Document:

exv10w20

Exhibit 10.20

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934 as Amended.

AMENDED SUPPLY AGREEMENT

     This Amended And Restated Supply Agreement is effective as of May 12, 2008 (the
“Effective Date”) by and between Endwave Corporation (“Buyer”) and Northrop Grumman
Space & Mission Systems Corp., acting through its Space Technology sector (“NGST”).

     Whereas, Endwave and NGST entered into a Supply Agreement with an effective date of
June 30, 2006, which is being amended and superseded by this Amended and Restated Supply Agreement
as of the Effective Date;

     Whereas, Buyer desires to purchase and NGST desires to provide, the Products as
specified in Exhibit A to this Agreement and the parties desire to define the terms and conditions
under which the same will be furnished;

     Now, Therefore, in consideration of the foregoing, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

ARTICLE 1

Definitions and Priority

     1.1 Definitions: The following words and phrases shall have the meanings set forth below:

	 	 	 	 	 
	          Agreement:	 	This Supply Agreement between NGST and Buyer including the following
Exhibits, attached hereto and made a part hereof:
	 
	 	 	 	 
	 

	 	Exhibit A:
	 	List of Products and Services
	 

	 	Exhibit B:
	 	List of Deliverables, Quantity Commitments, and
Buyer’s Site
	 

	 	Exhibit C:
	 	Buffer Inventory
	 

	 	Exhibit D:
	 	(Document [*])
	 
	 	 	 	 
	          Buffer Inventory:	 	Defined in Section 5.5.
	 
	 	 	 	 
	          Contract Price:	 	Defined in Section 4.1.
	 
	 	 	 	 
	          Delivery Date(s):	 	The date on which a Product leaves the NGST Plant.
	 
	 	 	 	 
	          NGST Plant:	 	Each of the factories or establishments of NGST and its
suppliers located in the United States.
	 
	 	 	 	 
	          Products:	 	The products and services described in Exhibit A to be supplied by NGST.

 

 

	 	 	 	 	 
	          Site:	 	Buyer’s facility or other location identified in Exhibit B as
the destination to which transportation is to be arranged for deliverable
items.
	 
	 	 	 	 
	           Term:	 	Defined in Article 3.

     1.2 Priority: In case of any inconsistencies between this Agreement and any of the Exhibits,
the text of this Agreement shall prevail.

ARTICLE 2

Subject Matter of Supply; Requirements; Use of Products

     2.1 Supply: NGST hereby agrees to sell to Buyer and Buyer hereby agrees to buy from NGST, on
and subject to the terms and conditions contained in this Agreement, the Products listed in Exhibit
A. During the Term, Buyer may elect to purchase optional Products as described in Exhibit A under
the terms and conditions set forth in this Agreement. To the extent that Buyer wishes to purchase
more than the maximum quantities of the Products as provided in Exhibit B, NGST may, but is under
no obligation to, provide Buyer such excess quantities. For the purchase of products not described
by this Agreement (including Exhibit A), a separate purchase order shall be used by Buyer and the
parts will be subject to the terms and conditions of this Agreement.

     2.2 Use of Products: Buyer understands and agrees that the Products to be sold by NGST
hereunder are neither designed nor warranted for use in medical devices with life support
functions, safety equipment (or similar applications where component failure would result in loss
of life or physical harm), and military or space applications or environments. Any use of Products
in these applications or environments is at Buyer’s sole and exclusive risk.

ARTICLE 3

Effective Date and Term

     This Agreement shall be effective and binding on the parties as of the Effective Date and
shall remain in force and effect until April 30, 2009, unless the parties choose to extend the Term
of this Agreement (the period between the Effective Date and the termination of this Agreement
shall be hereinafter referred to as the “Term”).

ARTICLE 4

Contract Price, Taxes

Transportation, Expenses and Charges

     4.1 Price: Buyer shall pay to NGST, as and for the performance of NGST’s obligations
hereunder, the prices for Products stated in Exhibit A in accordance with the provisions of Article
5. The aforementioned price is hereinafter referred to as the “Contract Price.”

     4.2 Taxes: All taxes (excluding income, but including stamp, withholding, value added and
turnover taxes), duties, fees, charges, or assessments of any nature levied by any governmental
authority in connection with this transaction, whether levied against Buyer or

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

NGST, or employees of NGST as a result of Products provided by NGST under this Agreement,
shall be for Buyer’s account and shall be paid directly by Buyer to the governmental authority
concerned. If NGST is required by law or otherwise to pay any such levy and/or fines, penalties,
or assessments in the first instance, or as a result of Buyer’s failure to comply with any
applicable laws or regulations governing the payment of such levies by Buyer, as NGST’s exclusive
remedy for claims under this Section 4.2, the amount of any payments so made by NGST shall be
reimbursed by Buyer to NGST upon submission of NGST’s invoices and written documentation justifying
NGST’s invoices.

     4.3 Transportation Expenses: Buyer shall pay for all expenses of handling, freight,
in-transit insurance, and other transportation expenses including, without limiting the foregoing,
all special handling charges for air shipment incurred in connection with the delivery of Products
from the NGST Plant to the Site. Buyer will provide NGST with a common carrier account number for
NGST’s use hereunder.

ARTICLE 5

Orders, Forecasts, and Buffer Inventory

     5.1 Orders: Buyer shall use purchase orders or scheduling agreements to order Products or to
specify subsequent changes to Products, which reference this Agreement and which specify the part
number, quantity, mutually agreed upon per unit price, desired Delivery Date(s) and shipping site
for Products (the “Order”). Any such Order shall not contain any preprinted or written terms and
conditions, and, to the extent that it does, Buyer and NGST hereby agree that such terms and
conditions of sale shall be superseded by the terms and conditions contained in this Agreement
shall govern any sale between the parties regarding the Products.

     5.2 Acceptance of Orders: NGST shall give Buyer written acknowledgment of its receipt and
notice of its acceptance or rejection of any Order within [*] days after receipt of such Order. If
NGST rejects any Order, it shall specify in such notice the reasons for rejection and the
conditions upon which it would consider accepting the Order. NGST shall use reasonable commercial
efforts to accept and supply all Orders for Products which Buyer submits hereunder, and unless
otherwise agreed, NGST shall deliver Products so ordered on or before the Delivery Dates specified
in each Order. Notwithstanding the foregoing, NGST shall have no obligation to accept and shall
not be deemed to have accepted unless specifically accepted in writing, any Order (i) for any
Products not listed in Exhibit A hereto or revisions thereof; (ii) for any quantity of Products in
excess of the quarterly maximum quantities specified in Exhibit B hereto or revisions thereof; or
(iii) that does not comply with Sections 5.3 and/or 5.4. The parties’ key contacts for management
of Orders shall be:

     Endwave:      [*]

     NGST:          [*],

     5.3 Forecast Orders: Commencing on the Effective Date and thereafter on a mutually agreed
upon business day of each week during the Term hereof, Buyer shall submit to NGST a rolling,
written forecast of its best estimate of its requirements for Products during the next succeeding
[*] week period. Unless otherwise agreed by the parties, the forecast shall be in

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

the form of an Email file attachment and shall represent a firm, non-cancelable Order for
Products from Buyer for the first [*] weeks of each such forecast period, and Buyer’s best
estimates of its requirements for Products for the balance of the forecast period. The weekly
Forecast Order shall list separately for each week during the period covered by the forecast the
amounts of Products which Buyer expects to purchase during such period by Product part numbers,
quantities of Products, and Delivery Dates or the shipment week. Buyer may request an increase in
Product quantity to its [*] Order or request that NGST expedite the quantity of specific Products
within the [*] window, subject to NGST’s acceptance. Buyer’s Product and delivery requirements for
Weeks [*], inclusive, of each forecast represent Buyer’s best estimate of its Product needs for
that period, are for planning purposes only, and are non-binding on Buyer or NGST. As part of its
acceptance of an Order as set out in Section 5.2 above, NGST shall provide Buyer a written shipment
plan (‘Shipment Plan’), within [*] business days of receiving Buyer’s weekly Forecast Order.

     5.4 Forecast Delivery:

          5.4.1 Shipping Process: Buyer is responsible for shipping documentation with each Order which
verifies the shipping destination, purchase order number, Buyer and NGST part identification
numbers, quantity, unit and total values of each part. NGST has agreed to prepare the shipping
documentation on behalf of Buyer at the same time a shipment is boxed. NGST will email the
shipping documentation to Buyer for review, signature, and return to NGST. If the shipping
documentation is not signed and returned to NGST via Email or FAX by close of business Friday of
any week in which a shipment is scheduled, then NGST may ship the Order to Buyer’s Diamond Springs
facility. Prior to shipping to Diamond Springs, NGST will alert and elevate the request for signed
shipping documents to Buyer Management and provide Buyer one business day to remedy the situation.
This default Delivery location will preserve the continuity of the parties’ Forecast Order
schedule.

          5.4.2 Changes: Pending availability of Products, Buyer may accelerate deliveries of Products
from the date stated in Buyer’s initial Order forecast. NGST may fill the requested increase from
either NGST’s existing inventory or from the Buffer Inventory. If NGST elects to use the Buffer
Inventory, NGST will notify Buyer of such buffer draw-down with the transmission of the next
Shipment Plan. Upon such notification, Buyer may instruct NGST to either re-build parts back up to
the initial buffer inventory level as described in Exhibit C, or permanently lower the buffer
inventory level for the affected part(s). Unless otherwise directed in writing within [*] business
days that such use of buffer inventory constitutes a permanent draw-down of Buffer Inventory by
Buyer, NGST shall replenish Buffer Inventory as soon as practicable. NGST will promptly notify
Buyer if it is unable to accelerate the delivery of Products as requested by Buyer.

     5.5 Establishment and Use of Buffer Inventory: NGST shall establish and maintain an inventory
of the Products identified in Exhibit A in the quantities set forth in Exhibit C (“Buffer
Inventory”). NGST shall insure that [*] of the Buffer Inventory for each Product is available for
shipment within [*] business days of NGST’s receipt of Buyer’s written Order therefor; the
remaining [*] of the Buffer Inventory for each Product shall be available for delivery by NGST to
Buyer within [*] days of Buyer’s Order therefore, unless otherwise used as a result of drawdown in
accordance with the provisions of Section 5.4.2.

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     5.6 Purchase of Buffer Inventory: Upon expiration of the Term, Buyer shall purchase all
Products remaining in the Buffer Inventory at the Contract Price promptly upon receipt of NGST’s
invoice; provided, however that if, in any [*] day period during the Term, Buyer fails to purchase
a minimum of [*] of an individual Product’s Buffer Inventory level, Buyer shall purchase the entire
Buffer Inventory of that Product at the Contract Price promptly upon receipt of NGST’s invoice.

ARTICLE 6

Payment

     Payment for Products shall be [*] days from the date of NGST’s invoice. Payment of other
charges, if any, provided for in this Agreement shall be due and payable with immediately available
funds within [*] days after the date of NGST’s invoice therefor. Payment shall be made by
electronic funds transfer (EFT) to NGST’s account of immediately available funds as follows:

[*]

[*]

[*]

[*]

[*]

ARTICLE 7

Shipment, Title, and Risk of Loss; Export of Products

     7.1 Delivery of Products: NGST shall place Products in the possession of a common carrier at
a time and date reasonably calculated to effect delivery to Buyer on or before the date or dates
specified in each Order therefor for delivery to Buyer, FOB NGST’s Plant to the Site specified in
Exhibit B. NGST shall place Products in the possession of a common carrier pursuant to the
Delivery Date(s) specified in each Order, but no more frequently than once a week. The cost of
such shipping shall be borne by Buyer.

     7.2 Protection and Packing of the Products: NGST shall arrange to have all Products suitably
packaged in accordance with good commercial practices. Unless otherwise provided, all packing
containers used by NGST shall be non-returnable.

     7.3 Risk of Loss and Title: Notwithstanding any provisions for payment of freight or
insurance, or the form of shipping documents, or the breach or default by NGST at the time of loss,
title and risk of loss for Products shall pass to Buyer on delivery to the carrier at the NGST
Plant. Title and risk of loss of Products sent to NGST for adjustment shall remain with Buyer
until such are received by NGST. Neither (i) the time, method, place, or medium of payment
provided for herein, or any combination of the foregoing, nor (ii) the manner of consignment
provided for, whether to, or to the order of, Buyer or its agent, shall in any way limit or modify
the rights of NGST as the owner of the Products, to have control over the right to possession of
the Products until title thereto passes to Buyer as provided herein.

     7.4 Shipping Documents: After Products have been shipped, NGST shall deliver to Buyer one (1)
copy of the packing list. Electronic delivery of the packing list is authorized.

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     7.5 Export of Products: All sales hereunder shall at all times be subject to the export
control laws and regulations of the United States and any amendments thereto. Buyer agrees that it
shall not make any disposition, by way of transshipment, re-export, diversion or otherwise, except
as such laws and regulations may expressly permit, of Products. Further, Buyer agrees that it
shall not knowingly sell, transfer, or deliver, directly or indirectly, any part or portion of the
Products or related documentation supplied by NGST pursuant to this Agreement to any person or
organization in any country where such sale, transfer, or delivery by Buyer would be prohibited by
law or regulation now or hereafter in effect which imposes any restrictions on United States trade
with foreign countries.

     7.6 Acceptance of Products: A signed air bill or other common carrier documentation
indicating receipt by Buyer of the Products constitutes proof of delivery. Buyer will provide NGST
with written notice of acceptance of the Products that conform to the applicable Order within ten
(10) business days of receipt; provided, however, if Buyer fails to provide NGST with either
written notice of acceptance or a formal statement of rejection and the reasons therefore within
ten (10) business days of receipt, such Products shall be deemed accepted upon expiration of the
ten (10) business day period. Acceptance shall be definitive and final in all cases, absent fraud.
Following such acceptance, Buyer’s only remedy for defective Products shall be as provided in
Article 8.

ARTICLE 8

Warranty

     8.1 Warranty:

          (a) NGST warrants that title to all Products delivered to Buyer hereunder will be free and
clear of all liens, encumbrances, security interests and other restrictions.

          (b) NGST warrants that for a period of 24 months after the Delivery Date all Products sold
hereunder (i) are made from new materials and (ii) meets the production circuit screening criteria
set forth in the then current and applicable test D-document for that Product, as identified in
Exhibit A hereof, at the time on wafer circuit screening occurred. NGST further warrants that
(iii) it will only ship Products from wafers which have met a [*] sample visual inspection and
contain no less than [*] of its Products passing the requirements of [*] attached hereto as Exhibit
D (the “Inspection Criteria”) for the [*] sample. For each Product that fails to satisfy the
requirements of (i), (ii) or (iii) above, NGST shall, at its option, either issue a credit to Buyer
or replace such Product with a similar Product, in all cases free from defect without charge and
with reasonable promptness.

          8.1.1 Return on Shipped Products: Buyer will immediately inspect and record incoming Products
subject to the Inspection Criteria. Such recordation shall include quantities of passed and failed
Products segregated by part type, and justification for any claimed failures. Buyer will retain
said records and any claimed failed Products for a period of three months or until the next
scheduled quarterly meeting of the parties, whichever is soonest. Upon discovery of suspected
failed product per 8.1, the buyer shall notify seller of the failure and request an RMA to ship the
suspected failed product back. NGST shall review and respond within 5 business days either with an
RMA number to return the product or a request for further

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

discussion to understand the failure and root cause. Buyer’s records of failed Products will
be discussed by the parties and a decision mutually made as to whether each Product is subject to
return to NGST under an RMA for replacement or credit.

          8.1.2 RMA Procedure: If it is determined by the parties that a quantity of Products failed
the Inspection Criteria, Buyer will request an RMA number from NGST for each part type to be
returned. For each Product, NGST shall make all replacements at NGST’s Plant. Buyer will ship RMA
Products from its Diamond Springs facility, and NGST shall return replacements for defective
Products to Buyer at the place where the defective Product was located when shipped to NGST and
will pay for such return shipment. Under no circumstances will NGST compensate Buyer for post-pay
field return costs incurred by Buyer in returning defective Products to NGST. All defective
Products replaced by NGST as herein provided shall become the property of NGST when the replacement
occurs, unless held for analysis by Buyer with NGST’s prior written consent. All Products replaced
by NGST shall remain under warranty for the remainder of the warranty period on the Products. The
warranty specified in this Section 8.1 does not extend (i) to Products which fail or are damaged
due to use or storage by Buyer in a manner or environment not conforming to NGST’s published
instructions and specifications in effect at the time such Products are delivered to Buyer; or,
(ii) to Products that are modified by Buyer or any person other than NGST. Buyer and NGST agree
that circuit screening in accordance with the applicable test D-document is the sole method of
determining the presence or absence of a defect affecting electrical performance in individual
Products on wafer as warranted in (ii) above.

     8.2 Exclusion: OTHER THAN THE WARRANTY FOR THE PRODUCTS SET FORTH IN SECTION 8.1 HEREOF, NGST
DOES NOT MAKE ANY WARRANTY, GUARANTEE OR MAKE ANY REPRESENTATIONS, EITHER EXPRESS OR IMPLIED,
INCLUDING MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, WHETHER ARISING BY LAW, CUSTOM,
CONDUCT OR USAGE OF TRADE, AND THE RIGHTS AND REMEDIES PROVIDED HEREIN ARE EXCLUSIVE AND IN LIEU OF
ANY OTHER RIGHT OR REMEDIES. PRODUCTS USED IN APPLICATIONS FOR WHICH THEY ARE NOT INTENDED AS SET
FORTH IN SECTION 2.2 HEREOF, ARE SOLD WITHOUT WARRANTY AND ON AN “AS-IS,” “WITH ALL FAULTS” BASIS.

ARTICLE 9

Delays

     9.1 Force Majeure: No failure or omission on the part of either party to carry out or observe
any of the terms or provisions of this Agreement or any Order hereunder (except the payment of
money) shall be deemed a breach of this Agreement or such Order if same shall arise or result from
force majeure or from any cause reasonably beyond the control of Buyer or NGST, as the case may be,
including but without limitation, acts of God, acts (including delay or failure to act) of any
governmental authority (de jure or de facto), war (declared or undeclared) riot, revolution, fires,
labor disputes, sabotage or epidemics. Should such delay occur, the date or dates of performance
by the affected party shall be extended for a period equal to the extent of the delay expected as a
result of the force majeure event. The affected party shall give the other party written notice of
such delay within five (5) working days after identification of the delay.

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     9.2 NGST Delays: If at any time NGST discovers that it is unable (whether for reasons set out
in Section 8 or otherwise) to deliver any Products to Buyer on the scheduled delivery date, NGST
shall give Buyer written notice within [*] days of such discovery, which notice shall specify the
delivery date on which NGST shall be able to deliver such Products to Buyer. If the delivery date
proposed by NGST is more than [*] days after the scheduled delivery date, Buyer shall have the
right, without liability, to cancel (in whole or in part) its Order for such Products, by giving
NGST notice of cancellation within [*] days of receipt of NGST’s notification of delay. To the
extent that there are NGST delays as described herein or NGST resulting delays as described herein,
there shall be made equitable adjustments to the purchasing and pricing provisions hereof.

ARTICLE 10

Transfers and Assignments

     10.1 Transfer: Neither party shall, without the consent in writing of the other party, which
shall not be unreasonably withheld, assign or transfer this Agreement or the benefits or
obligations thereof or any part thereof to any other person other than a subsidiary wholly owned by
such party; provided that this shall not affect any right of either party to assign, either
absolutely or by way of charge, any moneys due or to become due to it or which may become payable
to it under this Agreement; further provided, that no consent shall be necessary to the extent that
either party is acquired by merger or other acquisition or either party sells all or substantially
all of its assets relating to this Agreement to a third party.

     10.2 Release of Obligations: No assignment or transfer of any right or duty hereunder by
either party shall constitute a novation or otherwise release or relieve such party of its
obligations hereunder.

ARTICLE 11

Default

     11.1 Event of Default: An Event of Default on the part of either party shall exist under this
Agreement if:

          (a) Such party fails to pay the other party any amount required to be paid hereunder when due
and payable; or

          (b) Such party fails to perform its purchase or supply obligations (as the case may be
hereunder) specified in Section 2.1 during the Term hereof, or otherwise fails to perform any other
material obligation required to be performed by it under any provision of this Agreement within [*]
days after the time specified or within [*] days after written notice from the other party that
such performance has become due; provided, however, Buyer shall have no right to terminate this
Agreement for NGST’s default so long as corrective action is being diligently pursued by NGST in a
manner that reasonably demonstrates that NGST’s obligations hereunder shall be completed in
sufficient time to allow Buyer to reasonably meet its end-use requirements for Products without
incurring additional costs or penalties (as reasonably determined by Buyer), and NGST discloses to
Buyer in writing such corrective action(s).

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     11.2 Remedies Available for Default: Subject to other provisions hereof which expressly limit
the remedies available hereunder, if an Event of Default as defined in Section 10.1 exists on the
part of either party, then the other party may terminate this Agreement upon giving written notice
of termination and pursue any other remedies available at law or in equity.

ARTICLE 12

Limitation of Liability; Damages

     12.1 Limitation of Liability: NGST’s liability to Buyer on any claim of any kind (excluding
bodily injury or death), whether based on contract, warranty, tort (including negligence), strict
liability or otherwise, for any loss or damage arising out of, connected with, or resulting from
this Agreement or any Order, or from the performance or breach thereof, or from all Products
covered by or furnished under this Agreement or any Order hereunder, shall in no case exceed the
sum of [*] for a single claim, or [*] in the aggregate for all claims arising during the Term. For
the removal of all doubt, a “claim” for these purposes may equate to a single chip causing loss or
damage, even where multiple chips are evidencing the same or common cause defect. Buyer’s
liability to NGST on any claim of any kind (excluding bodily injury or death), whether based on
contract, warranty, tort (including negligence), strict liability or otherwise, for any loss or
damage arising out of, connected with, or resulting from this Agreement or any Order, or from the
performance or breach thereof, or from all Products covered by or furnished under this Agreement or
any Order hereunder, shall in no case exceed the price of the specific individual Product that
gives rise to the claim.

     12.2 Damages: In no event shall either party be liable for any special, indirect, incidental
or consequential damages, however caused, whether by such party’s sole or concurrent negligence or
otherwise, including but not limited to costs and expenses incurred in connection with labor,
overhead, transportation, installation, or removal of Products or substitute facilities or supply
sources.

ARTICLE 13

Notices

     All notices, requests, consents, and other communications required or permitted to be given
under this Agreement must be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient; (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a
nationally recognized overnight courier, special next day delivery, with written verification of
receipt, addressed as follows:

	 	 	 
	     If to NGST:

	 	Northrop Grumman Space Technology
	 

	 	Microelectronics Products & Services (MPS)
	 

	 	One Space Park Drive, D1-1024
	 

	 	Redondo Beach, California 90278
	 

	 	Attention: Contracts
	 

	 	Phone:       (310) 812-2789
	 

	 	FAX:         (310) 812-7011

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

	 	 	 
	     If to Buyer:

	 	Endwave Corporation
	 

	 	130 Baytech Dr.
	 

	 	San Jose, CA 95134
	 

	 	Attention: James R. Crossen
	 

	 	Phone:       (408) 522-3177
	 

	 	Fax:           (408) 522-3181
	 

	 	jim.crossen@endwave.com

ARTICLE 14

Contract Change Procedure

     14.1 Changes: Any changes to this Agreement after the Effective Date which relate to: (i)
the deletion of Products; (ii) adding additional Products; (iii) changing or modifying Products; or
(iv) making other changes which do not materially alter the scope of this Agreement shall be made
in accordance with the procedures set forth in this Article 14.

     14.2 Contract Changes: Every [*] during the Term hereof, the parties shall revisit the
maximum quantity commitments of the Products. Based on changes in Buyer’s contracts and production
forecasts, the parties may, but shall not be obligated to, negotiate changes to the production
commitments.

     14.3 Contract Chance Notice: If the parties mutually agree to implement a change request, a
standard form Contract Change Notice (“CCN”) shall describe the change. Execution of a CCN by both
parties shall constitute a modification hereof and shall be binding on both parties hereto.

     14.4 Exception: Substitutions relative to Products which are purchased items not manufactured
by NGST may be made by NGST without the consent of Buyer if such substitutes are of like quality
and are available at the same or lower cost to Buyer.

ARTICLE 15

Intellectual Property

     15.1 Proprietary Information: For the purpose of this Agreement:

          (a) “Proprietary Information” shall mean all drawings, documents, ideas, know-how and other
information supplied by one party to another (whether disclosed orally, or in documentary form, by
demonstration or otherwise) for the purpose of achieving the objectives of this Agreement.

          (b) “Proper Use” shall mean use of the Proprietary Information solely by the recipient for the
objectives of this Agreement.

     15.2 Nondisclosure: All Proprietary Information furnished shall remain the property of the
disclosing party and shall be treated by the recipient in strict confidence, shall not be used
except for Proper Use, shall be disclosed by the recipient only to persons within the recipient’s
company (including companies directly or indirectly more than fifty percent (50%) owned or
controlled by the recipient) who are directly concerned in the Proper Use, and shall not be

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

disclosed to consultants or by the recipient to any other party without the disclosing party’s
prior written consent, except for Proprietary Information that was:

          (a) In the public domain at the time it was disclosed; or

          (b) Known to the recipient without restriction at the time of receipt; or

          (c) Published or becomes available to others without restriction through no act or failure to
act on the part of the recipient; or

          (d) Known to the recipient from a source other than the disclosing party without breach of
this Agreement by the recipient; or

          (e) Subsequently designated by the disclosing party in writing as no longer proprietary;

          (f) Independently developed by the recipient without reference to the Proprietary Information;
or

          (g) Disclosed after [*] years from the date of delivery by the disclosing party to the
recipient, which [*] year period shall survive the termination of this Agreement; provided,
however, that if Buyer, as a result of an agreement with a customer, requires a longer
nondisclosure period, the parties shall agree to such longer nondisclosure periods with regard to
Proprietary Information applicable to such customer’s contract.

     If any portion of Proprietary Information falls within any one of these exceptions, the
remainder shall continue to be subject to the foregoing prohibitions and restrictions. The
recipient of Proprietary Information shall inform its employees of the confidential nature of the
Proprietary Information and shall prohibit them from making copies of any of it except where such
copies are necessary for the purposes of Proper Use, unless agreed upon by the disclosing party.
The recipient of Proprietary Information shall exercise the same degree of care in protecting such
Proprietary Information as it takes to preserve and safeguard its own proprietary information, and
in no event less than a degree of care a reasonable recipient would use to protect its own
proprietary information.

     15.3 Marking: Proprietary Information made available in written form by one party to the
other party shall be marked with the legend:

          “ENDWAVE PROPRIETARY INFORMATION”

or -    “NGST PROPRIETARY INFORMATION”

as the case may be, or an equivalent conspicuous legend. No sheet or page of any written material
shall be so labeled which is not, in good faith, believed by the disclosing party to contain
Proprietary Information. A recipient of Proprietary Information hereunder shall have no obligation
with respect to any portion of any written material which is not so labeled or any information
received orally unless it is identified as proprietary and a written summary of such oral
communication, specifically identifying the items of Proprietary Information, is furnished to the
recipient within thirty (30) days of such disclosure.

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     The individuals identified below are the only persons authorized to receive Proprietary
Information on behalf of the parties:

For Endwave:  [*]

For NGST:       [*]

     By written notice to the other parties, these representatives may be replaced by another person
from the same party.

     15.4 Compensation: The parties shall not be obligated to compensate each other for the
transfer of any Proprietary Information under this Agreement and agree that no warranties of any
kind are given with respect to such Proprietary Information or any use thereof. No license is
hereby granted under any patent, trademark or copyrights with respect to any Proprietary
Information.

     15.5 Survival: The obligations of the parties concerning confidentiality set forth in this
Article 14 shall survive termination or completion of this Agreement.

     15.6 Ownership of Masksets: NGST shall retain ownership and sole possession of any and all
glass plates utilized for photolithographic semiconductor processing of MMIC (as defined in Section
15.7 below) designs (“Masksets”) developed or procured by NGST under this Agreement.

     15.7 Ownership of MIMIC Designs: NGST shall retain sole ownership rights to its solely
developed designs for monolithic microwave integrated circuit (“MMIC”) designs. NGST shall also
retain sole ownership rights to individual circuit elements, design libraries, design rule manuals,
and MIMIC fabrication processes for all MMIC designs. Buyer shall retain sole ownership rights to
its solely developed designs for MMICs, including all associated documentation. If any MMIC design
work or maskset fabrication was or will be performed by NGST on behalf of Buyer under a separate
design and development agreement, the terms of such separate agreement shall determine the parties’
respective rights to such MMIC designs.

ARTICLE 16

Indemnification

     16.1 Indemnification by NGST: In the event any Products to be furnished under this Agreement
are not to be made in accordance with drawings, samples, or manufacturing specifications designated
by Buyer, but rather are the design of NGST, NGST agrees that it shall, at its own expense and at
its option, defend or settle any claim, suit, or proceeding brought against Buyer, based on an
allegation that the Products furnished under this Agreement constitute a direct or a contributory
infringement of any claim of any patent, mask work, copyright or any other intellectual property
right. This obligation shall be effective only if Buyer shall have made all payments then due and
if NGST is notified of said allegation promptly in writing and given authority, information, and
assistance for the settlement or defense of said claim, suit, or proceedings. NGST shall pay all
damages and costs assessed in such suit or proceedings. In the event of a final adjudication by a
court of competent jurisdiction that its Products or any part thereof infringes or violates any
third party intellectual property right or if the use or sale thereof

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

is enjoined, or if the provisions of any negotiated settlement agreement prohibit the use of
the Products, NGST shall at its sole option and its own expense, either:

          (a) Procure for Buyer the right to continue using the Product; or

          (b) Replace the Products with substantially equivalent non-infringing Products; or

          (c) Modify the Products so they become non-infringing but substantially equivalent; or

          (d) To the extent that the options set forth in clauses (a), (b) and (c) above are not
reasonably available, terminate the Buyer’s right to use the Product and return to the Buyer and
return to the Buyer the price originally paid by Buyer to NGST for the Product.

     The foregoing indemnity does not apply to the following:

          1. Infringement by a combination of Products furnished under this Agreement with other
products not furnished hereunder unless NGST is a contributory infringer;

          2. Infringement resulting from changes or modifications made to or from the Products by the
Buyer; and

          3. Any settlements of a claim, suit, or proceeding made without NGST’s written consent.

     The foregoing states the entire liability of NGST with respect to infringement or violation of
third party intellectual property rights in connection with Products furnished under this
Agreement.

     16.2 Indemnification by Buyer: In the event any Products to be furnished under this Agreement
are to be made in accordance with drawings, samples, or manufacturing specifications designated by
Buyer and are not the design of NGST, Buyer agrees that it shall, at its own expense and at its
option, defend or settle any claim, suit, or proceeding brought against NGST, based on an
allegation that the Products furnished under this Agreement constitute a direct or a contributory
infringement of any claim of any patent, mask work, copyright or any other intellectual property
right.

ARTICLE 17

Miscellaneous

     17.1 Headings: The headings and titles to the articles, sections, and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed a part hereof or affect the
construction or interpretation of any provision hereof.

     17.2 Remedies: Unless otherwise expressly provided herein, the rights and remedies hereunder
are in addition to, and not in limitation of, other rights and remedies under the

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Agreement, at law or in equity, and exercise of one right or remedy shall not be deemed a
waiver of any other right or remedy.

     17.3 Modification and Waiver: No cancellation, modification, amendment, deletion, addition,
or other change in the Agreement or any provision hereof, or waiver of any right or remedy herein
provided, shall be effective for any purpose unless specifically set forth in a writing signed by
the party to be bound thereby. No waiver of any right or remedy in respect of any occurrence or
event on one occasion shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.

     17.4 Entire Agreement: This Agreement supersedes all other agreements, oral or written,
heretofore made with respect to the subject hereof, and the transactions contemplated hereby and
contains the entire agreement of the parties.

     17.5 Severability: Any provision hereof prohibited by or unlawful or unenforceable under any
applicable law of any jurisdiction shall as to such jurisdiction be ineffective without affecting
any other provision of the Agreement. To the full extent, however, that the provisions of such
applicable law may be waived, they are hereby waived, to the end that the Agreement be deemed to be
a valid and binding agreement enforceable in accordance with its terms.

     17.6 Controlling Law: All questions concerning the validity and operation of this Agreement
and the performance of the obligations imposed upon the parties hereunder shall be governed by the
laws of the State of California applicable to contracts entered into and wholly to be performed in
such jurisdiction.

     17.7 Successors and Assigns: The provisions of this Agreement shall be binding upon and for
the benefit of NGST and Buyer and their respective successors and assigns. This provision shall
not be deemed to expand or otherwise affect the limitation on assignment and transfers set forth in
Article 10 and no party is intended to or shall have any right or interest under this Agreement,
except, as provided in Article 10.

     17.8 Counterparts: This Agreement has been executed in several counterparts, each of which
shall be deemed to be an original, and all such counterparts together shall constitute but one and
the same instrument.

     17.9 Language: If a translation of this Agreement is required or otherwise made, the English
version shall be the official version and shall control in the event of differences. All
communications relating to this Agreement shall be in English.

     17.10 Negotiated Terms: All terms of this Agreement were negotiated between the parties at
arm’s length. The parties agree that in the event a dispute arises in connection with this
Agreement, the terms contained in this Agreement shall be given their plain meaning, and that no
term shall be construed in favor of one party over the other by virtue of one party having drafted
a term in this Agreement.

     17.11 Disputes: All disputes between the parties in connection with or arising out of the
existence, validity, construction, performance and termination of this Agreement (or any terms
hereof), which the parties are unable to resolve amicably shall be finally settled by binding

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

arbitration, preceded by pre-arbitration mediation if the parties so mutually agree at the
time. The arbitration or any pre-arbitration mediation shall be held in Redondo Beach, California,
or such other venue as the parties may agree, and administered by the American Arbitration
Association under its Commercial Mediation Procedures, or if failing settlement, under its
Arbitration Procedures for Large, Complex Commercial Disputes by three arbitrators appointed in
accordance with the rules. Subject to Article 12, the arbitrators shall have authority to provide
any relief available in law or equity. Judgment on the arbitral award may be entered in any court
or tribunal having jurisdiction thereof, Each party shall be responsible for its own attorney fees
and costs. Each party shall be responsible for its own attorney fees and court costs.

     In Witness Whereof, the parties have executed this Agreement in English as of the
Effective Date.

	 	 	 	 	 
	 	ENDWAVE CORPORATION

 	 
	 	By:  	/s/ [*]
 	 
	 	 	 	 
	 	 	 	 
	 
	 	NORTHROP GRUMMAN SPACE & MISSION
 SYSTEMS CORP.

Northrop Grumman Space Technology

 	 
	 	By:  	/s/ [*]
 	 
	 	 	 	 
	 	 	 	 
	 

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT A

PRODUCTS AND PRICING

1. Products

	 	 	 	 	 	 	 
	 

	 	 	 	[*]	 	 
	APPROVED:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Endwave Corporation

	 	 	 	Northrop Grumman Space &
Mission Systems Corp., Space Technology	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ [*]
 

	 	 	 	/s/ [*]
 

	 	 
	Date

	 	 	 	Date	 	 

2. Optional Products. Buyer may elect to purchase additional Products in wafer form at prices and
cycle times to be determined by NGST and agreed to by the parties at the time Buyer exercises such
option subject to the ordering procedure described in Section 5.1 of the Agreement.

3. Engineering Support. Engineering support for failure analysis, device troubleshooting, test or
component characterization, mask layouts, and related support, shall be billed per NGST’s hourly
rates then in effect. Material shall be billed as incurred.

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT A-1

PRODUCTS AND PRICING

INTERIM FIXED WAFER PRICING

	 	 	 	 	 	 	 
	 

	 	[*]	 	 	 	 
	 
	 	 	 	 	 	 
	APPROVED:

	 	 	 	APPROVED:	 	 
	 
	 	 	 	 	 	 
	Endwave Corporation

	 	 	 	NGST	 	 
	 
	 	 	 	 	 	 
	/s/ [*]
 

	 	 	 	/s/ [*]
 

	 	 
	Date

	 	 	 	Date	 	 

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT B

LIST OF DELIVERABLES, QUANTITY COMMITMENTS,

DELIVERY SCHEDULE AND BUYER SITE

1. Deliverables

During the Term, NGST will supply Buyer with MMICs from either [*] Wafers, to be determined by the
parties.

NGST will ensure that all Products delivered to Buyer come from wafers that meet NGST’s PCM
specifications and have passed NGST’s commercial wafer-level sample visual screen criteria.

NGST will perform RF test on the wafers, and will dice the wafers and pick the die into waffle
packs. Die pick and waffle pack may be performed by qualified vendors on behalf of NGST.

NGST will deliver the Products in waffle packs.

Buyer will be responsible for performing visual inspection of the Products upon receipt, and will
bear all costs and yield losses for such tasks.

To minimize re-traying work for NGST, Buyer agrees that NGST may ship Products in either multiples
that coincide with particular full tray quantities for each Product, or quantities rounded up or
down to reasonably meet both Buyer’s forecast and use any remaining partially filled tray.

2. Quantity Commitments. NGST’s maximum quarterly MMIC quantity during the Term shall not exceed
[*] MMICs per quarter.

3. Delivery Schedule. Not to exceed one shipment per week.

4. Buyer Sites

	 	 	 	 	 
	Billing and Notices:	 	Delivery of Products:	 	Engineering/Procurement:
	 
	Endwave Corporation

	 	Endwave Corporation
	 	Endwave Corporation
	130 Baytech Dr.

	 	6425 Capitol Avenue, Bldg 2
	 	130 Baytech Dr.
	San Jose, CA 95134

	 	Diamond Springs CA 95619
	 	San Jose, CA 95134
	Att: [*]

	 	Att: [*]
	 	Att: [*] (unless otherwise specified in the Order)
	 
	Phone: [*]

	 	Phone: [*]
	 	Phone: [*]

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT C

BUFFER INVENTORY

Quantities of Products in the Buffer Inventory described in Article 5 of the Agreement are as
follows:

[*]

*NOTE: Die Buffer values will not be established until 3-inch wafer inventory is extinguished.
For these parts ‘Buffer Inventory’ shall be the lesser of the number of wafers indicated under
‘Wafer Buffer’ column or NGST’s remaining wafer inventory. NGST shall not build any additional
3-inch wafers.

Estimated Initial buffer Inventory value based on quantities ordered at prices listed in Exhibit A
is [*] based on current prices and recent history of quotes under this Agreement.

Replenishment Rate: When Buyer issues a purchase order to pull Products from the Buffer Inventory,
nominal refresh time (fab cycle) is [*] weeks.

Pull Rate is within [*] business days.

	 	 	 	 	 	 	 
	APPROVED:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Endwave Corporation

	 	 	 	NGST	 	 
	 
	 	 	 	 	 	 
	/s/ [*]
 

	 	 	 	/s/ [*]
 

	 	 

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

EXHIBIT D

[*]

[ * ] = Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.exv10w24

Exhibit 10.24

[GRAPHIC OMITTED]

1. Basic Provisions (“Basic Provisions”)

     1.1 Parties: This Lease (“Lease”), dated for reference purposes only May 20, 2008, is made by
and between 88 12, a California limited partnership, dba Garaventa Properties (“Lessor”) and
Endwave Corporation, a Delaware corporation (“Lessee”), (collectively the “Parties,” or
individually a “Party”).

     1.2 Premises: That certain real property, including all improvements therein or to be
provided by Lessor under the terms of this Lease, and commonly known as 105 Lake Forest Way,
Folsom, located in the County of Sacramento, State of California, and generally described as
(describe briefly the nature of the property and, if applicable, the “Project”, if the property is
located within a Project) An approximately 31,244 rentable square foot single-story office
building (“Premises”). (See also Paragraph 2)

     1.3 Term: Five (5) years and One (1) months (“Original Term”) commencing November 1, 2008 or
upon substantial completion of Lessee improvements (see Addendum, Paragraph 55) (“Estimated
Commencement Date”) and ending November 30, 2013 (“Expiration Date”). (See also Paragraph 3)

     1.4 Early Possession:                                           (“Early Possession Date”). (See also Paragraphs
3.2 and 3.3)

     1.5 Base Rent: $39,992.32 per month (“Base Rent”), payable on the First (1st) day
of each month commencing January 1, 2009. (See also Paragraph 4)

þ If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted.

     1.6 Base Rent and Other Monies Paid Upon Execution:

          (a) Base Rent: $39,992.32 for the period 12/1/08 to 12/31/08.

          (b) Security Deposit: $46,241.12 (“Security Deposit”). (See also Paragraph 5)

          (c) Association Fees: $N/A for the period N/A.

          (d) Other: $ N/A for N/A.

          (e) Total Due Upon Execution of this Lease: $86,233.44.

     1.7 Agreed Use:

Office use and any other permitted use under all applicable laws and zoning ordinances including
microelectronics device manufacturing and repair. (See also Paragraph 6)

     1.8 Insuring Party: Lessor is the “Insuring Party” unless otherwise stated herein. (See also
Paragraph 8)

     1.9 Real Estate Brokers: (See also Paragraph 15)

          (a) Representation: The following real estate brokers (the “Brokers”) and brokerage
relationships exist in this transaction

(check applicable boxes):

þ Cornish & Carey Commercial Real Estate represents Lessor exclusively (“Lessor’s Broker”);

þ Gallaway Commercial, Inc./Colliers International represents Lessee exclusively (“Lessee’s Broker”); or

o                      represents both Lessor and Lessee (“Dual Agency”).

          (b) Payment to Brokers: (Per separate agreement. See Paragraph 54).

     1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by N/A
(“Guarantor”). (See also Paragraph 37)

     1.11 Attachments. Attached hereto are the following, all of which constitute a part of this
Lease:

þ an Addendum consisting of Paragraphs 50 through 67;

þ a site plan depicting the Premises; (Exhibit “A”)

þ a current set of the Rules and Regulations;

þ a Work Letter; (Exhibit “C”)

þ other (specify): Lease Commencement Confirmation (Exhibit “B”); Exclusions to Operating Expenses (Exhibit “D”); Preliminary Space Plan (Exhibit “E”); and Final Construction Schedule (Exhibit “F”)

2. Premises.

     2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental, and upon ail of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this
Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree
is reasonable and any payments based thereon are not subject to revision whether or not the actual
size is more or less. Note: Lessee is advised to verify the actual size prior to executing this
Lease.

     2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on
the Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”), and, so
long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee
and in effect within thirty days following the Start Date, warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all

 1. 

 

other such elements In the Premises, other than those constructed by Lessee, shall be in good
operating condition on said date, that the structural elements of the roof, bearing walls and
foundation of any buildings on the Premises (the “Building”) shall be free of material defects, and
that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under
applicable state or federal law. If a non-compliance with said warranty exists as of the Start
Date, or if one of such systems or elements should malfunction or fall within the appropriate
warranty period, Lessor shall, as Lessor’s sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance, malfunction or failure,
rectify same at Lessor’s expense. The warranty periods shall be as follows: (i) 8 months as to
the HVAC systems, and to the remaining systems and other elements of the Building.

     2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the
Premises comply with the building codes, applicable laws, covenants or restrictions of record,
regulations, and ordinances (“Applicable Requirements”) that were in effect at the time that each
Improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which
Lessee will put the Premises, modifications which may be required by the Americans with
Disabilities Act or any similar laws as a result of Lessee’s use (see Paragraph 50), or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee.
NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and
especially the zoning, are appropriate for Lessee’s intended use, and acknowledges that past uses
of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor’s
expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty
within 6 months following the Start Date, correction of that non-compliance shall be the obligation
of Lessee at Lessee’s sole cost and expense. If the Applicable Requirements are hereafter changed
so as to require during the term of this Lease the construction of an addition to or an alteration
of the Premises and/or Building or the reinforcement or other physical modification of the Unit,
Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall allocate the cost of such
work as follows:

          (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay
the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires
such Capital Expenditure and deliver to Lessor written notice specifying a termination date at
least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital
Expenditure.

          (b) If such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay
for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the
remainder of the term of this Lease, on the date that on which the Base Rent is due, an amount
equal to 144th of the portion of such costs reasonably attributable to the Premises. Lessee shall
pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital
Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines
that it is not economically feasible to pay its share thereof, Lessor shall have the option to
terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in
writing, within 10 days after receipt of Lessor’s termination notice that Lessee will pay for such
Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any
such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent
until Lessor’s share of such costs have been fully paid. If Lessee Is unable to finance Lessor’s
share, or if the balance of the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate
this Lease upon 30 days written notice to Lessor.

          (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to
apply only to non-voluntary, unexpected, and new Applicable Requirements. If the Capital
Expenditures are instead triggered by Lessee as a result of en actual or proposed change in use,
change in intensity of use, or modification to the Premises then, and in that event, Lessee shall
either: (i) immediately cease such changed use or intensity of use and/or take such other steps as
may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such
Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this
Lease.

     2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/or
Brokers to satisfy itself with respect to the condition of the Premises (including but not limited
to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance
with Applicable Requirements and the Americans with Disabilities Act), and their suitability for
Lessee’s intended use, (b) Lessee has made such investigation as it deems necessary with reference
to such matters and assumes all responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written
representations or warranties with respect to said matters other than as set forth In this Lease.
In addition,

 2. 

 

Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties
concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it
is Lessor’s sole responsibility to Investigate the financial capability and/or suitability of all
proposed tenants.

     2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of
no force or effect if Immediately prior to the Start Date Lessee was the owner or occupant of the
Premises. In such event, Lessee shall be responsible for any necessary corrective work.

3. Term.

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

     3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early
possession. All other terms of this Lease (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such
period. Any such early possession shall not affect the Expiration Date.

     3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts,
Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be
obligated to pay Rent or perform its other obligations until Lessor delivers possession of the
Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from
the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If such written notice is not received by Lessor within said 10 day period, Lessee’s right
to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the
Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor
and Lessee, in writing. Lessee’s right to cancel as set forth in this paragraph shall expire if not
exercised within thirty (30) days following the expiration of sixty (60) day period in which Lessor
has failed to deliver the Premises following the Commencement Date (See Addendum, Paragraph 56).

     3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to
Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5).
Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under
this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s
election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee
is required to perform any other conditions prior to or concurrent with the Start Date, the Start
Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4. Rent.

     4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease
(except for the Security Deposit) are deemed to be rent (“Rent”).

     4.2 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of
the United States, without offset or deduction (except as specifically permitted In this Lease), on
or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole
dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent
for any period during the term hereof which is for less than one full calendar month shall be
prorated based upon the actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other persons or place as Lessor may from time to
time designate in writing. Acceptance of a payment which is less than the amount then due shall not
be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of
any check so stating. In the event that any check, draft, or other instrument of payment given by
Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by
cashiers check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount
to any other outstanding charges or costs.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as
security for Lessee’s faithful performance of its obligations under this Lease. If Lessee falls to
pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due already due Lessor, for Rents
which will be due in the future, and/ or to reimburse or compensate Lessor for any liability,
expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or
applies all or any portion of the Security Deposit, Lessee shall within 10 days after written
request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full
amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional monies with Lessor so that the total
amount of the Security Deposit shall at all times bear the same proportion to the increased Base
Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be
amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or
assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in
Lessor’s

 3. 

 

reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a
result thereof. If a change in control of Lessee occurs during this Lease and following such change
the financial condition of Lessee is, in Lessor’s reasonable judgment, significantly reduced,
Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the
Security Deposit to be at a commercially reasonable level based on such change in financial
condition. Lessor shall not be required to keep the Security Deposit separate from its general
accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall return
that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit
shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be
paid by Lessee under this Lease.

6. Use.

     6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal
use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or
permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance,
or that disturbs occupants of or causes damage to neighboring premises or properties. Other than
guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets,
animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to
any written request for a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or electrical systems
therein, and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold
consent, Lessor shall within 7 days after such request give written notification of same, which
notice shall include an explanation of Lessor’s objections to the change in the Agreed Use.

     6.2 Hazardous Substances.

          (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a
Reportable Use of Hazardous Substances without the express prior written consent of Lessor and
timely compliance (at Lessee’s expense) with all Applicable Requirements. “Reportable Use” shall
mean (i) the installation or use of any above or below ground storage tank, (ii) the generation,
possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a
permit from, or with respect to which a report, notice, registration or business plan is required
to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements requires that a notice be
given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the
foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in
the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue,
etc.) and common household cleaning materials, so long as such use is in compliance with all
Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring
property to any meaningful risk of contamination or damage or expose Lessor to any liability
therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself, the public, the
Premises and/or the environment against damage, contamination, injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration or termination) of
protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

          (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice of such fact to
Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance. Lessor acknowledges that Lessee has
disclosed its intentions to use lead solder paste, solder flux, and isopropyl alchohol in the
ordinary course of its occupancy of the premises. Tenant’s disclosure of such intent does not
modify or excuse any obligation of Lessee to indemnify Lessor that otherwise exists.

          (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.

          (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by
or for Lessee, or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance under the Premises from
adjacent properties not caused or contributed to by Lessee). Lessee’s obligations shall

 4. 

 

include, but not be limited to, the effects of any contamination or Injury to person, property
or the environment created or suffered by Lessee, and the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or termination of this
Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.

          (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which result from Hazardous Substances
which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and
when required by the Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration
or termination of this Lease. Notwithstanding anything to the contrary herein, Lessor has no
obligation to indemnify, defend, reimburse, and hold harmless Lessee, its employees, lenders, and
sureties from and against any and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which migrate onto or under the Premises during Lessee’s
occupancy thereof, where such migration arises from the acts or omissions of Lessee, its employees,
agents, contractors, subcontractors, suppliers, vendors or invitees.

          (f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”,
as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible
for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.

          (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e))
occurs during the term of this Lease, unless Lessee caused the condition (in which case Lessee
shall make the investigation and remediation thereof required by the Applicable Requirements and
this Lease shall continue in full force and effect, but subject to Lessor’s rights under Paragraph
62(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s expense, in
which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is
greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of
the date 60 days following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of
Lessee’s commitment to pay the amount by which the cost of the remediation of such Hazardous
Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof
within 30 days following such commitment. In such event, this Lease shall continue in full force
and effect, and Lessor shall proceed to make such remediation as soon as reasonably possible after
the required funds are available. If Lessee does not give such notice and provide the required
funds or assurance thereof within the time provided, this Lease shall terminate as of the date
specified in Lessor’s notice of termination.

     6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided in this
Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to the such Requirements, without regard to whether such Requirements
are now in effect or become effective after the Start Date. Lessee shall, within 10 days after
receipt of Lessor’s written request, provide Lessor with copies of all permits and other documents,
and other information evidencing Lessee’s compliance with any Applicable Requirements specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable
Requirements. Likewise, Lessee shall Immediately give written notice to Lessor of: (i) any water
damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to
the production of mold; or (ii) any mustiness or other odors that might indicate the presence of
mold in the Premises.

     6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any
such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a
Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination. In addition, Lessee shall provide copies of all relevant
material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request
therefor.

 5. 

 

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

     7.1 Lessee’s Obligations.

          (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3
(Lessee’s Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or
Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole expense, keep the Premises,
Utility Installations (intended for Lessee’s exclusive use, no matter where located), and
Alterations in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily accessible to
Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior
use, the elements or the age of such portion of the Premises), including, but not limited to, all
equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities,
boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior),
foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, and
skylights, located in, on, or adjacent to the Premises. Lessee, in keeping the Premises in good
order, condition and repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required by Paragraph 7.1(b)
below. Lessee’s obligations shall include restorations, replacements or renewals when necessary to
keep the Premises and all Improvements thereon or a part thereof in good order, condition and state
of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the
Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior
appearance of other similar facilities of comparable age and size In the vicinity, including, when
necessary, the exterior repainting of the Building. Lessee shall he responsible for the legal
disposal or remediation of any Lessee Owned Alterations and Utility Installations, Trade Fixtures
and any personal property of any kind remaining on the premises following the lease expiration, any
option periods, or holdover periods, that are contaminated with Hazardous Substances.

          (b) Service Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts,
with copies to Lessor, in customary form and substance for, and with contractors specializing and
experienced in the maintenance of the following equipment and Improvements, if any, if and when
installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
extinguishing systems, Including fire alarm and/or smoke detection, (iv) landscaping and Irrigation
systems, (v) roof covering and drains, and (vi) clarifiers. However, Lessor reserves the right,
upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee
shall reimburse Lessor, upon demand, for the cost thereof.

          (c) Failure to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph
7.1, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in
the case of an emergency, in which case no notice shall be required), perform such obligations on
Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall
promptly pay to Lessor a sum equal to 115% of the cost thereof.

          (d) Replacement. Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7
below, and without relieving Lessee of liability resulting from Lessee’s failure to exercise and
perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item
shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee
shall only be obligated to pay, each month during the remainder of the term of this Lease, on the
date on which Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie.
1/144th of the cost per month). Lessee shall pay interest on the unamortized balance but may prepay
its obligation at any time.

     7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto
that Lessor shall have the obligation, to repair and maintain the common areas of the Premises
including the landscaping, driveways, parking lots, signs, and sidewalks. It is the intention of
the Parties that the terms of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or
hereafter in effect to the extent it is inconsistent with the terms of this Lease.

     7.3 Utility Installations; Trade Fixtures; Alterations.

          (a) Definitions. The term “Utility Installations” refers to all floor and window coverings,
air and/or vacuum lines, power panels, electrical distribution, security and fire protection
systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on
the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be
removed without doing material damage to the Premises. The term “Alterations” shall mean any
modification of the improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).

          (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises
without Lessor’s prior written consent. Lessee may, however, make non-structural Utility
Installations to the Interior of the Premises (excluding the roof) without such consent but upon
notice to Lessor, as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the electrical, plumbing,
HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended
does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum equal to one month’s
Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof

 6. 

 

without the prior written approval of Lessor. Lessor may, as a precondition to granting such
approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations
or Utility Installations that Lessee shall desire to make and which require the consent of the
Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed
conditioned upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and specifications prior to commencement of
the work, and (iii) compliance with all conditions of said permits and other Applicable
Requirements In a prompt and expeditious manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon
completion furnish Lessor with as-built plans and specifications. For work which costs an amount in
excess of one month’s Base Rent, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility
Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor.

          (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest
therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then
Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the
same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the
enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal
to 100% of the amount of such contested lien, claim or demand, indemnifying Lessor against
liability for the same. If Lessor elects to participate In any such action, Lessee shall pay
Lessor’s attorneys’ fees and costs.

     7.4 Ownership; Removal; Surrender; and Restoration.

          (a) Ownership. Subject to Lessor’s rights to require removal or elect ownership as hereinafter
provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee,
but considered a part of the Premises. Lessor may, with sixty (60) days Notice of Election to elect
in writing to become the owner of specified parts of the Lessee Owned Alterations and Utility
Installations, to be effective at the end of the sixty (60) day period, or some other such time
period as the parties may negotiate. Unless otherwise instructed per paragraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall become the property of Lessor at the
expiration or termination of this lease.

          (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not
later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all
Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of
this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

          (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and
free of debris, and in good operating order, condition and state of repair, ordinary wear and tear
excepted. “Ordinary wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12
months or less, then Lessee shall surrender the Premises in the same condition as delivered to
Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned
Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and
all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except
Hazardous Substances which were deposited via underground migration from areas outside of the
Premises, or if applicable, the Premises) even if such removal would require Lessee to perform or
pay for work that exceeds statutory requirements. Trade Fixtures shall remain Ere property of
Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the
Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee
and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely
vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.

     8.1 Payment For Insurance. Sec Addendum, Paragraph 62.

     8.2 Liability Insurance. See Addendum, Paragraph 62.

     8.3 Lessee’s Property; Business Interruption Insurance.

          (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s
personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per
occurrence. The proceeds from any such Insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such insurance is in force.

 7. 

 

          (b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense
insurance in amounts as will reimburse Lessee for direct or Indirect loss of earnings attributable
to all perils commonly insured against by prudent lessees in the business of Lessee or attributable
to prevention of access to the Premises as a result of such perils.

          (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or
forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business
operations or obligations under this Lease.

     8.4 Insurance Policies. Insurance required herein shall be by companies duly licensed or
admitted to transact business in the state where the Premises are located, and maintaining during
the policy term a “General Policyholders Rating” of at least A-, VI, as set forth in the most
current issue of ‘Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of the required insurance. No
such policy shall be cancelable or subject to modification except after 30 days prior written
notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee
to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain
the Insurance required to be carried by it, the other Party may, but shall not be required to,
procure and maintain the same.

     8.5 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor
each hereby release and relieve the other, and waive their entire right to recover damages against
the other, for loss of or damage to its property arising out of or incident to the perils required
to be insured against herein. The effect of such releases and waivers is not limited by the amount
of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to
have their respective property damage insurance carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.

     8.6 Indemnity. See Addendum

     8.7 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or
breach of this Lease by Lessor or Its agents, neither Lessor nor its agents shall be liable under
any circumstances for. (i) injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or
about the Premises, whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC
or lighting fixtures, or from any other cause, whether the said injury or damage results from
conditions arising upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, (ii) any damages arising from any act or neglect of
any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of
any other lease in the Project, or (iii) injury to Lessee’s business or for any loss of Income or
profit therefrom. Instead, It Is intended that Lessee’s sole recourse in the event of such damages
or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain
pursuant to the provisions of paragraph 8.

     8.8 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain
or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor
to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to
ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required
insurance and/or does not provide Lessor with the required binders or certificates evidencing the
existence of the required insurance, the Base Rent shall be automatically increased, without any
requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever Is greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s
failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute
a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance,
prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee
of Its obligation to maintain the insurance specified in this Lease.

9. Damage or Destruction.

     9.1 Definitions.

          (a) “Promises Partial Damage” shall mean damage or destruction to the Improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be
repaired in B months or less from the date of the damage or destruction. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to whether or not the
damage is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not
include damage to windows, doors, and/or other similar items which Lessee has the responsibility to
repair or replace pursuant to the provisions of Paragraph 7.1.

          (b) “Premises Total Destruction” shall mean damage or destruction to the Premises, other than
Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be
repaired In 6 months or less from the date of the

 8. 

 

damage or destruction. Lessor shall notify Lessee In writing within 30 days from the date of
the damage or destruction as to whether or not the damage Is Partial or Total.

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

          (d) “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by
Lessor at the time of the occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by the operation of Applicable
Requirements, and without deduction for depreciation.

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

     9.2 Partial Damage — Insured Loss. If a Premises Partial Damage that is an Insured Loss
occurs, then Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures
or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this
Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair of which is $10,000
or less, and, in such event, Lessor shall make any applicable insurance proceeds available to
Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage In proceeds (except as to the deductible
which is Lessee’s responsibility) as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to
fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within 10 days following receipt of written notice of
such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof
within said 10 day period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If such funds or
assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to: (i) make such restoration and repair as Is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain In full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of
any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage
due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that them may be some
insurance coverage, but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party.

     9.3 Partial Damage — Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon as reasonably
possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or
(ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor
of knowledge of the occurrence of such damage. Such termination shall be effective 60 days
following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee’s commitment to pay for the repair of such damage without reimbursement from
Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30
days after making such commitment. In such event this Lease shall continue in full force and
effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If Lessee does not make the required commitment, this Lease shall
terminate as of the date specified in the termination notice.

     9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or
destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have
the right to recover Lessor’s damages from Lessee, except as provided In Paragraph 8.6.

     9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is
damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss,
Lessor may terminate this Lease effective 60 days following the date of occur a of such damage by
giving a written termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend
this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such
option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after
Lessee’s receipt of Lessor’s written notice purporting to terminate this Lease, or (ii) the day
prior to the date upon which such option expires. If Lessee duly exercises such option during such
period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in
Insurance proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such damage
as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee
fails to exercise such option and provide such funds or assurance during such period, then this
Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be
extinguished.

 9. 

 

     9.6 Abatement of Rent; Lessee’s Remedies.

          (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a
Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair, remediation or restoration of such damage
shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other obligations of
Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such
damage, destruction, remediation, repair or restoration except as provided herein.

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

     9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g)
or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other
advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.

10. Real Property Taxes.

     10.1 Definition. As used herein, the term “Real Property Taxes” shall Include any form of
assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other
than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the Premises or the Project,
Lessor’s right to other Income therefrom, and/or Lessor’s business of leasing, by any authority
having the direct or indirect power to tax and where the funds are generated with reference to the
Building address and where the proceeds so generated are to be applied by the city, county or other
local taxing authority of a jurisdiction within which the Premises are located. Real Property Taxes
shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed
by reason of events occurring during the term of this Lease, including but not limited to, a change
in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by
Lessor to Lessee pursuant to this Lease.

     10.2 Payment of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to
the Real Property Tax installment due at least 20 days prior to the applicable delinquency date. If
any such installment shall cover any period of time prior to or after the expiration or termination
of this Lease, Lessee’s share of such installment shall be prorated. In the event Lessee incurs a
late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require
that such taxes be paid in advance to Lessor by Lessee monthly in advance with the payment of the
Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated
installment of taxes divided by the number of months remaining before the month in which said
installment becomes delinquent. When the actual amount of the applicable tax bill is known, the
amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such
Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as is
necessary. Advance payments may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a Breach by Lessee in the performance of its obligations under this
Lease, then arty such advance payments may be treated by Lessor as an additional Security Deposit.

     10.3 Joint Assessment. If the Premises are not separately assessed, Lessee’s liability shall
be an equitable proportion of the Real Property Taxes for all of the land and improvements included
within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the
respective valuations assigned in the assessor’s work sheets or such other information as may be
reasonably available.

     10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed
against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real property of Lessor. If
any of Lessee’s said property shall be assessed with Lessor’s real property, Lessee shall pay
Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee’s property. Lessee shall remain responsible
for all such personal property taxes until the date on which Lessor has accepted in writing a
conveyance of such property. The parties shall pro-rate any personal property taxes to the date of
such written acceptance by Lessor.

11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone,
trash disposal and other utilities and services supplied to the Premises, together with any taxes
thereon. If any such services are not separately metered or billed to Lessee,

 10. 

 

Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly
metered or billed. There shall be no abatement of rent and Lessor shall net be Sable in any respect
whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service
due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor’s
reasonable control or in cooperation with governmental request or directions.

12. Assignment and Subletting.

     12.1 Lessor’s Consent Required.

          (a) Except for a Permitted Transfer as defined in 12 (b) below, Lessee shall not voluntarily
or by operation law assign, transfer, mortgage or encumber, or sublet (collectively “assign” or
“assignment”) all or any part of Lessee’s Interest in this Lease or in the premises without
Lessor’s prior written consent.

          (b) Lessee may assign this lease or sublet the premises, or any portion thereof, without
Lessor’s consent, to any entity which controls, in controlled by, or is under common control with
Lessee; to any entity which results from a merger of, reorganization of, or consolidation with
Lessee or to any entity which acquires substantially all of the stock or assets of Lessee, as a
going concern, with respect to the business that is being conducted in the premises (hereinafter
each a “Permitted Transfer”). In addition, a sale or transfer of the capital stock of Lessee shall
be deemed a Permitted Transfer if such sale or transfer occurs in connection with any bona fide
financing or capitalization for the benefit of Lessee. Landlord shall have no right to terminate
the lease in connection with, and shall have no right to any economic conseration resulting from
any Permitted Transfer. Lastely, a Permitted Transfer shall not cause the lapse of Paragraph 39,
Option Right, which are personal to the Lessee and any Permitted Transferee”. Any Permitted
Transferee shall obtain Lessor’s prior written consent to any change In the Agreed Use.

          (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by
way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee’s assets occurs, which results or
will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net
Worth as it was represented at the time of the execution of this Lease or at the time of the most
recent assignment to which Lessor has consented, or as it exists immediately prior to said
transaction or transactions constituting such reduction, whichever was or is greeter, shall be
considered an assignment of this Lease to which Lessor may withhold its consent. “Net Worth of
Lessee” shall mean the net worth of Lessee (excluding any guarantors) established under generally
accepted accounting principles.

          (d) An assignment or subletting without consent shall, at Lessor’s option, be a Default
curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either (i) terminate this Lease, or (ii) upon 30 days written notice,
increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of
such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect,
and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease
term shall be increased to 110% of the scheduled adjusted rent.

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

          (f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is
in Default at the time consent is requested.

          (g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, ie. 20
square feet or less, to be used by a third party vendor in connection with the installation of a
vending machine or payphone shall not constitute a subletting.

     12.2 Terms and Conditions Applicable to Assignment and Subletting.

          (a) Regardless of Lessor’s consent, no assignment or subletting shall: (i) be effective
without the express written assumption by such assignee or sublessee of the obligations of Lessee
under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

          (b) Lessor may accept Rent or performance of Lessee’s obligations from any person other than
Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver
or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.

          (c) Lessor’s consent to any assignment or subletting shall not constitute a consent to any
subsequent assignment or subletting.

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

          (e) Each request for consent to an assignment or subletting shall be in writing, accompanied
by information relevant to Lessor’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of
$500 as

 11. 

 

consideration for Lessor’s considering and processing said request. Lessee agrees to provide
Lessor with such other or additional information and/or documentation as may be reasonably
requested. (See also Paragraph 36)

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

          (g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such transfer is
specifically consented to by Lessor in writing. (See Paragraph 39.2)

     12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and
conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly incorporated therein:

          (a) Lessee hereby assigns and transfers to Lessor at of Lessee’s interest in all Rent payable
on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under
this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds
Lessee’s then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall
not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection
of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any
of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any
such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the
performance of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to become
due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all
Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

          (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn
to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

          (c) Any matter requiring the consent of the sublessor under a sublease shall also require the
consent of Lessor.

          (d) No sublessee shall further assign or sublet all or any part of the Premises without
Lessor’s prior written consent.

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

13. Default; Breach; Remedies.

     13.1 Default; Breach. A “Default” is defined as a failure by either party to comply with or
perform any of the terms, covenants, conditions, or Rules arid Regulations under this Lease. A
“breach” is defined as the occurrence of one or more of the following Defaults, and the failure of
the obligated party to cure such Default within any applicable grace period.

          (a) The abandonment of the Premises; or the vacating of the Premises without providing a
commercially reasonable level of security, or where the coverage of the property insurance
described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.

          (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be
made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable
evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of 3 business days
following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR
SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT
TO RECOVER POSSESSION OF THE PREMISES.

          (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the
commission of waste, act or acts constituting public or private nuisance, and/or an illegal
activity on the Premises by Lessee, where such actions continue for a period of 3 business days
following written notice to Lessee.

          (d) The failure by Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of this Lease, where any
such failure continues for a period of 10 days following written notice to Lessee.

          (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or
of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs
13.1(a), (b), (c) or (d), above, where such Default continues for a

 12. 

 

period of 30 days after written notice; provided, however, that if the nature of Lessee’s
Default is such that more than 30 days are reasonably required for its cure, then it shall not be
deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.

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

          (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor
was materially false.

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

          (i) Default by Lessor as to the terms, covenants, conditions, or provisions of this Lease,
where such default is not cured within thirty (30) days of receiving written notice from Lessee.

     13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within
10 days after written notice (or in case of an emergency, without notice), Lessor may, at its
option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by
Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor
may, with or without further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

          (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time
of award of the amount by which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss at the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment proximately caused by the
Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary renovation and alteration of
the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor
in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately preceding sentence shall
be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the
District within which the Premises are located at the time of award plus one percent. Efforts by
Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover damages under Paragraph 12. If termination of this Lease Is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding
any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee
under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In
such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute
shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two
such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.

          (b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes
due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of
maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
Interests, shall not constitute a termination of the Lessee’s right to possession.

          (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of
the state wherein the Premises are located. The expiration or termination of this Lease and/or the
termination of Lessee’s right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessees occupancy of the Premises.

 13. 

 

          (d) If Lessor fails to perform any of its affirmative duties or obligations with thirty (30)
days of receiving written notice from Lessee, and if performance has not been waived by Lessee or
otherwise mutually compromised, Lessee shall be entitled to seek those remedies available to
commercial tenants at law or equity, including the award of reasonable attorney’s fees and costs.

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

     13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge
equal to $1,000.00 The Parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late
charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect
to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3
consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the
contrary, Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.

     13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not
received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days
following the date on which it was due for non-scheduled payment, shall bear interest from the date
when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments.
The interest (“Interest”) charged shall be computed at the rate of 10% per annum but shall not
exceed the maximum rate allowed by law. Interest is payable in addition to the potential late
charge provided for In Paragraph 13.4.

     13.6 Breach by Lessor.

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

          (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender
cures said breach within 30 days after receipt of said notice, or if having commenced said cure
they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure,
provided, however, that such offset shall not exceed an amount equal to the greater of one month’s
Base Rent or the Security Deposit, reserving Lessee’s right to seek reimbursement from Lessor for
any such expense in excess of such offset. Lessee shall document the cost of said cure and supply
said documentation to Lessor.

14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this
Lease shall terminate as to the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the Building, or more than 25% of that
portion of the Premises not occupied by any building, is taken by Condemnation, Lessee may, at
Lessee’s option, to be exercised in writing within 10 days after Lessor shall have given Lessee
written notice of such taking (or in the absence of such notice, within 10 days after the
condemning authority shall have taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in
utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be
the property of Lessor, whether such award shall be made as compensation for diminution in value of
the leasehold, the value of the part taken, or for severance damages; provided, however, that
Lessee shall be entitled to any compensation paid by the condemnor for Lessee’s relocation
expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this
Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be
considered the property of the Lessee

 14. 

 

and Lessee shall be entitled to any and all compensation which is payable therefor. In the event
that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to
the Premises caused by such Condemnation.

15. Brokerage Fees.

     15.1 Additional Commission. See Addendum

     15.2 Assumption of Obligations. See Addendum

     15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finders fee in connection herewith. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed broker, finder or
other similar party by reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

16. Estoppel Certificates.

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

          (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within
such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the
Lease is in full force and effect without modification except as may be represented by the
Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and
(iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance.
Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate,
and the Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.

          (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee
and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be reasonably required by
such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3
years. All such financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17. Definition of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the
time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s
interest in the prior lease. In the event of a transfer of Lessor’s title or interest in the
Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit)
any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the
Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to
the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject
to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.

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

19. Days. Unless otherwise specifically indicated to the contrary, the word “days” as used in this
Lease shall mean and refer to calendar days.

20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor or its partners, members, directors, officers or shareholders, and
Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor’s
partners, members, directors, officers or shareholders, or any of their personal assets for such
satisfaction.

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

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

23. Notices.

     23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be
that Party’s address for delivery or mailing of

 15. 

 

notices. Either Party may by written notice to the other specify a different address for
notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute
Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to
such party or parties at such addresses as Lessor may from time to time hereafter designate in
writing.

     23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shell be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed
given 72 hours after the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or
courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered
upon telephone confirmation of receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday
or legal holiday, it shall be deemed received on the next business day.

24. Waivers.

          (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by
Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent.

          (b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.
Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee In connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

          (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS
RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT
SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

          (a) When entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of agency relationship
or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge
being advised by the Brokers In this transaction, as follows:

               (i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the
agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations:
To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with
the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A
duty to disclose all facts known to the agent materially affecting the value or desirability of the
property that are not known to, or within the diligent attention and observation of, the Parties.
An agent is not obligated to reveal to either Party any confidential information obtained from the
other Party which does not involve the affirmative duties set forth above.

               (ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part from the Lessor. An agent acting only
for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor:
a. Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A
duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the
agent materially affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party which does not involve
the affirmative duties set forth above.

               (iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly
or through one or more associate licenses, can legally be the agent of both the Lessor and the
Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee.
In a dual agency situation, the agent has the following affirmative obligations to both the Lessor
and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings
with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (I) or (ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Lessor will accept
rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a
higher rent than that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to advise about real
estate. If legal or tax advice is desired, consult a competent professional.

          (b) Brokers have no responsibility with respect to any default or breach hereof by either
Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty,
error or omission relating to this Lease may be brought against Broker

 16. 

 

more than one year after the Start Date and that the liability (including court costs and
attorneys’ fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not
exceed the fee received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.

          (c) Lessor and Lessee agree to identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential.

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over,
then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.

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

28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In construing this Lease, all
headings and titles are for the convenience of the Parties only and shall not be considered a part
of this Lease. Whenever required by the context, the singular shall include the plural and vice
versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according
to its fair meaning as a whole, as if both Parties had prepared it.

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

30. Subordination; Attornment; Non-Disturbance.

     30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security device
(collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all
advances made on the security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as
"Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under
this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to
the lien of Its Security Device by giving written notice thereof to Lessee, whereupon this Lease
and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates
of the documentation or recordation thereof.

     30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises
are acquired by another upon the foreclosure or termination of a Security Devise to which this
Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph
30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or,
at the election of the new owner, this Lease will automatically become a new lease between Lessee
and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations
hereunder and such new owner shall assume all of Lessor’s obligations, except that such new owner
shall not: (a) be liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee
might have against any prior lessor, (c) be bound by prepayment of more than one month’s rent, or
(d) be liable for the return of any security deposit paid to any prior lessor which was not paid or
credited to such new owner.

     30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the
execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a
commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender
which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the
execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device
which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance
Agreement within said 60 days, then Lessee may, at Lessee’s option, directly contact Lender and
attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.

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

31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises
whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or
the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award
shall not be computed in accordance with

 17. 

 

any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably
incurred. In addition, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in
the preparation and service of notices of Default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in connection with such Default or
resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).

32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to
enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times
after reasonable prior notice for the purpose of showing the same to prospective purchasers,
lenders, or tenants, and making such alterations, repairs, improvements or additions to the
Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of
utilities, services, pipes and conduits through the Premises and/or other premises as long as there
Is no material adverse effect to Lessee’s use of the Premises. All such activities shall be without
abatement of rent or liability to Lessee.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises
without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to permit an auction.

34. Signs. Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For
Lease” signs during the last 6 months of the term hereof. Except for ordinary “for sublease”
signs, Lessee shall not place any sign upon the Premises without Lessor’s prior written consent.
All signs must comply with all Applicable Requirements.

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

36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) Incurred in the consideration of, or response
to, a request by Lessee for any Lessor consent, Including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee
upon receipt of an invoice and supporting documentation therefor. Lessor’s consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee
of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor’s consent shall not
preclude the imposition by Lessor at the time of consent of such further or other conditions as are
then reasonable with reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other hereunder and reasonably
requests the reasons for such determination, the determining party shall furnish its reasons in
writing and in reasonable detail within 10 business days following such request.

37. Guarantor. (See Addendum, Paragraph 67)

38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the
covenants, conditions and provisions on Lessee’s part to be observed and performed under this
Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term
hereof.

39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall
apply:

     39.1 Definition. "Option” shall mean: (a) the right to extend or reduce the term of or renew
this Lease or to extend or reduce the term of or renew any lease that Lessee has an other property
of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other
property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of
first refusal to purchase the Premises or other property of Lessor.

     39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is
personal to the original Lessee, and cannot be assigned or exercised by anyone other than said
original Lessee and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.

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

     39.4 Effect of Default on Options.

          (a) Lessee shall have no right to exercise an Option: (i) during the period commencing with
the giving of any notice of Default and continuing until said Default is cured, (ii) during the
period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) In the event that Lessee has been given
3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month
period immediately preceding the exercise of the Option.

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

 18. 

 

          (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s
due and timely exercise of the Option, if, after such exercise and prior to the commencement of the
extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days
after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.

40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor,
Lessee agrees that it will abide by and conform to all reasonable rules and regulations which
Lessor may make from time to time for the management, safety, and care of said properties,
including the care and cleanliness of the grounds and including the parking, loading and unloading
of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees
to so abide and conform. Lessee also agrees to pay its fair share of common expenses incurred in
connection with such rules and regulations.

41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does
not include the cost of guard service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts of third parties.

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

43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to make payment “under protest” and
such payment shall not be regarded as a voluntary payment and there shall survive the right on the
part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there
was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party
shall be entitled to recover such sum or so much thereof as It was not legally required to pay. A
Party who does not initiate suit for the recovery of sums paid “under protest” with 6 months shall
be deemed to have waived its right to protest such payment.

44. Authority; Multiple Parties; Execution.

          (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or
similar entity, each individual executing this Lease on behalf of such entity represents and
warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each
Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such
authority.

          (b) If this Lease Is executed by more than one person or entity as “Lessee”, each such person
or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named
Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary
thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named
Lessees had executed such document.

          (c) This Lease may be executed by the Parties In counterparts, each of which shall be deemed
an original and all of which together shall constitute one and the same Instrument.

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

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

47. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at
the time of the modification. As long as they do not materially change Lessee’s obligations
hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be
reasonably required by a Lender in connection with the obtaining of normal financing or refinancing
of the Premises.

48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the
Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease o is
o is not attached to this Lease (See Addendum, Paragraph 66).

50. Americans with Disabilities Act. Lessor warrants and represents that the Premises shall be in
compliance with the Americans with Disabilities Act (ADA) at occupancy by Lessee. In the event
that Lessee’s use of the Premises requires modifications or additions to the Premises in order to
be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at
Lessee’s expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE

 19. 

 

PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING
SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEES INTENDED USE.

WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE
LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Executed at:	 	 	 	 	 	Executed at:	 	 	 	 
	On:

	 	 	 	 	 	 	 	On:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By LESSOR:	 	 	 	 	 	By LESSEE:	 	 	 	 
	Garaventa Properties,	 	 	 	Endwave Corporation,	 	 
	a dba of 88 12, a California limited	 	 	 	a Delaware corporation	 	 
	liability company	 	 	 	 	 	 	 	 	 	 
	By:	 	88 12, a California limited liability	 	 	 	Name Printed:	 	 	 	 
	Company	 	 	 	 	 	Title:	 	 	 	 
	Name Printed:	 	Joseph Garaventa	 	 	 	By:	 	 	 	 	 	 
	Title:	 	 	 	 	 	 	 	Name Printed:	 	 	 	 
	By:	 	/s/ Joseph Garaventa	 	 	 	Title	 	:	 	 	 	 
	 	 	Joseph Garaventa, Its COO	 	 	 	Address:	 	 	 	 
	Name Printed:	 	 	 	 	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 	 	Telephone:	 	(___)	 	 
	Address:	 	PO Box 5397	 	 	 	Facsimile:	 	(___)	 	 
	Concord,            CA 94524	 	 	 	Federal ID No.	 	 	 	 
	Telephone:	 	(925) 682-0795	 	 	 	 	 	 	 	 	 	 
	Facsimile:	 	(925) 692-2277	 	 	 	 	 	 	 	 	 	 
	Federal ID No.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BROKER:	 	 	 	 	 	BROKER:	 	 	 	 
	Cornish & Carey Commercial. Real Estate	 	 	 	Gallaway Commercial, Inc.	 	 
	 	 	 	 	 	 	 	 	Colliers International.	 	 
	Attn:

	 	 	 	Craig Brinitzer
	 	 	 	Attn:
	 	 	 	Russel Gallaway	 	 
	Title:	 	Senior Vice President	 	 	 	Title:	 	 	 	 
	Address:	 	1601 Response Road, Suite 160	 	 	 	Address:	 	10 Fullerton Court, Suite 110	 	 
	 

	 	 	 	Sacramento, CA 95815
	 	 	 	 	 	 	 	Sacramento, CA 95825	 	 
	Telephone:	 	(916) 920-4400	 	 	 	Telephone:	 	(916) 929-8878	 	 
	Facsimile:	 	(916) 920-0854	 	 	 	Facsimile:	 	(___)	 	 
	Federal ID No.	 	 	 	 	 	Federal ID No.	 	 	 	 

NOTICE: These forms are often modified to meet changing requirements of law and industry needs.
Always write or call to make sure you are utilizing the most current form: AIR Commercial Real
Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213)
687.8777. Fax No.: (213) 687-8616.

©
Copyright 2001 — By AIR Commercial Real Estate Association. All rights reserved.

No part of these works may be reproduced in any form without permission in writing.

 20. 

 

[LETTERHEAD OMITTED]

Lease Addendum

ADDENDUM TO STANDARD MULTI-TENANT OFFICE LEASE-GROSS

DATED MAY 20, 2008, BY AND BETWEEN

88 12, A CALIFORNIA LIMITED PARTNERSHIP, DBA GARAVENTA PROPERTIES, AS LESSOR, AND

ENDWAVE CORPORATION, A DELAWARE CORPORATION, AS LESSEE

	50.	 	Base Rent Schedule:
	 
	 	 	The Monthly Base Rent is based on a triple net lease with Lessee responsible for its
pro-rata share of common area maintenance and operating expenses, property taxes and
insurance. The following rent schedule shall apply during the initial lease term:

	 	 	 	 	 	 	 	 	 
	Time Period	 	Monthly Base Rent PRSF*	 	Monthly Base Rent
	Mos. 1
	 	Free	 	Free
	Mos. 2-12
	 	$	1.28	 	 	$	39,992.32	 
	Mos. 13-24
	 	$	1.33	 	 	$	41,554.52	 
	Mos. 25-36
	 	$	1.38	 	 	$	43,116.72	 
	Mos. 37-48
	 	$	1.43	 	 	$	44,678.92	 
	Mos. 49-61
	 	$	1.48	 	 	$	46,241.12	 

	51.	 	Operating Expenses:
	 
	 	 	Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent,
Lessee’s Share of all Operating Expenses, as hereinafter defined, during each
calendar year of the term of this Lease, in accordance with the following provisions:

A. “Operating Expenses” include all costs incurred by Lessor relating to the
ownership and operation of the Project, calculated as if the Project was at least 95%
occupied, including, but not limited to, the following:

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

	 	i.	 	The Common Areas, including their surfaces, coverings,
decorative items, parking areas, loading and unloading areas, trash
areas, roadways, sidewalks, walkways stairways, parkways, driveways,
landscaped areas, striping, bumpers, irrigation systems, Common Area
lighting facilities, building exteriors and roofs, fences and gates;
	 
	 	ii.	 	All heating, air conditioning, plumbing, electrical
systems, life safety equipment, communication systems and other
equipment used by Lessee, including tenant directories, fire detection
systems, sprinkler system maintenance, and repair.

(2) The cost of trash disposal, janitorial and security services, pest control
services, and the costs of any environmental inspections;

(3) The cost of any other service to be provided by Lessor that is elsewhere in
this Lease stated to be an “Operating Expense”;

(4) The cost of the premiums for the insurance policies maintained by Lessor,
including rental insurance, and any deductible portion of an insured loss
concerning the Building or the Common Areas;

(5) The amount of the Real Property Taxes payable by Lessor;

(6) The cost of water, sewer, gas, electricity, and other publically mandated
services not separately metered;

(7) Labor, salaries, and applicable fringe benefits and costs, materials,
supplies and tools, used in maintaining and/or cleaning the Project and
accounting and management fees attributed to the operation of the Project;

(8) The cost to replace equipment or capital components such as the roof,
foundations, or exterior walls, the cost to replace a Common Area capital
improvement, such as parking lot paving, elevators or fences, and/or the cost of
any capital improvement to the Building or Project. Provided however, that if
such equipment or capital component has a useful life for accounting purposes of
5 years or more that Lessor shall allocate the cost of any such capital
improvement over a 12 year period and Lessee shall not be required to pay more
than Lessee’s Share of 1/144th of the cost of such capital improvement in any
given month;

 1.

 

(9) The cost to replace equipment or improvements that have useful life for
accounting purposes of 5 years or less.

(10) Reserves set aside for maintenance, repair, and/or replacement of Common
Area improvements and equipment.

B. Any item of Operating Expense that is specifically attributable to the Premises,
the Building or to any other building in the Project or to the operation, repair and
maintenance thereof; shall be allocated entirely to such Premises, Building, or other
building. However, any such item that is not specifically attributable to the
Building or to any other building or to the operation, repair and maintenance
thereof, shall be equitably allocation by Lessor to all buildings in the Project.

C. The inclusion of the improvements, facilities and services shall not be deemed to
impose an obligation upon Lessor to either have said improvements or facilities or to
provide those services unless the Project already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide the
same or some of them.

D. Lessee’s share of Operating Expenses is payable monthly on the same day as the
Base Rent is due hereunder. The amount of such payments shall be based on Lessor’s
estimate of the Operating Expenses, Within 60 days after written request (but not
more than once each year) Lessor shall deliver to Lessee a reasonably detailed
statement showing Lessee’s Share of the actual Common Area Operating Expenses
incurred during the preceding year. If Lessee’s payments during such year exceed
Lessee’s Share, Lessor shall credit the amount of such over-payment against Lessee’s
future payments. If Lessee’s payments during such year were less than lessee’s Share,
Lessee shall pay to Lessor the amount of the deficiency with ten (10) days after
delivery by Lessor to Lessee of the statement.

E. Operating Expenses shall not include any expenses paid by any tenant directly to
third parties, or as to which Lessor is otherwise reimbursed by any third party,
other tenant, or by insurance proceeds.

F. Current estimates for Operating Expenses are $0.25 per square foot per month
(includes insurance, taxes, property management, and association common area
expenses). Lessor shall provide a cap on the annual expenses pass through to Lessee
for the normal and reasonable repair and maintenance of the roof equal to $6,000.00
per year. Any repairs and maintenance required to the roof as a result of Lessee’s
direct usage and access to the roof shall be exempt form this annual cap amount.
Lessor will institute a Roof Maintenance Program to be included within the $6,000.00
annual cap for Lessee for repairs and maintenance. If, after two (2) years, the
maintenance and repairs have exceeded $12,000.00, then Lessor shall replace said
roof. Lessee is responsible for all utilities and janitorial provided to their
premises.

	52.	 	Options to Renew:
	 
	 	 	Lessee shall have the option to extend the lease for three (3) additional one (1)
year terms. All terms and conditions of the lease shall remain the same during the
renewal period, except that Base Rent shall be ninety-five percent (95%) of the then
prevailing market rent. However, in no event shall the option periods’ commencing
rental rate be less than the last year of the previous term. Lessee shall exercise
its option by providing Lessor with written notice of its intent at least six (6)
months prior to the expiration of the current lease term.
	 
	53.	 	Right to Assign and Sublease:
	 
	 	 	Lessee shall have the right, subject to Lessor’s written consent, which shall not be
unreasonably withheld, delayed, or conditioned to sublease or assign any portion of
any space subsequently leased, at any time during the initial lease term and any
renewal periods. Any profits that Lessee realizes from the rent received from
subletting or assigning the premises shall be split equally between Lessor and
Lessee.
	 
	 	 	Any reorganization, merger, sale, partnership change, withdrawal or addition of a
partner, member, assignment, transfer or hypothecation of any partnership or other
ownership interest in Lessee that is greater than fifty percent (50%) or has a
controlling interest, will be deemed an Assignment or Sublease under the lease.
	 
	 	 	Neither the use by, nor the subletting to any subsidiary or affiliate of Lessee of
all or a portion of the premises will be deemed an assignment or sublease under the
lease, so long as said subsidiary or affiliate is not greater than fifty percent
(50%) of Lessee and does not have a controlling interest.
	 
	54.	 	Brokers:
	 
	 	 	Lessee and Lessor each represent and warrant that they have not been represented by
any other broker or agent in connection with the negotiation or execution of this
lease, except for Gallaway Commercial, Inc./Colliers International, who represents
Lessee and Cornish & Carey Commercial Real Estate, who represents Lessor. Lessee
shall indemnify and hold harmless Lessor from and against all claims (including costs
of defending against and investigating such claims) of any other broker or agent or
similar party claiming by, through or under Lessee in connection with this lease.
Lessor shall indemnify and hold harmless Lessee from and against all claims
(including costs of defending against and investigating such claims) of any other
broker or agent or similar party claiming by, through or used Lessor in connection
with this lease. After mutual execution hereof, Lessor shall pay to Gallaway
Commercial, Inc./Colliers International, a commission in an amount equal to four and
one-half percent (4.5%) of the Monthly base rent for months two (2) through sixty-one
(61). Fifty percent (50%) of commission shall be paid within thirty (30) days of
lease execution and fifty percent (50%) shall be paid within thirty (30) days of
occupancy.
	 
	55.	 	Commencement Date:
	 
	 	 	The Lease Commencement date shall be established as the date that Lessee Improvements
are substantially complete subject to Lessee delays as further described in the Work
Letter, Paragraph 10. . At such time that Lessor and Lessee have agreed on a general
contractor for the work to the Premises, both parties shall endeavor to mutually
agree on a reasonable timeline for the construction of the project (“Final
Construction Schedule”), which shall include the estimated completion date of
Lessee’s Improvements. The Final Construction Schedule shall be attached and made a
part of this lease and shall be referenced as Exhibit F to this Lease document.

 2.

 

	56.	 	Termination of the Lease:
	 
	 	 	Lessee shall have the right to cancel the lease with written notice in the event that
Lessee’s Improvements are not completed within sixty (60) calendar days after the
estimated completion date in the Final Construction Schedule (Exhibit F), subject to
Force Majeure and Lessee delays as specified in Exhibit C, paragraphs 11 and 12.
	 
	57.	 	Lessee Improvement Allowance:
	 
	 	 	Lessor shall provide Lessee improvements to the Premises per the attached Preliminary
Space Plan, attached and referenced as Exhibit E, subject to a mutually agreed final
construction cost estimate, which both parties shall endeavor to finalize within
fourteen (14) days of execution of the lease at a maximum total cost of $1,249,760.00
or $40.00 per usable square foot including architectural and engineering costs, and
permit fees. Lessee shall have the right to amortize up to an additional $156,220.00
or $5.00 per usable square foot using an interest rate of nine percent (9%) per annum
on the initial lease term.
	 
	 	 	Lessor shall secure a minimum of two (2) bids either from ICON General Construction,
DeKreek Construction or ASI Construction. Subject to Lessor’s approval, Lessee
Improvement work shall be awarded to the low, qualified bidder. Please reference
Exhibit C, the Work Letter Agreement, hereby attached for more details on the
construction of the Lessee Improvement work.
	 
	 	 	HVAC

Lessor shall be directly responsible for the cost of providing mechanical/HVAC units
in the same unit/tonnage capacity as to what currently exists at the building in good
working order at the Lease Commencement Date. Lessor acknowledges that this
requirement will require the replacement, and/or repair of many of the existing units
on the roof, and that this cost will be borne by Lessor, and not from Lessee’s
Improvement Allowance. To the degree that Lessee’s mechanical/HVAC requirement for
the premises surpasses the capacity that currently exists on the building, the cost
of any additional units and tonnage will be cost borne directly from Lessee’s
Improvement Allowance as specified in Paragraph 57.
	 
	 	 	ADA

Lessor will be responsible at Lessor’s sole cost and expense for applicable ADA work
to the exterior entry and walkways of the Premises.
	 
	58.	 	Signage:
	 
	 	 	Lessor shall provide Lessee with monument signage rights. Lessee shall be responsible
with all costs associated with design, fabrication, installation, maintenance, and
removal at lease termination of all signage. Lessee shall be directly responsible for
making sure the signage conforms to all applicable zoning, and CC&Rs for the business
park. Additionally, all signage shall be subject to Lessor’s written approval, which
shall not be unreasonably withheld or delayed.
	 
	59.	 	First Right of Refusal:
	 
	 	 	Lessee shall have a First Right of Refusal, after the execution of the lease, for
space that is currently available or that may come available during the initial term
of the lease in Lessor’s adjacent building at 181 Blue Ravine Road. Lessor shall
notify Lessee of its receipt of an acceptable written offer for available space and
Lessee shall have forty-eight (48) hours within to notify Lessor of its interest to
lease said space, and an additional forty-eight (48) hours from Lessor’s receipt of
Lessee’s interest in the space for mutually agreeable terms to be met between the
parties.
	 
	60.	 	Roof Rights:
	 
	 	 	Lessee shall have the right to install a satellite dish, antenna, or other business
related equipment subject to Lessor’s approval which shall not be unreasonably
withheld. All costs associated with installation, maintenance, and removal at lease
termination will be Lessee’s sole responsibility.
	 
	61.	 	Surveillance:
	 
	 	 	Lessee shall have the right to install surveillance equipment on the exterior of the
building subject to Lessor’s approval which shall not be unreasonably withheld. All
costs associated with the installation, monitoring, and servicing of surveillance
system serving Lessee’s Premises will be Lessee’s sole responsibility.
	 
	62.	 	Insurance:
	 
	 	 	Lessee shall during the Lease term, at its sole expense, maintain in full force
general liability insurance issued by one or more insurance carriers, insuring
against liability for injury to death of persons and loss of or damage to property
occurring in and on the Premises. Such liability insurance shall name Lessor as an
additional insured. The coverage limits for such liability insurance shall be at
least Three Million and 00/100 Dollars ($3,000,000.00) combined single limits for
bodily injury and property damage per occurrence. Lessee shall provide to Lessor,
throughout the lease term, a current Certificate of Insurance indicating that Lessor
is an additional insured in the amounts specified herein. Said insurance shall be
from an insurance carrier with a rating of “A” or better from the most recent edition
of Best Insurance Reports. Lessee shall provide a certificate upon execution of the
lease , and annually upon request.
	 
	 	 	Lessor shall maintain fire and extended coverage, public liability and property
insurance to adequately cover the value of the Facility and Premises.
	 
	 	 	Lessor and Lessee may comply with their insurance obligations hereunder by
endorsement to any blanket policy of insurance. Lessor and Lessee shall deliver to
each other certificates issued by the insurance carrier or carriers for each
liability policy insurance they are required to maintain by this Lease within twenty
(20) days after request therefore. Such certificates shall be renewed within thirty
(30) days of the expiration of any policy periods evidenced on the certificates. Any
insurance required by this Article to be procured by one party for the benefit of
another party shall contain a provision that the insurance cannot be terminated
without thirty (30) days prior written notice to the other party. All insurance
required of a party under this Agreement shall be maintained with insurance companies
qualified to do business in the state in which the Premises are located and otherwise
reasonably acceptable to the other party.

 3.

 

	63.	 	Indemnity:
	 
	 	 	Except for the Indemnitee’s gross negligence or willful misconduct, Lessee and Lessor
(each an “Indemnitor” when providing indemnity hereunder) will indemnify the other
(each an “Indemnitee”) against, and hold Indemnitee harmless from , all claims,
liabilities, demands or causes of action, including all reasonable expenses of the
Indemnitee incidental thereto, for injury to or death of any person and damage to any
property arising within or on the Facility, including the Premises, and caused by
Indemnitor’s (i) failure to fulfill and faithfully perform its obligations under this
Lease, or (ii) negligent act or omission or the negligent act or omission of any
employee or agent of Indemnitor. The liability of Indemnitor to indemnify Indemnitee
as herein above set forth shall not extend to any matter against which Indemnitee
shall be required to be effectively protected by insurance pursuant to the terms of
this Lease, provided that, if any such liability shall exceed the amount of the
effective and collectible insurance in question, the liability of Indemnitor shall
apply to such excess.
	 
	64.	 	Parking:
	 
	 	 	Parking is provided by Lessor at a ratio of approximately 3.5 spaces per 1,000 square
feet free of charge during the lease term.
	 
	65.	 	Permitted Chemicals:
	 
	 	 	Lessee to provide a list of the chemicals it is storing at the Premises to Lessor and
shall be solely responsible for obtaining any required permits from applicable
governmental entities in said regard.
	 
	66.	 	Mediation:
	 
	 	 	In the event that a good faith dispute arises regarding the performance of any
obligation hereunder by either party, or the interpretation of this Agreement
affecting obligations, Lessor and Lessee shall engage in management negotiations in
an attempt to resolve the dispute.
	 
	 	 	If after a thirty (30) day period of management negotiations between authorized party
representatives the matter is not fully settled, then the parties shall jointly refer
the matter to non-binding private mediation under the auspices of the Judicial
Arbitration and Mediation Service (“JAMS”) rules for small commercial disputes, by
that organization’s San Francisco offices. The mediation shall be conducted as soon
as practicable, and be heard by a single mediator chosen by JAMS for that purpose, at
a mutually agreeable site in San Francisco or the East Bay area. Each party shall
bear its own costs of mediation, regardless of the outcome of the proceeding, and
shall comply with the results of any successful mediation.
	 
	 	 	In the event that the parties are unable to reach agreement in non-binding mediation,
the parties shall immediately convert the proceedings to binding arbitration before
the same single mediator/arbitrator for a decision on the merits. Each side shall be
entitled to conduct limited discovery of the other as permitted by JAMS rules for
small commercial arbitrations. Each side shall bear its own expenses. Notwithstanding
anything to the contrary in this Agreement, the arbitrator shall be empowered to
award reasonable attorney’s fees and costs to the prevailing party if circumstances
support doing so in the interests of fairness. The arbitrator’s award shall be
binding on the parties, and shall be memorialized by a written arbitral award,
including the findings of fact upon which such award shall be based.
	 
	 	 	By their agreement to this three tier Disputes regime, the parties knowingly and
intentionally waive their respective rights to trial on the merits, and agree that
the prevailing party may only have access to the California courts in order to
perfect the arbitral award.
	 
	67.	 	Guarantor Assurance:
	 
	 	 	Lessee agrees to post an adjustable Letter of Credit in the amount of $600,000.00
within ten (10) business days of the execution of this lease, in order to secure the
value of Lessor provided leasehold improvements to be made prior to the lease
commencement date. The Letter of Credit shall not diminish in value until twenty-four
(24) months after the Lease Commencement Date, and thereafter shall automatically be
reduced 25% per annum ($150,000.00) at the start of the 25th,
37th, 49th, and 61st month of this lease or any
extension thereof. This lease shall be null and void in the event the Letter of
Credit is not posted within ten (10) business days of the last signatory of this
lease.

Agreed and Acknowledged:

			
	Lessor:	 	88 12, A CALIFORNIA LIMITED PARTNERSHIP, DBA

GARAVENTA PROPERTIES

	 	 	 	 	 	 	 
	By:

	 	/s/ Joseph Garaventa
 

Joseph Garaventa, its COO
	 	 	 	Date: June 2, 2008 

			
	Lessee:	 	ENDWAVE CORPORATION, A DELAWARE

CORPORATION

	 	 	 	 	 	 	 
	By:

	 	/s/ John J. Mikulsky
 

	 	 	 	Date: May 29, 2008 
	 
	 	 	 	 	 	 
	By:

	 	/s/ James R. Crossen
 

	 	 	 	Date: May 29, 2008 

 4.

 

Exhibit 10.24

RULES AND REGULATIONS FOR

STANDARD OFFICE LEASE

Dated: May 20, 1008

By and Between 88 12 , a California limited partnership, dba Garaventa Properties, as Lessor, and
Endwave Corporation, a Delaware corporation, as Lessee

GENERAL RULES

     1. Lessee shall not suffer or permit the obstruction of any Common Areas, including driveways,
walkways and stairways.

     2. Lessor reserves the right to refuse access to any persons Lessor in good faith judges to be
a threat to the safety and reputation of the Project and its occupants.

     3. Lessee shall not make or permit any noise or odors that annoy or Interfere with other
lessees or persons having business within the Project.

     4. Lessee shall not keep animals or birds within the Project, and shall not bring bicycles,
motorcycles or other vehicles Into areas not designated as authorized for same.

     5. Lessee shall not make, suffer or permit litter except in appropriate receptacles for that
purpose.

     6. Lessee shall not alter any lock or Install new or additional locks or bolts.

     7. Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing or
other utilities. No foreign substances of any kind are to be inserted therein.

     8. Lessee shall not deface the walls, partitions or other surfaces of the Premises or Project.

     9. Lessee shall not suffer or permit anything in or around the Premises or Building that
causes excessive vibration or floor loading In any part of the Project.

     10. Furniture, significant freight and equipment shall be moved into or out of the building
only with the Lessor’s knowledge and consent, and subject to such reasonable limitations,
techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any damage
to the Office Building Project arising from any such activity.

     11. Lessee shall not employ any service or contractor for services or work to be performed in
the Building, except as approved by Lessor.

     12. Lessee shall return all keys at the termination of its tenancy and shall be responsible
for the cost of replacing any keys that are lost.

     13. No window coverings, shades or awnings shall be installed or used by Lessee.

     14. No Lessee, employee or invitee shall go upon the roof of the Building without prior
consent or Lessor or Lessor’s property manager.

     15. Lessee shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in
areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas.

     16. Lessee shall not use any method of heating or air conditioning other than as provided by
Lessor.

     17. Lessee shall not install, maintain or operate any vending machines upon the Premises
without Lessor’s written consent.

     18. The Premises shall not be used for lodging.

     19. Lessee shall comply with all safety, fire protection and evacuation regulations
established by Lessor or any applicable governmental agency.

     20. Lessor reserves the right to waive any one of these rules or regulations, and/or as to any
particular Lessee, and any such waiver shall not constitute a waiver of any other rule or
regulation or any subsequent application thereof to such Lessee.

     21. Lessee assumes all risks from theft or vandalism and agrees to keep its Premises locked as
may be required.

     22. Lessor reserves the right to make such other reasonable rules and regulations as it may
from time to time deem necessary for the appropriate operation and safety of the Project and its
occupants. Lessee agrees to abide by these and such rules and regulations.

PARKING RULES

     1. Parking areas shall be used only for parking by vehicles no longer than full size,
passenger automobiles herein called “Permitted Size Vehicles.” Vehicles other than Permitted Size
Vehicles are herein referred to as “Oversized Vehicles.”

     2. Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or
Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or parked
in areas other than those designated by Lessor for such activities.

     3. Lessor reserves the right to refuse the sale of monthly identification devices to any
person or entity that willfully refuses to comply with the applicable rules, regulations, laws
and/or agreements.

     4. Lessor reserves the right to relocate all or a part of parking spaces from floor to floor,
within one floor, and/or to reasonably adjacent offsite location(s), and to reasonably allocate
them between compact and standard size spaces, as long as the same complies with applicable laws,
ordinances and regulations.

     5. Users of the parking area will obey all posted signs and park only in the areas designated
for vehicle parking.

     6. Unless otherwise instructed, every person using the parking area is required to park and
lock his own vehicle. Lessor will not be responsible for any damage to vehicles, Injury to persons
or loss of property, all of which risks am assumed by the party using the parking area.

     7. Validation, if established, will be permissible only by such method or methods as Lessor
and/or its licensee may establish at rates generally applicable to visitor parking.

     8. The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common
Areas Is prohibited.

     9. Lessee shall be responsible for seeing that all of its employees, agents and invitees
comply with the applicable parking rules, regulations, laws and agreements.

     10. Lessor reserves the right to modify these rules and/or adopt such other reasonable and
non-discriminatory rules and regulations as it may deem necessary for the proper operation of the
parking area.

 1.

 

     11. Such parking use as is herein provided is intended merely as a license only and no
bailment Is intended or shall be created hereby.

NOTICE: These forms are often modified to meet changing requirements of law and industry needs.
Always write or calf to make sure you are utilizing the most current form: AIR Commercial Real
Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213)
687.8777. Fax No.: (213) 687-8616.

 2.

 

Exhibit 10.24

[LETTERHEAD OMITTED]

SITE PLAN

EXHIBIT A

105 LAKE FOREST WAY

SITE PLAN

[GRAPHIC OMITTED]

 1.

 

Exhibit 10.24

[LETTERHEAD OMITTED]

LEASE COMMENCEMENT CONFIRMATION

EXHIBIT B

105 LAKE FOREST WAY

LEASE COMMENCEMENT CONFIRMATION

As required under the Lease Agreement (the “Lease”) dated May 20, 2008, between the undersigned
parties for space located in the Lake Forest Business Park, in the City of Folsom, County of
Sacramento, State of California, the undersigned hereby establish and agree that the term of the
Lease, commences on November 1, 2008 and expires on November 30, 2013.

Agreed and Acknowledged:

Lessor: GARAVENTA PROPERTIES, a DBA of 88 12, A CALIFORNIA LIMITED PARTNERSHIP

By: 8812, A CALIFORNIA LIMITED LIABILITY COMPANY

	 	 	 	 	 	 	 
	By:

	 	/s/ Joseph Garaventa
 

Joseph Garaventa, its COO
	 	 	 	Date: June 2, 2008 

Lessee:
 ENDWAVE CORPORATION, A DELAWARE CORPORATION

	 	 	 	 	 	 	 
	By:

	 	/s/ John J. Mikulsky
 

	 	 	 	Date: May 29, 2008 
	 
	 	 	 	 	 	 
	By:

	 	/s/ James R. Crossen
 

	 	 	 	Date: May 29, 2008 

 1.

 

Exhibit 10.24

[LETTERHEAD OMITTED]

WORK LETTER

EXHIBIT C

105 LAKE FOREST WAY

WORK LETTER

(“Turn Key”)

This work letter (“Work Letter”) is attached as Exhibit C to that certain Standard
Industrial/Commercial Single-Tenant Lease dated May 20, 2008 (the “Lease”) by and between 88 12, a
California limited partnership, dba Garaventa Properties, as Lessor, and Endwave Corporation, a
Delaware corporation, as Lessee. Lessor shall cause Substantial Completion (as such term is defined
in the Lease Addendum) of ( “The Improvements”) approved by Lessor and Lessee in accordance with
this Work Letter, by November 1, 2008 (the “Estimated Commencement Date”).

     1. DEFINITIONS. Unless otherwise defined in this Work Letter, the capitalized terms used
herein shall have the meaning assigned to them in the Lease.

     2. REPRESENTATIVES. Lessor hereby appoints Bob Hammons as Lessor’s representative to act for
Lessor in all matters covered by this Work Letter. Lessee hereby appoints Patrick O’Sullivan as
Lessee’s representative to act for Lessee in all matters covered by this Work Letter. All
inquiries, requests, instructions, authorizations and other communications with respect to the
matters covered by this Work Letter shall be related to Lessor’s representative or Lessee’s
representative, as the case may be. Lessee will not make any inquiries of or request to, and will
not give any instructions or authorizations to, any other employee or agent of Lessor, including
Lessor’s architects, engineers, and contractors or any of their agents or employees, with regard to
matters covered by this Work Letter. Either Lessor or Lessee may change its representative at any
time by written notice to the other.

     3. LESSEE SPACE PLAN AND THE IMPROVEMENT ALLOWANCE. Lessor and Lessee hereby approve the
preliminary space layout and improvement plan for the Premises, including Lessee’s design criteria
and signage (“Lessee Space Plan”) attached to the Lease as Exhibit “E”. Lessor, at Lessor’s sole
cost and expense, shall cause The Improvements to be Substantially Complete per the final
Construction Schedule, provided that Lessor shall not be obligated to pay in excess of
$1,405,980.00 (the “Allowance”) per Addendum, Paragraph 57, The Improvements.

     4. WORKING DRAWINGS. Based upon the approved Lessee Space Plan, Lessor will, through Lessor’s
architect or space planner, cause working drawings and specifications for The Improvements
(collectively “Working Drawings”) to be prepared and submitted to Lessee for approval by Lessee
prior to the formal submittal of the permit application to the City of Folsom. Lessee shall have
ten (10) days following receipt of the Working Drawings to approve or disapprove in writing. If
Lessee disapproves any portion of the Working Drawings, Lessor shall cause the Working Drawings to
be revised and shall re-submit them to Lessee for approval and Lessee shall have ten (10) days
following receipt to approve or disapprove in writing. Lessee’s failure to respond within such time
shall be deemed approval. The Working Drawings will be prepared by Lessor at Lessor’s sole cost and
expense. The Working Drawings will include all architectural, mechanical and electrical engineering
plans required for the issuance of permits and the completion of the Lessor’s Work, including,
without limitation, complete detailed plans and specifications for Lessee’s partition layout,
ceiling, heating and air conditioning, electrical outlets and switches, telephone outlets,
plumbing, fire sprinklers and finish specifications. It is further agreed that all plans and
specifications referred to in this Paragraph 4 are subject to Lessor and Lessee’s approval, which
shall not be unreasonably withheld, conditioned or delayed.

     5. APPROVAL OF BUDGET. Lessor shall coordinate the completion of cost analysis/budget
estimates at each significant phase (conceptual design, design development, and Working Drawings)
(each a “Budget”), and shall submit the estimates for Lessee’s approval. Lessee shall have five (5)
working days following receipt of the proposed Budget to approve or disapprove in writing. The term
"Projected Construction Cost” of the Lessor’s Work shall mean the total cost shown on the most
recent Budget presented by Lessor to Lessee. At each stage following Lessor’s submittal of a
proposed Budget for Lessee’s approval Lessee may elect either to: (a) approve any revised Budget
subsequently submitted by Lessor, or (b) request redesign efforts by the architect/engineer to
reduce the Projected Construction Cost to an amount reasonably acceptable to Lessee. If Lessee
elects the latter alternative, Lessor shall cause the architect/engineer to cooperate in revising
the scope and quality of the Lessor’s Work to effect the required cost reductions. Lessor shall
cause architect/engineer to render such redesign.

     6. EFFECT OF APPROVAL; AUTHORIZATION TO PROCEED. Lessee’s approval of Working Drawings
(initial or revised) will constitute Lessee’s acknowledgment that such Working Drawings correctly
depict the proper layout and design for any and all work to the Premises. Lessee’s written approval
of the Working Drawings and the Budget will constitute authorization to Lessor to proceed with and
complete construction of Lessee Improvements in the Premises. All of the Improvements called for by
the Working Drawings will be performed by Lessor’s contractors engaged by Lessor. Following
approval of the Working Drawings, Lessor will submit the Working Drawings to the appropriate
governmental authorities for necessary approvals and building permits.

     7. CHANGE ORDERS. Lessee may authorize changes in the Working Drawings and/or The Improvements
during construction only by written instructions to Lessor’s representative on a form reasonably
approved by Lessor. Also, such changes will be subject to Lessor’s prior written approval, which
shall not be unreasonably withheld, conditioned or delayed. Before commencing any change, Lessor
will prepare and deliver to Lessee, for Lessee’s written approval, the change order setting forth
the cost of such change, which will include associated architectural, engineering and construction
fees, if any, and the cost of such change for Lessor’s contractor’s overhead. If Lessee fails to
approve in writing such change order within three (3) working days, Lessee will be deemed to have
withdrawn the proposed change and Lessor will not proceed to perform that change. If Lessee timely
approves in writing such change order, Lessee will within ten (10) days of Substantial Completion
of the The Improvements, pay to Lessor any amounts payable in connection with such change orders,
to the extent Lessor

 1.

 

provides back-up information showing that such change order resulted in an increase over the
Projected Construction Cost set forth in the Budget most recently approved by Lessee.

     8. ACCESS TO THE PREMISES PRIOR TO DELIVERY. Lessor shall allow Lessee and its contractors to
enter the Premises at reasonable times prior to the Commencement Date to permit Lessee to install
cabling for telephone, computers, work stations and security system, or other work, if any;
provided, however, that prior to such entry into the Premises, Lessee shall provide evidence
reasonably satisfactory to Lessor that the insurance required to be carried by Lessee, pursuant to
the Lease shall be in full force and effect at the time of such entry. Lessee and its
representatives shall not interfere with Lessor or Lessor’s contractor in completing The
Improvements and Lessee and its representatives shall be subject to all reasonable directives of
Lessor and Lessor’s contractors in connection with such entry as well as the use of common areas,
restrooms and other facilities. Prior to the commencement of any construction in the Premises,
Lessee shall provide Lessor’s representative a proposed work schedule for Lessee’s contractors and
other representatives, which schedule shall be subject to Lessor’s reasonable approval. Except to
the extent arising from the gross negligence or willful misconduct of Lessor or its employees,
contractors, agents or invitees, Lessee agrees that Lessor shall not be liable in any way for any
injury, loss or damage which may occur to any of Lessee’s property placed upon or installed in the
Premises prior to the Lease Commencement Date, the same being at Lessee’s sole risk, and Lessee
shall be liable for all injury, loss or damage to persons or premises arising as a result of such
entry of the Premises by Lessee or its representatives.

     9. ALTERATIONS. Any alterations or improvements performed by Lessee after Lessor’s delivery of
the Premises shall be subject to the provisions of the Lease.

     10. COMPLETION AND COMMENCEMENT DATE. In the event any of the following (each a “Lessee
Delay”) shall cause a delay in the Substantial Completion of The Improvements, the Lease
Commencement Date shall be adjusted to the date that Substantial Completion would have occurred,
but for the Lessee’s Delay:

	 	(a)	 	Lessee’s failure to timely supply information necessary to complete the
Working Drawings or revisions to such drawings;
	 
	 	(b)	 	Lessee’s change order after approval of the Working Drawings;
	 
	 	(c)	 	modifications, revisions and changes to the Working Drawings requested by
or on behalf of Lessee after approval by Lessee;
	 
	 	(d)	 	orders to halt or delay The Improvements given by or on behalf of Lessee;
	 
	 	(e)	 	any delay in the Substantial Completion of The Improvements caused by
Lessee’s contractors or materials suppliers involved in constructing The
Improvements.

     11. FORCE MAJEURE. This Work Letter is subject to force majeure (“Force Majeure”) which shall
mean any delay of Lessor or Lessee’s obligations under this Work Letter beyond the reasonable
control of such party for such events as (“Force Majeure Event”) acts of God, fire, flood,
earthquake, acts of public enemy, riot, war, acts of terrorism, insurrection, unavailability of
materials, governmental restrictions on the sale of materials or supplies, strike directly
affecting construction or transportation of materials or supplies, unusual weather conditions
and/or, as to governmental approvals or permits, Lessor is obligated to obtain unusual governmental
delays in granting requisite approvals or issuance of permits throughout the construction process
or any similar matters.. A Force Majeure Event shall extend the time period set forth in this Work
Letter for completion of the affected party’s obligations by the number of days that party has thus
been delayed; provided however, that in no event shall any provision of this Work Letter, other
than the provisions relating to Lessee Delay, diminish Lessee’s right to terminate the Lease if
Landlord shall have failed to deliver the Premises to Lessee by ninety (90) days the date for
completion of The Financed Improvements in the final Construction Schedule.

     12. LESSEE RESPONSIBILITY. Lessee shall pay for all costs of the Lessor’s Work in excess of
the $1,405,980.00 and shown on a Budget approved by Lessee, within thirty (30) days after
Substantial Completion

The Improvements and Lessee’s receiving an invoice and appropriate back-up therefore. The foregoing
notwithstanding, under no circumstances shall Lessee be responsible for such change order costs
(and Lessor shall bear such excess costs) if (i) such change orders were made by Lessor not Lessee,
or (ii) such costs arise from structural, subsurface or other conditions not reasonably anticipated
by Lessee in agreeing to the amount of the Base Rent.

     13. WORK LETTER WARRANTIES. Lessor warrants that all Lessor’s Work and the materials used to
complete Lessor’s Work (i) shall substantially conform to the Lessee Space Plan and the Working
Drawings approved by Lessee, and (ii) shall be free from defects in material and workmanship, for a
period of one (1) full year from the date of Substantial Completion or for the duration of any
third-party warranty applicable to said work if longer. Lessor shall accordingly promptly repair or
replace any such nonconforming defective work or material evidenced within such one (1) year
period, or cause the same to be repaired if within any third-party warranty period. Lessor shall
make available to Lessee the benefit of any warranties of third parties with respect to Lessor’s
Work (to the extent Lessee is responsible for maintaining such items in accordance with the Lease).
All warranties that Lessor is required to obtain shall be commercially reasonable. Upon Substantial
Completion of Lessor’s Work, Lessor shall provide Lessee with all original warranties required
hereunder related to Lessor’s Work.

     14. SUBSTANTIAL COMPLETION. As used herein, “Substantial Completion” of Lessor’s Work means
Lessor has materially satisfied fully all of the following conditions with respect to the Lessor’s
Work.

	 	(a)	 	the governmental body having jurisdiction of the Premises shall have
inspected the Premises and issued a Certificate of Occupancy or a similar certificate
indicating that Lessee is legally entitled to occupy the Premises if such certificate
is not then available; provided, however, if such governmental body has not issued a
Certificate of Occupancy or a similar certificate because of a Lessee Delay, Lessor’s
Work shall be deemed to be Substantially Completed on the date it would have been
Substantially Complete but for such Lessee Delay. Lessor shall reasonably cooperate
with Lessee in obtaining a Certificate of Occupancy; provided, however, if the
applicable governmental entity requires Lessor to obtain the Certificate of Occupancy
then Lessor will obtain such Certificate of Occupancy and Lessee shall reasonably
cooperate in connection therewith;
	 
	 	(b)	 	Lessor shall have furnished to Lessee a certificate (executed by Lessor and
Lessor’s architect) stating that Lessor’s Work complies with all applicable federal,
state, and local Laws and that the construction of the Lessor’s Work has been
completed in accordance with the final Lessee Space Plan and Working Drawings
approved by Lessee in accordance with this Work Letter;

 2.

 

	 	(c)	 	The roof, foundation, structural components, and all building systems
serving the Premises are functioning and in good working order and repair; and
	 
	 	(d)	 	The Premises is in compliance with all laws at the time of permit issuance.

If there is any dispute between Lessor and Lessee as to whether the Lessor’s Work has been
Substantially Completed a certificate from an architect reasonably acceptable to both parties,
stating that the Lessor’s Work is Substantially Complete, as defined herein, shall be deemed to be
conclusive evidence that Lessor’s Work has been Substantially Completed.

     15. LESSEE INSPECTION. Lessee shall be entitled to inspect the construction of The
Improvements as it progresses at all reasonable times, and Lessor shall permit Lessee access during
the construction of Lessor’s Work.

     16. QUALITY OF CONSTRUCTION. It shall be Lessor’s sole responsibility to ensure that the
Working Drawings take into account the features of the Building and the Premises and Lessor’s sole
responsibility to cause The Improvements to be constructed in accordance with such Working Drawings
approved by Lessee as required by this Work Letter. Lessor agrees to correct, at its sole cost and
expense, any portion of The Improvements that does not substantially conform to the Working
Drawings which is brought to Lessor’s attention and to indemnify and hold Lessee harmless from any
and all losses, damages, claims, or liabilities incurred by Lessee or any third party as a result
of any portion of The Improvements not conforming to such Working Drawings. Any inspection of The
Improvements by Lessee during or after the performance of the The Improvements shall not constitute
a waiver of or relieve Lessor of this ultimate responsibility. It shall further be Lessor’s sole
responsibility to construct all of The Improvements in accordance with all laws and any and all
covenants or agreements applicable to the Building. The Improvements shall be constructed by Lessor
in a good and workmanlike manner using all new materials and equipment, in accordance with the
Working Drawings approved by Lessee as required by this Work Letter and, when finished, shall be in
a first class condition reasonably comparable to similar facilities being constructed in the
Folsom, California area.

     17. LESSOR REPRESENTATIONS. Lessor hereby represents and warrants to Lessee as follows:

          (a) Lessor has substantial experience and has qualified staff available to perform all
necessary tasks in connection with the terms of this Work Letter, including but not limited to,
locating, designing, acquiring, building, and obtaining permits for such projects.

          (b) Lessor shall submit all applicable plans, drawings and specifications to all governmental
authorities, architectural control committees and similar entities or agencies whose approval of
Lessor’s Work is required under any laws of any governmental authority or agency having or claiming
to have jurisdiction over the Premises and the orders and directions of any court, governmental
agency or authority having or claiming jurisdiction over the Premises and all of the necessary
approvals, permits and authorizations have been obtained from all such authorities and entities or,
if not yet obtained, will be obtained in a timely manner so as to permit the construction of the
Premises in accordance with the terms and conditions set forth herein.

          (c) To the best of Lessor’s knowledge and belief, based upon adequate investigation and due
diligence, there is no existing default by Lessor under any contract, document or instrument
relating to development or construction of the Project [Note: Be sure the term “Project” is defined
in the body of the Lease or an Addendum.], and there is no provision in any such contract, document
or instrument which would have an adverse effect on Lessor’s ability to fulfill its obligations to
Lessee under this Work Letter.

          (d) Lessor’s Building has full and free access to and from public highways, streets or roads
as shown on the Site Plan attached to the Lease as Exhibit “A”, all of which are open to the
public.

          (e) All water, sewer or waste water treatment system, gas, electric, telephone, drainage and
other utility equipment, facilities and services required by laws or necessary for the operation of
Lessor’s Building as contemplated by the Lease will be adequate to service the Premises for the use
intended by Lessee. Electric and gas will be separately metered to the Premises.

          (f) Currently and upon Substantial Completion of The Improvements, Lessor’s Building will
comply with all public and private agreements, covenants, conditions, reservations, restrictions,
except for those which must be covered by affirmative title insurance coverage (“Restrictions”),
zoning ordinances and other laws, and Lessor shall deliver or cause to be delivered to Lessee
evidence satisfactory to Lessee that zoning ordinances, subdivision laws, other land use laws and
permits and laws are being and shall be complied with and that all permits required for the
construction and operation of the Building have been or will be issued and obtained in order to
satisfy the Lessee timetable and schedule with respect to Substantial Completion of Lessor’s Work.

          (g) The general contractor performing The Improvements (a) will be fully licensed by the
appropriate governmental authorities to perform the Lessor’s Work and otherwise fulfill their
obligations hereunder, (b) shall carry adequate liability insurance to protect Lessee and Lessor
from the claims of third parties with respect to construction of Lessor’s Work, and (c) shall carry
a bond, if required by law.

          (h) Lessor shall deliver the Premises to Lessee free of liens.

     18. APPROVALS. Lessor shall be responsible for coordinating and obtaining any approvals that
may be needed from architectural control committees and the like relating to any covenants,
conditions, restrictions or reservations that may encumber the Land.

     19. AFFIDAVIT AND LIEN WAIVERS. Within ninety (90) days after the date on which all work to
the premises is Substantially Complete Lessor shall deliver to Lessee, and Lessee shall deliver to
Lessor as may be appropriate, the following: an affidavit of any general contractor performing work
in the premises, stating that the general contractor and all subcontractors, laborers and
materialmen who have performed work on or furnished materials to the Premises (whose names and
addresses shall be recited in the affidavit) have been paid in full and that all liens therefore
that have been or might be filed have been

 3.

 

discharged of record or waived (or if not paid, an affidavit setting forth the reasons why the
general contractor has not paid its subcontractor, materialmen or laborers).

	 	 	 	 	 	 	 	 	 	 	 
	LESSEE: Endwave Corporation	 	 	 	LESSOR: Garaventa Properties,

a dba of 88 12, a California

limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ John J. Mikulsky	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	John J. Mikulsky
	 	 	 	Name:
	 	/s/ Joseph Garaventa	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Joseph Garaventa, its COO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Exec. Vice-President/COO
	 	 	 	Title:
	 	COO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	May 29, 2008
	 	 	 	Date:
	 	June 2, 2008	 	 

 4.

 

Exhibit 10.24

[LETTERHEAD OMITTED]

EXCLUSIONS TO OPERATING EXPENSES

EXHIBIT D

105 LAKE FOREST WAY

EXCLUSIONS TO OPERATING EXPENSES

Lessor’s operational costs shall not include expenses incurred for business interruption or
rental value insurance or:

	A.	 	Legal fees, brokerage fees, leasing commissions, advertising costs of other related expenses
incurred by Lessor in connection with the leasing of the premises or any other space in the
building/park.
	 
	B.	 	Repairs, alterations, additions, improvements for replacements made to rectify or correct any
defect in the original design, material or workmanship of the building or common areas.
	 
	C.	 	Damage and repairs attributable to fire or other casualty.
	 
	D.	 	Damage and repairs necessitated by the negligence or willful misconduct of Lessor, Lessor’s
employees, contractors or agent.
	 
	E.	 	Executive salaries or salaries of service personnel to the extent that such personnel perform
services not solely in connection with the management, operations, repair or maintenance of
the building.
	 
	F.	 	Lessor’s general overhead expenses not related to the building.
	 
	G.	 	Legal fees, accounting fees, and other expenses incurred in connection with disputes with
tenants or occupants of the building or associated with the enforcement of the terms of any
leases with tenants or the defense of Lessor’s title to or interest in the building.
	 
	H.	 	Costs incurred due to violation by Lessor or any other Lessee of the building to the terms
and conditions of the lease.
	 
	I.	 	Costs (including permits, licensing and inspection fees) incurred in renovating or otherwise
improving, decorating, painting or altering space of Lessees or other occupants, or of vacant
space (excluding common areas) in the building.
	 
	J.	 	Any other real estate operating expense, which, under generally accepted accounting
principles would not be considered a reasonable maintenance and operating expense. Lessor
shall not collect in excess of 100% of operating expense and shall not recover the cost of any
items more than once. Endwave Corporation to have the right to audit Lessor’s statements in
the event of a dispute involving operating expenses.
	 
	K.	 	Salaries of building management personnel who perform services solely connected with the
management, operations, repair or maintenance of building shall not exceed three percent (3%)
of the gross revenue.
	 
	L.	 	Alterations, additions, improvements or replacements made to HVAC and any other parts of the
roof. Repairs and maintenance of the roof shall be capped at $6,000.00 per year (reference
Paragraph 51 of the Lease Addendum).
	 
	M.	 	Any payments and any increase in such payments payable by Lessor with respect to any debts
secured by a deed to secure or mortgages on the building or property.
	 
	N.	 	Amortization, debt service, or other payments on loans to Lessor.
	 
	O.	 	Depreciation on building.
	 
	P.	 	The cost incurred in performing work for furnishing services for individual tenants, which
work or services are in excess of work and services provided to such Lessee under the lease.
	 
	Q.	 	All costs incurred which are subject to reimbursement by other Lessees of the building or
other parties, including expenses for repair or replacement paid by proceeds of insurance or
at condemnation awards.

 1.

 

Exhibit 10.24

[LETTERHEAD OMITTED]

SPACE PLAN

EXHIBIT E

105 LAKE FOREST WAY

PRELIMINARY SPACE PLAN

[GRAPHIC OMITTED]

 1.

 

 

Exhibit 10.24

[LETTERHEAD OMITTED]

FINAL CONSTRUCTION SCHEDULE

EXHIBIT F

105 LAKE FOREST WAY

FINAL CONSTRUCTION SCHEDULE

 1.

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