Exhibit
10.1


 


 


 


 


 


 


 


 


LEASE


(Multi-Tenant; Net)


 


 


BETWEEN


 


 


THE IRVINE COMPANY LLC


 


 


AND


 


 


NETLIST, INC.
















INDEX TO LEASE


	
  ARTICLE I. BASIC LEASE
  PROVISIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. PREMISES

  	
   

  	
  3

  
	
  SECTION
  2.1.

  	
  LEASED PREMISES

  	
  3

  
	
  SECTION
  2.2.

  	
  ACCEPTANCE OF PREMISES

  	
  3

  
	
  SECTION
  2.3.

  	
  BUILDING NAME AND ADDRESS

  	
  3

  
	
  SECTION
  2.5. 

  	
  RIGHT OF FIRST REFUSAL

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. TERM

  	
   

  	
  5

  
	
  SECTION
  3.1.

  	
  GENERAL

  	
  5

  
	
  SECTION
  3.2.

  	
  DELAY IN POSSESSION

  	
  5

  
	
  SECTION
  3.3.

  	
  RIGHT TO EXTEND THIS LEASE

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. RENT AND OPERATING EXPENSES

  	
   

  	
  6

  
	
  SECTION
  4.1.

  	
  BASIC RENT

  	
  6

  
	
  SECTION
  4.2.

  	
  OPERATING EXPENSES

  	
  6

  
	
  SECTION
  4.3.

  	
  SECURITY DEPOSIT

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. USES

  	
   

  	
  9

  
	
  SECTION
  5.1.

  	
  USE

  	
  9

  
	
  SECTION
  5.2.

  	
  SIGNS

  	
  9

  
	
  SECTION
  5.3.

  	
  HAZARDOUS MATERIALS

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. COMMON AREAS; SERVICES

  	
   

  	
  11

  
	
  SECTION
  6.1.

  	
  UTILITIES AND SERVICES

  	
  11

  
	
  SECTION
  6.2.

  	
  OPERATION AND MAINTENANCE OF COMMON AREAS

  	
  12

  
	
  SECTION
  6.3.

  	
  USE OF COMMON AREAS

  	
  12

  
	
  SECTION
  6.4.

  	
  PARKING

  	
  12

  
	
  SECTION
  6.5.

  	
  CHANGES AND ADDITIONS BY LANDLORD

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. MAINTAINING THE PREMISES

  	
   

  	
  13

  
	
  SECTION
  7.1.

  	
  TENANT’S MAINTENANCE AND REPAIR

  	
  13

  
	
  SECTION
  7.2.

  	
  LANDLORD’S MAINTENANCE AND REPAIR

  	
  13

  
	
  SECTION
  7.3.

  	
  ALTERATIONS

  	
  13

  
	
  SECTION
  7.4.

  	
  MECHANIC’S LIENS

  	
  14

  
	
  SECTION
  7.5.

  	
  ENTRY AND INSPECTION

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT’S
  PROPERTY

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. ASSIGNMENT AND SUBLETTING

  	
   

  	
  15

  
	
  SECTION
  9.1.

  	
  RIGHTS OF PARTIES

  	
  15

  
	
  SECTION
  9.2.

  	
  EFFECT OF TRANSFER

  	
  16

  
	
  SECTION
  9.3.

  	
  SUBLEASE REQUIREMENTS

  	
  17

  
	
  SECTION
  9.4.

  	
  CERTAIN TRANSFERS

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. INSURANCE AND INDEMNITY

  	
   

  	
  17

  
	
  SECTION
  10.1.

  	
  TENANT’S INSURANCE

  	
  17

  
	
  SECTION
  10.2.

  	
  LANDLORD’S INSURANCE

  	
  18

  
	
  SECTION
  10.3.

  	
  TENANT’S INDEMNITY

  	
  18

  
	
  SECTION
  10.4.

  	
  LANDLORD’S NONLIABILITY

  	
  18

  
	
  SECTION
  10.5.

  	
  WAIVER OF SUBROGATION

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. DAMAGE OR DESTRUCTION

  	
   

  	
  18

  
	
  SECTION
  11.1.

  	
  RESTORATION

  	
  19

  
	
  SECTION
  11.2.

  	
  LEASE GOVERNS

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII. EMINENT DOMAIN

  	
   

  	
  20

  
	
  SECTION
  12.1.

  	
  TOTAL OR PARTIAL TAKING

  	
  20

  
	
  SECTION
  12.2.

  	
  TEMPORARY TAKING

  	
  20

  
	
  SECTION
  12.3.

  	
  TAKING OF PARKING AREA

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE;
  FINANCIALS

  	
  20

  
	
  SECTION
  13.1.

  	
  SUBORDINATION

  	
  20

  
	
  SECTION
  13.2.

  	
  ESTOPPEL CERTIFICATE

  	
  20

  
	
  SECTION
  13.3.

  	
  FINANCIALS

  	
  21

  
				



 



 i
 









 


	
  ARTICLE XIV. EVENTS OF DEFAULT AND REMEDIES

  	
   

  	
  21

  
	
  SECTION
  14.1.

  	
  TENANT’S DEFAULTS

  	
  21

  
	
  SECTION
  14.2.

  	
  LANDLORD’S REMEDIES

  	
  22

  
	
  SECTION
  14.3.

  	
  LATE PAYMENTS

  	
  23

  
	
  SECTION
  14.4.

  	
  RIGHT OF LANDLORD TO PERFORM

  	
  23

  
	
  SECTION
  14.5.

  	
  DEFAULT BY LANDLORD

  	
  23

  
	
  SECTION
  14.6.

  	
  EXPENSES AND LEGAL FEES

  	
  24

  
	
  SECTION
  14.7.

  	
  WAIVER OF JURY TRIAL/JUDICIAL REFERENCE

  	
  24

  
	
  SECTION
  14.8.

  	
  SATISFACTION OF JUDGMENT

  	
  25

  
	
  SECTION
  14.9.

  	
  LIMITATION OF ACTIONS AGAINST LANDLORD

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV. END OF TERM

  	
   

  	
  25

  
	
  SECTION
  15.1.

  	
  HOLDING OVER

  	
  25

  
	
  SECTION
  15.2.

  	
  MERGER ON TERMINATION

  	
  25

  
	
  SECTION
  15.3.

  	
  SURRENDER OF PREMISES; REMOVAL OF PROPERTY

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI. PAYMENTS AND NOTICES

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII. RULES AND REGULATIONS

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII. BROKER’S COMMISSION

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX. TRANSFER OF LANDLORD’S INTEREST

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE XX. INTERPRETATION

  	
   

  	
  26

  
	
  SECTION
  20.1.

  	
  GENDER AND NUMBER

  	
  26

  
	
  SECTION
  20.2.

  	
  HEADINGS

  	
  26

  
	
  SECTION
  20.3.

  	
  JOINT AND SEVERAL LIABILITY

  	
  26

  
	
  SECTION
  20.4.

  	
  SUCCESSORS

  	
  27

  
	
  SECTION
  20.5.

  	
  TIME OF ESSENCE

  	
  27

  
	
  SECTION
  20.6.

  	
  CONTROLLING LAW/VENUE

  	
  27

  
	
  SECTION
  20.7.

  	
  SEVERABILITY

  	
  27

  
	
  SECTION
  20.8.

  	
  WAIVER AND CUMULATIVE REMEDIES

  	
  27

  
	
  SECTION
  20.9.

  	
  INABILITY TO PERFORM

  	
  27

  
	
  SECTION
  20.10.

  	
  ENTIRE AGREEMENT

  	
  27

  
	
  SECTION
  20.11.

  	
  QUIET ENJOYMENT

  	
  27

  
	
  SECTION
  20.12.

  	
  SURVIVAL

  	
  27

  
	
  SECTION
  20.13.

  	
  INTERPRETATION

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXI. EXECUTION AND RECORDING

  	
   

  	
  27

  
	
  SECTION
  21.1.

  	
  COUNTERPARTS

  	
  27

  
	
  SECTION
  21.2.

  	
  CORPORATE, LIMITED LIABILITY COMPANY AND
  PARTNERSHIP AUTHORITY

  	
  27

  
	
  SECTION
  21.3.

  	
  EXECUTION OF LEASE; NO OPTION OR OFFER

  	
  28

  
	
  SECTION
  21.4.

  	
  RECORDING

  	
  28

  
	
  SECTION
  21.5.

  	
  AMENDMENTS

  	
  28

  
	
  SECTION
  21.6.

  	
  EXECUTED COPY

  	
  28

  
	
  SECTION
  21.7.

  	
  ATTACHMENTS

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXII. MISCELLANEOUS

  	
   

  	
  28

  
	
  SECTION
  22.1.

  	
  NONDISCLOSURE OF LEASE TERMS

  	
  28

  
	
  SECTION
  22.2.

  	
  GUARANTEE

  	
  28

  
	
  SECTION
  22.3.

  	
  CHANGES REQUESTED BY LENDER

  	
  28

  
	
  SECTION
  22.4.

  	
  MORTGAGEE PROTECTION

  	
  28

  
	
  SECTION
  22.5.

  	
  COVENANTS AND CONDITIONS

  	
  28

  
	
  SECTION
  22.6.

  	
  SECURITY MEASURES

  	
  29

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Exhibit A

  	
  Description of Premises

  	
   

  
	
   Exhibit
  A-1

  	
  Expansion Space

  	
   

  
	
   Exhibit
  A-2

  	
  Location of “Building Top” Sign

  	
   

  
	
   Exhibit B

  	
  Environmental Questionnaire

  	
   

  
	
   Exhibit C

  	
  Landlord’s Disclosures

  	
   

  
	
   Exhibit D

  	
  Insurance Requirements

  	
   

  
	
   Exhibit E

  	
  Rules and Regulations

  	
   

  
	
   Exhibit X

  	
  Work Letter

  	
   

  
	
   Exhibit Y

  	
  Project Site Plan

  	
   

  
					



 



 ii















LEASE

(Multi-Tenant; Net)


THIS LEASE is made as of the            
day of                                                  ,
2007 by and between THE IRVINE COMPANY LLC, a Delaware limited liability
company hereafter called “Landlord,” and
NETLIST, INC., a Delaware corporation, hereinafter called “Tenant.”


ARTICLE I. 
BASIC LEASE PROVISIONS


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


1.                                       Premises:  Suite No. 150 (the Premises are more
particularly described in Section 2.1).


Address of
Building:  51 Discovery, Irvine, CA


2.                                       Project
Description (if applicable): 
Discovery/Waterworks


3.                                       Use
of Premises:  General office and
warehouse, including but not limited to, the design, light manufacturing and
assembly of memory subsystems.


4.                                       Estimated
Commencement Date:  Sixteen (16) weeks
from and after the date of this Lease.


5.                                       Term:   Forty-Eight (48) months, plus such
additional days as may be required to cause this Lease to terminate on the
final day of the calendar month.


6.                                       Basic
Rent:  Commencing on the Commencement
Date, the Basic Rent shall be Thirty Two Thousand Nine Hundred Seventy-Three Dollars
($32,973.00) per month, based on $1.15 per rentable square foot.


Basic Rent is
subject to adjustment as follows:


Commencing twelve (12) months following the Commencement Date, the
Basic Rent shall be Thirty Four Thousand Four Hundred Six Dollars ($34,406.00)
per month, based on $1.20 per rentable square foot.


Commencing twenty-four (24) months following the Commencement Date, the
Basic Rent shall be Thirty Five Thousand Eight Hundred Forty Dollars
($35,840.00) per month, based on $1.25 per rentable square foot.


Commencing thirty-six (36) months following the Commencement Date, the
Basic Rent shall be Thirty Seven Thousand Two Hundred Seventy-Four Dollars
($37,274.00) per month, based on $1.30 per rentable square foot.


7.                                       Guarantor(s):  None


8.                                       Floor
Area:  Approximately 28,672 rentable
square feet


9.                                       Security
Deposit:  $41,001.00


10.                                 Broker(s):  “Landlord’s Broker”:  Irvine Realty Company


“Tenant’s Broker”:  Real-Tech, Inc.


11.                                 Additional
Insureds:   None



 1
 









12.                                 Address
for Notices:


	
  LANDLORD

  	
   

  	
  TENANT

  
	
   

  	
   

  	
   

  
	
  THE IRVINE COMPANY LLC
  550 Newport Center Drive

  Newport Beach, CA 92660

  Attn: Senior Vice President, Operations

  	
   

  	
  NETLIST, INC.

  51 Discovery, Suite 150

  Irvine, CA 92618



  
	
  

  	
  Irvine Office
  Properties

  	
   

  	
  Attn: Lee Kim, CFO

  
	
    

  	
   

  	
    

  
	
  with a copy of
  notices to:

  	
   

  	
  with a copy of notices to:

  
	
    

  	
   

  	
    

  
	
  THE IRVINE COMPANY LLC
  550 Newport Center Drive

  Newport Beach, CA 92660

  Attn: Vice President, Operations

  	
   

  	
  NETLIST, INC.

  51 Discovery, Suite 150

  Irvine, CA 92618

  Attn: General Counsel

  
	
  

  	
  Irvine Office Properties,Technology Portfolio

  	
   

  
				



 


13.                                 Address
for Payments:  All payments due under
this Lease shall be made to the address shown on the invoice for the payment
due, or if no address is shown, to Landlord’s notice address above.


14.                                 Tenant’s
Liability Insurance Requirement: 
$2,000,000.00


15.                                 Vehicle
Parking Spaces:   Eighty Six (86)



 2
 









ARTICLE
II.  PREMISES


SECTION 2.1.      LEASED PREMISES.  Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the “Premises”),
containing approximately the rentable square footage set forth as the “Floor Area”  in Item 8 of
the Basic Lease Provisions and known by the suite number identified in Item 1
of the Basic Lease Provisions.  The
Premises are located in the building identified in Item 1 of the Basic Lease
Provisions (the Premises together with such building and the underlying real
property, are called the “Building”), and
is a portion of the project identified in Item 2 of the Basic Lease Provisions
and shown in Exhibit Y, if any (the “Project”).  If the Project is not already completed,
Landlord makes no representation that the Project, if any, as shown on Exhibit Y,
(a) will be completed or that it will be constructed as shown on Exhibit Y
without change, or (b) to the extent the Project is constructed, it will
not be changed from the Project as shown on Exhibit Y.  All references to “Floor Area” in this Lease
shall mean the rentable square footage set forth in Item 8 of the Basic
Lease Provisions.  The rentable square
footage set forth in Item 8 may include or have been adjusted by various
factors, including, without limitation, a load factor to allocate a proportionate
share of any vertical penetrations, stairwells, common lobby or common features
or areas of the Building.  Tenant agrees
that the Floor Area set forth in Item 8 shall be binding on Landlord and Tenant
for purposes of this Lease regardless of whether any future or differing
measurements of the Premises or the Building are consistent or inconsistent
with the Floor Area set forth in Item 8.


SECTION 2.2.      ACCEPTANCE OF PREMISES.  Tenant acknowledges that neither Landlord nor
any representative of Landlord has made any representation or warranty with respect
to the Premises, the Building or the Project or their respective suitability or
fitness for any purpose, including without limitation any representations or
warranties regarding the compliance of Tenant’s use of the Premises with the
applicable zoning or regarding any other land use matters, and Tenant shall be
solely responsible as to such matters. 
Further, neither Landlord nor any representative of Landlord has made
any representations or warranties regarding (i) what other tenants or uses
may be permitted or intended in the Building or the Project, (ii) any
exclusivity of use by Tenant with respect to its permitted use of the Premises
as set forth in Item 3 of the Basic Lease Provisions, or (iii) any
construction of portions of the Project not yet completed.  Tenant further acknowledges that neither
Landlord nor any representative of Landlord has agreed to undertake any
alterations or additions or to construct any improvements to the Premises
except as expressly provided in this Lease and/or the Work Letter, if any,
attached hereto as Exhibit X (the “Work
Letter”), and that the flooring materials which may be installed
within portions of the Premises located on the ground floor of the Building may
be limited by the moisture content of the Building slab and underlying
soils.  As of the Commencement Date,
Tenant shall be conclusively deemed to have accepted the Premises and those
portions of the Building and Project in which Tenant has any rights under this
Lease, which acceptance shall mean that it is conclusively established that the
Premises and those portions of the Building and Project in which Tenant has any
rights under this Lease were in satisfactory condition and in conformity with
the provisions of this Lease, subject only to those defective or incomplete
portions of the Tenant Improvements constructed by Landlord pursuant to the
Work Letter which Tenant shall have itemized on a written punch list and
delivered to Landlord within fifteen (15) days after the Commencement Date (as
defined in Section 3.1).  If no items are
required of Landlord under the Work Letter, Tenant shall be conclusively deemed
to have accepted the Premises, and those portions of the Building and Project
in which Tenant has any rights under this Lease, in their existing condition as
of the Commencement Date, and to have waived any and all right or claim
regardless of the nature thereof against Landlord arising out of the condition
of the Premises, the Building or the Project. 
Nothing contained in this Section shall affect the commencement of the
Term or the obligation of Tenant to pay rent. 
Landlord shall diligently complete all punch list items of which it is
notified as provided above.


SECTION 2.3.      BUILDING NAME AND ADDRESS.  Tenant shall not utilize any name selected by
Landlord from time to time for the Building and/or the Project as any part of
Tenant’s corporate or trade name. 
Landlord shall have the right to change the name, address, number or
designation of the Building or Project without liability to Tenant.  Notwithstanding the foregoing, Landlord shall
not use the name “Netlist” as any part of the name or designation of the
Building or Project.


SECTION 2.4.      RIGHT
TO EXPAND.  Provided
that no Event of Default without cure by Tenant has occurred and is then
continuing, either at the time of exercise of the expansion right granted
herein or at the time of the commencement of such expansion, then Tenant shall
have the right to lease the space in the Building shown on Exhibit A-1
attached hereto (the “Expansion Space”),
in accordance with and subject to the provisions of this Section 2.4 (the “Expansion Right”). 
Tenant shall exercise its Expansion Right by and only by delivering to
Landlord, not later than December 31, 2007, Tenant’s irrevocable written notice
(the “Expansion Notice”) of its commitment to
lease the Expansion Space.  The Expansion
Space shall be leased to Tenant with new paint and carpet improvements only and
with the Term of the Lease as to the Expansion Space being coterminous with the
Term of this Lease as to the Premises, but the Basic Rent payable for the
Expansion Space shall be determined as provided in the following provisions.


If
Landlord and Tenant have not by then been able to agree upon the Basic Rent for
the Expansion Space, then within thirty (30) days following its receipt of the
Expansion Notice, Landlord shall notify Tenant in writing of the Basic Rent
that would reflect the prevailing market rental rate for the lease of
comparable space in the Project to the Expansion Space (together with any
increases thereof during the Term) (“Landlord’s Expansion Space
Determination”).  Should
Tenant disagree with the Landlord’s Expansion Space Determination, then Tenant
shall, not later than twenty (20) days thereafter, notify Landlord in writing
of Tenant’s determination of those rental terms (“Tenant’s
Expansion Space Determination”). 
Within ten (10) days following delivery of the Tenant’s Expansion Space
Determination, the parties shall attempt to agree on an appraiser to determine
the fair market rental.  If the parties
are unable to agree in that time, then each party shall designate an appraiser
within ten (10) days thereafter.  Should
either party fail to so designate an appraiser within that time, then the
appraiser designated by the other party



 3
 









shall determine
the fair market rental.  Should each of
the parties timely designate an appraiser, then the two appraisers so
designated shall appoint a third appraiser who shall, acting alone, determine
the fair market rental for the Expansion Space. 
Any appraiser designated hereunder shall have an MAI certification with
not less than five (5) years experience in the valuation of commercial
industrial buildings in the vicinity of the Project.


Within
thirty (30) days following the selection of the appraiser and such appraiser’s
receipt of the Landlord’s Expansion Space Determination and the Tenant’s
Expansion Space Determination, the appraiser shall determine whether the rental
rate determined by Landlord or by Tenant more accurately reflects the fair
market rental rate for the Expansion Space.   
Accordingly, either the Landlord’s Expansion Space Determination or the
Tenant’s Expansion Space Determination shall be selected by the appraiser as
the fair market rental rate for the Expansion Space.   In making such determination, the appraiser
shall consider rental comparables for the Project (provided that if there are
an insufficient number of comparables within the Project, the appraiser shall
consider rental comparables for similarly improved space owned by Landlord in
the vicinity of the Project with appropriate adjustment for location and
quality of project), but the appraiser shall not attribute any factor for
market tenant improvement allowances or brokerage commissions in making its
determination of the fair market rental rate. 
At any time before the decision of the appraiser is rendered, either
party may, by written notice to the other party, accept the rental terms
submitted by the other party, in which event such terms shall be deemed adopted
as the agreed fair market rental.  The
fees of the appraiser(s) shall be borne entirely by the party whose
determination of the fair market rental rate was not accepted by the appraiser.


Within twenty (20) days
after the determination of the fair market rental, Landlord shall prepare an
appropriate amendment to this Lease for the Expansion Space, and Tenant shall
execute and return same to Landlord within ten (10) days after Tenant’s receipt
of same.


If
Tenant fails to timely exercise the Expansion Right granted herein within the
time period expressly set forth for exercise by Tenant in the initial paragraph
of this Section 2.4, Tenant’s Expansion Right shall be extinguished without
further liability to Landlord.  Tenant’s
rights under this Section 2.4 shall belong solely to Netlist, Inc., a Delaware
corporation, and may not be assigned or transferred by it (except in connection
with a “Permitted Transfer” as defined in Section 9.4 of this Lease), and any
attempted assignment or transfer of such rights (except in connection with a
Permitted Transfer) shall be void and of no force and effect.


SECTION 2.5. 
RIGHT OF FIRST REFUSAL. Provided that no Event of
Default without cure by Tenant has occurred and is continuing, either at the
time of Tenant’s election of its rights granted herein or the time of the
commencement of Tenant’s lease of the Expansion Space, and provided that Tenant
shall not have exercised its Expansion Right under Section 2.4 above, Landlord
hereby grants Tenant a continuing right of first refusal (the “First Refusal Right”) to lease the
Expansion Space, all in accordance with and subject to the provisions of this
Section 2.5.  Following receipt by
Landlord of a bona fide letter of intent, request for proposal or other written
expression of interest to lease all or a portion of the Expansion Space to a
third party, Landlord shall give Tenant written notice, at any time from and
after January 1, 2008, of the basic economic terms including the designated
space, Basic Rent, term, operating expenses, security deposit and tenant
improvement allowance, if any (collectively, the “Economic Terms”) upon which Landlord is willing to lease such
particular Expansion Space to a third party. 
It is understood that should Landlord intend, as part of a single
transaction, to lease other space in portions of the Project outside the
Building in addition to the Expansion Space, then Landlord’s notice shall so
provide and all such space shall constitute the Expansion Space and shall
collectively be subject to the following provisions.  Within five (5) business days after receipt
of Landlord’s notice, Tenant must give Landlord written notice (“Tenant’s First Refusal Response”) pursuant to which Tenant
shall elect to (i) lease all, but not less than all, of the Expansion Space specified
in Landlord’s notice upon the Economic Terms and the same non-Economic Terms as
are set forth in this Lease; (ii) refuse to lease the Expansion Space,
specifying that such refusal is not based upon the Economic Terms, but upon
Tenant’s lack of need for the Expansion Space, in which event Tenant’s First
Refusal Right shall thereupon terminate and shall be of no further force or
effect and Landlord may lease the Expansion Space to any third party upon any
terms it deems appropriate; or (iii) refuse to lease the Expansion Space,
specifying that such refusal is based upon said Economic Terms, in which event
Tenant shall also specify revised Economic Terms (the “Revised
Economic Terms”) upon which Tenant shall be willing to lease the
Expansion Space.  In the event that
Tenant does not give a First Refusal Response within said period, Tenant shall
be deemed to have elected clause (ii) above. 
In the event Tenant’s First Refusal Response indicates an election under
clause (iii) above, Landlord may elect to either (x) lease the Expansion Space
to Tenant upon such Revised Economic Terms and the same other non-Economic
Terms as are set forth in this Lease, or (y) lease the Expansion Space to any
third party upon Economic Terms which are not materially more favorable to such
party than those Revised Economic Terms specified by Tenant in Tenant’s First
Refusal Response (provided that Landlord reserves the right, at any time, to
re-notice Tenant of any different Economic Terms upon which Landlord is willing
to lease the Expansion Space, in which case the procedures for Tenant’s First
Refusal Right as to said space as herein provided shall be repeated).  Should Landlord so elect to lease the
Expansion Space to Tenant, then Landlord shall promptly prepare and deliver to
Tenant, an amendment to this Lease consistent with the foregoing, and Tenant
shall execute and return same to Landlord within twenty (20) business days
subject to Tenant’s reasonable review and approval thereof.  Tenant’s failure to timely return the amendment
shall entitle Landlord to specifically enforce Tenant’s commitment to lease the
Expansion Space, to lease such space to a third party and/or to pursue any
other available legal remedy, at Landlord’s sole election.  Upon the execution and delivery of any lease
of the Expansion Space specified in Landlord’s notice, Tenant’s First Refusal
Right as to such space shall continue in full force and effect, but shall be
subject and subordinate to the interest of any third party tenant thereafter
occupying the Expansion Space (as more particularly provided in the next
paragraph of this Section 2.5).  In the
event that Landlord shall not enter into a lease for the Expansion Space, or a
portion thereof, with a third party within one hundred eighty (180) days following
Landlord’s notice described above, then prior to leasing the Expansion Space to
any thirty party, Landlord shall repeat the procedures set forth in this
Section 2.5.



 4















It is understood
and agreed that Tenant’s First Refusal Right shall be subject and subordinate
to any extension or expansion rights granted by Landlord to MSTAR
Communications Corporation, a  California
corporation, the current occupant of the Expansion Space, and to the interest
of any third party tenant now or hereafter occupying the Expansion Space or any
portion thereof, and their respective successors and assignees, and in no event
shall any such Expansion Space be subject to the First Refusal Right herein
granted unless and until the existing tenant thereof shall have vacated the
Expansion  Space.  Tenant’s rights under this Section 2.5 shall belong solely to Netlist, Inc., a Delaware corporation,
and may not be assigned or transferred by it (except in connection with a “Permitted
Transfer” as defined in Section 9.4 of this Lease).  Any attempted assignment or transfer of
Tenant’s rights under this Section 2.5 (except in connection with a Permitted
Transfer) shall be void and of no force or effect.


ARTICLE
III.  TERM


SECTION 3.1.      GENERAL.  The term of this Lease (“Term”)
shall be for the period shown in Item 5 of the Basic Lease Provisions.  Subject to the provisions of Section 3.2
below, the Term shall commence (“Commencement Date”)
on the earlier of (a) the date Tenant acquires possession of or commences use
of the Premises for any purpose other than any construction permitted to be
performed by Tenant pursuant to the Work Letter, or (b) the date the Premises
are tendered to Tenant, provided that the Premises shall not be tendered to
Tenant until any approvals by relevant governmental authorities of the tenant
improvements constructed by Landlord pursuant to the Work Letter (“Tenant Improvements”) which are required for occupancy of
the Premises have been obtained (as evidenced by written approval thereof in
accordance with the building permits issued for the Tenant Improvements or
issuance of a temporary or final certificate of occupancy for the Premises).
The date on which this Lease is scheduled to terminate is referred to as the “Expiration Date.” 
Prior to Tenant’s taking of possession of the Premises, the parties
shall memorialize on a form provided by Landlord (the “Commencement Date Morandum”) the actual
Commencement Date and the Expiration Date of this Lease.  Should Tenant fail to execute and return the
Commencement Date Memorandum to Landlord within five (5) business days (or
provide specific written objections thereto within that period), then Landlord’s
determination of the Commencement and Expiration Dates as set forth in the
Commencement Date Memorandum shall be conclusive.


SECTION 3.2.      DELAY IN POSSESSION.  If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant prior or subsequent to the
Estimated Commencement Date as set forth in Item 4 of the Basic Lease
Provisions (“Estimated Commencement  Date”), this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage.  However, Tenant shall not be liable for any rent
until the Commencement Date occurs as provided in Section 3.1 above, except
that if Landlord cannot tender possession of the Premises in accordance with
the provisions of Section 3.1(b) above due to any action or inaction of Tenant
(including without limitation any Tenant Delay described in the Work Letter, if
any, attached to this Lease), then the Commencement Date shall be deemed to
have occurred and Landlord shall be entitled to full performance by Tenant
(including the payment of rent) from the date Landlord would have been able to
so tender possession of the Premises to Tenant but for Tenant’s action or
inaction, including without limitation any Tenant Delay described in the
attached Work Letter, if any.


Notwithstanding
anything to the contrary contained in this Section 3.2, if for any reason other
than “Tenant Delays” (as defined in the Work Letter attached hereto), or other
matters beyond Landlord’s reasonable control, the actual Commencement Date has
not occurred by the date that is one hundred fifty (150) days following the
Estimated Commencement Date of this Lease (the “Outside Date”), then Tenant may, by written notice to Landlord
given at any time thereafter but prior to the actual occurrence of the
Commencement Date, elect to terminate this Lease; provided, however,
that if the Commencement Date occurs within ten (10) business days after
delivery to Landlord of Tenant’s termination notice, this Lease shall continue
in full force and effect.  If the
Commencement Date has not occurred within ten (10) business days after the date
of delivery of Tenant’s termination notice, then this Lease shall terminate as
of the tenth (10th)
business day after delivery of the termination notice, and Landlord shall
promptly return to Tenant any prepaid rent and/or Security Deposit delivered to
Landlord.  Notwithstanding the foregoing, if at any time
during the construction period, Landlord reasonably believes that the
Commencement Date will not occur on or before the Outside Date, Landlord shall
have the right to notify Tenant in writing of such fact and of a new Outside
Date on or before which the Commencement Date will occur (the “New Outside Date”), and Tenant must elect
within ten (10) days of delivery of such notice to either terminate this Lease
or waive its right to terminate this Lease (provided the Commencement Date does
occur on or prior to the New Outside Date established by Landlord in such
notice to Tenant).  Tenant’s failure to
elect to terminate this Lease within such ten (10) day period shall be deemed
Tenant’s waiver of its right to terminate this Lease as provided in this
paragraph as to the original Outside Date, but not as to the New Outside Date
established by said notice.


SECTION 3.3.      RIGHT
TO EXTEND THIS LEASE.  
Provided that no Event of Default has occurred under any provision of
this Lease, either at the time of exercise of the extension right granted
herein or at the time of the commencement of such extension, and provided
further that Tenant is occupying the entire Premises and has not assigned or
sublet any of its interest in this Lease, then Tenant may extend the Term of
this Lease for one (1) period of forty-eight (48) months.  Tenant shall exercise its right to extend the
Term by and only by delivering to Landlord, not less than nine (9) months or
more than twelve (12) months prior to the expiration date of the Term, Tenant’s
irrevocable written notice of its commitment to extend (the “Commitment Notice”). 
The Basic Rent payable under the Lease during any extension of the Term
shall be determined as provided in the following provisions.


If
Landlord and Tenant have not by then been able to agree upon the Basic Rent for
the extension of the Term, then within one hundred twenty (120) and ninety (90)
days prior to the expiration date of the Term, Landlord shall notify Tenant in
writing of the Basic Rent that would reflect the prevailing market rental rate
for a 48-month



 5
 









renewal of
comparable space in the Project (together with any increases thereof during the
extension period) as of the commencement of the extension period (“Landlord’s Determination”). 
Should Tenant disagree with the Landlord’s Determination, then Tenant
shall, not later than twenty (20) days thereafter, notify Landlord in writing
of Tenant’s determination of those rental terms (“Tenant’s
Determination”).   In no
event, however, shall Landlord’s Determination or Tenant’s Determination be
less than the Basic Rent payable by Tenant during the then-scheduled final
month of the initial Term.  Within ten
(10) days following delivery of the Tenant’s Determination, the parties shall
attempt to agree on an appraiser to determine the fair market rental.  If the parties are unable to agree in that
time, then each party shall designate an appraiser within ten (10) days
thereafter.  Should either party fail to
so designate an appraiser within that time, then the appraiser designated by
the other party shall determine the fair market rental.  Should each of the parties timely designate
an appraiser, then the two appraisers so designated shall appoint a third
appraiser who shall, acting alone, determine the fair market rental for the
Premises.  Any appraiser designated
hereunder shall have an MAI certification with not less than five (5) years
experience in the valuation of commercial industrial buildings in the vicinity
of the Project.


Within
thirty (30) days following the selection of the appraiser and such appraiser’s
receipt of the Landlord’s Determination and the Tenant’s Determination, the
appraiser shall determine whether the rental rate determined by Landlord or by
Tenant more accurately reflects the fair market rental rate for the 48-month
renewal of the Lease for the Premises, as reasonably extrapolated to the
commencement of the extension period. 
Accordingly, either the Landlord’s Determination or the Tenant’s
Determination shall be selected by the appraiser as the fair market rental rate
for the extension period.   In making
such determination, the appraiser shall consider rental comparables for the
Project (provided that if there are an insufficient number of comparables
within the project, the appraiser shall consider rental comparables for
similarly improved space owned by Landlord in the vicinity of the Project with
appropriate adjustment for location and quality of project), but the appraiser
shall not attribute any factor for market tenant improvement allowances or
brokerage commissions in making its determination of the fair market rental
rate.  At any time before the decision of
the appraiser is rendered, either party may, by written notice to the other
party, accept the rental terms submitted by the other party, in which event
such terms shall be deemed adopted as the agreed fair market rental.  The fees of the appraiser(s) shall be borne entirely
by the party whose determination of the fair market rental rate was not
accepted by the appraiser.


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


If
Tenant fails to timely exercise the extension right granted herein within the
time period expressly set forth for exercise by Tenant in the initial paragraph
of this Section 3.3, Tenant’s right to extend the Term shall be extinguished
and the Lease shall automatically terminate as of the expiration date of the
Term, without any extension and without any liability to Landlord.  Tenant’s rights under this Section 3.3 shall
belong solely to Netlist, Inc., a Delaware corporation, and any attempted
assignment or transfer of such rights (except in connection with a “Permitted
Transfer” as defined in Section 9.4 of this Lease) shall be void and of no
force and effect.  Tenant shall have no
other right to extend the Term beyond the single forty-eight (48) month
extension period created by this Section 3.3. 
Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment to this Lease or by a
holdover of the Premises by Tenant, or otherwise, shall be deemed a part of,
and not in addition to, any duly exercised extension period permitted by this
Section 3.3.


ARTICLE
IV.  RENT AND OPERATING EXPENSES


SECTION 4.1.      BASIC RENT.  From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, the rental amount for the
Premises shown in Item 6 of the Basic Lease Provisions (the “Basic Rent”), including subsequent adjustments, if any.  If the Commencement Date is other than the
first day of the calendar month, any rental adjustments shown in Item 6
occurring with reference to the monthly anniversary of the Commencement Date,
shall be deemed to occur on the first day of the next calendar month following
the specified monthly anniversary of the Commencement Date.  The rent shall be due and payable in advance
commencing on the Commencement Date (as prorated for any partial month) and
continuing thereafter on the first day of each successive calendar month of the
Term.  No demand, notice or invoice shall
be required for the payment of Basic Rent. 
An installment of rent in the amount of one (1) full month’s Basic Rent
at the initial rate specified in Item 6 of the Basic Lease Provisions and one
(1) month’s estimated Tenant’s Share of Operating Expenses (as defined in
Section 4.2) shall be delivered to Landlord concurrently with Tenant’s
execution of this Lease and shall be applied against the Basic Rent and
Operating Expenses first due hereunder.


SECTION 4.2.      OPERATING
EXPENSES.


(a)           From
and after Commencement Date, Tenant shall pay to Landlord, as additional rent,
Tenant’s Share of all Operating Expenses, as defined in Section 4.2(f),
incurred by Landlord in the operation of the Building and the Project.  The term “Tenant’s
Share” means that portion of any Operating Expenses determined by
multiplying the cost of such item by a fraction, the numerator of which is the
Floor Area and the denominator of which is the total rentable square footage,
as determined from time to time by Landlord, of (i) the Building, for expenses
determined by Landlord to benefit or relate substantially to the Building
rather than the entire Project, (ii) all or some of the buildings in the
Project, for expenses determined by Landlord to benefit or relate substantially
to all or some of the buildings in the Project rather than any specific
building, or (iii) all or some of the buildings within the Project as well as
all or a portion of other property owned by Landlord and/or its affiliates, for
expenses



 6
 









determined by Landlord to
benefit or relate substantially to such buildings within the Project and such
other property.  Landlord reserves the
right to allocate to the entire Project any Operating Expenses which may
benefit or substantially relate to a particular building within the Project in
order to maintain greater consistency of Operating Expenses among buildings
within the Project.  In the event that
Landlord determines in its sole and absolute discretion that the Premises or
the Building incur a non-proportional benefit from any expense, or is the
non-proportional cause of any such expense, Landlord may allocate a greater
percentage of such Operating Expense to the Premises or the Building.  In the event that any management and/or
overhead fee payable or imposed by Landlord for the management of Tenant’s
Premises is calculated as a percentage of the rent payable by Tenant and other
tenants of Landlord, then the full amount of such management and/or overhead fee
which is attributable to the rent paid by Tenant shall be additional rent
payable by Tenant, in full, provided, however, that Landlord may elect to
include such full amount as part of Tenant’s Share of Operating Expenses.


(b)           Prior
to the start of each full Expense Recovery Period (as defined in this Section
4.2), Landlord shall give Tenant a written estimate of the amount of Tenant’s
Share of Operating Expenses for the applicable Expense Recovery Period.  Any delay or failure by Landlord in providing
such estimate shall not relieve Tenant from its obligation to pay Tenant’s
Share of Operating Expenses or estimated amounts thereof, if and when Landlord
provides such estimate or final payment amount. 
Tenant shall pay the estimated amounts to Landlord in equal monthly
installments, in advance concurrently with payments of Basic Rent.  If Landlord has not furnished its written
estimate for any Expense Recovery Period by the time set forth above, Tenant
shall continue to pay monthly the estimated Tenant’s Share of Operating
Expenses in effect during the prior Expense Recovery Period; provided that when
the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued estimated Tenant’s Share of Operating Expenses
based upon the new estimate.  For
purposes hereof, “Expense Recovery Period”
shall mean every twelve month period during the Term (or portion thereof for
the first and last lease years) commencing July 1 and ending June 30,
provided that Landlord shall have the right to change the date on which an
Expense Recovery Period commences in which event appropriate reasonable
adjustments shall be made to Tenant’s Share of Operating Expenses so that the
amount payable by Tenant shall not materially vary as a result of such change.


(c)           Within
one hundred twenty (120) days after the end of each Expense Recovery Period,
Landlord shall furnish to Tenant a statement (a “Reconciliation Statement”) showing in reasonable detail the
actual or prorated Tenant’s Share of Operating Expenses incurred by Landlord
during such Expense Recovery Period, and the parties shall within thirty (30)
days thereafter make any payment or allowance necessary to adjust Tenant’s
estimated payments of Tenant’s Share of Operating Expenses, if any, to the actual
Tenant’s Share of Operating Expenses as shown by the Reconciliation
Statement.  Any delay or failure by
Landlord in delivering any Reconciliation Statement shall not constitute a
waiver of Landlord’s right to require Tenant to pay Tenant’s Share of Operating
Expenses pursuant hereto.  Any amount due
Tenant shall be credited against installments next coming due under this
Section 4.2, and any deficiency shall be paid by Tenant together with the next
installment.  Should Tenant fail to
object in writing to Landlord’s determination of Tenant’s Share of Operating
Expenses within sixty (60) days following delivery of Landlord’s Reconciliation
Statement, Landlord’s determination of Tenant’s Share of Operating Expenses for
the applicable Expense Recovery Period shall be conclusive and binding on the
parties for all purposes and any future claims to the contrary shall be barred.


(d)           Even
though this Lease has terminated and the Tenant has vacated the Premises, when
the final determination is made of Tenant’s Share of Operating Expenses for the
Expense Recovery Period in which this Lease terminates, Tenant shall within
thirty (30) days of written notice pay the entire increase over the estimated
Tenant’s Share of Operating Expenses already paid.  Conversely, any overpayment by Tenant shall
be rebated by Landlord to Tenant not later than thirty (30) days after such
final determination.


(e)           If,
at any time during any Expense Recovery Period, any one or more of the
Operating Expenses are increased to a rate(s) or amount(s) in excess of the
rate(s) or amount(s) used in calculating the estimated Tenant’s Share of
Operating Expenses for the year, then the estimate of Tenant’s Share of
Operating Expenses may be increased by written notice from Landlord for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to the estimated amount of Tenant’s Share
of the increase.  If Landlord gives
Tenant written notice of the amount or estimated amount of the increase and the
month in which the increase will or has become effective, then Tenant shall pay
the increase to Landlord as a part of Tenant’s monthly payments of the
estimated Tenant’s Share of Operating Expenses as provided in
Section 4.2(b), commencing with the month following Tenant’s receipt of
Landlord’s notice.  In addition, Tenant
shall pay upon written request any such increases which were incurred prior to
the Tenant commencing to pay such monthly increase.


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


(g)           The
term “Project Costs” shall mean all expenses
of operation, management, repair, replacement and maintenance of the Building
and the Project, including without limitation all appurtenant Common Areas (as
defined in Section 6.2), and shall include the following charges by way of
illustration but not limitation:  water
and sewer charges; insurance premiums and deductibles and/or reasonable premium
and deductible equivalents should Landlord elect to self-insure all or any
portion of any risk that Landlord is authorized to insure hereunder; license,
permit, and inspection fees; light; power; window washing; trash pickup;
janitorial services to any interior Common Areas; heating, ventilating and air
conditioning; supplies; materials; equipment; tools; the cost of any
environmental, insurance, tax, legal or other consultant utilized by Landlord
in connection with the Building and/or Project; establishment of reasonable
reserves for replacements and/or repairs; costs incurred in connection with
compliance with any laws or changes in laws applicable to the Building or the
Project; the cost of any capital improvements or replacements (other than
tenant improvements for specific tenants) to the extent of the amortized amount
thereof



 7
 









over the useful life of
such capital improvements or replacements (or, if such capital improvements or
replacements are anticipated to achieve a cost savings as to the Operating
Expenses, any shorter estimated period of time over which the cost of the
capital improvements or replacements would be recovered from the estimated cost
savings) calculated at a market cost of funds, all as determined by Landlord,
for each year of useful life or shorter recovery period of such capital
expenditure whether such capital expenditure occurs during or prior to the
Term; costs associated with the maintenance of an air conditioning, heating and
ventilation service agreement, and maintenance of an intrabuilding network
cable service agreement for any intrabuilding network cable telecommunications
lines within the Project, and any other maintenance, repair and replacement
costs associated with such lines; capital costs associated with a requirement
related to demands on utilities by Project tenants, including without
limitation the cost to obtain additional phone connections; labor; reasonably
allocated wages and salaries, fringe benefits, and payroll taxes for
administrative and other personnel directly applicable to the Building and/or
Project, including both Landlord’s personnel and outside personnel; any expense
incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and reasonable and
market-competitive overhead and/or management fees for the professional
operation of the Project.    It is
understood and agreed that Project Costs may include competitive charges for
direct services (including, without limitation, management and/or operations
services) provided by any subsidiary, division or affiliate of Landlord.


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


(i)  Notwithstanding the provisions of this
Section 4.2 to the contrary, Operating Expenses shall not include any cost or
expense identified by the express terms of this Lease as the responsibility of
Landlord and not as an Operating Expense or a Project Cost, and, in addition,
shall not include any of the following:


(1)       Leasing commissions, attorneys’ fees,
costs, disbursements and other expenses incurred by Landlord or its agents in
connection with negotiations for leases with tenants, other occupants or
prospective tenants or other occupants of the Project, and similar costs
incurred in connection with disputes with and/or enforcement of any lease with
tenants, other occupants, or prospective tenants or other occupants of the
Project;


(2)       “Tenant allowances”, “tenant concessions”,
work letter payments, and other costs or expenses (including permit, license
and inspection fees) incurred in completing, fixturing, furnishing, renovating
or otherwise improving, decorating or redecorating space for tenants or other
occupants of the Project, or vacant, leasable space in the Project, including
space planning/interior design fees for same;


(3)       Except as provided in this Lease,
depreciation and other “non-cash” expense items;


(4)       Services, items and benefits for which
Tenant or any other tenant or occupant of the Project specifically reimburses
Landlord, or those services, items or benefits which are not made available to
Tenant but which are made available to other tenants of the Building or the
Project;


(5)       Costs or expenses (including fines,
penalties and legal fees) incurred  due
to the violation by Landlord of any terms and conditions of this Lease which
would not have incurred but for such violation by Landlord;


(6)       Penalties for late payment of any
Operating Expenses by Landlord, including, without limitation, with respect to
taxes, equipment leases, etc.;


(7)       Payments in respect of overhead and/or
profit to any subsidiary or affiliate of Landlord for services on or to the
Project, or for goods, supplies or other materials supplied by any subsidiary
or affiliate of Landlord, to the extent that the costs of such services, goods,
supplies or materials exceed the costs that would have been paid if the
services, goods, supplies or materials had been provided by parties
unaffiliated with Landlord, of similar skill, competence and experience, on a
competitive basis;


(8)       Payments of principal, finance charges or
interest on debt or amortization on any deed of trust or other debt encumbering
the Project, and rental payments (or increases in same) under any ground or
underlying lease or leases encumbering the Project (except to the extent the
same may be made to pay or reimburse, or may be measured by Property Taxes);



 8
 









(9)       Except for a reasonable and
market-competitive management fee, costs of Landlord’s general overhead and
general administrative expenses (individual, partnership or corporate, as the
case may be) and wages, salaries and other compensation and benefits (as well
as adjustments thereto) for all employees and personnel of Landlord above the
level of manager or building engineer for the Project;


(10)     Advertising and promotional expenses;


(11)     Costs or expenses for the acquisition of
sculpture, paintings or other works of art, but not the reasonable expenses of
maintaining, repairing and insuring same;


(12)     Costs for which Landlord is actually
reimbursed by insurance;


(13)     Contributions to political or charitable
organizations; and


(14)     Costs incurred in removing the personal
property of former tenants and/or other occupants of the Project.


SECTION 4.3.      SECURITY DEPOSIT.  Concurrently with Tenant’s delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of the
Basic Lease Provisions, to be held by Landlord as security for the full and
faithful performance of all of Tenant’s obligations under this Lease (the “Security Deposit”). Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. 
Subject to the last sentence of this Section, the Security Deposit shall
be understood and agreed to be the property of Landlord upon Landlord’s receipt
thereof, and may be utilized by Landlord in its sole and absolute discretion
towards the payment of all expenses by Landlord for which Tenant would be
required to reimburse Landlord under this Lease, including without limitation
brokerage commissions and Tenant Improvement costs.  Upon any Event of Default by Tenant (as
defined in Section 14.1), Landlord may, in its sole and absolute discretion and
notwithstanding any contrary provision of Civil Code Section 1950.7, retain,
use or apply the whole or any part of the Security Deposit to pay any sum which
Tenant is obligated to pay under this Lease including, without limitation,
amounts estimated by Landlord as the amounts due it for prospective rent and
for damages pursuant to Section 14.2(a)(i) of this Lease and/or Civil Code Section
1951.2, sums that Landlord may expend or be required to expend by reason of the
Event of Default by Tenant or any loss or damage that Landlord may suffer by
reason of the Event of Default, or costs incurred by Landlord in connection
with the repair or restoration of the Premises pursuant to Section 15.3 of this
Lease upon expiration or earlier termination of this Lease.  In no event shall Landlord be obligated to
apply the Security Deposit upon an Event of Default and Landlord’s rights and
remedies resulting from an Event of Default, including without limitation,
Tenant’s failure to pay Basic Rent, Tenant’s Share of Operating Expenses or any
other amount due to Landlord pursuant to this Lease, shall not be diminished or
altered in any respect due to the fact that Landlord is holding the Security
Deposit.  If any portion of the Security
Deposit is applied by Landlord as permitted by this Section, Tenant shall
within five (5) days after written demand by Landlord deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its
original amount. If Tenant fully performs its obligations under this Lease, the
Security Deposit shall be returned to Tenant (or, at Landlord’s option, to the
last assignee of Tenant’s interest in this Lease) within thirty (30) days after
the expiration of the Term, provided that Tenant agrees that Landlord may
retain the Security Deposit to the extent and until such time as all amounts
due from Tenant in accordance with this Lease have been determined and paid in
full and Tenant agrees that Tenant shall have no claim against Landlord for
Landlord’s retaining such Security Deposit to the extent provided in this
Section.


ARTICLE
V.  USES


SECTION 5.1.      USE.  Tenant
shall use the Premises only for the purposes stated in Item 3 of the Basic
Lease Provisions, all in accordance with applicable laws and restrictions and
pursuant to approvals to be obtained by Tenant from all relevant and required
governmental agencies and authorities. 
The parties agree that any contrary use shall be deemed to cause
material and irreparable harm to Landlord and shall entitle Landlord to
injunctive relief in addition to any other available remedy.  Tenant, at its expense, shall procure,
maintain and make available for Landlord’s inspection throughout the Term, all
governmental approvals, licenses and permits required for the proper and lawful
conduct of Tenant’s permitted use of the Premises.  Tenant shall not do or permit anything to be
done in or about the Premises which will in any way interfere with the rights
of other occupants of the Building or the Project, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises or the Project.  Tenant shall not perform any work or conduct
any business whatsoever in the Project other than inside the Premises.  Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any insurance
policy(ies) covering the Building, the Project and/or their contents, and shall
comply with all applicable insurance underwriters rules.  Tenant shall comply at its expense with all
present and future laws, ordinances, restrictions, regulations, orders, rules
and requirements of all governmental authorities that pertain to Tenant or its
use of the Premises, including without limitation all federal and state
occupational health and safety requirements, whether or not Tenant’s compliance
will necessitate expenditures or interfere with its use and enjoyment of the
Premises.  Tenant shall comply at its
expense with all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building and/or
Project, and any amendments or modifications thereto, including without
limitation the payment by Tenant of any periodic or special dues or assessments
charged against the Premises or Tenant which may be allocated to the Premises
or Tenant in accordance with the provisions thereof.  Tenant shall promptly upon demand reimburse
Landlord for any additional insurance premium charged by reason of Tenant’s
failure to comply with the provisions of this Section, and shall indemnify
Landlord from any liability and/or expense resulting from Tenant’s
noncompliance.


SECTION 5.2.      SIGNS.  Provided Tenant continues to occupy at least
seventy-five percent (75%) of the Floor Area of the Premises, Tenant shall have
the non-exclusive right to one (1) exterior “building-top” sign on the Building
for Tenant’s name and graphics in the location shown on Exhibit A-2
attached hereto, subject to Landlord’s



 9
 









right of prior
approval that such exterior signage is in compliance with the Signage Criteria
(defined below).  Except as provided in
the foregoing Tenant and for Landlord’s standard suite signage identifying
Tenant’s name and/or logo and installed at a location designated by Landlord,
Tenant shall have no right to maintain signs in any location in, on or about
the Premises, the Building or the Project and shall not place or erect any
signs that are visible from the exterior of the Building.  The size, design, graphics, material, style,
color and other physical aspects of any permitted sign shall be subject to
Landlord’s written determination, as determined solely by Landlord, prior to
installation, that signage is in compliance with any covenants, conditions or
restrictions encumbering the Premises and Landlord’s signage program for the
Project, as in effect from time to time and approved by the City in which the
Premises are located (“Signage Criteria”).  Prior to placing or erecting any such signs,
Tenant shall obtain and deliver to Landlord a copy of any applicable municipal
or other governmental permits and approvals and comply with any applicable
insurance requirements for such signage. 
Tenant shall be responsible for all costs of any permitted sign,
including, without limitation, the fabrication, installation, maintenance and
removal thereof and the cost of any permits therefor.  If Tenant fails to maintain its sign in good
condition, or if Tenant fails to remove same upon termination of this Lease and
repair and restore any damage caused by the sign or its removal, Landlord may
do so at Tenant’s expense.  Landlord
shall have the right to temporarily remove any signs in connection with any
repairs or maintenance in or upon the Building. 
The term “sign” as used in this Section shall include all signs,
designs, monuments, displays, advertising materials, logos, banners, projected
images, pennants, decals, pictures, notices, lettering, numerals or
graphics.  Tenant’s exterior signage
rights under this Section 5.2 belong solely to Netlist, Inc., a Delaware
corporation, and any attempted assignment or transfer of such rights (except in
connection with a “Permitted Transfer” as defined in Section 9.4 of this Lease)
shall be void and of no force and effect.


SECTION 5.3.      HAZARDOUS
MATERIALS.


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


(b)           Tenant
shall not cause or knowingly permit any Hazardous Materials to be brought upon,
stored, used, generated, released or disposed of on, under, from or about the
Premises (including without limitation the soil and groundwater thereunder)
without the prior written consent of Landlord, which consent may be given or
withheld in Landlord’s sole and absolute discretion.  Notwithstanding the foregoing, Tenant shall
have the right, without obtaining prior written consent of Landlord, to utilize
within the Premises a reasonable quantity of standard office products that may
contain Hazardous Materials (such as photocopy toner, “White Out”, and the
like), provided  however, that (i) Tenant shall maintain such
products in their original retail packaging, shall follow all instructions on
such packaging with respect to the storage, use and disposal of such products,
and shall otherwise comply with all applicable laws with respect to such
products, and (ii) all of the other terms and provisions of this
Section 5.3 shall apply with respect to Tenant’s storage, use and disposal
of all such products.  Landlord may, in
its sole and absolute discretion, place such conditions as Landlord deems
appropriate with respect to Tenant’s use, storage and/or disposal of any
Hazardous Materials requiring Landlord’s consent.  Tenant understands that Landlord may utilize
an environmental consultant to assist in determining conditions of approval in
connection with the storage, use, release, and/or disposal of Hazardous
Materials by Tenant on or about the Premises, and/or to conduct periodic
inspections of the storage, generation, use, release and/or disposal of such
Hazardous Materials by Tenant on and from the Premises, and Tenant agrees that
any reasonable costs incurred by Landlord in connection therewith shall be
reimbursed by Tenant to Landlord as additional rent hereunder upon demand.


(c)           Prior
to the execution of this Lease, Tenant shall complete, execute and deliver to
Landlord an Environmental Questionnaire and Disclosure Statement (the “Environmental Questionnaire”) in the form of Exhibit B
attached hereto.  The completed
Environmental Questionnaire shall be deemed incorporated into this Lease for
all purposes, and Landlord shall be entitled to rely fully on the information
contained therein.  On each anniversary
of the Commencement Date until the expiration or sooner termination of this
Lease, Tenant shall disclose to Landlord in writing the names and amounts of
all Hazardous Materials which were stored, generated, used, released and/or
disposed of on, under or about the Premises for the twelve-month period prior
thereto, and which Tenant desires to store, generate, use, release and/or
dispose of on, under or about the Premises for the succeeding twelve-month
period.  In addition, to the extent
Tenant is permitted to utilize Hazardous Materials upon the Premises, Tenant
shall promptly provide Landlord with complete and legible copies of all the
following environmental documents relating thereto:  reports filed pursuant to any self-reporting
requirements; permit applications, permits, monitoring reports, emergency
response or action plans, workplace exposure and community exposure warnings or
notices and all other reports, disclosures, plans or documents (even those
which may be characterized as confidential) relating to water discharges, air
pollution, waste generation or disposal, and underground storage tanks for
Hazardous Materials; orders, reports, notices, listings and correspondence
(even those which may be considered confidential) of or concerning the release,
investigation, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other legal
documents filed by or against Tenant related to Tenant’s storage, generation,
use, release and/or disposal of Hazardous Materials.


(d)           Landlord
and its agents shall have the right, but not the obligation, to inspect, sample
and/or monitor the Premises and/or the soil or groundwater thereunder at any
time to determine whether Tenant is complying with the terms of this Section 5.3,
and in connection therewith Tenant shall provide Landlord with full access to
all facilities, records and personnel related thereto.  If Tenant is not in compliance with any of
the provisions of this Section 5.3, or in the event of a release of any
Hazardous Material on, under, from or about the



 10
 









Premises caused or
knowingly permitted by Tenant, its agents, employees, contractors, licensees or
invitees, Landlord and its agents shall have the right, but not the obligation,
without limitation upon any of Landlord’s other rights and remedies under this
Lease, to immediately enter upon the Premises without notice and to discharge
Tenant’s obligations under this Section 5.3 at Tenant’s expense, including
without limitation the taking of emergency or long-term remedial action.  Landlord and its agents shall endeavor to
minimize interference with Tenant’s business in connection therewith, but shall
not be liable for any such interference. 
In addition, Landlord, at Tenant’s expense, shall have the right, but
not the obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims arising out of the storage, generation,
use, release and/or disposal by Tenant or its agents, employees, contractors,
licensees or invitees of Hazardous Materials on, under, from or about the
Premises.


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


(f)            Landlord
hereby discloses to Tenant, and Tenant hereby acknowledges, certain facts
relating to Hazardous Materials at the Project known by Landlord to exist as of
the date of this Lease, as more particularly described in Exhibit C
attached hereto.  Tenant shall have no
liability or responsibility with respect to the Hazardous Materials facts
described in Exhibit C, nor with respect to any Hazardous Materials
which were neither released on the Premises during the Term nor caused or
knowingly permitted by Tenant, its agents, employees, contractors, licensees or
invitees.  Notwithstanding the preceding
two sentences, Tenant agrees to notify its agents, employees, contractors,
licensees, and invitees of any exposure or potential exposure to Hazardous
Materials at the Premises that Landlord brings to Tenant’s attention.  Tenant hereby acknowledges that this
disclosure satisfies any obligation of Landlord to Tenant pursuant to
California Health & Safety Code Section 25359.7, or any amendment or
substitute thereto or any other disclosure obligations of Landlord.


ARTICLE
VI.  COMMON AREAS; SERVICES


SECTION 6.1.      UTILITIES AND SERVICES.  Tenant shall be responsible for and shall pay
promptly, directly to the appropriate supplier, all charges for water, gas,
electricity, sewer, heat, light, power, telephone, telecommunications service,
refuse pickup, janitorial service, interior landscape maintenance and all other
utilities, materials and services furnished directly to Tenant or the Premises
or used by Tenant in, on or about the Premises during the Term, together with
any taxes thereon.  If any utilities or
services are not separately metered or assessed



 11
 









to Tenant, Landlord shall
make a reasonable determination of Tenant’s proportionate share of the cost of
such utilities and services, and Tenant shall pay such amount to Landlord, as
an item of additional rent, within ten (10) days after receipt of Landlord’s
statement or invoice therefor. 
Alternatively, Landlord may elect to include such cost in the definition
of Project Costs in which event Tenant shall pay Tenant’s proportionate share
of such costs in the manner set forth in Section 4.2.  Tenant shall also pay to Landlord as an item
of additional rent, within ten (10) days after receipt of Landlord’s statement
or invoice therefor, Landlord’s “standard charge” (as hereinafter defined,
which shall be in addition to the electricity charge paid to the utility
provider) for “after hours” usage by Tenant of each HVAC unit servicing the
Premises. “After hours” shall mean more than
sixty-six (66) hours of usage during any week during the Term.  “After hours” usage shall be determined based
upon the operation of the applicable HVAC unit during week each on a “non-cumulative”
basis (that is, without regard to Tenant’s usage or nonusage of other unit(s)
serving the Premises, or of the applicable unit during other weeks of the
Term).  As used herein, “standard charge” shall mean $1.00 for each hour of “after
hours” use (in addition to the applicable electricity charges paid to the
utility provider).  Landlord shall not be
liable for damages or otherwise for any failure or interruption of any utility
or other service furnished to the Premises, and no such failure or interruption
shall be deemed an eviction or entitle Tenant to terminate this Lease or
withhold or abate any rent due hereunder. 
Landlord shall at all reasonable times have free access to the Building
and Premises to install, maintain, repair, replace or remove all electrical and
mechanical installations of Landlord. 
Tenant acknowledges that the costs incurred by Landlord related to
providing above-standard utilities and services to Tenant, including, without limitation,
telephone lines, may be charged to Tenant.


SECTION 6.2.      OPERATION AND MAINTENANCE OF COMMON AREAS.  During the Term, Landlord shall operate and
maintain all Common Areas within the Building and the Project in the manner
Landlord may determine to be appropriate. 
All costs incurred by Landlord for the maintenance and operation of the
Common Areas shall be included in Project Costs except to the extent any
particular cost incurred is related to or associated with a specific tenant and
can be charged to such tenant of the Project. 
The term “Common Areas” shall mean all areas
within the exterior boundaries of the Building and other buildings in the
Project which are not held for exclusive use by persons entitled to occupy
space, and all other appurtenant areas and improvements within the Project
provided by Landlord for the common use of Landlord and tenants and their
respective employees and invitees, including without limitation parking areas
and structures, driveways, sidewalks, landscaped and planted areas, hallways
and interior stairwells not located within the premises of any tenant, common
electrical rooms and roof access entries, common entrances and lobbies,
elevators, and restrooms not located within the premises of any tenant.


SECTION 6.3.      USE OF COMMON AREAS.  The occupancy by Tenant of the Premises shall
include the use of the Common Areas in common with Landlord and with all others
for whose convenience and use the Common Areas may be provided by Landlord,
subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. 
Landlord shall at all times during the Term have exclusive control of
the Common Areas, and may restrain or permit any use or occupancy, except as
authorized by Landlord’s rules and regulations. 
Tenant shall keep the Common Areas clear of any obstruction or
unauthorized use related to Tenant’s operations or use of Premises, including
without limitation, planters and furniture. 
Nothing in this Lease shall be deemed to impose liability upon Landlord
for any damage to or loss of the property of, or for any injury to, Tenant, its
invitees or employees.  Landlord may
temporarily close any portion of the Common Areas for repairs, remodeling and/or
alterations, to prevent a public dedication or the accrual of prescriptive
rights, or for any other reason deemed sufficient by Landlord, without
liability to Tenant.  Landlord’s
temporary closure of any portion of the Common Areas for such purposes shall
not deprive Tenant of reasonable access to the Premises.


SECTION
6.4.      PARKING.  Tenant shall be entitled to the number of
vehicle parking spaces set forth in Item 15 of the Basic Lease Provisions,
which spaces shall be unreserved and unassigned, on those portions of the
Common Areas designated by Landlord for parking.  Tenant shall not use more parking spaces than
such number.  All parking spaces shall be
used only for parking of vehicles no larger than full size passenger
automobiles, sport utility vehicles or pickup trucks.  Tenant shall not permit or allow any vehicles
that belong to or are controlled by Tenant or Tenant’s employees, suppliers,
shippers, customers or invitees to be loaded, unloaded or parked in areas other
than those designated by Landlord for such activities.  If Tenant permits or allows any of the
prohibited activities described above, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that Landlord may
have, to remove or tow away the vehicle involved and charge the costs to Tenant.  Parking within the Common Areas shall be
limited to striped parking stalls, and no parking shall be permitted in any
driveways, access ways or in any area which would prohibit or impede the free
flow of traffic within the Common Areas. 
There shall be no parking of any vehicles for longer than a forty-eight
(48) hour period unless otherwise authorized by Landlord, and vehicles which
have been abandoned or parked in violation of the terms hereof may be towed
away at the owner’s expense.  Nothing contained
in this Lease shall be deemed to create liability upon Landlord for any damage
to motor vehicles of visitors or employees, for any loss of property from
within those motor vehicles, or for any injury to Tenant, its visitors or
employees, unless ultimately determined to be caused by the sole active
negligence or willful misconduct of Landlord. 
Landlord shall have the right to establish, and from time to time amend,
and to enforce against all users all reasonable rules and regulations
(including the designation of areas for employee parking) that Landlord may
deem necessary and advisable for the proper and efficient operation and
maintenance of parking within the Common Areas. 
Landlord shall have the right to construct, maintain and operate
lighting facilities within the parking areas; to change the area, level,
location and arrangement of the parking areas and improvements therein; to
restrict parking by tenants, their officers, agents and employees to employee
parking areas; after the expiration of the initial 48-month Term of this Lease,
to enforce parking charges (by operation of meters or otherwise); and to do and
perform such other acts in and to the parking areas and improvements therein
as, in the use of good business judgment, Landlord shall determine to be
advisable.  Any person using the parking
area shall observe all directional signs and arrows and any posted speed
limits.  In no event shall Tenant
interfere with the use and enjoyment of the parking area by other tenants of
the Project or their



 12
 









employees or invitees.  Parking
areas shall be used only for parking vehicles. 
Washing, waxing, cleaning or servicing of vehicles, or the storage of
vehicles for longer than 48-hours, is prohibited unless otherwise authorized by
Landlord.  Tenant shall be liable for any
damage to the parking areas caused by Tenant or Tenant’s employees, suppliers,
shippers, customers or invitees, including without limitation damage from
excess oil leakage.  Tenant shall have no
right to install any fixtures, equipment or personal property in the parking
areas.


SECTION 6.5.      CHANGES AND ADDITIONS BY LANDLORD.  Landlord reserves the right to make
alterations or additions to the Building or the Project, or to the attendant
fixtures, equipment and Common Areas. 
Landlord may at any time relocate or remove any of the various
buildings, parking areas, and other Common Areas, and may add buildings and
areas to the Project from time to time. 
No change shall entitle Tenant to any abatement of rent or other claim
against Landlord.  No such change shall:
(i) deprive Tenant of reasonable access to or use of the Premises, (ii)
materially impair the visibility of Tenant’s exterior signage, or
(iii) reduce the number or size of Tenant’s parking spaces granted under
this Lease in any material manner, without Tenant’s prior written consent which
shall not be unreasonably withheld.


ARTICLE
VII.  MAINTAINING THE PREMISES


SECTION 7.1.      TENANT’S MAINTENANCE AND REPAIR.  Tenant at its sole expense shall maintain and
make all repairs and replacements necessary to keep the Premises in the
condition as existed on the Commencement Date (or on any later date that the
improvements may have been installed), excepting ordinary wear and tear,
including without limitation all interior glass, doors, door closures,
hardware, fixtures, electrical, plumbing, fire extinguisher equipment and other
equipment installed in the Premises and all Alterations constructed by Tenant
pursuant to Section 7.3 below.  Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices by
Tenant.  As part of its maintenance
obligations hereunder, Tenant shall assure that the Premises remain free of moisture
conditions which could cause mold and promptly repair any moisture conditions
occurring within the Premises, and Tenant shall, at Landlord’s request, provide
Landlord with copies of all maintenance schedules, reports and notices prepared
by, for or on behalf of Tenant.  All
repairs and replacements shall be at least equal in quality to the original
work, shall be made only by a licensed contractor approved in writing in
advance by Landlord and shall be made only at the time or times approved by
Landlord.  Any contractor utilized by
Tenant shall be subject to Landlord’s standard requirements for contractors, as
modified from time to time.  Landlord may
impose reasonable restrictions and requirements with respect to repairs and
replacements, as provided in Section 7.3, and the provisions of Section 7.4
shall apply to all repairs and replacements. 
Alternatively, Landlord may elect to perform any repair and maintenance
of the electrical and mechanical systems and any air conditioning, ventilating
or heating equipment serving the Premises and include the cost thereof as part
of Tenant’s Share of Operating Expenses. 
If Tenant fails to properly maintain and/or repair the Premises as
herein provided following Landlord’s notice and the expiration of the
applicable cure period (or earlier if Landlord determines that such work must
be performed prior to such time in order to avoid damage to the Premises or
Building or other detriment), then Landlord may elect, but shall have no
obligation, to perform any repair or maintenance required hereunder on behalf
of Tenant and at Tenant’s expense, and Tenant shall reimburse Landlord upon
demand for all costs incurred.


SECTION 7.2.      LANDLORD’S MAINTENANCE AND REPAIR.  Subject to Section 7.1 and Article XI,
Landlord shall provide service, maintenance and repair with respect to any air
conditioning, ventilating or heating equipment which serves the Premises
(exclusive, however, of supplemental HVAC equipment serving only the Premises),
and shall maintain in good repair the roof, foundations, footings, the exterior
surfaces of the exterior walls of the Building (including exterior glass), the
structural, electrical and mechanical systems (including elevators, if any,
serving the Building), except that Tenant at its expense shall make all repairs
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors.  Landlord shall have the right to employ or
designate any reputable person or firm, including any employee or agent of
Landlord or any of Landlord’s affiliates or divisions, to perform any service,
repair or maintenance function.  Landlord
need not make any other improvements or repairs except as specifically required
under this Lease, and nothing contained in this Section shall limit Landlord’s
right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease.  Tenant understands that it shall not perform
any maintenance or make any repairs or replacements at Landlord’s expense and
shall have no right to any rental offset for any maintenance, repairs or
replacements performed by Tenant.  Tenant
further understands that Landlord shall not be required to make any repairs to
the roof, foundations, footings, the exterior surfaces of the exterior walls of
the Building (excluding exterior glass), or structural, electrical or
mechanical systems unless and until Tenant has notified Landlord in writing of
the need for such repair, and Landlord shall have a reasonable period of time
thereafter to commence and complete said repair, if warranted.  All costs of any maintenance, repairs and
replacements on the part of Landlord provided hereunder shall be considered
part of Project Costs.  Tenant further
agrees that if Tenant fails to report any such need for repair in writing
within sixty (60) days of its discovery by Tenant, Tenant shall be responsible
for any costs and expenses and other damages related to such repair which are
in excess of those which would have resulted had such need for repair been
reported to Landlord within such sixty (60) day period.


SECTION 7.3.      ALTERATIONS.  Except as otherwise provided in this Section,
Tenant shall make no alterations, additions, fixtures or improvements (“Alterations”)  to the
Premises or the Building without the prior written consent of Landlord, which
consent may be granted or withheld in Landlord’s sole and absolute
discretion.  In the event that any
requested Alteration would result in a change from Landlord’s building standard
materials and specifications for the Project (“Standard
Improvements”), Landlord may withhold consent to such Alteration in
its sole and absolute discretion.  In the
event Landlord so consents to a change from the Standard Improvements (such
change being referred to as a “Non-Standard Improvement”),
Tenant shall be responsible for the cost of replacing such  Non-Standard
Improvement with the applicable Standard Improvement (“Replacements”), which



 13
 









Replacements shall be
completed prior to the Expiration Date or earlier termination of this
Lease.  Landlord shall not unreasonably
withhold, condition or delay its consent to any Alterations which cost less
than Ten Thousand Dollars ($10,000.00), which Alterations do not
(i) affect the exterior of the Building or outside areas (or be visible
from adjoining sites), or (ii) affect or penetrate any of the structural
portions of the Building, including but not limited to the roof, or
(iii) require any change to the basic floor plan of the office portion of
the Premises (including, without limitation, the adding of any additional “office”
square footage to the Premises) or any change to any structural or mechanical
systems of the Premises, or (iv) fail to comply with any applicable
governmental requirements or require any governmental permit as a prerequisite
to the construction thereof, or (v) result in the Premises requiring building
services beyond the level normally provided to other tenants, or
(vi) interfere in any manner with the proper functioning of, or Landlord’s
access to, any mechanical, electrical, plumbing, elevator or HVAC systems,
facilities or equipment located in or serving the Building, or
(vii) diminish the value of the Premises including, without limitation,
using lesser quality materials than those existing in the Premises, or (viii)
alter or replace Standard Improvements. 
Landlord may impose any condition to its consent, including but not
limited to a requirement that the installation and/or removal of all
Alterations and Replacements be covered by a lien and completion bond
satisfactory to Landlord in its sole and absolute discretion and requirements
as to the manner and time of performance of such work.  Landlord shall in all events, whether or not
Landlord’s consent is required, have the right to approve prior to the commencement
of any work the contractor performing the installation and removal of
Alterations and Replacements and Tenant shall not permit any contractor not
approved by Landlord to perform any work on the Premises or on the Building.  Tenant shall obtain all required permits for
the installation and removal of Alterations and Replacements and shall perform
the installation and removal of Alterations and Replacements in compliance with
all applicable laws, regulations and ordinances, including without limitation
the Americans with Disabilities Act, all covenants, conditions and restrictions
affecting the Project, and the Rules and Regulations as described in
Article XVII.  Tenant understands
and agrees that Landlord shall be entitled to a supervision fee in the amount
of five percent (5%) of the cost of such Alterations either requiring a permit from the
City of Irvine or affecting any mechanical, electrical, plumbing or HVAC
systems, facilities or equipment located in or serving the Building.  Under no circumstances shall Tenant make any
Alterations or Replacements which incorporate any Hazardous Materials,
including without limitation asbestos-containing construction materials into
the Premises, the Building or the Common Area. 
In no event shall Tenant prosecute any Alterations that result in
picketing or labor demonstrations in or about the Building or Project.  If any governmental entity requires, as a
condition to any proposed Alterations or Replacements by Tenant, that
improvements be made to the Common Areas, and if Landlord consents to such
improvements to the Common Areas (which consent may be withheld in the sole and
absolute discretion of Landlord), then Tenant shall, at Tenant’s sole expense,
make such required improvements to the Common Areas in such manner, utilizing
such materials, and with such contractors, architects and engineers as Landlord
may require in its sole and absolute discretion.  Landlord shall have the right, but not the
obligation, to elect to make any such improvements to be made to the Common
Areas at Tenant’s expense, in which case Tenant shall reimburse Landlord upon
demand for all costs incurred in making such improvements.  Any request for Landlord’s consent to any
proposed Alterations shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord.  Landlord may elect to cause its architect to
review Tenant’s architectural plans, and the reasonable cost of that review
shall be reimbursed by Tenant.  Should
the work proposed by Tenant and consented to by Landlord modify the basic floor
plan of the Premises, then Tenant shall, at its expense, furnish Landlord with
as-built drawings and CAD disks compatible with Landlord’s systems and
standards.  Unless Landlord otherwise
agrees in writing, all Alterations made or affixed to the Premises, the
Building or to the Common Areas (excluding moveable trade fixtures and
furniture), including without limitation all Tenant Improvements constructed
pursuant to the Work Letter (except as otherwise provided in the Work Letter)
and all telephone and data cabling, shall become the property of Landlord and
shall be surrendered with the Premises at the end of the Term; except that
Landlord may, by notice to Tenant given either prior to or following the
expiration or termination of this Lease, require Tenant to remove by the
Expiration Date, or sooner termination date of this Lease, or within ten (10)
days following notice to Tenant that such removal is required if notice is
given following the Expiration Date or sooner termination, all or any of the
Alterations installed either by Tenant or by Landlord at Tenant’s request,
including without limitation all telephone and data cabling, and to repair any
damage to the Premises, the Building or the Common Areas arising from that
removal and restore the Premises to their condition prior to making such
Alterations.


Notwithstanding the provisions of this Section 7.3 to
the contrary, Landlord shall not have the right to require Tenant to
remove any of the components of the initial Tenant Improvements to the
Premises, except to the extent provided in the Work Letter attached hereto.


SECTION 7.4.      MECHANIC’S LIENS.  Tenant shall keep the Premises free from any
liens arising out of any services or work performed, materials furnished, or
obligations incurred by or for Tenant. 
Upon request by Landlord, Tenant shall promptly (but in no event later
than five (5) business days following such request) cause any such lien to be
released by posting a bond in accordance with California Civil Code Section
3143 or any successor statute.  In the
event that Tenant shall not, within thirty (30) days following the imposition
of any lien, cause the lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other available remedies,
the right to cause the lien to be released by any means it deems proper,
including payment of or defense against the claim giving rise to the lien.  All reasonable and actual expenses so incurred
by Landlord, including Landlord’s reasonable attorneys’ fees, and any
consequential or other damages incurred by Landlord arising out of such lien,
shall be reimbursed by Tenant upon demand, together with interest from the date
of payment by Landlord at the maximum rate permitted by law until paid.  Tenant shall give Landlord no less than
twenty (20) days’ prior notice in writing before commencing construction of any
kind on the Premises or Common Areas and shall again notify Landlord that
construction has commenced, such notice to be given on the actual date on which
construction commences, so that Landlord may post and maintain notices of
nonresponsibility on the Premises or Common Area, as applicable, which notices
Landlord shall have the right to post and which Tenant agrees it shall not
disturb.  Tenant shall also provide
Landlord notice in writing within ten (10) days following the date on which
such work is substantially completed. 
The provisions of this Section shall expressly survive the expiration or
sooner termination of this Lease.



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SECTION 7.5.      ENTRY AND INSPECTION.  Landlord shall at all reasonable times, upon
at least 24 hours prior written or oral notice (except in emergencies, when no
notice shall be required) have the right to enter the Premises to inspect them,
to supply services in accordance with this Lease, to perform any work required
or permitted to be performed by Landlord within the Premises, to have access to
install, repair, maintain, replace or remove all electrical and mechanical
installations of Landlord and to protect the interests of Landlord in the
Premises, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when an Event of Default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease.  Landlord shall have the right, if desired, to
retain a key which unlocks all of the doors in the Premises, excluding Tenant’s
vaults and safes, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open the doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by
Landlord as provided in this Section 7.5 shall not be deemed to be a forcible
or unlawful entry into, or a detainer of, the Premises, or any eviction of
Tenant from the Premises.


ARTICLE
VIII.  TAXES AND ASSESSMENTS ON TENANT’S
PROPERTY


Tenant shall be liable for and shall pay, at least ten
(10) days before delinquency, all taxes and assessments levied against all
personal property of Tenant located in the Premises, and, if required by
Landlord, against all Non-Standard Improvements to the Premises (as defined in
Section 7.3) made by Landlord or Tenant, and against any Alterations (as
defined in Section 7.3) made to the Premises or the Building by or on behalf of
Tenant.  If requested by Landlord, Tenant
shall cause its personal property, Non-Standard Improvements  and Alterations to be assessed and billed separately from
the real property of which the Premises form a part.  If any taxes required to be paid by Tenant on
Tenant’s personal property, Non-Standard Improvements and/or Alterations are
levied against Landlord or Landlord’s property and if Landlord pays the same,
or if the assessed value of Landlord’s property is increased by the inclusion
of a value placed upon Tenant’s personal property, Non-Standard Improvements
and/or Alterations and if Landlord pays the taxes based upon the increased
assessment, Landlord shall have the right to require that Tenant pay to
Landlord the taxes so levied against Landlord or the proportion of the taxes
resulting from the increase in the assessment. 
In calculating what portion of any tax bill which is assessed against
Landlord separately, or Landlord and Tenant jointly, is attributable to Tenant’s
Non-Standard Improvements, Alterations and personal property, Landlord’s
reasonable determination shall be conclusive.


ARTICLE
IX.  ASSIGNMENT AND SUBLETTING


SECTION 9.1.      RIGHTS
OF PARTIES.


(a)           Notwithstanding
any provision of this Lease to the contrary, and except as to transfers
expressly permitted without Landlord’s consent pursuant to Section 9.4, Tenant
will not, either voluntarily or by operation of law, assign, sublet, encumber,
or otherwise transfer all or any part of Tenant’s interest in this Lease or the
Premises, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord’s prior written consent, which consent shall not unreasonably
be withheld or conditioned in accordance with the provisions of Section
9.1(b).  No assignment (whether
voluntary, involuntary or by operation of law), subletting or other transfer
shall be valid or effective without Landlord’s prior written consent and, at
Landlord’s election, any such assignment, subletting or other transfer shall be
void and of no force and effect and any such attempted assignment, subletting
or other transfer shall constitute an Event of Default of this Lease.  Landlord shall not be deemed to have given
its consent to any assignment, subletting or other transfer by any course of
action, including without limitation its acceptance of rent or any other
payment due under this Lease from any person or entity other than Tenant or its
acceptance of any name for listing in the Building directory, other than
Landlord’s written consent.  To the
extent not prohibited by provisions of the Bankruptcy Code, 11 U.S.C. Section
101 et seq., (the “Bankruptcy
Code”), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord’s standard for consent as set forth
in Section 9.1(b) of this Lease.  If this
Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered in
connection with the assignment shall be delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not constitute property of
Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code.  Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.


(b)           If
Tenant desires to assign, sublease or otherwise transfer an interest in this
Lease or the Premises, it shall first notify Landlord of its desire and shall
submit in writing to Landlord:  (i) the
name and address of the proposed assignee, subtenant or transferee; (ii) the
nature of any proposed assignee’s, subtenant’s or transferee’s business to be
carried on in the Premises; (iii) the terms and provisions of any proposed
assignment, sublease or other transfer, including a copy of the proposed
assignment, sublease or transfer form; (iv) evidence that the proposed
assignee, subtenant or transferee will comply with the requirements of Exhibit D
hereto; (v) a completed Environmental Questionnaire from the proposed
assignee, subtenant or transferee; (vi) any other reasonable information
requested in writing by Landlord and reasonably related to the transfer and
(vii) the fee described in Section 9.1(e). 
Except as provided in Section 9.1(c), Landlord shall not unreasonably
withhold, condition or delay  its
consent, provided that the parties agree that it shall be reasonable for
Landlord to withhold its consent if:  (1)
the use of the Premises will not be consistent with the provisions of this
Lease or with Landlord’s commitment to other tenants of the Building and
Project; (2) the proposed assignee has not demonstrated to the reasonable
satisfaction of



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Landlord that it is
financially responsible to undertake and perform the obligations under this
Lease, or the proposed assignee, subtenant or transferee has failed to submit
to Landlord all reasonable information as requested by Landlord concerning the
proposed assignee, subtenant or transferee, including, but not limited to, a
certified balance sheet of the proposed assignee, subtenant or transferee as of
a date within ninety (90) days of the request for Landlord’s consent,
statements of income or profit and loss of the proposed assignee, subtenant or
transferee for the two-year period preceding the request for Landlord’s
consent, and/or a certification signed by the proposed assignee, subtenant or
transferee that it has not been evicted from any other leased premises for the
3-year period preceding the request for Landlord’s consent; (3) the proposed
subtenant, assignee or transferee is an existing tenant of the Building or
Project with whom Landlord is actively negotiating to expand or relocate within
the Building or Project, or a prospect with whom Landlord is actively
negotiating to become a tenant at the Building or Project; or (4) the proposed
assignment, sublease or transfer will impose additional burdens or adverse tax
effects on Landlord.  Tenant’s exterior
signage rights are personal to Tenant and may not be assigned or transferred to
any assignee of this Lease or subtenant of the Premises.  Notwithstanding the foregoing, said exterior
signage rights may be assigned in connection with a “Permitted Transfer,”
provided that Landlord shall have the right of prior approval that such signage
continues to comply with the Signage Criteria and the other requirements of
Section 5.2 of this Lease, and provided further that any name and/or graphics
on such signage do not materially devalue the Project as determined by Landlord
in its sole and absolute discretion.


If Landlord consents to the proposed transfer, Tenant
may within ninety (90) days after the date of the consent effect the transfer
upon the terms described in the information furnished to Landlord; provided
that any material change in the terms shall be subject to Landlord’s consent as
set forth in this Section 9.1.  Landlord
shall approve or disapprove any requested transfer within fifteen (15) business
days following receipt of Tenant’s written request, the information set forth
above, and the fee set forth below.


(c)           Notwithstanding
the provisions of Section 9.1(b) above, in lieu of consenting to a proposed
assignment of this Lease or a subletting of more than fifty percent (50%) of
the Floor Area of the Premises in the aggregate, Landlord may elect, within the
fifteen (15) business day period permitted for Landlord to approve or
disapprove a requested transfer, to (i) sublease the Premises (or the portion
proposed to be so subleased), or take an assignment of Tenant’s interest in
this Lease, but not in the event that Tenant desires to remain in the portion
of the Premises, upon substantially the same terms as offered to the proposed
subtenant or assignee (excluding terms relating to the purchase of personal
property, the use of Tenant’s name or the continuation of Tenant’s business),
respectively, or (ii) terminate this Lease in its entirety in the event of a
proposed assignment or terminate this Lease as to the portion of the Premises
proposed to be so subleased with a proportionate abatement in the rent payable
under this Lease.  The sublease,
assignment or termination elected by Landlord shall be effective thirty (30)
days following written notice by Landlord of its election.  Landlord may thereafter, at its option,
assign, sublet or re-let any space so sublet, obtained by assignment or
obtained by termination to any third party, including without limitation the
proposed transferee of Tenant.  In the
event of any termination of this Lease as to a portion of the Premises pursuant
to this Section 9.1(c), Landlord shall promptly prepare and deliver to Tenant
an amendment to this Lease appropriately amending those provisions of the Lease
affected by such termination, and Tenant shall execute and return same to
Landlord within twenty (20) business days thereafter subject to Tenant’s
reasonable review and approval thereof.


(d)           In
the event that Landlord approves the requested assignment, subletting or other
transfer, Landlord shall be entitled to receive fifty percent (50%) of any
amounts paid by the assignee or subtenant, however described, in excess of
(i) the Basic Rent payable by Tenant hereunder, or in the case of a
sublease of a portion of the Premises, in excess of the Basic Rent reasonably
allocable to such portion as determined by Landlord, plus (ii) Tenant’s
direct out-of-pocket costs which Tenant certifies to Landlord have been paid to
provide occupancy related services to such assignee or subtenant of a nature
commonly provided by landlords of similar space, with such costs to be
amortized on a straight-line basis over the then remaining term of this Lease
or any shorter term of any sublease of the Premises or a portion thereof.  The amounts due Landlord under this Section
9.1(d), shall be payable directly to Landlord by the assignee or subtenant
concurrently with such assignee’s or subtenant’s payment(s) to Tenant, or, at
Landlord’s option, by Tenant within ten (10) days of Tenant’s receipt
thereof.  Landlord shall have the right
to review or audit the books and records of Tenant, or have such books and
records reviewed or audited by an outside accountant, to confirm any such
direct out-of-pocket costs.  In the event
that such direct out-of-pocket costs claimed by Tenant are overstated by more
than five percent (5%), Tenant shall reimburse Landlord for any of Landlord’s
costs related to such review or audit. 
At Landlord’s request, a written agreement shall be entered into by and
among Tenant, Landlord and the proposed assignee or subtenant confirming the
requirements of this Section 9.1(d).


(e)           Tenant
shall pay to Landlord a fee equal to the greater of (i) Landlord’s actual and
reasonable costs related to such assignment, subletting or other transfer or
(ii) Five Hundred Dollars ($500.00), to process any request by Tenant for an
assignment, subletting or other transfer under this Lease.  Tenant shall pay Landlord the sum of Five
Hundred Dollars ($500.00) concurrently with Tenant’s request for consent to any
assignment, subletting or other transfer, and Landlord shall have no obligation
to consider such request unless accompanied by such payment.  Tenant shall pay Landlord upon demand any
costs in excess of such payment to the extent Landlord’s actual and reasonable
costs related to such request exceeds $500.00. 
Such fee is hereby acknowledged as a reasonable amount to reimburse
Landlord for its costs of review and evaluation of a proposed transfer.


SECTION 9.2.      EFFECT OF TRANSFER.  No assignment, subletting or other transfer,
even with the consent of Landlord, shall relieve Tenant of its obligation to
pay rent and to perform all its other obligations under this Lease.  Moreover, Tenant shall indemnify and hold
Landlord harmless, as provided in Section 10.3, for any act or omission by an
assignee, subtenant or transferee.  Each
assignee, other than Landlord, shall assume all obligations of Tenant under
this Lease and shall be liable jointly and severally with Tenant for the
payment of all rent, and for



 16
 









the due performance of
all of Tenant’s obligations, under this Lease. 
No assignment, subletting or transfer shall be effective or binding on
Landlord unless documentation in form and substance satisfactory to Landlord in
its reasonable discretion evidencing the transfer, and in the case of an
assignment, the assignee’s assumption of the obligations of Tenant under this
Lease, is delivered to Landlord, and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument prepared by
Landlord and consistent with the requirements of this Article.  Consent by Landlord to one or more transfers shall
not operate as a waiver or estoppel to the future enforcement by Landlord of
its rights under this Lease or as a consent to any subsequent transfer.


SECTION 9.3.      SUBLEASE REQUIREMENTS.  The following terms and conditions shall
apply to any subletting by Tenant of all or any part of the Premises and shall
be deemed included in each sublease:


(a)           Each
and every provision contained in this Lease (other than with respect to the
payment of rent hereunder) is incorporated by reference into and made a part of
such sublease, with “Landlord” hereunder meaning the sublandlord therein and “Tenant”
hereunder meaning the subtenant therein.


(b)           Tenant
hereby irrevocably assigns to Landlord all of Tenant’s interest in all rentals
and income arising from any sublease of the Premises, and Landlord may collect
such rent and income and apply the same toward Tenant’s obligations under this
Lease; provided, however, that until there is an Event of Default by Tenant,
Tenant shall have the right to receive and collect the sublease rentals.  Landlord shall not, by reason of this
assignment or the collection of sublease rentals, be deemed liable to the
subtenant for the performance of any of Tenant’s obligations under the
sublease.  Tenant hereby irrevocably
authorizes and directs any subtenant, upon receipt of a written notice from
Landlord stating that an Event of Default exists in the performance of Tenant’s
obligations under this Lease, to pay to Landlord all sums then and thereafter
due under the sublease.  Tenant agrees
that the subtenant may rely on that notice without any duty of further inquiry
and notwithstanding any notice or claim by Tenant to the contrary.  Tenant shall have no right or claim against
the subtenant or Landlord for any rentals so paid to Landlord.


(c)           In
the event of the termination of this Lease for any reason, including without
limitation as the result of an Event of Default by Tenant or by the mutual
agreement of Landlord and Tenant, Landlord may, at its sole option, take over
Tenant’s entire interest in any sublease and, upon notice from Landlord, the
subtenant shall attorn to Landlord.  In
no event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payments or
deposits under the sublease that have not been actually delivered to Landlord,
nor shall Landlord be bound by any sublease modification executed without
Landlord’s consent or for any advance rental payment by the subtenant in excess
of one month’s rent.  The provisions of
this Lease (other than with respect to the payment of rent), including without
limitation those pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the termination of this
Lease.  In the event Landlord does not
elect to take over Tenant’s interest in a sublease in the event of any such
termination of this Lease, such sublease shall terminate concurrently with the
termination of this Lease and such subtenant shall have no further rights under
such sublease and Landlord shall have no obligations to such subtenant.


SECTION 9.4.      CERTAIN
TRANSFERS.  The
following shall be deemed to constitute an assignment of this Lease;
(a) the sale of all or substantially all of Tenant’s assets (other than
bulk sales in the ordinary course of business), (b) if Tenant is a
corporation, an unincorporated association, a limited liability company or a
partnership, the transfer, assignment or hypothecation of any stock or interest
in such corporation, association, limited liability company or partnership in
the aggregate of twenty-five percent (25%) (except for publicly traded shares
of stock constituting a transfer of twenty-five percent (25%) or more in the
aggregate, so long as no change in the controlling interest of Tenant occurs as
a result thereof), or (c) any other direct or indirect change of control
of Tenant, including, without limitation, change of control of Tenant’s parent
company or a merger by Tenant or its parent company.  Notwithstanding anything to the contrary
contained above, Tenant shall have the right, without Landlord’s consent, but
upon ten (10) days prior notice to Landlord, to (A) sublet all or part of the
Premises to any entity which controls Tenant, is controlled by Tenant or is
under common control with Tenant (collectively, a “Tenant
Affiliate”), (B) assign its interest under this Lease to a Tenant
Affiliate, or to a successor entity into which or with which Tenant is merged
or consolidated or which acquires substantially all of Tenant’s assets or
property, or (C) effectuate any public offering of Tenant’s stock on the New
York Stock Exchange or in the NASDAQ over the counter market (collectively, a “Permitted Transfer”); provided that in the event of a
Permitted Transfer pursuant to clause (B) above, the net worth of the Tenant
Affiliate or successor or reorganized entity after such Permitted Transfer is
at least equal to the greater of the net worth of Tenant as of the execution of
this Lease or the net worth of Tenant immediately prior to the date of such
Permitted Transfer, evidence of which, satisfactory to Landlord, shall be
presented to Landlord with Tenant’s notice of such Permitted Transfer.  Tenant shall provide to Landlord, prior to
any such Permitted Transfer, such assignment documentation and other
information as Landlord may reasonably require in connection therewith, and all
of the terms and requirements of Section 9.2 and 9.3 (but not of Section 9.1)
shall apply with respect to such Permitted Transfer.  Nothing contained in the foregoing is
intended to nor shall permit Tenant to transfer its interest under this Lease
as part of a fraud or subterfuge to intentionally avoid its obligations under
this Lease.


ARTICLE
X.  INSURANCE AND INDEMNITY


SECTION 10.1.    TENANT’S INSURANCE.  Tenant, at its sole cost and expense, shall
provide and maintain in effect the insurance described in Exhibit D.  Evidence of that insurance must be delivered
to Landlord prior to the Commencement Date or any earlier date on which Tenant
may enter upon or take possession of the Premises for any reason whatsoever.



 17















SECTION 10.2.    LANDLORD’S
INSURANCE.  Landlord
may, at its election, provide any or all of the following types of insurance,
with or without deductible and in amounts and coverages as may be determined by
Landlord in its sole and absolute discretion: 
property insurance, subject to standard exclusions, covering the
Building and/or Project, and such other risks as Landlord or its mortgagees may
from time to time deem appropriate, including coverage for the Tenant
Improvements constructed by Landlord pursuant to the Work Letter (if any)
attached hereto, and commercial general liability coverage.  Landlord shall not be required to carry
insurance of any kind on Tenant’s Alterations or on Tenant’s other property,
including, without limitation, Tenant’s trade fixtures, furnishings, equipment,
signs and all other items of personal property, and Landlord shall not be
obligated to repair or replace that property should damage occur.  All proceeds of insurance maintained by Landlord
upon the Building and/or Project shall be the property of Landlord, whether or
not Landlord is obligated to or elects to make any repairs.  At Landlord’s option, Landlord may
self-insure all or any portion of the risks for which Landlord may elect to
provide insurance hereunder.


SECTION 10.3.    TENANT’S INDEMNITY.  To the fullest extent permitted by law,
Tenant shall defend, indemnify, protect, save and hold harmless Landlord, its
agents, and any and all affiliates of Landlord, including, without limitation,
any corporations or other entities controlling, controlled by or under common
control with Landlord, from and against any and all claims, demands, actions,
losses, liabilities, costs or expenses arising either before or after the
Commencement Date from: Tenant’s use or occupancy of the Premises, the Building
or the Common Areas, including, without limitation, the use by Tenant, its
agents, employees, invitees or licensees of any recreational facilities within
the Common Areas; the conduct of Tenant’s business; any activity, work, or
thing done, permitted or suffered by Tenant or its agents, employees, invitees
or licensees in or about the Premises, the Building or the Common Areas; any
Event of Default in the performance of any obligation on Tenant’s part to be
performed under this Lease; or any act or negligence of Tenant or its agents,
employees, visitors, patrons, guests, invitees or licensees.  Landlord may, at its option, require Tenant
to assume Landlord’s defense in any claim, action or proceeding covered by this
Section through counsel satisfactory to Landlord.  The provisions of this Section shall
expressly survive the expiration or sooner termination of this Lease.  Tenant’s obligations under this Section shall
not apply in the event that the claim, demand, action, loss, liability, cost or
expense is caused solely by the active negligence or willful misconduct of
Landlord.


SECTION 10.4.    LANDLORD’S NONLIABILITY.  Landlord, its agents, and any and all
affiliates of Landlord, shall not be liable to Tenant, its employees, agents
and/or invitees, and Tenant hereby waives all claims against Landlord, its
agents, and any and all affiliates of Landlord, for and knowingly assumes the
risk of loss of or damage to any property, or loss or interruption of business
or income, or any other loss, cost, damage, injury or liability whatsoever
(including without limitation any consequential damages and lost profit or
opportunity costs), resulting from, but not limited to, Acts of God, acts of
civil disobedience or insurrection, acts or omissions of third parties and/or
of other tenants within the Project or their agents, employees, contractors,
guests or invitees, fire, explosion, falling plaster, steam, gas, electricity,
water or rain which may leak or flow from or into any part of the Premises,
mold, or from the breakage, leakage, obstruction or other defects of the pipes,
sprinklers, wires, appliances, plumbing, air conditioning, electrical works,
roof, windows or other fixtures in the Building (whether the damage or injury
results from conditions arising in the Premises or in other portions of the
Building), regardless of the negligence of Landlord, its agents or any and all
affiliates of Landlord in connection with any of the foregoing.  It is understood that any such condition may
require the temporary evacuation or closure of all or a portion of the
Building.  Landlord shall have no
liability whatsoever (including without limitation consequential damages and
lost profit or opportunity costs) and, except as provided in Sections 11.1 and
12.1 below, there shall be no abatement of rent, by reason of any injury to or
interference with Tenant’s business arising from the making of any repairs,
alterations or improvements to any portion of the Building, including repairs
to the Premises, nor shall any related activity by Landlord constitute an
actual or constructive eviction.  In
making repairs, alterations or improvements, however, Landlord shall interfere
as little as reasonably practicable with the conduct of Tenant’s business in
the Premises.  Should Tenant elect to
receive any service or products from a concessionaire, licensee or third party
tenant of Landlord, Landlord shall have no liability for any services or
products so provided or for any breach of contract by such third party
provider.  Neither Landlord nor its
agents shall be liable for interference with light or other similar intangible
interests.  Tenant shall immediately
notify Landlord in case of fire or accident in the Premises, the Building or
the Project and of defects in any improvements or equipment.


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


ARTICLE
XI.  DAMAGE OR DESTRUCTION


SECTION 11.1.    RESTORATION.


(a)           If
the Premises or the Building or a part thereof are materially damaged by any
fire, flood, earthquake or other casualty, Landlord shall have the right to
terminate this Lease upon written notice to Tenant if:  (i) Landlord reasonably determines that
proceeds necessary to pay the full cost of repair are not available from
Landlord’s insurance, including without limitation earthquake insurance, plus
such additional amounts Tenant elects, at its option, to contribute, excluding
however the deductible (for which Tenant shall be responsible for Tenant’s



 18
 









Share);
(ii) Landlord reasonably determines that the Premises cannot, with
reasonable diligence, be fully repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, including without
limitation Hazardous Materials, earthquake faults, and other similar dangers)
within two hundred seventy (270) days after the date of the damage;
(iii) an Event of Default by Tenant has occurred; or (iv) the
material damage occurs during the final twelve (12) months of the Term.  Landlord shall notify Tenant in writing (“Landlord’s Notice”) within sixty (60) days after the damage
occurs as to (A) whether Landlord is terminating this Lease as a result of such
material damage and (B) if Landlord is not terminating this Lease, the number
of days within which Landlord estimates that the Premises, with reasonable
diligence, are likely to be fully repaired. 
In the event Landlord elects to terminate this Lease, this Lease shall
terminate as of the date specified for termination by Landlord’s Notice (which
termination date shall in no event be later than sixty (60) days following the
date of the damage, or, if no such date is specified, such termination shall be
the date of Landlord’s Notice).


(b)           If
Landlord has the right to terminate this Lease pursuant to Section 11.1(a) and
does not elect to so terminate this Lease, and provided that at the time of
Landlord’s Notice neither an Event of Default exists nor has Landlord delivered
to Tenant a notice of any failure by Tenant to fulfill an obligation under this
Lease which, unless cured by Tenant within the applicable grace period, would
constitute an Event of Default, then within thirty (30) days following delivery
of Landlord’s Notice pursuant to Section 11.1(a), Tenant may elect to terminate
this Lease by written notice to Landlord, but only if (i) Landlord’s Notice
specifies that Landlord has determined that the Premises cannot be repaired,
with reasonable diligence, within two hundred seventy (270) days after the date
of damage or (ii) the casualty has occurred within the final twelve (12) months
of the Term and such material damage has a materially adverse impact on Tenant’s
continued use of the Premises.  If Tenant
fails to provide such termination notice within such thirty (30) day period,
Tenant shall be deemed to have waived any termination right under this Section
1l.1(b) or any other applicable law.


(c)           In
the event that neither Landlord nor Tenant terminates this Lease pursuant to
this Section 11.1 as a result of material damage to the Building or Premises
resulting from a casualty, Landlord shall repair all material damage to the
Premises or the Building as soon as reasonably possible and this Lease shall
continue in effect for the remainder of the Term.  Subject to any provision to the contrary in
the Work Letter, such repair by Landlord shall include repair of material
damage to the Tenant Improvements constructed pursuant to the Work Letter.  Landlord’s repair of material damage shall be
at Landlord’s sole cost and expense except for any insurance deductible (for
which Tenant shall be responsible for Tenant’s Share).  Landlord shall have the right, but not the
obligation, to repair or replace any other leasehold improvements made by
Tenant or any Alterations (as defined in Section 7.3) constructed by
Tenant as part of Landlord’s repair of material damage, in which case Tenant
shall make available to Landlord upon demand insurance proceeds from insurance
required to be maintained by Tenant.  If
Landlord elects to repair or replace such leasehold improvements and/or
Alterations, all insurance proceeds available for such repair or replacement
shall be made available to Landlord. 
Landlord shall have no liability to Tenant in the event that the
Premises or the Building has not been fully repaired within the time period
specified by Landlord in Landlord’s Notice to Tenant as described in Section
11.1(a).  Notwithstanding the provisions
of this Article XI, the repair of damage to the Premises to the extent such
damage is not material shall be governed by Sections 7.1 and 7.2.


(d)           Commencing
on the date of such material damage to the Building, and ending on the sooner
of the date the damage is repaired or the date this Lease is terminated, the
rental to be paid under this Lease shall be abated in the same proportion that
the Floor Area of the Premises that is rendered unusable by the damage from
time to time bears to the total Floor Area of the Premises, as determined by
Landlord, but only to the extent that Landlord is entitled to reimbursement
from the proceeds of the business interruption insurance required to be
maintained by Tenant pursuant to Exhibit D.


(e)           Landlord
shall not be required to repair or replace any improvements or fixtures that
Tenant is obligated to repair or replace pursuant to Section 7.1 or any other
provision of this Lease and Tenant shall continue to be obligated to so repair
or replace any such improvements or fixtures, notwithstanding any provisions to
the contrary in this Article XI.  In
addition, but subject to the provisions of Section 10.5, in the event the
damage or destruction to the Premises or Building are due in substantial part
to the fault or neglect of Tenant or its employees, subtenants, invitees or
representatives, the costs of such repairs or replacement to the Premises or
Building shall be borne by Tenant, and in addition, Tenant shall not be
entitled to terminate this Lease as a result, notwithstanding the provisions of
Section 11.1(b).


(f)            Tenant
shall fully cooperate with Landlord in removing Tenant’s personal property and
any debris from the Premises to facilitate all inspections of the Premises and
the making of any repairs. 
Notwithstanding anything to the contrary contained in this Lease, if
Landlord in good faith believes there is a risk of injury to persons or damage
to property from entry into the Building or Premises following any damage or
destruction thereto, Landlord may restrict entry into the Building or the Premises
by Tenant, its employees, agents and contractors in a non-discriminatory
manner, without being deemed to have violated Tenant’s rights of quiet
enjoyment to, or made an unlawful detainer of, or evicted Tenant from, the
Premises.  Upon request, Landlord shall
consult with Tenant to determine if there are safe methods of entry into the
Building or the Premises solely in order to allow Tenant to retrieve files,
data in computers, and necessary inventory, subject however to all indemnities
and waivers of liability from Tenant to Landlord contained in this Lease and
any additional indemnities and waivers of liability which Landlord may require.


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



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ARTICLE
XII.  EMINENT DOMAIN


SECTION 12.1.    TOTAL OR PARTIAL TAKING.  If all or a material portion of the Premises
is taken by any lawful authority by exercise of the right of eminent domain, or
sold to prevent a taking, either Tenant or Landlord may terminate this Lease
effective as of the date possession is required to be surrendered to the
authority.  In the event title to a
portion of the Building or Project, whether or not including a portion of the
Premises, is taken or sold to prevent a taking, and if Landlord elects to
restore the Building in such a way as to alter the Premises materially, either
party may terminate this Lease, by written notice to the other party, effective
on the date of vesting of title.  In the
event neither party has elected to terminate this Lease as provided above, then
Landlord shall promptly, after receipt of a sufficient condemnation award,
proceed to restore the Premises to substantially their condition prior to the
taking, and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of the taking and restoration.  In addition, Tenant’s Share of Operating
Expenses and all other elements of this Lease which are a function of the
square footage of the Premises shall be adjusted to reflect the taking.  In the event of a taking, Landlord shall be
entitled to the entire amount of the condemnation award without deduction for
any estate or interest of Tenant; provided that nothing in this Section shall
be deemed to give Landlord any interest in, or prevent Tenant from seeking any
award against the taking authority for, the taking of personal property and
fixtures belonging to Tenant or for relocation or business interruption
expenses recoverable from the taking authority.


SECTION 12.2.    TEMPORARY TAKING.  No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant.  A temporary
taking shall be deemed to be a taking of the use or occupancy of the Premises
for a period of not to exceed ninety (90) days.


SECTION 12.3.    TAKING OF PARKING AREA.  In the event there shall be a taking of the
parking area such that Landlord can no longer provide sufficient parking to
comply with this Lease, Landlord may substitute reasonably equivalent parking
in a location reasonably close to the Building; provided that if Landlord fails
to make that substitution within ninety (90) days following the taking and if
the taking materially impairs Tenant’s use and enjoyment of the Premises,
Tenant may, at its option, terminate this Lease by written notice to
Landlord.  If this Lease is not so
terminated by Tenant, there shall be no abatement of rent and this Lease shall
continue in effect.


ARTICLE
XIII.  SUBORDINATION; ESTOPPEL
CERTIFICATE; FINANCIALS


SECTION 13.1.    SUBORDINATION.  At the option of Landlord or any lender of
Landlord’s that obtains a security interest in the Building, this Lease shall
be either superior or subordinate to all ground or underlying leases, mortgages
and deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as no Event of Default exists under this Lease, Tenant’s
possession and quiet enjoyment of the Premises shall not be disturbed and this
Lease shall not terminate in the event of termination of any such ground or
underlying lease, or the foreclosure of any such mortgage or deed of trust, to
which this Lease has been subordinated pursuant to this Section.  Tenant shall execute and deliver any
documents or agreements requested by Landlord or such lessor or lender which
provide Tenant with the non-disturbance protections set forth in this Section.  In the event of a termination or foreclosure,
Tenant shall become a tenant of and attorn to the successor-in-interest to
Landlord upon the same terms and conditions as are contained in this Lease, and
shall execute any instrument reasonably required by Landlord’s successor for
that purpose.  Tenant shall also, upon
written request of Landlord, execute and deliver all instruments as may be
required from time to time to subordinate the rights of Tenant under this Lease
to any ground or underlying lease or to the lien of any mortgage or deed of trust
(provided that such instruments include the nondisturbance and attornment
provisions set forth above), or, if requested by Landlord, to subordinate, in
whole or in part, any ground or underlying lease or the lien of any mortgage or
deed of trust to this Lease.  Tenant
agrees that any purchaser at a foreclosure sale or lender taking title under a
deed-in-lieu of foreclosure shall not be responsible for any act or omission of
a prior landlord, shall not be subject to any offsets or defenses Tenant may have
against a prior landlord, and shall not be liable for the return of the
security deposit to the extent it is not actually received by such purchaser or
bound by any rent paid for more than the current month in which the foreclosure
occurred.


SECTION 13.2.    ESTOPPEL
CERTIFICATE.


(a)           Tenant
shall within ten (10) days following written request from Landlord, execute,
acknowledge and deliver to Landlord, in any form that Landlord may reasonably
require, a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of the
modification and certifying that this Lease, as modified, is in full force and
effect) and the dates to which the rental, additional rent and other charges
have been paid in advance, if any, and (ii) acknowledging that, to Tenant’s
knowledge, there are no uncured defaults on the part of Landlord, or specifying
each default if any are claimed, and (iii) setting forth all further
information that Landlord or any prospective purchaser or encumbrancer may
reasonably require.  Tenant’s statement
may be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Building or Project.


(b)           Notwithstanding
any other rights and remedies of Landlord, Tenant’s failure to deliver any
estoppel statement within the provided time shall be conclusive upon Tenant
that (i) this Lease is in full force and effect, without modification except as
may be represented by Landlord, (ii) there are no uncured Events of Default in
Landlord’s performance, and (iii) not more than one month’s rental has been
paid in advance.



 20
 









SECTION 13.3.    FINANCIALS.


(a)           Tenant
shall deliver to Landlord, prior to the execution of this Lease and thereafter
at any time and from time to time within fifteen (15) days following Landlord’s
written request, Tenant’s current tax returns and financial statements,
certified to be true, accurate and complete by the chief financial officer of
Tenant, including a balance sheet and profit and loss statement for the most
recent prior year, (collectively, the “Statements”),
which Statements shall accurately and completely reflect the financial
condition of Tenant; provided, however, that in the event and so long as Tenant
is a publicly traded corporation on a nationally recognized stock exchange, the
foregoing obligation to deliver the Statements shall be waived.  If delivered to Landlord marked or otherwise
designated as “confidential,” Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser of the Building or Project, and to any encumbrancer or
proposed encumbrancer of all or any portion of the Building or Project.


(b)           Tenant
acknowledges that Landlord is relying on the Statements in its determination to
enter into this Lease, and Tenant represents to Landlord, which representation
shall be deemed made on the date of this Lease and again on the Commencement
Date, that no material change in the financial condition of Tenant, as
reflected in the Statements, has occurred since the date Tenant delivered the
Statements to Landlord.  The Statements
are represented and warranted by Tenant to be correct and to accurately and
fully reflect Tenant’s true financial condition as of the date of submission of
any Statements to Landlord.


ARTICLE
XIV.  EVENTS OF DEFAULT AND REMEDIES


SECTION 14.1.    TENANT’S DEFAULTS.  The occurrence of any one or more of the
following events (following the expiration of any cure period set forth below,
if any is provided) shall constitute an “Event of Default” by Tenant:


(a)           The
failure by Tenant to make any payment of Basic Rent or additional rent required
to be made by Tenant, as and when due, where the failure continues for a period
of three (3) days after written notice from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161 and
1161(a) as amended.  For purposes of
these Events of Default and remedies provisions, the term “additional
rent” shall be deemed to include all amounts of any type whatsoever
other than Basic Rent to be paid by Tenant pursuant to the terms of this Lease
and the Work Letter.


(b)           The
assignment, sublease, encumbrance or other transfer of this Lease by Tenant,
either voluntarily or by operation of law, whether by judgment, execution,
transfer by intestacy or testacy, or other means, without the prior written
consent of Landlord when consent is required by this Lease.


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


(d)           The
failure of Tenant to timely and fully provide any subordination agreement,
estoppel certificate or financial statements in accordance with the
requirements of Article XIII.


(e)           The
abandonment of the Premises by Tenant.


(f)            The
failure or inability by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in this Section 14.1, where the failure
continues for a period of thirty (30) days after written notice from Landlord
to Tenant or such shorter period as is specified in any other provision of this
Lease; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161 and 1161(a) as amended. However, if the nature of the failure is
such that more than thirty (30) days are reasonably required for its cure, then
an Event of Default shall not be deemed to have occurred if Tenant commences
the cure within thirty (30) days, and thereafter diligently pursues the cure to
completion.


(g)           (i)
The making by Tenant of any general assignment for the benefit of creditors;
(ii) the filing by or against Tenant of a petition to have Tenant adjudged a
Chapter 7 debtor under the Bankruptcy Code, to have debts discharged or for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within
thirty (30) 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, if possession is not restored to Tenant
within thirty (30) days; (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 the seizure is not discharged within
thirty (30) days; (v) Tenant’s convening of a meeting of its creditors for the
purpose of effecting a moratorium upon or composition of its debts; or (vi) the
failure of Tenant to pay its material obligations to creditors as and when they
become due and payable, other than as a result of a good faith dispute by
Tenant as to the amount due to such creditors. 
Landlord shall not be deemed to have knowledge of any event described in
this Section 14.1(g) unless notification in writing is received by Landlord,
nor shall there be any presumption attributable to Landlord of Tenant’s
insolvency.  In the event that any
provision of this Section 14.1(g) is contrary to applicable law, the provision
shall be of no force or effect.



 21
 









SECTION 14.2.    LANDLORD’S
REMEDIES.


(a)           If
an Event of Default by Tenant occurs, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:


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


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


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


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


(4)           Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant’s
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result from Tenant’s Event of Default,
including, but not limited to, the cost of recovering possession of the
Premises, the refurbishment, restoration and repair of the Premises to the
condition required upon the surrender of possession of this Lease, marketing
costs, commissions and other expenses of reletting, including necessary repair,
the unamortized portion of any tenant improvements and brokerage commissions
funded by Landlord in connection with this Lease, reasonable attorneys’ fees,
and any other reasonable costs; and


(5)           At Landlord’s election, all other
amounts in addition to or in lieu of the foregoing as may be permitted by
law.  The term “rent” as used in the
Lease shall be deemed to mean the Basic Rent, Tenant’s Share of Operating
Expenses and any other sums required to be paid by Tenant to Landlord pursuant
to the terms of this Lease whether or not designated as additional rent
hereunder, including, without limitation, any sums that may be owing from
Tenant pursuant to Section 4.3 of this Lease. 
Any sum, other than Basic Rent, shall be computed on the basis of the
average monthly amount accruing during the twenty-four (24) month period
immediately prior to the Event of Default, except that if it becomes necessary
to compute such rental before the twenty-four (24) month period has
occurred, then the computation shall be on the basis of the average monthly
amount during the shorter period.  As
used in Sections 14.2(a)(i) (1) and (2) above, the “worth at the time of award”
shall be computed by allowing interest at the rate of ten percent (10%) per
annum.  As used in Section 14.2(a)(i)(3)
above, the “worth at the time of award” shall be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).


(ii)           Landlord may elect not to terminate
Tenant’s right to possession of the Premises and to continue to enforce all of
its rights and remedies under this Lease, including the right to collect all
rent as it becomes due as provided in Civil Code Section 1951.4.  Efforts by the Landlord to maintain, preserve
or relet the Premises, or the appointment of a receiver to protect the Landlord’s
interests under this Lease, shall not constitute a termination of the Tenant’s
right to possession of the Premises.  In
the event that Landlord elects to avail itself of the remedy provided by this
Section 14.2(a)(ii), Landlord shall not unreasonably withhold its consent to an
assignment or subletting of the Premises subject to the reasonable standards
for Landlord’s consent as are contained in this Lease.


(b)           Landlord
shall be under no obligation to observe or perform any covenant of this Lease
on its part to be observed or performed which accrues after the date of any
Event of Default by Tenant unless and until the Event of Default is cured by
Tenant, it being understood and agreed that the performance by Landlord of its
obligations under this Lease are expressly conditioned upon Tenant’s full and
timely performance of its obligations under this Lease.  The various rights and remedies reserved to
Landlord in this Lease or otherwise shall be cumulative and, except as
otherwise provided by California law, Landlord may pursue any or all of its
rights and remedies at the same time.


(c)           No
delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any breach or Event of
Default by Tenant.  The acceptance by
Landlord of rent shall not be a (i) waiver of any preceding breach or Event of
Default by Tenant of any provision of this Lease, other than the failure of
Tenant to pay the particular rent accepted, regardless of Landlord’s knowledge
of the preceding breach or Event of Default at the time of acceptance of rent,
or (ii) a waiver of Landlord’s right to exercise any remedy available to
Landlord by virtue of the breach or Event of Default.  The acceptance of any payment from a debtor
in possession, a trustee, a receiver or any other person acting on behalf of
Tenant or Tenant’s estate shall not waive or cure a breach or Event of Default
under Section 14.1.  No payment by Tenant
or receipt by Landlord of a lesser amount than the rent required by this Lease
shall be deemed to be other than a partial payment on account of the earliest
due stipulated rent, nor shall any endorsement or statement on any check or
letter be deemed an accord and satisfaction and Landlord shall accept the check
or payment without prejudice to Landlord’s right to recover the balance of the
rent or pursue any other remedy available to it.  No act or thing done by Landlord or Landlord’s



 22
 









agents during the Term
shall be deemed an acceptance of a surrender of the Premises, and no agreement to
accept a surrender shall be valid unless in writing and signed by
Landlord.  No employee of Landlord or of
Landlord’s agents shall have any power to accept the keys to the Premises prior
to the termination of this Lease, and the delivery of the keys to any employee
shall not operate as a termination of this Lease or a surrender of the
Premises.


(d)           Any
agreement for free or abated rent or other charges, 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 or any other concession agreed to by
Landlord hereunder (“Inducement Provisions”)
shall be deemed conditioned upon Tenant’s full and faithful performance of the
terms, covenants and conditions of this Lease. 
Upon an Event of Default under this Lease by Tenant, any such Inducement
Provisions shall automatically be deemed deleted from this Lease and of no
further force or effect and the amount of any rent reduction or abatement or
other bonus, inducement or consideration or other concession already given by
Landlord or received by Tenant as an inducement shall be immediately due and
payable by Tenant to Landlord, notwithstanding any subsequent cure of said
Event of Default by Tenant.  The
acceptance by Landlord of rent or the cure of the Event of Default which
initiated the operation of this Section 14.1 shall not be deemed a waiver by
Landlord of the provisions of this Section 14.2(d).


SECTION 14.3.    LATE
PAYMENTS.


(a)           Any payment due to Landlord under this Lease,
including without limitation Basic Rent, Tenant’s Share of Operating Expenses
or any other payment due to Landlord under this Lease whether or not designated
as additional rent hereunder, that is not received by Landlord within five (5)
days following the date due shall bear interest at the maximum rate permitted
by law from the date due until fully paid. 
The payment of interest shall not cure any breach or Event of Default by
Tenant under this Lease.  In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of Basic Rent
and Tenant’s Share of Operating Expenses will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult and impracticable to ascertain. 
Those costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease, mortgage or trust deed covering the
Premises.  Accordingly, if any Basic Rent
or Tenant’s Share of Operating Expenses due from Tenant shall not be received
by Landlord or Landlord’s designee within five (5) days following the date due,
then Tenant shall pay to Landlord, in addition to the interest provided above,
a late charge, which the Tenant agrees is reasonable, in a sum equal to the
greater of five percent (5%) of the amount overdue or One Hundred Dollars
($100.00) for each delinquent payment. 
Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant’s breach or Event of Default with respect to the overdue amount, nor
shall it prevent Landlord from exercising any of its other rights and remedies.


(b)           Following
each second installment of Basic Rent and/or the payment of Tenant’s Share of
Operating Expenses within any twelve (12) month period that is not paid within
five (5) days following the date due, Landlord shall have the option (i) to
require that beginning with the first payment of Basic Rent next due, Basic
Rent and the Tenant’s Share of Operating Expenses shall no longer be paid in
monthly installments but shall be payable quarterly three (3) months in advance
and/or (ii) to require that Tenant increase the amount, if any, of the Security
Deposit by one hundred percent (100%). 
Should Tenant deliver to Landlord, at any time during the Term, two (2)
or more insufficient checks, the Landlord may require that all monies then and
thereafter due from Tenant be paid to Landlord by cashier’s check.  If any check for any payment to Landlord
hereunder is returned by the bank for any reason, such payment shall not be
deemed to have been received by Landlord and Tenant shall be responsible for
any applicable late charge, interest payment and the charge to Landlord by its
bank for such returned check.  Nothing in
this Section shall be construed to compel Landlord to accept Basic Rent, Tenant’s
Share of Operating Expenses or any other payment from Tenant if there exists an
Event of Default unless such payment fully cures any and all such Events of
Default.  Any acceptance of any such
payment shall not be deemed to waive any other right of Landlord under this
Lease.  Any payment by Tenant to Landlord
may be applied by Landlord, in its sole and absolute discretion, in any order
determined by Landlord to any amounts then due to Landlord.


SECTION 14.4.    RIGHT OF LANDLORD TO PERFORM.  All covenants and agreements to be performed
by Tenant under this Lease shall be performed at Tenant’s sole cost and expense
and without any abatement of rent or right of set-off.  If Tenant fails to pay any sum of money,
other than rent payable to Landlord, or fails to perform any other act on its
part to be performed under this Lease, and the failure continues beyond any
applicable grace period set forth in Section 14.1, then in addition to any
other available remedies, Landlord may, at its election make the payment or
perform the other act on Tenant’s part and Tenant hereby grants Landlord the
right to enter onto the Premises in order to carry out such performance.  Landlord’s election to make the payment or perform
the act on Tenant’s part shall not give rise to any responsibility of Landlord
to continue making the same or similar payments or performing the same or
similar acts nor shall Landlord be responsible to Tenant for any damage caused
to Tenant as the result of such performance by Landlord.  Tenant shall, promptly upon demand by
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary
incidental costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord.


SECTION 14.5.    DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in default
in the performance of any obligation under this Lease, and Tenant shall have no
rights to take any action against Landlord, unless and until Landlord has
failed to perform the obligation within thirty (30) days after written notice
by Tenant to Landlord specifying in reasonable detail the nature and extent of
the failure; provided, however, that if the nature of Landlord’s obligation is
such that more than thirty (30) days are required for its performance, then
Landlord shall not be deemed to be in default if it commences performance
within the thirty (30) day period and thereafter diligently pursues the cure to
completion.  In the event of Landlord’s
default under this Lease, Tenant’s sole remedies shall be to seek damages or
specific performance from Landlord, provided that any damages shall be limited
to Tenant’s actual out-of-pocket expenses and shall in no event include any
consequential damages, lost profits or opportunity costs.



 23
 









SECTION 14.6.    EXPENSES AND LEGAL FEES.  All sums reasonably incurred by Landlord in
connection with any Event of Default by Tenant under this Lease or holding over
of possession by Tenant after the expiration or earlier termination of this
Lease, or any action related to a filing for bankruptcy or reorganization by
Tenant, including without limitation all costs, expenses and actual
accountants, appraisers, attorneys and other professional fees, and any
collection agency or other collection charges, shall be due and payable to
Landlord on demand, and shall bear interest at the rate of ten percent (10%)
per annum.  Should either Landlord or
Tenant bring any action in connection with this Lease, the prevailing party
shall be entitled to recover as a part of the action its reasonable attorneys’
fees, and all other costs.  The
prevailing party for the purpose of this Section shall be determined by the
trier of the facts.


SECTION 14.7.    WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.


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


(b)           IN THE EVENT THAT THE JURY WAIVER
PROVISIONS OF SECTION 14.7(a) ARE NOT ENFORCEABLE UNDER CALIFORNIA LAW, THEN
THE PROVISIONS OF THIS SECTION 14.7(b) SHALL APPLY.  IT IS THE DESIRE AND INTENTION OF THE PARTIES
TO AGREE UPON A MECHANISM AND PROCEDURE UNDER WHICH CONTROVERSIES AND DISPUTES
ARISING OUT OF THIS LEASE OR RELATED TO THE PREMISES WILL BE RESOLVED IN A
PROMPT AND EXPEDITIOUS MANNER.  ACCORDINGLY,
EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR FORCIBLE DETAINER OR WITH
RESPECT TO THE PREJUDGMENT REMEDY OF ATTACHMENT, ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR SUBSIDIARY OR AFFILIATED
ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES AND/OR ANY CLAIM OF
INJURY OR DAMAGE, SHALL BE HEARD AND RESOLVED BY A REFEREE UNDER THE PROVISIONS
OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, SECTIONS 638 — 645.1, INCLUSIVE (AS
SAME MAY BE AMENDED, OR ANY SUCCESSOR STATUTE(S) THERETO) (THE “REFEREE
SECTIONS”).  ANY FEE TO INITIATE THE
JUDICIAL REFERENCE PROCEEDINGS SHALL BE PAID BY THE PARTY INITIATING SUCH
PROCEDURE; PROVIDED HOWEVER, THAT THE COSTS AND FEES, INCLUDING ANY INITIATION
FEE, OF SUCH PROCEEDING SHALL ULTIMATELY BE BORNE IN ACCORDANCE WITH SECTION
14.6 ABOVE.  THE VENUE OF THE PROCEEDINGS
SHALL BE IN THE COUNTY IN WHICH THE PREMISES ARE LOCATED.  WITHIN TEN (10) DAYS OF RECEIPT BY ANY PARTY
OF A WRITTEN REQUEST TO RESOLVE ANY DISPUTE OR CONTROVERSY PURSUANT TO THIS
SECTION 14.7(b), THE PARTIES SHALL AGREE UPON A SINGLE REFEREE WHO SHALL TRY
ALL ISSUES, WHETHER OF FACT OR LAW, AND REPORT A FINDING AND JUDGMENT ON SUCH
ISSUES AS REQUIRED BY THE REFEREE SECTIONS. 
IF THE PARTIES ARE UNABLE TO AGREE UPON A REFEREE WITHIN SUCH TEN (10)
DAY PERIOD, THEN ANY PARTY MAY THEREAFTER FILE A LAWSUIT IN THE COUNTY IN WHICH
THE PREMISES ARE LOCATED FOR THE PURPOSE OF APPOINTMENT OF A REFEREE UNDER
CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 AND 640, AS SAME MAY BE AMENDED
OF ANY SUCCESSOR STATUTE(S) THERETO.  IF
THE REFEREE IS APPOINTED BY THE COURT, THE REFEREE SHALL BE A NEUTRAL AND
IMPARTIAL RETIRED JUDGE WITH SUBSTANTIAL EXPERIENCE IN THE RELEVANT MATTERS TO
BE DETERMINED, FROM JAMS/ENDISPUTE, INC., THE AMERICAN ARBITRATION ASSOCIATION
OR SIMILAR MEDIATION/ARBITRATION ENTITY. 
THE PROPOSED REFEREE MAY BE CHALLENGED BY ANY PARTY FOR ANY OF THE
GROUNDS LISTED IN SECTION 641 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, AS
SAME MAY BE AMENDED OR ANY SUCCESSOR STATUTE(S) THERETO.  THE REFEREE SHALL HAVE THE POWER TO DECIDE
ALL ISSUES OF FACT AND LAW AND REPORT HIS OR HER DECISION ON SUCH ISSUES, AND
TO ISSUE ALL RECOGNIZED REMEDIES AVAILABLE AT LAW OR IN EQUITY FOR ANY CAUSE OF
ACTION THAT IS BEFORE THE REFEREE, INCLUDING AN AWARD OF ATTORNEYS’ FEES AND
COSTS IN ACCORDANCE WITH CALIFORNIA LAW. THE REFEREE SHALL NOT, HOWEVER, HAVE
THE POWER TO AWARD PUNITIVE DAMAGES, NOR ANY OTHER DAMAGES WHICH ARE NOT
PERMITTED BY THE EXPRESS PROVISIONS OF THIS LEASE, AND THE PARTIES HEREBY WAIVE
ANY RIGHT TO RECOVER ANY SUCH DAMAGES. 
THE PARTIES SHALL BE ENTITLED TO CONDUCT ALL DISCOVERY AS PROVIDED IN THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE REFEREE SHALL OVERSEE DISCOVERY AND
MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE,
WITH RIGHTS TO REGULATE DISCOVERY AND TO ISSUE AND ENFORCE SUBPOENAS,
PROTECTIVE ORDERS AND OTHER LIMITATIONS ON DISCOVERY AVAILABLE UNDER CALIFORNIA
LAW.  THE REFERENCE PROCEEDING SHALL BE
CONDUCTED IN ACCORDANCE WITH CALIFORNIA LAW



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(INCLUDING
THE RULES OF EVIDENCE), AND IN ALL REGARDS, THE REFEREE SHALL FOLLOW CALIFORNIA
LAW APPLICABLE AT THE TIME OF THE REFERENCE PROCEEDING.  IN ACCORDANCE WITH SECTION 644 OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE, THE DECISION OF THE REFEREE UPON THE WHOLE
ISSUE MUST STAND AS THE DECISION OF THE COURT, AND UPON THE FILING OF THE
STATEMENT OF DECISION WITH THE CLERK OF THE COURT, OR WITH THE JUDGE IF THERE
IS NO CLERK, JUDGMENT MAY BE ENTERED THEREON IN THE SAME MANNER AS IF THE
ACTION HAD BEEN TRIED BY THE COURT.  THE
PARTIES SHALL PROMPTLY AND DILIGENTLY COOPERATE WITH ONE ANOTHER AND THE
REFEREE, AND SHALL PERFORM SUCH ACTS AS MAY BE NECESSARY TO OBTAIN A PROMPT AND
EXPEDITIOUS RESOLUTION OF THE DISPUTE OR CONTROVERSY IN ACCORDANCE WITH THE
TERMS OF THIS SECTION 14.7(b).  TO THE
EXTENT THAT NO PENDING LAWSUIT HAS BEEN FILED TO OBTAIN THE APPOINTMENT OF A
REFEREE, ANY PARTY, AFTER THE ISSUANCE OF THE DECISION OF THE REFEREE, MAY
APPLY TO THE COURT OF THE COUNTY IN WHICH THE PREMISES ARE LOCATED FOR
CONFIRMATION BY THE COURT OF THE DECISION OF THE REFEREE IN THE SAME MANNER AS
A PETITION FOR CONFIRMATION OF AN ARBITRATION AWARD PURSUANT TO CODE OF CIVIL
PROCEDURE SECTION 1285 ET SEQ. (AS SAME MAY BE AMENDED OR ANY SUCCESSOR
STATUTE(S) THERETO).


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


SECTION 14.9.    LIMITATION OF ACTIONS AGAINST LANDLORD.  Any claim, demand or right of any kind by
Tenant which is based upon or arises in connection with this Lease, including
without limitation any arising under a tort or contract cause of action, shall
be barred unless Tenant commences an action thereon within the earlier of the
time period prescribed by law or twelve (12) months after the date that the
act, omission, event or default upon which the claim, demand or right arises,
has been discovered (or reasonably should have been discovered) by Tenant.


ARTICLE
XV.  END OF TERM


SECTION 15.1.    HOLDING OVER.  This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after
the expiration shall not constitute a renewal or extension of this Lease, or
give Tenant any rights under this Lease, except when in writing signed by both
parties.  Any period of time following
the Expiration Date or earlier termination of this Lease required for Tenant to
remove its property or to place the Premises in the condition required pursuant
to Section 15.3 (or for Landlord to do so if Tenant fails to do so) shall
be deemed a holding over by Tenant.  If
Tenant holds over for any period after the Expiration Date (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only and an Event of
Default under this Lease; such holding over with the prior written consent of
Landlord shall constitute a month-to-month tenancy commencing on the first
(1st) day following the termination of this Lease and terminating thirty (30)
days following delivery of written notice of termination by either Landlord or
Tenant to the other.  In either of such events,
possession shall be subject to all of the terms of this Lease, except that the
monthly Basic Rent shall be the greater of one hundred fifty percent (150%) of
the Basic Rent for the month immediately preceding the date of termination, or
(b) the then currently scheduled Basic Rent for comparable (b) the then
currently scheduled Basic Rent for comparable space in the Project.  The acceptance by Landlord of monthly
holdover rental in a lesser amount shall not constitute a waiver of Landlord’s
right to recover the full amount due for any holdover by Tenant, unless
otherwise agreed in writing by Landlord. 
If Tenant fails to surrender the Premises upon the expiration of this
Lease despite the written demand to do so by Landlord, Tenant shall indemnify
and hold Landlord harmless from all loss or liability, including without
limitation, any claims made by any succeeding tenant relating to such failure
to surrender.  The foregoing provisions
of this Section are in addition to and do not affect Landlord’s right of re-entry
or any other rights of Landlord under this Lease or at law.


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


SECTION 15.3.    SURRENDER OF PREMISES; REMOVAL OF PROPERTY.  Subject to the provisions of Section 7.3 of
this Lease and of the Work Letter, if any, attached hereto, upon the Expiration
Date or upon any earlier termination of this Lease, Tenant shall quit and
surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord’s obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
from the Premises all personal property, removable trade fixtures, and
equipment and debris and perform all work required under Section 7.3 of this
Lease and/or the Work Letter, if any, attached hereto, as to Replacements of
Non-Standard Improvements and removal of Alterations, except for any items that
Landlord may by written authorization allow to remain.  Tenant shall repair all damage to the
Premises resulting from the removal, which repair shall include the patching
and filling of holes and repair of structural damage, provided that Landlord
may instead elect to repair any structural damage at Tenant’s expense.  If Tenant



 25
 









shall fail to comply with
the provisions of this Section, Landlord may effect the removal and/or make any
repairs, and the cost to Landlord shall be additional rent payable by Tenant
upon demand.  If Tenant fails to remove
Tenant’s personal property from the Premises upon the expiration of the Term,
Landlord may remove, store, dispose of and/or retain such personal property, at
Landlord’s option, in accordance with then applicable laws, all at the expense
of Tenant.  If requested by Landlord,
Tenant shall execute, acknowledge and deliver to Landlord an instrument in
writing releasing and quitclaiming to Landlord all right, title and interest of
Tenant in the Premises.


ARTICLE
XVI.  PAYMENTS AND NOTICES


All sums payable by Tenant to Landlord shall be deemed
to be rent under this Lease and shall be paid, without deduction or offset, in
lawful money of the United States to Landlord at the address specified in Item
13 of the Basic Lease Provisions, or at any other place as Landlord may
designate in writing.  Unless this Lease
expressly provides otherwise, as for example in the payment of Basic Rent and
the Tenant’s Share of Operating Costs pursuant to Sections 4.1 and 4.2,
all payments shall be due and payable within five (5) days after demand.  All payments requiring proration shall be
prorated on the basis of the number of days in the pertinent calendar month or
year, as applicable.  Any notice,
election, demand, consent, approval or other communication to be given or other
document to be delivered by either party to the other may be delivered in
person or by courier or overnight delivery service to the other party, or may
be deposited in the United States mail, duly registered or certified, postage
prepaid, return receipt requested, and addressed to the other party at the
address set forth in Item 12 of the Basic Lease Provisions, or if to Tenant, at
that address or, from and after the Commencement Date, at the Premises (whether
or not Tenant has departed from, abandoned or vacated the Premises).  Either party may, by written notice to the
other, served in the manner provided in this Article, designate a different
address.  If any notice or other document
is sent by mail, duly registered or certified, it shall be deemed served or
delivered seventy-two (72) hours after mailing. 
If more than one person or entity is named as Tenant under this Lease,
service of any notice upon any one of them shall be deemed as service upon all
of them.


ARTICLE
XVII.  RULES AND REGULATIONS


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


ARTICLE
XVIII.  BROKER’S COMMISSION


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


ARTICLE
XIX.  TRANSFER OF LANDLORD’S INTEREST


In the event of any transfer of Landlord’s interest in
the Premises, the transferor shall be automatically relieved of all further
obligations on the part of Landlord, and the transferor shall be relieved of
any obligation to pay any funds in which Tenant has an interest to the extent
that such funds have been turned over, subject to that interest, to the
transferee and Tenant is notified of the transfer as required by law.  No beneficiary of a deed of trust to which
this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security
Deposit, unless the mortgagee or beneficiary under the deed of trust or the
landlord actually receives the Security Deposit.  It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.


ARTICLE
XX.  INTERPRETATION


SECTION 20.1.    GENDER AND NUMBER.  Whenever the context of this Lease requires,
the words “Landlord” and “Tenant” shall include the plural as well as the singular,
and words used in neuter, masculine or feminine genders shall include the
others.


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


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



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


SECTION 20.5.    TIME OF ESSENCE.  Time is of the essence with respect to the
performance of every provision of this Lease.


SECTION 20.6.    CONTROLLING LAW/VENUE.  This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.  Any litigation commenced concerning any
matters whatsoever arising out of or in any way connected to this Lease shall
be initiated in the Superior Court of the county in which the Project is
located.


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


SECTION 20.8.    WAIVER AND CUMULATIVE REMEDIES.  One or more waivers by Landlord or Tenant of
any breach of any term, covenant or condition contained in this Lease shall not
be a waiver of any subsequent breach of the same or any other term, covenant or
condition.  Consent to any act by one of
the parties shall not be deemed to render unnecessary the obtaining of that
party’s consent to any subsequent act. 
No breach by Tenant of this Lease shall be deemed to have been waived by
Landlord unless the waiver is in a writing signed by Landlord.  The rights and remedies of Landlord under
this Lease shall be cumulative and in addition to any and all other rights and
remedies which Landlord may have.


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


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


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


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


SECTION
20.13.       INTERPRETATION.  This Lease shall not be
construed in favor of or against either party, but shall be construed as if
both parties prepared this Lease.


ARTICLE
XXI.  EXECUTION AND RECORDING


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


SECTION 21.2.    CORPORATE, LIMITED LIABILITY COMPANY AND
PARTNERSHIP AUTHORITY. 
If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of the corporation, limited
liability company or partnership represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of the corporation,
limited liability company or partnership, and that this Lease is binding upon
the corporation, limited liability company or partnership in accordance with
its terms.  Tenant shall, at Landlord’s
request, deliver a certified copy of its board of directors’ resolution,
operating agreement or partnership agreement or certificate authorizing or
evidencing the execution of this Lease.



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


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


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


SECTION 21.6.    EXECUTED COPY.  Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.


SECTION 21.7.    ATTACHMENTS.  All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.


ARTICLE
XXII.  MISCELLANEOUS


SECTION 22.1.    NONDISCLOSURE OF LEASE TERMS.  Tenant acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary information of
Landlord.  Disclosure of the terms could
adversely affect the ability of Landlord to negotiate other leases and impair
Landlord’s relationship with other tenants. 
Accordingly, Tenant agrees that it, and its partners, members,
shareholders, officers, directors, employees and attorneys, shall not
intentionally and voluntarily disclose, by public filings or otherwise, the
terms and conditions of this Lease (“Confidential Information”)
to any third party, either directly or indirectly, without the prior written
consent of Landlord, which consent may be given or withheld in Landlord’s sole
and absolute discretion.  The foregoing
restriction shall not apply if either: (i) Tenant is required to disclose the
Confidential Information in response to a subpoena or other regulatory,
administrative or court order, (ii) independent legal counsel to Tenant
delivers a written opinion to Landlord that Tenant is required to disclose the
Confidential Information to, or file a copy of this Lease with, any
governmental agency or any stock exchange; provided however, that in such
event, Tenant shall, before making any such disclosure (A) provide Landlord
with prompt written notice of such required disclosure, (B) at Tenant’s sole
cost, take all reasonable legally available steps to resist or narrow such
requirement, including without limitation preparing and filing a request for
confidential treatment of the Confidential Information and (C) if disclosure of
the Confidential Information is required by subpoena or other regulatory,
administrative or court order, Tenant shall provide Landlord with as much
advance notice of the possibility of such disclosure as practical so that
Landlord may attempt to stop such disclosure or obtain an order concerning such
disclosure.  The form and content of a
request by Tenant for confidential treatment of the Confidential Information
shall be provided to Landlord at least five (5) business days before its
submission to the applicable governmental agency or stock exchange and is
subject to the prior written approval of Landlord.  In addition, Tenant may disclose the terms of
this Lease to prospective assignees of this Lease and prospective subtenants
under this Lease with whom Tenant is actively negotiating such an assignment or
sublease.


SECTION 22.2.    GUARANTEE.  [Intentionally Deleted]


SECTION 22.3.    CHANGES REQUESTED BY LENDER.  If, in connection with obtaining financing
for the Project, the lender shall request reasonable modifications in this
Lease as a condition to the financing, Tenant will not unreasonably withhold or
delay its consent, provided that the modifications do not materially increase
the obligations of Tenant or materially and adversely affect the leasehold
interest created by this Lease.


SECTION 22.4.    MORTGAGEE PROTECTION.  No act or failure to act on the part of
Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder shall result in such a release or termination unless (a) Tenant has
given notice by registered or certified mail to any beneficiary of a deed of
trust or mortgage encumbering the Premises whose address has been furnished to
Tenant in writing and (b) such beneficiary is afforded a reasonable opportunity
to cure the default by Landlord (which in no event shall be less than sixty
(60) days), including, if necessary to effect the cure, time to obtain
possession of the Premises by power of sale or judicial foreclosure provided
that such foreclosure remedy is diligently pursued.  Tenant agrees that each beneficiary of a deed
of trust or mortgage encumbering the Premises is an express third party
beneficiary hereof, Tenant shall have no right or claim for the collection of
any deposit from such beneficiary or from any purchaser at a foreclosure sale
unless such beneficiary or purchaser shall have actually received and not
refunded the deposit, and Tenant shall comply with any written directions by
any beneficiary to pay rent due hereunder directly to such beneficiary without
determining whether a default exists under such beneficiary’s deed of trust.


SECTION 22.5.    COVENANTS AND CONDITIONS.  All of the provisions of this Lease shall be
construed to be conditions as well as covenants as though the words
specifically expressing or imparting covenants and conditions were used in each
separate provision.



 28
 









SECTION 22.6.    SECURITY MEASURES.  Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project.  Tenant assumes all responsibility for the
protection of Tenant, its employees, agents, invitees and property from acts of
third parties.  Nothing herein contained
shall prevent Landlord, at its sole option, from providing security protection
for the Project or any part thereof, in which event the cost thereof shall be
included within the definition of Project Costs.


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  THE IRVINE COMPANY LLC,

  	
  NETLIST, INC.,

  
	
  a Delaware
  limited liability company

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Steven M.
  Case

  	
   

  	
  By:

  	
  /s/ Lee Kim

  	
   

  
	
   

  	
  Steven M. Case,
  Senior Vice President

  	
   

  	
  Lee Kim

  
	
   

  	
  Leasing, Office
  Properties

  	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Christopher
  J. Popma

  	
   

  	
  By:

  	
  /s/ Terrence J. Quinn

  	
   

  
	
   

  	
  Christopher J.
  Popma, Vice President

  	
   

  	
  Terrence J. Quinn

  
	
   

  	
  Operations,
  Office Properties

  	
   

  	
  Vice President of Operations

  



 



 29














THE
IRVINE COMPANY


51 Discovery


Suite 150


 





Exhibit
A



 1















 





51
Discovery


Suite 150


	
  

  	
   

  	
  

  
	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Expansion Space

  
	
  

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  



 


Exhibit
A-1


 



 1















EXHIBIT B


THE IRVINE COMPANY
— INVESTMENT PROPERTIES GROUP


HAZARDOUS MATERIAL
SURVEY FORM


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


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


THE IRVINE COMPANY
MANAGEMENT OFFICE


111 Innovation Drive


Irvine, CA  92617


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


1.             GENERAL
INFORMATION.


 




	
  Name of Responding Company: 

  	
   

  	
   

  
	
  Check all that apply:

  	
  Tenant

  	
  ( )

  	
  Contractor

  	
  ( )

  
	
   

  	
  Prospective

  	
  ( )

  	
  Existing

  	
  ( )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mailing Address:

  	
   

  	
   

  
	
  Contact person & Title:

  	
   

  	
   

  
	
  Telephone Number: (   )

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Current TIC Tenant(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Lease Premises:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Length of Lease or Contract Term:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Prospective TIC Tenant(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Leased Premises:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Current Operations:

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  
	
   

  
	
   

  
											






 


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


2.1           Will any hazardous materials be used
or stored on site?




	
  Chemical Products

  	
  Yes

  	
  ( )

  	
  No

  	
  ( )

  
	
  Biological
  Hazards/Infectious Wastes

  	
  Yes

  	
  ( )

  	
  No

  	
  ( )

  
	
  Radioactive
  Materials

  	
  Yes

  	
  ( )

  	
  No

  	
  ( )

  
	
  Petroleum
  Products

  	
  Yes

  	
  ( )

  	
  No

  	
  ( )

  






 



 1
 









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




	
  

  	
   

  	
  Location and Method

  	
   

  	
   

  
	
  Hazardous Materials

  	
   

  	
  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


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


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




	
  

  
	
   

  
	
   

  






 


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


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




	
  

  	
   

  	
  Location and Method

  	
   

  	
   

  
	
  Hazardous Materials

  	
   

  	
  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


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




	
  

  	
   

  	
  Location and Method

  	
   

  	
   

  
	
  Hazardous Materials

  	
   

  	
  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


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


Yes ( )   No ( )


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




	
  

  
	
   

  
	
   

  






 


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



 2
 









4.                                                                                       SPILLS


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


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




	
  

  
	
   

  
	
   

  






 


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


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


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


Yes  ( )                  No
 ( )


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


 




	
  

  
	
   

  
	
   

  






 


5.                                                                                       WASTEWATER
TREATMENT/DISCHARGE


5.1           Do you discharge
industrial wastewater to:




	
  

  	
  storm
  drain?

  	
   

  	
  sewer?

  
	
   

  	
  surface water?

  	
   

  	
  no industrial discharge

  






 


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


If yes, describe the type of treatment conducted.




	
  

  
	
   

  
	
   

  






 


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


6.             AIR DISCHARGES.


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


Yes  ( ) 
                No  ( )


6.2           Do you operate any equipment that
requires air emissions permits?


Yes  ( ) 
                No  ( )


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


7.             HAZARDOUS MATERIALS DISCLOSURES.


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


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


If so, attach a copy.



 3
 









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


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




	
  

  
	
   

  
	
   

  






 


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


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




	
  

  
	
   

  
	
   

  






 


8.                                                                                       ANIMAL
TESTING.


8.1           Does your company
bring or intend to bring live animals onto the premises for research or
development purposes?             Yes  ( ) 
                No  ( )


If so, describe the activity. 




	
  

  
	
   

  
	
   

  






 


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


If so, describe the activity. 




	
  

  
	
   

  
	
   

  






 


9.                                                                                       ENFORCEMENT
ACTIONS, COMPLAINTS.


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


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




	
  

  
	
   

  
	
   

  






 


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


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



 4
 









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




	
  

  
	
   

  
	
   

  
	
   

  
	
   

  






 


	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						



 



 5














EXHIBIT
C


LANDLORD’S
DISCLOSURES


SPECTRUM


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


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


 
















EXHIBIT D


TENANT’S INSURANCE


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


1.             Tenant
shall, at its sole cost and expense, commencing on the date Tenant is given
access to the Premises for any purpose and during the entire Term, procure, pay
for and keep in full force and effect: 
(i) commercial general liability insurance with respect to the Premises
and the operations of or on behalf of Tenant in, on or about the Premises,
including but not limited to coverage for personal injury, independent
contractors, broad form property damage, fire and water legal liability,
products liability (if a product is sold from the Premises), and liquor law
liability (if alcoholic beverages are sold, served or consumed within the
Premises), which policy(ies) shall be written on an “occurrence” basis and for
not less than the amount set forth in Item 14 of the Basic Lease
Provisions, with a combined single limit (with a $50,000 minimum limit on fire
legal liability) per occurrence for bodily injury, death, and property damage
liability, or the current limit of liability carried by Tenant, whichever is
greater, and subject to such increases in amounts as Landlord may determine
from time to time; (ii) workers’ compensation insurance coverage as required by
law, together with employers’ liability insurance of at least One Million
Dollars ($1,000,000.00); (iii) with respect to Alterations and the like
required or permitted to be made by Tenant under this Lease, builder’s risk
insurance, in an amount equal to the replacement cost of the work; (iv)
insurance against fire, vandalism, malicious mischief and such other additional
perils as may be included in a standard “special form” policy, insuring Tenant’s
Alterations, trade fixtures, furnishings, equipment and items of personal
property of Tenant located in the Premises, in an amount equal to not less than
ninety percent (90%) of their actual replacement cost (with replacement cost
endorsement); and (v) business interruption insurance in amounts satisfactory
to cover one (1) year of loss.  In no
event shall the limits of any policy be considered as limiting the liability of
Tenant under this Lease.


2.             In the event Landlord consents to
Tenant’s use, generation or storage of Hazardous Materials on, under or about
the Premises pursuant to Section 5.3 of this Lease, Landlord shall have the
continuing right to require Tenant, at Tenant’s sole cost and expense (provided
the same is available for purchase upon commercially reasonable terms), to
purchase insurance specified and approved by Landlord, with coverage not less
than Five Million Dollars ($5,000,000.00), insuring (i) any Hazardous Materials
shall be removed from the Premises, (ii) the Premises shall be restored to a
clean, healthy, safe and sanitary condition, and (iii) any liability of Tenant,
Landlord and Landlord’s officers, directors, shareholders, agents, employees
and representatives, arising from such Hazardous Materials.


3.             All policies of insurance required
to be carried by Tenant pursuant to this Exhibit D containing a
deductible exceeding Ten Thousand Dollars ($10,000.00) per occurrence must be
approved in writing by Landlord prior to the issuance of such policy.  Tenant shall be solely responsible for the
payment of all deductibles.


4.             All
policies of insurance required to be carried by Tenant pursuant to this Exhibit
D shall be written by responsible insurance companies authorized to do
business in the State of California and with a general policyholder rating of
not less than “A-” and financial rating of not less than “VIII” in the most
current Best’s Insurance Report.  Any
insurance required of Tenant may be furnished by Tenant under any blanket
policy carried by it or under a separate policy.  A true and exact copy of each paid up policy
evidencing the insurance (appropriately authenticated by the insurer) or a
certificate of insurance, certifying that the policy has been issued, provides
the coverage required by this Exhibit D and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the
waiver of subrogation and additional insured provisions required below, shall
be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises.  Proper
evidence of the renewal of any insurance coverage shall also be delivered to
Landlord not less than thirty (30) days prior to the expiration of the
coverage.  Landlord may at any time, and
from time to time, inspect and/or copy any and all insurance policies required
by this Lease.


5.             Each
policy evidencing insurance required to be carried by Tenant pursuant to this Exhibit D
shall contain the following provisions and/or clauses satisfactory to
Landlord:  (i) with respect to Tenant’s
commercial general liability insurance, a provision that the policy and the
coverage provided shall be primary and that any coverage carried by Landlord
shall be noncontributory with respect to any policies carried by Tenant,
together with a provision including Landlord, the Additional Insureds
identified in Item 11 of the Basic Lease Provisions, and any other parties in
interest designated by Landlord, as additional insureds; (ii) except with
respect to Tenant’s commercial general liability insurance, a waiver by the
insurer of any right to subrogation against Landlord, its agents, employees,
contractors and representatives which arises or might arise by reason of any
payment under the policy or by reason of any act or omission of Landlord, its
agents, employees, contractors or representatives; and (iii) a provision that
the insurer will not cancel or change the coverage provided by the policy
without first giving Landlord thirty (30) days prior written notice.



 1
 









6.             In
the event that Tenant fails to procure, maintain and/or pay for, at the times
and for the durations specified in this Exhibit D, any insurance
required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord’s written demand to Tenant.


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



 2















EXHIBIT E


RULES AND REGULATIONS


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


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


2.             The
walls, walkways, sidewalks, entrance passages, elevators, stairwells, courts
and vestibules shall not be obstructed or used for any purpose other than
ingress and egress of pedestrian travel to and from the Premises, and shall not
be used for smoking, loitering or gathering, or to display, store or place any
merchandise, equipment or devices, or for any other purpose.  The walkways, sidewalks, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant’s business unless such persons are engaged in
illegal activities.  Smoking is permitted
outside the building and within the project only in areas designated by
Landlord.  No tenant or employee or
invitee or agent of any tenant shall be permitted upon the roof of the Building
without prior written approval from Landlord.


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


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


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


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


7.             The
Premises shall not be used for manufacturing or for the storage of merchandise
except as such storage may be incidental to the permitted use of the
Premises.  No exterior storage shall be
allowed at any time without the prior written approval of Landlord.  The Premises shall not be used for cooking or
washing clothes without the prior written consent of Landlord, or for lodging
or sleeping or for any immoral or illegal purposes.


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


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


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


11.           Canvassing, soliciting, peddling,
parading, picketing, demonstrating or otherwise engaging in any conduct that
unreasonably impairs the value or use of the Premises or the Project are
prohibited and each Tenant shall cooperate to prevent the same.  Landlord shall have full and absolute
authority to regulate or prohibit the 



 1
 









entrance to the Premises of any vendor, supplier,
purveyor, petitioner, proselytizer or other similar person if, in the good
faith judgment of Landlord, such person will be involved in general
solicitation activities, or the proselytizing, petitioning, or disturbance of
other tenants or their customers or invitees, or engaged or likely to engage in
conduct which may in Landlord’s opinion distract from the use of the Premises
for its intended purpose. 
Notwithstanding the foregoing, Landlord reserves the absolute right and
discretion to limit or prevent access to the Buildings by any food or beverage
vendor, whether or not invited by Tenant, and Landlord may condition such
access upon the vendor’s execution of an entry permit agreement which may
contain provisions for insurance coverage and/or the payment of a fee to
Landlord.


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


13.           Regular
building hours of operation are from 6:00 AM to 6:00 PM Monday through Friday
and 9:00 AM to 1:00 PM on Saturday.  No
air conditioning unit or other similar apparatus shall be installed or used by
any Tenant without the prior written consent of Landlord.


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


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


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


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


18.           The moving of large or heavy objects
shall occur only between those hours as may be designated by, and only upon
previous written notice to, Landlord, and the persons employed to move those
objects in or out of the Building must be reasonably acceptable to
Landlord.  Without limiting the
generality of the foregoing, no freight, furniture or bulky matter of any
description shall be received into or moved out of the lobby of the Building or
carried in the elevator.


19.           Tenant shall not install equipment,
such as but not limited to electronic tabulating or computer equipment,
requiring electrical or air conditioning service in excess of that to be
provided by Landlord under the Lease without prior written consent of Landlord.


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


21.           Landlord reserves the right to amend
or supplement the foregoing Rules and Regulations and to adopt and promulgate
additional rules and regulations applicable to the Premises.  Notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Tenant.



 2















EXHIBIT X


INDUSTRIAL WORK LETTER


DOLLAR ALLOWANCE


(Competitive Bid)


The tenant improvement work to be contracted for by
Landlord hereunder (“Tenant Improvement Work”)
shall consist of the design and construction of all tenant improvements (“Tenant Improvements”), including work in place as of the
date hereof, required for the Premises pursuant to the approved final Working
Drawings and Specifications (as hereinafter defined).  All of the Tenant Improvement Work shall be
performed by the “TI Contractor” selected by Landlord and in accordance with
the procedures and requirements set forth below.


I.              ARCHITECTURAL AND CONSTRUCTION PROCEDURES.


A.                                     Prior to the execution of this Lease, Tenant and
Landlord have approved a preliminary plan for the Premises last revised March
26, 2007 (the “Preliminary Plan”), prepared by
Beck Martin & Associates (“Tenant’s Architect”).  The Preliminary Plan includes Landlord’s
building standard tenant improvements, materials and specifications for the
Project as set forth in Schedule I attached hereto (“Building Standard
Improvements”), except for changes and additions specifically noted
on the Preliminary Plan (any such addition or variation from the Standard
Improvements shall be referred to herein as a (“Non-Standard
Improvement”).


B.                                       Not later than three (3) weeks from and after the
full execution and delivery of this Lease, Tenant’s Architect shall prepare and
shall deliver to Landlord working drawings and specifications (“Working Drawings and Specifications”) based on the approved
Preliminary Plan.  Tenant’s Architect
shall use TKSC for the mechanical and plumbing engineering and K1 for the
electrical engineering for purposes of preparing the Working Drawings and
Specifications.  Landlord shall have ten
(10) business days from the receipt thereof to approve or disapprove the
Working Drawings and Specifications. 
Landlord shall not unreasonably withhold or delay its approval, and any
disapproval or requested modification shall be limited to items not consistent
with the approved Preliminary Plan. 
Should Landlord disapprove the Working Drawings and Specifications, such
disapproval shall be accompanied by specific reasons for disapproval and a
detailed list of requested revisions. 
Any revision reasonably requested by Landlord shall be incorporated into
a revised set of Working Drawings and Specifications within ten (10) business
days following receipt by Tenant’s Architect. 
Tenant’s or Tenant’s Architect’s failure to comply in a timely manner
with any of the requirements of this paragraph shall constitute a Tenant Delay
as defined below.


C.                                       Landlord shall submit the Work Drawings and
Specifications to a competitive bidding process involving at least three (3)
licensed and reputable general contractors; and Landlord shall request that KPRS
Construction Services, Inc. be one of such bidders.  If requested in writing by Tenant, Landlord
shall provide copies of the bid responses to Tenant.  After adjustments for any inconsistent
assumptions to reflect an “apples to apples” comparison, Landlord shall select
the lowest qualified bidder and that bid so selected shall be referred to as
the “Bid Amount”.  In the event Landlord selects other than the
lowest bidder, it shall do so based on commercially reasonable factors which it
shall demonstrate to Tenant.  Upon
selection of the bidder, Landlord shall prepare a final cost estimate for the
Completion Cost of Tenant Improvement Work which shall include the Bid Amount
(the “Final Cost Estimate”), and shall enter
into a “lump sum” or “fixed price” construction contract in the Bid Amount with
the chosen contractor (the “TI Contractor”)
for construction of the Tenant Improvements in accordance with the approved and
final Working Drawings and Specifications for the Bid Amount (“TI Contract”).


D.                                      In the event that Tenant requests in writing a
revision to the Working Drawings and Specifications (“Change”),
and Landlord so approves such Change as provided in Section I.E below, Landlord
shall advise Tenant by written change order as soon as is practical of any
increase in the Completion Cost and/or any Tenant Delay such Change would
cause.  Tenant shall approve or
disapprove such change order and Tenant Delay, if any, in writing within two
(2) days following Tenant’s receipt of such change order.  If Tenant approves any such change order,
Landlord, at its election, may either (i) require as a condition to the
effectiveness of such change order that Tenant pay the increase in the
Completion Cost attributable to such change order concurrently with delivery of
Tenant’s approval of the change order, or (ii) defer Tenant’s payment of such
increase until the date ten (10) days after delivery of invoices for same,
provided however, that the Tenant Contribution must in any event be paid in
full prior to Tenant’s commencing occupancy of the Premises.  If Tenant disapproves any such change order,
Tenant shall nonetheless be responsible for the reasonable architectural and/or
planning fees incurred in preparing such change order.  Landlord shall have no obligation to interrupt
or modify the Tenant Improvement Work pending Tenant’s approval of a change
order, but if Tenant fails to timely approve a change order, Landlord may (but
shall not be required to) suspend the applicable Tenant Improvement Work, in
which event any related critical path delays because of such suspension shall
constitute Tenant Delays hereunder.


E.                                        Landlord may consent in writing, in its sole and
absolute discretion, to Tenant’s request for a Change, including any
modification of a Standard Improvement to a Non-Standard Improvement in the
Preliminary Plan or any other modification of the Working Drawings and
Specifications, if requested



 1
 









in writing by Tenant.  In
addition, Landlord agrees that it shall not unreasonably withhold its consent
to Tenant’s requested Changes to previously approved Non-Standard Improvements,
unless Landlord determines, in its sole and absolute discretion, that such
requested Change to the Non-Standard Improvements (i) is of a lesser
quality than the Non-Standard Improvements previously approved by Landlord,
(ii) fails to conform to applicable governmental requirements, (iii) would
result in the Premises requiring building services beyond the level normally
provided to other tenants, (iv) would delay construction of the Tenant Improvements
and Tenant declines to accept such delay in writing as a Tenant Delay, (v)
interferes in any manner with the proper functioning of, or Landlord’s access
to, any mechanical, electrical, plumbing or HVAC systems, facilities or
equipment in or serving the Building,  or
(vi) would have an adverse aesthetic impact to the Premises or cause additional
expenses to Landlord in reletting the Premises. 
Unless Landlord otherwise agrees in writing, in its sole and
absolute discretion:  (a) the cost of any
Non-Standard Improvements shall be part of Tenant’s Contribution (as
hereinafter defined), and (b) all Standard Tenant Improvements and Non-Standard
Improvements shall become the property of Landlord and shall be surrendered
with the Premises at the end of the Term; except that Landlord may, by notice
to Tenant given at the time of Landlord’s consent to any Change, require Tenant
either to remove all or any of the Non-Standard Improvements approved by way of
such Change, to repair any damage to the Premises or the Common Area arising
from such removal, and to replace such Non-Standard Improvements with the
applicable Building Standard, or to reimburse Landlord for the reasonable cost
of such removal, repair and replacement upon demand.  Any such removals, repairs and replacements
by Tenant shall be completed by the Expiration Date, or sooner termination of
this Lease.  Notwithstanding the
foregoing, Tenant shall have no obligation to restore any portion of the Tenant
Improvements which are described in the approved Preliminary Plan.  Notwithstanding the foregoing, Landlord and
Tenant agree that the following components of the Tenant Improvements shall in
all events become the property of Landlord and shall be surrendered with the
Premises at the end of the Term: boardroom cabinets, ESD flooring, boardroom
light cove, manufacturing fencing and the split-unit for the server room.


F.                                        Notwithstanding any provision in the Lease to the
contrary, and not by way of limitation of any other rights or remedies of
Landlord, if Tenant fails to comply with any of the time periods specified in
this Work Letter, fails otherwise to approve or reasonably disapprove any
submittal within the time period specified herein for such response (or if no
time period is so specified, within five (5) days following Tenant’s receipt
thereof), fails to cause the Tenant’s Architect to prepare and deliver the
Working Drawings and Specifications within the time provided, fails to timely
deliver the Tenant’s Contribution as required hereunder, requests any Changes,
furnishes inaccurate or erroneous specifications or other information, or
otherwise delays in any manner the completion of the Tenant Improvements
(including without limitation by specifying materials that are not readily
available) or the issuance of an occupancy certificate (any of the foregoing
being referred to in this Lease as a “Tenant Delay”),
then Tenant shall bear any resulting additional construction cost or other
expenses, and the Commencement Date of this Lease shall be deemed to have
occurred for all purposes, including without limitation Tenant’s obligation to
pay rent, as of the date Landlord reasonably determines that it would have been
able to deliver the Premises to Tenant but for the collective Tenant
Delays.  Should Landlord determine that
the Commencement Date should be advanced in accordance with the foregoing, it
shall so notify Tenant in writing. 
Landlord’s determination shall be conclusive unless Tenant notifies
Landlord in writing, within five (5) days thereafter, of Tenant’s election to
contest same by arbitration pursuant to Paragraph IV below.  Pending the outcome of such arbitration
proceedings, Tenant shall make timely payment of all rent due under this Lease
based upon the Commencement Date set forth in the aforesaid notice from
Landlord.


G.                                       Landlord shall permit Tenant and its agents to
enter the Premises prior to the Commencement Date of the Lease in order that
Tenant may install fixtures, furniture and cabling through Tenant’s own
contractors prior to the Commencement Date. 
Any such work shall be subject to Landlord’s prior written approval, and
shall be performed in a manner and upon terms and conditions and at times
satisfactory to Landlord’s representative. 
The foregoing license to enter the Premises prior to the Commencement
Date is, however, conditioned upon Tenant’s contractors and their
subcontractors and employees working in harmony and not interfering with the
work being performed by Landlord as determined by Landlord in Landlord’s sole
and absolute discretion.  If at any time
that entry shall cause disharmony or interfere with the work being performed by
Landlord as defined by Landlord in Landlord’s sole and absolute discretion,
this license may be withdrawn by Landlord upon twenty-four (24) hours written
notice to Tenant.  That license is
further conditioned upon the compliance by Tenant’s contractors with all
requirements imposed by Landlord on third party contractors, including without
limitation the maintenance by Tenant and its contractors and subcontractors of
workers’ compensation and public liability and property damage insurance in
amounts and with companies and on forms satisfactory to Landlord, with
certificates of such insurance being furnished to Landlord prior to proceeding
with any such entry.  The entry shall be
deemed to be under all of the provisions of the Lease except as to the
covenants to pay rent.  Landlord shall
not be liable in any way for any injury, loss or damage which may occur to any
such work being performed by Tenant, the same being solely at Tenant’s
risk.  In no event shall the failure of
Tenant’s contractors to complete any work in the Premises extend the
Commencement Date of this Lease beyond the date that Landlord has completed its
Tenant Improvement Work and tendered the Premises to Tenant.


H.                                      Tenant hereby designates Terry Quinn (“Tenant’s Construction Representative”), Telephone No. (949)
435-0025, as its representative, agent and attorney-in-fact for all matters
related to the Tenant Improvement Work, including but not by way of limitation,
for purposes of receiving notices,



 2
 









approving submittals and issuing requests for Changes, and Landlord
shall be entitled to rely upon authorizations and directives of such person(s)
as if given directly by Tenant.  The
foregoing authorization is intended to provide assurance to Landlord that it
may rely upon the directives and decision making of the Tenant’s Construction
Representative with respect to the Tenant Improvement Work and is not  intended to limit or reduce Landlord’s right
to reasonably rely upon any decisions or directives given by other officers or
representatives of Tenant.   Tenant may
amend the designation of its Tenant’s Construction Representative(s) at any
time upon delivery of written notice to Landlord.


II.            COST OF TENANT IMPROVEMENTS


A.                                   Landlord
shall complete, or cause to be completed, the Tenant Improvements, at the
construction cost shown in the Final Cost Estimate (subject to increases for
Landlord approved Changes and as otherwise provided in this Work Letter), in
accordance with final Working Drawings and Specifications approved by both
Landlord and Tenant.


B.                                     Landlord shall pay up to Five Hundred Sixteen
Thousand Ninety-Six Dollars ($526,096.00), based
on $18.00 per rentable square foot of the Premises (“Landlord’s
Maximum Contribution”), of the final “Completion Cost” (as defined
below), but applicable only to “Building Standard Improvements” (as defined
below).   Tenant acknowledges that the
Landlord’s Maximum Contribution is intended only as the maximum amount Landlord
will pay toward Building Standard Improvements, and not by way of limitation,
any partitions, modular office stations, fixtures, cabling, furniture and
equipment requested by Tenant are not included in Building Standards and
are in no event subject to payment as part of Landlord’s Contribution.  In the event the sum of the cost of the
Building Standard Improvements  for the
Tenant Improvements is less than the Landlord’s Maximum Contribution, Landlord’s
actual contribution toward the Completion Cost (“Landlord’s
Contribution”) shall equal such lesser amount, and Tenant shall have
no right to receive any credit, refund or allowance of any kind for any unused
portion of the Landlord’s Maximum Contribution nor shall Tenant be allowed to
make revisions to an approved Preliminary Plan, Working Drawings and
Specifications or request a Change in an effort to apply any unused portion of
Landlord’s Maximum Contribution.  In
addition to the Landlord’s Maximum Contribution, Landlord shall reimburse
Tenant’s Architect in the amount of Two Thousand Eight Hundred Sixty-Seven
Dollars ($2,867.00) for the cost of one (1) test fit plan for the Tenant
Improvement Work, within thirty (30) days following invoicing from Tenant’s
Architect.


C                                        Tenant shall pay all Completion Costs attributable
to Non-Standard Improvements (“Non-Standard Improvement
Costs”), including, but not by way of limitation: (i) costs for each
variance or upgrade which increases the cost of a Building Standard
Improvement, and (ii) the entire cost of any improvements or work which are
additions (as opposed to variances or upgrades) to the Standard Improvements
(e.g., supplemental or back-up power or HVAC, extra finishes or millwork or
partitions).  In addition, Tenant shall
pay all Completion Costs attributable to any Changes requested by the Tenant,
any costs due to inaccurate or incomplete Programming Information and the
amount, if any, by which aggregate costs for the Building Standard Improvements
exceeds the Maximum Landlord Contribution. 
The amounts to be paid by Tenant for the Tenant Improvements pursuant to
this Section II.C. are sometimes cumulatively referred to herein as the “Tenant’s Contribution”.


D.                                    The “Completion Cost”
shall mean all costs of Landlord in completing the Tenant Improvements in
accordance with the approved Working Drawings and Specifications, including but
not limited to the following:  (i)
payments to Tenant’s Architect to prepare the Preliminary Plan and the Working
Drawings and Specifications in an amount not to exceed $1.20 per rentable
square foot of the Premises, (ii) payments made to engineers, contractors,
subcontractors and other third party consultants in the performance of the
work, (iii) salaries and fringe benefits of persons, if any, in the direct
employ of Landlord performing any part of the construction work, (iv) permit
fees and other sums paid to governmental agencies, and (v) costs of all
materials incorporated into the work or used in connection with the work.  The Completion Cost shall also include an administrative/supervision
fee to be paid to Landlord or to Landlord’s management agent in the amount of
five percent (5%) of the Completion Cost. 
Except for payments to Tenant’s Architect, unless expressly authorized
in writing by Landlord, the Completion Cost shall not include (and no portion
of the Landlord Contribution shall be paid for) any costs incurred by Tenant,
including without limitation, any costs for space planners, managers, advisors
or consultants retained by Tenant in connection with the Tenant Improvements.


E.                                      Prior to start of construction of the Tenant
Improvements, Tenant shall pay to Landlord eighty percent (80%) of the amount
of the Tenant’s Contribution set forth in the Final Cost Estimate (once
approved by Tenant).  The remainder of
the Tenant’s Contribution shall be due and payable on or before the
Commencement Date of this Lease.  If the
actual Completion Cost of the Tenant Improvements is greater than the Final
Cost Estimate because of Changes, modifications or extras not reflected on the
approved Working Drawings and Specifications, or because of Tenant Delays, then
Tenant shall pay all such additional costs within ten (10) days after written
demand for same.  The balance of any sums
not otherwise paid by Tenant shall be due and payable on or before the
Commencement Date of this Lease.  If
Tenant defaults in the payment of any sums due under this Work Letter, Landlord
shall (in addition to all other remedies) have the same rights as in the case
of Tenant’s failure to pay rent under the Lease, including, without limitation,
the right to terminate this Lease and recover damages from Tenant and/or to
charge a late payment fee and to collect interest



 3
 









on delinquent payments, and Landlord may (but shall not be required to)
suspend the Tenant Improvement Work following such default, in which event any
delays because of such suspension shall constitute Tenant Delays hereunder.


III.           LANDLORD’S
IMPROVEMENTS.


Landlord shall, at Landlord’s sole cost and expense and not as part of
the Landlord’s Contribution, construct the following improvements in the
Premises concurrently with the Tenant Improvement Work (the “Landlord’s Work”):


i)                                         Any code required upgrades to the Building’s
fire-life safety system, provided such upgrades are not triggered by Tenant’s
Non-Standard Improvements and/or by Changes requested by Tenant;


ii)                                      The upgrade of existing electrical service from
600 amps up to 1,000 amps in the Building;


iii)                                   Any code required upgrades to the existing
electrical, lighting and ceiling systems in the Building, provided such
upgrades are not triggered by Tenant’s Non-Standard Improvements and/or by
Changes requested by Tenant; and


iv)                                  Any costs incurred due to access requirements of
the Americans with Disabilities Act (or similar federal, state, or local
requirements) triggered by the Tenant Improvement Work, including but not
limited to costs required for path of travel, parking, and restrooms, provided
such costs are not triggered by Tenant’s Non-Standard Improvements and/or by
Changes requested by Tenant.


In addition, the Landlord’s Work shall include recreating the mechanical
and electrical as-built plans for the Building as shall be required for
purposes of the Working Drawings and Specifications.


IV.                                 DISPUTE RESOLUTION


A.                                   All claims or disputes between Landlord and Tenant
arising out of, or relating to, this Work Letter shall be decided by the
JAMS/ENDISPUTE (“JAMS”), or its successor, with
such arbitration to be held in Orange County, California, unless the parties
mutually agree otherwise.  Within ten
(10) business days following submission to JAMS, JAMS shall designate three
arbitrators and each party may, within five (5) business days thereafter, veto
one of the three persons so designated. 
If two different designated arbitrators have been vetoed, the third
arbitrator shall hear and decide the matter. If less than two (2) arbitrators
are timely vetoed, JAMS shall select a single arbitrator from the non-vetoed
arbitrators originally designated by JAMS, who shall hear and decide the matter.  Any arbitration pursuant to this section
shall be decided within thirty (30) days of submission to JAMS.  The decision of the arbitrator shall be final
and binding on the parties.  In no event
shall the arbitrator be empowered or authorized to award consequential or
punitive damages (including any award for lost profit or opportunity costs or
loss or interruption of business or income). 
All costs associated with the arbitration shall be awarded to the
prevailing party as determined by the arbitrator.


B.                                     Notice of the demand for arbitration by either
party to the Work Letter shall be filed in writing with the other party to the
Work Letter and with JAMS and shall be made within a reasonable time after the
dispute has arisen.  The award rendered
by the arbitrator shall be final, and judgment may be entered upon it in
accordance with applicable law in any court having jurisdiction thereof.  Except by written consent of the person or
entity sought to be joined, no arbitration arising out of or relating to this
Work Letter shall include, by consolidation, joinder or in any other manner,
any person or entity not a party to the Work Letter unless (1) such person or
entity is substantially involved in a common question of fact or law, (2) the
presence of such person or entity is required if complete relief is to be
accorded in the arbitration, or (3) the interest or responsibility of such
person or entity in the matter is not insubstantial.


C.                                     The agreement herein among the parties to
arbitrate shall be specifically enforceable under prevailing law.   The agreement to arbitrate hereunder shall
apply only to disputes arising out of, or relating to, this Work Letter, and
shall not apply to other matters of dispute under the Lease except as may
be  expressly provided in the Lease.



 4














CAMPUS OFFICE GENERIC SPECIFICATION


THE IRVINE COMPANY


Tenant Improvement / Interior
Construction Outline Specifications


(By Tenant/Tenant
Allowance)


 


	
  Tenant Standard General 

  	
   

  	
   

  
	
  Office:

  	
  CARPET 

  Direct glue, from one of the following options: Designweave
  — Z6354 Tempest Esq.: 

  a)   553 Steel Wool

  b)   773 Melba Toast

  c)   575 Silver Smoke

  d)   535 Dolphin

  e)   454 Denim

  	
  

  

  Designweave — Z6356 Techno: 

  a)   336 Lido 

  b)   252 Topaz 

  c)   518 Night Sky 

  d)   997 Silver Plum 

  e)   496 Galactic  

  
	
   

  	
   

  
	
   

  	
  VINYL COMPOSITION TILE (VCT) 

  	
   

  
	
   

  	
  12x12 VCT Armstrong Standard Excelon, from the
  following options:

  
	
   

  	
  a)   51803 Pearl White

  b)   51899 Cool White

  	
  c)   51908 Pewter

  d)   51899 Cool White  

  
	
   

  	
   

  
	
   

  	
  PAINT / WALLS 

  5/8” gypsum drywall on 2-1/2” x 25 ga. metal studs, floor
  to ceiling construction, no walls shall penetrate the grid unless required by
  code. All walls shall be straight, and parallel to building perimeter walls.
  All offices and rooms shall be constructed of a standard size and tangent to
  a building shell or core wall. Paint finish, one standard color to be
  Benjamin Moore AC-40, Glacier White, flat finish. 

  
	
   

  	
   

  
	
   

  	
  BASE 

  2-1/2”Burke rubber base color: Pearl 137P, straight at cut
  pile carpet, coved at resilient flooring and loop carpet.  

  
	
   

  	
   

  
	
   

  	
  RUBBER TRANSITION STRIP 

  Transition strip between carpet and resilient flooring to
  be Burke #150, color: to match adjacent V.C.T.  

  
	
   

  	
   

  
	
   

  	
  PLASTIC LAMINATE 

  Plastic laminate color at millwork to be Nevamar “Smoky
  White”, Textured #S-7-27T.

  
	
   

  	
   

  
	
   

  	
  CEILING 

  2x4 USG Radar Illusions #2842 grid and scored tile on 9/16”
  T-bar grid. Continuous grid throughout.

  
	
   

  	
   

  
	
   

  	
  PERIMETER WALLS 

  Furring, 25 ga. metal studs with 5/8” gypsum drywall, with
  batt insulation.

  
	
   

  	
   

  
	
   

  	
  LIGHTING 

  2X4 fluorescent, 3-lamp energy saving ballast, 18-cell
  parabolic lens fixture.

  
	
   

  	
   

  
	
   

  	
  DOORS 

  1-3/4” solid core, 3’’-0” x 8’-10”, plain sliced white oak,
  Western Integrated clear anodized aluminum frames, Schlage “D” series
  “Sparta” latchset hardware, dull chrome finish.

  
	
   

  	
   

  
	
   

  	
  OFFICE SIDELITES 

  All interior offices to have sidelite glazing adjacent to
  office entry door. 2’ wide x door height, Western Integrated clear anodized
  aluminum frame integral to door frame with clear tempered glass.

  



 


 


 


Schedule I











 


	
  

  	
   

  
	
   

  	
  WINDOW COVERINGS 

  Vertical blinds: Mariak Industries PVC blinds at building
  perimeter windows, Model M-3000, Color: Light Grey.

  
	
   

  	
   

  
	
  Tenant Standard 

  	
   

  
	
  Mechanical:

  	
  HVAC 

  Interior and Exterior zone VAV boxes shall be connected to
  the main supply air loop. Exterior zone VAV boxes shall be provided with
  single-row hot water reheat coil. 

  

  Air distribution downstream of VAV boxes shall be provided complete with
  ductwork, 2’x2’ perforated face ceiling diffusers, 2’x2’ perforated return
  air grilles and air balance. 

  

  Pneumatic thermostats with blank white cover shall be provided for each zone.
  Thermostats shall be located adjacent to light switch at 48” above finished
  floor. 

  

  Exterior corner spaces with more than one exposure shall be provided with a
  separate zone. 

  

  Conference Room (or Training Room) 20’x13’ or larger shall be provided with a
  separate zone. 

  

  Exterior zone shall be limited to a single exposure and a maximum of 750 to
  1000 square feet. 

  

  Interior zone shall be limited to a maximum of 2000 square feet.

  
	
   

  	
   

  
	
   

  	
  FIRE PROTECTION 

  Pendant satin chrome plated, recessed heads, adjustable
  canopies, minimum K factor to be 5.62, located at center of scored ceiling
  tile. Ceiling drops from shell supply loop.

  
	
   

  	
   

  
	
  Tenant Standard 

  	
   

  
	
  Electrical:

  	
  ELECTRICAL SYSTEM 

  277/480 volt, three phase, four wire metered distribution
  section added to main service at Main Electrical Room. 

  

  Electrical tenant distribution capacity suitable for 22 watts per s.f. to
  accommodate HVAC, lighting, data processing, computer loads and convenience
  outlets. 

  

  Tenant Electrical Room, located within the lease space, to include 270/480
  volt and 120/208 volt panels, transformer, lighting control panel, as
  required.

  
	
   

  	
   

  
	
   

  	
  LIGHTING 

  Double switch per Title 24, paired in double gang box,
  Leviton “Decora” white plastic coverplate, 42” AFF to switch centerline.
  Provide occupancy sensors as required by code. 2x4 fluorescent light
  fixtures, 3-lamp energy saving ballast, 18-cell parabolic lens fixture based
  upon one (1) fixture per 80 square feet. 

  

  Exit signs: Internally illuminated, white sign face with green text.

  



 











 


	
  

  	
   

  
	
  

  	
  OUTLETS 

  Power: 15-amp 125-volt specification grade duplex
  receptacle mounted vertically, 18” AFF to centerline, white plastic coverplate.
  Feeds to systems furniture by Tenant to be via walls, furred columns or
  ceiling J-box. Power poles and furniture by Tenant. Ratio of one (1) feed per
  eight (8) workstations. Assumes four (4) circuits, eight (8) wire
  configuration of systems furniture. 

  

  Telephone/Data: Single gang box with mud ring and pull string, mounted
  vertically, 18” AFF to centerline, Cover plate by telephone and/or cabling
  company. Teflon cable by tenant. 

  

  One (1) empty 2” conduit to be routed from Tenant’s Server Room, 4x8 backboard
  to building main telephone backboard.

  
	
   

  	
   

  
	
  Tenant Standard 

  	
   

  
	
  Warehouse/Shipping
  and Receiving:

  	
  FLOORS 

  Sealed concrete.

  
	
   

  	
   

  
	
   

  	
  WALLS 

  5/8” gypsum wallboard standard partition. Paint to match
  Benjamin Moore AC-40 Glacier White; rated partition at occupancy separation
  as required by code.

  
	
   

  	
   

  
	
   

  	
  CEILING 

  Exposed structure, non-painted.

  
	
   

  	
   

  
	
   

  	
  WINDOWS 

  None

  
	
   

  	
   

  
	
   

  	
  ACCESS 

  7’-6” H x 7’-6” W glazed service doors. Glazing is bronze
  reflective glass.

  
	
   

  	
   

  
	
   

  	
  HVAC 

  None

  
	
   

  	
   

  
	
   

  	
  PLUMBING

  Single accommodation restroom, if required. 

  

  Sheet vinyl flooring to be Armstrong Classic Corlon “Seagate” #86526 Oyster,
  with Smooth White FRP panel wainscot to 48” high. Painted walls and ceiling
  to be Benjamin Moore AC-40 Glacier White, semi-gloss finish.

  
	
   

  	
   

  
	
   

  	
  LIGHTING 

  Chain hung florescent strip fixtures.

  
	
   

  	
   

  
	
   

  	
  OTHER ELECTRICAL 

  Convenience outlets; surface mounted at exposed concrete
  walls.

  
	
   

  	
   

  
	
   

  	
  SECURITY 

  Lockable doors.

  



 















 


THE
IRVINE COMPANY


Spectrum 6





EXHIBIT Y