	  	 	  	 	  	lump sum	  	 	0.00	  	$	8,000	  	$	0.06
	 Plumbing - extra cores
	  	 	  	 	  	extra units	  	 	 	  	$	10,000	  	$	0.08
	 Coffee Bars
	  	 	  	 	  	each	  	 	5,000.00	  	$	0	  	$	—  
	 Toilet Parts/Accessories/RM
	  	 	  	 	  	sq ft	  	 	0.12	  	$	0	  	$	—  
	 Mirrors/RM
	  	 	  	 	  	sq ft	  	 	0.10	  	$	0	  	$	—  
	 Showers
	  	 	  	 	  	lump sum	  	 	5,235.00	  	$	0	  	$	—  
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	  	 	total>>>>>	  	$	492,875	  	$	3.75
	 	  	 	  	 	  	 	  	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	  	 	 	  	 	 	  	 	 










	 Electrical
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
	 Electrical - Allowance
	 	 	 	 	  	lump sum	  	 	  	$	525,000	  	$	4.00
	 Lighting align
	 	 	 	 	  	each	  	65.00	  	$	0	  	$	—  
	 New lighting
	 	 	 	50000	  	sq ft	  	1.50	  	$	75,000	  	$	0.57
	 Separate Meters
	 	 	 	 	  	lump sum	  	10,000.00	  	$	0	  	$	—  
	 T-Bar Lighting
	 	 	 	 	  	each	  	63.00	  	$	0	  	$	—  
	 new A/C unit power
	 	 	 	 	  	lump sum	  	3,135.00	  	$	0	  	$	—  
	 PG&E hook-up fee
	 	 	 	 	  	lump sum	  	 	  	$	10,000	  	$	0.08
	 Remove old switch gear
	 	 	 	 	  	lump sum	  	 	  	$	5,000	  	$	0.04
	 New switch gear & breakers
	 	 	 	 	  	lump sum	  	 	  	$	92,403	  	$	0.70
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 	 	 	 	 	  	 	  	total>>>>>	  	$	707,403	  	$	5.39
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 Invoiced to date
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
							
	 HVAC
	 	KVA x 3.14 /12,000 = Ton	 	 	  	 	  	 	  	 	 	  	 	 
	 HVAC
	 	 Tons =Sq Ft/300
	 	    1.00	  	lump sum	  	 	  	$	1,635,000	  	$	12.45
	 HVAC-UPS/Humidifier
	 	 	 	 	  	 	  	 	  	$	0	  	$	—  
	 Exhaust fans. Hoods 3t,17T units for labs
	 	 	 	 	  	ea	  	 	  	$	0	  	$	—  
	 HVAC - Warehouse Dump
	 	 	 	 	  	ton	  	1,700.00	  	$	0	  	$	—  
	 HVAC 24 Hour
	 	 	 	 	  	ton	  	2,500.00	  	$	0	  	$	—  
	 Structural Supports for HVAC
	 	 	 	 	  	sq.ft..	  	0.00	  	$	20,000	  	$	0.15
	 Add roof penetrations
	 	 	 	 	  	 	  	 	  	$	20,000	  	$	0.15
	 Trash cleanup
	 	 	 	 	  	 	  	 	  	$	0	  	$	—  
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 	 	 	 	 	  	 	  	total>>>>>	  	$	1,675,000	  	$	12.76
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 Invoiced to date
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
							
	 Drywall/Partitioning/Ceilings
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
	 Drywall
	 	 	 	 	  	Lump sum	  	0.00	  	$	95,500	  	$	0.73
	 Doors
	 	 	 	 	  	Lump sum	  	 	  	$	39,000	  	$	0.30
	 Dividing Wall (>16 ft)
	 	 	 	 	  	Lump sum	  	 	  	$	65,500	  	$	0.50
	 Smooth Texture Wall
	 	 	 	 	  	sq.ft..	  	0.00	  	$	0	  	$	—  
	 Acoustical Ceiling
	 	 	 	 	  	Lump sum	  	 	  	$	97,000	  	$	0.74
	 Acoustical Ceiling-Vinyl or 2 x 2
	 	 	 	 	  	sq.ft..	  	2.20	  	$	0	  	$	—  
	 Skylight Frame and glass
	 	 	 	 	  	 	  	0.00	  	$	0	  	$	—  
	 Corridor fire rating construction
	 	 	 	 	  	Lump sum	  	 	  	$	11,000	  	$	0.08
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 	 	 	 	 	  	 	  	total>>>>>	  	$	308,000	  	$	2.35
	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 Invoiced to date
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
							
	 Flooring/Painting
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
	 Carpeting & 4" Base (26 oz.)
	 	 	 	15000
	  	sq.ft..
	  	2.75
	  	$
	41,250
	  	$
	0.31

	Carpet tiles under partitions
	 	 	 	25000
	  	sq.ft..
	  	4.00
	  	$
	100,000
	  	$
	0.76

	Sheet Vinyl (see sheet vinyl in clean rm.)
	 	 	 	 	  	sq.ft..
	  	3.75
	  	$
	0
	  	$
	—  

	Epoxy sealant
	 	 	 	10000
	  	sq.ft..
	  	12.00
	  	$
	120,000
	  	$
	0.91

	Sealed concrete
	 	 	 	78319
	  	sq.ft..
	  	1.00
	  	$
	78,319
	  	$
	0.60

	Stone (Interior & Exterior)
	 	 	 	 	  	sq.ft..
	  	10.00
	  	$
	0
	  	$
	—  

	Painting/Wall Coverings
	 	 	 	0.22
	  	sq.ft..
	  	 	  	$
	35,000
	  	$
	0.27

	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 	 	 	 	128319.22
	  	 	  	total>>>>>
	  	$
	374,569
	  	$
	2.85

	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	Invoiced to date
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
							
	Cafeteria/Lunch Room
	 	 	 	 	  	 	  	 	  	 	 	  	 	 
	Cafeteria Hood and Related Duct
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Cafeteria Hood Fire System
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Cafeteria Tray Door
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Cafeteria Extra Electrical
	 	 	 	 	  	 	  	 	  	$
	0
	  	$
	—  

	Cafeteria Plumbing
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Concrete Replacement (lobby, cafeteria)
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Structural Windows
	 	 	 	 	  	each
	  	 	  	$
	0
	  	$
	—  

	Patio & Fence
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	Landscape Extras
	 	 	 	 	  	lump sum
	  	 	  	$
	0
	  	$
	—  

	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	 	 	 	 	 	  	 	  	total>>>>>
	  	$
	0
	  	$
	—  

	 	 	 	 	 	  	 	  	 	  	
	
	  	
	

	Invoiced to date
	 	 	 	 	  	 	  	 	  	 	 	  	 	 










	 Specialty
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
	 Elevators
	  	 	  	 	  	each	 	58,000.00	  	$	0	  	$	—  
	 Structural Steel -Elevator & Stairs
	  	 	  	 	  	each	 	32,400.00	  	$	0	  	$	—  
	 Levelor Blinds
	  	 	  	 	  	sq.ft..	 	0.40	  	$	0	  	$	—  
	 Millwork (Lunch Room, RM, & Coffee)
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Paging System
	  	 	  	 	  	each	 	 	  	$	0	  	$	—  
	 Expand electrical equipment pad
	  	 	  	 	  	20'x20'	 	8.00	  	$	3,200	  	$	0.02
	 Process equipment pad
	  	 	  	 	  	64'x64'	 	15.00	  	$	61,440	  	$	0.47
	 Extension of concrete pad at dock area
	  	 	  	 	  	24'x56'	 	8.00	  	$	10,752	  	$	0.08
	 8' concrete block fence for equipment pad-one 6' gate
	  	 	  	 	  	64'x8x4	 	18.00	  	$	36,864	  	$	0.28
	 Wharehouse rack dismantling
	  	 	  	 	  	each	 	 	  	$	15,000	  	$	0.11
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	 	total>>>>>	  	$	127,256	  	$	0.97
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
							
	 Fire Protection & Related
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
	 Fire Protection Rack
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Fire Sprinklers
	  	 	  	 	  	lump sum	 	 	  	$	3,000	  	$	0.02
	 Fire Sprinklers U/G
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Fire Sprinklers-Warehouse/racking dismantling
	  	 	  	 	  	lump sum	 	 	  	$	3,000	  	$	0.02
	 Recessed Sprinkler Heads
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Central Fire Monitor
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Fire Extinguishers
	  	1/3000sf or 75' apart	  	131320	  	sq ft	 	0.03	  	$	3,940	  	$	0.03
	 Smoke Detection - Lobby and Computer
	  	 	  	 	  	each	 	 	  	$	0	  	$	—  
	 Pre-action Sprinkler Computer
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 FM-200
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	 	total>>>>>	  	$	9,940	  	$	0.08
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
							
	 Dockage/Shipping
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
	 Shipping & Receiving Equipment
	  	 	  	 	  	lump sum	 	 	  	$	0	  	$	—  
	 Dock Levelers
	  	 	  	 	  	each	 	8,300.00	  	$	8,300	  	$	0.06
	 Canopy @ Truck Door
	  	 	  	 	  	 	 	 	  	$	0	  	$	—  
	 Dock Bumpers
	  	 	  	4	  	each	 	500.00	  	$	2,000	  	$	0.02
	 Roll Up Door/Exits
	  	 	  	 	  	 	 	8,500.00	  	$	0	  	$	—  
	 Roll Up Door-Retrofit
	  	 	  	13	  	 	 	5,176.92	  	$	67,300	  	$	0.51
	 Chain Link Fence
	  	 	  	 	  	ln ft	 	12.00	  	$	0	  	$	—  
	 Metal Dock Doors
	  	 	  	 	  	 	 	 	  	$	0	  	$	—  
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	 	total>>>>>	  	$	77,600	  	$	0.59
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
							
	 Exterior/Remodel Related
	  	 	  	 	  	 	 	 	  	 	 	  	 	 
	 Exit Doors
	  	 	  	 	  	each	 	5,000.00	  	$	0	  	$	—  
	 Extra Glass & Glazing
	  	 	  	 	  	 	 	 	  	$	0	  	$	—  
	 Tree & stump removal for switch gear pad
	  	 	  	2	  	each	 	2,500.00	  	$	5,000	  	$	0.04
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 	  	 	  	 	  	 	 	total>>>>>	  	$	5,000	  	$	0.04
	 	  	 	  	 	  	 	 	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	 	 	  	 	 	  	 	 










	 Clean Room
	  	 	  	 	  	 	  	 	  	 	 	  	 	 
	 Improvements C 10000 & 100000
	  	 	  	 	  	 	  	 	  	$	0	  	$	—  
	 AIA
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 Ceiling (included above in drywall)
	  	Sealed & Vinyl Rock	  	 	  	sq.ft..	  	 	  	$	0	  	$	—  
	 Vinyl Tile
	  	Coved & Welded	  	3,000	  	sq.ft..	  	6.50	  	$	19,500	  	$	0.15
	 Epoxy on flooring (see flooring above)
	  	 	  	 	  	 	  	 	  	$	0	  	 	 
	 Air Showers (waiting for pricing)
	  	 	  	2	  	each	  	2,500.00	  	$	5,000	  	$	0.04
	 Sewer Line
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 Concrete Replace
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 Piping (included in plumbing above)
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 Electrical
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 HVAC (included in HVAC above)
	  	 	  	 	  	lump sum	  	 	  	$	0	  	$	—  
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	

	 	  	 	  	 	  	 	  	total>>>>>	  	$	24,500	  	$	0.19
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	

	 Invoiced to date
	  	 	  	 	  	 	  	 	  	 	 	  	 	 
	 Contingency
	  	 	  	131,320	  	sq. ft.	  	1.90	  	$	249,508	  	$	1.90
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	

	 SUBTOTAL -
	  	 	  	 	  	 	  	 	  	$	4,295,998	  	$	32.71
	 Management Fee @ 6%
	  	 	  	 	  	 	  	 	  	$	257,800	  	$	1.96
	 Construction Interest & Points @1%
	  	 	  	 	  	 	  	 	  	$	42,960	  	$	0.33
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	

	 SUBTOTAL -
	  	 	  	 	  	 	  	 	  	$	300,760	  	$	2.29
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	

	 TOTAL -
	  	 	  	 	  	 	  	 	  	$	4,596,758	  	$	35.00
	 	  	 	  	 	  	 	  	 	  	
	
	  	
	




	1)	Electrical provided to HVAC and distribution only, tenant equipment not included. 


	2)	The following are specifically not included in this estimate: Telephone, data, security, cable trays, open office movable partitions, storage tank age, process equipment and other
specialty items not shown. 









 

 








 Exhibit D 
  



 








 

 








 Exhibit E 
  

Photon Dynamics 
  

	 Photon Dynamics TI Construction Schedule


	 5970 Optical Court
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Building 3A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	*	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	**	 	 	 	 	 	 	 	***
	 Description
	 	7-Aug	 	11-Aug	 	18-Aug	 	25-Aug	 	1-Sep	 	8-Sep	 	15-Sep	 	22-Sep	 	29-Sep	 	6-Oct	 	13-Oct	 	20-Oct	 	27-Oct	 	3-Nov	 	10-Nov	 	17-Nov	 	24-Nov	 	1-Dec	 	8-Dec	 	15-Dec	 	22-Dec
	 Submit Structural Modifications to City
	 	XX	 	XXXXX	 	XX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Start HVAC Bids
	 	 	 	XXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Start Electrical Design
	 	 	 	XXXXX	 	XXXXX	 	XX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Bid Plumbing
	 	 	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Start HVAC Design
	 	 	 	 	 	 	 	XXXXX	 	_XXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Bid Electrical
	 	 	 	 	 	 	 	XXX	 	_XXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Submit Improvement Plans to City
	 	 	 	 	 	 	 	XXXXX	 	_XXXX	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 2nd Deck
	 	 	 	 	 	 	 	 	 	_XXXX	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Concrete 2nd Deck
	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Draft Stop
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Roof Insulation
	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Sprinklers
	 	 	 	 	 	 	 	 	 	 	 	XX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 HVAC
	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 Electrical
	 	 	 	 	 	 	 	 	 	 	 	 	 	XX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 Drywall
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 T-Bar Wire & Frames
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	 	 	 	 	 	 	 	 	 	 	 
	 Counters & Millwork
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 Ceramic Tile
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	 	 	 	 	 
	 Painting
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 Install Telephone, Network & Security (above ceiling)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXX__	 	XXXXX	 	XX	 	 	 	 
	 Drop T-Bar
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XX	 	XXX__	 	XXXXX	 	XXXXX	 	 	 	 
	 Toilet Partitions, Mirrors & Accessories
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXXXX	 	XXX__	 	 	 	 	 	 	 	 
	 Carpeting & Flooring
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXX__	 	XX	 	 	 	 	 	 
	 Specialty Items
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	XXX__	 	 	 	 	 	 	 	 
	 Final Sub Inspections
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	XXXXX	 	 
	 Final Inspections
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	X	 	XXX
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 * Sep 1 = Labor Day
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 ** Nov 27-28 = Thanksgiving
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 *** Dec 25-26 = Christmas