Document:

exv10w13

 

Exhibit 10.13

MASTER LOAN AND SECURITY AGREEMENT

Agreement No. CKVP-ARU-03 Dated July 31, 2003

This Loan and Security Agreement (this “Agreement”) is entered into by and between Costella
Kirsch Venture Partners I, L.P. (“Lender”), having its principal place of business at 873 Santa
Cruz Ave., Suite 207, Menlo Park, CA 94025, and Aruba Wireless Networks, Inc.

(“Borrower”), having its principal place of business at 180 Great Oaks Blvd., Suite B, San Jose,
CA 95119.

1. LOAN: Subject to the terms and conditions of this Agreement, Lender agrees to make loans (each,
a “Loan” and, collectively, the “Loans”) to Borrower from time to time prior to April 30, 2004,
each in an amount equal to the aggregate original invoice cost of the Equipment (as defined below)
specified on a schedule in the form of Exhibit A attached hereto (each, a “Schedule” and,
collectively, the “Schedule(s)”); provided that the aggregate original amount of all Loans shall
not exceed the Commitment Amount as stated in the Commitment Letter attached hereto as Exhibit B.
Amounts borrowed and repaid may not be reborrowed. Each Loan shall be secured by the personal
property and software listed on a Schedule which shall be approved by Lender in its sole discretion
(such personal property and software with respect to any Schedule, together with any replacements,
substitutions, repairs, or additions being referred to herein as the “Equipment” with respect to
such Schedule). A list of such property to be included in a Schedule together with copies of paid
invoices must be delivered to Lender at least ten (10) calendar days before Lender funds under such
Schedule. Each Schedule shall constitute a separate and independent Loan and shall incorporate the
terms and conditions contained herein. Lender may suspend its commitment to make any additional
loans, advances or extensions of credit at any time if any of the following occurs as determined by
Lender in its sole discretion: (i) there is (A) any material adverse change to the business,
operations, or financial condition of Borrower or (B) a material impairment of any portion of the
Collateral or of the Borrower’s ability to perform under this Agreement or any Schedule, or (C) any
material adverse deviation by Borrower from the business plan presented to and approved by Lender
(each, a “Material Adverse Change”) or (ii) any Event of Default occurs and continues.

2. TERMS AND PAYMENTS: Each Loan shall commence upon the execution of a Schedule in connection
therewith by the Lender and the Borrower. Borrower agrees to pay Lender the combined payments of
principal and interest (“Payments”) specified herein and in the applicable Schedule. Borrower may
prepay any Loan at any time by making a single payment equal to (i) all outstanding amounts due
prior to the date of prepayment and (ii) the present value of all future payments, discounted using
a rate equal to the Bank of America Prime Rate (as in effect on the date of prepayment) minus 1.5%.
The first Payment is due on the date specified in the applicable Schedule (“Commencement Date”) and
remaining Payments are due on the same date of each succeeding month during the term of the Loan
(“Term”), or as specified in the applicable Schedule. If Lender should make any fundings under a
Schedule prior to the Commencement Date of the Schedule therefor, Borrower shall, on such
Commencement Date, pay interim interest to Lender at a rate equal to the implicit interest rate of
the Schedule multiplied by the “Equipment Cost This Schedule” as set forth in the applicable
Schedule from such funding date to the Commencement Date. If Borrower is late in making any
payment under this Agreement by more than three (3)

 

 

days (a “Late Payment”), Borrower agrees to pay a late charge of five percent (5%) of the payment
due, but not less than two hundred dollars ($200) for any one such delinquent payment, plus
default interest accruing at a rate of 1% per month on the amount due.

3.
THIS SECTION INTENTIONALLY LEFT BLANK.

4. GRANT OF SECURITY INTEREST: Borrower hereby grants to Lender a valid, first priority,
continuing security interest in all of its rights, title or interest in, to and under any and all
presently existing or owned or hereafter arising or acquired Equipment which is listed on a
Schedule and any and all proceeds thereof (collectively, the “Collateral”), in order to secure the
full, prompt and complete payment and performance of its obligations under this Agreement and each
Schedule.

5. WARRANTIES: Borrower acknowledges that it has made the selection of each item of Equipment
based upon its own judgment. LENDER MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF DESCRIPTION, INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE WITH RESPECT TO THE EQUIPMENT AND HEREBY DISCLAIMS THE SAME. Lender
shall have no liability for any damages, whether direct or consequential, incurred by Borrower as
a result of any defect or malfunction of the Equipment.

6. TITLE, LOCATION AND RETURN: Lender and Borrower hereby confirm their intent that the Equipment
used as Collateral for the Loan remain and be deemed the personal property of, regardless of its
attachment to any real property, and title thereto shall remain in Borrower. Borrower, at its
expense, shall protect and defend the title to the Collateral and keep it free of all claims and
liens of third parties other than Lender and other than Permitted Liens. “Permitted Liens” means:
(i) liens for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings, provided the same have no
priority over any of Lender’s security interests; and (ii) liens securing claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like persons or entities
imposed without action of such parties, provided that the payment thereof is not yet required.
If requested by Lender, Borrower will affix plates or markings on the Equipment indicating the
security interest of Lender. Borrower may not remove the Equipment from its place of installation
without Lender’s prior written consent, which consent shall not be unreasonably withheld. Lender
shall have the right to inspect the Equipment during regular business hours, with reasonable
notice, and in compliance with Borrower’s reasonable security procedures. Upon the occurrence and
continuance of any Event of Default as defined below, at Lender’s request, and at Borrower’s own
risk and expense, Borrower will deliver the Equipment to Lender in the same condition as when
received, ordinary wear and tear excepted, at such location as Lender shall designate within
Northern California. All charges to cover the Equipment’s transportation, deinstallation,
packing, installation and handling to and from Lender’s facilities or vendor’s plant or as required
hereunder shall be paid by Borrower.

7. ASSIGNMENT: Borrower acknowledges and agrees that Lender may sell, assign, grant a security
interest in, or otherwise transfer all or any part of its rights, title and interest in this
Agreement (including, without limitation, the security interest granted herein) or any Schedule
without notice to or the consent of Borrower. Upon written notice, Borrower shall, if requested,
pay directly to such assignee without abatement, deduction or set-off all amounts which become due
hereunder. Borrower waives and agrees it will not assert against such assignee any set-off in any
action for Payments under any Schedule. Each assignee shall be deemed a Lender hereunder

 

 

and if there are two or more Lenders through such assignment, the exercise of Lenders’ rights and
remedies shall be by agreement of Lenders holding a majority, by dollar amount, of the Loan
outstanding. BORROWER MAY NOT ASSIGN, GRANT A SECURITY INTEREST IN (OTHER THAN A PERMITTED LIEN),
OR OTHERWISE TRANSFER, LEASE OR DISPOSE OF ALL OR ANY PART OF ITS RIGHTS, TITLE AND INTEREST IN AND
TO THIS AGREEMENT, ANY SCHEDULE OR ANY EQUIPMENT. Notwithstanding the foregoing, Borrower may (i)
dispose of excess, worn-out or obsolete Equipment (provided that any cash proceeds from the
disposition are used to purchase additional equipment or are provided to Lender and applied to the
last payment under the applicable schedule), and (ii) assign this Agreement, the Equipment, and
each Schedule to a successor in interest to all or substantially all of the business of Borrower to
which the Equipment relates if the following conditions precedent are satisfied: (i) no Event of
Default has occurred and is continuing, (ii) such successor has a net worth and financial condition
greater than or equal to Borrower as determined in good faith by Lender, and (iii) such successor
executes an assumption agreement in form and substance satisfactory to Lender.

8. TAXES: Borrower agrees to pay if and when due, and indemnify, hold harmless and reimburse
Lender for, in addition to other amounts due hereunder and under each Schedule, all fees and
assessments, and all sales, use, property, excise and other taxes and charges (including all
interest and penalties), now or hereafter imposed by any governmental body or agency upon or in
connection with any of the Equipment or this Agreement or any Schedule hereunder or upon the
purchase, ownership, possession, leasing, operation, use, rentals or other payments, or disposition
of any Equipment whether payable by Lender or Borrower (exclusive, in each case, of any taxes on or
measured by Lender’s net income or gross receipts). Borrower agrees to prepare and file promptly
with the appropriate offices any and all tax and similar returns required to be filed with respect
thereto. Any expenses paid by Lender on behalf of Borrower shall become immediately due and
payable.

9. USE; MAINTENANCE: (a) Borrower, at its expense, shall make all necessary site preparations
and cause the Equipment to be operated substantially in accordance with any applicable
manufacturer’s manuals or instructions. So long as no Event of Default has occurred and is
continuing, Borrower shall have the right to quietly possess and use the Equipment as provided
herein without interference by Lender. (b) Borrower, at its expense, shall maintain the Equipment
in good condition, reasonable wear and tear excepted, and will comply with all material laws to
which the use and operation of the Equipment may be or become subject, except where the failure to
comply would not cause a Material Adverse Change. Such obligation shall extend to repair and
replacement of any partial loss or damage to the Equipment, regardless of the cause. If maintenance
is mandated by manufacturer, Borrower shall obtain and keep in effect, at all times during the term
of this Agreement maintenance service contracts reasonably approved by Lender such approval not to
be unreasonably withheld. All parts furnished in connection with such maintenance or repair shall
immediately become part of the Equipment. All such maintenance, repair and replacement services
shall be timely paid for and discharged by Borrower with the result that no lien will attach to the
Equipment.

10. INSURANCE: Borrower shall obtain and maintain for the term of this Agreement, at its own
expense, “all risk” insurance against loss or damage to the Equipment, and general public liability
insurance (including contractual liability coverage), and such other insurance against such other
risks of loss and with such terms, as maintained by similarly situated corporations. The amount of
the “all risk” insurance shall be the greater of the replacement value of the Equipment (as new) or
the “Total Purchase Price” of the Equipment as specified in the applicable Schedule. Each

 

 

insurance policy shall: (i) name Lender as an additional insured or loss payee, or both, as
appropriate, (ii) provide each insurer’s waiver of its right of subrogation against Lender, (iii)
provide that such insurance shall not be invalidated by any action of, or breach of warranty by,
Borrower under any of its insurance policies, (iv) provide that Borrower’s insurance shall be
primary without a right of contribution of Lender’s insurance, if any, and (v) shall contain a
clause requiring the insurer to give Lender at least 30 days prior written notice of any
alterations in the terms of such policy or of its cancellation. Borrower shall on or prior to the
date of the first Schedule and prior to each policy renewal, furnish to Lender certificates of
insurance or other evidence satisfactory to Lender that such insurance coverage is in effect.
Borrower further agrees to give Lender prompt notice of any material damage to, or loss of, the
Equipment, or any part thereof.

11. LOSS; DAMAGE; INDEMNIFICATION: If, for any reason, any of the Equipment shall become lost,
stolen, destroyed or damaged beyond repair, or be condemned, confiscated, or seized (except by
Lender), Borrower shall promptly replace the Equipment with equipment of similar kind and such
replacement equipment shall immediately become subject to Lender’s security interest hereunder, or
pay to Lender the aggregate unpaid Payments for the remaining term of the applicable Schedule plus
an amount equal to any final balloon payment obligation as set forth in the applicable Schedule
under “End of Loan Terms,” discounted using a rate equal to the Bank of America Prime Rate (as in
effect on the date of prepayment) minus 1.5% per annum from the scheduled date of each such payment
to the date of the loss, less the net amount of the recovery, if any, received by Lender from
insurance or a governmental authority. Borrower hereby assumes liability for, and shall indemnify
and defend Lender against, any and all liabilities, losses, damages, claims and expenses (including
reasonable attorney fees) in any way relating to or arising out of this Agreement, any Schedule or
any item of Equipment, including without limitation the manufacture, purchase, ownership,
shipment, transportation, delivery, installation, leasing, possession, use, operation,
deinstallation, storage and return of such Equipment, except for loss caused solely by the gross
negligence or willful misconduct of Lender. Borrower shall give Lender prompt notice of any
occurrence, event or condition in connection of which Borrower becomes aware with which Lender may
be entitled to indemnification hereunder. The indemnities contained herein shall survive the
expiration of the Term.

12. EVENTS OF DEFAULT: An “Event of Default” shall occur if Borrower: (i) fails to pay any
installment of rent or other payment required hereunder when due; or (ii) fails to perform or
observe any other covenant, condition or agreement hereunder or breaches any provision contained
herein or in any other document furnished Lender in connection herewith and such failure or breach
continues for 30 days; or (iii) without Lender’s consent, attempts to sell, transfer, encumber
(other than Permitted Liens), part with possession, or lease any item of Equipment (except as
permitted by this Agreement); or (iv) makes any representation or warranty herein or in any
document furnished in connection herewith, which shall have been materially false or inaccurate
when made; or (v) fails to maintain insurance required hereunder; or (vi) shall be generally unable
to pay its debts as they become due, makes an assignment for the benefit of creditors or consents
to the appointment of a trustee or receiver or bankruptcy or insolvency proceedings shall be
instituted by or against Borrower (and in the case of any such filing against Borrower, a period of
90 days shall have elapsed without such filing being vacated) or (vii) shall deviate materially
from its business plan as presented to Lender (or any subsequent business plan approved by
Borrower’s Board of Directors and presented to and accepted by Lender) or (viii) fails to provide
Lender with monthly financials within 30 days of month end, provided that Borrower shall have 15
days following receipt of written notice from Lender of such failure to provide monthly financials
to

 

 

cure such failure before such failure is deemed an Event of Default hereunder or (ix) fails to
provide audited annual financials within 240 days of year end provided that Borrower did have an
audit performed, provided that Borrower shall have 15 days following receipt of written notice
from Lender of such failure to provide audited annual financials to cure such failure before such
failure is deemed an Event of Default hereunder or (x) shall be in default with any other lender
for money borrowed in excess of $100,000 which default would allow such lender to accelerate such
loan.

13. REMEDIES: Upon the occurrence of any Event of Default and at any time thereafter, provided
such Event of Default is then continuing, Lender may, in its discretion, do any one or more of the
following: (i) terminate this Agreement upon notice to Borrower; (ii) declare any or all sums
under this Agreement or any Schedule to be immediately due and payable; (iii) require that Borrower
return all Equipment to Lender in accordance with Section 6 hereof; (iv) enter upon the premises
where such Equipment is located and take immediate possession of and remove the same, all without
liability to Lender or its agents for such entry; (v) to the extent permitted by applicable law,
sell any or all of the Collateral at public or private sale, with or without notice to Borrower or
advertisement, or otherwise dispose of, or lease to others such Equipment, all free and clear of
any rights of Borrower; (vi) exercise any other right or remedy which may be available under the
Uniform Commercial Code, any other applicable law or in equity, including the right to recover
damages for the breach hereof. In addition, Borrower shall be liable for, and reimburse Lender
for, all reasonable and necessary attorneys’ fees and other expenses incurred by Lender in
enforcing this Agreement, or the exercise of Lender’s remedies hereunder, including, without
limitation, placing any Equipment in the condition required by Section 6 hereof. No remedy
referred to in this Section is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise available to Lender at law or in
equity. There shall be no waiver by Lender of any default unless in writing and such waiver shall
not constitute a waiver of any other default by Borrower, or a waiver of any of Lender’s other
rights. Any partial exercise of or failure to exercise any right or remedy shall not operate as a
waiver or disclaimer of such right or remedy or any other right or remedy of Lender.

14. BORROWER’S REPRESENTATIONS, WARRANTIES, AND COVENANTS: As of
the date of the Loan, and, without any further action, again as of the date of each Schedule,
Borrower warrants and represents the following: (a) Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the state of its incorporation and is duly
qualified and authorized to do business in each state where the failure to be so qualified could
have a material adverse effect on Borrower. Borrower has the full corporate power, authority and
legal right and has obtained all necessary approvals, consents and given all notices to execute
and deliver this Agreement and perform the terms hereof and of each Schedule; (b) There is no
action, proceeding or patent claim pending or, insofar as Borrower knows, threatened against
Borrower or any of its subsidiaries before any court or administrative agency which might have a
materially adverse effect on the business, condition or operations of Borrower or such subsidiary;
and (c) All financials delivered to Lender by Borrower shall be prepared using Generally
Acceptable Accounting Practices. Borrower further warrants, represents, and covenants that it (i)
is and shall be in compliance with all securities, environmental, labor and other material laws,
rules and regulations to which it is subject except where noncompliance will not cause a Material
Adverse Change; (ii) will not transfer, sell, lease, license or otherwise convey any of the
Collateral except as permitted by this Agreement; and (iii) will not voluntarily pre-pay any other
amortizing debt prior to its scheduled maturity without offering comparable prepayment terms to
Lender with respect to the Loans.

 

 

15. MISCELLANEOUS: (a) Any notices hereunder shall be in writing and shall be deemed given when
delivered personally, by facsimile transmission or four days after being sent by certified mail,
postage prepaid, addressed to the other party at its address set forth herein or to such other
address as either party may designate in writing. (b) Borrower will promptly execute and deliver to
Lender such further reasonable documents (including, but not limited to, UCC financing statements)
and take such further reasonable action (including, but not limited to, obtaining any Landlord or
Mortgagee’s Waiver and Consent), as Lender may request in order to more effectively carry out the
intent and purpose of this Agreement. (c) Borrower shall furnish to Lender unaudited monthly and
audited (for any year in which an audit is performed) annual financial statements and such other
financial information as Lender may reasonably request from time to
time. (d) This Agreement and
the Commitment Letter attached hereto as Exhibit B and incorporated herein by reference constitute
the entire agreement on the subject matter hereof between the parties hereto and may not be amended
except in a writing executed by the Lender and the Borrower and shall be binding upon and inure to
the benefit of the parties hereto, their permitted successors and assigns. In the event of a
conflict between this Agreement and the Commitment Letter, this
Agreement shall prevail. (e) Any
provision of the Loan which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof; and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction. (f) Time is of the
essence with respect to each Loan. (g) The captions set forth herein are for convenience only and
shall not define or limit any of the terms hereof. (h) Borrower’s and Lender’s obligations
hereunder shall survive the expiration and termination of the Term to the extent required for full
performance and satisfaction thereof. (i) This Loan shall in all respects be governed by, and
construed in accordance with the laws of the State of California without regard to its principles
regarding conflicts of law. (j) Lender may use the logo and name of Borrower in its marketing
materials. (k) If any payment or other transaction under this Agreement or any Schedule shall be
deemed to be a preference or otherwise avoided, rescinded, reduced or required to be returned to
Borrower or its estate, then this Agreement and any obligations of Borrower so avoided shall remain
in full force and effect and the security interests granted herein to secure such obligations shall
be revived without any further action by the parties, all as though such payment or transaction had
never been made. (l) This Agreement and any Schedule may be executed in any number of counterparts,
each of which shall be deemed an original but all of which, when taken together, shall constitute
but one and the same agreement.

 

 

The person executing this Agreement on behalf of Borrower hereby certifies that he or she is
duly authorized to execute this Agreement on behalf of Borrower.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date
first written above.

	 	 	 	 	 	 	 
	BORROWER: ARUBA WIRELESS NETWORKS, INC.	 	LENDER: COSTELLA
KIRSCH
VENTURE PARTNERS I, L.P.
	 
	 	 	 	 	 	 
	BY:

	 	/s/ Pankaj Manglik	 	BY:
	 	/s/ Richard F. Ginn
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	PRINT NAME: P. Manglik	 	PRINT NAME: Richard F. Ginn
	 
	 	 	 	 	 	 
	TITLE: CEO      DATE: 8/5/03	 	TITLE: Member of the G.P.       DATE: 8/5/03

Exhibit A — Form of Schedule

Exhibit B — Commitment Letter

 

 

Exhibit A

	 	 	 	 	 	 	 
	SCHEDULE NO.

	o
	 	 	COMMENCEMENT DATE	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	LAST MONTHLY PAYMENT DATE	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	FINAL (BALLOON) PAYMENT DATE	 	 
	 

	 	 	 	 	 	 

To Master Loan and Security Agreement (MLSA)                      dated                     
between the
undersigned parties. The terms and conditions of the MLSA are incorporated herein by this reference
and apply to the Loan secured by the Equipment described below. Capitalized terms have the meanings
given to them in the MLSA.

	 	 	 
	A. BORROWER (AND EQUIPMENT LOCATION)

	 	B. LENDER
	 

	 	    COSTELLA KIRSCH VP I, L.P.
	 

	 	    873 Santa Cruz Avenue, Suite 207
	 

	 	    Menlo Park, CA 94025

C. LENDER’S COMMITMENT

	 	 	 	 	 	 	 
	 	 	Letter	 	Remaining Funds	 	Expiration
	Amount	 	Dated	 	Hardware/Softw    Other	 	Date
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	D. EQUIPMENT

	 	See attached Exhibit
	 	E. EQUIPMENT COST THIS SCHEDULE
	$	 	 	
	 

	 	“A”	 	 	 	 	 	 

F. PAYMENT TERMS

	 	 	 	 	 	 	 	 	 
	Monthly	 	 	 	Balloon	 	Monthly Payment	 	Monthly
	Payments	 	 	 	Payment	 	Due Date	 	Payment
	Months
	 	+
	 	%
	 	Payments In Advance
	 	$

G. END OF LOAN TERMS

	 	 	After
                    
monthly payments. Borrower will pay a final balloon payment of
$                     (                     %
of Equipment cost for this Schedule). This represents the final payment obligation.

H. INSURANCE    See attached Certificate of Insurance

I. SPECIAL PROVISIONS AND CONDITIONS (reference to additional clauses/attachments, if any)

	 	o	 	N/A
	 
	 	þ	 	With respect to this Schedule, title to all Equipment specified in Ex. “A”
attached shall remain with Borrower.

J. ACCEPTANCE CERTIFICATE

	 	 	On Behalf of Borrower, I hereby: (1) certify that I am duly authorized to execute this
Schedule; (2) request Lender to make this Loan for the purpose of financing Borrower’s purchase
of the Equipment; (3) confirm that Borrower has read and understood the terms and conditions
of the Loan and, as agent for Borrower, execute documents and accept the Equipment hereunder
on the above date; (4) declare that the Equipment and supplier thereof have been chosen by the
Borrower using its own skill and judgment; (5) acknowledge that this Schedule shall not become
binding on the Lender until signed for and on behalf of the Lender and Borrower; and (6) agree
that the Equipment has been installed and is ready for use as of the date hereof.

FOR
AND ON BEHALF OF:

	 	 	 	 	 	 	 
	BORROWER:

	 	 	 	LENDER:
	 	COSTELLA KIRSCH VP I, L.P.
	 
	 	 	 	 	 	 
	Signed:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 

 

 

Exhibit B (Commitment Letter)

COSTELLA
KIRSCH 873 Santa Cruz Ave., Suite 207, Menlo Park CA 94025; 650-462-1888

			
	 	 	 
	Pankaj Manglik, Founder and CEO
	 	Jul 7, 2003
	Deborah Kranz, Kranz and Assoc.	 	 
	Aruba Networks, Inc.	 	 
	180 Great Oaks Blvd., Suite B	 	 
	San Jose, California 95119	 	 

Dear Pankaj:

Costella Kirsch is pleased to offer this final revised commitment to Aruba Networks, Inc. to
provide debt financing on the following terms:

LENDER:

Costella Kirsch or its assigns

BORROWER:

Aruba Networks, Inc.

TOTAL COMMITMENT:

$2,000,000.

AVAILABILITY:

A. $500,000 is available before the next venture round is complete. The next venture
round must be not less than $10,000,000. and be sufficient to last for twelve months per a board
approved financial plan. This portion of the commitment expires October 31, 2003 if a new venture
round has not closed.

B. $1,500,000 is available through April 30, 2004, but only after the above venture round.
Any unused commitment in A may be added to this availability.

COLLATERAL:

Computers, software, demo-pool (evaluation) units, and miscellaneous office equipment. Evaluation
units at Borrower’s material cost. Evaluation units, software and other soft costs not to exceed
35% of Total Commitment. All collateral subject to Lender’s final approval.

TERM and PAYMENTS:

Each funding will be evidenced by a Schedule and carry a 39 (thirty-nine) month term, with timely
monthly payments in advance, first payment due at the time of
funding, each equal to 3.09% of the
Equipment Cost on each Schedule (the “Monthly Rate Factor or
MRF”). There is no balloon payment
due at the end of the term. The effective rate of the MRF is 12.25%.

The MRF will be adjusted to reflect changes in Bank of America Prime Rate, but once funded, the
payments remain fixed for the full term. Each draw shall be not less than 550,000 and will include
invoices dated in the prior 60 days.

 

 

Pankaj Manglik — Page 2

WARRANTS:

For the
initial $500,000 facility, warrants to purchase $25,000 (5%) of the lower of Series
A preferred at the Series A price per share or Series B preferred at the Series B price per share
shall be awarded to Lender.

For the
follow-on $1,500,000 facility, warrants to purchase $75,000 (5%) of Series B (when issued)
at the to be determined Series B price. If Series B has not been issued when the warrant is
exercised, than the warrant will be for Series A at the Series A exercise price.

The warrants will survive an IPO or merger (unless merger consideration consists of cash or
publicly traded securities and has a value of at least three times the warrant exercise price),
have an exercise period of seven (7) years, allow for net issuance, and have the same rights and
protections as other investors in the stock series.

OWNERSHIP:

All costs of ownership of the Equipment are to be paid by Borrower. This includes, but is
not limited to, filing and paying personal property tax, sales tax, and maintenance costs.

FINANCIAL:

Borrower to provide Lender with monthly financial and annual audited statements.

COMMITMENT DEPOSIT:

Borrower shall remit a deposit of $5,000 (.25% of Total Commitment) to Lender in good faith
upon acceptance of this commitment by signature below. This deposit will be applied first to a
documentation fee of $2000, and then pro rata, to the first Monthly Payment on each Equipment
Schedule until fully utilized.

CONDITION — PRECEDENT:

Lender’s obligations to provide funding against this commitment are subject to the following:

1. Execution of documentation satisfactory to both parties.

2. Borrower’s performance against Business Plan and financial projections as presented at the
meeting on April 3, 2003, and absence of any material adverse change in the management or
financial condition (including timing and amount of future equity rounds) of the Borrower from the
date herein through the funding dates of each Equipment Schedule, all as determined by Lender in
its sole discretion.

3. This commitment expires July 9, 2003 and supercedes the previously executed term sheet dated
June 9, 2003.

Pankaj and Deborah, we enjoyed hearing your presentation and learning about your exciting
company. We look forward to working with you.

If these terms are acceptable to you, please sign below and return to me along with your good
faith deposit of $5,000. We will then commence with final documentation.

	 	 	 
	Best regards,
	 	 
	COSTELLA KIRSCH

	 	Accepted and agreed this 5 day of AUG, 2003.
	 

	 	Aruba Networks, Inc.       By: Pankaj Manglik 
	 

	 	Title: CEOEXHIBIT 10.14

 

Exhibit 10.14

SUBLEASE

     THIS SUBLEASE (“Sublease”) is dated for reference purposes only as of September 10, 2004, and
is made by and between Harmonic Inc., a Delaware corporation (“Sublessor), and Aruba Wireless
Networks, a Delaware corporation (“Sublessee”). Sublessor and Sublessee hereby agree as follows:

     1. Recitals: This Sublease is made with reference to the fact that Caribbean/Geneva
Investors, a California limited partnership, and Crossman Partners, L.P., a California limited
partnership, as landlord (together, “Master Lessor”), and Sublessor, as tenant, entered into that
certain Lease Agreement dated as of May 24, 2000 (“Master Lease”), whereby Master Lessor leased to
Sublessor those certain premises consisting of approximately 52,325 rentable square feet as more
particularly described on Exhibit A to the Master Lease (the
“Premises”) being a building (the
“Building”) located at 1322 Crossman Avenue, Sunnyvale, California, A copy of the Master Lease is
attached hereto as Exhibit “A” and incorporated herein to the extent set forth below. Capitalized
terms not otherwise defined herein shall have the same meaning as in the Master Lease.

     2. Premises: Pursuant to the terms and conditions of this Sublease, Sublessor hereby
subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the entire Premises.

     3. Term:

          (a)
Initial Term. The term of this Sublease (“Term”) shall commence on the latest to
occur of (i) October 1, 2004, and (ii) the date on which Sublessor has received Master Lessor’s
written consent to this Sublease (such later date herein called the “Commencement Date”), and shall
end three (3) years after the Commencement Date (“Expiration Date”), unless this Sublease is sooner
terminated pursuant to its terms or the Master Lease is sooner terminated pursuant to its terms.
Sublessee, at Sublessee’s option, shall have the right to early entry into the Premises for fit-up
purposes (i.e., installing Sublessee’s furniture, equipment, fixtures and voice and data
communications systems) upon receipt of Master Lessor’s consent to this Sublease. During such early
entry Sublessee shall pay no Monthly Base Rent (as defined in Paragraph 4(a) below) or Additional
Rent (as defined in Paragraph 4(b) below), except for the cost of utilities provided to the
Premises during the period of such early entry, and the cost to repair any damage caused by
Sublessee or its Agents (as defined in Paragraph 14 below). The indemnity provisions of Paragraph
10(c) of the Master Lease shall be applicable to any such early entry by Sublessee. Sublessee shall
not be entitled to any fitup period unless the Master Lessor provides its consent to this Sublease
prior to October 1, 2004, the scheduled Sublease Commencement Date, and the failure of the Master
Lessor to provide its consent prior to such date shall not entitle Sublessee to extend the Sublease
Commencement Date in order to fit up the Premises.

          (b)
Extension Option. Upon condition that (i) no Default (as defined in Paragraph 15
below) is continuing under this Sublease at the time of exercise or at the commencement of the
option term, and (ii) Sublessee continues to physically occupy at least fifty percent (50%) of the
entire Premises, then Sublessee shall have the right to extend the Term through August 31, 2010
(the

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“Extension Term”) following the initial Expiration Date by giving written notice (“Exercise
Notice”) to Sublessor at least one hundred eighty (180) days prior to the expiration of the initial
Term.

          (c) Rent During Extension Term. The Monthly Base Rent during the Extension Term
shall be the greater of the Monthly Base Rent paid during the last month of the initial Term or at
ninety-five percent (95%) of the Fair Market Rental Value for the Premises as of the commencement
of the Extension Term, as determined in accordance with Paragraph 43(a) of the Master Lease;
provided that the references to “eighteen (18) months” in said Paragraph 43(a) shall be modified to
be “one hundred eighty (180) days”. On each anniversary of the commencement date of the Extension
Term, the Monthly Base Rent shall increase by four percent (4%) of the Monthly Base Rent for the
immediately prior year.

     4. Rent:

          (a) Monthly Base Rent. Commencing on the Commencement Date and continuing
throughout the Term, Sublessee shall pay monthly base rent (“Monthly Base Rent”) to Sublessor as
follows:

	 	 	 	 	 
	Months	 	Monthly Base Rent
	01-12
	 	$	26,162.50	 
	13-24
	 	$	28,778.75	 
	25-Expiration Date
	 	$	31,395.00	 

As used herein, the word “month” shall mean a period beginning on the first (1st) day of a month
and ending on the last day of that month. Monthly Base Rent shall be paid on or before the first
(1st) day of each calendar month during the Term. Rent for any period during the Term which is for
less than one month of the Term shall be a pro rata portion of the monthly installment based on a
thirty (30)-day month. Rent shall be payable without notice or demand and without any deduction,
offset, or abatement, in lawful money of the United States of America. Rent shall be paid directly
to Sublessor at 549 Baltic Way, Sunnyvale, California 94089, Attention: Chief Financial Officer, or
such other address as may be designated in writing by Sublessor.

          (b) Additional Rent: All monies other than Monthly Base Rent required to be paid
by Sublessee under this Sublease, including, without limitation, (i) Additional Charges (as defined
in Paragraph 3 of the Master Lease), and (ii) utility charges with respect to utilities serving the
Premises, shall be deemed additional rent (“Additional Rent”) and shall be payable within fifteen
(15) days after receiving an invoice from Sublessor; provided, however, with respect to the
calculation of the management fee listed in Paragraph 3(c)(i)(D) of the Master Lease, Sublessee
shall only be responsible for the payment of the management fee as calculated based on Sublessee’s
Monthly Base Rent under this Sublease and not the “Monthly Base Rent” payable by Sublandlord under
the Master Lease. Notwithstanding the foregoing, Sublessee shall not be responsible for any cost or
expense to repair and maintain the Building foundations, exterior wall structure, roof structure,
roof membrane, structural support system or subsurface plumbing (as it relates to structure).
Sublessor shall be responsible for all such costs and expenses as between Sublessor and Sublessee
solely to the extent that the Master Lease obligates the “Tenant”

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thereunder to pay for such costs and expenses. Monthly Base Rent and Additional Rent
hereinafter collectively shall be referred to as “Rent”.

          (c) Prepayment of First Month’s Rent: Upon execution hereof by Sublessor,
Sublessee shall pay to Sublessor, in cash, the sum of Twenty Six Thousand One Hundred Sixty-Two and
50/100 Dollars ($26,162.50), which shall be applied as a credit against the first installment of
Monthly Base Rent due hereunder.

     5. Security Deposit: Upon the execution of this Sublease by Sublessor, Sublessee shall
deposit with Sublessor, in cash, the sum of Twenty Six Thousand One Hundred Sixty-Two and 50/100
Dollars ($26,162.50) (the “Security Deposit”). The Security Deposit shall be held by Sublessor as
security for the faithful performance by Sublessee of all of its obligations under this Sublease.
The Security Deposit is not an advance payment of Rent or a measure or limit of Sublessor’s damages
upon Sublessee’s default under this Sublease. Sublessor may retain the Security Deposit with its
general funds and shall not be obligated to pay interest thereon. Sublessee hereby grants to
Sublessor a security interest in the Security Deposit pursuant to the applicable provisions of the
California Uniform Commercial Code. Sublessor may apply the Security Deposit as is reasonably
necessary for the following purposes: (a) to remedy any default by Sublessee in the payment of Rent
that is not cured within any applicable cure period; (b) to repair damage to the Premises caused by
Sublessee which is not repaired by Sublessee within any applicable cure period (subject to
Paragraph 7(e) of the Master Lease); (c) to clean the Subleased Premises upon termination of this
Sublease; and (d) to remedy any other default of Sublessee to the extent permitted by law that is
not cured within any applicable cure period, and in this regard, Sublessee hereby waives any
restriction on the uses to which the Security Deposit may be put contained in California Civil Code
Paragraph 1950.7. The use, application or retention of the Security Deposit, or any portion
thereof, by Sublessor shall not prevent Sublessor from exercising any other right or remedy
provided by this Sublease or by law or in equity, it being intended that Sublessor shall not first
be required to proceed against the Security Deposit, and the Security Deposit shall not operate as
a limitation on any recovery to which Sublessor otherwise may be entitled. If following a default
hereunder that is not cured within any applicable cure period, any portion of the Security Deposit
is used by Sublessor, Sublessee, within seven (7) days after written demand therefor, shall deposit
cash with Sublessor in an amount sufficient to restore the Security Deposit to the amount required
hereunder. Sublessee’s failure to restore the Security Deposit as required hereunder shall be an
incurable default under this Sublease. Sublessor shall return the Security Deposit, without
interest, to Sublessee, or so much of the Security Deposit as has not been applied in accordance
with this Paragraph 5 to cure any default of Sublessee, within thirty (30) days after Sublessee
surrenders the Subleased Premises to Sublessor in the condition required by this Sublease.

     6. Late Charge. If Sublessee shall fail to pay Sublessor any amount due hereunder on
or before the date when such payment is due and such failure continues beyond the five (5) day
grace period set forth in Paragraph 3(d) of the Master Lease, the late charges and interest set
forth in said Paragraph 3(d) of the Master Lease shall be charged to Sublessee.

     7. Possession and Condition of Premises. Exclusive possession of the Premises shall be
delivered to Sublessee on the Commencement Date. If exclusive possession of the Premises is

3

 

not delivered to Sublessee on or before November 15, 2004, Sublessee may terminate this Sublease
upon written notice to Sublessor delivered on or before December 15, 2004. Upon such termination,
Sublessor shall promptly refund to Sublessee all monies previously tendered to Sublessor. Except as
otherwise expressly provided herein, Sublessee agrees to accept possession of the Premises in
accordance with the foregoing schedule in its “AS IS” “WHERE IS” condition existing on the date
this Sublease is executed by Sublessor. Sublessee acknowledges that, except as expressly set forth
herein, Sublessor has not made any representation or warranty, express or implied, with respect to
the condition of the Premises, the suitability or fitness of the Premises for the conduct of
Sublessee’s permitted use or for any other purposes, or the actual dimensions of the Premises.
Sublessee represents and warrants that Sublessee has conducted a thorough and diligent inspection
and investigation, either independently or through agents of Sublessee’s own choosing, of the
Premises and the suitability of the Premises for Sublessee’s intended use, that Sublessee is fully
aware of the needs of its operations and has determined, based solely on its own investigation,
that the Premises are suitable for its operations and intended use. In no event shall Sublessor be
liable for any defect in the Premises or for any limitations on the use of the Premises, except as
expressly and specifically set forth in this Sublease. Sublessor’s sole obligation with respect to
the condition of the Premises upon delivery of possession shall be to deliver it in broom clean
condition with all building systems (electrical, plumbing and HVAC), roof membrane, parking lot,
driveways, sidewalks and truck doors in good operating condition. In addition, Sublessee agrees
that the sole improvements required to be made by Sublessor to the Premises shall be to replace all
damaged ceiling tiles, touch up the interior paint, repair the flooring in the labs as reasonably
needed, and coil the coaxial cable and secure it to a T-Bar out of sight. If Sublessee fails to
provide Sublessor written notice that any of the foregoing warranted portions of the Premises are
not in good operating condition or that the improvements Sublessor agreed to make are incomplete or
defective within forty-five (45) days after the Commencement Date, then Sublessor shall be deemed
to have complied with its obligations set forth in the immediately preceding sentence, and
Sublessee’s obligations regarding maintenance and repair of such shall be controlled by Paragraph 7
of the Master Lease. If Sublessee timely notifies Sublessor that any of the foregoing warranted
portions of the Premises are not in good operating condition or that the improvements Sublessor
agreed to make are incomplete or defective, Sublessor shall promptly correct the same; provided,
however, that if any of the warranted items are the obligation of the Master Lessor to repair,
Sublessor shall promptly notify the Master Lessor of the need for repair. Sublessee specifically
acknowledges and agrees that Sublessor shall have no obligation to perform any improvements,
repairs or other work to the Premises in connection with this Sublease other than to deliver
possession as hereinabove specified. Sublessee shall look solely to Master Lessor for performance
of any repairs required to be performed by Master Lessor under the terms of the Master Lease, and
if Master Lessor fails to perform any such repairs within thirty (30) days after Master Lessor has
been requested to do so by Sublessee, then Sublessee shall promptly notify Sublessor of Master
Lessor’s failure to perform, and use reasonable efforts to cause Master Lessor to perform any such
repairs and maintenance as provided in Paragraph 23(a) below.

     8. Indemnities: The indemnities set forth in Paragraphs 10(a) and 10(c) shall
apply to the Sublessor and Sublessee, respectively. The foregoing indemnities shall survive the
expiration or earlier termination of this Sublease.

4

 

     9. Right to Cure Defaults: Sublessor shall have all cure rights afforded the Master
Lessor under the Master Lease in the event of Sublessee’s default hereunder, including without
limitation, the cure rights set forth in Paragraph 7(e). All such sums paid, and all costs and
expenses of performing any such act, shall be deemed Additional Rent payable by Sublessee to
Sublessor upon demand. In addition, Sublessee shall pay to Sublessor interest on all amounts due,
at the Default Rate from the date of the expenditure until repaid.

     10. Assignment and Subletting: Sublessee may not assign this Sublease, sublet the
Premises, transfer any interest of Sublessee therein or permit any use of the Premises by another
party (collectively, “Transfer”), without the prior written consent of Sublessor (which consent
shall not be unreasonably withheld, conditioned or delayed) and Master Lessor, and otherwise in
strict accordance with the terms of the Master Lease as incorporated herein. A consent to one
Transfer shall not be deemed to be a consent to any subsequent Transfer. Any Transfer without such
consent shall be void and, at the option of Sublessor, shall terminate this Sublease. Sublessor’s
waiver or consent to any assignment or subletting shall be ineffective unless set forth in writing,
and Sublessee shall not be relieved from any of its obligations under this Sublease unless the
consent expressly so provides. Notwithstanding anything to the contrary contained in this Sublease
or in the Master Lease (as incorporated herein), (a) Sublessee shall pay to Sublessor one hundred
percent (100%) of all rent and other consideration received by Sublessee in connection with any
assignment of the Sublease or sublease of the Premises in excess of the Rent allocated to the space
sublet or assigned, after deducting any reasonable brokerage commissions incurred by Sublessee in
connection with the Transfer amortized on a straight line basis (without interest and not to exceed
6% of monthly base rent) over the term of the sublease or assignment; (b) at Sublessor’s sole
option, Sublessor shall have the right to terminate this Sublease within ten (10) days after
receipt of such request, if Sublessee requests Sublessor’s consent to an assignment of this
Sublease or a sublet of all or any portion of the Premises; (c) Sublessee may enter into a
Permitted Transfer (as defined in Paragraph 9(d) of the Master Lease) provided that such transfer
shall be subject to the terms and conditions of said Paragraph 9(d) and Suiblessee shall provide
Sublessor with ten (10) days prior written notice of the transfer accompanied with the current
financials of the transferee; and (d) Sublessee may enter into an Assignment of Sublessee’s
interest in this Sublease or a sublease of all or any portion of the Premises to an Affiliate (as
defined in Paragraph 9(f) of the Master Lease) provided that such Assignment or sublease shall be
subject to the terms and conditions of said Paragraph 9(f).

     11. Use: Sublessee may use the Premises only for the uses specified in the Master
Lease and for no other purpose and in strict compliance with all other terms of the Master Lease
which are incorporated herein. Sublessee shall not store any materials, supplies, finished or
unfinished products, or articles of any nature outside of the Premises. Sublessee shall comply with
all rules and regulations promulgated from time to time by Master Lessor with respect to
Sublessor’s use of the Premises.

     12. Effect of Conveyance: As used in this Sublease, the term “Sublessor” means the
holder of the tenant’s interest under the Master Lease. In the event of any transfer of said
tenant’s interest, Sublessor shall be and hereby is entirely relieved of all covenants and
obligations of Sublessor hereunder to be performed after the date of the conveyance, and it shall
be deemed and construed, without further agreement between the parties, that the transferee has
assumed and shall

5

 

carry out all covenants and obligations thereafter to be performed by Sublessor hereunder from and
after the date of the conveyance. Sublessor shall transfer and deliver any Security Deposit of
Sublessee to the transferee of said tenant’s interest in the Master Lease, and thereupon Sublessor
shall be discharged from any further liability with respect thereto. Notwithstanding the foregoing,
as between Sublessor and Sublessee, in no event shall the release provided in the first sentence of
this Paragraph 12 relieve Sublessor of any covenants or obligations which Sublessor was obligated
to perform or which Sublessor failed to perform under the Master Lease prior to the Commencement
Date of this Sublease.

     13. Alterations and Improvements: No alterations or improvements shall be made by or
for Sublessee to the Premises, except in accordance with this Sublease and the Master Lease, and
with the prior written consent of both Master Lessor and Sublessor, which consent of Sublessor
shall not be unreasonably withheld, conditioned or delayed. .

     14. Hazardous Substances. With respect to Hazardous Substances, Sublessee shall not
engage in or permit any activities in or about the Premises which involve the use or presence of
Hazardous Substances on or about the Premises, or on or under the Building or the Land, except as
otherwise expressly permitted under the Master Lease, and shall comply with all provisions of the
Master Lease relating to Hazardous Substances, including, without limitation, Paragraph 40.
Sublessor represents and warrants, without duty of inquiry or investigation, that, except as set
forth in the report referenced in said Paragraph 40, Sublessor has no actual knowledge of any
Hazardous Substances located on the Premises, or on or under the Building or the Land. Sublessor
agrees to indemnify Sublessee as set forth in Paragraph 40(c) of the Master Lease, but only as to
Hazardous Substances to the extent released, manufactured, discharged, disposed, used or stored on,
in or under the Project, the Land, the Building or the Premises prior to the Commencement Date by
Sublessor or its servants, employees, contractors, agents, licensees or invitees. Sublessee agrees
to indemnify Sublessee as set forth in Paragraph 40(b) of the Master Lease, but only as to
Hazardous Substances to the extent released, manufactured, discharged, disposed, used or stored on,
in or under the Project, the Land, the Building or the Premises after the Commencement Date by
Sublessee or any of its servants, employees, contractors, agents, licensees or invitees (“Agents”).

     15. Default: Sublessee’s performance of each of its obligations under this Sublease
constitutes a condition as well as a covenant, and Sublessee’s right to continue in possession of
the Premises is conditioned upon such performance within the applicable time periods provided
herein (including all applicable cure periods). In addition, Sublessee shall be in material default
of its obligations under this Sublease if Sublessee is responsible for the occurrence of any of the
events of “Default” set forth in Paragraph 19(a) of the Master Lease.

     16. Remedies: In the event of any default by Sublessee under this Sublease (including,
without limitation, a Default pursuant to Paragraph 19 of the Master Lease as incorporated herein),
Sublessor shall have all rights pursuant to Paragraph 19 of the Master Lease and all remedies
provided by applicable law. Sublessor may resort to its remedies cumulatively or in the
alternative.

     17. Surrender: Prior to Expiration Date or earlier termination of this Sublease,
Sublessee shall remove all of its trade fixtures and other property and improvements if and to the
extent required under this Sublease and shall surrender the Premises to Sublessor in substantially

6

 

the same condition as received, normal wear and tear and damage by casualty or condemnation
excepted, free of Hazardous Substances placed on or about the Premises, the Project, the Land and
the Building, by Sublessee or its Agents, and otherwise in the condition required under Paragraph
24 of the Master Lease. If the Premises are not so surrendered, then Sublessee shall be liable to
Sublessor for all costs incurred by Sublessor in returning the Premises to the required condition,
plus interest thereon at the Default Rate. Sublessee shall have no responsibility or liability for
the removal of any Alterations not constructed by or for Sublessee.

     18. Broker: Sublessor and Sublessee each represent to the other that they have dealt
with no real estate brokers, lenders, agents or salesmen in connection with this transaction other
than Cornish & Carey representing Sublessor and CRESA Partners representing Sublessee
(collectively, the “Brokers”). Each party agrees to hold the other party harmless from and against
all claims for brokerage commissions, finder’s fees, or other compensation made by any agent,
broker, salesman or finder other than the Brokers as a consequence of said party’s actions or
dealings with such agent, broker, salesman, or finder other than the Brokers. Sublessor shall pay
its broker a commission in connection with this transaction pursuant to a separate written
agreement.

     19. Notices: Unless five (5) days’ prior written notice is given in the manner set
forth in this Paragraph, the address of each party for all purposes connected with this Sublease
shall be that address set forth below their signatures at the end of this Sublease. The address for
Master Lessor shall be as set forth in the Master Lease. All notices, demands, or communications in
connection with this Sublease shall be considered received when (i) personally delivered; or (ii)
if properly addressed and either sent by nationally recognized overnight courier or deposited in
the mail (registered or certified, return receipt requested, and postage prepaid), on the date
shown on the return receipt for acceptance or rejection. All notices given to the Master Lessor
under the Master Lease shall be considered received only when delivered in accordance with the
Master Lease to all parties hereto at the address set forth below their signatures at the end of
this Sublease.

     20. Severability: If any term of this Sublease is held to be invalid or unenforceable
by any court of competent jurisdiction, then the remainder of this Sublease shall remain in full
force and effect to the fullest extent possible under the law, and shall not be affected or
impaired.

     21. Amendment: This Sublease may not be amended except by the written agreement of all
parties hereto.

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     22. Insurance; Waiver: Sublessee shall procure and maintain all insurance policies
required of the “Tenant” under the Master Lease with respect to the Premises. All such liability
policies shall name Sublessor and Master Lessor as additional insureds. A certificate of insurance
reflecting that the insurance required to be carried by Sublessee pursuant to this Sublease and the
Master Lease is in force, accompanied by an endorsement showing the required additional insureds
satisfactory to Sublessor in substance and form, shall be delivered to Sublessor prior to
Sublessee’s entry onto the Premises (but in no event after the Commencement Date), and upon renewal
of such policies (but not less than thirty (30) days prior to the expiration of the term of such
coverage). Sublessor and Sublessee agree that the waiver of subrogation in Paragraph 11 of the
Master Lease shall be deemed a three-party agreement by and among Sublessee, Sublessor and Master
Lessor.

     23. Other Sublease Terms:

          (a) Incorporation by Reference: Except as otherwise provided in this Sublease, the
terms and provisions contained in the Master Lease are incorporated herein by reference and are
made a part hereof as if set forth at length; provided, however, that: (i) each reference in such
incorporated Paragraphs to “Lease” and to “Premises” shall be deemed a reference to this “Sublease”
and the “Premises” defined herein, respectively; (ii) each reference to “Landlord” and “Tenant”
shall be deemed a reference to “Sublessor” and “Sublessee”, respectively, except as expressly set
forth herein; (ii) with respect to any obligation of Sublessee to be performed under this Sublease,
wherever the Master Lease grants to Sublessor a specified number of days to perform its obligations
under the Master Lease, except as otherwise provided herein, Sublessee shall have three (3) fewer
days to perform the obligation, including, without limitation, curing any defaults but in no event
fewer than three (3) days; (iii) Sublessor shall have no liability to Sublessee with respect to (a)
representations and warranties made by Master Lessor under the Master Lease, (b) any
indemnification obligations of Master Lessor under the Master Lease, or other obligations or
liabilities of Master Lessor under the Master Lease with respect to compliance with laws, condition
of the Premises or Hazardous Substances, and (c) except as otherwise expressly set forth herein,
obligations under the Master Lease to repair, maintain, restore, or insure all or any portion of
the Premises, regardless of whether the incorporation of one or more provisions of the Master Lease
might otherwise operate to make Sublessor liable therefore; (iv) with respect to any approval or
consent required to be obtained from the Master Lessor under the Master Lease, such approval or
consent must be obtained from both Master Lessor and Sublessor, and the approval of Sublessor may
be withheld if Master Lessor’s approval or consent is not obtained; (v) in any case where “Tenant”
is to indemnify, release or waive claims against “Landlord”, such indemnity, release or waiver
shall be deemed to run from Sublessee to both Master Lessor and Sublessor; (vi) Sublessee shall not
have the right to terminate this Sublease due to casualty or condemnation unless Sublessor has such
right under the Master Lease; (vii) in any case where “Tenant” is to execute and deliver certain
documents or notices to “Landlord”, such obligation shall be deemed to run from Sublessee to both
Master Lessor and Sublessor; (ix) the following provisions of the Master Lease are expressly
not incorporated herein by reference or are incorporated as amended hereby: Basic Lease
Information (Lease Date, Lease Term, Estimated Availability Date, Monthly Base Rent, Monthly Base
Rent Adjustment, and Security Deposit) are not incorporated but “Tenant” and “Tenant’s Address” are
incorporated but refer to Sublessor herein; first paragraph of Master Lease; Paragraphs 2, 3(a) and
(b); Paragraph 3(c)(vi) is

8

 

incorporated but “180 days” is changed to “120” days and the reference to “Landlord” therein shall
mean only “Master Landlord”; the last sentence of Paragraph 9(b); Paragraphs 26, 32, 37, 42, 43
(the introductory first paragraph only is excluded); and (x) notwithstanding the foregoing, all
references to “Landlord” in the following provisions of the Master Lease shall mean Master Lessor,
not Sublessor: Basic Lease Information (Landlord’s and Managing Agent’s Address); and Paragraphs
9(f) and 15.

          (b) Assumption of Obligations: This Sublease is and all times shall be subject and
subordinate to the Master Lease and the rights of Master Lessor thereunder. Sublessee hereby
expressly assumes and agrees: (i) to comply with all provisions of the Master Lease applicable to
the Premises which are incorporated herein to the extent first arising during the Term of this
Sublease, (ii) to perform all the obligations on the part of the “Tenant” to be performed under the
terms of the Master Lease which are incorporated herein first arising during the Term of this
Sublease, and (iii) to do nothing which shall create a Default under the Master Lease, and (iv) to
hold Sublessor free and harmless of and from all liability, judgments, costs, damages, claims,
demands, and expenses (including reasonable attorneys’ and experts’ fees) to the extent caused by
Sublessee’s failure to comply with or to perform Sublessee’s obligations hereunder or the
obligations of the “Tenant” under the Master Lease as herein provided or to act or omit to act in
any manner which will constitute a breach of the Master Lease. The foregoing indemnity shall
survive the expiration or earlier termination of this Sublease. Should there be any conflict
between the terms of this Sublease and the terms of the Master Lease, the terms of this Sublease
shall control as between Sublessor and Sublessee only.

          (c) Obligations of Master Lessor: With respect to work, services, repairs,
restoration, insurance or the performance of any other obligation of Master Lessor under the Master
Lease (including, without limitation, Paragraphs 3(c)(vi), 5(a), 7(a), 10(f), 12(a), 20(a), and
34), the sole obligation of Sublessor shall be to request the same in writing from Master Lessor,
as and when requested to do so by Sublessee, and to use Sublessor’s reasonable efforts to obtain
Master Lessor’s performance so long as Sublessee advances all costs of Sublessor in connection
therewith; provided, however, if Master Lessor defaults under the Master Lease or fails to perform
any of its obligations under the Master Lease after receipt of written notice from Sublessor of
such failure, Sublessor shall either institute legal proceedings against Master Lessor directly so
long as Sublessee advances all costs of Sublessor in connection therewith, or assign Sublessor’s
rights under the Master Lease to Sublessee solely to the extent necessary to permit Sublessee to
institute legal proceedings against Master Lessor to obtain the performance of Master Lessor’s
obligations under the Master Lease so long as Sublessee indemnifies, defends, protects and holds
Sublessor harmless from and against any claims, losses or liabilities arising out of such
assignment except to the extent Master Lessor’s default or failure to perform is due to default of
Sublessor under the Master Lease.

     25. Sublandlord’s Representations: Sublessor hereby represents to Sublessee that
to the best of Sublessor’s knowledge: (i) the Master Lease attached hereto as Exhibit A has been
executed and delivered by Master Lessor and Sublessor and constitutes the entire agreement of the
parties thereto relating to the lease of the Premises; (ii) no default or breach by Sublessor or by
Master Lessor exists under the Master Lease; (iii) no event has occurred that, with the passage of
time, the giving of notice, or both, otherwise would constitute a default or breach by Sublessor or

9

 

by Master Lessor under the Lease; (iv) subject to the receipt of Master Lessor’s written consent
hereto, Sublessor has the right and power to execute and deliver this Sublease and to perform its
obligations hereunder; and (v) the Premises complies with all building codes and requirements for
seismic and structural strength, the ADA and Title 24. Sublessor shall not amend or modify the
Master Lease in any manner which would have a material adverse effect upon Sublessee or terminate
the Master Lease unless such termination will be effective after the expiration of the initial Term
unless Master Lessor is willing to enter into a direct lease with Sublessee on the terms set forth
herein. So long as no default by Sublessee has occurred and remains uncured after the expiration of
any applicable cure periods, Sublessee shall be entitled to peaceful and quiet possession of the
Premises, subject to the terms and conditions of this Sublease and the Master Lease.

     26. Condition Precedent: This Sublease and Sublessor’s and Sublessee’s obligations
hereunder are conditioned upon having obtained the written consent of the Master Lessor. If
Sublessor has not obtained Master Lessor’s consent on or before September 30, 2004, either party
may terminate this Sublease by written notice to the other party given at any time until such
consent is obtained by Sublessor, whereupon this Sublease shall terminate and Sublessor shall
return to Sublessee all sums paid by Sublessee to Sublessor in connection with its execution of
this Sublease, and neither party shall have any further rights or obligations hereunder. The return
of all sums paid by Sublessee shall be Sublessee’s sole and exclusive remedy in the event of a
termination pursuant to the foregoing sentence.

     27. Board Approval: Sublessee represents and warrants to Sublessor that Sublessee’s
Board of Directors has authorized Sublessee’s execution hereof.

     28. Miscellaneous: This Sublease shall in all respects be governed by and construed in
accordance with the laws of the state in which the Premises are located. If any term of this
Sublease is held to be invalid or unenforceable by any court of competent jurisdiction, then the
remainder of this Sublease shall remain in full force and effect to the fullest extent possible
under the law, and shall not be affected or impaired. This Sublease may not be amended except by
the written agreement of all parties hereto. Time is of the essence with respect to the performance
of every provision of this Sublease in which time of performance is a factor. Any executed copy of
this Sublease shall be deemed an original for all purposes. This Sublease shall, subject to the
provisions regarding assignment and subletting, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Sublessor and Sublessee. The language in all parts of this
Sublease shall in all cases be construed as a whole according to its fair meaning, and not strictly
for or against either Sublessor or Sublessee. The captions used in this Sublease are for
convenience only and shall not be considered in the construction or interpretation of any provision
hereof. When a party is required to do something by this Sublease, it shall do so at its sole cost
and expense without right of reimbursement from the other party unless specific provision is made
therefor. Whenever one party’s consent or approval is required to be given as a condition to the
other party’s right to take any action pursuant to this Sublease, unless another standard is
expressly set forth, such consent or approval shall not be unreasonably withheld or delayed. This
Sublease may be executed in counterparts, all of which taken together as a whole, shall constitute
one original document.

10

 

     29. Holdover: The holdover provisions set forth in Paragraph 14 of the Master Lease
shall apply to any holding over by Sublessee after the expiration of the initial Term of this
Sublease; provided that the holdover rent shall be based upon the Monthly Base Rent payable by
Sublessee under this Sublease and not the “Monthly Base Rent” payable by Sublandlord under the
Master Lease. Notwithstanding the foregoing, if Sublessee exercises its option to renew this
Sublease until the expiration date of the Master Lease, the parties hereby acknowledge that if
Sublessee fails to surrender the Premises to Sublessor by the expiration date of the Master Lease
(or the earlier termination of this Sublease during the Extension Term, as defined in Paragraph
3(b) above), Sublessor will be obligated to pay Master Lessor holdover rent based upon the “Monthly
Base Rent” reserved under the Master Lease, which Monthly Base Rent is significantly greater than
the Monthly Base Rent reserved hereunder. Accordingly, in the event that Sublessee does not
surrender the Premises by the expiration date of the Master Lease (or earlier termination of this
Sublease during the Extension Term) in accordance with Paragraph 17 hereof, Sublessee shall
indemnify, defend, protect and hold harmless Sublessor from and against all costs, loss and
liability resulting from Sublessee’s delay in surrendering the Premises and pay Sublessor holdover
rent as provided in Paragraph 14 of the Master Lease, except that such holdover rent shall be equal
to the amount of holdover rent payable by Sublessor under the Master Lease. The indemnification set
forth in this Paragraph shall survive the expiration or earlier termination of this Sublease.

     30. Furniture: Sublessee shall have the right to use the furniture listed in the
attached Exhibit B (“Furniture”) during the Term (as it may be extended). Such use shall be without
representation or warranty of any kind whatsoever by Sublessor. Sublessee shall insure the
Furniture for its full replacement value and shall surrender the same upon the expiration or
earlier termination of the Term (as it may be extended) in the same condition as received,
reasonable wear and tear excepted.

11

 

IN WITNESS WHEREOF, the parties have executed this Sublease as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 
	SUBLESSOR:	 	SUBLESSEE:	 	 
	 
	 	 	 	 	 	 	 	 
	HARMONIC INC.,	 	ARUBA WIRELESS NETWORKS,	 	 
	a Delaware corporation	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robin N. Dickson
	 	By:
	 	/s/ Dusten Williams	 	 
	 

	 	 
	 	 	 	 	 	 
	Printed

	 	 	 	Printed	 	 	 	 
	Name:

	 	Robin N. Dickson
	 	Name:
	 	Dusten Williams	 	 
	Title:

	 	CFO
	 	Title:
	 	CFO	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Keerti G. Melkote	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Printed	 	 	 	 
	 

	 	 	 	Name:
	 	Keerti G. Melkote	 	 
	 

	 	 	 	Title:
	 	VP, Product Mgmt.	 	 
	 
	 	 	 	 	 	 	 	 
	Address:	 	549 Baltic Way

Sunnyvale CA 94089

Attn: Diane Georgi	 	Address: Prior to the Commencement:

180 Great Oaks Blvd

San Jose, CA 95119
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	After the Commencement Date:
	 	 	 	 	At the Premises

12

 

EXHIBIT “A”

LEASE AGREEMENT

by and between

CARIBBEAN/GENEVA INVESTORS

and CROSSMAN PARTNERS, L.P.

(“Landlord”)

and

HARMONIC, INC.

(“Tenant”)

Dated
as of May 24, 2000

 

 

EXHIBITS

	 	 	 
	Exhibit “A”

	 	Premises
	 
	 	 
	Exhibit “B”

	 	Land
	 
	 	 
	Exhibit “C”

	 	Declaration of Covenants, Conditions and Restrictions
	 
	 	 
	Exhibit “D”

	 	Rules and Regulations
	 
	 	 
	Exhibit “E”

	 	Form of Tenant Estoppel Certificate
	 
	 	 
	Exhibit “F”

	 	Subordination, Nondisturbance and
Attornment Agreement

- i -

 

BASIC LEASE INFORMATION

	 	 	 
	Lease Date:

	 	May 24, 2000
	 
	 	 
	Landlord:

	 	Caribbean/Geneva Investors, a California limited partnership, and
Crossman Partners, L.P., a California limited partnership, Tenants In
Common
	 
	 	 
	Managing Agent:

	 	The Mozart Development Company
	 
	 	 
	Landlord’s and Managing Agent’s

	 	
	Address:

	 	c/o The Mozart Development
Company
1068 East Meadow Circle
	 

	 	Palo Alto, CA 94303
	 

	 	Attn: James Freitas & John Mozart
	 
	 	 
	Tenant:

	 	Harmonic, Inc., a Delaware corporation

	 	 	 	 	 
	TENANT’S ADDRESS:

	 	FOR NOTICE
	 	FOR BILLING
	 

	 	549 Baltic Way
	 	549 Baltic Way
	 

	 	Sunnyvale, CA 94089
	 	Sunnyvale, CA 94089
	 

	 	Attn: Robin Dickson,
	 	Attn: Robin Dickson,
	 

	 	          Chief Financial Officer
	 	          Chief Financial Officer

	 	 	 
	Building:

	 	The building located at 1322
Crossman Avenue, Sunnyvale, California
	 
	 	 
	Premises:

	 	The entire Building as depicted on Exhibit “A”
	 
	 	 
	Land:

	 	The Real Property described on Exhibit “B”
	 
	 	 
	Rentable Area of the Premises:

	 	52.325 rentable square feet (“Rentable Area”)
	 
	 	 
	Parking Spaces:

	 	All parking spaces located on the Land
	 
	 	 
	Tenant’s Use of the Premises:

	 	General office, research, development, manufacturing, storage and
distribution, production, marketing and distribution
	 
	 	 
	Lease Term:

	 	Ten (10) years (the “Initial Term”), with the right to extend for two
(2) additional five (5) year terms (each an “Extension Term”) in accordance
with Paragraph 42. The Initial Term, and any Extension Term(s) shall
collectively be defined as the “Term”
	 
	 	 
	Estimated Availability Date:

	 	September 1, 2000
	 
	 	 
	Monthly Base Rent:

	 	$3.25 per rentable square foot of the Rentable Area of the Premises.
	 
	 	 
	Monthly Base Rent Adjustment:

	 	On each anniversary of the Commencement Date, the Monthly Base Rent
shall increase by four percent (4%) of the Monthly Base Rent for the
immediately prior year
	 
	 	 
	Tenant’s Share of Expenses and
Taxes:

	 	100%
	 
	 	 
	Security Deposit:

	 	$193,600

- ii -

 

	 	 	 
	Guarantor of Lease:

	 	None
	 
	 	 
	Landlord’s Broker:

	 	None
	 
	 	 
	Tenant’s Broker:

	 	Cornish & Carey
	 
	 	 
	Broker’s Fee or Commission,
	 	
	 
	 	 
	
if any, paid by:
	 	Landlord, pursuant to separate
agreement

The foregoing Basic Lease Information is hereby incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information shall mean the
respective information hereinabove set forth and shall be construed to incorporate all of the
terms provided under the particular paragraph pertaining to such information. In the event of
any conflict between any Basic Lease Information and the Lease, the latter shall control

	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	CARIBBEAN/GENEVA INVESTORS,	 	 
	 	 	a California Limited Partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Mozart	 	 
	 

	 	 	 	 

John Mozart, Trustee of the Mozart 
Family Trust dated
September 8, 1977
	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Lovewell	 	 
	 

	 	 	 	 

John Lovewell
	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	CROSSMAN PARTNERS, L.P.,	 	 
	 	 	a California Limited Partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John Mozart	 	 
	 

	 	 	 	 

John Mozart, Trustee of the Mozart 
Family Trust
dated September 8, 1977
	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	HARMONIC, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Robin N. Dickson	 	 
	 

	 	 	 	 

Robin N. Dickson
	 	 
	 

	 	 	 	Its: Chief Financial Officer	 	 

- iii -

 

LEASE AGREEMENT

     THIS LEASE AGREEMENT (the “Lease”) is made and entered into as of May 24, 2000, by and between
CARIBBEAN/GENEVA INVESTORS, a California Limited Partnership and
CROSSMAN PARTNERS, L.P., a
California Limited Partnership, as Tenants in Common (herein collectively called “Landlord”), and
HARMONIC, INC., a Delaware corporation (herein called “Tenant”).

     Upon and subject to the terms, covenants and conditions hereinafter set forth, Landlord hereby
leases to Tenant and Tenant hereby hires from Landlord those premises (the “Premises”) outlined on
EXHIBIT A, comprising the entire rentable area in the Building located at 1322 Crossman Avenue in
Sunnyvale, California (hereinafter referred to as the “Building”) specified in the Basic Lease
Information attached hereto. Prior to the execution of this Lease, Tenant has reviewed and approved
the Rentable Area specified in the Basic Lease Information, which shall be conclusive and binding
on the parties for purposes of calculating Rent and the Tenant Allowance hereunder notwithstanding
any measurement or remeasurement by Landlord. Tenant or any other party that may now or
hereafter indicate a different Rentable Area. The Building, together with the associated land
specified in the Basic Lease Information and improvements is referred to as the “Project.” The term
“Common Area” shall mean all areas and facilities within the Project that are not designated by
Landlord for the exclusive use of Tenant or any other tenant or other occupant of the Project that
are located outside the perimeter (including footings) of the Building, including the parking
areas, access and perimeter roads, pedestrian sidewalks, landscaped areas, trash enclosures,
recreation areas and the like.

     1. OCCUPANCY AND USE. Tenant may use and occupy the Premises for the purposes
specified in the Basic Lease Information (“Permitted Use”), subject to the terms and conditions of
this Lease, and for no other use or purpose without the prior written consent of Landlord.
Landlord shall have the right to grant or withhold consent to a use other than as specified in the
Basic Lease Information in its sole discretion. Tenant shall be entitled to the nonexclusive use of
the Common Area with Landlord and other occupants (if any) of the Project in accordance with the
Rules and Regulations established by Landlord from time to time. Notwithstanding anything to the
contrary in the Basic Lease Information or in this Lease, Tenant understands and agrees that the
Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) described in EXHIBIT C encumbers
the Project and that Tenant’s Occupancy and Use of the Premises are restricted by, and Tenant shall
fully comply with any and all restrictions on the use of the Premises
specified in, such CC&Rs.

     2. TERM AND POSSESSION.

          (a) The term of this Lease (the “Term”) shall be for the period specified in the Basic Lease
Information (or until sooner terminated as herein provided), commencing on the Commencement Date
and expiring on the Expiration Date. The “Commencement Date” shall be the earlier to occur of (i)
thirty (30) days after the date on which Landlord gives Tenant written notice that the Premises is
available for Tenant’s occupancy, or (ii) any earlier date upon which Tenant actually occupies and
conducts business in any portion of the Premises. Within five (5) business days after the
Commencement Date, the parties shall execute a letter confirming the Commencement Date and
certifying that Tenant has accepted delivery of the Premises (the “Commencement Date Memorandum”).
Either party’s failure to request execution of, or to execute, the Commencement Date Memorandum
shall not in any way alter the Commencement Date. By occupying the
Premises, Tenant shall be deemed
to have accepted the same as suitable for the purpose herein intended. The “Expiration Date” shall
be the date that is one day prior to the tenth anniversary of the Commencement Date (subject to
extension in accordance with Paragraph 42 to the date that is one day prior to the fifth
anniversary of any exercised Extension Term).

          (b) Tenant is aware that the Premises is currently occupied by another tenant (“Existing
Tenant”). Pursuant to a written agreement between Landlord and the Existing Tenant, the Existing
Tenant has agreed to vacate the Premises on or before the Estimated Availability Date set forth in
the Basic lease Information. If Landlord, for any reason whatsoever (including without limitation
the failure of the Existing Tenant to surrender possession of the Premises on or before the
Estimated Availability Date), cannot deliver possession of the Premises to Tenant by the Estimated
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord be

- 1 -

 

liable to Tenant for any loss or damage resulting therefrom. In that event, however, the Term of
the Lease shall not commence until such commencement date as is determined pursuant to Paragraph
2(a). In such event, the Commencement Date and the Expiration Date shall be adjusted accordingly.

          (c) The Premises shall be delivered by Landlord to Tenant in its as-is, where-is condition,
with all faults”, but in “broom clean” condition. Tenant acknowledges that Landlord has not made
any representation or warranty, express or implied, with respect to the condition of the Premises,
the suitability or fitness of the Premises for the conduct of Tenant’s Permitted Uses or for any
other purposes, or the actual dimensions of the Premises. Tenant represents and warrants that
Tenant has conducted a thorough and diligent inspection and investigation, either independently or
through agents of Tenant’s own choosing, of the Premises and the suitability of the Premises for
Tenant’s intended use, that Tenant is fully aware of the needs of its operations and has
determined, based solely on its own investigation, that the Premises are suitable for its
operations and intended use. In no event shall Landlord be liable for any defect in the Premises
or for any limitations on the use of the Premises, except as expressly and specifically set forth
in this Lease.

     3. RENT;
RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.

          (a) Monthly
Base Rent and Additional Charges. Commencing on the Commencement Date and
throughout the Term of this Lease, Tenant shall the monthly base rent specified in the Basic Lease
Information, as adjusted pursuant to Paragraph 3(b) (as so adjusted from time to time, “Monthly
Base Rent”), on the first day of each month, in advance, with the first month’s Monthly Base Rent
and Additional Charges for Expenses and Taxes (as defined below) due upon execution of this Lease,
in lawful money of the United States (without any prior demand therefor and without deduction or
offset whatsoever, except as expressly provided in Paragraphs 20 and 21) to Landlord or its
Managing Agent at the address specified in the Basic Lease Information or to such other firm or to
such other place as Landlord or its Managing Agent may from time to time designate in writing. In
addition, Tenant shall pay to Landlord all charges and other amounts whatsoever as provided in this
Lease (“Additional Charges”) at the place where the Monthly Base Rent is payable, and Landlord
shall have the same remedies for a Default in the payment of Additional Charges as for a Default in
the payment of Monthly Base Rent. As used herein, the term “Rent” shall include all Monthly Base
Rent and Additional Charges (including, without limitation, Additional Charges for Real Estate
Taxes and Expenses pursuant to Paragraph 3(c) below, and Additional Charges pursuant to Paragraphs
6, 7(e), 8, 10(d) and 23). If the Commencement Date occurs on a day other than the first day of a
calendar month, or the Expiration Date occurs on a day other than the last day of a calendar month,
then the Monthly Base Rent and Additional Charges for such fractional month shall be prorated on a
daily basis.

          (b) Annual
Adjustments in Monthly Base Rent. The Monthly Base Rent under Paragraph 3(a) shall
be adjusted throughout the Term (including any Extension Term(s)) as provided in the Basic Lease
Information under the heading “Monthly Base Rent Adjustment”.

          (c) Additional
Charges for Expenses and Taxes.

          (i)
Definitions of Additional Charges. For purposes of this
Paragraph 3(c),
the following terms shall have the meanings hereinafter set forth:

          (A)
“Tax Year” shall mean each twelve (12) consecutive month period commencing
January 1st of the calendar year during which the Commencement Date of this Lease
occurs, provided that Landlord, upon notice to Tenant, may change the Tax Year from
time to time so any other twelve (12) consecutive month period and, in the event of
any such change, Tenant’s Share of Real Estate Taxes (as hereinafter defined) shall
be equitably adjusted for the Tax Years involved in any such change.

          (B)
“Tenant’s Share” shall mean the percentage figure so specified in the Basic
Lease Information.

- 2 -

 

          (C) “Real Estate Taxes” shall mean all taxes, assessments and charges levied upon or with
respect to the Project or any personal property of Landlord used in the operation thereof, or
Landlord’s interest in the Project or such personal property. Real Estate Taxes shall include,
without limitation, all general real property taxes and general and special assessments, charges,
fees or assessments for transit, housing, police, fire or other governmental services or purported
benefits to the Project (provided, however, that any refunds of Real Estate Taxes paid by Tenant
shall be credited against Tenant’s further obligation to pay Real Estate Taxes during the Term or
refunded to Tenant if received by Landlord within one year after the Expiration Date), service
payments in lieu of taxes, and any tax, fee or excise on the act of entering into this Lease, or
any other lease of space in the Building, or on the use or occupancy of the Building or any part
thereof, or on the rent payable under any lease or in connection with the business of renting space
in the Building, that are now or hereafter levied or assessed against Landlord by the United States
of America, the State of California, or any political subdivision, public corporation, district or
any other political or public entity, and shall also include any other tax fee or other excise,
however described, that may be levied or assessed as a substitute for, or as an addition to, in
whole or in part, any other Real Estate Taxes, whether or not now customary or in the contemplation
of the parties on the date of this Lease. Real Estate Taxes shall not include franchise, transfer,
inheritance or capital stock taxes or income taxes measured by the net income of Landlord from all
sources unless, due to a change in the method of taxation, any of such taxes is levied or assessed
against Landlord as a substitute for, in whole or in part, any other tax that would otherwise
constitute a Real Estate Tax. Additionally, Real Estate Taxes shall not include any assessments
or like charges to pay for any remediation of contamination from any Hazardous Substance (defined
in Paragraph 40 hereof) existing at the Project as of the
Commencement Date unless introduced in,
on, under or about the Premises by Tenant or Tenant’s employees, agents, contractors or invitees.
Real Estate Taxes shall also include reasonable legal fees, costs and disbursements incurred in
connection with proceedings to contest, determine or reduce Real
Estate Taxes; provided that such
fees, costs and disbursements do not exceed the actual savings in Real Estate Taxes obtained by
Tenant over the Term of the Lease. If any assessments are levied on the Project, Tenant shall have
no obligation to pay more than that amount of annual installments of principal and interest that
would become due during the Term had Landlord elected to pay the assessment in installment
payments, even if Landlord pays the assessment in full.

          (D)
“Expenses” shall mean the total costs and expenses paid or incurred by Landlord in
connection with the management, operation, maintenance and repair of the Project, including,
without limitation (i) the cost of air conditioning, electricity, steam, heating,
mechanical, ventilating, elevator systems and all other utilities, to the extent provided by
Landlord, and the cost of supplies and equipment and maintenance and service contracts in
connection therewith, (ii) the cost of repairs and general maintenance and cleaning; (iii) the cost
of fire, extended coverage, boiler, sprinkler, public liability, property damage, rent, earthquake
(if Landlord elects to obtain it) and other insurance for the Project obtained by Landlord, or
otherwise obtained by Landlord in connection with the Project, all including, without limitation,
insurance premiums and any deductible amounts paid by Landlord, including, without limitation, the
insurance required by Paragraph 10(f); (iv) fees, charges and other costs directly related to the
operation of the Project (as distinct from the operation of the partnership which owns the
Project), including management fees, consulting fees, legal fees and accounting fees, fees of all
independent contractors engaged by Landlord directly related to the operation of the Project or
reasonably
charged by Landlord if Landlord performs management services in
connection with the Project,
(though the management fee shall not exceed the cap noted in the following paragraph); (v) the
cost of any capital improvements made to the Project after the Commencement Date (excluding,
however, any capital improvements required by Laws that are Tenant’s responsibility under
Paragraph 5, which shall be paid directly by Tenant pursuant to Paragraph 5), the cost of such
capital improvements incurred by Landlord shall be amortized over the useful life of the capital
item in question as determined in accordance with generally accepted accounting principles
(“GAAP”), ”), together with interest on the unamortized balance at the greater of (x) the rate paid

- 3 -

 

by Landlord on funds borrowed from an institutional lender for the purpose of constructing
such capital improvements; or (y) 10% per annum; provided, however, the amount of the cost
of capital improvements which may be included within Expenses pursuant to this clause (v)
shall be the greater of (I) the amount that would be payable pursuant to the foregoing
amortization or (II) $.02 per square foot of the Rentable Area of the Premises per month
(and to the extent the amount under this clause (II) exceeds the amount that would be
payable under clause (I), such excess shall be credited against the unamortized balance of
the cost of capital improvements in the inverse order in which they would be payable by
Tenant under clause (i)); and (vi) any other reasonable expenses of any other kind
whatsoever reasonably incurred in managing, operating, maintaining and repairing the
Project. Any “deductible” amounts relating to capital improvements required to be paid by
Tenant hereunder in connection with any property or earthquake insurance policy carried by
Landlord shall be amortized over the useful life of the restoration work to which such
deductible amount relates in accordance with GAAP, in the same manner as other capital
improvements that are included in Expenses as provided above.

Notwithstanding
anything to the contrary herein contained, Expenses shall not include, and
in no event shall Tenant have any obligation to pay for pursuant to this Paragraph 3 or
Paragraph 7(a)7(b), (aa) any rent payable pursuant to a ground lease, and debt service
(including, but without limitation, interest, principal and any impound payments) required
to be made on any mortgage or deed of trust recorded with respect to all or any portion of
the Project other than debt service and financing charges imposed pursuant to Paragraph
3(c)(i)(D)(v) above; (bb) depreciation; (cc) the portion of a management fee paid to
Landlord or affiliate in excess of three percent (3%) of Monthly Base Rent and Additional
Charges for Expenses and Taxes (excluding the management fee); (dd) costs occasioned by
the fraud or willful misconduct under applicable laws of Landlord or its agents, servants,
contractors, employees; (ee) costs for which Landlord has a right of and has received
reimbursement from others; (ff) environmental pollution remediation related costs for
which Landlord has indemnified Tenant pursuant to
Paragraph 40(c); (gg) advertising or
promotional expenditures; and (hh) leasing commissions. All costs and expenses shall be
determined in accordance with GAAP which shall be consistently applied (with accruals
appropriate to Landlord’s business).

          (E)
“Expense Year” shall mean each twelve (12) consecutive month period commencing
January 1 of the calendar year during which the Commencement Date of the Lease occurs,
provided that Landlord, upon notice to Tenant, may change the Expense
Year from time to
time to any other twelve (12) consecutive month period, and, in the event of any such
change, Tenant’s Share of Expenses shall be equitably adjusted for the Expense Years
involved in any such change.

          (ii)
Payment of Real Estate Taxes. With reasonable promptness after Landlord has received the
tax bills for any Tax Year, Landlord shall furnish Tenant with a statement (herein called
“Landlord’s Tax Statement”) setting forth the amount of Real Estate Taxes for such Tax Year.
Unless otherwise required pursuant to Paragraph 3(c)(v) below, Tenant shall pay to Landlord the
full amount of said actual Real Estate Taxes no later than twenty (20) days prior to the due date
of each installment of Real Estate Taxes. Notwithstanding the
foregoing, Landlord shall have the
right, upon the giving of written notice to Tenant, to require Tenant to pay the estimated amount
of Real Estate Taxes; and if Landlord gives such notice, Tenant shall, commencing with the next
succeeding calendar month, pay to Landlord as Additional Charges
one-twelfth (1/12th) of the Real
Estate Taxes for each Tax Year on or before the first day of each
month during such Tax Year, in
advance, in an amount reasonably estimated by Landlord and billed by Landlord to Tenant. Landlord
shall have the right initially to determine monthly estimates and to revise such estimates from
time to time. If the actual Real Estate Taxes for such Tax Year (as shown on Landlord’s Tax
Statement) exceed the estimated Real Estate Taxes paid by Tenant for
such Tax Year, Tenant shall
pay to Landlord the difference between the amount paid by Tenant and the actual Real Estate Taxes
within fifteen (15) days after the receipt of Landlord’s Tax Statement, and if the total amount
paid by Tenant for any such Tax Year shall exceed the actual Real Estate Taxes for such Tax Year,
such excess

- 4 -

 

shall be credited against the next installment of Real Estate Taxes due from Tenant to Landlord
hereunder or if the Term has ended it shall be returned to Tenant within thirty (30) days. If it
has been determined that Tenant has overpaid Real Estate Taxes during the last year of the Lease
Term, then Landlord shall reimburse Tenant for such overage on or before the thirtieth (30th) day
following the Expiration Date. No delay by Landlord in providing Landlord’s Tax Statement shall be
deemed a default by Landlord or a waiver of Landlord’s right to require payment of the actual or
estimated sums of Real Estate Taxes.

          (iii)
Payment of Insurance Costs. With reasonable promptness after Landlord has received an
invoice for any fire, extended coverage, boiler, sprinkler, public
liability, property damage, rent,
earthquake (if Landlord elects to obtain it) and other insurance for the Project obtained by
Landlord, or otherwise obtained by Landlord in connection with the
Project, including, without
limitation, the insurance required by Paragraph 10(f), Landlord shall furnish Tenant with a
statement (herein called “Landlord’s Insurance Statement”) setting forth the amount of the premium
for such insurance. Unless otherwise required pursuant to Paragraph 3(c)(v) below, Tenant shall pay
to Landlord the full amount of said insurance premium no later than twenty (20) days prior to the
due date of such insurance premium. Notwithstanding the foregoing, Landlord shall have the right,
upon the giving of written notice to Tenant, to require Tenant to pay the estimated amount of
Landlord’s cost of insurance in monthly installments in accordance with the provisions of Paragraph
3(c)(iv) below.

          (iv)
Payment of Expenses. Commencing on the Commencement Date, Tenant shall pay to Landlord
as Additional Charges one-twelfth (1/12th) of the Expenses (including insurance premiums if
Landlord has made the election described in the last sentence of Paragraph 3(c)(iii) above) for
each Expense Year on or before the first day of each month of such Expense Year, in advance, in an
amount reasonably estimated by Landlord and billed by Landlord to Tenant, and Landlord shall have
the right initially to determine monthly estimates and to revise such estimates from time to time.
With reasonable promptness after the expiration of each Expense Year, Landlord shall furnish
Tenant with a statement (herein called “Landlord’s Expense Statement”), setting forth in
reasonable detail the Expenses for such Expense Year. If the actual Expenses for such Expense Year
exceed the estimated Expenses paid by Tenant for such Expense Year, Tenant shall pay to Landlord
the difference between the amount paid by Tenant and the actual Expenses within fifteen (15) days
after the receipt of Landlord’s Expense Statement, and if the total amount paid by Tenant for any
such Expense Year shall exceed the actual Expenses for such Expense Year, such excess shall be
credited against the next installment of the estimated Expenses due from Tenant to Landlord
hereunder or if the Term has ended it shall be returned to Tenant within thirty (30) days. Any
utility rebates for the Project which Landlord receives for payments made by Tenant shall be
forwarded to Tenant so long as such rebate is received within one year following the Expiration
Date or sooner termination of the Lease. If it has been determined that Tenant has overpaid
Expenses during the last year of the Lease Term (including rebates of utilities applicable to
Tenant), then Landlord shall reimburse Tenant for such overage on or before the thirtieth (30th)
day following the Expiration Date.

          (v)
Other. To the extent any item of Real Estate Taxes or Expenses is payable by Landlord in
advance of the period to which it is applicable (e.g. insurance and tax escrows required by
Landlord’s Lender), or to the extent that prepayment is
customary for the service or matter,
Landlord may (i) include such items in Landlord’s estimate for periods prior to the date such item
is to be paid by Landlord and (ii) to the extent Landlord has not collected the full amount of
such item prior to the date such item is to be paid by Landlord, Landlord may include the balance
of such full amount in a revised monthly estimate for Additional Charges. If the Commencement Date
or Expiration Date shall occur on a date other than the first day of a Tax Year and/or Expense
Year, Tenant’s Share of Real Estate Taxes and Expenses,
for the Tax Year and/or Expense Year in which the Commencement Date occurs shall be prorated.

          (vi)
Audit. Within one hundred eighty (180) days after receipt of any Expense Statement
or Tax Statement from Landlord, Tenant shall have the right to examine and copy Landlord’s books
and records relating to such Expense Statements and Tax Statements, or cause an independent audit
thereof to be conducted by an accounting firm to be selected by Tenant and subject to the
reasonable approval of Landlord. If the audit conclusively proves that Tenant has overpaid either
Expenses or Real

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Estate Taxes, then Landlord shall reimburse Tenant within thirty (30) days for such overage
together with interest on such overpayment at the Default Rate (as defined in 3(d) below),
and if such overage exceeds five percent (5%) of the actual amount of Expenses or Real
Estate Taxes paid by Landlord for the Tax or Expense Year covered by such audit, then
Landlord shall bear the reasonable cost of such audit, up to a maximum cost of $5,000. If
Tenant fails to object to any such Expense Statement or Tax Statement or conduct an
independent audit thereof within one hundred eighty (180) days
after receipt thereof, such
Expense Statement and/or Tax Statement shall be final and shall not be subject to any
audit, challenge or adjustment. All information obtained through any audit by Tenant and
any compromise, settlement or adjustment reached between Landlord and Tenant relative to
the results of such audit shall be held in strict confidence by the Tenant.

          (d) Late
Charges. Tenant recognizes that late payment of any Monthly Base Rent or Additional
Charges will result in administrative expenses to Landlord, the extent of which additional expense
is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if
any Monthly Base Rent or Additional Charges remain unpaid five (5) days after such amount is due,
the amount of such unpaid Monthly Base Rent or Additional Charges shall be increased by a late
charge to be paid to Landlord by Tenant in an amount equal to four percent (4%) of the amount of
the delinquent Monthly Base Rent or Additional Charges. In addition, any outstanding Monthly Base
Rent, Additional Charges, late charges and other outstanding Rent amounts shall accrue interest at
an annualized rate of the lesser of (i) the greater of 10% or The Federal Reserve Discount Rate
plus 5% until paid to Landlord, or (ii) the maximum rate permitted by law (“the Default Rate”).
Tenant agrees that such amount is a reasonable estimate of the loss and expense to be suffered by
Landlord as a result of such late payment by Tenant and may be charged by Landlord to defray such
loss and expense. The provisions of this Paragraph 3(d) in no way relieve Tenant of the obligation
to pay Monthly Base Rent or Additional Charges on or before the date on which they are due, nor do
the terms of this Paragraph 3(d) in any way affect Landlord’s remedies pursuant to Paragraph 19 in
the event any Monthly Base Rent or Additional Charges are unpaid after the date due.

     4. RESTRICTIONS ON USE. Tenant shall not use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant cause or maintain or permit any
nuisance in, on or about the
Premises. Tenant shall not commit or suffer the commission of any
waste in, on or about the
Premises.

     5.
COMPLIANCE WITH LAWS.

          (a) Tenant’s Compliance Obligations. Tenant shall not use the Project or permit anything to be
done in or about the Project which will in any way conflict with any present and future laws,
statutes, ordinances, resolutions, regulations, proclamations, orders or decrees of any municipal,
county, state or federal government or other governmental or regulator authority with jurisdiction
over the Project, or any portion thereof, whether currently in effect or adopted in the future and
whether or not in the contemplation of the parties hereto (collectively, “Laws”), and Tenant shall
promptly, at its sole expense, maintain the Premises, any Alterations (as defined in Paragraph 6
below) permitted hereunder and Tenant’s use and operations thereon in strict compliance at all
times with all Laws. “Laws” shall include, without
limitation, all Laws relating to health and safety
(including, without limitation, the California Occupational Safety and Health Act of 1973 and the
California Safe Drinking Water and Toxic Enforcement Act of 1986, including posting and delivery of
notices required by such Laws with respect to the Premises), disabled accessibility (including,
without limitation, the Americans with Disabilities Act 42 U.S.C. section 12101 et seq.), Hazardous
Substances, and all present and future life safety, fire, sprinkler,
seismic retrofit, building code
and municipal code requirements; provided however, that Tenant’s obligation to comply with Laws
relating to Hazardous Substances is subject to the terms and conditions of Paragraph 40, and Tenant
shall not be responsible for compliance with clean-up provisions of any Laws with respect to
Hazardous Substances except to the extent of any release caused by the Tenant or any of its
servants, employees, contractors, agents, licensees or invitees
(collectively, including Tenant, the
“Tenant Parties”) or otherwise included in Tenant’s
indemnity contained in Paragraph 40.
Notwithstanding the foregoing, Landlord, and not Tenant, shall be responsible for correcting any
condition with respect to the exterior or structural portions of the Building (but not with respect
to the interior of the Premises), which is in violation of applicable Laws (subject to Tenant’s
obligation to pay such costs to the extent they are included as Expenses under Paragraph 3(c)(i)(D)
above), except to the extent such condition is caused by the negligent or intentional acts or
omissions of the Tenant Parties, or such violation results from Tenant’s particular

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use of the Premises, or such condition will be altered in connection with the installation of any
Alterations. Any Alterations that are Tenant’s responsibility pursuant to this Paragraph 5 shall be
made in accordance with Paragraph 6 below, at Tenant’s sole cost. The parties acknowledge and agree
that Tenant’s obligation to comply with all Laws as provided in this paragraph (subject to the
limitations contained herein) is a material part of the bargained-for consideration under this
Lease. Tenant’s obligations under this Paragraph and under Paragraph 7(c) below shall include,
without limitation, the responsibility of Tenant to make substantial or structural repairs and
alterations to the Premises to the extent provided above, regardless
of, among other factors, the
relationship of the cost of curative action to the Rent under this Lease, the length of the then
remaining Term hereof, the relative benefit of the repairs to Tenant or Landlord, the degree to
which the curative action may interfere with Tenant’s use or enjoyment of the Premises, and the
likelihood that the parties contemplated the particular Law involved.

          (b) Insurance
Requirements. Tenant shall not do or permit anything to be done in or about the
Premises or bring or keep anything therein which will in any way increase the rate of any insurance
upon the Project or any of its contents (unless Tenant agrees to pay for such increase) or cause a
cancellation of any insurance on the Project or otherwise violate any requirements, guidelines,
conditions, rules or orders with respect to such insurance. Tenant shall at its sole cost and
expense promptly comply with the requirements of the Insurance Services Office (ISO), board of fire
underwriters, or other similar body now or hereafter constituted relating to or affecting Tenant’s
use or occupancy of the Project (other than in situations where compliance involves repair,
maintenance or replacement of items that Landlord is expressly required to repair, maintain or
replace under this Lease).

          (c) No
Limitation on Obligations. The provisions of this Paragraph 5 shall in no way limit
Tenant’s maintenance, repair and replacement obligations under Paragraph 7 or Tenant’s obligation
to pay Expenses under Paragraph 3(c). The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether Landlord is
a party thereto or not, that
Tenant has so violated any such Law shall be conclusive of such violation as between Landlord and
Tenant.

     6. ALTERATIONS.

          (a) Tenant shall not make or suffer to be made any additional alterations, additions or
improvements (“Alterations”) in, on or to the Premises or any part thereof without the prior
written consent of Landlord. Failure of Landlord to give its approval within fifteen (15) calendar
days after receipt of Tenant’s written request for approval shall constitute disapproval by
Landlord. Any Alterations in, on or to the Premises, except for Tenant’s trade fixtures and movable
furniture and equipment, shall be the property of Tenant during the Term and shall become
Landlord’s property at the end of the Term without compensation to Tenant. Landlord shall not
unreasonably withhold or delay its consent to Alterations that (i) do not materially affect the
structure of the Building or its electrical, plumbing, HVAC, security or other systems, (ii) are
not visible from the exterior of the Premises and do not otherwise affect the exterior appearance
of the Building, (iii) are consistent with Tenant’s Permitted Use hereunder; (iv) do not require
any application to a political jurisdiction for rezoning, general plan amendment, variance,
conditional use permit or architectural review approval, (v) will not interfere with the use and
occupancy of any other portion of the Project by Landlord or by any other tenants or occupants or
their invitees, or by any other party with the right to use any portion of the Project, (vi) comply
with any ground lease, CC&Rs (including without limitation the CC&Rs described in EXHIBIT C) and
Mortgages, and (vii) do not adversely affect the value or marketability of Landlord’s reversionary
interest upon termination or expiration of this Lease.

          (b) If
Landlord consents to the making of any Alterations by Tenant, the same
shall be made by
Tenant, at Tenant’s sole cost and expense, in accordance with plans and specifications submitted by
Tenant to Landlord concurrently with its request pursuant to Paragraph 6(a) and reasonably approved
by Landlord, and any contractor or person selected by Tenant to make the same must first be
reasonably approved in writing by Landlord. With respect to any Alterations that affect the
structure of the Building, the Building Systems, or any portion of the Project outside the
Premises, at Landlord’s option the Alterations shall be made by Landlord, or by a contractor
specified by Landlord, for Tenant’s account and Tenant shall reimburse Landlord for the cost
thereof (including a reasonable charge for Landlord’s overhead) as an Additional Charge, within
twenty (20) days after receipt of a statement from Landlord therefor

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          (c) Tenant shall reimburse Landlord upon demand for any reasonable out-of-pocket expenses
incurred by Landlord in the review of any Alterations made by Tenant, including fees charged by
Landlord’s contractors or consultants to review plans and specifications, and such obligation shall
be an Additional Charge. Landlord’s consent to any Alterations shall not obligate Landlord to
repair, maintain, insure or otherwise assume any responsibility or liability with respect to any
such Alteration. In addition, notwithstanding Landlord’s review, Tenant and not Landlord shall be
responsible for compliance of the Alterations, and plans and specifications therefor, with all
applicable Laws, and Landlord shall not be responsible for any omissions or errors therein.

          (d) Upon
the expiration or sooner termination of the Term, Tenant shall upon demand by
Landlord, at Landlord’s election either (i) at Tenant’s sole cost and expense, forthwith and with
all due diligence remove any Alterations made by or for the account of Tenant, designated by
Landlord to be removed (provided, however, that upon the written request of Tenant prior to
installation of such Alterations, Landlord shall advise Tenant at that time whether or not such
Alterations must be removed upon the expiration or sooner termination of this Lease), and restore
the Premises to substantially its original condition as of the Commencement Date, subject to normal
wear and tear and the rights and obligations of Tenant concerning casualty damage pursuant to
Paragraph 20 or (ii) pay Landlord the reasonable estimated cost thereof.

     7. REPAIR AND MAINTENANCE.

          (a) Landlord’s
Obligations.

          (i) Landlord shall maintain, repair and replace, except as provided in Paragraph 7(c),
the exterior (excluding windows and window frames), roof structure (but not the roof
membrane) and structural portions of the Building (including load bearing walls and
foundations).

          (ii) Landlord shall maintain, repair and replace the parking areas, courtyards,
sidewalks, entry ways, lawns, fountains, landscaping and other similar facilities located
in the Common Area.

All costs incurred by Landlord in connection with the foregoing obligations shall be payable by
Tenant as Additional Charges in accordance with Paragraph 3(c) to the extent they are properly
included in Expenses thereunder. Landlord’s obligations under this Paragraph 7(a) with respect to
any particular repair, replacement or maintenance requirement, shall not commence until Tenant
notifies Landlord in writing of any circumstances which Tenant believes may trigger Landlord’s
obligations.

          (b) Tenant’s
Obligations. Tenant shall maintain, repair and replace, at its sole cost and
expense, all portions of the Premises which are not Landlord’s obligations under Paragraph 7(a),
including, without limitation, (i) the roof membrane, windows, and window frames; (ii) the building
systems serving the Premises for electrical, mechanical, HVAC and plumbing and all controls
appurtenant thereto, and any elevators in the Building (collectively,
including elevators,
“Building Systems”); and (iii) the interior portion of the Building, the Alterations, and any
additional tenant improvements, alterations or additions installed by or on behalf of Tenant within
the Premises. Tenant shall be responsible for the expense of installation, operation, and
maintenance of its telephone and other communications cabling from the point of entry into the
Building to the Premises and throughout the Premises, though Landlord shall have the right to
perform such work on behalf of Tenant in Common Areas, provided Landlord performs such work in
coordination with Tenant and its contractors in such a manner as will accommodate Tenant’s
reasonable objectives with respect thereto. The Premises shall at all times be maintained by
Tenant in the condition of a first-class office building. Tenant’s obligations under this Paragraph
7 include, without limitation, the replacement, at Tenant’s sole cost and expense, of any portions
of the Premises or Building Systems which are not Landlord’s express responsibility under Paragraph
7(a), if it would be commercially prudent to replace, rather than repair, such portions of the
Premises, regardless of whether such replacement would be considered a capital expenditure. Tenant
hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1941 and
1942 of the California Civil Code or under any similar law, statute or ordinance now or hereafter
in effect. In addition, Tenant hereby waives and releases its right to terminate this Lease under
Section 1932(1) of the California Civil Code or under any
similar law, statute or ordinance now or
hereafter in effect.

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          (c) Additional
Obligations of Tenant. The purpose of Paragraph 7(a) and 7(b) is to define the
obligations of Landlord and Tenant to perform various repair and
maintenance functions; the
allocation of the costs therefor are covered under this
Paragraph 7(c) and Paragraph 3. Tenant
shall bear the full cost of repairs or maintenance interior or exterior, structural or otherwise,
to preserve the Premises and the Building in good working order and first-class condition, arising
out of (i) the existence, installation, use or operation of any Alterations or any of Tenant’s
trade fixtures or personal property; (ii) the moving of Tenant’s property or fixtures in or out of
the Building or Project or in and about the Premises; (iii) the particular use or particular
occupancy or manner of use or occupancy of the Premises by any Tenant Party; or (iv) except to the
extent any claims arising from any of the foregoing are reimbursed by insurance carried by
Landlord, are covered by the waiver of subrogation in Paragraph 11 or are otherwise provided for in
Paragraph 20, the acts, omissions or negligence of any Tenant Parties.

          (d) Maintenance
Service Contracts. In connection with Tenant’s maintenance and repair
obligations contained in this Paragraph 7, Tenant shall, at its own cost and expense, enter into
regularly scheduled preventive maintenance service contracts with maintenance contractors approved
by Landlord, in its reasonable discretion, for servicing all Building Systems, elevators and
equipment within the Premises, and shall provide copies of such contracts and periodic maintenance
reports to Landlord. At Landlord’s option at any time in which Tenant is in Default hereunder,
maintenance service contracts shall be prepaid on an annual basis. Each maintenance service
contract shall specifically name Landlord as a third parly beneficiary, with the right to receive
copies of all notices delivered under such contract and the ability to exercise Tenant’s rights
thereunder, at Landlord’s election, in connection with any cure of Tenant’s default by Landlord, or
any assumption by Landlord of Tenant’s maintenance obligations with respect to Building Systems,
pursuant to Paragraph 7(e) below.

          (e) Cure
Rights. Tenant shall have a period of thirty (30) days from the date of written
notice from Landlord within which to cure any failure to fulfill any of its obligations under this
Paragraph 7; provided, however, that if such failure is curable but cannot be cured within such
thirty (30) day period, Tenant shall have such additional time as may be reasonably required to
cure (not to exceed sixty (60) additional days) so long as Tenant commences such cure within such
(30) day period and diligently prosecutes such cure to completion. Landlord shall have the rights
set forth in Paragraph 23 with respect to any failure of Tenant to perform its obligations under
this Paragraph 7. In addition. Landlord may elect, by delivery of written notice to Tenant, to
assume Tenant’s maintenance obligations with respect to the Building Systems under item (ii) of
Paragraph 7(b) if Tenant does not cure any breach of such obligations, or if Tenant has failed to
perform such obligations more than once in any twelve month period (without benefit of cure
periods) upon the second such failure. If Landlord assumes such obligations, all costs incurred
by Landlord in connection therewith shall be included in Expenses payable by Tenant as Additional
Charges in accordance with Paragraph 3(c). The remedies described in this paragraph are
cumulative and in addition to any other remedies Landlord may have at law or under this Lease.

          (f) No
Abatement. Except to the extent any claims arising from any of the foregoing are
reimbursed by rental abatement insurance proceeds actually received by Landlord, are covered by
the waiver of subrogation in Paragraph 11 or are otherwise provided for in Paragraph 20, there
shall be no abatement of Rent with respect to, and except for Landlord’s gross negligence or
willful misconduct, Landlord shall not be liable for any injury to or interference with Tenant’s
business arising from, any repairs, maintenance, alteration or improvement in or to any portion of
the Project, including the Premises, or in or to the fixtures, appurtenances and equipment
therein.

     8. LIENS. Tenant shall keep the Premises free from any liens arising out of any work
performed, material furnished or obligations incurred by Tenant. In the event that Tenant shall
not within ten (10) days following the imposition of any such lien, cause the same to be released
of record by payment or posting of a proper bond, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including without limitation by the payment of the
claim giving rise to such lien or by the posting of a bond. All such sums paid by Landlord and all
expenses incurred by Landlord in connection therewith shall be considered Additional Charges and
shall be payable to Landlord by Tenant on demand with interest from the date incurred by Landlord
at the Default Rate. Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or which Landlord shall deem proper, for the
protection of Landlord, the Premises, the Project and any other

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party having an interest therein, from mechanics’ and materialment’s liens, and Tenant shall give
written notice to Landlord at least fifteen (15) business days prior to commencement of any
construction on the Premises.

     9. ASSIGNMENT AND SUBLETTING

          (a) Except as otherwise provided in this Paragraph 9, Tenant shall not directly or indirectly,
voluntarily or by operation of law, sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant’s leasehold estate hereunder (collectively,
“Assignment”), or permit the Premises to be occupied by anyone other than Tenant or sublet the
Premises or any portion thereof (collectively, “Sublease”), without Landlord’s prior written
consent in each instance, which consent shall not be unreasonably withheld; provided, however, that
Tenant shall have the right to enter into an Assignment of Sublease to any affiliate of Tenant
pursuant to Paragraph 9(f) below or a Permitted Transfer pursuant to Paragraph 9(d) below.
Without otherwise limiting the criteria upon which Landlord may withhold its consent to any
proposed Sublease or Assignment, if Landlord withholds its consent where either (i) the
creditworthiness of the proposed Sublessee or Assignee is not reasonably acceptable to Landlord, or
(ii) the proposed Sublessee’s or Assignee’s use of the Premises is not in compliance with the
Permitted Use as described in the Basic Lease Information, such withholding of consent shall be
presumptively reasonable. If Landlord consents to the Sublease or
Assignment, Tenant may thereafter
enter into a valid Sublease or Assignment upon the terms and conditions set forth in this Paragraph
9.

          (b) If Tenant desires at any time to enter into an Assignment of this Lease or a Sublease of
the Premises or any portion thereof for which Landlord’s consent is required it shall first give
written notice to Landlord of its desire to do so, which notice shall contain (i) the name of the
proposed assignee, subtenant or occupant; (ii) the name of the
proposed assignee’s, subtenant, or
occupant’s business to be carried on in the Premises; (iii) the terms and provisions of the
proposed Assignment or Sublease; and (iv) such financial information as Landlord may reasonably
request concerning the proposed assignee, subtenant or occupant.

          At any time within fifteen (15) days after Landlord’s receipt of the notice specified in
Paragraph 9(b), Landlord may by written notice to Tenant elect to (i) consent to the Sublease or
Assignment; or (ii) disapprove the Sublease or Assignment. In
addition, Landlord may elect to
terminate this Lease as to the portion of the Premises that is specified in such notice, with a
proportionate abatement in Monthly Base Rent and Additional Charges for Expenses and Taxes, if
such notice is with respect to (x) any proposed Assignment or (y) any proposed Sublease and either
(I) such Sublease has a term (including any renewal or extension options) that either is
coterminous with the Term or expires within the last two years of the Term, or (II) after giving
effect to such Sublease, the original Tenant will occupy less than fifty percent (50%) of the
Rentable Area of the Premises. If Landlord elects to terminate the Lease as to a portion of the
Premises pursuant to the immediately preceding sentence, Tenant shall at all times provide
reasonable and appropriate access to such portion of the Premises and use of any common facilities
within the Building. Promptly after request from Landlord, Tenant shall enter into any amendment
to this Lease or other documentation reasonably requested by Landlord in connection with any such
termination of this Lease as to a portion of the Premises. Failure by Landlord to either consent
to or disapprove a proposed Assignment or Sublease within the fifteen (15) day time period
specified above shall be deemed to be Landlord’s disapproval
thereof. At Tenant’s option, Tenant
may notify Landlord in writing if Tenant wishes to Assign or Sublease any portion of the Premises,
prior to commencing negotiations for an Assignment or Sublease with another party, if such
Assignment or Sublease would be subject to Landlord’s termination right provided above (such
notice being the “Availability Notice”), and Landlord shall have the option, by written notice to
Tenant within fifteen (15) days after receiving any Availability Notice, to terminate this Lease
with respect to the portion of the Premises as provided above. If Landlord declines or fails
timely to elect to terminate this Lease with respect to such portion
of the Premises, Tenant shall
have the right within one hundred twenty (120) days after the expiration of such fifteen (15) day
period, to enter into an Assignment or Sublease with respect to the portion of the Premises
designated in the Availability Notice, subject to Landlord’s consent and the other provisions of
this Paragraph 9, except that Landlord shall not have the further right to terminate with respect
to such Assignment or Sublease. If Tenant fails to enter into an Assignment or Sublease within
such one hundred twenty (120) day period, or upon expiration of any Sublease entered into within
such one hundred twenty (120) day period, Landlord’s rights under this Paragraph 9 to terminate
the Lease with respect to the portion of the Premises upon any future proposed Sublease or
Assignment shall revive. If Landlord consents to the Sublease or Assignment within fifteen (15)
days

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after receipt of Tenant’s notice as provided above. Tenant may thereafter within one hundred twenty
(120) days after Landlord’s consent, but not later than the expiration of said one hundred twenty
(120) days, enter into such Assignment or Sublease of the Premises or portion thereof upon the
terms and conditions set forth in the notice furnished by Tenant to Landlord pursuant to Paragraph
9(b). However, Tenant shall pay to Landlord seventy-five percent (75%) of any rent or other
consideration realized by Tenant under any and all Subleases in excess of the Monthly Base Rent and
Additional Charges payable hereunder (or the amount thereof proportionate to the portion of the
Premises subject to such Sublease(s)), including, without limitation, any sums paid for the sale or
rental of any Alterations, after first deducting from such excess costs reasonably incurred for
tenant improvements installed by Tenant (commensurate with a standard office build-out) to obtain
the Sublease or Assignment in question, each of which are installed in that portion of the Premises
which is the subject of the Sublease or Assignment and which unamortized costs shall be amortized
on a straight line basis (without interest) over the term of the Sublease or Assignment in equal
installments, and after deducting therefrom any customary brokers’ commissions that Tenant has
incurred in connection with such Sublease amortized on a straight line basis (without interest)
over the term of the Sublease.

          (c) No consent by Landlord to any Assignment or Sublease by Tenant shall relieve Tenant of any
obligation to be performed by Tenant under this Lease, whether arising before or after the
Assignment or Sublease. The consent by Landlord to any Assignment or Sublease shall not relieve
Tenant from the obligation to obtain Landlord’s express written consent to any other Assignment or
Sublease. Any Assignment or Sublease that is not in compliance with this Paragraph 9 shall be void
and, at the option of Landlord, shall constitute a material Default by Tenant under this Lease. The
acceptance of Monthly Base Rent or Additional Charges by Landlord from a proposed assignee or
sublessee shall not constitute the consent to such Assignment or Sublease by Landlord.

          (d) The following shall be deemed a voluntary assignment of Tenant’s interest in this Lease:
(i) any dissolution, merger, consolidation, or other reorganization of Tenant; and (ii) if the
capital stock of Tenant is not publicly traded, the sale or transfer
to one person or entity stock
possessing more than fifty percent (50%) of the total combined voting power of all classes of
Tenant’s stock issued, outstanding and entitled to vote for the
election of directors.
Notwithstanding anything to the contrary contained in this
Paragraph 9, Tenant may enter into any
of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent: (1)
Tenant may assign its interest in the Lease to a corporation, partnership, limited liability
company, or limited liability partnership (“Transfer Entity”) which results from a merger,
consolidation or other reorganization, so long as the surviving Transfer Entity has a net worth
immediately following such transaction that is equal to or greater than the net worth of Tenant as
of the date immediately prior to such transaction; and (2) Tenant may assign this Lease to a
Transfer Entity which purchases or otherwise acquires all or substantially all of the assets of
Tenant so long as such acquiring Transfer Entity has a net worth immediately following such
transaction that is equal to or greater than the net worth of Tenant as of the date immediately
prior to such transaction.

          (e) Each assignee pursuant to an Assignment as provided in this Paragraph 9 shall assume all
obligations of Tenant under this Lease, and shall be and remain liable jointly and severally with
Tenant for the payment of Monthly Base Rent and Additional Charges, and for the performance of all
the terms, covenants, conditions and agreements herein contained on Tenant’s part to be performed
for the Term. No Assignment shall be binding on Landlord unless the assignee or Tenant shall
deliver to Landlord a counterpart of the Assignment and an instrument in recordable form that
contains a covenant of assumption by the assignee satisfactory in substance and form to Landlord,
consistent with the requirements of this Paragraph 9(e), but the failure or refusal of the
assignee to execute such instrument of assumption shall not release or discharge the assignee from
its liability as set forth above. Notwithstanding anything to the contrary in this Lease, no
Sublease shall be binding on Landlord unless and until Landlord shall agree in writing following
termination of this Lease to recognize such sublessee and such sublessee agrees in writing to
attorn to Landlord on the terms and conditions of the sublease (including the obligations under
this Lease to the extent that they relate to the portion of the Premises subleased), and any
Sublease entered into by Tenant hereunder shall include an obligation by the sublessee to so
attorn to Landlord if Landlord, in Landlord’s sole discretion, elects to recognize such Sublease
upon any termination of this Lease.

          (f) Tenant shall have the right, without Landlord’s consent and without triggering Landlord’s
rights under Paragraph 9(b), but with written notice to Landlord at least ten (10) days prior
thereto, to enter into an

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Assignment of Tenant’s interest in the Lease or a Sublease of all or any
portion of the Premises to an Affiliate (as defined below) of Tenant, provided that
(i) in connection with an Assignment that is not a Sublease, the Affiliate delivers
to Landlord concurrent with such Assignment a written notice of the Assignment and
an assumption agreement whereby the Affiliate assumes and agrees to perform,
observe and abide by the terms, conditions, obligations, and provisions of this
Lease arising from and after the effective date of the assignment; and (ii) the
assignee or sublessee remains an Affiliate throughout the term of this Lease (and,
in connection with an Assignment that is not a Sublease, the assumption agreement
shall contain provisions consistent with the provisions of this subparagraph
allowing Landlord to terminate this Lease at such time as the entity is no longer
an Affiliate of the original Tenant). If this Lease is assigned or sublet to an
Affiliate and thereafter any circumstance occurs which causes such assignee or
sublessee to no longer be an Affiliate of the assigning or subleasing Tenant,
Tenant shall give written notice thereof to Landlord, which notice, to become
effective, shall refer to Landlord’s right to terminate this Lease pursuant to this
subparagraph, in the event of an Assignment, or to cause Tenant to terminate the
Sublease, in the event of a Sublease (“Affiliation Termination Notice”). Following
occurrence of the circumstance giving rise to the discontinuation of such assignee
or sublessee being an Affiliate (“Affiliate Termination”) of the assigning or
subleasing Tenant, Landlord shall be entitled to terminate this Lease in the event
of an Assignment or to cause Tenant to terminate the Sublease in the event of a
Sublease, unless Landlord has given its prior written consent to such circumstance,
which consent shall not be unreasonably withheld by Landlord so long as, in the
event of an Assignment, such assignee (after giving effect to such circumstance)
has financial strength (as demonstrated by audited financial statements) equal to
or greater than the assigning or subleasing Tenant (including its net worth) as of
the date of execution of this Lease, or the assigning or subleasing Tenant executes
a guaranty in usual form reasonably acceptable to Landlord (however, this does not
imply that Tenant would be released without such guaranty). No Sublease or
Assignment by Tenant made pursuant to this paragraph shall relieve Tenant of
Tenant’s obligations under this Lease. As used in this paragraph, the term
“Affiliate” shall mean and collectively refer to a corporation or other entity
which controls, is controlled by or is under common control with Tenant, by means
of an ownership of either (aa) more than fifty percent (50%) of the outstanding
voting shares of stock or partnership or other ownership interests, or (bb) stock,
or partnership or other ownership interests, which provide the right to control the
operations, transactions and activities of the applicable entity.

     10. INSURANCE AND INDEMNIFICATION

          (a) Except to the extent caused by the negligence or willful misconduct of Tenant Parties or
Tenant’s breach of this Lease, Landlord shall indemnify and hold Tenant harmless from and defend
Tenant against any and all claims or liability for any injury or damage to any person or property
including any reasonable attorney’s fees (but excluding any consequential damages or loss of
business) occurring in, on, or about the Project to the extent such injury or damage is caused by
the gross negligence or willful misconduct of: (i) Landlord; or (ii) Landlord’s agents, servants,
contractors or employees (collectively, together with Landlord, “Landlord Parties”), provided,
however, that in no event shall Landlord be liable to Tenant for any losses arising from any
interruption of Tenant’s business, or for lost profits, or for charges or expenses which continue
but would have been earned if the business had gone on without interruption, or for any other loss,
claim, cost, expense or damage which would be covered by a standard policy of business interruption
insurance, even if such lost profits, charges, expenses, losses, claims, costs or damages caused by
the gross negligence or willful misconduct of Landlord’s agents, servants, contractors or
employees.

          (b) Landlord shall not be liable to Tenant and Tenant hereby waives all claims against
Landlord Parties for any injury or damage to any person or property in or about the Premises by or
from any cause whatsoever (other than the gross negligence or willful misconduct of Landlord
Parties), and without limiting the generality of the foregoing, whether caused by water leakage of
any character from the roof, walls, basement, or other portion of the Premises or the Building, or
caused by gas, fire, oil, electricity, or any cause whatsoever, in,
on,
or about the Premises, the Project or any part thereof (other than that caused by the gross negligence or willful
misconduct of Landlord Parties); provided, however, that in no event shall Landlord be liable to Tenant for any
losses arising from any interruption of Tenant’s business, or for lost profits, or for charges or expenses which
continue but would have been earned if the business had gone on
without interruption, or for any other loss, claim,
cost, expense or damage which would be covered by a standard policy of business interruption insurance, even if
caused by the gross negligence or willful misconduct of Landlord’s agents, servants, contractors or
employees.

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Tenant
acknowledges that any casualty insurance carried by Landlord will not cover loss of income
to Tenant or damage to the Alterations in the Premises installed by Tenant or Tenant’s
personal property located within the Premises (except as provided in Paragraph 10(f) below).
Tenant shall be required to maintain the insurance described in Paragraph 10(d) below during the
Term.

          (c) Except to the extent caused by the gross negligence or willful misconduct of Landlord
Parties, Tenant shall indemnify and hold Landlord harmless from and defend Landlord against any and
all claims or liability for any injury or damage to any person or
property whatsoever: (i)
occurring in or on the Premises; or (ii) occurring in, on, or about any other portion of the Project
to the extent such injury or damage shall be caused by the negligence or willful misconduct by the
Tenant Parties. Tenant further agrees to indemnify and hold Landlord harmless from, and defend
Landlord against, any and all claims, losses, or liabilities (including damage to Landlord’s
property) arising from (x) any breach of this Lease by Tenant, (y) any matter referred to in
Paragraph 10(g). and/or (z) the conduct of any work or business of Tenant Parties in or about the
Project, including, but not limited to any release, discharge, storage or use of any Hazardous
Substance. In the event of a discrepancy between the terms of this paragraph and the terms of
Paragraph 40 of the Lease concerning Hazardous Substance liability, the latter shall control.
Notwithstanding the foregoing, however, Tenant shall so indemnify, hold harmless and defend Landlord
with respect to losses arising from any interruption of Tenant’s business, or for lost profits, or
for charges or expenses which continue but would have been earned if the business had gone on without
interruption, or for any other loss, claim, cost, expense or damage which would be covered by a
standard policy of business interruption insurance, even if such losses resulted from the gross
negligence or willful misconduct of Landlord’s agents, servants, contractors or employees.

          (d) Tenant shall procure at its cost and expense and keep in effect during the Term the
following insurance:

          (i) Commercial general liability insurance on an occurrence form, including
contractual liability, with a minimum combined single limit of liability of Three
Million Dollars ($3,000,000). Such insurance shall name Landlord, any Mortgagee, any
ground lessor, and such other parties as Landlord may request as additional insureds,
shall specifically include the liability assumed hereunder by Tenant and shall provide
that it is primary insurance, and not excess over or contributory with any other valid,
existing and applicable insurance in force for or on behalf of Landlord, and shall
provide that Landlord shall receive thirty (30) days’ written notice from the insurer
prior to any cancellation or change of coverage. The limits of such insurance shall not
limit the liability of Tenant hereunder, and Tenant is responsible for ensuring that the
amount of liability insurance carried by Tenant is sufficient for
Tenant’s purposes.

          (ii)
Intentionally Omitted;

          (iii)
“Special” (also known as “all risk”) property insurance (including, without
limitation, boiler and machinery (if applicable), sprinkler damage, vandalism and
malicious mischief) on all of Tenant’s personal property. Such insurance shall be in an
amount equal to full replacement cost of the aggregate of the foregoing and shall
provide coverage comparable to the coverage in the standard ISO All Risk form, when such
form is supplemented with the coverages required above;

          (iv)
Worker’s compensation insurance with limits as may be required
by law;

          (v) Such other insurance as may be required by Laws, or by Landlord to the extent
it is commercially reasonable for tenants to be required to carry such other insurance
under similar leases with respect to similar property in similar locations.

Insurance
required under this Paragraph 10(d) shall be in companies rated “A”X or better in
“Best’s Insurance Guide.” Tenant shall deliver copies of policies of such insurance and
certificates naming the additional insureds thereof to Landlord on or before the Commencement
Date, and thereafter at least thirty (30) days before the expiration dates of expiring
policies; and, in the event Tenant shall fail to procure such insurance, or to deliver such

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policies
or certificates, Landlord may, at its option after written notice to
Tenant, procure same for the account of Tenant and the cost thereof shall be paid to
Landlord as Additional Charges within five (5) days after delivery to Tenant of bills
therefor.

          (e) The provisions of this Paragraph 10 shall survive the expiration or
termination of this
Lease with respect to any claims or liability occurring prior to such expiration
or termination.

          
(f) Landlord shall maintain insurance on the Project, including the Building, and
any
Alterations installed in the Premises by Tenant at its expense to the extent
Tenant provides Landlord with all
information reasonably required by Landlord or its insurer in connection therewith
(with the entire cost of any such
insurance on Alterations to be payable directly by Tenant to Landlord as an
Additional Charge, including the
incremental cost to add such insurance to Landlord’s policies and any deductibles
payable with respect to such
Alterations), against fire and risks covered by “special” coverage (also known as
“all risk”) (excluding earthquake
and flood, though Landlord, at its sole option, may include this coverage) on a
100% of “replacement cost” basis
(though reasonable deductibles may be included under such coverage). Landlord’s
insurance shall also have a
building ordinance provision and shall provide for rental interruption insurance
covering a period of twelve (12) full
months. In no event shall Landlord be deemed a co-insurer under such policy.
Landlord shall also maintain
commercial general liability insurance on an occurrence basis in amounts not less
than Three Million Dollars
($3,000,000) per occurrence with respect to bodily injury or death and property
damage in the Project.
Notwithstanding the foregoing obligations of Landlord to carry
insurance, Landlord
may modify the foregoing
coverages if and to the extent it is commercially reasonable to do so. Landlord
agrees to provide Tenant, upon
written request, with certificates of insurance evidencing the foregoing coverages.
Tenant acknowledges that,
notwithstanding any provision of this Paragraph 10(f) or any other provision of
this Lease, Landlord currently
intends to carry earthquake insurance on the Project during the Term of this Lease.

          (g) Tenant acknowledges that even if Landlord installs and operates security
cameras or
other security equipment and/or provides any other services that could be
construed as being intended to enhance
security, Landlord shall have no obligation to Tenant or to any of Tenant’s
Parties for any damage, claim, loss or
liability related to any claim that Landlord had a duty to provide security or
that the equipment or services provided
by Landlord were inadequate, inoperative or otherwise failed to provide adequate
security. Any such claim made
against Landlord by any employee, customer or invitee of Tenant shall be included
within Tenant’s obligation of
indemnity and defense set forth in Paragraph 10)(c) above.

     11. WAIVER
OF SUBROGATION. Notwithstanding anything to the contrary in
this Lease, the
parties hereto release each other (including Landlord Parties and Tenant Parties)
and their respective agents,
employees, successors, assignees and subtenants from all liability for injury to
any person or damage to any property
that is caused by or results from a risk (i) which is actually insured against, to
the extent of receipt of payment under
such policy (unless the failure to receive payment under any such policy results
from a failure of the insured party to
comply with or observe the terms and conditions of the insurance policy covering
such liability, in which event,
such release shall not be so limited), (ii) which is required to be insured
against under this Lease, without regard to
the negligence or willful misconduct of the entity so released, or (iii) which
would normally be covered by the
standard form of “special” or “all risk” coverage property insurance. Landlord
and Tenant shall each obtain from
their respective insurers under all policies of fire, theft, and other property
insurance maintained by either of them at
any time during the Term insuring or covering the Building, the Premises, or the
Project or any portion thereof of its
contents therein, a waiver of all rights of subrogation which the insurer of one
party might otherwise, if at all, have
against the other party and Landlord and Tenant shall each indemnify the other
against any loss or expense,
including reasonable attorneys’ fees, resulting from the failure to obtain such
waiver.

     12. SERVICES
AND UTILITIES.

          (a) Landlord shall provide the maintenance and repairs described in Paragraph
7(a), except for damage occasioned by the act or omission of Tenant or for which
Tenant is responsible pursuant to Paragraph 10(c), which damage shall be repaired by
Landlord at Tenant’s expense.

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          (b) Subject to the provisions elsewhere herein contained and to the Rules and
Regulations,
Tenant shall be responsible for arranging for, and direct payment of any and all
cost of, garbage pickup, recycling,
janitorial, security, transportation management programs, water, electricity, gas,
telephone, cable and digital
services, and Tenant shall provide the maintenance, repair and replacement of
Building Systems in connection with
such utilities and services, and Tenant shall provide the maintenance, repair and
services as described in Paragraph
7(b). Landlord shall cooperate with Tenant’s efforts to arrange all such
services. If Landlord assumes Tenant’s
maintenance obligations with respect to the Building Systems pursuant to Paragraph
7(e), Tenant shall cooperate
fully with Landlord and abide by all the reasonable regulations and requirements that
Landlord may prescribe for the
proper functioning and protection of the Building Systems.

          (c) Tenant will not without the written consent of Landlord, which consent shall
not be
unreasonably withheld or delayed, use any apparatus or device in the Premises
which, when used, puts an excessive
load on the Building or its structure or systems, including, without limitation,
electronic data processing machines,
punch card machines and machines using excess lighting or voltage in excess of the
amount for which the Building
is designed.

          (d) Landlord shall not be in default hereunder, nor be deemed to have evicted
Tenant, nor be
liable for any damages directly or indirectly resulting from, nor shall the rental
herein reserved be abated, except as
expressly provided for in the last sentence of this paragraph, by reason of (i) the installation, use or interruption of
use of any equipment in connection with the foregoing utilities and
services; (ii) failure to furnish or delay in
furnishing any services to be provided by Landlord when such failure or delay is
caused by Acts of God or the
elements, labor disturbances of any character, any other accidents or other
conditions beyond the reasonable control
of Landlord, or by the making of repairs or improvements to the Premises or to the
Building (except in the case of
Landlord’s gross negligence or willful misconduct); or (iii) the limitation,
curtailment, rationing or restriction on use
of water or electricity, gas or any other form of energy or any other service or
utility whatsoever serving the
Premises or the Project. Furthermore, Landlord shall be entitled to cooperate
with the mandatory requirements of
national, state or local governmental agencies or utilities suppliers in
connection with reducing energy or other
resources consumption. If the Premises become unsuitable for Tenant’s use as a
consequence of cessation of gas
and electric utilities or other services provided to the Premises resulting from a
casualty covered by Landlord’s
insurance, then Tenant’s Monthly Base Rent and Additional Charges shall abate
during the period of time in which
Tenant cannot occupy the Premises for the Permitted Uses, but only to the extent
of rental abatement insurance
proceeds received by Landlord.

     13. TENANT’S
CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days
from receipt of written notice from Landlord, will execute, acknowledge and
deliver to Landlord and, at Landlord’s
request, to any prospective tenant, purchaser, ground or underlying lessor or
mortgagee of any part of the Project
any other party acquiring an interest in Landlord, a certificate of Tenant
substantially in the form attached as
EXHIBIT E and also containing any other information that may reasonably be required
by any of such persons. It is
intended that any such certificate of Tenant delivered pursuant to this Paragraph
13 may be relied upon by Landlord
and any prospective tenant, purchaser, ground or underlying lessor or mortgagee of
any part of the Project, or such
other party.

     14. HOLDING
OVER. If Tenant (directly or through any successor-in-interest
of Tenant) remains in
possession of all or any portion of the Premises after the expiration of the Term
or the termination of this Lease with
the written consent of Landlord, such continued possession shall be construed to
be a tenancy from month to month
at one hundred twenty-five percent (125%) of the Monthly Base Rent payable in the
last full month prior to such
termination or expiration (and shall be increased in accordance with
Paragraph 3(b)), together with an amount
estimated by Landlord for the monthly Additional Charges for Expenses and Taxes
payable under this Lease, and
shall otherwise be on the terms and conditions herein specified so far as
applicable. If Tenant (directly or through
any successor-in-interest of Tenant) remains in possession of all or any portion of
the Premises after the expiration
of the Term or the termination of this Lease without the written consent of
Landlord, Tenant’s continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. In
such event,
Tenant shall continue to comply with
or perform all the terms and obligations of Tenant under this Lease, except that
the Monthly Base Rent during
Tenant’s holding over shall be the greater of the then-fair market rent for the
Premises (as reasonably determined by

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Landlord) or one hundred fifty percent (150%) of the Monthly Base Rent and Additional
Charges for Expenses and Taxes payable in the last full month prior to the termination
or expiration of this Lease (and shall be increased in accordance with Paragraph 3(b).
In addition to Rent, Tenant shall pay Landlord for all damages proximately caused by
reason of the Tenant’s retention of possession. Landlord’s acceptance of Rent after the
expiration of the Term or termination of the Term of this Lease shall not constitute a
renewal of this Lease, and nothing contained in this provision shall be deemed to waive
Landlord’s right of re-entry or any other right hereunder or at law. Tenant
acknowledges that in Landlord’s marketing and re-leasing efforts for the Premises,
Landlord is relying on Tenant’s vacation of the Premises on the Expiration Date.
Accordingly, Tenant shall indemnify, defend and hold Landlord harmless from and against
all claims, liabilities, losses, costs, expenses and damages arising or resulting
directly or indirectly from Tenant’s failure to timely surrender the Premises,
including (i) any loss, cost or damages suffered by any prospective tenant of all or
any part of the Premises, and (ii) Landlord’s damages as a result of such prospective
tenant rescinding or refusing to enter into the prospective lease of all or any portion
of the Premises by reason of such failure of Tenant to timely surrender the Premises.

     15. SUBORDINATION. Without the necessity of any additional document
being executed by
Tenant for the purpose of effecting a subordination, this Lease shall be subject and
subordinate at all times to: (i) all
ground leases or underlying leases which may now exist or hereafter be executed
affecting all or any portion of the
Project, (ii) any CC&Rs (including without limitation the CC&Rs described in EXHIBIT
C), and (iii) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed in any amount
for which all or any portion
of the Project, ground leases or underlying leases, or Landlord’s interest or estate
in any of said items, is specified as
security (any of the foregoing, a “Mortgage”, and the beneficiary or mortgagee under
any of the foregoing, a
“Mortgagee”). Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be
subordinated any such ground leases or underlying leases or any such Mortgages to
this Lease. In the event that any
ground lease or underlying lease terminates for any reason or any Mortgage is
foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any subordination,
attorn to and become the
Tenant of the successor in interest to Landlord at the option of such successor in
interest. Notwithstanding anything
to the contrary contained herein, this Lease shall not be subject or subordinate to
any ground or underlying lease or
to any Mortgage, unless the ground lessor or Mortgagee executes a reasonable
recognition and non-disturbance
agreement which provides that Tenant shall be entitled to continue in possession of
the Premises on the terms and
conditions of this Lease if and for so long as Tenant fully performs all of its
obligations hereunder. Landlord and
Tenant covenant and agree to cooperate in efforts to obtain a mutually acceptable
form of subordination, non-disturbance and attornment agreement from Landlord’s current Mortgagee, and Tenant
covenants and agrees to
execute and deliver upon demand by Landlord and in the form requested by Landlord and
reasonably acceptable to
Tenant (Tenant has approved the form of the subordination, non-disturbance and
attornment agreement attached as
EXHIBIT F, without limiting Tenant’s future approval of any additional or substitute
form), any customary
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground leases
or underlying leases or the lien of any such Mortgage. Tenant shall execute, deliver
and record any such documents
within ten (10) days after Landlord’s written request.

     16. RULES
AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and
regulations attached to this Lease as EXHIBIT D and all reasonable modifications
thereof and additions thereto from
time to time put into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other
Tenant or occupant of the Building or the Project of any said rules and regulations.
In the event of an express and
direct conflict between the terms, covenants, agreements and conditions of this Lease
and those set forth in the rules
and regulations, as modified and amended from time to time by Landlord, this Lease
shall control.

     17. RE-ENTRY
BY LANDLORD. Landlord reserves and shall at all reasonable
times, upon
reasonable prior notice (except in the case of an emergency), and subject to Tenant’s
reasonable security precautions
and the right of Tenant to accompany Landlord at all times, have the right to
re-enter the Premises to inspect the
same, to supply janitor service and any other service to be provided by Landlord to
Tenant hereunder (unless Tenant
is supplying such service), to show the Premises to prospective
purchasers,
Mortgagees or tenants (as to prospective
tenants, only during the last eighteen (18) months of the Term), to post notices of
nonresponsibility or as otherwise
required or allowed by this Lease or by law, and to alter, improve or repair the
Premises and any portion of the
Building and may for that purpose erect, use, and maintain scaffolding, pipes,
conduits, and other necessary

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structures in and through the Premises where reasonably required by the character of
the work to be performed. Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage arising from
Landlord’s entry and acts pursuant to this paragraph and Tenant shall not be entitled
to an abatement or reduction of Monthly Base Rent or Additional Charges if Landlord
exercises any rights reserved in this paragraph. Tenant hereby waives any claim for
damages for any injury or inconvenience to or interference with Tenant’s business,
any loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, except to the extent caused by Landlord’s gross negligence or
willful misconduct. For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant’s vaults and safes, or special security areas (designated
in advance), and Landlord shall have the right to use any and all means which
Landlord may deem necessary or proper to open said doors in an emergency, in order to
obtain entry to any portion of the Premises, and any entry to the Premises, or
portion thereof obtained by Landlord by any of said means, or otherwise, shall not
under any emergency circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction, actual or constructive,
of Tenant from the Premises or any portions thereof. Landlord shall use commercially
reasonable efforts during re-entry to not unreasonably interfere with Tenant’s use of
the Premises or its business conducted therein.

     18. INSOLVENCY
OR BANKRUPTCY. The appointment of a receiver to take
possession of all or
substantially all of the assets of Tenant, or an assignment of Tenant for the
benefit of creditors, or any action taken
or suffered by Tenant under any insolvency, bankruptcy, reorganization or other
debtor relief proceedings, whether
now existing or hereafter amended or enacted, shall at Landlord’s option
constitute a breach of this Lease by Tenant
(provided that, with respect to a petition in bankruptcy, or receiver attachment,
or other remedy pursued by a third
party, such event shall not constitute a breach of this Lease so long as it is
discharged within sixty (60) days). Upon
the happening of any such event or at any time thereafter, this Lease shall
terminate five (5) days after written notice
of termination from Landlord to Tenant. In no event shall this Lease be assigned
or assignable by operation of law
or by voluntary or involuntary bankruptcy proceedings or otherwise and in no
event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency,
reorganization or other debtor relief
proceedings.

     19. DEFAULT.

          (a) The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a “Default” hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall have a
period of five (5) days from the date of written notice from Landlord (which notice
shall be in lieu of and not in addition to the notice required by Section 1161 of the
California Code of Civil Procedure) within which to cure any failure to pay Monthly
Base Rent or Additional Charges; provided, however, that Landlord shall not be
required to provide such notice more than two (2) times during any two (2) year
period during the Term with respect to non-payment of Monthly Base Rent or Additional
Charges, the third such non-payment constituting Default without requirement of
notice. Tenant shall have a period of thirty (30) days from the date of receipt of
written notice from Landlord within which to cure any other Default
under this Lease;
provided, however, that with respect to any curable Default other than the payment of
Monthly Base Rent or Additional Charges that cannot reasonably be cured within thirty
(30) days, the cure period shall be extended for an additional period of time
reasonably required to cause such cure if Tenant commences to cure within thirty (30)
days from Landlord’s notice and continues to prosecute diligently the curing thereof,
provided that such cure period shall
in no event extend beyond ninety (90) days after Landlord’s notice. Notwithstanding
the foregoing, (i) if a different cure period is specified elsewhere in this Lease
with respect to any specific obligation of Tenant, such specific cure period shall
apply with respect to a failure of such obligation in lieu of and not in addition
to, the cure period provided in this Paragraph 19(a); and (ii) the cure periods
specified in Paragraphs 7(e) and 23 shall apply with respect to
Landlord’s rights to
cure Tenant’s failure to perform pursuant to Paragraphs 7(e) and
23, respectively.
Upon a Default of this Lease by Tenant, Landlord shall have the following rights and
remedies in addition to any other rights or remedies available to Landlord at law or
in equity:

          (i)
The rights and remedies provided by California Civil Code,
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid

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Monthly Base Rent and Additional Charges for the balance of the Term after the time of
award exceeds the amount of rental loss for the same period that the Tenant proves could be
reasonably avoided, as computed pursuant to subsection (b) of
said Section 1951.2;

          (ii)
The rights and remedies provided by California Civil Code, Section 1951.4, that
allows Landlord to continue this Lease in effect and to enforce all of its rights and
remedies under this Lease, including the right to recover Monthly Base Rent and Additional
Charges as they become due, for so long as Landlord does not terminate Tenant’s right to
possession; provided, however, if Landlord elects to exercise its remedies described in
this Paragraph 19(a)(ii) and Landlord does not terminate this Lease, and if Tenant requests
Landlord’s consent to an assignment of this Lease or a sublease of the Premises at such
time as Tenant is in Default, Landlord shall not unreasonably withhold its consent to such
assignment or sublease. Acts of maintenance or preservation, efforts to relet the Premises
or the appointment of a receiver upon Landlord’s initiative to protect its interest under
this Lease shall not constitute a termination of Tenant’s rights
to possession;

          (iii) The right to terminate this Lease by giving notice to Tenant in accordance with
applicable law;

          (iv) if Landlord elects to terminate this Lease, the right and power to enter the
Premises and remove therefrom all persons and property and, to store such property in a
public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell
such property and apply such proceeds therefrom pursuant to
applicable California law.

          (b) Landlord shall have a period of thirty (30) days from the date of written notice from
Tenant within which to cure any default of Landlord under this Lease; provided, however, that
with respect to any default that cannot reasonably be cured within thirty (30) days, the default
shall not be deemed to be uncured if Landlord commences to cure within thirty (30) days from
Tenant’s notice and continues to prosecute diligently the curing thereof. Tenant agrees to deliver
to any Mortgagee a copy of any Notice of Default served upon the Landlord in the manner prescribed
by Paragraph 26 hereof, provided that prior to such notice Tenant has been notified in writing (by
way of Notice of Assignment of Rents and Leases, or otherwise) of the address of such Mortgagee.
Tenant further agrees that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then the Mortgagee shall have an additional thirty (30) days (provided
that Tenant notifies Mortgagee concurrently with Tenant’s notice to Landlord at the beginning of
Landlord’s thirty (30) day period; otherwise Mortgagee shall have sixty (60) days from the date on
which it is noticed) within which to cure such default or if such default cannot be cured within
that time, then such additional time as may be reasonably necessary to cure such default shall be
granted if within such applicable period Mortgagee has commenced and is diligently pursuing the
remedies necessary to cure such default (including, but not limited
to, commencement of
foreclosure proceedings, if necessary to effect such cure), in which event the Lease shall not be
terminated while such remedies are being so diligently pursued.

     20. DAMAGE
BY FIRE, ETC.

          (a) Restoration or Termination. If the Premises or the Building are damaged by fire or
other casualty, Landlord shall forthwith repair the same, provided that such repairs can be made
within one hundred eighty (180) days after the date of such damage under the laws and regulations
of the federal, state and local governmental authorities having jurisdiction thereof. In such
event, this Lease shall remain in full force and effect except that Tenant shall be entitled to a
proportionate reduction of Monthly Base Rent and Additional Charges while such repairs to be made
hereunder by Landlord are being made. Such reduction of Monthly Base Rent and Additional Charges,
if any, shall be based upon the greater of (i) the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises; or (ii) the extent
to which such damage and the making of such repairs by Landlord shall interfere with the business
carried on by Tenant in the Premises, and shall be limited to the extent of rental abatement
insurance proceeds actually received by Landlord under Landlord’s casualty insurance policy.
Within thirty (30) days after the date of such damage, Landlord shall notify Tenant whether or not
in Landlord’s reasonable opinion such repairs can be made within one hundred eighty

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(180) days after the date of such damage and Landlord’s reasonable estimate of the time needed for
such repairs. If such repairs cannot be made within one hundred eighty (180) days from the date of
such damage, Landlord shall within thirty (30) days after the date of such damage elect either to:
(i) notify Tenant of Landlord’s intention to repair such damage and diligently prosecute such
repairs, in which event this Lease shall continue in full force and effect and the Monthly Base
Rent and Additional Charges shall be reduced as provided herein; or (ii) notify Tenant of
Landlord’s election to terminate this Lease as of a date specified in such notice, which date shall
not be less than thirty (30) days nor more than sixty (60) days after such notice is given and this
Lease shall terminate on the date specified in such notice. If Landlord notifies Tenant that
restoration or repair of the Premises will take more than one hundred
eighty (180) days, Tenant
shall have a right to terminate the Lease within fifteen (15) days following receipt of Landlord’s
notice, by providing Landlord with written notice of its election to do so. In such event (and also
in the event Landlord terminates the Lease pursuant to the immediately preceding sentence), Tenant
shall have no liability for payment of the deductible under Landlord’s insurance relating to such
damage. In case of termination by either event, the Monthly Base Rent and Additional Charges shall
be reduced by a proportionate amount based upon the extent to which such damage interfered with the
business carried on by Tenant in the Premises, and Tenant shall pay such reduced Monthly Base Rent
and Additional Charges up to the date of termination. Landlord agrees to refund to Tenant any
Monthly Base Rent and Additional Charges previously paid for any period of time subsequent to such
date of termination. The repairs to be made hereunder by Landlord shall not include, and Landlord
shall not be required to repair, any damage by fire or other cause to the property of Tenant or any
repairs or replacements of any paneling, decorations, railings, floor coverings or any alterations,
additions, fixtures or improvements installed on the Premises by or at the expense of Tenant;
provided, however, that to the extent Landlord’s insurance policies cover any Alterations pursuant
to Paragraph 10(f), Landlord shall make available to Tenant any available insurance proceeds with
respect to any damage or destruction that affects such Alterations, after deducting therefrom the
cost, if any, to Landlord for the recovery of such proceeds and/or of any repair to the Building or
Premises or Project for which Landlord is responsible hereunder, in order for Tenant to repair and
restore such Alterations, pursuant to disbursement procedures established by Landlord and/or any
Mortgagee. Tenant hereby waives the provisions of Section 1932.2, and Section 1933.4, of the Civil
Code of California. Notwithstanding anything contained herein to the contrary, if a Major Casualty
(as defined below) occurs with respect to any portion of the Building, and the net insurance
proceeds obtained as a result of such casualty are ninety percent (90%) or a lesser percentage of
the cost of restoration, rebuilding or replacement, then Landlord shall not be obligated to
undertake such restoration, rebuilding or replacement unless Landlord elects to do so in writing,
provided that Landlord’s election not to restore shall be deemed Landlord’s election to terminate.
For the purpose of this Lease, a “Major Casualty” shall mean a casualty that renders unusable
twenty percent (20%) or more of the Net Rentable Area of the Building or which materially adversely
affects the use of such Building.

          (b) Casualty at End of Term. Notwithstanding anything to the contrary contained in this
Lease, if during the twelve (12) months prior to the expiration of the Term, either of the
Building or a substantial
portion thereof are damaged or destroyed by fire or other casualty, either Tenant or Landlord
shall have the option to
terminate this Lease as of the date of such damage or destruction by written notice to the
other party given within
thirty (30) days after such damage or destruction, in which event Landlord shall make a
proportionate refund to
Tenant of such Rent as may have been paid in advance. For purposes of this paragraph, a
“substantial portion” shall
mean fifty percent (50%) of the Building.

          (c) Uninsured Casually. Notwithstanding Paragraph 20(a), and subject to the termination
right in Paragraph 20(b), in the event of a total or partial destruction of the Premises (i)
by a casualty of a type not
required to be insured against by Landlord under the terms of this Lease, or (ii) under
circumstances where Landlord
has been required by any Mortgagee to utilize substantially all of the insurance proceeds to
pay down the Mortgage,
which destruction exceeds five percent (5%) of the replacement cost of the Building, this
Lease shall automatically
terminate, unless (x) Landlord elects to reconstruct the Building, and (y) the damage can be
reconstructed within one
hundred eighty (180) days after the date of such damage. If
Landlord elects to reconstruct, the
cost incurred by Landlord for such reconstruction shall be amortized over the useful life of the
Building and such amortization shall be reimbursed by Tenant to Landlord as an Additional Charge
together with interest at the Default Rate; provided, however, that Tenant shall not be obligated
to pay for any portion of the useful life of the Building which
extends beyond the Expiration
Date.

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     21. EMINENT DOMAIN. If any part over fifteen percent (15%) of the Premises shall
be taken or
appropriated under the power of eminent domain or conveyed in lieu
thereof, Tenant shall have
the right to
terminate this Lease at its option. In such event, Landlord shall receive (and Tenant shall
assign to Landlord upon
demand from Landlord) any income, rent, award or any interest therein which may be paid in
connection with the
exercise of such power of eminent domain, and Tenant shall have no claim against Landlord for
any part of sum
paid by virtue of such proceedings, whether or not attributable to the value of the unexpired
term of this Lease
except that Tenant shall be entitled to petition the condemning
authority for the following:
(i) the then unamortized
cost of any Alterations paid for by Tenant from its own funds (as opposed to any allowance,
including the Tenant
Allowance, provided by Landlord); (ii) the value of Tenant’s trade fixtures; (iii) Tenant’s
relocation costs; and (iv)
Tenant’s goodwill, loss of business and business interruption. If a part of the Premises
shall be so taken or
appropriated or conveyed and neither party hereto shall elect to terminate this Lease and the
Premises have been
damaged as a consequence of such partial taking or appropriation or
conveyance, Landlord shall
restore the
Premises continuing under this Lease at Landlord’s cost and expense; provided, however, that
Landlord shall not be
required to repair or restore any injury or damage to the property of Tenant or to make any
repairs or restoration of
any Alterations installed on the Premises by or at the expense of Tenant. Thereafter, the
Monthly Base Rent and
Additional Charges to be paid under this Lease for the remainder of the Term shall be
proportionately reduced, such
that thereafter the amounts to be paid by Tenant shall be in the ratio that they are of the
portion of the Premises not
so taken bears to the total area of the Premises prior to such taking. Notwithstanding
anything to the contrary
contained in this Paragraph 21, if the temporary use or occupancy of any part of the Premises
shall be taken or
appropriated under power of eminent domain during the Term, this Lease shall be and remain
unaffected by such
taking or appropriation and Tenant shall continue to pay in full all Monthly Base Rent and
Additional Charges
payable hereunder by Tenant during the Term. In the event of any such temporary appropriation
or taking, Tenant
shall be entitled to receive that portion of any award which represents compensation for the
use of or occupancy of
the Premises during the Term, and Landlord shall be entitled to receive that portion of any
award which represents
the cost of restoration of the Premises and the use and occupancy of the Premises after the
end of the Term. If such
temporary taking is for a period longer than two hundred and seventy (270) days and
unreasonably interferes with
Tenant’s use of the Premises or the Common Area, then Tenant shall have the right to terminate
the Lease, Landlord and Tenant understand and agree that the provisions of this Paragraph 21 are intended
to govern fully the
rights and obligations of the parties in the event of a Taking of all or any portion of the
Premises. Accordingly, the
parties each hereby waives any right to terminate this Lease in whole or in part under
Sections 1265.120 and
1265.130 of the California Code of Civil Procedure or under any similar Law now or hereafter
in effect.

     22. SALE BY LANDLORD. If Landlord sells or otherwise conveys its interest in the
Premises, Landlord shall be relieved of its obligations under the Lease from and after the date of sale
or conveyance (including
the obligations of Landlord under Paragraph 40), only when the successor assumes in writing
the obligations to be
performed by Landlord on and after the effective date of the transfer, whereupon Tenant shall
attorn to such
successor.

     23. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant’s sole cost
and expense and
without any abatement of Monthly Base Rent or Additional Charges. If Tenant shall default in
the payment of any
sum of money, other than Monthly Base Rent or Additional Charges, required to be paid by it
hereunder or shall fail
to perform any other act on its part to be performed hereunder
(including, without limitation, Tenant’s obligation to
maintain and repair the Premises and Building Systems pursuant to Paragraph 7(b)), and either
(i) such failure
continues, and Tenant does not commence cure of such failure, for ten (10) days after notice
thereof by Landlord as
provided in Paragraph 19(a) (except in the event of emergency, when no cure period shall be
required but Landlord
shall make reasonable good faith efforts to notify Tenant prior to commencing such emergency
cure), or (ii) having
commenced such cure Tenant does not diligently prosecute the curing thereof, or (iii) if
Landlord is, in Landlord’s
reasonable business judgment, in a better position to accomplish such cure or can accomplish
such cure in a more
efficient or cost-effective manner than Tenant, or (iv) if a
default under any Mortgage is, in
Landlord’s reasonable
judgment, likely to occur due to Tenant’s failure to cure such failure in a timely manner,
then in any such situation
Landlord may, but shall not be obligated so to do, and without waiving or releasing Tenant
from any obligations of
Tenant, make any such payment or perform any such act on Tenant’s part to be made or performed
as provided in
this Lease. All sums so paid and costs so incurred by Landlord, together with interest
thereon at the Default Rate

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from the date Landlord makes such payment or incurs such cost, shall be payable as
Additional Charges to Landlord within thirty (30) days after receipt by Tenant of a
bill or statement therefor.

     24. SURRENDER OF PREMISES.

          (a) At the end of the Terra or any renewal thereof or other sooner termination of
this Lease,
Tenant will peaceably deliver to Landlord possession of the Premises, together
with all improvements or additions
upon or belonging to Landlord, by whomsoever made, in substantially the same
condition as received, or first
installed, subject to the terms of Paragraphs 6, 21 and 40, subject to normal wear
and tear and the rights and
obligations of Tenant concerning casualty damage pursuant to Paragraph 20. Tenant
may, upon the termination of
this Lease, remove all movable furniture and equipment belonging to Tenant, at
Tenant’s sole cost, provided that
Tenant repairs any damage caused by such removal. Property not so removed by the
Expiration Date (or in the
event of an earlier termination, within five (5) days of such earlier termination
date) shall be deemed abandoned by
Tenant and title to the same shall thereupon pass to Landlord. Upon such
expiration or sooner termination of the
Term, Tenant shall upon demand by Landlord, at Landlord’s election either (i) at
Tenant’s sole cost and expense,
forthwith and with all due diligence remove any Alterations made by or for the
account of Tenant, designated by
Landlord to be removed (provided, however, that upon the written request of Tenant
prior to installation of such
Alterations, Landlord shall advise Tenant at that time whether or not such
Alterations must be removed upon the
expiration or sooner termination of this Lease), and restore the Premises to its
original condition as of the Delivery Date, subject to the foregoing; or (ii) pay Landlord the reasonable estimated cost
thereof.

          (b) The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation
thereof, shall not work a merger, and shall, at the option of Landlord, terminate
all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it of
any or all such subleases or
subtenancies.

     25. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition
contained in this Lease, such waiver shall not be deemed to be a waiver of any
subsequent breach of the same or any
other term, covenant or condition contained herein. Furthermore, the acceptance of
Rent or Additional Charges by
Landlord shall not constitute a waiver of any preceding breach by Tenant of any
term, covenant or condition of this
Lease, regardless of Landlord’s knowledge of such preceding breach at the time
Landlord accepted such Monthly
Base Rent or Additional Charges. Failure by Landlord to enforce any of the terms,
covenants or conditions of this
Lease for any length of time shall not be deemed to waive or to decrease the right
of Landlord to insist thereafter
upon strict performance by Tenant. Waiver by Landlord of any term, covenant or
condition contained in this Lease
may only be made by a written document signed by Landlord.

     26. NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices,
demands, requests or other communications given or required to be given under this
Lease shall be effective only if
rendered or given in writing, sent by certified mail, return receipt requested,
reputable overnight carrier, or delivered
personally, (i) to Tenant (A) at Tenant’s address set forth in the Basic Lease
Information, if sent prior to Tenant’s
taking possession of the Premises, or (B) at the Premises if sent subsequent to
Tenant’s taking possession of the
Premises, or (C) at any place where Tenant may be found if sent subsequent to
Tenant’s vacating, deserting,
abandoning or surrendering the Premises; or (ii) to Landlord at Landlord’s address
set forth in the Basic Lease
Information; or (iii) to such other address as either Landlord or Tenant may
designate as its new address for such
purpose by notice given to the other in accordance with the provisions of this
Paragraph 26. Any such bill,
statement, notice, demand, request or other communication shall be deemed to have
been rendered or given on the
date the return receipt indicates delivery of or refusal of delivery if sent by
certified mail, the day upon which
recipient accepts and signs for delivery from a reputable overnight carrier, or on
the date a reputable overnight
earner indicates refusal of delivery, or upon the date personal delivery is made.
If Tenant is notified in writing of
the identity and address of any Mortgagee or ground or underlying
lessor, Tenant
shall give to such Mortgagee or
ground or underlying lessor notice of any Default by Landlord under the terms of
this Lease in writing sent by
registered or certified mail, and such Mortgagee or ground or underlying lessor
shall be given the opportunity to
cure such Default (as defined in Paragraph 19(a)) prior to Tenant exercising any
remedy available to it.

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     27. TAXES
PAYABLE BY TENANT. Prior to delinquency Tenant shall pay all
taxes levied or
assessed upon Tenant’s equipment, furniture, fixtures and other personal property
located in or about the Premises.
If the assessed value of Landlord’s property is increased by the inclusion therein
of a value placed upon Tenant’s
equipment, furniture, fixtures or other personal property, Tenant shall pay to
Landlord, upon written demand, the
taxes so levied against Landlord, or the proportion thereof resulting from said
increase in assessment.

     28. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial
and maintenance obligations under this Lease at any time during the Term, and if
Tenant shall abandon and cease
performing its financial and maintenance obligations under this Lease, or
surrender the Premises or be dispossessed
by process of law, or otherwise, any personal property belonging to Tenant and
left on the Premises shall, at the
option of Landlord, be deemed to be abandoned and title thereto shall thereupon
pass to Landlord. Notwithstanding
anything to the contrary contained herein, Tenant shall not be allowed to vacate
the Premises for any period of time
unless either (a) such vacation would not result in a termination of, limitation
on, or other adverse effect on,
Landlord’s insurance policies, or (b) Tenant pays the incremental premium costs,
and assumes responsibility for any
increased deductible amounts, to the extent required to cause Landlord’s insurance
policies to not be terminated,
limited or adversely affected as a result of such vacation. For purposes of this
Paragraph 28, the Tenant shall not be
deemed to have abandoned the Premises solely because the Tenant is not occupying
the Premises.

     29. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 9, the
terms, covenants
and conditions contained herein shall be binding upon and inure to the benefit of
the parties hereto and their
respective legal and personal representatives, successors and assigns.

     30. ATTORNEY’S FEES. If Tenant or Landlord brings any action for any
relief against the other,
declaratory or otherwise, arising out of this Lease, including any suit by
Landlord for the recovery of Rent or
possession of the Premises, the losing party shall pay to the prevailing party a
reasonable sum for attorney’s fees and
costs, which shall be deemed to have accrued on the commencement of such action
and shall be paid whether or not
the action is prosecuted to judgment.

     31. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any
structure which may hereafter be lawfully erected (whether or not by Landlord)
shall entitle Tenant to any reduction
of rent under this Lease, result in any liability of Landlord to Tenant, or in any
other way affect this Lease or
Tenant’s obligations hereunder. Landlord has informed Tenant that it has no
intention of constructing additional
facilities at the Project except those facilities needed to service
the Project.

     32. SECURITY
DEPOSIT. Concurrently with execution hereof, Tenant has
paid to Landlord the
Security Deposit specified in the Basic Lease Information as security for the full
and faithful performance of
Tenant’s obligations under this Lease. If a default occurs under this Lease, or
if Tenant is the subject of an
Insolvency Proceeding, Landlord may use the Security Deposit to remedy any such
default and to compensate
Landlord for damages incurred. If Landlord uses any portion of the Security
Deposit to cure any default by Tenant
hereunder, Tenant shall deposit additional cash with Landlord in an amount equal
to restore the Security Deposit to
its original amount within ten (10) days of notice from Landlord; and Tenant’s
failure to do so shall become be a
material breach of this Lease. Landlord shall hold the Security Deposit for the
foregoing purposes; provided,
however, that Landlord shall have no obligation to segregate the Security Deposit
from its general funds or to pay
interest thereon. Within sixty (60) days after the expiration of the Term or
earlier termination, the Security Deposit
shall be returned to Tenant, reduced by those amounts that may be required by
Landlord to remedy defaults on the
part of Tenant in the payment of Rent, to repair damages to the Premises caused by
Tenant and to clean the
Premises. If Landlord conveys or transfers its interest in the Leased Premises,
and as a part of such conveyance or
transfer, assigns its interest in this Lease and Security Deposit, or any portion
thereof not previously applied, the
Security Deposit shall be transferred to Landlord’s successor and Landlord shall
be released and discharged from
any further liability to Tenant with respect to such Security Deposit. In no event
shall any mortgagee or beneficiary
under a mortgage or deed of trust encumbering all or any portion of the Project,
or any purchaser of all or any
portion of the Project at a public or private foreclosure sale under such mortgage
or deed of trust, have any liability
or obligation whatsoever to Tenant or Tenant’s successors or assigns for the
return of all or any pan of the Security
Deposit in the event any such mortgagee, beneficiary or purchaser becomes a
mortgagee in possession or succeeds

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to the interest of Landlord under this Lease unless, and then only to the
extent that, such mortgagee, beneficiary or purchaser has received all or any part of
the Security Deposit.

     33.
CORPORATE AUTHORITY; FINANCIAL INFORMATION. If Tenant signs as a
corporation each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing corporation,
that Tenant has and is qualified to do business in California, that the corporation
has full right and authority to enter into this Lease, and that each and both of the
persons signing on behalf of the corporation were authorized to do so . If Tenant
signs as a partnership or limited liability company, each of the persons executing
this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing partnership or limited liability company, as applicable, that
Tenant has and is qualified to do business in California, that Tenant has full right
and authority to enter into this Lease, and that each and both of the persons signing
on behalf of the Tenant were authorized to do so and by their signatures bind the
Tenant. Upon Landlord’s request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and warranties.
Upon Landlord’s request, Tenant shall provide Landlord with evidence reasonably
satisfactory to Landlord confirming the foregoing covenants and warranties. Tenant
hereby further covenants and warrants to Landlord that all financial information and
other descriptive information regarding Tenant’s business, which has been or shall be
furnished to Landlord, is and shall be accurate and complete at the time of delivery
to Landlord. If Landlord signs as a corporation each of the persons executing this
Lease on behalf of Landlord does hereby covenant and warrant that Landlord is a duly
authorized and existing corporation, that Landlord has and is qualified to do business
in California, that the corporation has full right and authority to enter into this
Lease, and that each and both of the persons signing on behalf of the corporation were
authorized to do so. Upon Tenant’s request, Landlord shall provide Tenant with
evidence reasonably satisfactory to Tenant confirming the foregoing covenants and
warranties.

     34. PARKING.
Tenant shall have the right to use, and Landlord shall
maintain for use by Tenant
pursuant to the provisions of Paragraph 7, all of the parking spaces located on
the Project. Landlord agrees that so
long as not required by an applicable governmental entity, there shall be no
additional Monthly Base Rent charged
for parking (not to be confused with the Expenses charged pursuant to Paragraph
3).

     35. MISCELLANEOUS.

          (a) The term “Premises” wherever it appears herein includes and shall be
deemed or taken to
include (except where such meaning would be clearly repugnant to the context) the
office space demised and
improvements now or at any time hereafter comprising or built in the space hereby
demised. The paragraph
headings herein are for convenience of reference and shall in no way define,
increase, limit or describe the scope or
intent of any provision of this Lease. The term “Landlord” shall include Landlord
and its successors and assigns. In
any case where this Lease is signed by more than one person, the obligations
hereunder shall be joint and several.
The term “Tenant” or any pronoun used in place thereof shall indicate and include
the masculine or feminine, the
singular or plural number, individuals, firms or corporations, and their and each
of their respective successors,
executors, administrators, and permitted assigns, according to the context hereof.

          (b) Time is of the essence of this Lease and all of its provisions. This Lease
shall in all
respects be governed by the laws of the State of California. This Lease,
together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations. There
have been no representations
made by the Landlord or Tenant or understandings made between the parties other
than those set forth in this Lease
and its exhibits. This Lease may not be modified except by a written instrument by
the parties hereto.

          (c) If for any reason whatsoever any of the provisions hereof shall be
unenforceable or
ineffective, all of the other provisions shall be and remain in full force and
effect.

          (d) Upon Tenant paying the Monthly Base Rent and Additional Charges and performing
all
of Tenant’s obligations under this Lease, Tenant shall have quiet and peaceful
enjoyment of the Premises during the
Term as against all persons or entities lawfully claiming by, through or under
Landlord; subject, however, to the
provisions of this Lease.

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     36. TENANT’S REMEDIES. If any default hereunder by Landlord is not cured within
the applicable cure period provided in Paragraph
19(b) (including any Mortgagee’s additional cure
period), Tenant’s exclusive remedies shall be (i) an action for specific performance, or (ii) an
action for actual damages. Tenant shall look solely to Landlord’s interest in the Project for the
recovery of any judgment from Landlord. Landlord, or if Landlord is a partnership its partners
whether general or limited, or if Landlord is a corporation its directors, officers or
shareholders, or if Landlord is a limited liability company its members or managers, shall never be
personally liable for any such judgment. Any lien obtained to enforce such judgment and any levy of
execution thereon shall be subject and subordinate to any Mortgage (excluding any Mortgage which
was created as part of an effort to defraud creditors, i.e., a fraudulent conveyance); provided,
however that any such judgement and any such levy of execution thereon shall not be subject or
subordinated to any Mortgage that is created or recorded in the official records of the county in
which the Project is located after the date of the judgement giving rise to such lien. Landlord’s
interest in the Project shall include any insurance proceeds received by Landlord which are not
controlled by any Mortgagee or other lender. Tenant hereby waives the benefit of any Laws granting
it (A) the right to perform Landlord’s obligations, or (B) the right to terminate this Lease or
withhold Rent on account of any Landlord default, including, without
limitation, Sections 1932(1),
1941 and 1942 of the California Civil Code.

     37. REAL ESTATE BROKERS. Each party represents that it has not had dealings with any
real estate broker, finder or other person with respect to this Lease in any manner, except for any
broker named in the Basic Lease Information, whose fees or commission, if earned, shall be paid as
provided in the Basic Lease Information. Each party shall hold harmless the other party from all
damages resulting from any claims that may be asserted against the other party by any other broker,
finder or other person with whom the other party has or purportedly has dealt.

     38. LEASE EFFECTIVE DATE. Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or option for lease, and it is not effective as a
lease or otherwise until execution and delivery by both Landlord and Tenant.

     39. SIGNAGE. Tenant shall be allowed to use a monument sign near the Project’s
entrance, and to install exterior signage and signage in the lobby of the Building, subject to this
Paragraph 39. Tenant shall be responsible for the costs related to such signage. Such signage shall
be subject to approval from Landlord of the exact number, size, location and materials therefor
(which consent shall not be unreasonably withheld), approval from the City of Sunnyvale and
compliance with applicable governmental restrictions, including but not limited to ordinances of
the City of Sunnyvale.

     40. HAZARDOUS SUBSTANCE LIABILITY. Tenant has received from Landlord a copy of the
Phase I Environmental Assessment of Two Office Buildings located at
1322 Crossman Avenue and 1341
Orleans Drive, Sunnyvale, California, dated August 7, 1997,  prepared by McLaren Han (the
“Environmental Report”).

          (a) Definition of Hazardous Substances. For the purpose of this Lease, “Hazardous
Substances” shall be defined, collectively, as oil, flammable explosives, asbestos, radioactive
materials, hazardous wastes, toxic or contaminated substances or similar materials, including,
without limitation, any substances which are “hazardous
substances,” “hazardous wastes,” “hazardous
materials” or “toxic substances” under applicable environmental laws, ordinance or regulation.

          (b) Tenant Indemnity. Tenant releases Landlord from any liability for, waives all claims
against Landlord and shall indemnify, defend and hold harmless Landlord, its employees, partners,
agents, subsidiaries and affiliate organizations against any and all claims, suits, loss, costs
(including costs of investigation, clean up, monitoring, restoration and reasonably attorney fees),
damage or liability, whether foreseeable or unforeseeable, by reason of property damage (including
diminution in the value of the property of Landlord), personal injury or death directly arising
from or related to Hazardous Substances released, manufactured, discharged, disposed, used or
stored on, in, or under the Project or Premises during the Term by any Tenant Parties. The
provisions of this Tenant Indemnity regarding Hazardous Substances shall survive the termination of
the Lease.

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          (c) Landlord Indemnity. Landlord releases Tenant from any liability for, waives all claims
against Tenant and shall indemnify, defend and hold harmless Tenant, its officers, employees, and
agents to the extent of Landlord’s interest in the Project, against any and all actions by any
governmental agency for clean up of Hazardous Substances on or under the Project, including costs
of legal proceedings, investigation, clean up, monitoring, and restoration, including reasonable
attorney fees, if, and to the extent, arising from the presence of Hazardous Substances on, in or
under the Project or Premises as of the date of this Lease. The provisions of this Landlord
Indemnity regarding Hazardous Substances shall survive the termination of the Lease.

Tenant’s use of Hazardous Substances beyond very immaterial amounts of toxic materials incidental
to its office use (e.g., copier toner) shall be subject to Landlord’s prior written approval and
shall comply with any applicable laws.

     41. SATELLITE
ANTENNAE. During the Term of this Lease, Tenant shall have the right,
subject to relevant regulatory approvals and Landlord’s consent (with Landlord’s consent not to be
unreasonably withheld, conditioned or delayed), to install satellite antennae (“Antennae”) on the
roof of the Building in a location satisfactory to both Landlord and
Tenant. Without otherwise
limiting the criteria upon which Landlord may withhold its consent to any proposed Antennae, if
Landlord withholds its consent due to concerns regarding the appearance of the Antennae or the
impact on structural aspects of the Building, such withholding of consent shall be presumptively
reasonable. Tenant shall not be charged additional rent for roof space. Prior to submitting any
plans to the City of Sunnyvale or proceeding with any installation of the Antennae. Tenant shall
submit to Landlord elevations and specifications for the Antennae. Tenant shall install the
Antennae at its sole expense and shall be responsible for any damage caused by the installation of
the Antennae or related to the Antennae. At the end of the Term, Tenant shall remove the Antennae
from their locations and repair any damage caused by such removal.

     42. OPTION TO RENEW. Upon condition that (i) no Default is continuing under this Lease
at the time of exercise or at the commencement of the option term, and (ii) Tenant continues to
physically occupy the entire Premises, then Tenant shall have the right to extend the Term for two
(2) periods of five (5) years each (each, an “Extension Term”) following the initial Expiration
Date or the Expiration Date as extended by the first Extension Term, as applicable, by giving
written notice (“Exercise Notice”) to Landlord at least eighteen (18) months prior to the
Expiration of the immediately preceding Term.

     43. RENT DURING EXTENSION TERM. The initial Monthly Base Rent (subject to Paragraph
3(b)) during each five (5) year Extension Term shall be the greater of the Base Rent paid during
the last month of the immediately preceding Term or the Fair Market Rental Value for the Premises as
of the commencement of the option term, as determined below:

          (a) Within thirty (30) days after receipt of Tenant’s Exercise Notice, Landlord shall notify
Tenant of Landlord’s estimate of the Fair Market Rental Value for the Premises, as determined
below, for determining Monthly Base Rent during the ensuing Extension Term; provided, however, if
Tenant’s Exercise Notice is given more than eighteen
(18) months before the Expiration Date,
Landlord’s estimate of Fair Market Rental Value may, but need not be given more than eighteen (18)
months before the Expiration Date. Within fifteen (15) days after receipt of such notice from
Landlord, Tenant shall notify Landlord in writing that it (i) agrees with such rental rate or (ii)
disagrees with such rental rate. No response shall constitute
agreement. In the event that Tenant
disagrees with Landlord’s estimate of Fair Market Rental Value for the Premises, then the parties
shall meet and endeavor to agree within fifteen (15) days after Landlord receives Tenant’s notice
described in the immediately preceding sentence. If the parties cannot agree upon the Fair Market
Rental Value within said fifteen (15) day period, then the parties shall submit the matter to
binding appraisal in accordance with the following procedure except that in any event neither
party shall be obligated to start such procedure sooner than eighteen (18) months before the
expiration of the Lease Term. Within fifteen (15) days of the conclusion of the period during
which the
two parties fail to agree (but not sooner than eighteen (18) months before the expiration of the
Lease Term), the parties shall either (i) jointly appoint an appraiser for this purpose or (ii)
failing this joint action, each separately designate a disinterested appraiser. No person shall be
appointed or designated an appraiser unless such person has at least five (5) years experience in
appraising major commercial property in Santa Clara County and is a member of a recognized society
of real estate appraisers. If within thirty (30) days after the appointment, the two appraisers
reach agreement on the Fair Market Rental Value for the Premises, that value shall be binding and
conclusive upon

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the parties. If the two appraisers thus appointed cannot reach agreement on the Fair Market Rental
Value for the Premises within thirty (30) days after their appointment, then the appraisers thus
appointed shall appoint a third disinterested appraiser having like qualifications within five (5)
days. If within thirty (30) days after the appointment of the third appraiser a majority of the
appraisers agree on the Fair Market Rental Value of the Premises, that value shall be binding and
conclusive upon the parties. If within thirty (30) days after the appointment of the third appraiser
a majority of the appraisers cannot reach agreement on the Fair Market Rental Value for the
Premises, then the three appraisers shall each simultaneously submit their independent appraisal to
the parties, the appraisal farthest from the median of the three appraisals shall be disregarded,
and the mean average of the remaining two appraisals shall be deemed to be the Fair Market Rental
Value for the Premises and shall be binding and conclusive upon the parties. Each party shall pay
the fees and expenses of the appraiser appointed by it and shall share equally the fees and
expenses of the third appraiser. If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser, they or either of them shall give notice of such failure to
agree to the parties and if the parties fail to agree upon the selection of such third appraiser
within ten (10) days after the appraisers appointed by the parties give such notice, then either of
the parties, upon notice to the other party, may request such appointment by the American
Arbitration Association or, on it failure, refusal or inability to act, may apply for such
appointment to the presiding judge of the Superior Court of Santa
Clara County, California.

          (b) Wherever used throughout this paragraph (Rent during Extension Term) the term “Fair Market
Rental Value” shall mean the fair market rental value of the Premises, using as a guide the rate
of monthly base rent which would be charged during the Extension Term in the City of Sunnyvale and
adjacent cities for comparable high image. Class A office space in comparable condition, of
comparable quality, as of the time that the Extension Term commences, with appropriate adjustments
regarding taxes, insurance and operating expenses as necessary to insure comparability to this
Lease, as the case may be, and also taking into consideration amount and type of parking, location,
the existence of any leasehold improvements (regardless of who paid
for them and with the
assumption, for purposes of determining the Fair Market Rental Value, that they are fully usable by
Tenant), proposed term of lease, amount of space leased, extent of
service provided or to be
provided, and any other relevant terms or conditions (including consideration of whether or not the
monthly base rent is fixed).

          (c) In
the event of a failure, refusal or inability of any appraiser to act, his successor
shall be appointed by the party who originally appointed him, but in the case of the third
appraiser, his successor shall be appointed in the same manner as provided for appointment of the
third appraiser.

          (d) The appraisers shall render their appraisals in writing with counterpart copies to
Landlord and Tenant. The appraisers shall have no power to modify the
provisions of this Lease.

          (e) To
the extent that a binding appraisal has not been completed prior to the expiration of
any preceding period for which Monthly Base Rent has been determined, Tenant shall pay Monthly Base
Rent at the rate estimated by Landlord, with an adjustment to be made once Fair Market Rental Value
is ultimately determined by binding appraisal. In no event shall any such adjustment result in a
decrease of the Monthly Base Rent for the Premises below the amount payable by Tenant as of the
period immediately preceding the ensuing Extension Term.

- 26 -

 

          (f) From and after the commencement of the Extension Term, all of the other terms, covenants
and conditions of the Lease shall also apply; provided, however, that during the second Extension
Term Tenant shall have no further rights to extend the Term.

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above
written.

	 	 	 	 	 
	 	LANDLORD:

CARIBBEAN/GENEVA INVESTORS,
 a
California Limited Partnership

 	 
	 	By:  	/s/ John Mozart	 
	 	 	John Mozart, Trustee of the Mozart 	 
	 	 	Family Trust dated September 8,
1977 
Its: General Partner 	 
	 
	 	 	 
	 	By:  	/s/
John Lovewell 	 
	 	 	John Lovewell 	 
	 	 	Its: General Partner 	 
	 
	 	GROSSMAN PARTNERS, L.P., 
a
California Limited Partnership

 	 
	 	By:  	/s/
John Mozart	 
	 	 	John Mozart, Trustee of the Mozart  	 
	 	 	Family Trust dated September 8, 1977

Its: General Partner 	 
	 
	 	TENANT:

HARMONIC, INC.,

 a Delaware corporation

 	 
	 	By:  	                                      /s/ Robin N. Dickson
 	 
	 	 	Robin N. Dickson  	 
	 	 	Its: Chief Financial Officer 	 
	 

- 27 -

 

EXHIBIT “A”

PREMISES

[See attached Site Plan]

- 1 -

 

- 2 -

 

EXHIBIT “B”

LEGAL DESCRIPTION OF THE LAND

REAL
PROPERTY in the City of Sunnyvale, County of Santa Clara, State of California, described as
follows:

Parcel 6, as shown on that certain Map entitled which was filed for record in the Office of the
Recorder of the County of Santa Clara, State of California on
July 18, 1978 in Book 423 of Maps,
page(s) 13.

APN: 110-36-003

ARB: 10-04-23.02.02 (23.02, 23)

- 1 -

 

EXHIBIT “C”

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

- 1 -

 

     2. So long as Tenant is not in default (beyond any period given Tenant to cure such default)
in the payment of rent or additional rent or in the performance of any material term, covenant or
condition of the Lease on Tenant’s part to the performed, (a) Tenant’s possession of the Demised
Premises and Tenant’s rights and privileges under the Lease, or any extensions or renewals thereof
or acquisition of additional space which may be effected in accordance with any option therefor in
the Lease, shall not be diminished or interfered with by Mortgagee in the exercise of any of its
rights under the Mortgage, and (b) Mortgagee will not join Tenant as a party defendant in any
action or proceeding for the purposes of terminating Tenant’s interest and estate under the Lease
because of any default under the Mortgage, however Mortgagee may join Tenant as a party defendant
in any action or proceeding to enforce the Mortgage or any other instrument given as security for
the loan to Landlord, if such is done only for purposes of procedure and required completeness and
not for the purposes of canceling the Lease or Tenant’s rights under such Lease.

     3. In the event any proceedings are brought for the foreclosure of the Mortgage, or if the
Mortgaged Property be sold pursuant to a trustee’s sale under the Mortgage or if the Mortgagee
becomes owner of the Mortgaged Property by acceptance of a deed or assignment in lieu of
foreclosure or otherwise, Tenant shall attorn to the purchaser or Mortgagee, as the case may be,
upon any such foreclosure sale or trustee’s sale or acceptance by Mortgagee of a deed or assignment
in lieu of foreclosure and Tenant shall recognize such purchaser or Mortgagee, as the case may be,
as the landlord under the Lease. Such attornment shall be effective and self-operative without the
execution of any further instrument on the part of any of the parties hereto. Tenant agrees,
however, to execute and deliver at any time and from time to time, upon the request of Landlord or
of any holder(s) of any of the indebtedness or other obligations secured by the Mortgage or any
such purchaser, any instrument or certificate which, in the reasonable judgment of Landlord or of
such holder(s) or such purchaser, may be necessary or appropriate in any such foreclosure
proceeding or otherwise to evidence such attornment.

     4. If Mortgagee shall succeed to the interest of Landlord under the Lease in any manner, or if
any purchaser acquires the Demised Premises upon any foreclosure of the Mortgage or any trustee’s
sale under the Mortgage, Mortgagee or such purchaser, as the case may be, in the event of
attornment shall have the same remedies by entry, action or otherwise in the event of any default
by Tenant (beyond any period given Tenant to cure such default) in the payment of rent or
additional rent or in the performance of any of the terms, covenants and conditions of the Lease on
Tenant’s part to be performed that Landlord had or would have had if Mortgagee or such purchaser
had not succeeded to the interest of Landlord. From and after any such attornment, Mortgagee or
such purchaser shall be bound to Tenant under all the terms, covenants, and conditions of the
Lease, and Tenant shall, from and after the succession to the interest of Landlord under the Lease
by Mortgagee or such purchaser, have the same remedies against Mortgagee or such purchaser for the
breach of an agreement contained in the Lease that Tenant might have had under the Lease against
Landlord if Mortgagee or such purchaser had not succeeded to the interest of Landlord; provided,
however, the Mortgagee or such purchaser shall not be:

          (a) liable for any act or omission of any prior landlord (including Landlord); or

          (b) subject to any offsets or defenses which Tenant might have against any prior landlord
(including Landlord); or

- 2 -

 

          (c) bound by any rent or additional rent which Tenant might have paid for more than the
current month to any prior landlord (including Landlord).

     5. Nothing herein contained is intended, nor shall it be construed, to abridge or adversely
affect any right or remedy of Landlord under the Lease in the event of any default by Tenant
(beyond any period given Tenant to cure such default) in the payment of rent or additional rent or
in the performance of any of the terms, covenants or conditions of the Lease on Tenant’s part to be
performed.

     6. This Agreement and the Lease may not be amended or modified orally or in any manner other
than by an agreement in writing signed by the parties hereto or their respective successors in
interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto,
their successors and assigns, and any purchaser or purchasers at foreclosure of the Mortgaged
Property, and their respective heirs, personal representatives, successors and assigns.

     7. To the extent that the Lease shall entitle the Tenant to notice of any mortgage, and/or the
address of the Mortgagee, this Agreement shall constitute such notice to the Tenant with respect to
the Mortgage and to the address of the Mortgagee.

     IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be duly executed
as of the day and year first above written.

	 	 	 	 	 
	 	TENANT:

NAME

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MORTGAGEE:

GENERAL AMERICAN LIFE INSURANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Title:       Vice President/Authorized Representative 	 
	 	 	Address:    700 Market Street

                St. Louis, Missouri 63101 	 
	 

- 3 -

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