Document:

Exhibit 10.35

 

STANDARD FORM LEASE

 

1.             Basic
Provisions

 

1.1          Parties:
This Lease, executed in duplicate at Sunnyvale, California, on July 19,
2010, by and between Mission West Properties, L.PI., a Delaware limited
partnership, and Mosys, Inc., a Delaware corporation, hereinafter called
respectively Lessor and Lessee, without regard to number or gender.

 

1.2          Letting: Lessor hereby
leases to Lessee, and Lessee hires from Lessor, the Premises, for the term, at
the rental and upon all the terms and conditions set forth herein.

 

1.3          Use: Lessee may use
the Premises for the purpose of conducting therein office, research and
development, light manufacturing, and warehouse activities, and any other legal
activity.

 

1.4          Premises: The real
property with appurtenances as shown on Exhibit A (the “Premises”)
situated in the City of Santa Clara, County of Santa Clara, State of
California, and more particularly described as follows:

 

The
Premises are 46,886 square feet of a 64,500 square foot building, including all
improvements thereto as shown on Exhibit A.1 including the right to use up
to 170 unreserved parking spaces.  The
address for the Premises is 3301 Olcott Street, Santa Clara, California
95054.  Lessee’s pro-rata share of the
Premises is 72.69% (46,886/64,500).

 

1.5          Term: The term shall
be for One Hundred Twenty (120) months unless extended pursuant to Section 35
of this Lease (the “Lease Term”), commencing on the Commencement Date as
defined in Section 1.11 and ending One Hundred Twenty (120) months
thereafter.

 

1.6          Rent: Rent shall be
payable in monthly installments as follows:

 

	
   

  	
   

  	
  Base Rent*

  	
   

  	
  Estimated CAC**

  	
   

  	
  Total Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug 1, 2010-Jul 31, 2011

  	
   

  	
  $

  	
  49,230

  	
   

  	
  $

  	
  9,612

  	
   

  	
  $

  	
  58,842

  	
   

  
	
  Aug 1, 2011-Jul 31, 2012

  	
   

  	
  $

  	
  50,707

  	
   

  	
  $

  	
  9,804

  	
   

  	
  $

  	
  60,511

  	
   

  

 

**
CAC charges to be adjusted per Common Area Charges Section below.  *Monthly Base Rent to increase to 103% of
prior month’s rent on August 1, 2012 and every year thereafter during
Lease Term.

 

Base
rent and CAC as scheduled above shall be payable in advance on or before the
first day of each calendar month during the Lease Term.  The term “Rent,” as used herein, shall be
deemed to be and to mean the base monthly rent and all other sums required to
be paid by Lessee pursuant to the terms of this Lease.  Rent shall be paid in lawful money of the
United States of America, without offset or deduction, and shall be paid to
Lessor at such place or places as may be designated from time to time by
Lessor.  Rent for any period less than a
calendar month shall be a pro rata portion of the monthly installment.  Upon execution of this Lease, Lessee shall
deposit with Lessor the first month’s rent, including estimated CAC and
Security Deposit.

 

1.7          Security
Deposit: Lessee shall deposit with Lessor the sum of Fifty
Eight Thousand Dollars ($58,000.00) (the “Security Deposit”).  The Security Deposit shall be held by Lessor
as security for the faithful performance by Lessee of all of the terms,
covenants, and conditions of this Lease applicable to Lessee.  If Lessee commits a default as provided for
herein, including but not limited to a default with respect to the provisions
contained herein relating to the condition of the Premises, Lessor may (but
shall not be required to) use, apply or retain all or any part of the Security
Deposit for the payment of any amount which Lessor may spend by reason of
default by Lessee.  If any portion of the
Security Deposit is so used or applied,

 

 

Lessee
shall, within ten days after written demand therefore, deposit cash with Lessor
in an amount sufficient to restore the Security Deposit to its original
amount.  Lessee’s failure to do so shall
be a default by Lessee.  Any attempt by
Lessee to transfer or encumber its interest in the Security Deposit shall be
null and void.

 

1.8          Common
Area Charges: Lessee shall pay to Lessor, as additional Rent, an
amount equal to Lessee’s pro-rata share of the total common area charges of the
Premises as defined below (the common area charges for the Premises is referred
to herein as (“CAC”)).  Lessee shall pay
to Lessor as Rent, on or before the first day of each calendar month during the
Lease Term, subject to adjustment and reconciliation as provided below, the sum
of Nine Thousand Six Hundred Twelve Dollars ($9,612), said sum representing
Lessee’s estimated monthly payment of Lessee’s percentage share of CAC and
includes a fixed monthly sum of Fourteen Hundred Seven Dollars ($1,407.00)
which represents the long term capital reserve for replacement of existing HVAC
units, parking lot, roof and painting of building exterior (“Capital Reserves”).  It is understood and agreed that Lessee’s
obligation under this paragraph shall be prorated to reflect the Commencement
Date and the end of the Lease Term.

 

Lessee’s
estimated monthly payment of CAC payable by Lessee during the calendar year in
which the Lease commences is set forth above. 
At or prior to the commencement of each succeeding calendar year term
(or as soon as practical thereafter), Lessor shall provide Lessee with Lessee’s
estimated monthly payment for CAC which Lessee shall pay to Lessor as
Rent.  Within 120 days of the end of the
calendar year and the end of the Lease Term, Lessor shall provide Lessee a
statement of actual CAC incurred including Capital Reserves for the preceding year
or other applicable period in the case of a termination year.  If such statement shows that Lessee has paid
less than its actual percentage, then Lessee shall on demand pay to Lessor the
amount of such deficiency.  If such
statement shows that Lessee has paid more than its actual percentage, then
Lessor shall, at its option, promptly refund such excess to Lessee or credit
the amount thereof to the Rent next becoming due from Lessee.  Lessor reserves the right to revise any
estimate of CAC if the actual or projected CAC show an increase or decrease in
excess of 10% from an earlier estimate for the same period.  In such event, Lessor shall provide a revised
estimate to Lessee, together with an explanation of the reasons therefore, and
Lessee shall revise its monthly payments accordingly.  Lessor’s and Lessee’s obligation with respect
to adjustments at the end of the Lease Term or earlier expiration of this Lease
shall survive the Lease Term or earlier expiration.

 

As
used in this Lease, CAC shall include but is not limited to: (i) items as
specified in Sections 5(b), 6, 16 and 31; (ii) all costs and expenses
including but not limited to supplies, materials, equipment and tools used or
required in connection with the operation and maintenance of the Premises; (iii) licenses,
permits and inspection fees; (iv) all other costs incurred by Lessor in
maintaining and operating the Premises; (v) Capital Reserves replacements
and government regulations imposed on the Premises not related to Lessee’s use
and occupancy of the Premises; and (vi) an amount equal to $.02 per square
foot per month, as compensation for Lessor’s accounting and management
services.  Lessee shall have the right to
review the basis and computation analysis used to derive the CAC applicable to
this Lease annually.

 

1.9          Late
Charges: Lessee hereby acknowledges that a late payment made
by Lessee to Lessor of Rent and other sums due hereunder 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 on Lessor according to the terms of any
mortgage or trust deed covering the Premises. 
Accordingly, if any installment of base monthly rent or monthly estimate
of CAC is not received by Lessor or Lessor’s designee within five business (5) days
after such amount is due or if any other Rent or other sum payable to Lessor is
not received by Lessor or Lessor’s designee within five (5) business days
after Lessor delivers a written notice to Lessee, Lessee shall pay to Lessor a
late charge equal to five percent (5%) of such overdue amount.  The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will incur
by reason of late payments made by Lessee. 
Acceptance of such late charges by Lessor shall in no event constitute a
waiver of Lessee’s default with respect to such overdue amount, nor shall it
prevent Lessor from exercising any of the other rights and remedies granted
hereunder.  Lessor will waive the late
charge once in every

 

2

 

12
months if Lessee fails to pay payment before penalty date due to accounting
error, but pays within 5 days of notice from Lessor.

 

1.10        Quiet
Enjoyment: Lessor covenants and agrees with Lessee that upon
Lessee paying Rent and performing its covenants and conditions under this
Lease, Lessee shall and may peaceably and quietly have, hold and enjoy the
Premises for the Lease Term, subject, however, to the rights reserved by Lessor
hereunder.  Lessee agree to sign a
commercial reasonable SNDA from Lessor’s lender.

 

1.11        Possession: Possession
shall be deemed tendered upon signature by Lessee and Lessor and completion of
the Lessee Improvements Lessee Improvements shall mean the initial improvements
made by Lessor and as shown on the floor plan included as Exhibit A-1 and
listed in Exhibit B. The Lease shall commence on the later of August 31,
2010 or the time of Substantial Completion of the Lessee Improvements (the “Commencement
Date”). Substantial Completion” shall mean that the City of Santa Clara has
signed off the building permit and completed the final inspection.

 

2.             Lessee
Improvements:  Lessor, at
Lessor’s cost, shall construct its initial Lessee Improvements to the Premises,
using properly licensed contractors of its own choosing, pursuant to the plans
and specifications which shall be submitted to Lessee in advance for approval.

 

2.1          Acceptance
Of Premises And Covenants To Surrender: Lessee accepts the Premises
in an “AS IS” condition and “AS IS” state of repair, subject to Lessor’s
representation that the Premises are in good order and repair, and comply with
all requirements for occupancy as of the Commencement Date.  Lessee agrees on the last day of the Lease
Term, or on the sooner termination of this Lease, to surrender the Premises to
Lessor in Good Condition and Repair.  “Good
Condition and Repair” shall generally mean that the Premises are in the
condition that one would expect the Premises to be in, if throughout the Lease
Term Lessee (i) uses and maintains the Premises in a commercially
reasonable manner and in an accordance with the requirements of this Lease and (ii) makes
all Required Replacements.  “Required
Replacements” are the replacements to worn-out equipment, fixtures, and
improvements that a commercially reasonable owner-user would make.  All of the following shall be in Good
Condition and Repair: (i) the interior walls and floors of all offices and
other interior areas, (ii) all suspended ceilings and any carpeting shall
be clean and in good condition, (iii) all glazing, windows, doors and door
closures, plate glass, and (iv) all electrical systems including light
fixtures and ballasts, plumbing, and temperature control systems.  Lessee, on or before the end of the Lease
Term or sooner termination of this Lease, shall remove all its personal
property and trade fixtures from the Premises, and all such property not so
removed shall be deemed to be abandoned by Lessee.  Lessee shall reimburse Lessor for all
disposition costs incurred by Lessor relative to Lessee’s abandoned
property.  If the Premises are not
surrendered at the end of the Lease Term or earlier termination of this Lease,
Lessee shall indemnify Lessor against loss or liability resulting from any
delay caused by Lessee in surrendering the Premises including, without
limitation, any claims made by any succeeding Lessee founded on such delay

 

3.             Uses
Prohibited: Lessee shall not commit, or suffer to be committed,
any waste upon the Premises, or any nuisance, or other act or thing which may
disturb the quiet enjoyment of any other tenant in or around the buildings in
which the subject Premises are located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, or place any loads upon the floor, walls, or ceiling
which may endanger the structure, or use any machinery or apparatus which will
in any manner vibrate or shake the Premises or the building of which it is a
part, or place any harmful liquids in the drainage system of the building.  No waste materials or refuse shall be dumped
upon or permitted to remain upon any part of the Premises outside of the
building proper.  No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the building structure unless approved by
all required governmental agencies. 
Parking spaces used for such purposes will be deducted from Lessee’s
allocation of parking.  Lessee may use
Hazardous Materials approved by the local, state 

 

3

 

federal
or other applicable governing authority but this does not relieve Lessee of any
of its Lease obligations not to contaminate the Premises and related real
property or violate any Hazardous Materials Laws.  Lessor consents to Lessee’s use of materials
which are incidental to the normal, day-to-day operations of any office user,
such as copier fluids, cleaning materials, etc.

 

4.             Alterations
And Additions: Lessee shall not make, or suffer to be made, any
alteration or addition to said Premises, or any part thereof, without the
express, advance written consent of Lessor; any addition or alteration to said
Premises, except movable furniture and trade fixtures, shall become at once a
part of the realty and belong to Lessor at the end of the Lease Term or earlier
termination of this Lease.  Alterations
and additions which are not deemed as Trade Fixtures shall include HVAC
systems, lighting systems, electrical systems, partitioning, carpeting, or any
other installation which has become an integral part of the Premises.  Lessee agrees that it will not proceed to
make such alterations or additions until all required government permits have
been obtained and after having obtained consent from Lessor to do so, until
five (5) days from the receipt of such consent, so that Lessor may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Lessee’s improvements. 
Lessee shall at all times permit such notices to be posted and to remain
posted until the completion of work.  At
the end of the Lease Term or earlier termination of this Lease, Lessee shall
remove and shall be required to remove its special tenant improvements, all
related equipment, and any additions or alterations installed by Lessee at or
during the Lease Term and Lessee shall return the Premises to the condition
that existed before the installation of the tenant improvements.  Notwithstanding the above, Lessor agrees to
allow any reasonable alterations and improvements and will notify Lessee at the
time of approval of such improvements or alterations are to be removed at the
end of the Lease Term or earlier termination of this Lease.

 

5.             Maintenance
Of Premises:

 

(a) Lessee
shall at its sole cost and expense keep, repair, and maintain the interior of
the Premises in Good Condition and Repair, including, but not limited to, the
interior walls and floors of all offices and other interior areas, doors and
door closures, all lighting systems, temperature control systems, and plumbing
systems, including any Required Replacements. 
Lessee shall provide interior and exterior window washing as needed.

 

(b) Lessor
shall, at Lessee’s expense, keep, repair, and maintain in Good Condition and
Repair including replacements (based on a pro-rata share of (i) costs
based on square footage or (ii) costs directly related to Lessee’s use of
the Premises) the following, which shall be included in the monthly CAC:

 

1.
The exterior of the building, any appurtenances and every part thereof,
including but not limited to, glazing, sidewalks, parking areas, electrical
systems, and painting of exterior walls. 
The parking lot to receive a finish coat every five to seven years.

 

2.
The HVAC by a service contract with a licensed air conditioning and heating
contractor which contract shall provide for a minimum of quarterly maintenance
of all air conditioning and heating equipment at the Premises including HVAC
repairs or replacements which are either excluded from such service contract or
any existing equipment warranties.

 

3.
The landscaping by a landscape contractor to water, maintain, trim and replace,
when necessary, any shrubbery, irrigation parts, and landscaping at the
Premises.

 

4.
The roof membrane by a service contract with a licensed reputable roofing
contractor which contract shall provide for a minimum of semi-annual
maintenance, cleaning of storm gutters, drains, removing of debris, and
trimming overhanging trees, repair of the roof and application of a finish coat
every five years to the building at the Premises.

 

5.
Exterior pest control.

 

6.
Fire monitoring services.

 

7.
Parking lot sweeping.

 

4

 

(c) Lessee
hereby waives any and all rights to make repairs at the expense of Lessor as
provided in Section 1942 of the Civil Code of the State of California, and
all rights provided for by Section 1941 of said Civil Code.

 

(d) Lessor
shall be responsible for the repair of any structural defects in the Premises
including the roof structure (not membrane), exterior walls and foundation
during the Lease Term, as well as any defects in the Lessee Improvements during
the vendor warranty period.

 

6.             Insurance:

 

A) Hazard Insurance: Lessee shall not use, or
permit said Premises, or any part thereof, to be used, for any purpose other
than that for which the Premises are hereby leased; and no use shall be made or
permitted to be made of the Premises, nor acts done, which may cause a
cancellation of any insurance policy covering the Premises, or any part
thereof, nor shall Lessee sell or permit to be kept, used or sold, in or about
said Premises, any article which may be prohibited by a fire and extended
coverage insurance policy.  Lessee shall
comply with any and all requirements, pertaining to said Premises, of any
insurance organization or company, necessary for the maintenance of reasonable
fire and extended coverage insurance, covering the Premises.  Lessor shall, at Lessee’s sole cost and
expense, purchase and keep in force All Risk Insurance excluding flood and
earthquake, covering loss or damage to the Premises in an amount equal to the
full replacement cost of the Premises, as determined by Lessor, with proceeds
payable to Lessor.  In the event of a
loss per the insurance provisions of this paragraph, Lessee shall be
responsible for deductibles up to a maximum of $10,000 per occurrence.  Lessee acknowledges that the insurance
referenced in this paragraph does not include coverage for Lessee’s personal
property.

 

B) Loss of Rents Insurance: Lessor shall, at Lessee’s
sole cost and expense, purchase and maintain in full force and effect, a policy
of rental loss insurance, in an amount equal to the amount of Rent payable by
Lessee commencing within sixty (60) days of the date of the loss or on the date
of loss if reasonably available for the next ensuing one (1) year, as reasonably
determined by Lessor with proceeds payable to Lessor (“Loss of Rents Insurance”).

 

C) Liability and Property Damage Insurance: Lessee, as a
material part of the consideration to be rendered to Lessor, hereby waives all
claims against Lessor and Lessor’s Agents for damages to goods, wares and
merchandise, and all other personal property in, upon, or about the Premises,
and for injuries to persons in, upon, or about the Premises, from any cause
arising at any time, and Lessee will hold Lessor and Lessor’s Agents exempt and
harmless from any damage or injury to any person, or to the goods, wares, and
merchandise and all other personal property of any person, arising from the use
or occupancy of the Premises by Lessee, or from the failure of Lessee to keep
the Premises in Good Condition and Repair, as herein provided.  Lessee shall, at Lessee’s sole cost and
expense, purchase and keep in force a standard policy of commercial general
liability insurance and property damage policy covering the Premises and all
related areas insuring the Lessee having a combined single limit for both
bodily injury, death and property damage in an amount not less than five
million dollars ($5,000,000.00) and Lessee’s insurance shall be primary.  The limits of said insurance shall not,
however, limit the liability of Lessee hereunder.  Lessee shall, at its sole cost and expense,
comply with all of the insurance requirements of all local, municipal, state
and federal authorities now in force, or which may hereafter be in force, pertaining
to Lessee’s use and occupancy of the said Premises.

 

D) Personal Property Insurance: Lessee shall obtain, at
Lessee’s sole cost and expense, a policy of fire and extended coverage
insurance including coverage for direct physical loss special form, and a
sprinkler leakage endorsement insuring the personal property of Lessee.  The proceeds from any personal property
damage policy shall be payable to Lessee.

 

All
insurance policies required in 6 C) and 6 D) above shall: (i) provide for
a certificate of insurance evidencing the insurance required herein, being
deposited with Lessor ten (10) days prior to the Commencement Date, and
upon each renewal, such certificates shall be provided 30 days prior to the
expiration date of such coverage, (ii) be in a form reasonably
satisfactory to 

 

5

 

Lessor
and shall provide the coverage required by Lessee in this Lease, (iii) be
carried with companies with a Best Rating of A minimum, (iv) specifically
provide that such policies shall not be subject to cancellation, reduction of
coverage, or other change except after 30 days prior written notice to Lessor, (v) name
Lessor, Lessor’s lender, and any other party with an insurable interest in the
Premises as additional insureds by endorsement to policy, and (vi) shall
be primary.

 

Lessee
agrees to pay to Lessor, as additional Rent, on demand, the full cost of the
insurance polices referenced in 6 A) and 6 B) above as evidenced by insurance
billings to Lessor which shall be included in the CAC.  If Lessee does not occupy the entire
Premises, the insurance premiums shall be allocated to the portion of the
Premises occupied by Lessee on a pro-rata square footage basis.  It is agreed that Lessee’s obligation under
this paragraph shall be prorated to reflect the Commencement Date and the end
of the Lease Term.

 

Lessor
and Lessee hereby waive any rights each may have against the other related to
any loss or damage caused to Lessor or Lessee as the case may be, or to the
Premises or its contents, and which may arise from any risk covered by fire and
extended coverage insurance and those risks required to be covered under Lessee’s
personal property insurance.  The parties
shall provide that their respective insurance policies insuring the property or
the personal property include a waiver of any right of subrogation which said
insurance company may have against Lessor or Lessee, as the case may be.

 

7.             Abandonment:
Lessee shall not vacate or abandon the Premises at any time during the
Lease Term; and if Lessee shall abandon, vacate or surrender said Premises, or
be dispossessed by process of law, or otherwise, any personal property
belonging to Lessee and left on the Premises shall be deemed to be abandoned,
at the option of Lessor.  Notwithstanding
the above, the Premises shall not be considered vacated or abandoned if Lessee
maintains the Premises in Good Condition and Repair, provides security and is
not in default.

 

8.             Free
From Liens: Lessee shall keep the subject Premises and the property
in which the subject Premises are situated, free from any and all liens
including but not limited to liens arising out of any work performed, materials
furnished, or obligations incurred by Lessee. 
However, the Lessor shall allow Lessee to contest a lien claim, so long
as the claim is discharged prior to any foreclosure proceeding being initiated
against the property and provided Lessee provides Lessor a bond if the lien
exceeds $5,000.

 

9.             Compliance
With Governmental Regulations: Lessee shall, at its sole
cost and expense, comply with all of the requirements of all local, municipal,
state and federal authorities now in force, or which may hereafter be in force,
pertaining to the Premises, and shall faithfully observe in the use and
occupancy of the Premises all local and municipal ordinances and state and
federal statutes now in force or which may hereafter be in force.

 

10.          Intentionally Omitted.

 

11.          Advertisements And Signs: Lessee shall
not place or permit to be placed, in, upon or about the Premises any unusual or
extraordinary signs, or any signs not approved by the city, local, state,
federal or other applicable governing authority. Lessee shall not place, or
permit to be placed upon the Premises, any signs, advertisements or notices
without the written consent of the Lessor, and such consent shall not be
unreasonably withheld.  A sign so placed
on the Premises shall be so placed upon the understanding and agreement that
Lessee will remove same at the end of the Lease Term or earlier termination of
this Lease and repair any damage or injury to the Premises caused thereby, and
if not so removed by Lessee, then Lessor may have the same removed at Lessee’s
expense.  If Lessee builds a monument
sign on Freeway 20% of monument should be available for future teanant.

 

6

 

12.          Utilities: Lessee shall
pay for all water, gas, heat, light, power, telephone and other utilities
supplied to the Premises.  Any charges
for sewer usage, Silicon Valley Power and telephone site service or related
fees shall be the obligation of Lessee and paid for by Lessee.  If any such services are not separately
metered to Lessee, Lessee shall pay a reasonable proportion of all charges
which are jointly metered, the determination to be made by Lessor acting
reasonably and on any equitable basis. 
Lessor and Lessee agree that Lessor shall not be liable to Lessee for
any disruption in any of the utility services to the Premises.

 

13.          Attorney’s Fees: In case suit
should be brought for the possession of the Premises, for the recovery of any
sum due hereunder, because of the breach of any other covenant herein, or to
enforce, protect, or establish any term, conditions, or covenant of this Lease
or the right of either party hereunder, the losing party shall pay to the
Prevailing Party reasonable attorney’s fees which shall be deemed to have
accrued on the commencement of such action and shall be enforceable whether or
not such action is prosecuted to judgment. 
The term “Prevailing Party” shall mean the party that received
substantially the relief requested, whether by settlement, dismissal, summary
judgment, judgment, or otherwise.

 

14.          Default

 

14.1        Lessee
Default: The occurrence of any of the following shall
constitute a default and breach of this Lease by Lessee: a) Any failure by
Lessee to pay Rent or to make any other payment due under this Lease ; b) The
abandonment or vacation of the Premises by Lessee except as provided in Section 7;
c) A failure by Lessee to observe and perform any other provision of this Lease
to be observed or performed by Lessee, where such failure continues for thirty
days after written notice thereof by Lessor to Lessee; provided, however, that
if the nature of such default is such that the same cannot be reasonably cured
within such thirty (30) day period, Lessee shall not be deemed to be in default
if Lessee shall, within such period, commence such cure and thereafter
diligently prosecute the same to completion; d) The making by Lessee of any
general assignment for the benefit of creditors; the filing by or against
Lessee of a petition to have Lessee adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy; e) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee’s assets or Lessee’s interest in this Lease, or 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.  Notwithstanding the above, Lessor will waive
one 3 day notice per year provided payment is made with 5 business days after
written notice from Lessor of late payment.

 

14.2        Surrender
Of Lease: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity, Lessor
shall have the immediate option to terminate this Lease before the end of the
Lease Term and all rights of Lessee hereunder, by giving written notice of such
intention to terminate.  In the event
that Lessor terminates this Lease due to a default of Lessee, then Lessor may
recover from Lessee: a) the worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus b) the worth at the time
of award of unpaid Rent which would have been earned after termination until
the time of award exceeding the amount of such rental loss that the Lessee
proves could have been reasonably avoided; plus c) the worth at the time of
award of the amount by which the unpaid Rent for the balance of the Lease Term
after the time of award exceeds the amount of such rental loss that the Lessee
proves could have been reasonably avoided; plus d) any other amount necessary
to compensate Lessor for all the detriment proximately caused by Lessee’s
failure to perform his obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom; and e) at Lessor’s
election, such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable California law.  As used in (a) and (b) above, the “worth
at the time of award” is computed by allowing interest at the rate of Wells
Fargo’s prime rate plus two percent (2%) per annum.  As used in (c) above, the “worth at the
time of award” is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

 

7

 

14.3        Right
of Entry and Removal: In the event of any such default by Lessee,
Lessor shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Lessee.

 

14.4        Abandonment:
In the event of the vacation or abandonment, except as provided in Section 7,
of the Premises by Lessee or in the event that Lessor shall elect to re-enter
as provided in paragraph 14.3 above or shall take possession of the Premises
pursuant to legal proceeding or pursuant to any notice provided by law, and
Lessor does not elect to terminate this Lease as provided in Section 14.2
above, then Lessor may from time to time, without terminating this Lease,
either recover all Rent as it becomes due or relet the Premises or any part
thereof for such term or terms and at such rental rates and upon such other
terms and conditions as Lessor, in its sole discretion, may deem advisable with
the right to make alterations and repairs to the Premises.  In the event that Lessor elects to relet the
Premises, then Rent received by Lessor from such reletting shall be applied;
first, to the payment of any indebtedness other than Rent due hereunder from
Lessee to Lessor; second, to the payment of any cost of such reletting; third,
to the payment of the cost of any alterations and repairs to the Premises;
fourth, to the payment of Rent due and unpaid hereunder; and the residue, if
any, shall be held by Lessor and applied to the payment of future Rent as the
same may become due and payable hereunder. 
Should that portion of such Rent received from such reletting during any
month, which is applied by the payment of Rent hereunder according to the
application procedure outlined above, be less than the Rent payable during that
month by Lessee hereunder, then Lessee shall pay such deficiency to Lessor
immediately upon demand therefore by Lessor. 
Such deficiency shall be calculated and paid monthly.  Lessee shall also pay to Lessor, as soon as
ascertained, any costs and expenses incurred by Lessor in such reletting or in
making such alterations and repairs not covered by the rentals received from
such reletting.

 

14.5        No
Implied Termination: No re-entry or taking possession of the
Premises by Lessor pursuant to Section 14.3 or Section 14.4 of this
Lease shall be construed as an election to terminate this Lease unless a
written notice of such intention is given to Lessee or unless the termination
thereof is decreed by a court of competent jurisdiction.  Notwithstanding any reletting without
termination by Lessor because of any default by Lessee, Lessor may at any time
after such reletting elect to terminate this Lease for any such default.

 

15.          Surrender Of Lease: The voluntary
or other surrender of this Lease by Lessee, or a mutual cancellation thereof,
shall not work a merger, and shall, at the option of Lessor, terminate all or
any existing subleases or sub tenancies, or may, at the option of Lessor,
operate as an assignment to him of any or all such subleases or sub tenancies.

 

16.          Taxes: Lessee shall
pay and discharge punctually and when the same shall become due and payable
without penalty, all real estate taxes, personal property taxes, taxes based on
vehicles utilizing parking areas in the Premises, taxes computed or based on
rental income (other than federal, state and municipal net income taxes),
environmental surcharges, privilege taxes, excise taxes, business and
occupation taxes, school fees or surcharges, gross receipts taxes, sales and/or
use taxes, employee taxes, occupational license taxes, water and sewer taxes,
assessments (including, but not limited to, assessments for public improvements
or benefit), assessments for local improvement and maintenance districts, and
all other governmental impositions and charges of every kind and nature
whatsoever, regardless of whether now customary or within the contemplation of
the parties hereto and regardless of whether resulting from increased rate
and/or valuation, or whether extraordinary or ordinary, general or special,
unforeseen or foreseen, or similar or dissimilar to any of the foregoing (all
of the foregoing being hereinafter collectively called “Tax” or “Taxes”) which,
at any time during the Lease Term, shall be applicable or against the Premises,
or shall become due and payable and a lien or charge upon the Premises under or
by virtue of any present or future laws, statutes, ordinances, regulations, or
other requirements of any governmental authority whatsoever.  The term “Environmental Surcharge” shall
include any and all expenses, taxes, charges or penalties imposed by the
Federal Department of Energy, Federal Environmental Protection Agency, the
Federal Clean Air Act, or any regulations promulgated thereunder, or any other
local, state or federal governmental agency or entity now or hereafter vested
with the power to impose taxes, assessments or other types of surcharges 

 

8

 

as
a means of controlling or abating environmental pollution or the use of energy
in regard to the use, operation or occupancy of the Premises.  The term “Tax” shall include, without
limitation, all taxes, assessments, levies, fees, impositions or charges
levied, imposed, assessed, measured, or based in any manner whatsoever (i) in
whole or in part on the Rent payable by Lessee under this Lease, (ii) upon
or with respect to the use, possession, occupancy, leasing, operation or
management of the Premises, (iii) upon this transaction or any document to
which Lessee is a party creating or transferring an interest or an estate in
the Premises, (iv) upon Lessee’s business operations conducted at the
Premises, (v) upon, measured by or reasonably attributable to the cost or
value of Lessee’s equipment, furniture, fixtures and other personal property
located on the Premises or the cost or value of any leasehold improvements made
in or to the Premises by or for Lessee, regardless of whether title to such
improvements shall be in Lessor or Lessee, or (vi) in lieu of or
equivalent to any Tax set forth in this Section 16.  In the event any such Taxes are payable by
Lessor and it shall not be lawful for Lessee to reimburse Lessor for such
Taxes, then the Rent payable thereunder shall be increased to net Lessor the same
net rent after imposition of any such Tax upon Lessor as would have been
payable to Lessor prior to the imposition of any such Tax.  It is the intention of the parties that
Lessor shall be free from all such Taxes and all other governmental impositions
and charges of every kind and nature whatsoever.  However, nothing contained in this Section 16
shall require Lessee to pay any Federal or State income, franchise, estate,
inheritance, succession, transfer or excess profits tax imposed upon Lessor.  If any general or special assessment is
levied and assessed against the Premises, Lessor agrees to use its best
reasonable efforts to cause the assessment to become a lien on the Premises
securing repayment of a bond sold to finance the improvements to which the
assessment relates which is payable in installments of principal and interest
over the maximum term allowed by law.  It
is understood and agreed that Lessee’s obligation under this paragraph will be
prorated to reflect the Commencement Date and the end of the Lease Term.  It is further understood that if Taxes cover
the Premises and Lessee does not occupy the entire Premises, the Taxes will be
allocated to the portion of the Premises occupied by Lessee based on a pro-rata
square footage or other equitable basis, as determined by Lessor.  Real estate taxes billed by Lessor to Lessee
shall be included in the monthly CAC.

 

Subject
to any limitations or restrictions imposed by any deeds of trust or mortgages
now or hereafter covering or affecting the Premises, Lessee shall have the
right to contest or review the amount or validity of any Tax by appropriate
legal proceedings but which is not to be deemed or construed in any way as
relieving, modifying or extending Lessee’s covenant to pay such Tax at the time
and in the manner as provided in this Section 16.  However, as a condition of Lessee’s right to
contest, if such contested Tax is not paid before such contest and if the legal
proceedings shall not operate to prevent or stay the collection of the Tax so
contested, Lessee shall, before instituting any such proceeding, protect the
Premises and the interest of Lessor and of the beneficiary of a deed of trust
or the mortgagee of a mortgage affecting the Premises against any lien upon the
Premises by a surety bond, issued by an insurance company acceptable to Lessor
and in an amount equal to one and one-half (1 1/2) times the amount contested
or, at Lessor’s option, the amount of the contested Tax and the interest and
penalties in connection therewith.  Any
contest as to the validity or amount of any Tax, whether before or after
payment, shall be made by Lessee in Lessee’s own name, or if required by law,
in the name of Lessor or both Lessor and Lessee.  Lessee shall defend, indemnify and hold
harmless Lessor from and against any and all costs or expenses, including
attorneys’ fees, in connection with any such proceedings brought by Lessee,
whether in its own name or not. Lessee shall be entitled to retain any refund
of any such contested Tax and penalties or interest thereon which has been paid
by Lessee.  Nothing contained herein
shall be construed as affecting or limiting Lessor’s right to contest any Tax
at Lessor’s expense.

 

17.          Notices: Unless
otherwise provided for in this Lease, any and all written notices or other
communication (the “Communication”) to be given in connection with this Lease
shall be given in writing and shall be given by personal delivery, facsimile
transmission or by mailing by registered or certified mail with postage thereon
or recognized overnight courier, fully prepaid, in a sealed envelope addressed
to the intended recipient as follows:

 

	
  (a)

  	
  to
  the Lessor at:

  	
  10050
  Bandley Drive

  
	
   

  	
   

  	
  Cupertino,
  California 95014

  

 

9

 

	
   

  	
   

  	
  Attention:
  Carl E. Berg

  
	
   

  	
   

  	
  Raymond V. Marino

  
	
   

  	
   

  	
  Fax
  No: (408) 725-1626

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  to
  the Lessee at:

  	
  3301
  Olcott Street

  
	
   

  	
   

  	
  Santa
  Clara, California 95054

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:  CFO

  

 

or
such other addresses, facsimile number or individual as may be designated by a
Communication given by a party to the other parties as aforesaid.  Any Communication given by personal delivery
shall be conclusively deemed to have been given and received on a date it is so
delivered at such address provided that such date is a business day, otherwise
on the first business day following its receipt, and if given by registered or
certified mail, on the day on which delivery is made or refused or if given by
recognized overnight courier, on the first business day following deposit with
such overnight courier and if given by facsimile transmission, on the day on
which it was transmitted provided such day is a business day, failing which, on
the next business day thereafter.

 

18.          Entry By Lessor: Lessee shall
permit Lessor and its agents to enter into and upon said Premises on reasonable
notice at all reasonable times using the minimum amount of interference and
inconvenience to Lessee and Lessee’s business, subject to any security
regulations of Lessee, for the purpose of inspecting the same or for the
purpose of maintaining the building in which said Premises are situated, or for
the purpose of making repairs, alterations or additions to any other portion of
said building, including the erection and maintenance of such scaffolding,
canopies, fences and props as may be required, without any rebate of Rent and
without any liability to Lessee for any loss of occupation or quiet enjoyment
of the Premises; and shall permit Lessor and his agents, at any time within
ninety (90) days prior to the end of the Lease Term, to place upon said
Premises any usual or ordinary “For Sale” or “For Lease” signs and exhibit the
Premises to prospective tenants at reasonable hours.

 

19.          Destruction Of Premises: In the event of
a partial destruction of the said Premises during the Lease Term from any cause
which is covered by Lessor’s property insurance, Lessor shall forthwith repair
the same, provided such repairs can be made within one hundred eighty (180)
days after receipt of building permit under the laws and regulations of State,
Federal, County, or Municipal authorities, but such partial destruction shall
in no way annul or void this Lease, except that Lessee shall be entitled to a
proportionate reduction of Rent while such repairs are being made to the extent
of payments received by Lessor under its Loss of Rents Insurance coverage.  Notwithstanding the above, if Lessor in good
faith notifies Lessee in writing that repairs cannot be completed in 180 days
after receipt of required permits, Lessee may cancel the Lease by written
notice within 14 business days after Lessor’s notice which shall include any
estimated cost not covered by insurance. 
With respect to any partial destruction which Lessor is obligated to
repair or may elect to repair under the terms of this paragraph, the provisions
of Section 1932, Subdivision 2, and of Section 1933, Subdivision 4,
of the Civil Code of the State of California are waived by Lessee.  A total destruction of the building in which
the subject Premises are situated shall terminate this Lease.  Notwithstanding the above, Lessor is only
obligated to repair or rebuild to the extent of available insurance proceeds
including any deductible amount paid by Lessee. 
Should Lessor determine that insufficient or no insurance proceeds are
available for repair or reconstruction of Premises, Lessor, at its sole option,
may terminate the Lease.  Lessee shall
have the option of continuing this Lease by agreeing to pay all repair costs to
the subject Premises not covered by insurance Lessor is required to cover under
Lease.

 

20.          Assignment And Subletting: Lessee shall
not assign this Lease, or any interest therein, and shall not sublet the said
Premises or any part thereof, or any right or privilege appurtenant thereto, or
cause any other person or entity, to occupy or use the Premises, or any portion
thereof, without the advance written consent of Lessor.  Notwithstanding the above, Lessee may,
without the consent of Lessor, assign this Lease or sublet all or any part of
the Premises to a bona fide subsidiary, parent or affiliate of Lessee or its
parent or subsidiary, an entity in which or with which Lessee merges or an
entity which acquires all or

 

10

 

 

substantially
all of the assets or stock of Lessee (“Excepted Party”).  Any such assignment or subletting requiring
Lessor’s consent made without Lessor’s consent shall be void, and shall, at the
option of the Lessor, terminate this Lease. 
This Lease shall not, nor shall any interest therein, be assignable, as
to the interest of Lessee, by operation of law, without the written consent of
Lessor.  Notwithstanding Lessor’s
obligation to provide reasonable approval, Lessor reserves the right to
withhold its consent for any proposed sublessee or assignee of Lessee if the
proposed sublessee or assignee is a user or generator of Hazardous and does not
meet the reasonable financial requirements of Lessor If Lessee desires to
assign its rights under this Lease or to sublet all or any part of the Premises
to a party other than an Excepted Party, Lessee shall first notify Lessor of
the proposed terms and conditions of such assignment or subletting.  Lessee and Lessor shall split equally (50/50)
the Bonus Rent, as hereafter defined, actually received by the Lessee in
connection with any subletting or assignment to a party other than an Excepted
Party.  As used herein “Bonus Rent” shall
mean the consideration received by the Lessee for the subleasing of the sublet
premises or the assignment of this Lease, less the amounts that remain payable
by the Lessee under this Lease with respect to the affected portions of the
Premises, less reasonable leasing broker and attorney costs associated with the
transaction, and less the cost that Lessee is required to incur to perform its
obligations under such sublease or assignment, and including without
limitation, any improvement costs and any other tenant inducements.  Whether or not Lessor’s consent to a sublease
or assignment is required, in the event of any sublease or assignment, Lessee
shall be and shall remain primarily liable for the performance of all
conditions, covenants, and obligations of Lessee hereunder and, in the event of
a default by an assignee or sublessee, Lessor may proceed directly against the
original Lessee hereunder and/or any other predecessor of such assignee or
sublessee without the necessity of exhausting remedies against said assignee or
sublessee. Notwithstanding the foregoing, Lessee may assign this Lease to an
Excepted Party, provided there is no substantial reduction in the net worth of
the resulting entity unless Lessee agrees to increase the Security Deposit to
an amount equal to six (6) months rent. 
If Lessee merges or sells substantially all of its assets and the net
worth of the resulting entity is substantially less than that of Lessee, such
sale shall be a default under this Lease unless approved by Lessor.

 

21.          Condemnation: If any part of
the Premises shall be taken for any public or quasi-public use, under any
statute or by right of eminent domain or private purchase in lieu thereof, and
a part thereof remains which is susceptible of occupation hereunder, this Lease
shall as to the part so taken, terminate as of the date title vests in the condemnor
or purchaser, and the Rent payable hereunder shall be adjusted so that the
Lessee shall be required to pay for the remainder of the Lease Term only that
portion of Rent as the value of the part remaining.  The rental adjustment resulting will be computed
at the same Rental rate for the remaining part not taken; however, Lessor shall
have the option to terminate this Lease as of the date when title to the part
so taken vests in the condemnor or purchaser. 
If all of the Premises, or such part thereof be taken so that there does
not remain a portion susceptible for occupation hereunder, this Lease shall
thereupon terminate.  If a part or all of
the Premises be taken, all compensation awarded upon such taking shall be
payable to the Lessor.  Lessee may file a
separate claim and be entitled to any award granted to Lessee.

 

22.          Effects Of Conveyance: The term “Lessor”
as used in this Lease, means only the owner for the time being of the land and
building constituting the Premises, so that, in the event of any sale of said
land or building, or in the event of a Lease of said building, Lessor shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Lessor hereunder, and it shall be deemed and construed, without further
agreement between the parties and the purchaser of any such sale, or the Lessor
of the building, that the purchaser or lessor of the building has assumed and
agreed to carry out any and all covenants and obligations of the Lessor
hereunder.  If any security is given by
Lessee to secure the faithful performance of all or any of the covenants of
this Lease on the part of Lessee, Lessor may transfer and deliver the security,
as such, to the purchaser at any such sale of the building, and thereupon the
Lessor shall be discharged from any further liability.

 

23.          Subordination: This Lease, in
the event Lessor notifies Lessee in writing, shall be subordinate to any ground
lease, deed of trust, or other hypothecation for security now or hereafter
placed upon the real property at which the Premises are a part and to any and
all advances made on the security thereof and to renewals, modifications,
replacements and extensions thereof. 

 

11

 

Lessee
agrees to promptly execute any documents which may be required to effectuate
such subordination. Notwithstanding such subordination, if Lessee is not in
default and so long as Lessee shall pay the Rent and observe and perform all of
the provisions and covenants required under this Lease, Lessee’s right to quiet
possession of the Premises shall not be disturbed or effected by any
subordination.  Lessor will upon signing
of Lease, will use good faith and best efforts to obtain a commercial
reasonably SNDA acceptable to both parties.

 

24.          Waiver: The waiver by
Lessor or Lessee of any breach of any term, covenant or condition, herein
contained shall not be construed to be a waiver of such term, covenant or
condition or any subsequent breach of the same or any other term, covenant or
condition therein contained.  The
subsequent acceptance of Rent hereunder by Lessor shall not be deemed to be a
waiver of Lessee’s breach of any term, covenant, or condition of the Lease.

 

25.          Holding Over: Any holding
over after the end of the Lease Term requires Lessor’s written approval prior
to the end of the Lease Term, which, notwithstanding any other provisions of
this Lease, Lessor may withhold.  Such
holding over shall be construed to be a tenancy at sufferance from month to
month.  Lessee shall pay to Lessor
monthly base rent equal to one and one-half (1.5) times the monthly base rent
installment due in the last month of the Lease Term and all other additional
rent and all other terms and conditions of the Lease shall apply, so far as
applicable.  Holding over by Lessee
without written approval of Lessor shall subject Lessee to the liabilities and
obligations provided for in this Lease and by law, including, but not limited
to those in Section 2.1 of this Lease. 
Lessee shall indemnify and hold Lessor harmless against any loss or
liability resulting from any delay caused by Lessee in surrendering the
Premises, including without limitation, any claims made or penalties incurred
by any succeeding lessee or by Lessor. 
No holding over shall be deemed or construed to exercise any option to
extend or renew this Lease in lieu of full and timely exercise of any such
option as required hereunder.

 

26.          Lessor’s Liability: If Lessee
should recover a money judgment against Lessor arising in connection with this
Lease, the judgment shall be satisfied only out of the Lessor’s interest in the
Premises and neither Lessor or any of its partners shall be liable personally
for any deficiency.

 

27.          Estoppel Certificates: Lessee shall at
any time during the Lease Term, upon not less than ten (10) days prior
written notice from Lessor, execute and deliver to Lessor a statement in
writing certifying that, this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification) and the dates to which
the Rent and other charges have been paid in advance, if any, and acknowledging
that there are not, to Lessee’s knowledge, any uncured defaults on the part of
Lessor hereunder or specifying such defaults if they are claimed.  Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises.  Lessee’s failure to deliver such a statement
within such time shall be conclusive upon the Lessee that (a) this Lease
is in full force and effect, without modification except as may be represented
by Lessor; (b) there are no uncured defaults in Lessor’s performance.

 

28.          Time: Time is of the
essence of the Lease.

 

29.          Captions: The headings on
titles to the paragraphs of this Lease are not a part of this Lease and shall have
no effect upon the construction or interpretation of any part thereof.  This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed
by all of the parties hereto or their respective successors in interest.

 

30.          Party Names: Landlord and
Tenant may be used in various places in this Lease as a substitute for Lessor
and Lessee respectively.

 

12

 

31.          Earthquake Insurance: At the request
of Lessee, Lessor agrees to waive the requirement for earthquake insurance
during the Lease Term.

 

32.          Habitual Default: Notwithstanding
anything to the contrary contained in Section 14 herein, Lessor and Lessee
agree that if Lessee shall have defaulted in the payment of Rent for two or
more times during any twelve month period during the Lease Term, then such
conduct shall, at the option of the Lessor, represent a separate event of
default which cannot be cured by Lessee. 
Lessee acknowledges that the purpose of this provision is to prevent
repetitive defaults by the Lessee under the Lease, which constitute a hardship
to the Lessor and deprive the Lessor of the timely performance by the Lessee
hereunder.

 

33.          Hazardous Materials

 

33.1        Definitions: As used in
this Lease, the following terms shall have the following meaning:

 

a.
The term “Hazardous Materials” shall mean (i) polychlorinated biphenyls; (ii) radioactive
materials and (iii) any chemical, material or substance now or hereafter
defined as or included in the definitions of “hazardous substance” “hazardous
water”, “hazardous material”, “extremely hazardous waste”, “restricted
hazardous waste” under Section 25115, 25117 or 15122.7, or listed pursuant
to Section 25140 of the California Health and Safety Code, Division 20,
Chapter 6.5 (Hazardous Waste Control Law), (iv) defined as “hazardous
substance” under Section 25316 of the California Health and Safety Code,
Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substances Account
Act), (v) defined as “hazardous material”, “hazardous substance”, or “hazardous
waste” under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release, Response, Plans and
Inventory), (vi) defined as a “hazardous substance” under Section 25181
of the California Health and Safety Code, Division 20l, Chapter 6.7
(Underground Storage of Hazardous Substances), (vii) petroleum, (viii) asbestos,
(ix) listed under Article 9 or defined as “hazardous” or “extremely
hazardous” pursuant to Article II of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (x) defined as “hazardous
substance” pursuant to Section 311 of the Federal Water Pollution Control
Act, 33 U.S.C. 1251 et seq. or listed pursuant to Section 1004 of the
Federal Water Pollution Control Act (33 U.S.C. 1317), (xi) defined as a “hazardous
waste”, pursuant to Section 1004 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., (xii) defined as “hazardous
substance” pursuant to Section 101 of the Comprehensive Environmental
Responsibility Compensations, and Liability Act, 42 U.S.C. 9601 et seq., or (xiii) regulated
under the Toxic Substances Control Act, 156 U.S.C. 2601 et seq.

 

b.
The term “Hazardous Materials Laws” shall mean any local, state and federal
laws, rules, regulations, or ordinances relating to the use, generation,
transportation, analysis, manufacture, installation, release, discharge,
storage or disposal of Hazardous Material.

 

c.
The term “Lessor’s Agents” shall mean Lessor’s agents, representatives,
employees, contractors, subcontractors, directors, officers and partners.

 

d.
The term “Lessee’s Agents” shall mean Lessee’s agents, representatives,
employees, contractors, subcontractors, directors, officers, partners, invitees
or any other person related in any way to Lessee in or about the Premises.

 

33.2        Lessee’s
Right to Investigate: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use
of Hazardous Materials in or about the Premises, and (ii) the potential
for exposure to Lessee’s employees and other persons to any Hazardous Materials
used and stored by previous occupants in or about the Premises.  Lessee shall provide Lessor with copies of
all inspections, tests and evaluations. 
Lessee shall indemnify, defend and hold Lessor harmless from any cost,
claim or expense arising from such entry by Lessee or from the performance of
any such investigation by such Lessee.

 

13

 

33.3        Lessor’s
Representations: Lessor hereby represents and warrants to the best of
Lessor’s knowledge that the Premises are, as of the date of this Lease, in
compliance with all Hazardous Material Laws.

 

33.4        Lessee’s
Obligation to Indemnify: Lessee, at its sole cost and expense, shall
indemnify, defend, protect and hold Lessor and Lessor’s Agents harmless from
and against any and all cost or expenses, including those described under
subparagraphs i, ii and iii herein below set forth, arising from or caused in
whole or in part, directly or indirectly by:

 

a.
Lessee’s or Lessee’s Agents’ use, analysis, storage, transportation, disposal,
release, threatened release, discharge or generation of Hazardous Material to,
in, on, under, about or from the Premises; or

 

b.
Lessee’s or Lessee’s Agents failure to comply with Hazardous Material laws; or

 

c.
Any release of Hazardous Material to, in, on, under, about, from or onto the
Premises caused by or occurring as a result of acts or omissions of Lessee or
Lessee’s Agents or occurring during the Lease Term, except ground water
contamination from other parcels where the source is from off the Premises not
arising from or caused by Lessee or Lessee’s Agents.

 

The
cost and expenses indemnified against include, but are not limited to the
following:

 

i.
Any and all claims, actions, suits, proceedings, losses, damages, liabilities,
deficiencies, forfeitures, penalties, fines, punitive damages, cost or
expenses;

 

ii.
Any claim, action, suit or proceeding for personal injury (including sickness,
disease, or death), tangible or intangible property damage, compensation for
lost wages, business income, profits or other economic loss, damage to the
natural resources of the environment, nuisance, pollution, contamination,
leaks, spills, release or other adverse effects on the environment;

 

iii.
The cost of any repair, clean-up, treatment or detoxification of the Premises
necessary to bring the Premises into compliance with all Hazardous Material
Laws, including the preparation and implementation of any closure, disposal,
remedial action, or other actions with regard to the Premises, and expenses (including,
without limitation, reasonable attorney’s fees and consultants fees,
investigation and laboratory fees, court cost and litigation expenses).

 

33.5        Lessee’s
Obligation to Remediate Contamination: Lessee shall, at its sole
cost and expense, promptly take any and all action necessary to remediate
contamination of the Premises by Hazardous Materials during the Lease Term as a
result of acts or omissions of Lessee or Lessee’s Agents :.

 

33.6        Obligation
to Notify: Lessor and Lessee shall each give written notice to
the other as soon as reasonably practical of (i) any communication
received from any governmental authority concerning Hazardous Material which
related to the Premises and (ii) any contamination of the Premises by
Hazardous Materials which constitutes a violation of any Hazardous Material
Laws.

 

33.7        Survival:
The obligations of Lessee under this Section 33 shall survive the
Lease Term or earlier termination of this Lease.

 

33.8        Certification
and Closure: On or before the end of the Lease Term or earlier
termination of this Lease, Lessee shall deliver to Lessor a certification
executed by Lessee stating that, to the best of Lessee’s knowledge, there
exists no violation of Hazardous Material Laws resulting from Lessee’s
obligation in Paragraph 33.  If pursuant
to local ordinance, state or federal law, Lessee is required, at the expiration
of the Lease Term, to submit a closure plan for the Premises to a local, state
or federal agency, then Lessee shall comply at its sole cost and expense with
the requirements of the closure plan and furnish to Lessor a copy of such plan.

 

14

 

33.9        Prior
Hazardous Materials: Lessee shall have no obligation to clean up or to
hold Lessor harmless with respect to any Hazardous Material or wastes
discovered on the Premises, except as a result of Environmental Surcharges,
which were not introduced into, in, on, about, from or under the Premises
during the Lease Term by Lessee or Lessee’s Agents or ground water
contamination from other parcels where the source is from off the Premises not
arising from or caused by Lessee or Lessee’s Agents.

 

34.          Brokers: Lessor and
Lessee represent that they have not utilized or contacted a real estate broker
or finder with respect to this Lease and Lessee agrees to indemnify and hold
Lessor harmless against any claim, cost, liability or cause of action asserted
by any broker or finder claiming through Lessee.  Lessor represents and warrants that it has not
utilized or contacted a real estate broker or finder with respect to this Lease
and Lessor agrees to indemnify and hold Lessee harmless against any claim,
cost, liability or cause of action asserted by any broker or finder claiming
through Lessor.

 

35.          Option to Extend

 

A. Option: Lessor hereby grants to
Lessee two (2) options to extend the Lease Term at 95% of the fair market
monthly Rent, with the extended term of each option to be for a period of five (5) years,
on the following terms and conditions:

 

(i) Lessee
shall give Lessor written notice of its exercise of its option to extend no
earlier than twelve (12) , nor later than six (6) calendar months before
the Lease Term would end but for said exercise. 
If Lessee and Lessor have not agreed to rental terms in writing, Lessee
may withdraw its notice of exercise of an extension option prior to six (6) months
before the Lease Term would end but for said exercise.  Lessor shall provide Lessee with Lessor’s
proposed base monthly rent for the option period within twenty (20) days of
Lessee’s written request.  However, once
Lessee delivers a notice of exercise of an option to extend the Lease Term it
may not be withdrawn except as provided for herein and subject to the
provisions of this Section 35, such notice shall operate to extend the
Lease Term.  Upon any extension of the
Lease Term pursuant to this Section 35, the term “Lease Term” as used in
this Lease shall thereafter include the then extended term.  Time is of the essence.

 

(ii) Lessee
may not extend the Lease Term pursuant to any option granted by this Section 35
if Lessee is in default beyond applicable notice and related cure periods as of
the date of the exercise of its option. 
If Lessee has committed a default by Lessee as defined in Section 14
or 32 that has not been cured or waived by Lessor in writing by the date that
any extended term is to commence, then Lessor may elect not to allow the Lease
Term to be extended, notwithstanding any notice given by Lessee of an exercise
of this option to extend.

 

(iii) All
terms and conditions of this Lease shall apply during the extended term, except
that the base rent and rental increases for each extended term shall be
determined as provided in Section 35 (B) below

 

(iv) The
option rights of Mosys, Inc. granted under this Section 35 are
granted for Mosys, Inc.’s personal benefit and may not be assigned or
transferred by Mosys, Inc. or exercised if Mosys, Inc. is not
occupying the Premises at the time of exercise. 
Excepted Parties may have the benefit of the option rights.

 

B. Extended Term Rent - Option Period: The monthly
Rent for the Premises during the extended term shall equal 95% of the fair
market monthly Rent for the Premises as of the exercise date of the extended
term. Promptly upon Lessee’s exercise of the option to extend, Lessee and Lessor
shall meet and attempt to agree on the fair market monthly Rent for the
Premises as of the commencement date of the extended term.  In the event the parties fail to agree upon
the amount of the monthly Rent for the extended term prior to commencement
thereof, the monthly Rent for the extended term shall be determined by
appraisal in the 

 

15

 

manner
hereafter set forth.  Annual base rent
increases during the extended term shall be three and one-half percent (3.5%)
per year.  In the event it becomes
necessary under this paragraph to determine the fair market monthly Rent of the
Premises by appraisal, Lessor and Lessee each shall appoint a real estate
appraiser within five days after Lessor or Lessee notifies the other party that
the proposed rental rate for the extended term is unacceptable, who shall be a
member of the American Institute of Real Estate Appraiser (“AIREA”) and such
appraisers shall each determine the fair market monthly Rent for the Premises
taking into account the value of the Premises and the amenities provided by the
outside areas, the common areas, and the building, and prevailing comparable
Rentals in the area.  Such appraisers
shall, within twenty (20) business days after their appointment, complete their
appraisals and submit their appraisal reports to Lessor and Lessee.  If the fair market monthly Rent of the
Premises established in the two (2) appraisals varies by five percent (5%)
or less of the higher Rent, the average of the two shall be controlling.  If said fair market monthly Rent varies by
more than five percent (5%) of the higher Rental, said appraisers, within ten (10) days
after submission of the last appraisal, shall appoint a third appraiser who
shall be a member of the AIREA and who shall also be experienced in the
appraisal of Rent values and adjustment practices for commercial properties in
the vicinity of the Premises.  Such third
appraiser shall, within twenty (20) business days after his appointment,
determine by appraisal the fair market monthly Rent of the Premises taking into
account the same factors referred to above, and submit his appraisal report to
Lessor and Lessee.  The fair market
monthly Rent determined by the third appraiser for the Premises shall be controlling,
unless it is less than that set forth in the lower appraisal previously
obtained, in which case the value set forth in said lower appraisal shall be
controlling, or unless it is greater than that set forth in the higher
appraisal previously obtained in which case the Rent set for in said higher
appraisal shall be controlling.  If
either Lessor or Lessee fails to appoint an appraiser, or if an appraiser
appointed by either of them fails, after his appointment to submit his
appraisal within the required period in accordance with the foregoing, the
appraisal submitted by the appraiser properly appointed and timely submitting
his appraisal shall be controlling.  If
the two appraisers appointed by Lessor and Lessee are unable to agree upon a
third appraiser within the required period in accordance with the foregoing,
application shall be made within twenty (20) days thereafter by either Lessor
or Lessee to AIREA, which shall appoint a member of said institute willing to
serve as appraiser.  The cost of all
appraisals under this subparagraph shall be borne equally be Lessor and Lessee.

 

36.          Approvals: Whenever in
this Lease the Lessor’s or Lessee’s consent is required, such consent shall not
be unreasonably or arbitrarily withheld or delayed.  In the event that the Lessor or Lessee does
not respond to a request for any consents which may be required of it in this
Lease within ten business days of the request of such consent in writing by the
Lessee or Lessor, such consent shall be deemed to have been given by the Lessor
or Lessee.

 

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

 

38.          Indemnification of Lessor: Except to the
extent caused by the sole negligence or willful misconduct of Lessor or Lessor’s
Agents, Lessee shall defend, indemnify and hold Lessor harmless from and
against any and all obligations, losses, costs, expenses, claims, demands,
attorney’s fees, investigation costs or liabilities on account of, or arising
out of the use, condition or occupancy of the Premises or any act or omission
to act of Lessee or Lessee’s Agents or any occurrence in, upon, about or at the
Premises resulting for act or omissions of Lessee or Lessee’s Agents,
including, without limitation, any of the foregoing provisions arising out of
the use, generation, manufacture, installation, release, discharge, storage, or
disposal of Hazardous Materials by Lessee or Lessee’s Agents.  It is understood that Lessee is and shall be
in control and possession of the Premises and that Lessor shall in no event be
responsible or liable for any injury or damage or injury to any person
whatsoever, happening on, in, about, or in connection with the Premises, or for
any injury or damage to the Premises or any part thereof.  This Lease is entered into on the express condition
that Lessor shall not be liable for, or suffer loss by reason of injury to
person or property, 

 

16

 

from
whatever cause, which in any way may be connected with the use, condition or
occupancy of the Premises or personal property located herein. The provisions
of this Lease permitting Lessor to enter and inspect the Premises are for the
purpose of enabling Lessor to become informed as to whether Lessee is complying
with the terms of this Lease and Lessor shall be under no duty to enter,
inspect or to perform any of Lessee’s covenants set forth in this Lease.  Lessee shall further indemnify, defend and
hold harmless Lessor from and against any and all claims arising from any
breach or default in the performance of any obligation to Lessee’s part to be
performed under the terms of this Lease. 
The provisions of Section 38 shall survive the Lease Term or
earlier termination of this Lease with respect to any third party claims,
damage, injury or death occurring during the Lease Term.

 

39.          Right of First Refusal: Lessee shall
have the Right of First Refusal to expand into the balance of the building (the
“ROFR Space”), on the following terms and conditions:

 

(i) 
Prior to Lessor accepting any offer to lease the ROFR Space, or prior to Lessor
making any offer to lease the ROFR Space at any time during the Lease Term or
any extension thereof, Lessor shall give Lessee written notice of such offer
and Lessee shall have the opportunity to lease the ROFR Space on the terms and
conditions set forth in such offer . 
Lessee shall have the option, which may be exercised by written notice
to Lessor at any time within ten (10) business days from the receipt of
the Lessor’s notice, to agree to lease the ROFR Space on the terms and
conditions specified in the notice to Lessee. 
If Lessee fails to exercise its option within the ten (10) business
day period, Lessor shall automatically have the right to lease the ROFR Space
to such other tenant on the terms as specified in the notice, provided that
Lessor executes a written lease with such tenant within six (6) months
after the date of Lessor’s written notice to Lessee of the offer to lease.

 

(ii) 
Lessee may not expand the Premises pursuant to any right of first refusal
granted by this Section 39 if Lessee is in Default as of the date of the
exercise of its option.  If Lessee has
committed a Default by Lessee as defined in Section 14 or 32 that has not
been cured or waived by Lessor in writing by the date that any expansion is to
commence, then Lessor may elect not to allow the Premises to be expanded,
notwithstanding any notice given by either Lessor or Lessee of an exercise of
this right of first refusal for the ROFR Space.

 

(iii) Lessee
may not expand the Premises pursuant to any right of first refusal granted by
this Section 39 if Lessee has delivered the Lease Termination Notice to
Lessor as described in Section 1.5, and this Section 39 will be null
and void and have no further force or effect.

 

(iv) All
terms and conditions of this Lease shall apply to the ROFR Space, except that
the base rent, base rent increases, term, term extensions, termination options,
any tenant improvement allowance or any additional tenant improvement allowance
for the ROFR Space shall be in accordance with the Right of First Refusal
notice from Lessor.

 

(v) The
rights of Mosys, Inc. granted under this Section 39 are granted for
Mosys, Inc.’s personal benefit and may not be assigned or transferred by
Mosys, Inc. or exercised if Mosys, Inc. is not occupying the Premises
at the time of exercise.  Excepted
Parties may have the benefit of this Right of First Refusal.

 

40.          Successors And Assigns: The covenants
and conditions herein contained shall, subject to the provisions as to
assignment, apply to and bind the heirs, successors, executors, administrators
and assigns of all of the parties hereto; and all of the parties hereto shall
be jointly and severally liable hereunder.

 

41.          Miscellaneous Provisions: All rights and
remedies hereunder are cumulative and not alternative to the extent permitted
by law and are in addition to all other rights or remedies in law and in
equity.

 

17

 

42.          Choice of Law:  This lease shall be construed and enforced in
accordance with the substantive laws of the State of California.  The language of all parts of this lease shall
in all cases be construed as a whole according to its fair meaning and not
strictly for or against either Lessor or Lessee.

 

43.          Early Termination:  Early Termination of the
Lease will be allowed subject to the terms herein; (i) No earlier than 24
months from Commencement Date, (ii) Minimum of ninety (90) days advance
written notice from Lessee to Lessor and (iii)  Lessee has signed a new
lease and is moving into a facility owned by Lessor or one of its affiliated
entities that is at least 20% larger than current premises for rent of at least
95% of the then fair market monthly Rent. 
Lessee may also cancel the Lease at the end of the 60th or 90th month of
Lease, subject to Lessee having provided a minimum of 9 months advance notice,
if Lessor does not have a property available that meets the reasonable
requirements of Lessee or Lessee has sold all or substantially all the assets
of the Lessee to an independent buyer, provided the Lessee pays Lessor any
amount equal to the unamortized outstanding unamortized balance of the Lessee
Improvements.  Landlord estimates that,
as of the end of the 60th month of the Lease Term, the unamortized outstanding
balance shall be $874,238.00 and at then end of the 90th month the unamortized outstanding balance
shall be $460,882. The unamortized portion of the Lessee Improvements was determined
using an interest rate of Seven percent (7%).

 

INTENTIONALLY
BLANK

 

44.          Entire Agreement:  This Lease is the entire agreement between
the parties, and there are no agreements or representations between the parties
except as expressed herein.  Except as
otherwise provided for herein, no subsequent change or addition to this Lease
shall be binding unless in writing and signed by the parties hereto.

 

In
Witness Whereof, Lessor and Lessee have executed this Lease, the
day and year first above written.

 

18

 

	
  Lessor  

  Mission West Properties, L.P. I  

  By: Mission West Properties, Inc., its
  general partner

  	
   

  	
  Lessee  

  MoSys, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Carl E. Berg

  	
   

  	
  By:

  	
  /s/
  James Sullivan

  
	
  Signature of authorized representative

  	
   

  	
  Signature
  of authorized representative

  
	
   

  	
   

  	
   

  
	
  Carl E. Berg

  	
   

  	
  James
  Sullivan

  
	
  Printed name

  	
   

  	
  Printed
  name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title CEO

  	
   

  	
  Title
  CFO

  
	
   

  	
   

  	
   

  
	
  Date July 19, 2010

  	
   

  	
  Date
  July 20, 2010

  

 

Exhibit A and A.1

 

Site plan and floor plan to be attached.

 

19Exhibit
10.1

 

EARTHLINK, INC.

 

2006 EQUITY AND CASH INCENTIVE PLAN

 

Restricted Stock Unit Agreement

 

No. of
Restricted Stock

Units
Awarded Hereunder:

 

THIS
RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) dated as of the 20th day of July, 2010, between EarthLink, Inc.,
a Delaware corporation (the “Company”), and
         (the “Participant”) is made
pursuant and subject to the provisions of the Company’s 2006 Equity and Cash
Incentive Plan (the “Plan”), a copy of which is attached hereto.  All terms used herein that are defined in the
Plan have the same meaning given them in the Plan.

 

1.                                      Grant of Restricted Stock Units.  Pursuant to the Plan, the Company, on
July 20, 2010 (the “Date of Grant”), granted to the Participant
        Restricted Stock Units, each
Restricted Stock Unit corresponding to one share of the Common Stock of the
Company (this “Award”).  Subject to the
terms and conditions of the Plan, each Restricted Stock Unit represents an
unsecured promise of the Company to deliver, and the right of the Participant
to receive, one share of the Common Stock of the Company at the time and on the
terms and conditions set forth herein. 
As a holder of Restricted Stock Units, the Participant has only the
rights of a general unsecured creditor of the Company.

 

2.                                      Terms and Conditions.  This Award is subject to the following terms
and conditions:

 

(a)                                 Vesting of Award.

 

(i)                                     In General.  Except as otherwise provided below, thirty
percent (30%) of the outstanding Restricted Stock Units (rounded down to the
nearest whole share of Company Common Stock) shall become earned and payable on
May 20, 2011, and the remaining outstanding Restricted Stock Units shall
become earned and payable on November 20, 2011, provided in each case the
Participant has been continuously employed by, or providing services to, the
Company or an Affiliate from the Date of Grant through such date.

 

(ii)                                  Change in
Control.  If there is a Change in
Control and no provision is made for the continuance, assumption or
substitution by the Company or its successor in connection with the Change in
Control of the outstanding Restricted Stock Units, then immediately prior to
the Change in Control, to the extent not previously vested, one hundred percent
(100%) of the outstanding Restricted Stock Units shall become earned and
payable, provided the Participant has been continuously employed by, or
providing services to, the Company or an Affiliate from the Date of Grant until
the Change in Control.  Notwithstanding the
foregoing, if provision is made for the continuance, assumption or substitution
by the Company or its successor in connection with the Change in Control of the
outstanding Restricted Stock Units and at any time on or after a Change in
Control the 

 

 

Participant’s
employment is terminated (A) by the Company or an Affiliate for any reason
other than Cause and other than on account of death or Disability, or (B) by
the Participant “For Good Reason” (with such term having the meaning set forth
in the EarthLink, Inc. Amended and
Restated Change-In-Control Accelerated Vesting and Severance Plan(the “CIC Plan”)
with respect to accelerated vesting of outstanding restricted stock units for a
participant in the CIC Plan at the “Bronze Benefit Category” and solely for
purposes of subsections (i) and (ii) of such definition, but in no
respect shall Participant be entitled to participate in the CIC Plan),
then, to the extent not previously vested, one hundred percent (100%) of the
outstanding Restricted Stock Units shall become earned and payable, provided
the Participant has been continuously employed by, or providing services to,
the Company or an Affiliate from the Date of Grant until the time of such
termination of employment; provided, however, that Participant must give the
Company notice of any event or condition that would constitute “For Good Reason”
within thirty (30) days of the event or condition that would constitute “for
Good Reason,” and upon receipt of such notice the Company shall have thirty
(30) days to remedy such event or condition, and if such event or condition is
not remedied within such thirty (30)-day period, any termination of employment
by Participant “For Good Reason” must occur within sixty (60) days after the
period for remedying such condition or event has expired.

 

(iii)                               Position
Elimination. 
Notwithstanding the foregoing, if before a Change in Control occurs the
Company or an Affiliate terminates the Participant’s employment as the result
of a position elimination, such that the Participant is entitled to receive
benefits under any position elimination and severance plan maintained by the
Company or Affiliate, then, to the extent not previously vested, the
outstanding Restricted Stock Units shall become earned and payable as to that
number that equals (A) the product of the aggregate number of Restricted
Stock Units subject to this Agreement multiplied by a fraction, the numerator
of which equals the number of full or partial months during which the
Participant remained continuously employed by the Company or an Affiliate from the
Date of Grant until the position elimination (but not to exceed sixteen (16))
and the denominator of which is sixteen (16), minus (B) the aggregate
number of Restricted Stock Units that have vested previously.

 

(iv)                              Vesting Date.  Outstanding Restricted Stock Units shall be
forfeitable until they become earned and payable as described above.  Each date upon which the Restricted Stock
Units or any portion thereof becomes earned and payable shall be referred to as
a “Vesting Date” with respect to the applicable number of Restricted Stock
Units.

 

(b)                                 Settlement of Award. 
Subject to the terms of this Section 2 and Section 3 below,
the Company shall issue to the Participant one share of Common Stock for each
Restricted Stock Unit that becomes earned and payable under Section 2(a) above
and shall deliver to the Participant such shares as soon as practicable (and
within thirty (30) days) after the applicable Vesting Date.  As a condition to the settlement of the
Award, the Participant shall be required to pay any required withholding taxes
attributable to the Award in cash or cash equivalent acceptable to the
Committee.  However, the Company in its
discretion may, but is not required to, allow the Participant to satisfy any
such applicable withholding taxes (i) by allowing the Participant to
surrender shares of Common Stock that the Participant already owns (but only
for the minimum required withholding), (ii) by the Company withholding
shares of Common Stock issuable to the Participant hereunder, with such shares
to be valued at their fair market

 

2

 

value as of the date of
settlement, (iii) by such other medium of payment as the Committee shall
authorize or (iv) by any combination of the allowable methods of payment
set forth herein.

 

3.                                      Termination of Award.  Notwithstanding any other provision of this
Agreement, outstanding Restricted Stock Units that have not become earned and
payable before the termination of the Participant’s employment with  the Company or an Affiliate, shall expire and may not become earned and
payable at and after such time.

 

4.                                      Shareholder Rights.  Except as set forth in Section 6
below, the Participant shall not have any rights as a shareholder with respect
to shares of Common Stock subject to any Restricted Stock Units until issuance
of such shares of Common Stock.  The
Company may include on any certificates representing shares of Common Stock
issued pursuant to this Award such legends referring to any representations,
restrictions or any other applicable statements as the Company, in its
discretion, shall deem appropriate.

 

5.                                      Transferability.  Except as otherwise provided herein, this
Award is not transferable other than by will or the laws of descent and
distribution.  If this Award is
transferred by will or the laws of descent and distribution, the Award must be
transferred in its entirety to the same person or persons or entity or
entities.  Notwithstanding the foregoing,
the Participant, at any time prior to the Participant’s death, may transfer all
or any portion of this Award to the Participant’s children, grandchildren,
spouse, one or more trusts for the benefit of such family members or a
partnership in which such family members are the only partners, on such terms
and conditions as are appropriate for such transferees to be included in the
class of transferees who may rely on a Form S-8 registration statement
under the Securities Act of 1933 to sell shares received pursuant to the
Award.  Any such transfer will be
permitted only if (i) the Participant does not receive any consideration
for the transfer and (ii) the Committee expressly approves the
transfer.  Any transferee to whom this
Award is transferred shall be bound by the same terms and conditions that
governed the Award during the time it was held by the Participant (which terms
and conditions shall still be read from the perspective of the Participant);
provided, however, that such transferee may not transfer the Award except than
by will or the laws of descent and distribution.  Any such transfer shall be evidenced by an
appropriate written document that the Participant and the transferee execute
and the Participant shall deliver a copy thereof to the Committee on or before
the effective date of the transfer.  No
right or interest of the Participant or any transferee in this Award shall be
liable for, or subject to, any lien, liability or obligation of the Participant
or transferee.

 

6.                                      Cash Dividends.  For so long as the Participant holds
outstanding Restricted Stock Units, if the Company pays any cash dividends on
its Common Stock, then the Company will pay the Participant in cash for each
outstanding Restricted Stock Unit covered by this Award as of the record date
for such dividend, less any required withholding taxes, the per share amount of
such dividend that the Participant would have received had the Participant
owned the underlying shares of Common Stock as of the record date of the
dividend if, and only if, the applicable Restricted Stock Units become earned
and payable and the related shares of Common Stock are issued to the
Participant.  In that case, the Company
shall pay such cash amounts to the Participant, less any required withholding
taxes, at the same time the related shares of Common Stock are delivered.  The additional payments pursuant to this Section 6
shall be treated as a separate arrangement.

 

3

 

7.                                      Change in Capital Structure.  The terms of this Award shall be adjusted in
accordance with the terms and conditions of the Plan as the Committee
determines is equitably required in the event the Company effects one or more
stock dividends, stock splits, subdivisions or consolidations of shares or
other similar changes in capitalization.

 

8.                                      Notice.  Any notice or other communication given
pursuant to this Agreement, or in any way with respect to the Award, shall be
in writing and shall be personally delivered or mailed by United States
registered or certified mail, postage prepaid, return receipt requested, to the
following addresses:

 

	
  If
  to the Company:

  	
  EarthLink, Inc.

  
	
   

  	
  1375
  Peachtree Street - Level A

  
	
   

  	
  Atlanta,
  Georgia 30309

  
	
   

  	
  Attention:
  General Counsel

  

 

If to the Participant:

 

9.                                      No Right to Continued Employment or Service.  Neither the Plan, the granting
of this Award nor any other action taken pursuant to the Plan or this Award
constitutes or is evidence of any agreement or understanding, express or
implied, that the Company or any Affiliate will retain the Participant as an
employee or other service provider for any period of time or at any particular
rate of compensation.

 

10.                               Agreement to Terms of Plan and Agreement.  The Participant has received a copy of the
Plan, has read and understands the terms of the Plan and this Agreement, and
agrees to be bound by their terms and conditions.

 

11.                               Tax Consequences.  The Participant acknowledges that (i) there
may be adverse tax consequences upon acquisition or disposition of the shares
of Common Stock issued pursuant to this Award and (ii) Participant should
consult a tax adviser prior to such acquisition or disposition.  This Award and all payments hereunder are
intended to be exempt from Code Section 409A as short-term deferrals.  However, the Participant is solely
responsible for determining the tax consequences of the Award and for
satisfying the Participant’s tax obligations with respect to the Award
(including, but not limited to, any income or excise taxes resulting from the
application of Code Section 409A), and neither the Company nor any
Affiliate shall be liable to the Participant or any other person if this Award
is subject to taxes, penalties or interest as a result of failing to be exempt
from, or comply with, Code Section 409A. 
For purposes
of this Agreement, all rights to payments hereunder shall be treated as rights
to receive a series of separate payments and benefits to the fullest extent
allowed by Section 409A of the Code.

 

12.                               Binding Effect.  Subject to the limitations stated above and
in the Plan, this Agreement shall be binding upon and inure to the benefit of
the distributees, legatees and personal representatives of the Participant and
the successors of the Company.

 

4

 

13.                               Conflicts.  In the event of any conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall govern.  All references
herein to the Plan shall mean the Plan as in effect on the date hereof.

 

14.                               Counterparts.  This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.

 

15.                               Miscellaneous.  The parties agree to execute such further
instruments and take such further actions as may be necessary to carry out the
intent of the Plan and this Agreement. 
This Agreement and the Plan shall constitute the entire agreement of the
parties with respect to the subject matter hereof.

 

16.                               Governing Law.  This Agreement shall be governed by the laws
of the State of Delaware, except to the extent federal law applies.

 

5

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and the Participant has affixed his signature hereto.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  EARTHLINK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  

 

6

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