Document:

exv10w25

 

EXHIBIT 10.25

BUSINESS PARK NET LEASE

940 AUBURN COURT

FREMONT, CALIFORNIA

BY AND BETWEEN

BEDFORD PROPERTY INVESTORS INC.,

A MARYLAND CORPORATION

(LANDLORD)

AND

PINE PHOTONICS COMMUNICATIONS, INC.,

A DELAWARE CORPORATION

(TENANT)

 

 

BUSINESS PARK NET LEASE

This Business Park Net Lease (“LEASE”) is entered into by and between “LANDLORD” and “TENANT”
(defined below and collectively the “PARTIES”) and dated for reference purposes only as of JUNE 30,
2000.

ARTICLE 1. SALIENT LEASE TERMS

In addition to the terms defined throughout this Lease, the terms set forth below shall have the
following meanings when referred to in this Lease:

	 	 	 	 	 
	1.1

	 	RENT PAYMENT ADDRESS:
	 	BEDFORD PROPERTY INVESTORS
	 

	 	 	 	Lockbox No, 73048 — “AUBURN COURT”
	 

	 	 	 	P.O. Box 60000
	 

	 	 	 	San Francisco, CA 94160-3048.
	 
	 	 	 	 
	1.2

	 	LANDLORD & NOTICE ADDRESS:
	 	BEDFORD PROPERTY INVESTORS, INC., a
	 

	 	 	 	Maryland corporation
	 

	 	 	 	270 Lafayette Circle 
	 

	 	 	 	Lafayette, California 94549

	 

	 	 	 	Facsimile number (925) 283-0896
	 
	 	 	 	 
	1.3

	 	TENANT & NOTICE ADDRESS:
	 	PINE PHOTONICS COMMUNICATIONS, INC., a
	 

	 	 	 	Delaware corporation
	 

	 	 	 	940 Auburn Court
	 

	 	 	 	Fremont, California 94538
	 

	 	 	 	Facsimile number: (     )                     
	 
	 	 	 	 
	1.4

	 	PREMISES:
	 	940 AUBURN COURT, FREMONT, CA, containing
	 

	 	 	 	approximately 12,060 square feet (the
	 

	 	 	 	“RENTABLE AREA”), as outlined in Exhibit
B.
	 
	 	 	 	 
	1.5

	 	BUILDING:
	 	BUILDING 2: 910-940 AUBURN COURT,

FREMONT, CALIFORNIA in which the Premises

are located.
	 
	 	 	 	 
	1.6

	 	COMPLEX:
	 	AUBURN COURT, located at 850-860 AUBURN

COURT. (BUILDING 1) AND 910-940 AUBURN

COURT (BUILDING 2), FREMONT, CALIFORNIA,

in the State of California (“STATE”),

consisting of: (i) that parcel of real
property
on which the Premises are
located,
(ii) the Common Area, and (iii)
any contiguous parcels owned by Landlord,
us more particularly
described in Exhibit A.
	 
	 	 	 	 
	1.7

	 	TERM:
	 	(A) AUGUST 1, 2000 (the “COMMENCEMENT DATE”).

	 	 	 
	 

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	 	 	 	(B)  SIXTY (60) months.
	 
	 	 	 	 
	1.8

	 	MINIMUM MONTHLY RENT:
	 	(A)  Minimum Monthly
	 
	 	 	 	 
	 

	 	 	 	         8/1/00 — 7/31/01: $21,105.00
	 

	 	 	 	         8/1/01 — 7/31/02: $22,160.25
	 

	 	 	 	         8/1/02 — 7/31/03: $23,268.26
	 

	 	 	 	         8/1/03 — 7/31/04: $24,431.68
	 

	 	 	 	         8/1/04 — 7/31/05: $25,653.26
	 
	 	 	 	 
	 

	 	 	 	(B)  Advance Rent: $21,105.00
	 
	 	 	 	 
	1.9

	 	SECURITY DEPOSIT:
	 	$307,839.12 (SEE ADDENDUM #1 — “LETTER OF
CREDIT AS SECURITY DEPOSIT”)
	 
	 	 	 	 
	1.10

	 	PERMITTED USE:
	 	Administrative office, warehouse and
distribution, and
engineering uses for
optical communication component business.
	 
	 	 	 	 
	1.11

	 	INITIAL PRO RATA %:
	 	17.73% Percent — CAM and Insurance Pro
Rata (12,060 SF + 68,030 SF)
33.33% Percent — Property Tax Pro Rata
(12,060 SF + 36,180 SF)
	 

	 	COMPLEX RENTABLE AREA:
	 	68,030 Square Feet (850-940 Auburn Court)
	 

	 	BUILDING 2 RENTABLE AREA:
	 	36,180 Square Feet (910-940 Auburn Court)
	 
	 	 	 	 
	1.12

	 	LANDLORD’S ALLOWANCE:
	 	Not to Exceed: $24,120.00
	 
	 	 	 	 
	1.13

	 	CC&RS:
	 	Date of Recordation AUGUST 30, 1979
Book 112, Page 85
Document Number
	 
	 	 	 	 
	1.14

	 	MANAGEMENT FEE:
	 	3% percent of gross rental revenue
	1.15

	 	BROKER:
	 	LANDLORD: CPS REALTY
	 
	 	 	 	 
	 

	 	 	 	TENANT: SHORELINE COMMERCIAL REAL ESTATE
	 
	 	 	 	 
	1.16

	 	CONTENTS:
	 	This Lease consists of Pages 1 through 15;
Articles 1
through 34; and Addenda 1; as
well as the following Exhibits:
Exhibit A — Legal Description of
Complex
Exhibit B — Plan of the Complex and Floor
Plan of the Premises
Exhibit C — Work Letter
for Construction
Obligations
Exhibit D —
Acknowledgment of Commencement
of Term
Exhibit E —
Rules and Regulations

	 	 	 
	 

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ARTICLE 2. PREMISES

     2.1 Demising Clause. Landlord leases to Tenant and Tenant leases from Landlord the Premises
upon the terms and conditions set forth in this Lease. Landlord reserves the area beneath and above
the Building and the exterior thereof together with the right to install, maintain, use, repair and
replace pipes, ducts, conduits, wires, and structural elements leading through the Premises serving
other parts of the Complex, so long as such items are concealed by walls, flooring or ceilings.
Such reservation in no way affects the maintenance obligations imposed herein. Landlord may change
the shape, size, location, number and extent of the improvements to any portion of the Complex,
including the Building, without the consent of Tenant and without affecting Tenant’s obligations
hereunder if such changes do not have a material adverse impact on Tenant’s use of the Premises. In
this Lease “LANDLORD PARTIES” means Landlord’s directors, officers, employees, shareholders,
contractors, property managers, agents, Lenders, successors, assignees, nominees and other lien
holders, but excluding other tenants in the Complex, and “TENANT PARTIES” means Tenant’s directors,
officers, employees, partners, shareholders, invitees, agents, contractors, assigns, subtenants or
occupants.

     2.2 Covenants, Conditions and Restrictions. The Parties agree that this Lease is subject and
subordinate to the effect of: (a) any covenants, conditions, restrictions, easements, Security
Instruments, and any other matters or documents of record, including the CC&Rs, and all amendments
or modification thereto (collectively, the “RESTRICTIONS”); (b) zoning and other laws of the city,
county and state where the Complex is situated; and (c) general and special taxes not delinquent.
Tenant agrees that as to its leasehold estate, Tenant and all persons in possession or holding
under Tenant will conform to and will not violate the terms of any Restrictions.

ARTICLE 3. TERM AND POSSESSION

     3.1 Commencement Date. The Commencement Date specified in Section 1.7 (A) is the date the
Parties agree that the Lease shall
commence, whether or not Tenant has completed construction of the Tenant Improvements by such
date. Following the Commencement Date, Tenant shall execute a written acknowledgment of that date
as the actual Commencement Date in the form of Exhibit D.

     3.2 Term. The Term of this Lease shall start on the Commencement Date and shall be for the
term specified in Section 1.7 (B) hereof, plus any partial month at the commencement of the Term.

     3.3 Pre-Term Possession. Following delivery of the Premises by Landlord, Tenant may enter the
Premises at its own risk to construct the Tenant Improvements pursuant to Exhibit C hereto. During
any period prior to the Commencement Date that Tenant is in possession of the Premises, all terms
and conditions of the Lease shall apply, including Tenant indemnities under the Lease and Tenant’s
payment of utilities, but excluding the payment of other Rent.

	 	 	 
	 

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     3.4 Landlord Delay. Landlord shall use reasonable efforts to deliver the Premises to Tenant on
or before the Commencement Date specified in Section 1.7 (A). If Landlord cannot deliver possession
of the Premises on or before the Commencement Date, the Lease shall not be void or voidable, nor
shall Landlord be liable for any loss or damage resulting therefrom. If Landlord cannot deliver
possession of the Premises within six months following the Commencement Date for any reason other
than as may be caused by Tenant or any of the Tenant Parties, Tenant shall have the right to cancel
this Lease upon Notice to Landlord given within ten days after the expiration of the six-month
period. In the event of any such delay in delivery of possession of the Premises to Tenant by
Landlord (the “LANDLORD DELAY”), the proposed Commencement Date of August 1, 2000, shall be
extended by an period equal to the Landlord Delay.

ARTICLE 4. RENT

     4.1 Payment. Tenant shall pay to Landlord the Minimum Monthly Rent specified in Section 1.8
(A) and the Additional Rent as set forth in Articles 5 through 8 and elsewhere in this Lease (the
Minimum Monthly Rent and the Additional Rent are collectively referred to as “RENT”). Minimum
Monthly Rent is payable in advance on the first day of each month of the Term at the Rent Payment
Address or such other address specified by Landlord. If the Term commences on other than the first
day of the month, the Rent for the first partial month shall be prorated accordingly. All Rent is
payable in lawful money of the United States.

     4.2 No Set Off. Rent shall be paid without prior notice, demand, deduction, setoff, offset,
counterclaim, recoupment, suspension or abatement except as expressly provided in Articles 12 and
20.

     4.3 Advance Rent. The amount specified in Section 1.8 (B) is paid to Landlord upon execution
of this Lease as advance Rent; provided, however, that such amount shall be held by Landlord as a
Security Deposit pursuant to the Lease until it is applied by Landlord to the Minimum Monthly Rent.

     4.4 Late Charges; Interest. Tenant acknowledges that late payment of Rent or other sums due
under the Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount
being extremely difficult and impractical to fix. Such costs include processing and accounting
charges, late charges that may be imposed on Landlord by the terms of any encumbrance covering the
Premises, and interest costs. If Landlord does not receive any Rent or other sums due from Tenant
on the due date, Tenant shall pay to Landlord an additional sum of ten percent of such Rent or
other sum as a late charge. The Parties agree that this late charge represents a fair and
reasonable estimate of the cost Landlord will incur by reason of Tenant’s late payment. Accepting
any late charge does not waive Tenant’s default with respect to the overdue amount or prevent
Landlord from exercising any other rights or remedies available to Landlord. In addition to the
late charge, Tenant shall pay interest at the rate of 10 percent per annum on any Rent or other sum
not paid within 30 days of the date due.

	 	 	 
	 

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ARTICLE 5. TAXES

     5.1 Definition. The terms “REAL PROPERTY TAXES” or “TAXES” as used in this Lease include all
of the following, but do not include any tax levied upon the net income or profits of Landlord:

          (a) Present and future Real Property Taxes on the Building, the Complex, the land on which the
Building is situated and the various estates in the Building and the land, including this Lease, as
well as all personal property taxes levied on the property used in the operation of the Building or
land;

          (b) The cost to Landlord of contesting the amount, validity, or applicability of any Taxes;

          (c) General or special assessments, improvement or other bonds, commercial and gross rental
tax, levy, or tax imposed by any authority having the direct or indirect power to tax, as against
any legal or equitable interest of Landlord in the Premises or in the real properly of which the
Premises are a part, as against Landlord’s right to Rent or other income therefrom, or as against
Landlord’s business of leasing the Premises;

          (d) Any tax, fee, or charge with respect to the possession, leasing, transfer of interest,
operation, management, maintenance, alteration, repair, use, or occupancy by Tenant, of any part of
the Premises, Building, or Complex; and

          (e) Any tax imposed in substitution, partially or totally, for any tax previously included
within the definition of Taxes herein, or any additional tax, the nature of which may or may not
have been previously included within the definition of Taxes.

     5.2 Assessments. Only the current amount of any general or special assessments and statutory
interest (prorated for any partial year) that comprise a part of the Taxes and are paid in annual
or semi-annual installments shall be included within the computation of Taxes for which Tenant is
responsible.

     5.3 Separate Assessment. If the Premises are assessed separately by the taxing agency, Tenant
shall pay to such agency all Taxes applicable to the Premises. Such payment is due ten days prior
to such Taxes becoming delinquent. If the Premises share parking or Common Area with other
premises, Section 5.4 below shall apply to Taxes thereon.

     5.4 Proration. If the Premises are not separately assessed, Tenant shall pay as Additional
Rent to Landlord, within ten days after Notice, Tenant’s share of all Real Property Taxes stated in
the tax bill in which the Premises are included, including the parking and Common Area, as well as
the improvements on all of said land, or otherwise arising under the provisions of this Article. As
used in this Section, “Tenant’s share” is a fraction in which the numerator is the Rentable Area of
the Premises and the denominator is the sum of all rentable areas included within the tax bill. The
term “tax bill” means the tax bill that includes the Premises, or a group of tax bills aggregated
at the option of Landlord, as long as all tax bills relate to the Complex.

	 	 	 
	 

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     5.5 Estimated Payments. Landlord, at its option, may estimate the Taxes next due and collect
front Tenant on a monthly basis, along with Tenant’s payment of Minimum Monthly Rent, the amount of
Tenant’s estimated Tax obligation. About May 1 of each year during the Term (or as soon thereafter
as is reasonably practicable), Landlord will provide Tenant with a reconciliation of Tenant’s
account with respect to such estimated Tax payments. If it is established upon such reconciliation
that Tenant has not paid enough estimated Taxes to cover Tenant’s share for the year in question,
Tenant shall pay to Landlord the full amount of such shortage within ten days of billing. If it is
established that Tenant has overpaid its Tax obligation, Tenant will receive a credit applicable to
the next ensuing estimated Tax payments or a refund of the amount if the Term has expired.

     5.6 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant
contained in the Premises or elsewhere. When possible, Tenant shall cause such trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed separately from
the real property of Landlord. If any of Tenant’s personal property shall be assessed with
Landlord’s reel property, or if any other Taxes or taxes which are payable by Tenant pursuant to
this Lease or otherwise are assessed against Landlord or Landlord’s real property, Tenant shall pay
Landlord the Taxes and other taxes attributable to Tenant within ten days after receipt of a
written statement setting forth the amount owed.

     5.7 Net Rent. It is the intention of the Parties that the Rent received by Landlord be net of
any Taxes of any sort to be paid by
Landlord. If it is not lawful for Tenant to reimburse Landlord for any of the Taxes, the
Minimum Monthly Rent shall be increased by the amount equal to the Taxes allocable to Tenant so as
to net to Landlord the amount that it would have received if such Tax had not been imposed.

ARTICLE 6. COMMON AREAS AND COMMON AREA COSTS

     6.1 Definitions

          (a) “COMMON AREA” include all areas and facilities outside the Premises, within the exterior
boundaries of the Complex, that are provided by Landlord for the general use and convenience of
Tenant and of other Complex tenants and their authorized representatives and invitees. Common Area
includes driveways, parking areas, sidewalks, and landscaped areas, all as generally described or
shown on Exhibit B attached hereto. Exhibit B is tentative, and Landlord reserves the right to make
alterations to it from time to time. Common Area also includes systems within the Premises that
also serve other tenants such as plumbing, fire sprinkler or non-exclusive HVAC.

          (b) “COMMON AREA COSTS” are all costs incurred by Landlord for (i) maintenance, repair,
replacement, improvement, or operation of the Complex, except for Landlord’s maintenance obligation
under Section 19.1; (ii) refuse disposal; (iii) property owner’s association dues or assessments
imposed upon Landlord by any Restrictions; (iv) liability and other insurance for the Complex not
covered in Section 8.4; (v) security services for the Complex; (vi) upgrading the utility,
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system serving tenants of the Complex; (vii) the Management Fee set forth in Section 1.14; (viii)
any other costs or fees reasonably related to the use, operation or enjoyment of any part of the
Complex; (ix) any insurance deductibles for repairs under Article 12 or elsewhere in the Lease; and
(x) amortized Capital Costs.

          (c) “PRO RATA %” is a fraction where the numerator is the Rentable Area of the Premises and
the denominator is the sum of the rentable areas of the buildings in the Complex using the Common
Area or for whose benefit the Common Area Cost in incurred. Tenant’s Initial Pro Rata % is stated
in Section 1.11. The Pro Rata % may change from time to time.

          (d) “CAPITAL COSTS” are any (i) expenditures that do not recur more frequently than at five
year intervals in the normal course of operation and maintenance of the Complex; (ii) costs of
capital improvements made by Landlord to the Complex for the purpose of reducing recurring expenses
or utility costs; and/or (iii) costs of capital improvements made by Landlord that are required by
governmental law, ordinance, regulation or mandate now or hereafter in effect, that was not
applicable to the Complex at the time of the original construction. The portion of Capital Costs to
be included each year in Common Area Costs is that fraction allocable to the calendar year in
question calculated by amortizing the cost over the useful life of such improvement, as reasonably
determined by Landlord, with interest on the unamortized balance at ten per cent per annum.

     6.2 Rights and Duties of Landlord. Landlord shall maintain the Common Area, establish and
enforce reasonable rules and regulations therefor, close any of the Common Area to whatever extent
required in Landlord’s opinion to prevent a dedication of or the accrual of any rights of any
person or of the public to the Common Area, close temporarily any of the Common Area for
maintenance purposes, and make changes to the Common Area including changes in the location of
driveways, entrances, exits, vehicular parking spaces, parking area, the designation of area for
the exclusive use of others, the direction of the flow of traffic or construction of additional
buildings thereupon, in a manner Landlord deems proper in its opinion,. Tenant hereby acknowledges
that Landlord is under no obligation to provide security for the Common Area but may do so at its
option as a Common Area Cost.

     6.3 Payments by Tenant. As Additional Rent, Tenant shall pay Landlord its “PRO RATA SHARE”,
being the product of the Pro Rata % times Common Area Costs, within ten days of receiving a bill
from Landlord, but no more frequently than monthly. Landlord shall have the right to estimate
Tenant’s future Pro Rata Share and to collect it from Tenant on a monthly basis along with Tenant’s
payment of Minimum Monthly Rent. Landlord will provide a reconciliation of Tenant’s account at
least annually. If the reconciliation allows Tenant’s account does not cover Tenant’s Pro Rata
Share for the period estimated, Tenant shall immediately pay Landlord any deficiency. Any excess
indicated by to reconciliation shall be credited to Tenant’s account to reduce the estimated
payments for the next ensuing period, or if excess is determined at the end of the Term, it shall
be refunded to Tenant.

     6.4 Adjustments. Notwithstanding the foregoing provisions, Tenant’s Pro Rata % as to certain
expenses included in Common Area Costs may be calculated differently to yield a

	 	 	 
	 

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higher percentage share for Tenant as to those expenses if Landlord permits other tenants or
occupants in the Complex to incur such expenses directly rather than have Landlord incur the
expense in common for the Complex. In such case, Tenant’s Pro Rata % of the applicable expense
shall be calculated as having as its denominator the sum of the rentable areas of all premises in
the Complex less the rentable areas of tenants who have incurred such expense directly. In any case
where Tenant, with Landlord’s consent, incurs such expenses directly, Tenant’s Pro Rata Share of
such costs will be calculated specially so that expenses of the same character which are incurred
by Landlord solely for the benefit of other tenants in the Complex will not be prorated to Tenant.
Nothing herein shall imply that Landlord will permit Tenant or any other tenant of the Complex to
incur Common Area Costs. Any such permission shall be in the sole discretion of Landlord.

     6.5 Refuse Disposal. Tenant shall pay Landlord, within ten days of being billed therefore, for
the removal from the Common Area, the Complex, or the Building of any amounts of refuse or rubbish
that Tenant has generated in excess of amounts typically generated by other tenants of the Complex.

ARTICLE 7. ASSIGNMENT AND SUBLETTING

     7.1 Restriction on Transfer. Except as expressly provided in Article 7, Tenant will not,
either voluntarily or by operation of law, assign, mortgage, hypothecate, encumber or otherwise
transfer this Lease or any interest herein or sublet or license the Premises or any part thereof,
or permit the use or occupancy of the Premises by any party other than Tenant (any of which are
referred to as a “TRANSFER”), without the prior written consent of Landlord. For purposes of this
Article, if Tenant is a corporation, limited liability company, partnership or other entity any
transfer, assignment, encumbrance or hypothecation of fifty percent or more (individually or in the
aggregate) of any stock or other ownership or beneficial interest in such entity, and/or any
transfer, assignment, hypothecation or encumbrance of any controlling ownership, beneficial or
voting interest in such entity, will be deemed a Transfer and will be subject to all of the
restrictions and provisions contained in this Article. The immediately preceding sentence will not
apply to public corporations, the stock of which is traded through a public exchange or over the
counter system.

     7.2 Transfer Notice. If Tenant desires to affect a Transfer, at least 30 days prior to the
date when Tenant desires the Transfer to be effective (the “TRANSFER DATE”), Tenant will give
Notice (the “TRANSFER NOTICE”), stating the name, address and business of the proposed assignee,
subtenant or other transferee (the “TRANSFEREE”). The Notice must contain information in such
detail as Landlord may reasonably require concerning the character, ownership, and financial
condition of Transferee (including references), the Transfer Date, any relationship between Tenant
and Transferee, and a draft of the “TRANSFER AGREEMENT” showing the consideration and other terms
of the proposed Transfer.

     7.3 Landlord’s Options. Within fifteen days of receipt of a Transfer Notice, and any
additional information reasonably requested by Landlord concerning the Transferee’s financial
responsibility, Landlord will notify Tenant of its election to do one of the following: (i) consent
to the proposed Transfer subject to such reasonable conditions as Landlord may impose in

	 	 	 
	 

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providing such consent; (ii) refuse such consent, which refusal shall be on reasonable grounds; or
(iii) terminate this Lease as to the portion of the Premises which is the subject of the proposed
Transfer and recapture that portion of the Premises for reletting by Landlord. Tenant agrees that
it is reasonable for Landlord to deny consent to a proposed Transfer under (ii), above, on any of
the following grounds, which list is not exclusive:

          (a) The financial strength of the proposed Transferee is not comparable to that of Tenant at
the time of execution of this Lease;

          (b) A proposed Transferee whose occupation of the Premises would cause a diminution in the
reputation of the Complex or the
other businesses located therein;

          (c) A proposed Transferee whose impact on the common facilities or the efficiency or
effectiveness of any utility or telecommunication system serving the Building or the Complex or
other tenants of the Complex would be adverse, disadvantageous or require improvements or changes
in any utility or telecommunication capacity currently serving the Building or the Complex;

          (d) A proposed Transferee whose use presents any risk of violation of Article 16;

          (e) A proposed Transferee whose occupancy will require a variation in the terms of this Lease
(e.g., a variation in the use clause) or which otherwise adversely affects any interest of
Landlord;

          (f) The existence of any default by Tenant under any provision of this Lease;

          (g) A proposed Transferee who is or is likely to be, or whose business is or is likely to be,
subject to compliance with additional laws or other governmental requirements beyond those to which
Tenant or Tenant’s business is subject; or

          (h) The proposed Transfer, or Landlord’s consent thereto, would result in Landlord’s breach of
an existing agreement with a third party.

     7.4 Additional Conditions. A condition precedent to any Transfer will be the delivery to
Landlord of a true copy of the fully executed Transfer Agreement that does not differ materially
from that provided pursuant to Section 7.2. Tenant undertaking the transfer (“TRANSFEROR”) agrees
to pay Landlord, as Additional Rent, 80 percent of all sums and other consideration payable to and
for the benefit of Tenant by the Transferee in excess of the Rent payable under the Lease for the
same period and portion of the Premises. In calculating excess Rent or other consideration which
may be payable to Landlord under this paragraph, Tenant will be entitled to deduct a monthly
amortization of commercially reasonable third party brokerage commissions and attorney’s fees and
other amounts reasonably and actually expended by Tenant in connection with the Transfer if
acceptable written evidence of such expenditures is provided to Landlord. No Transfer will release
Transferor (or any prior Transferor) of Tenant’s obligations under this Lease or alter the primary
liability of Transferor (or any prior Transferor) to perform all obligations to be performed by
Tenant hereunder. Landlord may require that

	 	 	 
	 

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Transferee remit directly to Landlord on a monthly basis, all monies clue Transferor by said
Transferee. Consent by Landlord to one Transfer will not be deemed consent to any subsequent
Transfer. In the event of default by Transferee, Tenant or any successor of Tenant in the
performance of any other terms hereof, Landlord may proceed directly against Transferor (or any
prior Transferor) without the necessity of exhausting remedies against Transferee or successor. If
Tenant requests the consent of Landlord to a Transfer, Tenant will pay Landlord an administrative
fee of Two Hundred Fifty Dollars ($250.00) concurrent with the request, plus Landlord’s reasonable
attorney’s fees.

     7.5 Recapture. By Notice to Tenant (the “TERMINATION NOTICE”) within thirty days after
Landlord receives the information specified in Section 7.2, Landlord may terminate this Lease in
the event of a Transfer of the Lease as to the entire Premises, or terminate this Lease as to the
portion of the Premises to be transferred, if the Transfer is for less than the entire Premises. If
Landlord elects to terminate this Lease to the portion of the Premises to be Transferred, an
amendment to this Lease shall be executed restating the description of the Premises and reducing
Tenant’s obligations for Rent and other charges in proportion to the reduction in rentable area of
the Premises caused thereby. If Landlord elects a whole or partial termination hereunder, Landlord
may enter into a new lease covering the Premises or the affected portion thereof with the intended
Transferee on such terms as Landlord and such person may agree or enter into a new lease covering
the Premises with any other person. In such event, Tenant shall not be entitled to any portion of
the profit that Landlord may realize on account of such termination and reletting. Upon the
termination of this Lease, the Parties shall have no further obligations to each other under this
Lease except for matters occurring or obligations arising prior to the date of such termination.

     7.6 Reasonable Restriction. Tenant acknowledges and agrees that the restrictions on transfer
in this Article are reasonable for all purposes, including the provisions of Code Section
1951.4(b)(2). Tenant expressly waives any rights which it might otherwise be deemed to possess
pursuant to applicable law, including Code Section 1997.040, which would limit any remedy of
Landlord pursuant
to Sections 1951.2 or 1951.4 of the Code by means of proof that enforcement of a restriction
on use or Transfer of the Premises would be unreasonable.

ARTICLE 8. PROPERTY INSURANCE

     8.1 Landlord’s Insurance. In addition to any other insurance Landlord elects to maintain,
Landlord agrees to maintain commercial property insurance covering the Building against broad form
causes of loss. Such insurance shall be issued in the names of Landlord and its lender, as their
interests appear, and shall be for the sole benefit of such parties and under their sole control.

     8.2 Use of Premises. No use shall be made or permitted to be made an the Premises, nor acts
done, by Tenant or any of its invitees, contractors or agents which will increase the existing rate
of insurance upon the Building in which the Premises are located or upon any other building or
improvement in the Complex or cause the cancellation of any insurance policy covering the Building,
or any other building or improvement in the Complex, or any part thereof. Tenant or Tenant Parties
shall not sell, or permit to be kept, used or sold, in or about the

	 	 	 
	 

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Premises, any article that may be prohibited by commercial property insurance, special form
policies. At its sole cost and expense, Tenant shall comply with all requirements of any insurance
company, necessary to maintain reasonable property damage and commercial general liability
insurance covering the Premises, Building, or Complex.

     8.3 Increase in Premiums. Tenant agrees to pay to Landlord, as Additional Rent, any increase
in premiums on policies which may be carried by Landlord on to Premises, the Building or the
Complex, or any blanket policies which include the Building or Complex, covering damage thereto and
loss of Rent caused by fire and other perils resulting from the nature of Tenant’s occupancy or any
act or omission of Tenant. All payments of Additional Rent by Tenant to Landlord pursuant to this
Section shall be made within ten days after receipt by Tenant of Landlord’s billing therefor.

     8.4 Pro Rata Share of Premiums. Tenant shall pay to Landlord, as Additional Rent, its pro rata
share of the insurance premiums for any property insurance carried by Landlord covering the Complex
(the “COMPLEX INSURANCE PREMIUM”) of the nature or cause of such increase. Tenant will pay such
costs as stet forth in Section 8.5. Such pro rata share is defined as a fraction of the insurance
premiums in which the numerator is the Rentable Area of the Premises and the denominator is the
total rentable areas in all premises to which the Complex Insurance Premium is applicable. If the
property insurance carried by Landlord for the Complex is a blanket policy covering other
properties not related to the Complex, the Complex Insurance Premium shall be calculated as that
portion of such blanket policy insurance premium which, in Landlord’s good faith judgment, is
properly allocable to the Complex. These sums due shall be in addition to sums due under the
previous Section of this Lease.

     8.5 Estimated Payments. Landlord may, at its option, estimate the amount of insurance premiums
for property insurance to be due in the future from Tenant and collect from Tenant on a monthly
basis, along with payment of Tenant’s Minimum Monthly Rent, the amount of Tenant’s estimated
insurance premium obligation. Prior to May 1 of each year (or as soon thereafter as reasonably
practicable), Landlord shall provide Tenant with a reconciliation of Tenant’s account along with a
billing for any shortage in the event of a deficiency or statement for credit applicable to the
next ensuing insurance premium payments, if an overpayment has been made by Tenant.

ARTICLE 9. TENANT’S INSURANCE

At its expense, Tenant shall obtain and keep in force during the Term, and provide coverage after
expiration of the Term for events occurring during the Term, the following insurance, on an
occurrence basis, against claims for injuries to persons or damages to property that may arise from
or in connection with the Tenant’s operation and use of the Premises:

          (a) Commercial Property policy with Special Form causes of loss covering: (i) business
personal property, leasehold improvements on a replacement cost basis, subject to a deductible no
greater than $1,000; (ii) business income and extra expense equal to at least one year’s gross
revenue from Tenant’s operations on the Premises; which policy shall include waiver of subrogation
rights of insurer against Landlord consistent with Section 11.2.

	 	 	 
	 

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          (b) Commercial General Liability policy for bodily injury, personal injury an property damage
with limits of not less than $1,000,000 per occurrence and $2,000,000 annual aggregates on a per
location basis. Endorsements satisfying the following requirements shall be affixed: (i) Landlord,
Lender and any other party designated by Landlord (including Landlord’s property manager) shall be
named as additional insureds; (ii) Tenant’s policy shall be primary, not contributing with, and not
in excess of any other applicable insurance carried by Landlord; (iii) Tenant’s policy shall extend
to and include injuries to persons and damage to property arising in connection with any
alterations or improvements to or about the Premises performed by or on behalf of Tenant; and (iv)
Tenant’s policy shall include contractual liability coverage.

          (c) Business Auto Liability covering all owned, non-owned and hired vehicles with a limit of
$1,000,000 per accident.

          (d) Workers’ Compensation on a statutory basis and Employers’ Liability with $1,000,000 per
accident for bodily injury and diseases.

          (e) Umbrella Liability with a $3,000,000 per occurrence/annual aggregate limit.

ARTICLE 10. INSURANCE POLICY REQUIREMENTS

All insurance policies to be carried by Tenant hereunder shall conform to the following
requirements:

          (a) The insurer in each case shall carry a designation in “Best’s Insurance Reports” as issued
from time to time throughout the Term as follows: Policyholders’ rating of A; financial rating of
not less than VII;

          (b) The insurer shall be qualified to do business in the State;

          (c) The policy shall be in a form and include such endorsements as are acceptable to Landlord;

          (d) Certificates of insurance shall be delivered to Landlord at commencement of the term and
certificates of renewal at least 30 days prior to the expiration of each policy; and

          (e) Each policy shall require that Landlord be notified in writing by the insurer at least 30
days prior to any cancellation or expiration of such policy, or any reduction in the amounts of
insurance carried.

ARTICLE 11. INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION

     11.1 Intent and Purpose. The Parties intend to completely assign the risk of loss, whether
resulting from negligence of the Parties or otherwise, to the party who the Lease obligates to
cover the risk of such loss with insurance. The object of the indemnity and waiver of claims
provisions of this Lease is to assign the risk for a particular casualty to the party

	 	 	 
	 

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obligated to carry the insurance for such risk (which is not a limitation of the assignment of the
risk), without respect to the causation thereof.

     11.2 Waiver of Subrogation. The Parties release each other from any claims for damage to the
Premises, Building and Complex, and to the furniture, fixtures, and other business personal
property, Tenant’s improvements and alterations of either Landlord or Tenant, in or on the
Premises, Building and Complex, and for loss of income, to the extent such damages or loss are
actually covered by insurance policies maintained by the Parties or that would have been covered by
insurance policies required of the Parties under this Lease.

     11.3 Tenant’s Indemnity. Tenant shall indemnify, defend, protect and hold harmless Landlord
from and against all actions, claims,
demands, damages, liabilities, losses, penalties, or expenses of any kind (“CLAIMS”) which may
be brought or imposed upon Landlord or which Landlord may pay or incur by reason of injury to
person or property, from whatever cause including the negligence of the Parties hereto, in any way
connected with the condition or use of the Premises, or Alterations, improvements or personal
property therein or thereon, including any liability or injury to the person or property of Tenant
or Tenant Parties, except to the extent caused by Landlord’s gross negligence or willful acts.

     11.4 Waiver of Claims. Except as arising from the gross negligence or willful misconduct of
Landlord, Tenant releases and waives all claims against Landlord for damages or injury from any
cause arising at any time, including the negligence of the Parties, for damages to goods, wares,
merchandise and loss of business in, upon or about the Premises or Complex and injury to Tenant,
its agents, employees, invitees or third persons, in, upon, or about the Premises or Complex. It is
understood and agreed that the release set forth herein extends to all claims of every nature and
kind whatsoever, known or unknown, suspected or unsuspected, and Tenant expressly waives all rights
under Section 1542 of the Code which reads as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must have materially
affected his settlement with the debtor.”

     11.5 References. Wherever the term Landlord, Tenant or the Parties is used in this Article,
and such party is to receive the benefit of a provision of this Article, such term shall also refer
also to the Party’s officers, directors, shareholders, employees, partners, agents, mortgagees and
other lienholders.

ARTICLE 12. DESTRUCTION

     12.1 Rights of Termination. If the Premises suffers an Uninsured Property Loss or a property
loss which cannot be repaired within 195 days from the date of destruction, as determined by
Landlord, Landlord may terminate this Lease as of the date of the damage (the “LOSS DATE”) upon
Notice to Tenant. If the Premises cannot be repaired within 195 days of the Loss Date, as
determined by Landlord and stated in Landlord’s Notice to Tenant, Tenant may elect to terminate
this Lease by Notice to Landlord given within 20 days of Landlord’s Notice that the restoration
time will exceed 195 days. Landlord’s Notice shall be given within 45 days

	 	 	 
	 

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of the Loss Date or as soon thereafter as the restoration time can be determined. “UNINSURED
PROPERTY LOSS” is any damage or destruction for which the insurance proceeds available to Landlord
are insufficient to pay for the repair or reconstruction of the Premises.

     12.2 Repairs. In the event of a casualty that may be repaired within 195 days from the Loss
Date, or if the Parties do not elect to terminate this Lease under Section 12.1, this Lease shall
continue in full force and effect and Landlord shall promptly undertake to make repairs to
reconstitute the Premises to as near as practicable to the condition as existed prior to the Loss
Date. The partial destruction shall in no way void this Lease except, to the extent of Landlord’s
recovery under its rent abatement insurance for the Premises, Tenant shall be entitled to a
proportionate reduction of Minimum Monthly Rent and any Additional Rent following the property loss
until the time the Premises are restored. The reduction amount will reflect the degree of
interference with Tenant’s business. As long as Tenant conducts business in the Premises, there
shall be no abatement until the Parties agree on the amount thereof if the Parties cannot agree
within 45 days of the Loss Date, the matter shall be submitted to arbitration under the rules of
the American Arbitration Association. Upon the resolution of the dispute, the settlement shall be
retroactive and Landlord shall within ten days thereafter refund to Tenant any sums due in respect
of the reduced Rent from the date of the property loss. Landlord’s obligations to restore shall in
no way include any construction originally performed by Tenant or subsequently undertaken by
Tenant, but shall include solely that property constructed by Landlord prior to commencement of the
Term.

     12.3 Repair Costs. The cost of any repairs to be made by Landlord pursuant to Section 12.2
shall be paid by Landlord using available insurance proceeds.

     12.4 Waiver. Tenant hereby waives all statutory or common law rights of termination in respect
to any partial destruction or property loss which Landlord is obligated to repair or may elect to
repair under the terms of this Article. Further, in event of a property loss occurring during the
last two years of the original term hereof or of any extension, Landlord need not undertake any
repairs and may cancel this Lease unless Tenant has the right under the terms of this Lease to
extend the term for an additional period of at least
five years and does so within 30 days of the date of the property loss.

     12.5 Landlord’s Election. If the Complex or Building is destroyed by more than 35 percent of
the replacement cost, Landlord may elect to terminate this Lease, whether the Premises are damaged
or not, as set forth in Section 12.1. A total destruction of the Complex or the Premises terminates
this Lease.

ARTICLE 13. ACCORD AND SATISFACTION

     No payment by Tenant or receipt by Landlord of less than the full Rent due hereunder shall be
deemed to be other than on account of the earliest due Rent. No endorsement or statement on any
check or any letter accompanying any such check or payment will be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such Rent or pursue any other remedy available in this Lease, at law or
in equity. Landlord may accept partial payment from Tenant without invalidation of any

	 	 	 
	 

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contractual notice required to be given herein (to the extent such contractual notice is required)
and without invalidation of any notice required to be given pursuant to California Code of Civil
Procedure (“CCP”) Section 116), et seq., or any successor statute.

ARTICLE 14. SECURITY DEPOSIT

     14.1 Payment on Lease Execution. On execution of the Lease Tenant shall pay Landlord the
Security Deposit. This sum is a deposit securing Tenant’s performance of the Lease and shall remain
the sole and separate property of Landlord until actually repaid to Tenant (or at Landlord’s option
the last assignee, if any, of Tenant’s interest hereunder). Tenant does not earn said sum until all
conditions precedent for its payment to Tenant have been fulfilled. As this sum both in equity and
at law is Landlord’s separate property, Landlord is not be required to keep it separate from its
general accounts or pay interest for its use. If Tenant fails to pay Rent or other charges when due
hereunder, or otherwise defaults with respect to any provision of this Lease, including and not
limited to Tenant’s obligation to restore or clean the Premises following vacation thereof, at
Landlord’s election, Tenant shall be deemed not to have earned the right to repayment of the
Security Deposit, except those portions not used by Landlord for the payment of any Rent or other
charges in default, or for the payment of any other sum to which Landlord may become obligated by
reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may
suffer thereby. Landlord may retain such portion of the Security Deposit as it reasonably deems
necessary to restore or clean the Premises following vacation by Tenant. The Security Deposit is
not to be characterized as Rent until and unless so applied to a default by Tenant.

     14.2 Restoration of Deposit. If Landlord elects to use or apply all or any portion of the
Security Deposit as provided in Section 14.1, Tenant shall within ten days after written demand
therefor pay to Landlord in cash, an amount equal to that portion of the Security Deposit used or
applied by Landlord, and Tenant’s failure to do so shall be a material breach of this Lease. The
ten day notice specified in the preceding sentence shall insofar as not prohibited by law,
constitute full satisfaction of notice of default provisions required by law or ordinance.

ARTICLE I5. USE

     The Premises may be used and occupied only for the purposes specified in Section 1.10 and for no
other purpose. Tenant shall not use or permit the use of the Premises in any manner that will
disturb any other tenant in the Building or Complex, or obstruct or interfere with the rights of
other tenant or occupants of the Building or Complex, or injure or annoy them or create any
unreasonable smells, noise or vibrations (taking into account the nature and tenant-mix of the
Building). Tenant shall not allow the Premises to be used for any unlawful or objectionable
purpose, nor shall Tenant cause, maintain, or permit any nuisance or waste in, on or about the
Premises, Building or Complex.

ARTICLE 16. COMPLIANCE WITH LAWS AND REGULATIONS

     16.1 Tenant’s Obligations. At its sole cost and expense, Tenant shall comply with all of the
requirements of all municipal, state, federal, and quasi-governmental authorities and utility

	 	 	 
	 

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providers now in force, or which may hereafter be in force, affecting the Premises and/or Tenant’s
use thereof including those pertaining to Tenant Parties, and faithfully observe in the use or
occupancy of the Premises all municipal ordinances and state and federal statutes, laws and
regulations now or hereafter in force, including the Environmental Laws and the Americans with
Disabilities Act, 42 U.S.C. Sections 12101-12213 (collectively the “LAWS AND REGULATIONS”).
Tenant’s obligation to comply with and observe the Laws and Regulations shall apply regardless of
whether such Laws and Regulations regulate or relate to Tenant’s particular use of the Premises or
relate to the use of premises in general, and regardless of the cost thereof. A judgment of any
court of competent jurisdiction, or the admission of Tenant in any action or proceeding against
Tenant, whether Landlord be a party thereto or not, that any Laws and Regulations pertaining to the
Premises have been violated, is conclusive of that fact as between Landlord and Tenant.

     16.2 Condition of Premises. Subject to performance of Landlord’s work, if any, as stated in
Exhibit C, Tenant hereby accepts the Premises in “AS IS” condition as of the date of occupancy,
subject to all applicable Laws and Regulations, Restrictions, and requirements in effect during any
part of the Term regulating the Premises, and without representation, warranty or covenant by
Landlord, express or implied, as to the condition, habitability or safety of the Premises, the
suitability or fitness thereof for their intended purposes. Tenant acknowledges that the Premises
in such condition are in good and sanitary order, condition and repair.

     16.3 Hazardous Materials.

          (a) Definitions

               (i) “ENVIRONMENTAL LAWS” mean any federal, State, local or administrative agency ordinance,
law, rule or regulation, order or requirement relating to Hazardous Materials, radioactive
materials, medical wastes, or which deal with air or water quality, air emissions, soil or ground
conditions or other environmental matters of any kind.

               (ii) “HAZARDOUS MATERIALS” means any substance, chemical, waste or materiel which is listed,
defined or otherwise identified as “hazardous” or “toxic” under any of the Environmental Laws,
including formaldehyde, urea, polychlorinated biphenyls, petroleum, petroleum products, crude oil,
natural gas, radioactive materials, radon, asbestos or any by-product of same.

               (iii) “LEASES” mean claims, liability, damages (whether consequential, direct or indirect,
known or unknown, foreseen or unforeseen), penalties, fines, liabilities, losses (including
property damage, diminution in value of Landlord’s interest in the Premises, Building or Complex,
damages for the loss of use of any space or amenity within the Premises, Building, or Complex,
damages arising from any adverse impact on marketing space in the Complex, sums paid in settlement
of claims and any costs and expenses associated with injury, illness or death to or of any person),
suits, administrative proceedings, costs and fees, including Professional Fees and expenses.

	 	 	 
	 

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               (iv) “RELEASE” means generation, discharge, disposal, release, deposit, transport, or storage
of Hazardous Materials

          (b) Use of Hazardous Materials. Tenant shall use and store in the Premises and Complex only
ordinary and general office and cleaning supplies in normal and customary amounts, and such other
Hazardous Materials as have been previously approved by Landlord in writing (which approval may be
withheld in Landlord’s sole and absolute discretion) and which are reasonably necessary for
Tenant’s business. All such Hazardous Materials shall be limited to quantities consistent with the
approved use of the Premises and shall be used, stored and disposed of in full compliance with all
Environmental Laws. Tenant shall not install any tanks under or on the Premises for the storage of
Hazardous Materials without the written consent of Landlord, which may be given or withheld in
Landlord’s sole discretion. Upon the expiration or earlier termination of this Lease, Tenant shall
promptly remove from the Premises, Building and Complex all Hazardous Materials brought on, stored,
used, generated or Released on the Premises, Building or Complex by Tenant or any Tenant Parties.

          (c) Release of Hazardous Materials. Tenant shall promptly give Landlord Notice of any Release
of Hazardous Materials in the
Premises, Building or Complex of which Tenant becomes aware during the Term whether caused by
Tenant or others. At its sole cost and expense, Tenant shall investigate, clean up and remediate
any Release of Hazardous Materials that were caused or created by Tenant or any of Tenant Parties.
Investigation, clean up and remediation may be performed only after Tenant has Landlord’s written
approval of the remediation plan Tenant may respond immediately to an emergency without first
obtaining Landlord’s written consent. All clean up and remediation shall be done in compliance with
Environmental Laws and to the reasonable satisfaction of Landlord.

          (d) Inspection and Testing by Landlord. At reasonable times during the term of this Lease,
Landlord may inspect the Premises and conduct tests to determine whether Tenant is in compliance
with the provisions of this Article 16. Except in case of emergency, Landlord shall give reasonable
notice to Tenant before conducting any inspections or tests. Tenant shall pay the cost of any
inspections or tests that discloses any violation by Tenant or Tenant Parties of the terms and
provisions of Article 16.

          (e) Liability. It is the express intention of the Parties that Tenant shall be liable under
Section 16.3 for any and all conditions which were caused or created by Tenant or any Tenant
Parties, whenever created or caused. Tenant shall not enter into any settlement agreement, consent
decree or other compromise with respect to any claims relating to any Hazardous Materials in any
way connected to the Premises without first (i) notifying Landlord of Tenant’s intention to do so
and affording Landlord the opportunity to participate in any such proceedings, and (ii) obtaining
Landlord’s written consent.

     16.4 Indemnity. Tenant shall indemnify and hold harmless Landlord and Landlord Parties, from
and against all Losses arising from or related to (a) any violation or alleged violation by Tenant
or any Tenant Parties of any Laws and Regulations or the Environmental Laws; (b) any liability
under any Laws and Regulations or the Environmental Laws arising out of Hazardous Materials that
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or any Tenant Parties; (c) any breach of the provisions of Article 16 by Tenant or any Tenant
Parties; or (d) any Release of Hazardous Materials on the Premises, Building or Complex by Tenant
or Tenant Parties. Tenant shall also reimburse Landlord costs of cleanup, remediation, removal and
restoration that are in any way related to any matter covered by the foregoing indemnity. Tenant’s
obligations under this Section survive the expiration or termination of the Lease.

ARTICLE 17. UTILITIES

     17.1 Payment by Tenant. Tenant, from the earlier of the time it first enters the Premises for
the purpose of setting fixtures, or from the commencement of this Lease, and throughout the Term,
shall pay all charges including connection fees for water, gas, heat, sewer, power, cable,
telephone cabling and services and any other utility supplied to or consumed in or on the Premises.
Tenant shall not allow refuse, garbage or trash to accumulate outside of the Premises except on the
day of scheduled scavenger pick-up services, and then only in areas designated for that purpose by
Landlord. Landlord shall not be responsible or liable for any interruption or failure in utility,
refuse or telecommunication services, nor shall such interruption or failure affect the
continuation or validity of this Lease.

     17.2 Separate Meters. Landlord reserves the right to install separate meters for any utility
servicing the Premises for which a meter is not presently installed, in which event Tenant shall
make payments, when due, directly to the utility involved.

     17.3 Joint Meters. For any utility services not separately metered to Tenant, Tenant shall pay
a proportion to be determined by Landlord of all charges jointly metered with other leased premises
or occupants in the Complex. All payments to Landlord in respect thereof shall be due within ten
days after receipt of the billing by Tenant as Additional Rent.

ARTICLE 18. ALTERATIONS

     18.1 Consent of Landlord; Ownership. Tenant shall not make or allow alterations, additions or
improvements, including any that result in increased telecommunication demands or require the
addition of new conduit, communication or computer wires, cables or related devises or expand the
number of telephone or communication lines dedicated to the Premises by the Building’s
telecommunication design, (“ALTERATIONS”) to the Premises without the prior written consent of
Landlord. Tenant may not make any Alterations that affect structural elements of the Building. Upon
expiration or termination of this Lease, any Alterations except trade fixtures shall become a part
of the realty and belong to Landlord. Except as otherwise provided in this Lease, Tenant shall have
the right to remove its trade fixtures placed upon the Premises provided that Tenant restores the
Premises as indicated below.

     18.2 Requirements. Landlord may condition its consent for any Alterations upon Tenant
complying at its sole coat and expense with reasonable conditions and requirements, including the
preparation of all construction plans, drawings and specifications for approval by Landlord; the
use of contractors and subcontractors approved by Landlord; the delivery of performance and payment
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Landlord of duplicate originals of all as-built drawings. Tenant shall obtain all necessary permits
as its sole obligation and expense, and strictly comply with the following requirements:

          (a) Following approval by Landlord of Alterations, Tenant shall give Landlord at least ten
days’ prior Notice or commencement of work in the Premises so that Landlord may post notices of
non-responsibility in or upon the Premises as provided by law;

          (b) The Alterations must use materials of at least equal quality to Tenant Improvements at the
Commencement Date, and must be performed in compliance with all laws, ordinances, rules and
regulation now or hereafter in effect and in a manner such that they will not interfere with the
quiet enjoyment of the other tenants in the Complex; and

          (c) All costs and expenses incurred by Landlord in altering, repairing or replacing any
portion of the Premises, Building or Complex in connection with approving any Alterations shall be
paid solely by Tenant to Landlord prior to commencing any Alterations.

     18.3 Liens. Tenant will keep the Premises and the Complex free from any liens arising out of
any Alterations done by Tenant. If a mechanic’s or other lien is filed against the Premises,
Building or Complex through Tenant, Landlord may demand that Tenant furnish a satisfactory lien
release bond of one hundred fifty percent of the amount of the contested lien claim. Such bond must
be posted ten days after Notice from Landlord. In addition, Landlord may require Tenant to pay
Landlord’s attorneys’ fees and costs in participating in any action contesting such lien, or the
foreclosure thereof, if Landlord elects to do so. Landlord may pay the claim prior to the
enforcement thereof, in which event Tenant shall reimburse Landlord in full, including attorneys’
fees, for any such expense, as Additional Rent, with the next due Rent payment.

ARTICLE 19. MAINTENANCE AND REPAIRS

     19.1 Obligations of Landlord and Tenant. At its cost and expense, Tenant shall maintain the
Premises in good condition and repair including all necessary replacements. Tenant shall maintain
the appearance of the Premises in a manner consistent with the character, use and appearance of the
Complex. Subject to the obligations of Tenant under this Article and Article 16, Landlord will
perform all necessary repairs, maintenance and replacement of the foundation, roof and structural
parts of the Building. The cost thereof will be paid by Landlord and reimbursed by Tenant on a pro
rata basis in the manner provided in this Lease with respect to Common Area Costs, including
amortization of Capital Costs. At its expense, Tenant shall maintain all utilities, fixtures and
mechanical equipment within, or otherwise serving, the Premises in good order, condition and
repair. In the case of equipment installed by Landlord for Tenant, or installed by Tenant to be the
property of Landlord, such as heating, ventilating and air conditioning equipment, or other
mechanical equipment, at its expense, Tenant shall maintain a service contract for its regular
maintenance with a service company acceptable to Landlord. Tenant shall not place anything on the
roof or penetrate the roof without the consent of Landlord, which consent may be withheld in
Landlord’s sole discretion.

     19.2 HVAC System. Notwithstanding the provisions of Section 19.1, Landlord may elect at any
time upon Notice to Tenant to perform the maintenance of the heating, ventilating

	 	 	 
	 

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and air conditioning system (hereinafter “HVAC”) for the account of Tenant. In such event, Tenant
shall pay as Additional Rent the full cost of the maintenance contract for the Premises HVAC within
ten days of receipt of billing from Landlord, as well as for costs of necessary repair or
replacement of parts, in the reasonable judgment of Landlord. Landlord may, at its option, elect to
have the
HVAC in the Premises maintained in common with other equipment in the Complex. If so, Tenant shall
pay its Pro Rata Share of the maintenance costs.

     The maintenance contract on the HVAC, extended warranties and any repairs and replacements not
covered by the maintenance contract or warranty shall be included in the charges allocated to
Tenant. Landlord may elect to replace the HVAC system, if necessary, and in such event the cost
thereof shall be treated as provided in Article 6. Tenant shall pay as Additional Rent to Landlord,
within ten days after receipt of billing, its pro rats share of such amortization, established on
an equitable basis as set forth in the prior paragraph.

     19.3 Waiver. Tenant waives all rights it may have under law or at equity to make repairs or to
perform any obligation of Landlord arising under this Lease at Landlord’s expense.

ARTICLE 20. CONDEMNATION

     20.1 Definitions.

          (a) “CONDEMNATION” means (i) the exercise of any governmental power, whether by legal
proceedings or otherwise, by a Condemnor and/or (ii) a voluntary sale by Landlord to a Condemnor,
under threat of Condemnation or while legal proceedings for Condemnation are pending.

          (b) “DATE OF TAKING” means the date the condemnor has the right to possession of the property
being condemned.

          (c) “AWARD” means all compensation, sums or anything of value awarded, paid or received on a
total or partial condemnation.

          (d) “CONDEMNOR” means any person or entity having the power of condemnation.

     20.2 Total Taking. If the Premises are totally taken by condemnation, this Lease shall
terminate on the Date of Taking.

     20.3 Partial Taking; Common Area.

          (a) If a portion of the Premises is taken by condemnation, this Lease shall remain in effect,
except that Tenant can elect to terminate this Lease if 20 percent or more of the total number of
square feet in the Premises is taken.

          (b) If any part of the Common Area of the Complex is taken by condemnation, this Lease shall
remain in full force and effect so long as there is no material interference with the recess to the
Premises, except that if 35 percent or more of the Common

	 	 	 
	 

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Area is taken by condemnation, either party shrill have the election to terminate this Lease
pursuant to this Section.

          (c) If 30 percent or more of the Building in which the Premises are located is taken, Landlord
shall have the election to terminate this Lease in the manner prescribed herein.

     20.4 Termination or Abatement. If either party elects to terminate this Lease under the
provisions of Section 20.3 (such party is hereinafter referred to as the “TERMINATING PARTY”), it
must terminate by giving Notice to the other party (the “NONTERMINATING PARTY”) within 30 days
after the nature and extent of the taking have been determined (the “DECISION PERIOD”). The
Terminating Party shall notify the Nonterminating Party of the date of termination, which date
shall not be earlier than sixty days after the Terminating Party given Notice of its election to
terminate nor later than the date of taking. If Notice of Termination is not given within the
Decision Period, the Lease shall continue in full force and effect. The Minimum Monthly Rent shall
be computed as the Minimum Monthly Rent in effect prior to the taking times a fraction of which the
numerator is the number of square feet remaining in the Premises and the denominator is the number
of square feet in the Premises prior to the taking.

     20.5 Restoration. If there is a partial taking of the Premises and this Lease remains in full
force and effect, Landlord shall make all necessary restoration so that the Premises is returned as
near as practical to its condition immediately prior to the taking, but in no
event shall Landlord be obligated to expend more for such restoration than the extent of funds
actually paid to Landlord by the condemnor.

     20.6 Award. Any award arising from the condemnation or the settlement thereof shall belong and
be paid to Landlord, including any award for the leasehold value. Tenant may seek a separate award
for Tenant’s trade fixtures, tangible personal property and relocation expenses, if specified in
the award by the condemning authority and so long as it does not reduce Landlord’s award.

ARTICLE 21. PARKING

Landlord shall have the right by Notice to Tenant, to specify areas of the Complex for employee
parking. If Landlord so designates an employee parking area, then automobiles of Tenant, its
employees and agents must park within the parking areas specified by Landlord as employee parking.
Tenant shall be entitled to park in common with other tenants of Landlord. Tenant agrees not to
overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the
use of parking facilities. Landlord reserves the right in its sole discretion to determine if
parking facilities are becoming crowded and to allocate and assign parking spaces among Tenant and
other tenants. Upon request, Tenant shall provide Landlord with the license plate numbers of its
employees. Tenant shall not at any time park its trucks or other delivery vehicles in the Common
Area, except in such areas designated by Landlord. Landlord hereby agrees that Tenant shall have
the non-exclusive use of not less than thirty-seven (37) parking spaces in the Complex.

	 	 	 
	 

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ARTICLE 22. ENTRY BY LANDLORD

Tenant shall permit Landlord and any mortgagee under a mortgage or beneficiary under a deed of
trust encumbering the Building and their agents (each a “LENDER”) to enter the Premises at all
reasonable times for the purpose of (a) inspecting them, (b) maintaining the Building, (c) making
repairs, replacements, alterations or additions to any portion of the Building, including the
erection and maintenance of such scaffolding, canopies, fences and props as may be required, (d)
posting notices of non-responsibility for alterations, additions or repairs, (e) placing upon the
Building any usual or ordinary “for sale” signs and showing the space to prospective purchasers,
investors and lenders, or (f) placing on the Premises “to lease” signs or marketing and showing the
Premises to prospective tenants at any time Tenant is in uncured default hereunder or otherwise
within 180 days prior to the expiration of this Lease, without any rebate of Rent and without any
liability to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned.

ARTICLE 23. SIGNS

Tenant shall not place on the Premises or Complex any exterior signs or advertisements nor any
interior signs or advertisements that are visible from the exterior of the Premises, without
Landlord’s prior written consent, which Landlord may withhold in its sole discretion. The cost of
installation and maintenance of any approved signs shall be at the sole expense of Tenant. At the
end of the Term, Tenant shall remove all its signs and damage caused by the removal shall be
repaired at Tenant’s expense.

ARTICLE 24. DEFAULT

     24.1 Tenant Default. The occurrence of any of the following shall constitute a default and
breach of this Lease by Tenant:

          (a) Any failure by Tenant to pay when due the Rent or any other required payment;

          (b) Tenant’s failure to observe or perform any Lease provision where such failure continues
for ten days after Notice thereof to Tenant; provided, if the nature of the default is such that it
cannot reasonably be cured within the ten-day period, Tenant shall not be deemed in default if, in
the ten-day period, Tenant commences to cure and thereafter diligently prosecute the cure to
completion;

          (c) If at any time during the Term there shall be filed by or against Tenant a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of
all or a portion of Tenant’s property, or if a receiver or trustee takes possession of any of the
assets of Tenant, or if the leasehold interest herein passes to a receiver, or if Tenant makes an
assignment for the benefit of creditors or petitions for or enters into an arrangement;

          (d) Any attempted Transfer in violation of Article 7; or

	 	 	 
	 

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          (e) Tenant fails to take possession of the Premises on the Commencement Date or Tenant vacates
or abandons the Premises.

     24.2 Landlord Default. Landlord shall be in default if it fails to observe or perform any of
the covenants, conditions or provisions of this Lease for a period longer than 30 days after Notice
from Tenant; provided, however, that if more than 30 days is required for performance, Landlord
shall not be in default if it commences performance within 30 days of Tenant’s Notice and
thereafter completes such performance diligently and within a reasonable time.

ARTICLE 25. REMEDIES UPON DEFAULT

     25.1 Termination and Damages. In the event of any Tenant default, in addition to any other
remedies available to Landlord herein or at law or in equity, Landlord shall have the immediate
option to terminate this Lease and all rights of Tenant hereunder by giving Notice of such
intention to terminate. If Landlord shall elect to so terminate this Lease, then Landlord may
recover from Tenant:

          (a) The worth at the time of award of any unpaid Rent which had been earned at the time of
such termination; plus

          (b) The worth at the time of award of the amount by which the unpaid Rent which would have
been earned after termination until the time of award exceeds the amount of such Rent loss Tenant
proves could have been reasonably avoided. As used in subsections 25.1(a) and (b) the “worth at the
time of award” is computed by including interest at ten percent per annum; plus

          (c) The worth at the time of award (computed by discounting such amount at the discount rate
at the time of award of the Federal Reserve Bank for the State plus one percent) of the amount by
which the unpaid Rent for the balance of the term after the time of award exceeds the amount of
such Rent loss that Tenant proves could be reasonably avoided; plus

          (d) Any other amount necessary to compensate Landlord for the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease; and

          (e) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as
may be permitted by applicable State law.

     25.2 Personal Property. In the event of default by Tenant, Landlord shall have the right, with
or without terminating this Lease, to reenter the Premises and remove all persons and property from
the Premises. Such properly may be stored in a public warehouse at the cost of and for the account
of Tenant.

     25.3 Recovery of Rent; Reletting.

          (a) In the event of the abandonment of the Premises by Tenant or if Landlord elects to either
reenter as provided in Section 25.2 or take possession of the Premises pursuant to legal proceeding
or pursuant to any notice provided by law, then if Landlord does not elect to

	 	 	 
	 

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terminate this Lease as provided in Section 25.1, this Lease shall continue in effect, and Landlord
may enforce all its rights and remedies under this Lease, including Landlord’s right from time to
time, without terminating this Lease, to either recover all Rent as it becomes due or relet the
Premises or any part thereof for such term or terms and at such Rent and upon such other terms and
conditions as Landlord, in its sole discretion may deem advisable with the right to make
alterations and repairs to the Premises. Acts of maintenance or preservation or efforts to relet
the Premises or the appointment of a receiver upon initiation of Landlord or other legal proceeding
granting Landlord or its agent possession in protect Landlord’s interest under this Lease shall not
constitute a
termination of Tenant’s right to possession.

          (b) If landlord elects to relet, the Rent received by Landlord from reletting shall be applied
in the following order: (1) to the payment of any indebtedness other than Rent due hereunder from
Tenant; (2) to the payment of any cost of reletting, including brokerage fees; (3) to the payment
of the cost of any alterations and repairs to the Premises; (4) to the payment of Rent due and
unpaid hereunder; and (5) any residue shall be held by Landlord and applied in payment of future
Rent as the same may become due and payable hereunder. If the portion of Rent received under clause
(b) (4) is less than the Rent payable during that month by Tenant hereunder, Tenant shall pay such
deficiency to Landlord immediately upon demand. Tenant shall also pay to Landlord when ascertained,
any costs and expenses incurred by Landlord in such reletting or in making such alterations and
repairs not covered by the Rents received from such reletting.

          (c) No reentry or taking possession of the Premises or any other action under this Section
shall be construed as an election to terminate this Lease unless a Notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by landlord because of any default by Tenant,
Landlord may at any time after such reletting elect to terminate this Lease for any such default.

          (d) Landlord has the remedy described in California Civil Code (“CODE”) Section 1951.4
(Landlord may continue Lease in effect after Tenant’s breach and abandonment and recover Rent as it
becomes due, if Tenant has right to sublet or assign, subject only to reasonable limitations).

     25.4 No Waiver. Efforts by Landlord to mitigate the damages caused by Tenant’s default in this
Lease shall not constitute a waiver of Landlord’s right to recover damages hereunder.

     25.5 Curing Defaults. If Tenant fails to repair, maintain, keep clean, or service any of the
Premises or fails to perform any other Lease obligation, then alter having given Tenant reasonable
Notice of any failure and a reasonable opportunity to remedy the failure, which in no case shall
exceed ten days, Landlord may enter upon the Premises and perform or contract for the performance
of the repair, maintenance, or other Tenant obligation, and Tenant shall pay Landlord as Additional
Rent all direct and indirect costs incurred in connection therewith within ten days of receiving a
bill therefor from Landlord.

	 	 	 
	 

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     25.6 Cumulative Remedies. The various rights, options, election powers, and remedies of
Landlord contained in this Article and elsewhere in this Lease are cumulative. None of them is
exclusive of any others or of any legal or equitable remedy that Landlord might otherwise have in
the event of breach or default, and the exercise of one right or remedy by Landlord will not in any
way impair its right to any other right or remedy.

ARTICLE 26 FORFEITURE OF PROPERTY

Tenant agrees that as of the date of termination of this Lease or repossession of the Premises by
Landlord, by way of default or otherwise, Tenant shall remove all personal property in accordance
with applicable law. The Parties agree that any property of Tenant not removed by such date shall,
at the option of Landlord, be deemed abandoned by Tenant.

ARTICLE 27. SURRENDER OF LEASE

The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall
not work as a merger. At the election of Landlord, it shall either terminate all or any existing
subleases or subtenancies or operate as an assignment to Landlord of any or all such subleases or
subtenancies. Tenant shall return the Premises to Landlord at the expiration or earlier termination
of this Lease in good and sanitary order, condition and repair, free of rubble and debris, broom
clean, reasonable wear and tear excepted. Tenant shall ascertain from Landlord at least 30 days
prior to the termination of this lease, whether Landlord desires the Premises, or any part thereof,
restored to its condition prior to the making of Alterations, installations and improvements, and
if Landlord shall so desire, then Tenant shall forthwith restore said Premises or the designated
portions thereof, as the case may be, to its original condition, entirely at its own expense,
excepting normal wear and tear. All damage to the Premises caused by the removal of trade fixtures
and personal property that Tenant is permitted to remove under the terms of this Lease shall be
promptly repaired by Tenant at its sole cost and expense.

ARTICLE 28. LANDLORD’S EXCULPATION

In the event of default, breach, or violation by Landlord or Landlord Parties of any of Landlord’s
obligations under this Lease, Landlord’s liability to Tenant shall be limited to its ownership
interest in the Building or the proceeds of a public sale of such interest pursuant to foreclosure
of a judgment against Landlord. Landlord shall not be personally liable for any deficiency beyond
its interest in the Building.

ARTICLE 29. NOTICES

All notices required or permitted to be given under this Lease (“NOTICE”), shall be in writing and
shall be given or made to the respective party at the address or number set forth in Sections 1.2
and 1.3 of this Lease by (i) personal service; (ii) mailing by registered or certified mail, return
receipt requested, postage prepaid; (iii) reputable courier which provides written evidence of
delivery; or (iv) facsimile with the date and time imprinted during transmission. Either Party may
change its address for Notice by a Notice sent to the other. Each Notice shall be deemed given or
made upon receipt or refusal to receive.

	 	 	 
	 

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ARTICLE 30. SUBORDINATION

     30.1 Priority of Encumbrances. This Lease shall be subordinate to any ground lease, first
mortgage, or first deed of trust upon the real property of which the Premises are a part (each a
“SECURITY INSTRUMENT”) and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Tenant’s right to quiet possession of the Premises shall not be disturbed if Tenant
is not in default and so long as Tenant shall pay the Rent and observe and perform all the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If a
Lender or ground lessor gives Tenant Notice of its election to have this Lease prior to the lien of
its Security Instrument, this Lease shall be deemed prior to such Security Instrument, whether this
Lease is dated prior or subsequent to the date of said Security Instrument or the date of recording
thereof.

     30.2 Execution of Documents. Tenant agrees that no documentation other than this Lease is
required to evidence such subordination, however, Tenant agrees to execute any documents required
to effectuate such subordination and any attornment or to make this Lease prior to the lien of any
Security Instrument, as the case may be. Tenant agrees that its failure to execute these documents
may cause Landlord serious financial damage by causing the failure of a financing or sale
transaction.

     30.3 Attornment. If a Lender or ground lessor enforces its remedies provided by law or under
the pertinent Security Instrument and succeeds to Landlord’s interest in the Premises (a
“SUCCESSOR-IN-INTEREST”), Tenant shall, upon request of any Successor-in-Interest, automatically
become the tenant of said Successor-in-Interest without change in the terms or other provisions of
this Lease. The Successor-in-Interest shall not be (i) bound by any payment of Rent for more than
30 days in advance; (ii) bound by any modification or amendment of this Lease to shorten the term
or decrease the Minimum Monthly Rent without the consent of the Lender or ground lessor; (iii)
liable for any act or omission of Landlord or any previous landlord; (iv) bound by any obligation
of Landlord under the Lease that is not reasonably susceptible to performance by the
Successor-in-Interest; (v) subject to any offset, defense, recoupment or counterclaim that Tenant
may have given to Landlord or any previous landlord; or (vi) liable for any deposit that Tenant may
have with respect to Landlord or previous landlord that has not been transferred to the
Successor-in-Interest. Within ten days after Notice of a request by Successor-in-Interest, Tenant
shall deliver an executed attornment agreement in a form required by such Successor-in-Interest.

ARTICLE 31. ESTOPPEL CERTIFICATES

     31.1 Execution by Tenant. Within ten days after receipt of Notice by Landlord, Tenant shall
execute and deliver to Landlord an estoppel certificate acknowledging such facts regarding this
Lease as Landlord may reasonably require, including that (i) this Lease is in full force and
effect, binding and enforceable in accordance with its terms and unmodified (or if modified,
specifying the written modification documents); (ii) no default exists on the part of Landlord or
Tenant under this Lease; (iii) there are no events which with the passage of time, or the giving of
notice, or both, would create a default under this Lease; (iv) no Rent in excess of one month’s

	 	 	 
	 

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Rent has been paid in advance; (v) Tenant has not sold, assigned, transferred, mortgaged or pledged
this Lease or the Rent nor has it received notice of same; (vi) Tenant has no defense, setoff,
recoupment or counterclaim against Landlord, and (vi) such other matters as Landlord may reasonably
request. Landlord, any Lender, or any prospective purchaser of the Building or Complex may rely
upon such estoppel certificate. Failure to comply with this Article shall be a breach of this Lease
by Tenant giving Landlord all rights and remedies under Article 25 hereof, as well as a right to
damages caused by the loss of a loan or sale which may result from such failure by Tenant.

     31.2 Financing, Sale or Transfer. If Landlord desires to finance, refinance, sell, ground
lease or otherwise transfer the Premises, Building or Complex, or any part thereof, Tenant agrees,
within ten days of request therefor by Landlord, to deliver to Landlord and to any lender or to any
prospective buyer, ground lessor or other transferee designated by Landlord financial statements of
Tenant and any parent company as may be reasonably required by such party. Such statements shall
include the past three years’ financial statements of Tenant. All such financial statements shall
be received by Landlord in confidence and shall be used only for the purposes herein set forth.

ARTICLE 32. LENDER PROTECTION

Tenant agrees to give any Lender, by registered mail, a copy of any notice of default served upon
Landlord, provided that prior to such notice Tenant has been given Notice of the address of such
Lender. Tenant agrees that if Landlord fails to cure the default within the time provided for in
this Lease, Lender shall have an additional 30 days within which to cure the default or, if the
default cannot be cured within that time, then such additional time as may be necessary if, within
the 30 days, Lender has commenced and is diligently pursuing the remedies necessary to cure the
default (including commencement of foreclosure proceedings, if necessary). This Lease shall not be
terminated while such remedies are being pursued.

ARTICLE 33. BANKRUPTCY

If at any time during the Term (1) there shall be filed by or against Tenant, in any court,
pleadings to initiate a bankruptcy petition of any kind, or the appointment of a receiver or
trustee of all or a portion of Tenant’s assets, or (2) if a receiver or trustee takes possession of
any of the assets of Tenant, or if the leasehold interest herein passes to a receiver or trustee,
or (3) if Tenant makes an assignment for the benefit of creditors or petitions for or enters into
an arrangement with creditors (any of which are referred to herein as a “BANKRUPTCY EVENT”), then
the following provisions shall apply:

          (a) Any receiver, assignee for the benefit of creditors (“assignee”), trustee of any kind, or
Tenant as debtor-in-possession (“debtor”) shall either expressly assume or reject this Lease within
sixty days following the assignment to the Assignee or the filing of the pleading initiating the
receivership or bankruptcy ease. All such parties agree that they will not seek Court permission to
extend such time for assumption or rejection. Failure to assume or reject in the time set forth
herein shall mean that the Lease may be terminated at Landlord’s option.

	 	 	 
	 

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          (b) if the Lease is assumed by a debtor, receiver, assignee or trustee, such party shall
immediately after such assumption (i) cure any default or provide adequate assurances that defaults
will be promptly cured; (2) pay Landlord for actual pecuniary less or provide adequate assurances
that compensation will be made for such loss; and (3) provide adequate assurance of future
performance.

          (c) Where a default exists under the Lease, the party assuming the Lease may not require
Landlord to provide services or supplies incidental to the Lease before its assumption by such
trustee or debtor, unless Landlord is compensated under the terms of the Lease for such services
and supplies provided before the assumption of such Lease.

          (d) Landlord reserves all remedies available to Landlord in Article 26 or at law or in equity
in respect of a Bankruptcy Event by Tenant, to the extent such remedies are permitted by law.

ARTICLE 34. MISCELLANEOUS PROVISIONS

     34.1 Captions. The captions of this Lease are for convenience only and are not a part of this
Lease and do not in any way limit or amplify the terms and provisions of this Lease.

     34.2 Construction. Whenever the singular number is used in this Lease and when required by the
context, the same shall include the plural, the plural shall include the singular. Items following
the terms “include” or “including” are descriptive only and not by way of limitation. All approvals
to be given by any party to the Lease are not to be unreasonably withheld, conditioned or delayed
unless specifically indicated to the contrary in the Lease.

     34.3 Modifications. This instrument contains all the agreements, conditions and
representations made between the Parties and may only be modified by a written agreement signed by
all of the Parties.

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

     34.5 No Offer. The preparation and submission of a draft of this Lease by either party to the
other shall not constitute an offer, nor shall either party be bound to any terms of this Lease or
the entirety of the Lease itself until the Parties have fully executed a final document and an
original signature document has been received by the Parties. Until such time as described in the
previous sentence, either party is free to terminate negotiations with no obligation to the other.

     34.6 Light, Air and View. No diminution of light, air, or view by any structure, whether or
not erected by Landlord, shall entitle Tenant to any reduction of Rent, result in any liability of
Landlord to Tenant, or in any other way affect this Lease or Tenant’s obligations hereunder.

     34.7 Public Transportation Information. If required by law, Tenant shall establish and
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employed on the Premises. Tenant shall comply with all requirements of any local transportation
management ordinance.

     34.8 Rules and Regulations. Tenant will comply with all reasonable Rules and Regulations
adopted and promulgated by Landlord and applicable to all tenants in the Building or Complex. The
“RULES AND REGULATIONS” concerning the Complex are attached hereto as Exhibit E. Landlord reserves
the right to change the Rules and Regulations affecting the Complex. Landlord shall have no
liability for violation of any Rules or Regulations by any other tenant in the Complex nor shall
such violation or waiver thereof excuse Tenant’s compliance. All delivery and dispatch of supplies,
fixtures, equipment and furniture shall be by means and during hours established by Landlord.

     34.9 Joint and Several Liability. Should Tenant consist of more than one person or entity,
they shall be jointly and severally liable on this Lease.

     34.10 Survival. All obligations of Tenant which may accrue or arise during the Term of this
Lease or as a result of any act or omission of Tenant during the Term shall, to the extent they
have not been fully performed, satisfied or discharged, survive the expiration or termination of
this Lease.

     34.11 Brokers. Landlord and Tenant each represent and warrant to the other party that it has
not authorized or employed, or acted by implication to authorize or employ, any real estate broker
or salesmen to act for it in connection with this Lease, except for the Broker identified in
Article 1. Landlord and Tenant shall each indemnify, defend and hold the other party harmless from
and against any and all claims by any real estate broker or salesman whom the indemnifying party
authorized or employed, or acted by implication to authorize or employ, to act for the indemnifying
party in connection with this Lease.

     34.12 Non-liability of Landlord. Except as otherwise expressly stated in this Lease, and only
to the extent so stated, the consent or approval, whether express or implied, or the act, failure
to act or failure to object, by Landlord in connection with any plan, specification, drawing,
proposal, request, act, omission, notice or communication (collectively “act”) by or for, or
prepared by or for,
Tenant, shall not create any responsibility or liability on the part of Landlord, and shall
not constitute a representation by Landlord, with respect to the completeness, sufficiency,
efficacy, propriety, quality or legality of such act. Notwithstanding anything to the contrary
contained in this Lease, if any provision of this Lease expressly or impliedly obligates Landlord
not to unreasonably withhold its consent or approval, an action for declaratory judgment or
specific performance will be Tenant’s sole right and remedy in any dispute as to whether Landlord
has breached such obligation.

     34.13 Attorneys’ Fees. In the event of litigation or arbitration between the Parties with
respect to this Lease, then all costs and expenses, including all reasonable fees of appraisers,
accountants, experts, consultants and attorneys (collectively “PROFESSIONAL FEES”) incurred by the
prevailing party shall be paid by the other party. If Landlord is named as a defendant, or
requested or required to appear as a witness or produce any documents in any suit brought by Tenant
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hereunder, Tenant shall pay Landlord its costs and expenses incurred in such suit, including its
actual Professional Fees.

     34.14 Effect of Waiver. Landlord’s waiver of any breach of a Lease provision is not a waiver
of such Lease provision or any subsequent breach of the same or any other term, covenant or
condition of the Lease. Subsequent acceptance of Rent by Landlord is not a waiver of any preceding
breach by Tenant of any provision of this Lease, other than the failure of Tenant to pay the
particular Rent so accepted, regardless of Landlord’s knowledge the preceding breach at the time of
acceptance of Rent.

     34.15 Holding-Over. If Tenant remains in possession of the Promises after the expiration of
the Term, with Landlord’s written consent, then such holding over shall be construed as a
month-to-month tenancy, subject to all the conditions, provisions and obligations of this Lease (as
applicable to a month-to-month tenancy) as existed during the last month of the Term, except the
Minimum Monthly Rent shall be equal to twice the Minimum Monthly Rent then payable. Such tenancy
may be terminated by either party upon ten days’ Notice prior to the end of any monthly period. Any
option or right to extend, renew or expand shall not be applicable. Landlord’s acceptance of Rent
after such expiration or termination shall not constitute a holdover hereunder or result in a
renewal of this Lease.

     34.16 Binding Effect. The covenants and conditions of this Lease, subject to the provisions as
to assignment, apply to and bind the heirs, successors, executors, administrators and assigns the
Parties.

     34.17 Time of the Essence. Time is of the essence of this Lease.

     34.18 Release of Landlord. If Landlord sells its interest in the Building or Complex, then
from and after the effective date of the sale or conveyance, Landlord shall be released and
discharged from any and all obligations and responsibilities under this Lease except those already
accrued.

     34.19 Transfer to Purchaser. If Tenant provides security fm the faithful performance of any of
its covenants of the Lease, Landlord may transfer the security to a purchaser of the reversion, if
the reversion be sold, and thereupon Landlord shall be discharged from any further liability in
reference thereto.

     34.20 Waiver by Tenant. The Parties have negotiated numerous provisions of this Lease, some of
which are covered by statute. Whenever a provision of this Lease and a provision of any statute or
other law cover the same matter, the provisions of this Lease shall control. Therefore, Tenant
waives (for itself and all persons claiming under Tenant) the provisions of Code Sections 1932(2)
and 1933(4) with respect to the destruction of the Premises; Code Sections 1941 and 1942 with
respect to Landlord’s repair duties and Tenant’s right to repair, Code Section 1995.310 with
respect to remedies for breach of contract; Code Section 3275 and CCP Section 1179 relating to
rights of redemption; and CCP Section 1265.130, allowing either party a Court petition to terminate
this Lease in the event of a partial taking of the

	 	 	 
	 

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Premises by condemnation. This waiver applies to future statutes enacted in addition to or in
substitution for the statutes specified.

     34.21 Waiver of Jury Trial. Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the Parties against the other on any matters
whatsoever arising out of this Lease, or any other claims.

     34.22 Authorization. If Tenant is a corporation, partnership or limited liability company,
each person executing this Lease on behalf of such entity represents and warrants (i) that he or
she is duly authorized to execute this Lease on behalf of such entity, (a) if a corporation, in
accordance with either a duty adopted resolution of its Board of Directors or its Bylaws; (b) if a
partnership, in accordance with its partnership agreement; or (c) if a limited liability company,
in accordance with its limited liability company agreement and (ii) that this Lease is binding upon
Tenant in accordance with its terms.

     34.23 Conversion to a Limited Liability Entity. If Tenant is a partnership (either general or
limited), joint venture, cotenancy, joint tenancy or an individual, Tenant may not convert (the
“CONVERSION”) the Tenant entity or person into any type of entity which possesses the
characteristic of limited liability such as, by way of example only, a corporation, a limited
liability company, limited liability partnership or limited liability limited partnership (a
“LIMITED ENTITY”) without the consent of Landlord, subject to fulfillment of the conditions below.
The following are conditions precedent to Landlord’s obligation to act reasonably with respect to a
Conversion to a Limited Entity: (i) the Limited Entity assumes all of Tenant’s liabilities and is
assigned all of Tenant’s assets as of the effective date of the Conversion; (ii) as of the
effective date of the Conversion, the Limited Entity shall have a net worth (“NET WORTH”), which is
not less than either (a) Tenant’s Net Worth on the date of execution of the Lease or (b) Tenant’s
Net Worth as of the date Tenant requests consent to the Conversion; (iii) Tenant is not in default
under the Lease; (iv) Tenant delivers to Landlord a satisfactory agreement, executed by each equity
interest holder of Tenant, wherein each agrees to remain personally liable for all of the terms,
covenants and conditions of the Lease; and (v) Tenant reimburses Landlord within ten days of
Landlord’s written demand for any and all reasonable costs and expenses that may be incurred by
Landlord in connection with the Conversion including, without limitation, reasonable attorneys’
fees.

	 	 	 
	 

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     In Witness Whereof, the Parties have executed this Lease as of the date first written above.

	 	 	 	 	 	 	 	 	 
	“LANDLORD”	 	 	 	“TENANT”
	 	 	 	 	 
	BEDFORD PROPERTY
INVESTORS, INC.,	 	 	 	PINE PHOTONICS COMMUNICATIONS, INC.,
	MARYLAND CORPORATION
	 	 	 	A DELAWARE CORPORATION
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	/s/ Hsing Kung
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:
	 	Hsing Kung
	 

	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:
	 	CEO & President
	 

	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:
	 	7/10/00
	 

	 	 	 	 	 	 	 	 

FOR OFFICE USE ONLY:

PREPARED BY: ___

REVIEWED BY: ___

APPROVED BY: ___

	 	 	 
	 

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ADDENDUM NO. 1

LETTER OF CREDIT AS DEPOSIT SECURITY

     This ADDENDUM NO. 1 (this “ADDENDUM”) is made in connection with and is a part of that certain
Lease, dated as of June 30, 2000, by and between Bedford Property Investors, Inc., a Maryland
corporation, as Landlord, and Pine Photonics Communications, Inc., as Tenant, (the “LEASE”).

     1. Definitions and Conflict. All capitalized terms referred to in this Addendum shall have the
same meaning as provided in the
Lease, except as expressly provided to the contrary in this Addendum. In case of any conflict
between any term or provision of the Lease and any exhibits attached thereto and this Addendum,
this Addendum shall control.

     2. Letter of Credit Security Deposit. Pursuant to the terms of the Lease, a Security Deposit
of $307,839.11 is required from Tenant. In lieu of depositing cash for the full amount of the
Security Deposit, Tenant shall deposit a letter of credit for $$307,839.11 (the “MAXIMUM LETTER OF
CREDIT AMOUNT”), with the balance of the Security Deposit in the form of cash. Said letter of
credit shall be in the form of an irrevocable, unconditional and clean standby letter of credit and
otherwise in the form set forth below (the “LETTER OF CREDIT”). The term Security Deposit shall
mean the cash portion of the Security Deposit and the Letter of Credit.

          2.1 Form of Letter of Credit. The Letter of Credit shall be issued by a national bank
acceptable to Landlord in its reasonable discretion, with offices in the San Francisco Bay Area
that will accept and pay on any draw on the Letter of Credit. The Letter of Credit shall be issued
for a term of at least twelve months (with a term during the last year of the Lease Term of at
least one full month following the expiration of the Lease Term) and shall be in a form and with
such content acceptable to Landlord in its sole and absolute discretion. Any Letter of Credit that
Tenant delivers to Landlord in replacement of an existing Letter of Credit shall be in an amount
equal to the replaced Letter of Credit (prior to any draws) so that the cash and Letter of Credit
together equal the amount of the Security Deposit specified in the Lease. Any such replacement
Letter of Credit shall be delivered to and received by Landlord no later than thirty days prior to
the expiration of the term of the letter of Credit then in effect. If Tenant fails to deposit a
replacement Letter of Credit or renew the expiring Letter of Credit, Landlord shall have the right
to draw upon the expiring Letter of Credit for the full amount thereof and hold the same as
Security Deposit; provided, however, that if Tenant provides a replacement Letter of Credit that
meets the requirements of this section, Landlord shall promptly return to Tenant in cash that
amount of the Letter of Credit that had been drawn upon by Landlord. The Letter of Credit shall
expressly permit full and partial draws. If for any reason the Letter of Credit does not permit
partial draws, then Landlord shall have the right to make a full draw on the Letter of Credit,
notwithstanding that the full amount may not be required to cure any default by Tenant. The Letter
of Credit shall designate Landlord as beneficiary and shall be transferable by beneficiary to any
transferee, successor, and assign (including any lender of Landlord) at no cost or expense to
beneficiary. The Letter of Credit shall provide that it may be drawn by Landlord (or its assignee)
upon presentation by Landlord to the issuing bank (at its offices in the San Francisco Bay Area) of
a sight draft(s), together with a written statement executed by Landlord stating that

	 	 	 
	 

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the amount requested is due Landlord under the Lease. The amount of the draw requested by Landlord
shall be payable by the bank without further inquiry or any other documentation or further action
required of the bank, landlord, or Tenant. All costs and expenses to obtain the Letter of Credit
and all renewals shall be borne by Tenant.

          2.2 Landlord’s Draw. If the Letter of Credit is drawn upon by Landlord, Tenant shall, within
ten days after written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to amount required under the Lease and this Addendum. At all times the
Security Deposit, whether in the form of cash and/or Letter of Credit, shall be in the amount
specified in the Lease. The use, application or retention of the Letter of Credit, or any portion
thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided
by this Lease or by law, it being intended that Landlord shall not first be required to use all or
any part of the Letter of Credit or cash portion of the Security Deposit, and such use shall not
operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant shall
not be entitled to any interest on the cash portion of the Security Deposit. The exercise of any
rights of Landlord to the Security Deposit shall not constitute a waiver of nor relieve Tenant from
any liability or obligation for any default by Tenant. If Landlord draws upon the entire amount of
the Letter of Credit, Tenant may deliver a replacement Letter of Credit to Landlord, instead of
depositing cash with Landlord, equal to the original amount of the Letter of Credit.

          2.3 Return or Transfer of Letter of Credit. Within thirty days after the expiration or earlier
termination of the Lease and provided Tenant has complied with all of its obligations under the
Lease, Landlord shall promptly return the refundable portion of the Security Deposit, including the
Letter of Credit, to Tenant. In the event of a transfer of the Premises, Building or Project by
Landlord, Landlord or any subsequent transferor shall deliver the refundable portion of the
Security Deposit, including both the cash portion and the Letter of Credit, to the successor
landlord or transferee.

	 	 	 
	 

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EXHIBIT A

LEGAL DESCRIPTION

REAL PROPERTY in the City of Fremont, County of Alameda, State of California, described as follows:

Lots 5, 6, and 7, Tract 4200, filed August 30, 1979 in Book 112 of Maps, Page 85, Alameda County
Records.

APN Nos.: 519-1680-010 and 519-1680-011-01

	 	 	 
	 

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EXHIBIT B

PLAN OF THE COMPLEX

36

 

EXHIBIT B-1

FLOOR PLAN OF THE PREMISES

(NOT AVAILABLE)

	 	 	 
	 

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EXHIBIT C

CONSTRUCTION OBLIGATIONS

     1. DEFINED TERMS. All capitalized terms referred to in this Exhibit C (this “Agreement”) not
defined below shall have the same meaning as defined in the Lease of which this Agreement forms a
part.

     2. CONSTRUCTION OF TENANT IMPROVEMENTS. Tenant shall construct the Tenant Improvements in
accordance with this Agreement and due approved Construction Plans.

     3. DEFINITIONS. Each of the following terms shall have the following meaning:

     “ARCHITECT” shall mean                     . Architect shall be employed by Tenant and all
costs of Architect will be the responsibility of Tenant as part of the Tenant Improvement Cost.

          “LANDLORD’S ALLOWANCE” shall mean the amount to be contributed by Landlord toward Tenant
Improvement Cost as stated in Section 1.12 of the Lease. Notwithstanding anything to the contrary
contained herein or in the Lease, in no event shall Landlord have any obligation to pay any costs
or expenses incurred in connection with or arising out of the Tenant Improvements in excess of the
Landlord’s Allowance specified herein.

          “BUILDING” shall mean the Building Shell and the Tenant Improvements.

          “BUILDING SHELL” shall mean the basic minimum enclosure of the Building consisting of the
foundation and floors, structural framework, roof coverings, exterior walls and exterior doors and
windows, basic fire sprinkler systems, plumbing system stubs,
underground electrical power stubs, the parking lots and landscaping appurtenant to the Common
Areas, but excluding all Tenant Improvements.

          “CONSTRUCTION PLANS” shall mean the complete plans and specifications for the construction of
the Tenant Improvements, which shall be in substantial compliance with the Approved Preliminary
Plans, consisting of all architectural, engineering mechanical and electrical drawings and
specifications which are required to obtain all building permits, licenses and certificates from
the applicable governmental authority(ies) for the construction of the Tenant Improvements. The
Construction Plans shall be prepared by Architect, and in all respects shall be in compliance with
all applicable laws, rules, regulations, and building codes for the City of Fremont, California.

          “CONTRACTOR” shall mean a California licensed general contractor with experience and expertise
in constructing projects similar to the Tenant Improvements as mutually agreed to by Landlord and
Tenant pursuant to Section 6, below. Contractor shall be responsible for construction of the Tenant
Improvements.

          “PREMISES” shall mean the portion of the Building Shell wherein the Tenant Improvements are to
be constructed. Landlord shall deliver the Premises to Tenant in broom clean condition, with all
building systems existing as of the date of execution of this Lease in

	 	 	 
	 

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good working order and repair, and otherwise in “AS-IS WHERE-IS” condition. Tenant acknowledges
that the Base Tenant Improvement Allowance is provided to Tenant by Landlord for the purpose of
remodeling and/or rehabilitating the Premises, and other than providing the Base Tenant Improvement
Allowance in the time and manner provided for herein, Landlord shall have no responsibility for the
condition of the Premises or the improvements located therein.

          “TENANT’S PERSONAL PROPERTY” shall mean all personal property constructed or installed in the
Promises by Tenant at Tenant’s expense, including furniture, fixtures, equipment and all data and
telephone cabling to be constructed or installed in the Premises by Tenant, but excluding the
Tenant improvements.

          “TENANT IMPROVEMENTS” shall mean all interior portions of the Building to be constructed by
Tenant pursuant to this Agreement and the Approved Construction Plans, including but not limited
to, electrical systems, heating, ventilating and air conditioning systems (“HVAC”), plumbing and
fire sprinkler systems (to the extent such electrical, HVAC, plumbing and fire sprinkler systems
are not included in the Building Shell), interior partitions, millwork, floor coverings, acoustical
ceilings, interior painting, and similar items.

          “TENANT IMPROVEMENT COST” shall mean the costs for construction and installation of the Tenant
Improvements, inclusive of the fees charged by Architect. The costs for construction and
installation shall include, but not be limited to, the following:

               (a) architectural / space planning fees and costs charged by Architect in the preparation of
the Preliminary Plans, Construction Plans and/or any Change Requests;

               (b) any and all other fees and costs charged by architects, engineers and consultants in the
preparation of the Construction Plans, including mechanical, electrical, plumbing and structural
drawings and of all other aspects of the Construction Plans, and for processing governmental
applications and applications for payment, observing construction of the work, and other customary
engineering, architectural, interior design and space planning services;

               (c) surveys, reports, environmental and other tests and inspections of the site and any
improvements thereon necessary for the construction of the Tenant Improvements;

               (d) labor, materials, equipment and fixtures supplied by the Contractor, its subcontractors
and/or materialmen;

               (e) the furnishing and installation of all HVAC duct work, terminal boxes, distributing
diffusers and accessories required for completing the heating, ventilating and air conditioning
system in the Premises, including costs of meter and key control for after-hour usage;

               (f) all electrical circuits, wiring, lighting fixtures, and tube outlets furnished and
installed throughout the Premises, including costs of meter and key control for after-hour
electrical power usage;

	 	 	 
	 

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               (g) all window and floor coverings in the Premises:

               (h) all fire and life safety control systems, such as fire walls, sprinklers and fire alarms,
including piping, wiring and accessories installed within the Premises;

               (i) all plumbing, fixtures, pipes and accessories installed within the Premises;

               (j) fees charged by the city and/or county where the Building is located (including, without
limitation, fees for building permits and plan checks) required for the construction of the Tenant
Improvements in the Premises;

               (k) all taxes, fees, charges and levies by governmental and quasi-governmental agencies for
authorization, approvals, licenses and permits; and all sales, use and excise taxes for the
materials supplied and services rendered in connection with the installation and construction of
the Tenant Improvements;

               (l) all costs and expenses incurred to comply with all Laws and Regulations, as well as all
rules, regulations or ordinances of any governmental authority in connection with the construction
of the Tenant Improvements including, without limitation, any costs of complying with the ADA in
the Complex required as a condition to approving the construction of the Tenant Improvements.

               Tenant improvement Costs shall not include the cost of any of Tenant’s Personal Property or
the installation thereof, which shall be performed by Tenant at its sole cost and expense. Subject
to the payment by Landlord of the Base Tenant Improvement Allowance in the time and manner
specified in Section 12, below, Tenant shall be solely responsible for paying all Tenant
Improvement Costs.

     4. SPACE PLAN FOR TENANT IMPROVEMENTS.

     4.1 APPROVED PRELIMINARY PLAN. As soon as reasonably possible following the full execution of
this Agreement, the space plan (“Preliminary Plan”) for the Tenant Improvements shall be prepared
by the Architect, and shall be reviewed and approved by Landlord and Tenant (the “Approved
Preliminary Plan”). The Approved Preliminary Plan shall be used by Architect to develop the
Construction Plans.

     5. CONSTRUCTION PLANS FAR TENANT IMPROVEMENTS.

     5.1 PREPARATION BY ARCHITECT. Within 20 days following completion of the Approved Preliminary
Plan, Architect shall provide Tenant and Landlord with completed Construction Plans showing (i)
Tenant’s partition layout and the location and details; (ii) the location of telephone and
electrical outlets; (iii) the location, style and dimension of any desired special lighting; (iv)
the location, design and style of all doors, floor coverings and wall coverings; (v) the location,
design, style and dimensions of cabinets and casework; and (vi) all details, including “cut
sheets,” for the Tenant Improvements, which shall be in conformity with the Approved Preliminary
Plans. The Construction Plans shall be in a form satisfactory to

	 	 	 
	 

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appropriate governmental authorities responsible for issuing permits and licenses required for
construction of the Tenant Improvements.

     5.2 LANDLORD’S REVIEW OF CONSTRUCTION PLANS FOR TENANT Improvements. Within ten (10) business
days after receipt of the Construction Plans, Landlord shall notify Tenant in writing of any
changes necessary to bring the Construction Plans into substantial conformity with the Approved
Preliminary Plans. If any changes requested by Landlord are reasonably necessary to bring the
Construction Plans into substantial conformity with the Approved Preliminary Plans, Architect shall
make such changes and
provide the revised Construction Plans to Landlord for its review and approval, such approval
not to be unreasonably withheld or delayed. Within ten (10) business days thereafter, Landlord
shall either (i) notify Tenant in writing of any changes necessary to bring the Construction Plans
into substantial conformity with the Approved Preliminary Plans, or (ii) approve such revised
Construction Plans. Architect shall continue to revise the Construction Plans as required by
Landlord and Tenant until Landlord’s and Tenant’s written approval is received. The Construction
Plans approved in writing by both Landlord and Tenant shall be deemed the “Approved Construction
Plans.”

     6. CONTRACTOR. Tenant shall, as soon as reasonably possible, provide Landlord with the names
of not less than three (3) California licensed general contractors with expertise and experience in
constructing projects similar to the Tenant Improvements. Upon request of Landlord, Tenant shall
provide Landlord with references for such contractors so that Landlord may verify such contractors’
expertise and ability to construct the Tenant Improvements. Landlord shall have no obligation to
approve any contractor proposed by Tenant that either (i) does not possess sufficient experience
and expertise in constructing projects similar to the Tenant Improvements, or (ii) to which
Landlord otherwise makes reasonable objection. Following Landlord’s written approval of a
Contractor, Tenant shall enter into a contract with the Contractor for the construction of the
Tenant Improvements (the “Construction Contract”), for a bid price acceptable to Tenant in its sole
discretion (the “Approved Bid.”) The Construction Contract between Tenant and Contractor shall
provide that all Tenant Improvements shall be warranted by Contractor for a period not less than
one (1) year, and shall provide that all such warranties are assignable to, and enforceable by,
Landlord. Landlord must approve the Construction Contract before Tenant and Contractor execute the
same, such approval not to be unreasonably withheld.

     7. BUILDING PERMIT. Tenant shall be responsible for obtaining a building permit (“Building
Permit”) for the Tenant Improvements. To the extent requested by Tenant, Landlord shall, at no cost
or expense to Landlord, assist Landlord in obtaining the Building Permit. Tenant, the Architect or
the Contractor shall submit the Approved Construction Plans to the appropriate governmental body
for plan checking and a Building Permit.

     8. CHANGE REQUESTS. No changes to the Approved Construction Plans requested by Tenant (each, a
“Change Request”) shall be made without Landlord’s prior written approval, which approval shall not
be unreasonably withheld or delayed, subject to the following:

          (i) No Change Request shall affect the structure or operating systems of the Building;

	 	 	 
	 

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          (ii) A Change Request shall constitute an agreement by Tenant to any delay in completion of
the Tenant Improvements caused by reviewing, processing and implementing the Change Request;

          (iii) Any delays in completion of the Tenant Improvements caused as a result of a Change
Request shall not delay the commencement of the term of the Lease from the Commencement Date
specified in Section 1.7 of the Lease. Tenant agrees that the Lease and all obligations of Tenant
thereunder (including without limitation the obligation to pay Rent) shall commence on the
Commencement Date specified in Section 1.7 of the Lease, notwithstanding any delay in construction
of the Tenant Improvements caused by any Change Request.

     Any and all costs incurred in connection with a Change Request approved by Landlord shall be
paid for solely by Tenant, including, without limitation, increased architectural or engineering
fees and costs, permit re-submittal fees and costs, increased construction costs, costs incurred as
a result of any delay in constructing the Tenant Improvements caused by the Change Request, costs
incurred by Landlord in having the proposed Change Request reviewed by third parties, and any other
costs and expenses incurred in connection with or arising out of such Change Request.

     9. PAYMENT OF ADDITIONAL COSTS. Following substantial completion of the Tenant Improvements
and determination of the total Tenant Improvement Cost, to the extent the Tenant Improvement Cost
exceeds the Landlord’s Allowance (the “Additional Costs”), and such Additional Costs have not
previously been paid by Tenant pursuant to Section 10, below, Tenant shall be solely responsible
for payment of such Additional Costs.

     10. PAYMENT OF CONTRACTOR. Once Tenant and Contractor have mutually executed the Construction
Contract, Tenant shall be responsible for making monthly progress payments to Contractor in
accordance with the Construction Contract, subject to
reimbursement by Landlord pursuant to the following procedure. Landlord shall reimburse Tenant
each month, within twenty (20) days of receipt of bills or invoices from Tenant representing the
current months’ payment obligation to the Contractor (the “Monthly Payment”), for that portion of
the Monthly Payment determined by taking a fraction, the numerator of which is the Landlord’s
Allowance, and the denominator of which is the Approved Bid, and multiplying the Monthly Payment by
such fraction. Tenant shall be solely responsible for paying the balance of any Monthly Payment as
Additional Costs. If the total Approved Bid is in equal to or less than the sum of the Landlord’s
Allowance, Landlord shall reimburse Tenant each month, within twenty (20) days of receipt of bills
or invoices from Tenant representing the current Monthly Payment, for the entire Monthly Payment.
It shall be a condition precedent to Landlord’s obligation to reimburse Tenant for any Monthly
Payment that Tenant shall have provided Landlord with unconditional lien releases and waivers from
the Contractor, any subcontractors and/or any material suppliers providing goods or services for
the Tenant Improvements, in the form required by California law, whereby such Contractor, any
subcontractors and/or any material suppliers unconditionally waive any mechanics’ or other
statutory lien rights with respect to the current and/or any prior Monthly Payment made or to be
made by Landlord to Tenant.

	 	 	 
	 

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     11. REQUIREMENTS. All construction and installation of the Tenant Improvements shall be
subject to strict conformity with the following requirements:

          (a) Tenant shall give Landlord at least ten (10) days’ prior written notice of commencement of
the construction of the Tenant Improvements so that Landlord may post notices of non-responsibility
in or upon the Premises as provided by law;

          (b) All Tenant improvements shall be constructed in a skillful and workmanlike manner,
consistent with the best practices and standards of the construction industry, and pursued with
diligence in accordance with the Approved Construction Plans and in full accord with all applicable
laws, regulations and ordinances, including without limitation, the ADA. All material, equipment,
and articles incorporated in the Tenant Improvements are to be new, and of recent manufacture, and
of the most suitable grade for the purpose intended;

          (c) The Contractor shall maintain all of the insurance reasonably required by Landlord,
including, without limitation, commercial general liability and workers’ compensation insurance in
the amounts specified in Article 9 of the Lease, and builder’s risk and course of construction
insurance in an amount not less than the total Tenant Improvement Costs. Tenant shall provide
Landlord with certificates of insurance evidencing such insurance coverage by Contractor prior to
commencing the construction of the Tenant Improvements. Landlord and any other party in interest
designated by Landlord shall be named as an additional insured on the commercial general liability
policy, and Landlord shall be named as the loss payee on the builder’s risk and course of
construction insurance.

          (d) Landlord may require performance and labor and materialmen’s payment bonds issued by a
surety approved by Landlord, in a sum equal to the Tenant Improvement Costs, guarantying the
completion of the Tenant Improvements free and clear of all liens and other charges in accordance
with the Approved Construction Plans. Such bonds shall name Landlord as beneficiary;

          (e) Construction of the Tenant Improvements must be performed in a manner such that it will
not interfere with the quiet enjoyment of the other tenants in the Complex;

          (f) Construction of the Tenant Improvements must be completed during calendar year 2000.

     12. LIENS. Tenant shall keep the Premises and the Complex in which the Premises are situated
free from any liens arising out of any work performed, materials furnished or obligations incurred
by Tenant in connection with the construction of the Tenant Improvements. In the event a mechanic’s
or other lien is filed against the Premises or the Complex as a result of a claim arising through
Tenant or the Tenant Improvements, Landlord may demand that Tenant furnish to Landlord a surety
bond satisfactory to Landlord in an amount equal to at least one hundred fifty percent (150%) of
the amount of the contested lien claim or demand, indemnifying Landlord against liability for the
same and holding the Premises and Complex free from the effect of such lien or claim. Such bond
must be posted within ten (10) days following notice from Landlord. In addition, Landlord may
require Tenant to pay Landlord’s attorneys’ fees and

	 	 	 
	 

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costs in participating in any action to foreclose such lien if Landlord shall decide it is to its
best interest to do so. In any event, Tenant shall indemnify, defend, protect and hold harmless
Landlord from and against any and all claims, demands, expenses, actions, judgments, damages,
penalties, fines, liabilities, losses, suits, costs and fees, including, but not limited to,
reasonable attorneys’ fees and expenses, incurred in connection with or related to a claim arising
through Tenant or the Tenant Improvements.

	 	 	 
	 

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EXHIBIT D

ACKNOWLEDGEMENT OF COMMENCEMENT

This Acknowledgement is made as of                      with reference to that certain Lease Agreement
(hereinafter referred to as the “Lease”) dated, June 30, 2000, by and between BEDFORD PROPERTY
INVESTORS, INC., a Maryland corporation “Landlord” therein, and PINE PHOTONICS COMMUNICATIONS,
INC., a Delaware corporation “Tenant”, for the Premises situated at 940 AUBURN COURT, FREMONT,
CALIFORNIA 94538.

The undersigned hereby confirms the following:

1. That the Tenant accepted possession of the Premises (as described in said Lease) on                    ,
and acknowledges that the Premises are as represented by the Landlord and in good order, condition
and repair, and that the improvements, if any, required to be constructed for Tenant by Landlord
under this Lease have been so constructed and are satisfactorily completed in all respects.

2. That all conditions of said Lease to be performed by Landlord prerequisite to the full
effectiveness of said Lease have been satisfied and that Landlord has fulfilled all of its duties
of an inducement nature.

3. That in accordance with the provisions of said Lease the commencement date of the term is
                    , and that, unless sooner terminated, the original term thereof expires on                     .

4. That said Lease is in full force and effect and that the same represents the entire agreement
between Landlord and Tenant concerning said Lease.

5. That there are no existing defenses which Tenant has against the enforcement of said Lease by
Landlord, and no offsets or credits against rentals.

6. That the minimum rental obligations of said Lease is presently in effect and that all rentals,
charges and other obligations on the part of Tenant under said Lease commenced to accrue on
                    .

7. That the undersigned has not made any prior assignment, hypothecation or pledge of said Lease or
of the rents hereunder.

TENANT:

PINE PHOTONICS COMMUNICATIONS, INC.

A DELAWARE CORPORATION

	 	 	 	 	 
	BY:

	 	 	 	 
	 

	 	 	 	 
	(PRINT):
	 	 	 	 
	 

	 	 	 	 
	ITS:
	 	 	 	 
	 

	 	 	 	 
	DATE:
	 	 	 	 
	 

	 	 	 	 

	 	 	 
	 

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EXHIBIT E

RULES AND REGULATIONS ATTACHED TO AND MADE

A PART OF THIS LEASE

	1.	 	No sign, placard, picture, advertisement, name of notice shall be inscribed, displayed or
printed or affixed on the Building or to any part thereof, or which is visible from the
outside of the Building, without the written consent of Landlord, first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture, advertisement, name
or notice without notice and at the expense of Tenant.
	 
	 	 	All approved signs or lettering on doors shall be printed, affixed or inscribed at the expense of
Tenant by a person approved by Landlord.
	 
	 	 	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.	 	If a directory is located at the Building, it is provided exclusively for the display of the
name and location of Tenant only and Landlord reserves the right to exclude any other names
therefrom.
	 
	3.	 	The sidewalks, passages, exits, entrances, and stairways in and around the Building shall not
be obstructed by Tenant or used by it for any purpose other than for ingress to and egress
from the Premises. The passages, exits, entrances, stairways, 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 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 person with whom
Tenant normally deals in the ordinary course of Tenant’s business unless such persons are
engaged in illegal activities. Neither Tenant nor any employees or invitees of Tenant shall
go upon the roof of the Building.
	 
	4.	 	Tenant shall not be permitted to install any additional lock or locks on any door in the
Building unless written consent of Landlord shall have first been obtained. Two keys will be
furnished by Landlord for every room.
	 
	5.	 	The toilets and urinals shall not be used for any purpose other than those for which they
were constructed, and no rubbish, newspapers or other substances of any kind shall be thrown
into them. Wastes and excessive or unusual use of water shall not be allowed. Tenant shall be
responsible for any breakage, stoppage or damage resulting from the violation of this rule by
Tenant or its employees or invitees.
	 
	6.	 	Tenant shall not overload the floor of the Premises or mark, drive nails, screw or drill into
the partitions, woodwork or plaster or in any way deface the Premises or any part thereof.
	 
	7.	 	Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substance
in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive
or objectionable to Landlord or other occupants of the Building by

	 	 	 
	 

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reason of noise, odors and/or vibrations, or interfere in any way with other Tenants or those
having business therein.

	8.	 	The Premises shall not be used for the storage of merchandise, for washing clothes, for
lodging, or for any improper objectionable or immoral purposes.
	 
	9.	 	Tenant shall not use or keep in the Premises or the Building any kerosene, gasoline, or
inflammable or combustible fluid or material, or use any method of heating or air conditioning
other than that supplied by Landlord.
	 
	10.	 	Landlord will direct electricians as to the manner and location in which telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be allowed without
the consent of Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the approval of Landlord.
	 
	11.	 	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.
The expense of repairing any damage resulting from a violation of this rule or removal of any
floor covering shall be borne by Tenant.
	 
	12.	 	Exterior blinds are furnished for each window by Landlord. Any additional window covering
desired by Tenant shall be approved by Landlord.
	 
	13.	 	Landlord reserves the right to exclude or expel from the Building any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall
in any manner do any act in violation of any of the rules and regulations of the Building.
	 
	14.	 	Tenant shall not disturb, solicit, or canvass any occupant of the Building.
	 
	15.	 	Without the written consent of Landlord, Tenant shall not use the name of the Building in
connection with or in promoting or advertising the business of Tenant except as Tenant’s
address.
	 
	16.	 	Tenant shall not permit any contractor or other person making any alterations, additions or
installations within the Premises to use the hallways, lobby or corridors as storage or work
areas without the prior consent of Landlord. Tenant shall be liable for and shall pay the
expense of any additional cleaning or other maintenance required to be performed by Landlord
as a result of the transportation or storage of materials or work performed within the
Building by or for Tenant.
	 
	17.	 	Tenant shall be entitled to use parking spaces as mutually agreed upon between Tenant and
Landlord subject to such reasonable conditions and regulations as may be imposed from time to
time by Landlord Tenant agrees that vehicles of Tenant or its employees or agents shall not
park in driveways nor occupy parking spaces or other areas reserved for any use such as
Visitors, Delivery, Loading, or other tenants. Landlord or its agents shall save the right to
cause or be removed any car or Tenant, its employees or agents, that

	 	 	 
	 

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may be parked in unauthorized areas, and Tenant agrees to save and hold harmless Landlord, its
agents and employees from any and all claims, losses, damages and demands asserted or arising in
respect to or in connection with the removal of any such vehicle. Tenant, its employees, or
agents shall not park campers, trucks or cars on the Building parking areas overnight or over
weekends. Tenant will from time to time, upon request of Landlord, supply Landlord with a list of
license plate numbers of vehicles owned or operated by its employees and agents.

	18.	 	Landlord reserves the right to make modifications hereto and such other and further rules and
regulations as in its sole judgment may be required for the safety, care and cleanliness of
the premises and the Building and for the preservation of good order therein. Tenant agrees to
abide by all such rules and regulations.
	 
	19.	 	Canvassing, soliciting and peddling is prohibited in the Building and each Tenant shall
cooperate to prevent the same.
	 
	20.	 	Landlord is not responsible for the violation of any rule contained herein by any other
Tenant.
	 
	21.	 	Landlord may waive any one or more of these rules for the benefit of any particular Tenant,
but no such waiver shall be construed as a waiver of Landlord’s right to enforce these rules
against any or all Tenants occupying the Building.
	 
	22.	 	Tenant is responsible for purchasing and installing a security system if required by the City
of FREMONT. The cost of purchasing and installation of any such system is the sole costs and
expense of the Tenant.

	 	 	 
	 

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APPENDIX

INDEX TO DEFINED TERMS

			
	Term	 	Section No.        
	Advance Rent 

Alterations 

Award 

Bankruptcy Event 

Broker 

Building 

Capital Costs

& CP 

CC&Rs 

Claims 

Commencement Date 

Common Area 

Common Area Costs 

Complex 

Complex Insurance Premium 

Condemnation 

Condemnor 

Construction Budget 

Construction Costs 

Construction Plans 

Conversion 

Code 

Date of Taking 

Decision Period 

Environmental Laws 

Estimated Commencement Date 

Force Majeure Delay 

Hazardous Materials 

HVAC 

Initial Pro Rata %

Landlord 

Landlord’s Allowance 

Landlord Parties 

Laws and Regulations 

Lease 

Lender 

Limited Entity 

Loss Date 

Losses 

Management Fee 

Minimum Monthly Rent 

Net Worth 

Nonterminating Party 

Notice 

Parties 

Permitted Use 

Premises 

Pro Rata %

Pro Rata Share 

Professional Fees 

Real Property Taxes 

Release 

Rent 

Rent Payment Address 

Rentable Area 

Restrictions 

Rules and Regulations 

Security Deposit 

Security Instrument 

Space Plan 

State 

Substantial Completion 

Substantially Completed 

Successor-in-Interest 

Taxes 

Tenant 

Tenant Delay 

Tenant Improvements 

Tenant Parties 

Tenant’s Participation 

Term 

Terminating Party 

Termination Notice 

Transfer 

Transfer Agreement 

Transfer Date 

Transfer Notice 

Transferee 

Transferor 

Uninsured Property Loss
	 	Section 1.8 (B)

Section 18.1

Section 20.1 (c)

Article 33

Section 1.15

Section 1.5

Section 6.1 (d)

Article 13

Section 1.13

Section 11.3

Section 3.1

Section 6.1 (a)

Section 6.1 (b)

Section 1.6

Section 8.4

Section 20.1 (a)

Section 20.1 (d)

Section 3 of Exhibit C

Section 3 of Exhibit C

Section 3 of Exhibit C

Section 34.23

Section 25.4 (d)

Section 20.1 (b)

Section 20.4

Section 16.3 (a) (i)

Section 1.7 (A)

Section 3 of Exhibit C

Section 16.3 (a) (ii)

Section 19.2

Section 1.11

Section 1.2

Section 1.12

Section 2.1

Section 16.1

Introduction

Article 22

Section 34.23

Section 12.1

Section 16.3 (a) (iii)

Section 1.14

Section 1.8 (A)

Section 34.23

Section 20.4

Article 29

Introduction

Section 1.11

Section 1.4

Section 6.1 (c)

Section 6.3

Section 34.13

Section 5.1

Section 16.3 (a) (iv)

Section 4.1

Section 1.1

Section 1.4

Section 2.2

Section 34.8

Section 1.9

Section 30.1

Section 3 of Exhibit C

Section 1.6

Section 3 of Exhibit C

Section 3 of Exhibit C

Section 30.3

Section 5.1

Section 1.3

Section 3 of Exhibit C

Section 3 of Exhibit C

Section 2.1

Section 3 of Exhibit C

Section 1.7

Section 20.4

Section 7.5

Section 7.1

Section 7.2

Section 7.2

Section 7.2

Section 7.2

Section 7.4

Section 12.1

	 	 	 
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FIRST AMENDMENT TO BUSINESS PARK NET LEASE

THIS FIRST AMENDMENT TO BUSINESS PARK NET LEASE (this “Amendment”) is entered into this 1ST day of
September, 2000, by and between BEDFORD PROPERTY INVESTORS, INC., A MARYLAND CORPORATION,
(“Landlord”) and PINE PHOTONICS COMMUNICATIONS, INC., A DELAWARE CORPORATION, (“Tenant”).

RECITALS

A. Landlord and Tenant previously entered into that certain Lease dated June 30, 2000 (the
“Lease”), whereby Landlord leased to Tenant and Tenant leased from Landlord approximately 12,060
rentable square feet of space located at 940 AUBURN COURT, FREMONT, CALIFORNIA (the “Premises”).

B. The parties hereto wish to amend the Lease to (i) expand the size of the Premises by
approximately Six Thousand One Hundred (6,100) rentable square feet, known as 930 Auburn Court,
Fremont, California as shown on Exhibit “A” attached hereto and incorporated herein by this
reference (the “Expansion Premises”), (ii) revise the Minimum Rent for the Premises after inclusion
of the Expansion Premises, (iii) revise Tenant’s Initial Pro Rata % specified in Section 1.11 of
the Lease after inclusion of the Expansion Premises, (iv) revise the Letter of Credit as Security
Deposit for the Premises after inclusion of the Expansion Premises, and to otherwise amend the
terms and conditions of the Lease as hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

AGREEMENT

1. RECITALS. The foregoing recitals are true and correct and are incorporated herein by this
reference.

2. DEFINED TERMS. All capitalized terms used in this Amendment that are not defined herein shall
have the meanings as defined in the Lease.

3. COMMENCEMENT DATE. The Commencement Date for the Expansion Premises shall be September 15, 2000,
and shall expire July 31, 2005.

4. EXPANSION OF PREMISES. Upon the Commencement Date, Tenant hereby hires from Landlord, and
Landlord hereby leases to Tenant, the Expansion Premises. From and after the Commencement Date, the
Expansion Premises shall be deemed to be a part of the Premises for all purpose under the Lease,
and Landlord and Tenant hereby agree that the Premises shall consist of approximately Eighteen
Thousand One Hundred Sixty (18,160) rentable square feet. The Lease is hereby amended accordingly.

	 	 	 
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5. MINIMUM MONTHLY RENT. From and after the Commencement Date, Tenant shall pay to Landlord as
Minimum Rent for the Premises (including the Expansion Premises) the following amounts:

	 	 	 	 	 
	9/1/00 — 9/14/00:

	 	$9,849.00 (Existing Premises partial month)
	 	 
	9/15/00 — 9/30/00:

	 	$16,949.33 (partial month)	 	 
	10/1/00 — 7/31/01:

	 	$31,780.00 (per month)	 	 
	8/1/01 — 7/31/02:

	 	$33,369.00 (per month)	 	 
	8/1/02 — 7/31/03:

	 	$35,037.45 (per month)	 	 
	8/1/03 — 7/31/04:

	 	$36,789.32 (per month)	 	 
	8/1/04 — 7/31/05:

	 	$38,628.79 (per month)	 	 

6. TENANT’S PRO RATA %. As of the Commencement Date, Tenant’s Pro Rata % specified in Section 1.11
of the Lease is deleted in its entirety and the following is substituted therefore:

“26.69%” —          CAM and Insurance Pro Rata (18,160 SF + 68,030 SF)

“50.19%” —          Property Tax Pro Rata (18,160 SF + 36,180 SF)

7. TENANT IMPROVEMENTS. From and after the Commencement Date, Landlord shall provide Tenant with an
improvement allowance of up to Twelve Thousand Two Hundred Dollars ($12,200.00) (the “Allowance”),
for Tenant to make certain improvements to the Expansion Premises (the “Tenant Improvements.”) All
Tenant improvements proposed to be performed by Tenant shall be performed in accordance with
Article 18 and Exhibit “C” of the Lease, will otherwise in accordance with all applicable laws and
regulations pertaining thereto. Tenant shall provide Landlord with bills, invoices or other
evidence reasonably satisfactory to Landlord of sums expended by Tenant on the Tenant Improvements,
and Landlord shall reimburse Tenant within thirty (30) days following receipt of such bills,
invoices or such other evidence. In no event shall Landlord be required to reimburse Tenant for any
amounts in excess of the Allowance. Any part of the Allowance not spent by Tenant on the Tenant
Improvements shall be the sole property of Landlord and Tenant shall have no right thereto.

8. LETTER OF CREDIT AS SECURITY DEPOSIT. Prior to the Commencement Date of this Amendment, Tenant
shall deposit to Landlord (i) a revised letter of credit in the amount of $463,545.45 inclusive of
the Expansion Premises, or (ii) a letter of credit in the amount of $155,706.34, which shall be
separate and in addition to the letter of credit in the amount of $307,839.11 for the premises
located at 940 Auburn Court in Fremont, California. Said letter of credit shall be in the form of
an irrevocable, unconditional and clean standby letter of credit and otherwise in the form set
forth below (the “Letter of Credit”). The term Security Deposit shall mean the cash portion of the
Security Deposit and the Letter of Credit,

     8.1 FORM OF LETTER OF CREDIT. The Letter of Credit shall be issued by a national bank
acceptable to Landlord in its reasonable discretion, with offices in the San Francisco Bay Area
that will accept and pay on any draw on the Letter of Credit. The Letter of Credit shall be issued
for a term of at least twelve months (with a term during the last year of the Lease Term of at
least one full month following the expiration of the Lease Term) and shall be in a form and with
such content acceptable to Landlord in its sole and absolute discretion. Any Letter of Credit that

	 	 	 
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Tenant delivers to Landlord in replacement of an existing Letter of Credit shall be in an amount
equal to the replaced Letter of Credit (prior to any draws) so that the cash and Letter of Credit
together equal the amount of the Security Deposit specified in the Lease. Any such replacement
Letter of Credit shall be delivered to and received by Landlord no later than thirty days prior to
the expiration of the
term of the Letter of Credit then in effect. If Tenant fails to deposit a replacement Letter of
Credit or renew the expiring Letter of Credit, Landlord shall have the right to draw upon the
expiring Letter of Credit for the full amount thereof and hold the same as Security Deposit;
provided, however, that if Tenant provides a replacement Letter of Credit that meets the
requirements of this section, Landlord shall promptly return to Tenant in cash that amount of the
Letter of Credit that had been drawn upon by Landlord. The Letter of Credit shall expressly permit
full and partial draws. If for any reason the Letter of Credit does not permit partial draws, then
Landlord shall have the right to make a full draw on the Letter of Credit, notwithstanding that the
full amount may not be required to cure any default by Tenant. The Letter of Credit shall designate
Landlord as beneficiary and shall be transferable by beneficiary to any transferee, successor, and
assign (including any lender of Landlord) at no cost or expense to beneficiary. The Letter of
Credit shall provide that it may be drawn by Landlord (or its assignee) upon presentation by
Landlord to the issuing bank (at its offices in the San Francisco Bay Area) of a sight draft(s),
together with a written statement executed by Landlord stating that the amount requested is due
Landlord under the Lease. The amount of the draw requested by Landlord shall be payable by the bank
without further inquiry or any other documentation or further action required of the bank,
Landlord, or Tenant. All costs and expenses to obtain the Letter of Credit and all renewals shall
be borne by Tenant.

     8.2 LANDLORD’S DRAW. If the Letter of Credit is drawn upon by Landlord, Tenant shall, within
ten days after written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to amount required under the Lease and this Addendum. At all times the
Security Deposit, whether in the form of cash and/or Letter of Credit, shall be in the amount
specified in the Lease. The use, application or retention of the Letter of Credit, or any portion
thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided
by this Lease or by law, it being intended that Landlord shall not first be required to use all or
any part of the Letter of Credit or cash portion of the Security Deposit, and such use shall not
operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant shall
not be entitled to any interest on the cash portion of the Security Deposit. The exercise of any
rights of Landlord to the Security Deposit shall not constitute a waiver of nor relieve Tenant from
any liability or obligation for any default by Tenant. If Landlord draws upon the entire amount of
the Letter of Credit, Tenant may deliver a replacement Letter of Credit to Landlord, instead of
depositing cash with Landlord, equal to the original amount of the Letter of Credit

     8.3 RETURN OR TRANSFER OF LETTER OF CREDIT. Within thirty days after the expiration or earlier
termination of the Lease and provided Tenant has complied with all of its obligations under the
Lease, Landlord shall promptly return the refundable portion of the Security Deposit, including the
Letter of Credit, to Tenant. In the event of a transfer of the Premises, Building or Project by
Landlord, Landlord or any subsequent transferor shall deliver the refundable portion of the
Security Deposit, including both the cash portion and the Letter of Credit, to the successor
landlord or transferee.

	 	 	 
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9. REAL ESTATE BROKERS. Tenant hereby represents and warrants to Landlord that Tenant has not
authorized or employed, or acted by implication to authorize or employ, any real estate broker or
salesman to act for it in connection with this First Amendment and the expansion of the Premises
contemplated herein. Tenant shall indemnify, defend and hold the Landlord harmless from and against
any and all claims by any real estate broker or salesman whom Tenant authorized or employed, or
acted by implication to authorize or employ, to act for Tenant in connection with this First
Amendment.

10. NO CHANGE. Except as set forth herein, all of the terms and conditions of the Lease remain
unchanged and in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment as of the day and date
first written above.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	BEDFORD PROPERTY INVESTORS, INC., A	 	 	 	PINE PHOTONICS COMMUNICATIONS, INC., A
	MARYLAND CORPORATION	 	 	 	DELAWARE CORPORATION
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ James R. Moore
	 	 	 	BY:
	 	/s/ Hsing Kung
	 

	 	 
	 	 	 	 	 	 
	

ITS:
DATE:

	 	JAMES R. MOORE

SR. VICE PRESIDENT/COO

9/19/00
	 	 	 	(PRINT):
ITS:
DATE:
	 	 Hsing Kung

President/CEO

9/11/00

	 	 	 
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EXHIBIT A

FLOOR PLAN OF EXPANSION SPACE

[FLOOR PLAN]

	 	 	 
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SECOND AMENDMENT TO BUSINESS PARK

NET LEASE

This SECOND AMENDMENT TO BUSINESS PARK NET LEASE (“Second Amendment”) is made as of this 23RD day
of JUNE, 2005, by and between BEDFORD PROPERTY INVESTORS, INC., A MARYLAND CORPORATION,
(“Landlord”) and OPNEXT, INC., A DELAWARE CORPORATION, successor in interest to Pine Photonics,
Inc., a Delaware corporation (“Tenant”).

R E C I T A L S

     A. The Tenant and Landlord entered into that certain lease dated, June 30, 2000, as amended by
the First Amendment dated September 1, 2000 (collectively the “LEASE”), under the terms of which
Tenant leased certain space (the “Leased Premises”) commonly known as 940 AUBURN COURT, FREMONT,
CALIFORNIA containing approximately 18,160 rentable square feet, as fully described in the Lease.

     B. Landlord and Tenant desire to amend and modify the Lease as more particularly set forth
in this Second Amendment.

     In consideration of the foregoing and the covenants and obligations contained herein, the
parties agree to amend the Lease in the following particulars only.

     1. RATIFICATION. Except as otherwise stated in this Second Amendment, the terms of the Lease
remain in full force and effect and the Lease, as hereby amended shall bind, and inure to the
benefit of, the successors of the parties hereto.

     2. TERM. The Salient Lease Terms are hereby amended such that the Term will be extended for a
period of thirty six (36) months commencing August 1, 2005 and terminating July 31, 2008.

     3. MINIMUM MONTHLY RENT. The Salient Lease Terms are hereby amended such that the Minimum
Monthly Rent payable during the Term of the Lease shall be as follows:

	 	 	 
	August 1, 2005 — July 31, 2006:

	 	$12,530.00 per month, NNN
	August 1, 2006 — July 31, 2007:

	 	$13,075.00 per month, NNN
	August 1, 2007 — July 31, 2008:

	 	$13,620.00 per month, NNN

4. LANDLORD’S ALLOWANCE. The Landlord agrees to contribute an amount of $72,640.00 (i.e. $4.00 per
square foot of the rentable area of the Premises) to be paid by Landlord for the Tenant Improvement
Cost for the Tenant Improvements to be mutually agreed upon by Landlord and Tenant. This sum shall
be paid directly to the contracting parties entitled to payment. Any unused portion of Landlord’s
Allowance for the Tenant Improvements shall remain the property of Landlord, and Tenant shall have
no interest in said funds. Tenant acknowledges and agrees that it shall be responsible for payment
of all Construction Costs in excess of Landlord’s Allowance and shall pay to Landlord within ten
(10) days after request from Landlord the amount of such excess Construction Costs.

1

 

     5. NO BROKERS. Tenant represents and warrants that it has not authorized or employed, or acted
by implication to authorize or employ, any real estate broker or salesman to act for it in
connection with this Second Amendment. Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims by any real estate broker or salesman Tenant authorized or
employed, or acted by implication to authorize or employ, to act for Tenant in connection with this
Second Amendment to Lease.

     6. CONFIRMATION. Tenant acknowledges that as of the date of this Second Amendment it has no
claims against Landlord or its agent which may serve as the basis of any set-off against Rent or
any other remedy at law or equity. Each party represents and warrants to the other that it is duly
authorized to enter into this Second Amendment and perform its obligations without the consent or
approval of any other party and that the person signing on its behalf is duly authorized to sign on
behalf of such party.

     7. COUNTERPARTS. This Second Amendment may be executed in any number of counterparts, which
together shall constitute a final Second Amendment.

[the balance of this page has been intentionally left blank;

signature page follows]

2

 

     IN WITNESS WHEREOF, this Second Amendment has been executed as of the date first set forth
above.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	BEDFORD PROPERTY INVESTORS, INC., A	 	 	 	OPNEXT, INC.
	MARYLAND CORPORATION	 	 	 	A DELAWARE CORPORATION
	 
	 	 	 	 	 	 	 	 
	/s/

	 	Stephen M. Silla
	 	 	 	BY:
	 	/s/ Harry L. Bosco
	 

	 	 
	 	 	 	 	 	 
	By:

	 	Stephen M. Silla
	 	 	 	(Print):
	 	HL BOSCO
	ITS:

	 	Exec VP & COO
	 	 	 	ITS:
	 	PRESIDENT & CEO
	 

	 	7/11/05
	 	 	 	DATE:
	 	7-7-05
	 

	 	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 	 	 

FOR OFFICE USE ONLY

	 	 	 	 	 
	PREPARED BY:

	 	/S/
	 	 
	 

	 	 	 	 
	REVIEWED BY:

	 	/S/	 	 
	 

	 	 	 	 
	APPROVED BY:

	 	/S/	 	 
	 

	 	 	 	 

3exv10w28

 

Exhibit 10.28

Logistics
Agreement

This AGREEMENT made effective as of the April 1, 2002.

Between

OpNext, Inc. hereinafter call “OPI” a company incorporated in USA whose registered office is 1
Christopher Way, Eatontown, New Jersey 07724, U.S.A.

and

HITACHI TRANSPORT SYSTEM, LTD, hereinafter call “HTS” a company incorporated in Japan whose
registered office is 7-2-18, Toyo, Koto-Ku, Tokyo 135-8372, Japan.

Whereas

	(A)	 	OPI manufactures and distributes and sales in World Wide.
	 
	(B)	 	HTS provides, certain services relating to logistics of OPI and OPI’s subsidiaries, subject
to and on the terms of this Agreement.

It is agreed as follows:

Interpretation

	1.1	 	In this Agreement, unless the context otherwise requires the following expressions will have
the following meanings:

	 	 	 
	“Agreement”

	 	means this agreement, as amended from time to time;
	 
	 	 
	“Commencement Date”

	 	means April 1, 2002;
	 
	 	 
	“OPI’s subsidiaries”

	 	means OpNext Japan, Inc. (hereinafter call “OPJ”),
OpNext Germany, GmbH. (hereinafter call “OPG”)
	 
	 	 
	“HTS’s subsidiaries”

	 	means Hitachi Transport System (America), Ltd.
(hereinafter call “HTSA”), Hitachi Transport
System (Nederland) B.V. (hereinafter call “HTSN”)

 

 

	 	 	 
	 
	 	 
	“OP”

	 	means OPI and OPI’s subsidiaries ;
	 
	 	 
	“HT”

	 	means HTS and HTS’s subsidiaries ;
	 
	 	 
	“End User”

	 	means customers of OP, insofar as they purchase or
receive products in the countries as mentioned on
“Destination” ;
	 
	 	 
	“Manager”

	 	means the appointed managers of HT who will
manage inside of HT to provide the Services as
mentioned in APPENDIX 1.
	 
	 	 
	“Restricted Information”

	 	means any information relating to the products or
OP which is disclosed pursuant to or in connection
with this Agreement.
	 
	 	 
	“Services”

	 	means the services relating to the products
specified in APPENDIX 1 to this agreement, as such
schedule is amended time to time;
	 
	 	 
	“Service Providers”

	 	means third parties who provide services to HT in
connection with HT’s performance of its
obligations under this Agreement;
	 
	 	 
	“Service Charges”

	 	means the service charges set out in APPENDIX 3.
	 
	 	 
	“Service Area”

	 	means USA, Japan and Netherlands ;
	 
	 	 
	“Destination”

	 	means USA, Canada, Japan and countries in EU ;
	 
	 	 
	“RMA”

	 	means Return Material Authorization;

 

 

Service

	2.1	 	HT will perform the Services in the Service Area in accordance with the terms of this
Agreement. The contents of HT service is as APPEXDIX. 1. For Service Area, HT will submit
its service contents and conditions time to time.
	 
	2.2	 	HT will provide three dedicated Managers consisted with each Manager from USA, Japan and
Europe who will manage inside of HT to provide the Services as mentioned in APPENDIX 1.
	 
	2.3	 	HT will, in relation to the products:

	(a)	 	Transport the products in accordance with the scope and the requirement from OP.
	 
	(b)	 	Storage the products only on the terms and conditions of the requirement from OP in the
agreed facilities.

Service Charge, Payments and Administration

	3.1	 	In consideration of the Services provided by HT hereunder in any month, OP will pay HT the
relevant Service Charges against the HT invoice with the below mentioned payment terms. The
payment amount will be based on actual handled volume with APPENDIX 3.

	(a)	 	From OPI To HTSA : 15th of following month.
	 
	(b)	 	From OPJ To HTS : End of following month.
	 
	(c)	 	From OPG To HTSN : 15th of following month.

	3.2	 	HT will submit their invoices to OP. The details of submission route is as follows. In case
of other un-described charges was issued, the detail of invoicing will be discussed between
OP and HT from time to time.

	(a)	 	From HTSA To OPI

	 	(1)	 	Drop Shipment to the End User in USA

	 	(i)	 	Transportation fee from Narita Airport to the End User in USA.
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

 

 

	 	(2)	 	Shipment to Warehouse in Fremont, CA, USA

	 	(i)	 	Transportation fee from Narita Airport to Warehouse in Fremont,
CA, USA
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

	 	(3)	 	Storage fee for Warehouse in Fremont, CA, USA
	 
	 	(4)	 	Shipment from Warehouse in Fremont, CA, USA to the End User in USA and Canada.

	 	(i)	 	In case of OPI is not responsible to deliver to the End User,
shipment arrangement fee will be invoiced to OPI.
	 
	 	(ii)	 	In case of OPI is responsible to deliver to the End User,
shipment arrangement fee and transportation fee from Warehouse in Fremont, CA,
USA to the End User will be invoiced to OPI.

	 	(5)	 	RMA for Returning to OPJ

	 	(i)	 	Receiving fee from OPI and temporary storage fee at Warehouse in
Fremont, CA, USA.
	 
	 	(ii)	 	Shipment and transportation fee from Warehouse in Fremont, CA,
USA to Narita Airport.

	 	(6)	 	RMA Re-Import to OPI from OPJ

	 	(i)	 	Import Customs Clearance at San Francisco airport.
	 
	 	(ii)	 	Transportation fee from San Francisco airport to Warehouse in
Fremont, CA, USA.
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

	(b)	 	From HTS To OPJ

	 	(1)	 	Exportation

	 	(i)	 	Transportation fee from Totsuka factory to Narita airport
	 
	 	(ii)	 	Export Customs Clearance fee
	 
	 	(iii)	 	Terminal fee at Narita airport

	 	(2)	 	Domestic Sales

	 	 	 	Transportation fee from Warehouse in Totsuka factory to the End User in Japan

	 	(3)	 	RMA for Import to OPJ

	 	(i)	 	Import Customs Clearance at Narita Airport.
	 
	 	(ii)	 	Transportation fee from Narita Airport to OPJ
	 
	 	(iii)	 	Import duty, import consumption tax or others, if it is
necessary to pay to Government.

 

 

	 	(4)	 	RMA for Re-Export from OPJ to OPI and OPG

	 	(i)	 	Transportation fee from Totsuka factory to Narita airport
	 
	 	(ii)	 	Export Customs Clearance fee and Terminal fee at Narita airport.
	 
	 	(iii)	 	Transportation fee from Narita airport to San Francisco airport
and Amsterdam airport.

	(c)	 	From HTSN To OPG

	 	(1)	 	Drop Shipment to the End User in EU

	 	(i)	 	Transportation fee from Narita airport to End User in EU
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

	 	(2)	 	Shipment to Warehouse in Waadenburg, Netherlands

	 	(ii)	 	Transportation fee from Narita airport to Warehouse in
Waadenburg, Netherlands.
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

	 	(3)	 	Storage fee for Warehouse in Waadenburg, Netherlands
	 
	 	(4)	 	Shipment from Warehouse in Waadenburg, Netherlands to the End User in EU.

	 	(i)	 	In case of OPG is not responsible to deliver to the End User,
shipment arrangement fee will be invoiced to OPG.
	 
	 	(ii)	 	In case of OPG is responsible to deliver to the End User,
shipment arrangement fee and transportation fee from Warehouse in Waadenburg,
Netherlands to the End User will be invoiced to OPG.

	 	(5)	 	RMA for Returning to OPJ

	 	(i)	 	Receiving products from OPG and temporary storage fee at
Warehouse in Waadenburg, Netherlands.
	 
	 	(ii)	 	Shipment and arrangement fee from Warehouse in Waadenburg,
Netherlands to Narita airport.

	 	(6)	 	RMA Re-Import to OPG from OPJ

	 	(i)	 	Customs Clearance fee at Amsterdam airport.
	 
	 	(ii)	 	Transportation fee from Amsterdam airport to Warehouse in
Waadenburg, Netherlands.
	 
	 	(ii)	 	Customs duty and others, if it is necessary to pay to Government.

	3.3	 	The currency for invoicing from HT to OP is as mentioned below.

	(a)	 	From HTSA To OPI : US$
	 
	(b)	 	From HTS To OPJ : JPY

 

 

	(c)	 	From HTSN To OPG : EUR

	3.4	 	HTS will submit a monthly summery sheet which will describe all the invoice details from HT
to OP.

Confidentiality (Non-disclosure)

	4.1	 	OP will provide HT with Restricted Information necessary for HT to provide the Services. HT
will use such Restricted Information solely for the purpose of providing the Services and will
keep such Restricted Information secret and confidential during the continuance of this
Agreement and for a period of 3 years after its expiry or earlier termination and will not
disclose such Restricted Information to any third party other than to such of HT’s employees,
Service Providers (only to the extent necessary for such Service Providers to perform the
relevant services required by HT), professional advisers and insurers to whom disclosure is
necessary in order for HT to provide the Services. HT will consult with OP about treatment of
related documents, such as disposal by HT, submission to OP or others, if HT require.
	 
	4.2	 	Clause 4.1 will not apply to information i) which is or comes into the public domain, ii)
which is legally required to be disclosed by any competent courts or administrative agencies
or otherwise required to be disclosed under any applicable laws. Before disclosing, however,
HT will consult with OP the availability to disclose.
	 
	4.3	 	In the event that OP receives or is given access to HT’s confidential information, OP will
have the same obligations with respect to such information as does HT with respect to
Restricted Information.

Force majeure

	5.	 	If either party is unable to perform its obligations under this Agreement due to causes
beyond its control (including but not limited to Act of God, fire, actions of military forces,
civil commotion, any restriction, regulation, order, act or omission or operation by any local
authority or government department, official or unofficial national or regional industrial
action) the party unable to perform

 

 

	 	 	its obligations will notify the other party immediately of such inability and the
provisions of this Agreement will be suspended during the period of inability. However,
the party unable to perform its obligations will use all reasonable endeavours to overcome
such inability and will notify the other party when the inability ceases, whereupon the
provisions of this Agreement will come back into effect

Term

	6.1	 	This Agreement will have an initial term of one year from the Commencement Date (the
“Initial Term”) and, subject to Clause 7 hereof, will renew automatically thereafter for
further terms of one year (each, a “Subsequent Term”), unless either party hereto gives a
written notice to terminate this Agreement to the other party two months prior to the end of
the Initial Term or any Subsequent Term, as the case may be.
	 
	6.2	 	The contents of this agreement including Service Charges will be reviewed every
September. The reviewed contents will be effected from every coming November 1. However, if
modification, additions and deletions are necessary during agreement period, OP and HT will
discuss and agree with good face time to time.

Termination

	7.1	 	Either party will be entitled forthwith to terminate this Agreement by written notice if:
	 
	(a)	 	The other party has adopted a corporate resolution for dissolving or otherwise winding up its
business;
	 
	(b)	 	The other party has suspended payment of its debts due to financial inability for three
months;
	 
	(c)	 	The other party has filed for bankruptcy, special liquidation, civil rehabilitation or
similar;

 

 

	7.2	 	Upon the occurrence of any of the events set forth in Clause 7.1 above with regard to
either party, any outstanding amount owed by such party to the other party pursuant to this
Agreement will be deemed to become due and payable immediately.

Assignability

	8.	 	Either party may not assign this Agreement and its rights and obligations hereunder to any
person without the other party’s prior written consent:

Consultation.

	9.	 	The parties will consult with each other in good faith in order to resolve any
disagreement between the parties.

Arbitration and Governing Law

	10.	 	All disputes, controversies or claims arising out of or in connection with this Agreement
including its interpretation, termination or invalidity shall be finally settled under the
Rules of Arbitration of the International Chamber of Commerce by a sole arbitrator appointed
in accordance with those Rules. The seat of the arbitration shall be in USA. The language of
arbitration will be in English.

Notices

	11.1	 	All notices given pursuant to this Agreement will be sent by confirmed facsimile
transmission, electronic mail, pre-paid registered mail or hand delivery with signed receipt
to the addresses set out below or to such other addresses as notified from time to time in
accordance with this Clause.

	 	 	 
	For OPI:

	 	1 Christopher Way, Eatontown,
	 
	 	 
	 

	 	New Jersey, 07724, U.S.A.
	 
	 	 
	For HTS:

	 	7-2-18, Toyo, Koto-ku, Tokyo 135-8372, Japan

 

 

	11.2	 	Any notice sent by electronic mail and facsimile transmission will be deemed to have been
duly sent on the date of transmission.

Amendments

	13.	 	This Agreement may not be modified except by an instrument in writing signed by the duly
authorized representatives of the parties.

entire agreement

	14.	 	This Agreement sets out the entire agreement and understanding between the parties with
respect to the subject matter hereof. This Agreement supersedes all previous agreements,
arrangements and understandings between the parties with respect to the subject of this
Agreement, which will cease to have any further force or effect.

 

 

In witness whereof, the parties have caused this Agreement to be executed by their duly
authorized representatives.

SIGNED for and on behalf of

OpNext, Inc.

/s/ Lawrence Dooling

 

Name: Lawrence Dooling

Title: VP & CIO

Date: 3/26/02

SIGNED for and on behalf of

Hitachi Transport System, Ltd.

/s/ Shizuo
Seki

 

Name: Shizuo Seki

Title: General Manager

Date: 25th of March 2002

 

 

LIST OF APPENDIX

	 	 	 	 	 
	APPENDIX 1

	 	 	 	Service Menu
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 1.)
	 	Procedure for Drop Shipment to End User in USA
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 2.)
	 	Procedure for Storage Shipment to Fremont Warehouse
in USA
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 3.)
	 	Procedure for Receiving, Storage and Shipment at
Fremont Warehouse in USA to End User in USA &
Canada
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 4.)
	 	Procedure for Drop Shipment to End User in EU
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 5.)
	 	Procedure for Storage Shipment to Waadenburg
Warehouse in Netherlands
	 
	 	 	 	 
	APPENDIX 2

	 	(Part 6.)
	 	Procedure for Receiving, Storage and Shipment at
Waadenburg Warehouse in Netherlands to End User in
EU
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 1)
	 	Service Fee for Drop Shipment to End User in USA
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 2)
	 	Service Fee for Shipment from Narita airport to
Warehouse in Fremont, and Shipment from Warehouse
in Fremont to End User in Continental, USA
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 3)
	 	Service Fee for Shipment from Narita airport to
Warehouse in Fremont, and Shipment from Warehouse
in Fremont to End User in Hawaii, USA
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 4)
	 	Service Fee for Shipment to Warehouse in Fremont,
and Shipment from Warehouse in Fremont to End User
in Canada

 

 

	 	 	 	 	 
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 5)
	 	Service Fee for Drop Shipment to End User in EU
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 6)
	 	Service Fee for Shipment from Warehouse in
Waadenburg to End User in EU
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 7)
	 	Service Fee for Shipment from Narita airport to
Warehouse in Waadenburg
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 8)
	 	Warehouse Fee at Fremont, USA
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 9)
	 	Warehouse Fee at Waadenberg, Netherlands
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 10)
	 	RMA Fee from OPI
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 11)
	 	RMA Fee from OPG
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 12)
	 	RMA Freight from OPI
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 13)
	 	RMA Freight from OPG
	 
	 	 	 	 
	APPENDIX 3

	 	(Part 14)
	 	RMA Import Fee at Narita Airport
	 
	 	 	 	 
	APPENDIX 4

	 	(Part 1)
	 	Cargo & Document Flow for Shipment to OPI
	 
	 	 	 	 
	APPENDIX 4

	 	(Part 2)
	 	Cargo & Document Flow for Shipment to OPG
	 
	 	 	 	 
	APPENDIX 5

	 	(Part 1)
	 	Outline for Shipment to OPI
	 
	 	 	 	 
	APPENDIX 5

	 	(Part 2)
	 	Outline for Shipment to OPG

 

 

APPENDIX 1

Service Menu

	1.	 	Exportation from Japan

	 	1.1	 	Transportation from OPJ Totsuka factory to Narita airport.
	 
	 	1.2	 	Export Customs Clearance.
	 
	 	1.3	 	Documentation related Exportation in Japan and Importation at Destination Airport.

	2.	 	Import and Delivery in USA

	 	2.1	 	Import Customs Clearance at San Francisco Airport in USA.
	 
	 	2.2	 	Transfer to the Service Providers of HTS.
	 
	 	2.3	 	Delivery to the End User in USA.
	 
	 	2.4	 	Management of the Service Providers of HTS.

	3.	 	Import and Delivery in EU

	 	3.1	 	Import Customs Clearance at Airport in Netherlands.
	 
	 	3.2	 	Transfer to the Service Providers of HTS.
	 
	 	3.3	 	Delivery to the End User in EU.
	 
	 	3.4	 	Management of the Service Providers of HTS.

	4.	 	Domestic Delivery in Japan

	 	4.1	 	Storage in the Warehouse in Japan.
	 
	 	4.2	 	Delivery to the End User in Japan.

	5.	 	Related Data Management for Transportation

	 	5.1	 	Shipping Instruction Data Receiving.
	 
	 	5.2	 	T2 Data (Confirmation of Customs Clearance of Exportation from Japan) Returning.
	 
	 	5.3	 	T3 Data (Confirmation of Import Customs Clearance at Destination Airpport) Returning.
	 
	 	5.4	 	T4 Data (Confirmation of Delivery at the Instructed Delivery Place) Data Sending.

	6.	 	Storage at the Warehouse in Fremont, CA, USA

	 	6.1	 	Receiving and In-Bounding to Warehouse.
	 
	 	6.2	 	Picking and Out-Bounding.
	 
	 	6.3	 	Arrangement of Shipping to the Instructed End User.

	7.	 	Storage at the Warehouse in Waadenburg, Netherland

	 	7.1	 	Receiving and In-Bounding to Warehouse.
	 
	 	7.2	 	Picking and Out-Bounding.
	 
	 	7.3	 	Arrangement of Shipping to the Instructed End User.

	8.	 	Return Shipment from OP

	 	8.1	 	Receiving at Warehouse in Fremont, CA, USA and Waadenburg, Netherland from OP.
	 
	 	8.2	 	In-Bounding returned products.
	 
	 	8.3	 	Picking and Out-Bounding.
	 
	 	8.4	 	Arrangement of Shipping to OpNext Japan, Inc. Totsuka Works in accordance with the return
shipment instruction from OP.

 

 

APPENDIX 2

(Part 1.)

Procedure for Drop Shipment to End User in USA

Procedure

1. OP

OP will send shipping instruction data from Oracle System of OP to Higlos System of HTS
via electric method.

This data transfer time will be two times per day with the below mentioned time schedule
in Japan.

	 	(1)	 	First Time : PM 2:00 (Japan Time)
	 
	 	(2)	 	Second Time : PM 4:00 (Japan Time)

2. HTS Totsuka Sales Office (hereinafter call “HTS-Totsuka”)

	 	(1)	 	HTS-Totsuka will dispatch the packed products to Narita airport.

3. HTS Air Cargo Division 1 (hereinafter call “HTS-KA1”)

	 	(1)	 	HTS-KA1 will receive the above mentioned (2.(1)) shipping instruction
data by Higlos system.
	 
	 	(2)	 	The received data will be used for generation of the below mentioned
documents

	 	(a)	 	Commercial Invoice

	 	�	 	Shipper : OpNext Japan, Inc
	 
	 	‚	 	Buyer : OpNext, Inc.
	 
	 	ƒ	 	Delivery To : End User

	 	(b)	 	Packing List

	 	(3)	 	HTS-KA1 will generate necessary HAWB with the below mentioned conditions.

	 	(a)	 	Shipper : OpNext Japan, Inc.
	 
	 	(b)	 	Consignee : OpNext, Inc.
	 
	 	(c)	 	Destination : San Francisco, USA

	 	(4)	 	HTS-KA1 will send the Packing List to HTS-Narita warehouse for attachment
to the actual carton box for the End User.
	 
	 	(5)	 	HTS-KA1 will arrange Airline pouch with the below mentioned documents
only.

	 	(a)	 	Packing List
	 
	 	(b)	 	HAWB
	 
	 	(c)	 	MAWB

	 	(6)	 	HTS-KA1 will send the below mentioned documents to HTSA-SFO as shipping
advice through fax.

	 	(a)	 	Commercial Invoice
	 
	 	(b)	 	Packing List
	 
	 	(c)	 	HAWB
	 
	 	(d)	 	MAWB

4. HTS Narita Operation Office (hereinafter call “HTS-Narita”)

	 	(1)	 	HTS-Narita will arrange export customs clearance to Customs Office.
	 
	 	(2)	 	HTS-Narita will attach the packing list to the actual carton box which
packing list will be received from HTS-KA1 as mentioned 3. (4).
	 
	 	(3)	 	HTS-Narita will transfer the customs cleared products to the booked
Airline Company’s warehouse at Narita Airport.

5. HTSA San Francisco Sales Office (hereinafter call “HTSA-SFO”)

	 	(1)	 	HTSA-SFO will receive shipping advice as mentioned 3. (6).
	 
	 	(2)	 	After arrival of flight at San Francisco Airport, HTSA-SFO will arrange
import customs clearance.
	 
	 	(3)	 	Cleared products will be transferred to FedEx warehouse for ship to each
End User. The end user name will be referred on the commercial invoice as mentioned
“Delivery To : ”.
	 
	 	(4)	 	The commercial invoice as mentioned 3. (2) will not be attached on the
carton box nor delivered to he End User.
	 
	 	(5)	 	AWB of FedEx will be generated with as mentioned below.

	 	(a)	 	Shipper : OpNext, Inc. / HTSA
	 
	 	(b)	 	Consignee : End User

 

 

APPENDIX 2

(Part 2.)

Procedure for Storage Shipment to Fremont Warehouse in USA

Procedure

1. OP

OP will send shipping instruction data from Oracle System of OP to Higlos System of HTS via
electric method.

This data transfer time will be two times per day with the below mentioned time schedule
in Japan.

	 	(3)	 	First Time : PM 2:00 (Japan Time)
	 
	 	(4)	 	Second Time : PM 4:00 (Japan Time)

2. HTS-Totsuka

	 	(2)	 	HTS-Totsuka will dispatch the packed products to Narita airport.

3. HTS-KA1

	 	(7)	 	HTS-KA1 will receive the above mentioned (2.(1)) shipping instruction
data by Higlos system.
	 
	 	(8)	 	The received data will be used for generation of the below mentioned
documents

	 	(c)	 	Commercial Invoice

	 	�	 	Shipper : OpNext Japan, Inc
	 
	 	‚	 	Buyer : OpNext, Inc.
	 
	 	ƒ	 	Delivery To : Fremont, CA, USA

	 	(d)	 	Packing List

	 	(9)	 	HTS-KA1 will generate necessary HAWB with the below mentioned conditions.

	 	(d)	 	Shipper : OpNext Japan, Inc.
	 
	 	(e)	 	Consignee : OpNext, Inc.
	 
	 	(f)	 	Destination : San Francisco, USA

	 	(10)	 	HTS-KA1 will send the Packing List to HTS-Narita warehouse for attachment
to the actual carton box.
	 
	 	(11)	 	HTS-KA1 will arrange Airline pouch with the below mentioned documents
only.

	 	(d)	 	Packing List
	 
	 	(e)	 	HAWB
	 
	 	(f)	 	MAWB

	 	(12)	 	HTS-KA1 will send the below mentioned documents to HTSA-SFO as shipping
advice through fax.

	 	(e)	 	Commercial Invoice
	 
	 	(f)	 	Packing List
	 
	 	(g)	 	HAWB
	 
	 	(h)	 	MAWB

4. HTS-Narita

	 	(4)	 	HTS-Narita will arrange export customs clearance to Customs Office.
	 
	 	(5)	 	HTS-Narita will attach the packing list to the actual carton box which
packing list will be received from HTS-KA1 as mentioned 3. (4).
	 
	 	(6)	 	HTS-Narita will transfer the customs cleared products to the booked
Airline Company’s warehouse at Narita airport.

5. HTSA-SFO

	 	(6)	 	HTSA-SFO will receive shipping advice as mentioned 3. (6).
	 
	 	(7)	 	After arrival of flight at San Francisco Airport, HTSA-SFO will arrange
import customs clearance.
	 
	 	(8)	 	Cleared goods will be delivered to Fremont Warehouse.

 

 

APPENDIX 2

(Part 3.)

Procedure for Receiving, Storage and Shipment

at Fremont Warehouse in USA to End User in USA & Canada

Procedure

	 	1.	 	In-Bounding to Inventory
	 
	 	1.1	 	HTSA Fremont Sales Office (hereinafter call “HTSA-Fremont”)

	 	(1)	 	HTSA-Fremont will receive the products from HTSA-SFO.
	 
	 	(2)	 	HTSA-Fremont will inbound the arrived products in accordance with the
manual for in-bounding which is provided by OP.
	 
	 	(3)	 	The products will be stored in the shelf or approved method by OP.

	2. Out-Bounding from Inventory

	 	2.1	 	OPI

	 	(1)	 	OPI will encode the picking instruction to Oracle System for enable
HTSA-Fremont to perform the necessary out-bounding work for shipment to End User in
USA.

	 	2.2	 	HTSA-Fremont

	 	(1)	 	HTSA-Fremont will receive out-bound instruction through Oracle System at
Fremont Warehouse.
	 
	 	(2)	 	HTSA-Fremont will issue the below mentioned documents through Oracle
System at Fremont Warehouse.

	 	(a)	 	Picking Slip
	 
	 	(b)	 	Barcode Label which shows details of products to be shipped out
to End User.

	 	(3)	 	HTSA-Fremont will pack the instructed products in accordance with packing
specification, if it is necessary.
	 
	 	(4)	 	HTSA-Fremont will put the picking slip into the carton box for delivery
to End User.
	 
	 	(5)	 	HTSA-Fremont will attach the barcode label on the side of carton box.
	 
	 	(6)	 	HTSA-Fremont will issue the FedEx AWB for delivery to End User. The
contents of FedEx AWB will be as mentioned below. The issued AWB will be attached
on the carton box.

	 	(a)	 	Shipper : OpNext, Inc. / HTSA
	 
	 	(b)	 	Consignee : End User

	 	(7)	 	Upon completion from 2.2 (1) to 2.2 (6), HTSA-Fremont will ship the
products to End User.
	 
	 	(8)	 	HTSA-Fremont will provide necessary staff for actual inventory counting
in accordance with the requirement from OPI.

	3. Storage in the Warehouse

	 	3.1	 	The stored products will be stored in the shelf or approved method by OP.
	 
	 	3.2	 	The stored products will be protected by inner packaging
material which will be arranged at the factory in Japan. Therefore
anti-static treatment will not be required to the shelf and other facilities and the staff who will handle the inner packed products.

 

 

APPENDIX 2

(Part 4.)

Procedure for Drop Shipment to End User in EU

Procedure

1. OP

OP will send shipping instruction data from Oracle System of OP to Higlos System of HTS
via electric method.

This data transfer time will be two times per day with the below mentioned time schedule
in Japan.

	 	(5)	 	First Time : PM 2:00 (Japan Time)
	 
	 	(6)	 	Second Time : PM 4:00 (Japan Time)

2. HTS-Totsuka

	 	(3)	 	HTS-Totsuka will dispatch the packed products to Narita airport.

3. HTS-KA1

	 	(13)	 	HTS-KA1 will receive the above mentioned (2.(1)) shipping instruction
data by Higlos system.
	 
	 	(14)	 	The received data will be used for generation of the below mentioned
documents

	 	(e)	 	Commercial Invoice

	 	�	 	Shipper : OpNext Japan, Inc
	 
	 	‚	 	Buyer : OpNext Germany, GmbH.
	 
	 	ƒ	 	Delivery To : End User

	 	(f)	 	Packing List

	 	(15)	 	HTS-KA1 will generate necessary HAWB with the below mentioned conditions.

	 	(g)	 	Shipper : OpNext Japan, Inc.
	 
	 	(h)	 	Consignee : OpNext Germany, GmbH.
	 
	 	(i)	 	Destination : Amsterdam, Netherlands

	 	(16)	 	HTS-KA1 will send the Packing List to HTS-Narita warehouse for attachment
to the actual carton box for the End User.
	 
	 	(17)	 	HTS-KA1 will arrange Airline pouch with the below mentioned documents
only.

	 	(g)	 	Packing List
	 
	 	(h)	 	HAWB
	 
	 	(i)	 	MAWB

	 	(18)	 	HTS-KA1 will send the below mentioned documents to HTSN as shipping
advice through fax.

	 	(i)	 	Commercial Invoice
	 
	 	(j)	 	Packing List
	 
	 	(k)	 	HAWB
	 
	 	(l)	 	MAWB

4. HTS-Narita

	 	(7)	 	HTS-Narita will arrange export customs clearance to Customs Office.
	 
	 	(8)	 	HTS-Narita will attach the packing list to the actual carton box which
packing list will be received from HTS-KA1 as mentioned 3. (4).
	 
	 	(9)	 	HTS-Narita will transfer the customs cleared products to the booked
Airline Company’s warehouse at Narita Airport.

5. HTSN

	 	(9)	 	HTSN will receive shipping advice as mentioned 3. (6).
	 
	 	(10)	 	After arrival of flight at Amsterdam, Netherlands, HTSN will arrange
import customs clearance.
	 
	 	(11)	 	Cleared products will be transferred to DHL warehouse for ship to each
End User. The End User name will be referred on the commercial invoice as mentioned
“Delivery To : ”.
	 
	 	(12)	 	The commercial invoice as mentioned 3. (2) will not be attached on the
carton box nor delivered to the End User.
	 
	 	(13)	 	AWB of DHL will be generated with as mentioned below.

	 	(a)	 	Shipper : OpNext Germany, GmbH / HTSN
	 
	 	(b)	 	Consignee : End User

 

 

APPENDIX 2

(Part 5)

Procedure for Storage Shipment to Waadenburg Warehouse in Netherlands

Procedure

1. OP

OP will send shipping instruction data from Oracle System of OP to Higlos System of HTS via
electric method.

This data transfer time will be two times per day with the below mentioned time
schedule
in Japan.

	 	(7)	 	First Time : PM 2:00 (Japan Time)
	 
	 	(8)	 	Second Time : PM 4:00 (Japan Time)

2. HTS-Totsuka

	 	(4)	 	HTS-Totsuka will dispatch the packed products to Narita airport.

3. HTS-KA1

	 	(19)	 	HTS-KA1 will receive the above mentioned (2.(1)) shipping instruction
data by Higlos system.
	 
	 	(20)	 	The received data will be used for generation of the below mentioned
documents

	 	(g)	 	Commercial Invoice

	 	�	 	Shipper : OpNext Japan, Inc
	 
	 	‚	 	Buyer : OpNext Germany, GmbH.
	 
	 	ƒ	 	Delivery To : Waadenburg, Netherlands.

	 	(h)	 	Packing List

	 	(21)	 	HTS-KA1 will generate necessary HAWB with the below mentioned conditions.

	 	(j)	 	Shipper : OpNext Japan, Inc.
	 
	 	(k)	 	Consignee : OpNext Germany, GmbH.
	 
	 	(l)	 	Destination : Amsterdam, Netherlands

	 	(22)	 	HTS-KA1 will send the Packing List to HTS-Narita warehouse for attachment
to the actual carton box for the End User.
	 
	 	(23)	 	HTS-KA1 will arrange Airline pouch with the below mentioned documents
only.

	 	(j)	 	Packing List
	 
	 	(k)	 	HAWB
	 
	 	(l)	 	MAWB

	 	(24)	 	HTS-KA1 will send the below mentioned documents to HTSN as shipping
advice through fax.

	 	(m)	 	Commercial Invoice
	 
	 	(n)	 	Packing List
	 
	 	(o)	 	HAWB
	 
	 	(p)	 	MAWB

4. HTS-Narita

	 	(10)	 	HTS-Narita will arrange export customs clearance to Customs Office.
	 
	 	(11)	 	HTS-Narita will attach the packing list to the actual carton box which
packing list will be received from HTS-KA1 as mentioned 3. (4).
	 
	 	(12)	 	HTS-Narita will transfer the customs cleared products to the booked
Airline Company’s warehouse at Narita Airport.

5. HTSN

	 	(14)	 	HTSN will receive shipping advice as mentioned 3. (6).
	 
	 	(15)	 	After arrival of flight at Amsterdam Airport, HTSN will arrange bonded
transfer to Waadenburg Warehouse.

 

 

APPENDIX 2

(Part 6)

Procedure for Receiving, Storage and Shipment

at Waadenburg Warehouse in Netherlands to End User in EU

Procedure

1. In-Bounding to Inventory

	 	1.1	 	HTSN

	 	(4)	 	HTSN will receive the products from Amsterdam Airport.
	 
	 	(5)	 	HTSN will inbound the arrived products in accordance with the manual for
in-bounding which is provided by OPG.
	 
	 	(6)	 	The products will be stored in the shelf or approved method by OP.

2. Out-Bounding from Inventory

	 	2.1	 	OPG

	 	(2)	 	OPG will encode the picking instruction to Oracle System for enable HTSN
to perform the necessary out-bounding work for shipment to End User in EU.

	 	2.2	 	HTSN

	 	(9)	 	HTSN will receive out-bound instruction through Oracle at Waadenburg
Warehouse.
	 
	 	(10)	 	HTSN will issue the below mentioned documents through Oracle System at
Waadenburg Warehouse.

	 	(c)	 	Picking Slip
	 
	 	(d)	 	Barcode Label which shows details of products to be shipped out
to End User.

	 	(11)	 	HTSN will pack the instructed products in accordance with packing
specification.
	 
	 	(12)	 	HTSN will put the picking slip into the carton box for delivery to End
User.
	 
	 	(13)	 	HTSN will attach the barcode label on the side of carton box.
	 
	 	(14)	 	HTSN will issue the DHL AWB for delivery to End User. The contents of
DHL AWB will be as mentioned below. The issued AWB will be attached on the carton
box.

	 	(c)	 	Shipper : OpNext Germany, GmbH / HTSN
	 
	 	(d)	 	Consignee : End User

	 	(15)	 	Upon completion from 2.2 (1) to 2.2 (6), HTSN will ship the products to
End User.
	 
	 	(16)	 	HTSN will provide necessary staff for actual inventory counting in
accordance with
the requirement from OPG.

3. Storage in the Warehouse

	 	3.1	 	The stored products will be stored in the shelf or approved method by OP.
	 
	 	3.2	 	The stored products will be protected by inner packaging
material which will be arranged at the factory in Japan. Therefore anti-static
treatment will not be required to the shelf and other facilities and the staff who will handle the inner packed
products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX 3

(Part 8)

	 	 	 	 
	

	 	Hitachi Transport System (America), Ltd. 

Semiconductor Distribution Center 

41460 Boyce Road · Fremont, CA 94538

Telephone 510.770.0444 · Fax 510.770.0755	 

September 24, 2001

Dear OpNext, Inc. Representative,

Thank you very much for giving us opportunity of business.

We are pleased to provide you with the following quotation(s):

Warehouse Fee at Fremont, USA

	 	 	 
	1. Receiving

	 	$3.45/Carton
	 
	 	 
	2. Shipping (Consist of next 2 categories/EX-Warehouse)
	 
	 	 
	     •     Processing

	 	$5.75/Shipping instruction/part name
	 
	 	 
	     •     Handling 

	 	$3.45/Carton
	 
	 	 
	3. Storage

	 	$4.42/QFt/Month
	 

	 	(Minimum charge : $300.00/Month)

(Part name by Part name Location. Less than 1QFt counts for 1QFt.)

(Storage calcuration; previous month/end ttl volume + this month ttl receiving)

	 	 	 
	Remarks;

	 	This quotation is based on current manner of Warehouse operation, does not include
below.
	 
	 	 
	 

	 	•     Set up (customize) fee for inventory controll system & P.C., Printer.

	 
	 	 
	 

	 	•     Processing fee for Return Material

	 
	 	 
	 

	 	•     Product Disposal fee (In the event of Product scrap request)

	 
	 	 
	 

	 	•     Special service such as Serial Number Tracking.

Sincerely,

Hiromoto Sekizawa

Hitachi Transport System (America), Ltd.

Semiconductor Distribution Center

 

 

APPENDIX 3

(Part 9)

 Hitachi Transport Systeem Nederland

October 18, 2001

Dear OpNext, Inc.

We are very glad to have received your request for quotation. In
response to your inquiry, we would like to submit the following quotation;

Warehouse Fee at Waadenbutg, Netherlands

	 	 	 
	1. Handling in

	 	EUR2.50/carton

     Handling goods in, sorting, check quality and quantity

     Pallet in and out rack location

	 	 	 
	2. Storage

	 	EUR6.50/m2/week
	 

	 	(Minimum EUR100.00/week)

*Storage calculation: average sqm in week x unit price

	 	 	 
	3. Handling out

	 	EUR2.50/carton

     Picking, Packing, Handling goods out, create and print shipping documents

4. Additional service

     If any, additional service calculated by EUR50.00/manhour

	 	 	 
	Remarks:

	 	-     This price is based on cargo volume 3ton/month (on chargeable weight basis).
	 
	 

	 	-     not include hardware, software and set up fee for OpNext’s system.

	 
	 

	 	-     not include packing material expense.

	 
	 

	 	-     not include processing fee for return cargo.

	 
	 

	 	-     not include product disposal fee.

Sincerely

Business Development Manager

Masaaki Homma

Hitachi Transport Systeem Nederland BV

 

 

APPENDIX 3

(Part 10)

	 	 	 	 
	

	 	Hitachi Transport System (America), Ltd. 

Semiconductor Distribution Center

41460 Boyce Road · Fremont, CA 94538

Telephone 510.770.0444 · Fax 510.770.0755	 

September 24, 2001

Dear OpNext, Inc. Representative,

Thank you very much for giving us opportunity of business.

We are pleased to provide you with the following quotation(s):

RMA Fee from OPI

	 	 	 
	1. Receiving

	 	$3.45/Carton
	 
	 	 
	2. Shippng fee for Return Material (Consist of next 2 categories/EX-Warehouse)
	 
	 	 
	     •     Processing

	 	$17.25/RMA#
	 

	 	(Fixed cost, ship or scrap)
	 
	 	 
	     •     Handling

	 	$0.25/product pc
	 

	 	(Q’ty count, part name verification, inspection for damage)
	 
	 	 
	3. Storage

	 	$4.42/QFt/Month
	 

	 	(Minimum charge : $300.00/Month)

(Part name by Part name Location. Less than 1QFt counts for 1QFt.)

(Storage calcuration; previous month/end ttl volume + this month ttl receiving)

	 	 	 
	Remarks;

	 	This quotation is based on current manner of Processing RMA (Return Material).
Does not include below.
	 
	 

	 	•     Set up (customize) fee for inventory controll system & P.C., Printer.

	 
	 

	 	•     Product Disposal fee (In the event of Product scrap request)

	 
	 

	 	•     Special service such as Serial Number Tracking.

Sincerely,

Hiromoto Sekizawa

Hitachi Transport System (America), Ltd.

Semiconductor Distribution Center

 

 

APPENDIX 3

(Part 11)

      Hitachi Transport Systeem Nederland

October 24, 2001

Dear OpNext, Inc.

We are very glad to have received your request for quotation. In response to your inquiry, we would
like to submit the following quotation;

RMA Fee from OPG

	 	 	 
	1. Receiving

	 	EUR3.00/carton
	 
	 	 
	2. Shipping fee for Return Material
	     Processing Fee

	 	EUR20.00/RMA#
	     Handling

	 	EUR0.30/product pcs
	     (Q’ty count, part name verification, inspection for damage)

	 	 	 
	3. Storage

	 	EUR6.50/m2/week
	 

	 	(Minimum EUR100.00/week)

*Storage calculation: average sqm in week x unit price

5. Additional service

     If any, additional service calculated by EUR50.00/manhour

	 	 	 
	Remarks:

	 	-     not include hardware, software and set up fee for OpNext’s system.

	 
	 

	 	-     not include re-packing material expense.

	 
	 

	 	-     not include product disposal fee

Sincerely

Business Development Manager

Masaaki Homma

Hitachi Transport Systeem Nederland BV

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