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Exhibit 10.8  

INDUSTRIAL
LEASE AGREEMENT 

Between

Landlord:        VEF
III FUNDING, LLC,

                a Delaware limited liability company 

And 

Tenant:        ALTIGEN
COMMUNICATIONS, INC.,

                a Delaware corporation 

Dated:
October 1, 2003 

For
Premises Located At: 

4555
CUSHING PARKWAY

FREMONT, CALIFORNIA 

  

 
 

TABLE OF CONTENTS    
    
    LEASE AGREEMENT    
    

	 
	 	 
	 	 
	 	Page

	A.	 	PREMISES/TERM/POSSESSION	 	1
	 	 	1.	 	Premises	 	1
	 	 	2.	 	Lease Term	 	2
	 	 	3.	 	Landlord's Failure to Give Possession	 	5
	 	 	4.	 	Quiet Enjoyment	 	5
	B.	 	RENT/PAYMENT/SECURITY DEPOSIT	 	5
	 	 	5.	 	Base Rent	 	5
	 	 	6.	 	Rent Payment	 	6
	 	 	7.	 	Operating Expenses/Taxes/Impositions	 	6
	 	 	8.	 	Late Charge	 	10
	 	 	9.	 	Partial Payment	 	10
	 	 	10.	 	Security Deposit	 	10
	C.	 	USE/LAWS/RULES	 	11
	 	 	11.	 	Use of Premises/Environmental Matters	 	11
	 	 	12.	 	Compliance with Laws	 	15
	 	 	13.	 	Waste Disposal	 	15
	 	 	14.	 	Rules and Regulations	 	15
	D.	 	UTILITIES/SIGNAGE/TENANT BUILDOUT	 	15
	 	 	15.	 	Utilities	 	15
	 	 	16.	 	Signs	 	16
	 	 	17.	 	Buildout Allowance and Tenant Finishes	 	16
	 	 	18.	 	Force Majeure	 	18
	E.	 	REPAIRS/ALTERATIONS/CASUALTY/CONDEMNATION	 	18
	 	 	19.	 	Repairs By Landlord	 	18
	 	 	20.	 	Repairs By Tenant	 	19
	 	 	21.	 	Alterations and Improvements	 	19
	 	 	22.	 	Liens	 	20
	 	 	23.	 	Destruction or Damage	 	21
	 	 	24.	 	Eminent Domain	 	22
	 	 	25.	 	Damage or Theft of Personal Property	 	22
	F.	 	INSURANCE/INDEMNITIES/WAIVER/ESTOPPEL	 	22
	 	 	26.	 	Insurance; Waivers	 	22
	 	 	27.	 	Indemnities	 	25
	 	 	28.	 	Acceptance and Waiver	 	25
	 	 	29.	 	Estoppel	 	25
	G.	 	DEFAULT/REMEDIES/SURRENDER/HOLDING OVER	 	26
	 	 	30.	 	Notices	 	26
	 	 	31.	 	Abandonment of Premises	 	26
	 	 	32.	 	Default	 	26
	 	 	33.	 	Landlord's Remedies	 	27
	 	 	34.	 	Service of Notice	 	28
	 	 	35.	 	Advertising	 	28
	 	 	36.	 	Surrender of Premises	 	28
	 	 	37.	 	Cleaning Premises	 	29
	 	 	38.	 	Removal of Fixtures	 	29
	 	 	39.	 	Holding Over	 	29
	 	 	40.	 	Attorney's Fees	 	29
	 	 	41.	 	Mortgagee's Rights	 	29
	 	 	 	 	 	 	 

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	H.	 	LANDLORD ENTRY/RELOCATION/ASSIGNMENT AND SUBLETTING	 	31
	 	 	42.	 	Entering Premises	 	31
	 	 	43.	 	Relocation	 	31
	 	 	44.	 	Assignment and Subletting	 	31
	I.	 	SALE OF BUILDING; LIMITATION OF LIABILITY	 	35
	 	 	45.	 	Sale	 	35
	 	 	46.	 	Limitation of Liability	 	35
	J.	 	BROKERS/CONSTRUCTION/AUTHORITY	 	35
	 	 	47.	 	Broker Disclosure	 	35
	 	 	48.	 	Definitions	 	35
	 	 	49.	 	Construction of this Agreement	 	36
	 	 	50.	 	No Estate In Land	 	36
	 	 	51.	 	Paragraph Titles; Severability	 	36
	 	 	52.	 	Cumulative Rights	 	36
	 	 	53.	 	Waiver of Jury Trial	 	36
	 	 	54.	 	Entire Agreement	 	37
	 	 	55.	 	Submission of Agreement	 	37
	 	 	56.	 	Authority	 	37
	 	 	57.	 	Intentionally deleted	 	37
	 	 	58.	 	Joint and Several Obligations	 	37
	 	 	59.	 	Name of Building	 	37
	 	 	60.	 	Governing Law	 	37
	 	 	61	 	Obligations Independent	 	37
	 	 	62.	 	Exhibits	 	38
	 	 	63.	 	Security Measures	 	38
	 	 	64.	 	Reservations	 	38
	 	 	65.	 	Interruption of Services	 	38
	 	 	66.	 	Furniture	 	38

 
 

LIST OF EXHIBITS    
    

	A	 	Legal Description of Property
	A-1	 	Plan of Premises
	B	 	Work Letter
	C	 	Substantial Completion/Acceptance Letter
	D	 	Hazardous Materials Questionnaire
	E	 	Rules and Regulations
	F	 	Furniture
	G	 	Space Plan
	G-1	 	Budget

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BASIC LEASE PROVISIONS  
    

        The following sets forth some of the Basic Provisions of the Lease. In the event of any conflict between the terms of these Basic Lease Provisions and the
referenced Sections of the Lease, the referenced Sections of the Lease shall control. In addition to the following Basic Lease Provisions, all of the other terms and conditions and sections of the
Industrial Lease Agreement hereinafter set forth are hereby incorporated as an integral part of this Summary. 

	

1.	
 	

A.  Building (See Section 1):	
 	

4555 Cushing Parkway

Fremont, California
	

 	
 	

B.  Industrial Center (See Section 1):	
 	

Multi Building complex known as:

Northport Business Center

Fremont, California, consisting of 45635, 45645, 45655, 45865 and

45875 Northport Loop East and 4555 Cushing Parkway
	

2.	
 	

Rentable Square Feet of Premises:	
 	

31,925
	

 	
 	

Rentable Square Feet of Building:	
 	

58,130
	

 	
 	

Rentable Square Feet of Industrial Center: (See Section 1)	
 	

144,624
	

3.	
 	

Term (See Section 2):	
 	

62 full calendar months
	

 	
 	

Target Commencement Date:	
 	

December 22, 2003, subject to Section 2
	

 	
 	

Target Ready Date	
 	

November 22, 2003, subject to Section 2
	

 	
 	

Target Expiration Date:	
 	

February 21, 2009, subject to Section 2
	

 	
 	

Option Term:	
 	

Five (5) years following Expiration Date, subject to Section 2
	

4.	
 	

Base Rent (See Section 5):	
 	

 

	Period
 
	 	Rate Per Rentable

Square Foot of Premises
	 	Monthly

Installment

	Months 1-5	 	$0.00	 	$	0.00
	Months 6-17	 	$0.64	 	$	20,432.00
	Months 18-29	 	$0.66	 	$	21,070.50
	Months 30-41	 	$0.68	 	$	21,709.00
	Months 42-53	 	$0.70	 	$	22,347.50
	Months 54-62	 	$0.72	 	$	22,986.00
	Option Term:	 	95% of FMV, to be determined	 	 	 

	

5.	
 	

Rent Payment Address

(See Section 5)

Lend Lease AAF VEF III Northport

File # 1425900944

P.O. Box 73860

San Francisco, California 94160-3860	
 	

 
	

6.	
 	

Use of Premises:	
 	

Office, research and development, manufacturing/assembly, warehouse and related uses, all in conformance with applicable zoning requirements.
	 	 	 	 	 

iii

 

	

7.	
 	

Tenant's Share (See Section 7):	
 	

54.92%
	

8.	
 	

Security Deposit (See Section 10):	
 	

$50,000.00
	

9.	
 	

Unreserved Parking Spaces (See Section 1):	
 	

115
	

10.	
 	

Tenant Improvement Allowance

(See Section 17):	
 	

$1.08 per rentable square foot or $34,479.00; and, at Tenant's option, up to $5.00 per rentable square foot or $159,625.00 as a "Supplemental Allowance," and $50,000.00 as a "Moving Allowance."
	

11.	
 	

Tenant's Liability Insurance

(See Section 26):	
 	

Combined Single Limit: $1,000,000

Annual Aggregate Limit: $4,000,000

Umbrella Limit: $4,000,000
	

12.	
 	

Landlord's Broker (See Section 47):	
 	

Commercial Property Services
	

 	
 	

Tenant's Broker (See Section 47):	
 	

Cornish & Carey Commercial
	

13.	
 	

Notice Address (See Section 30)	
 	

 
	

 	
 	

Landlord
	
 	

Tenant

	 	 	VEF III Funding, LLC

C/O Lend Lease Real Estate

Investments, Inc.

One Front Street, Suite 1100

San Francisco, CA 94111

Attn: Peggy Toppin,

        Investment Manager

Fax No.: (415) 733-9219	 	Altigen Communications, Inc.

47427 Fremont Boulevard

Fremont, CA 94538

Attn: Mr. Phil McDermott

Fax No.: (510) 252-9738
	 	 	 	 	With a copy of Tenant's notices to:
	 	 	 	 	Silicon Valley Law Group

152 N. Third Street, Suite 900

San Jose, CA 95112

Attn: Lucy A. Lofrumento

Fax No.: (408) 286-1430
	

14.	
 	

Guarantor (See Section 57):	
 	

None

        [Signatures on next page] 

iv

 

        IN
WITNESS WHEREOF, Landlord and Tenant have executed this instrument as of the date set forth on the first page hereof. 

	Landlord:	 	Tenant:
	VEF III FUNDING, LLC, a

Delaware limited liability company	 	ALTIGEN COMMUNICATIONS, INC., a

Delaware corporation
	

By:	
 	

/s/  PEGGY A. TOPPIN      
	
 	

By:	
 	

/s/  PHILLIP MCDERMOTT      

	

Name:	
 	

Peggy A. Toppin
	
 	

Name:	
 	

Phillip McDermott

	

Its:	
 	

Vice President
	
 	

Its:	
 	

CFO

	

ATTEST/WITNESS:	
 	

ATTEST/WITNESS:
	

By:	
 	

	
 	

By:	
 	

	

Its:	
 	

	
 	

Its:	
 	

	

ATTEST/WITNESS:	
 	

ATTEST/WITNESS:
	

By:	
 	

	
 	

By:	
 	

	

Its:	
 	

	
 	

Its:	
 	

v

  

 
 

INDUSTRIAL LEASE AGREEMENT    
    

        THIS INDUSTRIAL LEASE AGREEMENT (hereinafter called the "Lease") is made and entered into as of the date appearing on the first page
hereof by and between the Landlord and Tenant identified above. 

A. Premises/Term/Possession  

        1.    Premises.    

        (a)   Landlord
does hereby rent and lease to Tenant and Tenant does hereby rent and lease from Landlord the Premises located in the Building and in the Industrial Center
identified in the Basic Lease Provisions, situated on the real property described in Exhibit "A" attached hereto (the "Property"), such
Premises as all further shown by diagonal lines on the drawing attached hereto as Exhibit "A-1" and made a part hereof by reference. Tenant has inspected the Premises and agrees to accept
the same "AS IS," without representation or warranty on the part of Landlord to perform any improvements therein, except as expressly set forth in Exhibit "B" attached
hereto and made a part of hereof, subject to all other representations and warranties of Landlord expressly set forth in this Lease. Landlord and Tenant agree that the number of rentable square feet
described in Paragraph 2 of the Basic Lease Provisions has been confirmed and conclusively agreed upon by the parties. No easement for light, air or view is granted hereunder or included within
or appurtenant to the Premises. 

        (b)   Tenant
shall be entitled to use the number of unreserved parking spaces specified in Paragraph 9 of the Basic Lease Provisions on those portions of the Common
Areas designated from time to time by Landlord for parking, which shall include fifteen (15) general "visitor"-designated parking spaces near the front entrance of the Premises (marked on the
ground as such and identified by signage erected by Landlord). Tenant shall not use more parking spaces than said number. Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "Permitted Size Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and loaded or unloaded
as directed by Landlord in the Rules and Regulations as defined in Paragraph 14 issued by Landlord. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant's employees, suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those designated by Landlord for such activities. If Tenant permits or
allows any of the prohibited activities described in this Paragraph 1, then Landlord shall have the right, upon reasonable notice (which may take the form of a general notice in the parking
areas), in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable upon demand by
Landlord. 

(c)  (i) The
term "common areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Industrial Center and interior utility
raceways within the Premises that are provided and designated by the Landlord from time to time for the general non-exclusive use of Landlord, Tenant and other Tenants of the Industrial
Center and their respective employees, suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas. Within such common areas, Landlord shall provide Tenant with a loading area for Tenant's exclusive access. 

        (ii)   Landlord
hereby grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease,
the non-exclusive right to use, in common with others entitled to such use, the common areas as they exist from time to time, subject to any rights, powers, and privileges reserved by
Landlord under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Industrial Center; provided, however that Tenant shall have no right to use the
common areas of buildings in 

1

 

the
Industrial Center other than the common areas within the Building. Under no circumstances shall the right herein granted to use the common areas be deemed to included the right to store any
property, temporarily or permanently, in the common areas. Any such storage shall be permitted only by the prior written consent of Landlord or Landlord's designated agent, which consent may be
revoked at any time. In the event that any unauthorized storage shall occur then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to
remove the property and charge the cost of Tenant, which cost shall be immediately payable upon demand by Landlord. 

        (iii)  Landlord
or such other person(s) as Landlord may appoint shall have the exclusive control and management of the common areas and shall have the right, from time to
time, to establish, modify,
amend and enforce reasonable, non-discriminatory Rules and Regulations with respect thereto in accordance with Paragraph 14. Tenant agrees to abide by and conform to all such Rules
and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform; provided, however, that Tenant shall only be bound by Rules and
Regulations and changes thereto if Landlord has provided such Rules and Regulations (or changes thereto) to Tenant and in the case of changes to the Rules and Regulations, Tenant has received thirty
(30) days prior written notice of such changes. Landlord shall not be responsible to Tenant for the non-compliance with said rules and regulations by other tenants of the Industrial
Center, but, upon receipt of written notice from Tenant, landlord shall use commercially reasonable efforts to enforce such rules and regulations as to other tenants not in compliance therewith. 

        (iv)  Tenant
shall not succeed to any of Landlord's easement rights over and relating to the Property, nor shall Tenant obtain any rights to common areas, as designated by
Landlord, other than those rights specifically granted to Tenant in this Lease. Landlord shall have the sole right of control over the use, maintenance, configuration, repair and improvement of the
common areas, which Landlord shall keep neat and clean and in good condition and repair. Landlord may make such changes to the use or configuration of, or improvements comprising, the common areas as
Landlord may elect without liability to Tenant, provided that Landlord shall not have the right to make any changes that materially adversely affect Tenant's vehicular parking rights or areas,
Tenant's path of ingress and egress, Tenant's signage, the common area lighting, or Tenant's use and enjoyment of the Premises and common areas. 

        2.    Lease Term.    

        (a)   Tenant
shall have and hold the Premises for the term ("Term") identified in the Basic Lease Provisions commencing on the date (the
"Commencement Date") which is thirty (30) days after the date on which Landlord notifies Tenant that the Work in the Premises is substantially complete (or is
deemed substantially complete pursuant to Paragraph 4(b) of Exhibit "B") and the Building Systems are in good working order as required by Section 19 of this
Lease (the "Ready Date"), and shall terminate at midnight on the last day of the Term (the "Expiration Date"), unless sooner terminated or
extended as hereinafter provided. Promptly following the Commencement Date, Landlord and Tenant shall enter into a letter agreement in the form attached hereto as Exhibit
"C", specifying and/or confirming the Commencement Date and the Expiration Date (and the number of rentable square feet contained within the Premises and the amount of Base Rent payable
hereunder, if such numbers as finally determined differ from those set forth in the Basic Lease Provisions). 

        (b)   Landlord
shall permit Tenant and Tenant's agents and contractors to enter the Premises on and after the Ready Date, in order to permit Tenant to prepare the Premises for
Tenant's occupancy (such entry prior to the Commencement Date referred to herein as the "Early Entry Period". If Landlord permits such entry prior to completion of the Work, then such permission is
conditioned upon Tenant and Tenant's agents, contractors, workmen, mechanics, suppliers, and invitees working in 

2

 

harmony
and not interfering with Landlord and Landlord's contractors in doing the Work. If at any time such entry shall cause or threaten to cause such interference, Landlord shall have the right to
withdraw such permission upon twenty-four (24) hours' oral or written notice to Tenant. Tenant agrees that any such entry into the Premises shall be deemed to be under all of the
terms, covenants, conditions, and provisions of this Lease (including, without limitation, all insurance requirements), except as to the covenant to pay Rent hereunder, and further agrees that
Landlord shall not be liable in any way for any injury, loss, or damage which may occur to any items of work constructed by Tenant or to other property of Tenant that may be placed in the Premises
prior to completion of the Work, the same being at Tenant's sole risk, except and only to the extent caused by Landlord's own negligence or willful misconduct. 

(c)(i)  Landlord
grants to Tenant one option to extend the Term (the "Extension Option") for a period of five (5) years (the "Extension Period"). Tenant's privilege to exercise the
Extension Option is expressly conditioned upon Tenant not being in default (following the expiration of all applicable notice and cure provisions) at the time the Extension Option is exercised and not
being in default (following the expiration of all applicable notice and cure provisions) between the time the Extension Option is exercised and the start of the Extension Period. 

        (ii)   Tenant
shall have the right to exercise the Extension Option by giving written notice (the "Extension Notice") to Landlord no later than nine (9) months and no
earlier than twelve (12) months prior to the Expiration Date of the Term. All terms and conditions of this Lease shall continue during the Extension Period, provided that during each Extension
Period, the Base Rent shall be ninety-five percent (95%) of the Fair Market Rent as of the date (the "Rent Determination Date") that is nine (9) months preceding the Expiration Date
(such Base Rent for the Extension Period being deemed "Renewal Rent"). 

        (iii)  As
used in this Lease, Fair Market Rent shall mean the effective rental rates then being obtained by tenants in the marketplace for comparable buildings and premises.
The effective rental rates shall include consideration of the presence or absence of tenant improvements or allowances existing or to be provided under the lease for such premises, rental abatements,
lease takeovers/assumptions, moving expenses and other forms of rental concessions, real estate brokerage commissions, proposed term of lease, extent of service provided or to be provided under the
lease for such premises, the time the particular rate under consideration became or is to become effective and any other relevant terms or conditions. 

        (iv)  In
the event of an exercise of an option by Tenant, Landlord shall notify Tenant of Landlord's determination of the Renewal Rent within thirty (30) days of the
Rent Determination Date and if Landlord and Tenant cannot agree on the Renewal Rent within thirty (30) days thereafter, the Renewal Rent payable during the Extension Period shall be
conclusively determined as follows: 

        (A)  Within
ten (10) days after the expiration of the thirty (30) day period, each party, at its cost and by giving notice to the other party, shall appoint an
unaffiliated MAI designated real estate appraiser with at least five (5) years' full-time commercial appraisal experience in the general vicinity of the Premises (an "Appraiser"),
to appraise and determine the then Fair Market Rent as described in this Section. 

        (B)  If
one party does not appoint an Appraiser within the time period in Section 2(c)(iv)(A) above, the Appraiser appointed by the other party shall be the sole
Appraiser and shall determine the Fair Market Rent. 

        (C)  If
neither party appoints an Appraiser within the time period set forth in Section 2(c)(iv)(A), the Base Rent during the Extension Period shall be the Base Rent
payable in the last full month immediately preceding the Expiration Date. 

3

 

        (D)  If
the two (2) Appraisers are so appointed by the parties, they shall meet promptly and attempt to appraise and determine the Fair Market Rent. If they are unable
to agree within thirty (30) days after the second Appraiser has been appointed, they shall attempt to select a third Appraiser who meets the qualifications stated in Section 2(c)(iv)(A)
within ten (10) days after the last day the two Appraisers are given to determine the Fair Market Rent. If they are unable to agree on a third Appraiser, either of the parties to this Lease, by
giving ten (10) days' notice to the other party, can apply to the President of the Alameda County Real Estate Board or the presiding judge of the Superior Court for Alameda County for the
selection of a third Appraiser who meets the qualifications stated in Section 2(c)(iv)(A). Each of the parties shall bear one-half (1/2) of the cost of appointing the
third Appraiser and of the third Appraiser's fees. The third Appraiser, however selected, shall be a person who has not previously acted in any capacity for either party or is not or has not been
affiliated with the other appointed Appraisers. 

        (E)  Within
thirty (30) days after the selection of the third Appraiser, a majority of the Appraisers shall appraise and determine the Fair Market Rent. If a majority
of the Appraisers are unable to so set the Fair Market Rent within the required period of time, the appraisals of the three Appraisers shall be added together and their total divided by three. The
resulting quotient shall be the Fair Market Rent. 

        (F)  If,
however, the low appraisal or the high appraisal are more than ten percent (10%) lower or higher than the middle appraisal, the low appraisal or the high appraisal
shall be disregarded. If only one appraisal is disregarded, the remaining two appraisals shall be added together and their total divided by two. The resulting quotient shall be the Fair Market Rent.
If two appraisals are disregarded, the remaining appraisal shall be the Fair Market Rent. 

        (d)   Except
in connection with an assignment which is to an Altigen Affiliate (as that term is hereinafter defined), the Extension Option is not assignable by Tenant, and any
attempted assignment shall be void. Additionally, if subleases (excluding Permitted Transfers) covering more than twenty-five percent (25%) of the Premises exist at the time of exercise of
the Extension Option, such exercise shall be of no force and effect. 

        3.    Landlord's Failure to Give Possession.    Landlord shall
not be liable for damages to Tenant for failure to deliver possession of the Premises to Tenant for any reason whatsoever, nor shall this Lease be void or voidable as a result of such delay, except
that the commencement of the Term shall be delayed until Landlord delivers possession of the Premises to Tenant (so long as Tenant is not responsible for such failure or delay). Landlord will use all
commercially reasonable efforts to deliver possession of the Premises to Tenant, with the Work substantially completed, on or prior to the Target Ready Date identified in the Basic Lease Provisions
(all such entry into the Premises by Tenant prior to the Commencement Date shall be deemed to be a part of the Early Entry Period). Notwithstanding the foregoing to the contrary, if the Ready Date
does not occur on or before January 1, 2004, then Tenant shall receive a credit against the Base Rent first payable under Section 5 below in the amount of $20,432.00 per month, prorated
on a daily basis, for each day between January 1, 2004 and the date the Premises is delivered to Tenant in the condition required by this Lease. Notwithstanding the foregoing, in no event shall
the total rent credit provided pursuant to this Section 3 exceed $40,864.00. Further, if the Commencement Date does not occur on or before June 1, 2004, then, Tenant may terminate this
Lease upon written notice ("Termination Notice") to Landlord given prior to the Commencement Date, but in all events on or before June 10, 2004. 

        4.    Quiet Enjoyment.    Tenant, upon payment in full of the
required Rent and full performance of the terms, conditions, covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises during the Term hereof.
Landlord shall not be responsible for the 

4

 

acts
or omissions of Tenant, any other tenant, or any third party that may interfere with Tenant's use and enjoyment of the Premises. 

B.    Rent/Payment/Security Deposit.  

        5.    Base Rent.    Tenant shall pay to Landlord, at the address
stated in the Basic Lease Provisions or at such other place as Landlord shall designate in writing to Tenant, monthly base rent ("Base Rent") in the amounts set forth in
the Basic Lease Provisions. 

        6.    Rent Payment.    The Base Rent for each month during the
Term shall be due on the first (1st) day of each calendar month, in advance, in legal tender of the United States of America, without abatement, demand, deduction or offset whatsoever.
One full monthly installment of Base Rent shall be due and payable on the date of execution of this Lease by Tenant and shall be applied to the sixth (6th) month's Base Rent; provided,
that if the Commencement Date should be a date other than the first day of a calendar month, the monthly Base Rent installment paid on the date of execution of this Lease by Tenant shall be prorated
to that sixth (6th) partial calendar month in which non-zero Base Rent is required to be paid, and the excess shall be applied as a credit against the next monthly Base Rent
installment. Tenant shall pay, as Additional Rent, all other sums due from Tenant under this Lease (the term "Rent", as used herein, means all Base Rent, Additional Rent and all other amounts payable
hereunder from Tenant to Landlord). 

        7.    Operating Expenses/Taxes/Impositions.    

        (a)   Tenant
agrees to reimburse Landlord throughout the Term, as "Additional Rent" hereunder, for Tenant's Share (as defined below) of: (i) the annual Operating
Expenses (as defined below) for each calendar year, or portion thereof, during the Term; and (ii) the annual Taxes (as defined below) for each calendar year, or portion thereof, during the
Term. The term "Tenant's Share" as used in this Lease shall mean the percentage determined by dividing the rentable square footage of the Premises by the rentable square footage of the Building or the
Industrial Center, consistent with the manner by which Landlord aggregates Operating Expenses and Taxes to the Building or to the Industrial Center. Landlord and Tenant hereby agree that Tenant's
Share for the Building with respect to the Premises initially demised by this Lease is the percentage amount set forth in Paragraph 7 of the Basic Lease Provisions. "Tenant's Share" may change
during the Term of this Lease in the event that the rentable area of the Industrial Center changes as a result of additions or subtractions of land or buildings to the Industrial Center. Tenant's
Share of Operating Expenses and Taxes for any calendar year shall be appropriately prorated for any partial year occurring during the Term. 

        (b)   "Operating
Expenses" shall mean all costs and expenses incurred by Landlord with respect to the ownership, maintenance and operation of the Building and the Property
including, but not limited to: maintenance, repair and replacement of the heating, ventilation, air conditioning, plumbing, electrical, mechanical, utility and safety systems, paving and parking
areas, roads and driveways; maintenance of exterior areas such as gardening and landscaping, snow removal and signage; maintenance and repair of roof membrane, flashings, gutters, downspouts, roof
drains, skylights and waterproofing; painting; lighting; cleaning; refuse removal; security; utility services attributable to the common areas; Building personnel costs; personal property taxes;
rentals or lease payments paid by Landlord for rented or leased personal property used in the operation or maintenance of the Property; fees for required licenses and permits; and a property
management fee. The management fee charged to Tenant shall not exceed two percent (2%) of the gross Rents payable under this Lease for the applicable calendar year. 

        Operating
Expenses do not include: (a) the cost of any structural repairs or maintenance to Building foundations and external walls; (b) the cost of other capital repairs,
replacements or improvements, except to the extent of annual depreciation (based on the useful life of the item under generally accepted accounting principles) on any such other capital repair,
replacement or 

5

 

improvement;
(c) debt service under mortgages or ground rent under ground leases; (d) costs of restoration following a casualty except for insurance deductibles applicable thereto
(provided, however, that any earthquake deductibles or other deductibles applied to the structural repairs shall be treated the same as a capital repair, replacement or improvement described above);
(e) depreciation other than as set forth above; (f) leasing commissions and tenant improvement costs; (g) litigation expenses relating to disputes with tenants; (h) any
cost or expenditure (or portion thereof) for which Landlord is reimbursed, whether by insurance proceeds, pursuant to the terms of a lease of another tenant in the Building or otherwise,
(i) the cost of any service or improvements furnished to any other occupant of the Building which is not available to Tenant under this Lease, (j) advertising and promotional expenses,
(k) compensation paid to any employee of Landlord for management of the Property other than the management fee allowed hereunder, (l) any cost for which Landlord is entitled to be
reimbursed by any tenant of the Building other than Tenant, (m) the investigation, clean-up, remediation, and other costs associated with any Contamination by Hazardous Substances
(as defined in Section 11), unless caused or permitted by Tenant, and (n) Taxes, as defined below. 

        (c)   "Taxes"
shall mean all taxes and assessments of every kind and nature which Landlord shall become obligated to pay with respect to each calendar year of the Term or
portion thereof because of or in any way connected with the ownership, leasing, and operation of the Building and the Property, subject to the following: (i) the amount of ad valorem real and
personal property taxes against Landlord's real and personal property to be included in Taxes shall be the amount required to be paid for any calendar year, notwithstanding that such Taxes are
assessed for a different calendar year (the amount of any tax refunds received by Landlord during the Term of this Lease shall be deducted from Taxes for the calendar year to which such refunds are
attributable); (ii) the amount of special taxes and special assessments to be included shall be limited to the amount of the installments (plus any interest, other than penalty interest,
payable thereon) of such special tax or special assessment payable for the calendar year in respect of which Taxes are being determined; (iii) the amount of any tax or excise levied by the
State or the City where the Building is located; any political subdivision of either, or any other taxing body, on rents or other income from the Property (or the value of the leases thereon) to be
included shall not be greater than the amount which would have been payable on account of such tax or excise by Landlord during the calendar year in respect of which Taxes are being determined had the
income received by Landlord from the Building [excluding amounts payable under this subparagraph (iii)] been the sole taxable income of Landlord for such calendar year;
(iv) there shall be excluded from Taxes all income taxes [except those which may be included pursuant to the preceding subparagraph (iii) above], excess profits
taxes, franchise, capital stock, and inheritance or estate taxes; and (v) Taxes shall also include Landlord's reasonable costs and expenses (including reasonable attorneys' fees) in contesting
or attempting to reduce any Taxes assessed for a different calendar year. 

        (d)   Landlord
shall, on or before the Commencement Date and as soon as reasonably possible after the commencement of each calendar year
thereafter, provide Tenant with a reasonably detailed, line item statement of the estimated monthly installments of Tenant's Share of Operating Expenses
and Taxes which will be due for the remainder of the calendar year in which the Commencement Date occurs or for the next ensuing calendar year, as the case may be. Landlord agrees to keep books and
records showing the Operating Expenses in accordance with generally accepted accounting principles (as modified for industrial buildings in a manner comparable to other similar buildings in the
commercial area where the Building is located) and practices consistently maintained on a year-to-year basis, in compliance with such provisions of this Lease as may affect
such accounts, and Landlord shall deliver to Tenant after the close of each calendar year (including the calendar year in which this Lease terminates), a reasonably detailed, line item statement
("Landlord's Statement") containing the following: (1) a statement that the books and records covering the operation of the Building have been maintained in accordance with the requirements in
this subparagraph (d); (2) the amount of Operating Expenses for such calendar year; and (3) the amount of Taxes for such calendar year. 

6

 

        Upon
reasonable prior written request given not later than ninety (90) days following the date Landlord's Statement is delivered to Tenant, Landlord will provide Tenant detailed
documentation to support such Landlord's Statement or provide Tenant with the opportunity to review such supporting information. If Tenant does not notify Landlord of any objection to Landlord's
Statement within ninety (90) days after the later of delivery of Landlord's Statement or such requested supporting documentation, Tenant shall be deemed to have accepted Landlord's Statement as
true and correct and shall be deemed to have waived any right to dispute the Operating Expenses and/or Taxes due pursuant to that Landlord's Statement. Tenant acknowledges that Landlord maintains its
records for the Property at Landlord's main office, currently One Front Street, Suite 1100, San Francisco, California, and Tenant agrees that any review of records under this Paragraph shall be at the
sole expense of Tenant and shall be conducted by an accountant or other person experienced in accounting for income and expenses of industrial projects engaged solely by Tenant on terms which do not
entail any compensation based or measured in any way upon any savings in Additional Rent or reduction in Operating Expenses achieved through the inspection process. Tenant acknowledges and agrees that
any records reviewed under this Paragraph constitute confidential information of Landlord, which shall not be disclosed to anyone other than the person performing the review, the principals or
officers of Tenant or the reviewer who receive the results of the review, Tenant's or the reviewer's accounting or administrative employees, and Tenant's legal counsel. The disclosure of such
information to any other person by Tenant or its employees or agents, whether or not caused by the conduct of Tenant, shall constitute a material breach of this Lease unless such disclosure is
required by law or in connection with a legal proceeding. 

        (i)    Tenant
shall pay to Landlord, together with its monthly payment of Base Rent as provided in Section 5 above, as Additional Rent hereunder, the estimated monthly
installment of Tenant's Share of Operating Expenses and Taxes for the calendar year in question. At the end of any calendar year, if Tenant has paid to Landlord an amount in excess of Tenant's Share
of Operating Expenses and Taxes for such calendar year, Landlord shall reimburse to Tenant any such excess amount (or shall apply any such excess amount to any amount then owing to Landlord hereunder,
and if none, to the next due installment or installments of Additional Rent due hereunder, at the option of Landlord). At the end of any calendar year
if Tenant has paid to Landlord less than Tenant's Share of Operating Expenses
and Taxes for such calendar year, Tenant shall pay to Landlord any such deficiency within thirty (30) days after Tenant receives the annual statement. 

7

  

        (ii)   For
the calendar year in which this Lease terminates and is not extended or renewed, the provisions of this Section shall apply, but Tenant's Share for such calendar
year shall be subject to a pro rata adjustment based upon the number of days prior to the expiration of the Term of this Lease. Tenant shall make monthly estimated payments of the pro rata portion of
Tenant's Share for such calendar year (in the manner provided above) and when the actual prorated Tenant's Share for such calendar year is determined, Landlord shall send Landlord's Statement to
Tenant for such year and if such Statement reveals that Tenant's estimated payments for the prorated Tenant's Share for such calendar year exceeded the actual prorated Tenant's Share for such calendar
year, Landlord shall include a refund for that amount along with the Statement (subject to offset in the event Tenant is in default hereunder). If Landlord's Statement reveals that Tenant's estimated
payments for the prorated Tenant's Share for such calendar year were less than the actual prorated Tenant's Share for such calendar year, Tenant shall pay the shortfall to Landlord within thirty
(30) days after the date of receipt of Landlord's Statement. 

        (iii)  If
the Building or the Industrial Center, as appropriate, is less than completely occupied throughout any calendar year of the Term, then the actual Operating Expenses
for the calendar year in question which vary with occupancy levels in the Building or the Industrial Center shall be increased to the amount of Operating Expenses which Landlord reasonably determines
would have been incurred during that calendar year if the Building or the Industrial Center had been completely occupied throughout such calendar year. 

        (e)   In
addition to the monthly rental and other charges to be paid by Tenant under this Lease, Tenant shall pay Landlord for all of the following items (collectively,
"Impositions"): (i) taxes, other than local, state, and federal personal or corporate income taxes measured by the net income of Landlord; (ii) monthly installments of assessments,
including without limitation, all assessments for public improvements, services, or benefits, irrespective of when commenced or completed; (iii) excises; (iv) levies; (v) business
taxes; (vi) license, permit, inspection, and other authorization fees other than in connection with the Work; (vii) transit development fees; (viii) assessments or charges for
housing funds; (ix) service payments in lieu of taxes and; (x) any other fees or charges that are levied, assessed, confirmed, or imposed by a public authority; provided, however, that
Impositions shall not include amounts otherwise included in Operating Expenses or Taxes. Tenant is obligated to pay only to the extent that the Impositions are (a) on, measured by, or
reasonably attributable to, the cost or value of Tenant's equipment, furniture, fixtures, and other personal property located in the Premises, or the cost or value of any leasehold improvements made
to the Premises by or for Tenant, regardless of whether title to the improvements shall be in Tenant or Landlord; (b) based on or measured by the monthly rental or other charges payable under
this Lease, including without limitation, any gross receipts tax levied by a municipality, the State of California, the Federal Government, or any other governmental body with respect to the receipt
of the rental; (c) based on the development, possession, leasing, operation, management, maintenance, alteration, repair, use, or occupancy by Tenant of the Premises or any portion of the
Premises; or (d) on this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. If it is unlawful for Tenant to reimburse
Landlord for the Impositions, but lawful to increase the monthly rental to take into account Landlord's payment of the Impositions, the monthly rental payable to Landlord shall be revised to net
Landlord the same net return without reimbursement of the Impositions as would have been received by Landlord with reimbursement of the Impositions. 

        8.    Late Charge.    Other remedies for non-payment
of Rent notwithstanding, if any monthly installment of Base Rent or Additional Rent is not received by Landlord on or before the date due, or if any payment due Landlord by Tenant which does not have
a scheduled due date is not received by Landlord on or before the tenth (10th) day following the date Tenant was invoiced, a late charge of five percent (5%) of such past due amount
shall be immediately due and payable as Additional Rent hereunder, provided however, that before imposition of the first late charge that accrues in any 

8

 

calendar
year of the Term, such first late charge shall not be imposed unless Tenant fails to make such late payment within five (5) calendar days following a written notice from Landlord of
the impending imposition of such late charge, and interest shall accrue on all delinquent amounts from the date past due until paid at the lower of a rate of one (1.0%) percent per month or fraction
thereof from the date such payment is due until paid (Annual Percentage Rate = 12%), or the highest rate permitted by applicable law. 

        9.    Partial Payment.    No payment by Tenant or acceptance by
Landlord of an amount less than the Rent herein stipulated shall be deemed a waiver of any other Rent due. No partial payment or endorsement on any check or any letter accompanying such payment of
Rent shall be deemed an accord and satisfaction, but Landlord may accept such payment without prejudice to Landlord's right to collect the balance of any Rent due under the terms of this Lease or any
late charge assessed against Tenant hereunder. 

        10.    Security Deposit.    Tenant shall pay Landlord the amount
identified as the Security Deposit in Paragraph 8 of the Basic Lease Provisions (hereinafter referred to as "Security Deposit") as evidence of good faith on the part of Tenant in the
fulfillment of the terms of this Lease, which shall be held by the Landlord during the Term of this Lease, or any renewal thereof. Under no circumstances will Tenant be entitled to any interest on the
Security Deposit. The Security Deposit may be used by Landlord, at its sole discretion, to apply to any amount owing to Landlord hereunder, or to pay the expenses of repairing any damage to the
Premises caused by Tenant, except natural wear and tear occurring from normal use of the Premises, but this right shall not be construed to limit Landlord's right to recover additional sums from
Tenant for damages to the Premises. If there are no payments to be made from the Security Deposit as set out in this paragraph, or if there is any balance of the Security Deposit remaining after all
payments have been made, the Security Deposit, or such balance thereof remaining, will be refunded to Tenant within the time periods required pursuant to California Civil Code Section 1950.7.
In no event shall Tenant be entitled to apply the Security Deposit to any Rent due hereunder. In the event of an act of bankruptcy by or insolvency of Tenant, or the appointment of a receiver for
Tenant or a general assignment for the benefit of Tenant's creditors, then the Security Deposit shall be deemed immediately assigned to Landlord. The right to retain the Security Deposit shall be in
addition and not alternative to Landlord's other remedies under this Lease or as may be provided by law and shall not be affected by summary proceedings or other proceedings to recover possession of
the Premises. Upon sale or conveyance of the Building, Landlord shall transfer or assign the Security Deposit to any new owner of the Premises, and upon such transfer all liability of Landlord for the
Security Deposit shall terminate. Landlord shall be entitled to commingle the Security Deposit with its other funds. 

C.    Use/Laws/Rules.  

        11.    Use of Premises/Environmental Matters.    

        (a)    Use.    Tenant shall use and occupy the Premises solely
for the purposes set forth in the Basic Lease Provisions and for no other purpose. The Premises shall not be used for any illegal purpose, nor in violation of any valid law, ordinance or regulation of
any governmental body, nor in any manner to create any nuisance or trespass, nor in any manner which will void the insurance or increase the rate of insurance on the Premises or the Building, nor in
any manner inconsistent with the quality of the Building. Tenant acknowledges that Landlord has made no representations or warranties with respect to the suitability of the Premises for Tenant's
proposed use. 

9

 

        (b)    Environmental Matters.    

        (1)   For
purposes of this Lease: 

        "Contamination"
means the presence of or release, spillage, leakage, migration, disposal, burial, or placement of Hazardous Substances (as hereinafter defined) upon, within, below, or
into any surface water, ground water, land surface, subsurface soil or strata, building, or improvement at any portion of the Demised Premises, the Building, the Common Area or the Project. 

        "Environmental
Laws" means all codes, laws (including, without limitation, common law), ordinances, regulations, reporting or licensing requirements, rules, or statutes relating to
pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface, or subsurface soil or strata), including, without limitation
(i) the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §§9601 et seq. ("CERCLA"); (ii) the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§6901 et seq., ("RCRA"); (iii) the Emergency Planning and Community Right to Know Act (42 U.S.C.
§§11001 et seq.); (iv) the Clean Air Act (42 U.S.C. §§7401 et seq.) (v) the Clean Water Act (33 U.S.C. §§1251 et
seq.); (vi) the Toxic Substances Control Act (15 U.S.C. §§2601 et seq.) (vii) the Hazardous Materials Transportation Act (49 U.S.C. §§5101
et seq.) (viii) the Safe Drinking Water Act (41 U.S.C. §§300f et seq.); (ix) any state, county, municipal or local statutes, laws or ordinances similar or
analogous to the federal statutes listed in parts (i) – (viii) of this subparagraph; (x) any amendments to the statutes, laws or ordinances listed in parts
(i) – (ix) of this subparagraph, regardless of whether in existence on the date hereof; (xi) any rules, regulations, guidelines, directives, orders or the like
adopted pursuant to or implementing the statutes, laws, ordinances and amendments listed in parts (i) – (x) of this subparagraph; and (xii) any other law,
statute, ordinance, amendment, rule, regulation, guideline, directive, order or the like in effect now or in the future relating to environmental, health or safety matters. 

        "Hazardous
Substances" means any chemical, waste, by-product, pollutant, contaminant, compound, product, substance, equipment or fixture defined as or deemed hazardous or
toxic or otherwise regulated under any Environmental Law, including, without limitation, (i) RCRA hazardous wastes, (ii) CERCLA hazardous substances, (iii) gasoline, diesel fuel,
fuel oil, motor oil, waste oil, and any other petroleum hydrocarbon, including any additives or other by-products or constituents associated therewith, (iv) pesticides and other
agricultural chemicals, (v) asbestos and asbestos containing materials in any form, (vi) polychlorinated biphenyls, (vii) radioactive materials and radon, and (viii) urea
formaldehyde foam insulation. 

        (2)   Tenant
covenants that all its activities, and the activities of any entity affiliated with Tenant ("Tenant's Affiliates"), on the Premises and in the Building and on the
Property, during the Term will be conducted in compliance with Environmental Laws. Tenant represents and warrants to Landlord that Tenant is currently in compliance with all applicable Environmental
Laws and that there are no pending or threatened notices of deficiency, notices of violation, orders, or judicial or administrative actions involving alleged violations by Tenant of any Environmental
Laws. Tenant, at Tenant's sole cost and expense, shall be responsible for obtaining all permits or licenses or approvals under Environmental Laws necessary for Tenant's operation of its business on
the Premises ("Environmental Permits") and shall make all notifications and registrations required by any applicable Environmental Laws. Tenant, at Tenant's sole cost and expense, shall at all times
comply with the terms and 

10

 

conditions
of all such Environmental Permits notifications and registrations and with any other applicable Environmental Laws. Tenant represents and warrants that it has obtained all such
Environmental Permits and made all such notifications and registrations required by any applicable Environmental Laws necessary for Tenant's operation of its business on the Premises. 

        (3)   Tenant
shall not cause or permit any Hazardous Substances to be brought upon, kept or used in or about the Premises, on the Building, or the Property without the prior
written consent of Landlord, which consent shall not be unreasonably withheld; provided, however, that the consent of Landlord shall not be
required for the use at the Premises of cleaning supplies, toner for photocopying machines and other similar materials, as well as small amounts of solder, in containers and quantities reasonably
necessary for and consistent with normal and ordinary use by Tenant in the routine operation of Tenant's business or in the routine janitorial service, cleaning and maintenance for the Premises. For
purposes of the foregoing, Landlord shall be deemed to have reasonably withheld consent if Landlord determines that the presence of such Hazardous Substance within the Premises could result in a risk
of harm to person or property or otherwise negatively affect the value or marketability of the Building or the Property. 

        (4)   Regardless
of any consents granted by Landlord pursuant to the foregoing allowing Hazardous Substances upon the Premises, Tenant shall under no circumstances whatsoever
cause or permit any Contamination by Tenant or Tenant's Affiliates. If such Contamination by Tenant shall occur, Tenant shall promptly at its expense (i) contain and control, investigate, and
clean up, remove, or remedy such Contamination to the extent required by, and take any and all other actions required under, applicable Environmental Laws, (ii) restore the Premises, the
Building and the Property to the condition existing prior to the Contamination, and (iii) notify and keep Landlord reasonably informed of such containment, control, investigation, cleanup,
removal, remediation and restoration activities. All such activities shall be conducted by Tenant or Tenant's Affiliates in accordance with any and all Environmental Laws and other applicable federal,
state and local laws and regulations. Landlord shall have the right, but not the obligation, after providing Tenant with notice and a reasonable opportunity to cure, to enter onto the Premises or to
take such other actions as Landlord deems necessary or advisable so to contain, control, investigate, clean up, remove, remediate, restore, resolve or minimize the impact of, or otherwise deal with,
any such contamination. All costs and expenses incurred by Landlord in the exercise of any such rights shall be payable by Tenant upon demand. 

        (5)   Regardless
of any consents granted by Landlord pursuant to Paragraph 11(b)(3) above allowing Hazardous Substances upon the Premises, Tenant shall under no
circumstances whatsoever cause or permit (i) any activity on the Premises which would cause the Premises to become subject to regulation as a hazardous waste treatment, storage or disposal
facility under RCRA or the regulations promulgated thereunder, (ii) any activity on the Premises which would cause the Premises, the Building, or the Property to become subject to any lien
imposed under or as a result of any Environmental Law, (iii) the discharge of Hazardous Substances into the storm sewer system serving the Property, or (iv) the installation of any
underground tank, oil/water separator, sump pump, or underground piping on or under the Premises. 

        (6)   Landlord
shall also have the right prior to the expiration of the Term of this Lease, if Tenant has caused any Contamination previously or if there are other reasonable
grounds, to require Tenant to cause a qualified environmental consultant to perform, at Tenant's sole cost and expense, an environmental audit of the Premises satisfactory to Landlord in its
reasonable discretion. Should Tenant fail to undertake and seek diligently to perform said environmental 

11

 

audit
within thirty (30) days of the Landlord's request, Landlord shall have the right, but not the obligation, to retain a qualified environmental consultant to perform such environmental
audit. All costs and expenses incurred by Landlord in the exercise of such rights shall be payable by Tenant upon demand. 

        (7)   Without
limiting in any way Tenant's obligations under any other provision of this Lease, Tenant and its successors and assigns shall indemnify, protect, defend (with
counsel approved by Landlord) and hold Landlord, its partners, officers, directors, shareholders, employees, agents, lenders, contractors and each of their respective successors and assigns (the
"Indemnified Parties") harmless from any and all claims, damages, liabilities, losses, costs and expenses of any nature whatsoever, known or unknown, contingent or otherwise (including, without
limitation, attorneys' fees, litigation, arbitration and administrative proceedings costs, expert and consultant fees and laboratory costs, as well as damages arising out of the diminution in the
value of the Premises or any portion thereof, damages for the loss of the Premises, damages arising from any adverse impact on the marketing of space in the Premises, and sums paid in settlement of
claims), which arise during or after the Term in whole or in part as a result of the storage, generation, release, spillage, leakage, burial, placement, handling, treatment, transportation, disposal,
or arrangement for transportation or disposal, of any Hazardous Substances (whether accidental, intentional, or negligent) by Tenant or Tenant's Affiliates or by reason of Tenant's breach of any of
the provisions of this Paragraph 11(b). Such expenses, losses and liabilities shall include, without limitation, any and all expenses that Landlord may incur (i) to comply with any
Environmental Laws, (ii) in studying, removing, disposing or otherwise addressing any Hazardous Substances and contamination at, on, under, or from the Premises, the Building, or the Property,
(iii) with respect to fines, penalties or other sanctions assessed upon Landlord, and (iv) with respect to legal and professional fees and costs incurred by Landlord in connection with
the foregoing. The indemnity contained herein shall survive the expiration or earlier termination of this Lease. 

        (8)   Tenant
has completed and delivered to Landlord prior to execution and delivery of this Lease by Tenant a Hazardous Materials Questionnaire in the form attached hereto as
Exhibit "D", and Tenant
represents and warrants to Landlord that the information set forth therein is true and accurate in all material respects. 

        (9)   California
law requires landlords to disclose to tenants the existence of certain hazardous substances. Accordingly, the existence of tobacco smoke must be disclosed.
Although smoking is prohibited in the public areas of the Building, these areas may, from time to time, be exposed to tobacco smoke. Landlord covenants to comply during the Lease term with all local,
state and federal laws and regulations requiring disclosure to tenants regarding the existence of Hazardous Substances within the Building. Landlord shall have available at the Building office for
inspection by Tenant, during normal business hours, all reports in Landlord's possession relating to Hazardous Substances existing at that Property, including that certain Phase I Environmental Site
Assessment, Northport Business Park, dated September 17, 1999, prepared for Lend Lease Real Estate Investments, Inc. by Dames & Moore, with D&M Job
No. 40676-081-042. Except as otherwise set forth in such report referenced immediately above, Landlord has no actual knowledge of the presence of Hazardous Substances
in, on or about the Property in violation of any applicable Environmental Laws or Environmental Permits. 

12

   
        12.    Compliance with Laws.    Tenant shall operate within the
Premises, the Building and the Industrial Center in compliance with all applicable federal, state, and municipal laws, ordinances and regulations (including, without limitation, the Americans with
Disabilities Act) and shall not knowingly, directly or indirectly, make any use of the Premises, the Building or the Industrial Center which is prohibited by any such laws, ordinances or regulations.
Further, Tenant, at its sole cost and expense, shall (i) cause the Premises to comply with the provisions of the Americans With Disabilities Act, 42 U.S.C. § 12101 et
seq. and any governmental regulations with respect thereto (the "ADA"), title 24 of the California Administrative Code ("Title 24") and other similar federal, state and local laws and
regulations, including, without limitation, any alterations required under ADA for the purposes of "public accommodations" (as that term is used in the ADA), and (ii) reimburse Landlord upon
demand for any and all costs incurred by Landlord to comply with ADA, Title 24 or such other similar federal, state or local laws and regulations in any other portion of the floor on which the
Premises are located or any other portion of the Building arising out of Tenant's use of or construction in the Premises (but excluding any alterations in connection with the Work, which costs shall
be borne solely by Landlord). Except as provided above, Tenant shall have no responsibility to comply with such laws for the exterior of the building. 

        13.    Waste Disposal.    

        (a)   All
normal trash and waste (i.e., waste that does not require special handling pursuant to subparagraph (b) below) shall be deposited in dumpsters located at the
Property. 

        (b)   Tenant
shall be responsible for the removal and disposal of any waste deemed by any governmental authority having jurisdiction over the matter to be hazardous or
infectious waste or waste requiring special handling, such removal and disposal to be in accordance with any and all applicable governmental rules, regulations, codes, orders or requirements. Tenant
agrees to separate and mark appropriately all waste to be removed and disposed of in dumpsters pursuant to (a) above and hazardous, infectious or special waste to be removed and disposed of by
Tenant pursuant to this subparagraph (b). Tenant hereby indemnifies and holds harmless Landlord from and against any loss, claims, demands, damage or injury Landlord may suffer or sustain as a result
of Tenant's failure to comply with the provisions of this subparagraph (b). 

        14.    Rules and Regulations.    The rules and regulations in
regard to the Building and the Property, a copy of which is attached hereto as Exhibit "E", and all reasonable non-discriminatory, rules and regulations and
modifications thereto which Landlord may hereafter from time to time adopt and promulgate after notice thereof to Tenant, for the government and management of the Building and the Property, are hereby
made a part of this Lease and shall during the Term be observed and performed by Tenant, its agents, employees and invitees. 

D.    Utilities/Signage/Tenant Buildout.  

        15.    Utilities.    Tenant will promptly pay, directly to the
appropriate supplier, the cost of all natural gas, heat, cooling, energy, light, power, sewer service, telephone, water, refuse disposal and other utilities ands services supplied to the Premises,
together with any related installation or connection charges or deposits (collectively, "Utility Costs") incurred during the Term. If any services or utilities are jointly metered with other premises,
Landlord will make a reasonable determination of Tenant's proportionate share of such Utility Costs and Tenant will pay such share to Landlord. Landlord reserves the right to participate in wholesale
energy purchase programs and to provide energy to the Premises through such programs so long as the cost to Tenant is competitive. The Premises are currently separately metered for natural gas and
electricity. 

        16.    Signs.    Tenant shall not paint or place any signs,
placards, or other advertisements of any character upon the outside walls, common areas or the roof of the Building (except with the prior consent of Landlord, which consent may be withheld by
Landlord in its absolute discretion). 

13

 

Notwithstanding
the foregoing, subject to Landlord's reasonable approval of its design, and provided that the following are allowed under, and are in compliance with, all applicable laws,
(i) Tenant shall be permitted to install signage including Tenant's name and logo, in the top position on the existing monument sign on the Property adjacent to Cushing Parkway, and
(ii) Tenant shall be permitted to install identification signage on the Building of a size and in a color, font and location that is similar to other building signs in the vicinity of the
Building, subject to Landlord's reasonable approval. Up to Three Thousand Dollars ($3,000) for the cost of the monument sign shall be paid by Landlord (as shown on the Budget described in Exhibit
"B"), and any signage costs in excess of such amount shall be Tenant's sole responsibility. 

        17.    Buildout Allowance and Tenant Finishes.    

        (a)   Landlord
shall perform the Work as described in Exhibit "B" on a turnkey basis, at Landlord's sole cost and expense. Additionally, Landlord
will provide to Tenant the following allowances (each an "Allowance") (i) an allowance ("Tenant Improvement Allowance") per rentable
square foot contained within the Premises for Additional Work and costs of Tenant's holdover at its existing premises, and (ii) an additional amount equal to Fifty Thousand and No/100 Dollars
($50,000.00) for moving and other expenses related to the preparation of the Premises for occupancy by Tenant (the "Moving Allowance"), and, (iii) at Tenant's
option, an additional allowance ("Supplemental Allowance") per rentable square foot, all as set forth in Paragraph 10 of the Basic Lease Provisions, which
Supplemental Allowance is subject to repayment as set forth below in subsection (f), to be applied to the cost of the Additional Work permitted in Exhibit "B", and all
costs relating thereto including without limitation, the costs of contractors, architects or other consultants in connection therewith, as well as "soft costs" related thereto, and toward the payment
of costs for furniture or furniture systems, and cabling and telecommunications equipment to be installed and used in the Premises by Tenant. However, notwithstanding the description above regarding
the purpose of each designated Allowance, any unused portion of any Allowance may be used for any purpose provided for any other Allowance as described above. 

        (b)   All
such reimbursements for costs other than for the Work and the Additional Work shall be paid by Landlord to Tenant (or at Tenant's directions, directly to Tenant's
vendors and contractors) within fifteen (15) calendar days after Landlord's receipt of written request thereof from Tenant accompanied by invoices covering all work and costs for which the
request is so submitted). The Tenant Improvement Allowance and the Supplemental Allowance shall be available for application to the cost of the Additional Work only to the extent that the Additional
Work is commenced on or before thirty (30) days after the Target Commencement Date (unless Landlord has failed to deliver the Premises to Tenant for reasons other than Tenant Delay, in which
case, such period for reimbursement shall extend through the date thirty (30) days after the Commencement Date). 

        (c)   Tenant
and Landlord agree that all costs of the Additional Work in excess of such Tenant Improvement Allowance or Supplemental Allowance which are requested by Tenant
and approved by Landlord shall be paid by Tenant to Landlord as follows: twenty-five (25%) percent of such excess costs prior to the commencement of the Additional Work, fifty percent
(50%) of such excess costs within five (5) business days of Landlord's notice that fifty percent (50%) of the Additional Work is complete and the balance (i.e. 25%) of actual costs upon
substantial completion and prior to occupancy. The amount due for each installment shall be set forth in a written invoice from Landlord. Should Tenant fail to pay for such excess costs when due as
herein provided, such amount due shall accrue interest at the lesser of a rate of one and one-half (11/2%) percent per month or fraction thereof from the date such payment
is due until paid (Annual Percentage Rate = 18%), or the highest rate permitted by applicable law, and the failure to pay such amount when due shall be a default, subject to the provisions of
Section 33 below. 

14

 

        (d)   Within
sixty (60) days after substantial completion of any Additional Work, Landlord shall provide Tenant with a final accounting of the application of the Tenant
Improvement Allowance and the Supplemental Allowance to such Additional Work, along with copies of invoices, subcontracts or other documentation as reasonably required to evidence the application of
such funds. If there are any sums remaining in the Tenant Improvement Allowance or the Moving Allowance (but not the Supplemental Allowance) after application of such Allowances to the actual costs of
Tenant's holdover, the costs of the Additional Work, the actual costs of Tenant's move and preparation of the Premises for occupancy, or the cost of Tenant's furniture, furniture systems, cabling and
telecommunications equipment, then the total of such sums remaining in the Tenant Improvement Allowance and the Moving Allowance shall be applied as a credit in Tenant's favor against the rents first
becoming due under this Lease. 

        (e)   The
Work Letter attached hereto as Exhibit "B" and executed by Landlord and Tenant, is hereby made a part of this Lease, and its provisions
shall control in the event of a conflict with the provisions contained in this Lease. 

        (f)    The
Supplemental Allowance shall be made available to Tenant as a loan and only upon Tenant's written request to Landlord therefor made no later than thirty
(30) days after the Target Commencement Date. Such written request shall specify the maximum amount of the Supplemental Allowance desired. Landlord shall have no obligation to disburse any
portion of the Supplemental Allowance in excess of the amount so requested by Tenant. The Supplemental Allowance shall be disbursed in the same manner and upon the same conditions as the Tenant
Improvement Allowance. Landlord shall first disburse all portions of the Tenant Improvement Allowance and the Moving Allowance prior to disbursing any portions of the Supplemental Allowance. Upon the
date that Tenant submits the final application for reimbursement of costs other than directly related to the Additional Work, or upon completion of the Additional Work, whichever is later, Landlord
shall advise Tenant of the amount of the Supplemental Allowance (including said final application for reimbursement) disbursed and the payment schedule for repayment thereof. Tenant shall only be
obligated to pay Landlord for the Supplemental Allowance actually disbursed (the "Amortized Payment") and not the maximum amount of the Supplemental Allowance requested (unless such maximum amount
shall have been actually disbursed). The Amortized Payment shall be made by Tenant to Landlord in equal monthly installments over the sixty-two (62) month term of this Lease,
amortized at ten percent (10%) per annum, simple, as Additional Rent, payable at the same time in the same manner as Base Rent, prepayable at any time (without future interest). If Landlord has not
advised Tenant of the payment schedule prior to the Commencement Date, Tenant shall make those payments which would have been due as of the Commencement Date within ten (10) business days after
notification thereof. In the event of an early termination of the Lease (for any reason, including, without limitation, by reason of casualty or condemnation), the repayment of the Amortized Payment
may be accelerated by Landlord and, otherwise, Tenant shall remain liable for the principal balance thereof and all accrued interest thereon without regard to the limitations of California Civil Code
§ 1951.2, acknowledging that such obligation is not future rent, but rather a loan. 

        18.    Force Majeure.    In the event of a strike, lockout, labor
trouble, civil commotion, an act of God, or any other event beyond Landlord's control (a "force majeure event") which results in the Landlord or Tenant being unable to
timely perform its obligations hereunder to repair the Premises, provide services, or complete Work (as provided in Exhibit "B"), so long as such party diligently proceeds
to perform such obligations after the end of such force majeure event, such party shall not be in breach hereunder, nor shall this Lease terminate, provided, however, that in no event shall Tenant's
obligation to pay any Base Rent, Additional Rent, or any other charges and sums due and payable be excused. 

15

 

E.    Repairs/Alterations/Casualty/Condemnation.  

        19.    Repairs By Landlord.    Tenant, by taking possession of
the Premises, shall accept and shall be held to have accepted the Premises as suitable for the use intended by this Lease, subject to the terms and conditions of this Lease. In no event shall Tenant
be entitled to compensation or any other damages or any other remedy against Landlord in the event the Premises are not deemed suitable for Tenant's use. Landlord shall not be required, after
possession of the Premises has been delivered to Tenant, to make any repairs or improvements to the Premises, except as set forth in this Lease. 

        Except
for damage caused by casualty and condemnation (which shall be governed by Sections 23 and 24 below), and subject to normal wear and tear, Landlord shall maintain in good
condition and repair the structural components of the exterior walls, roof and foundation, and the common areas of the Industrial Center, provided such repairs are not necessitated or occasioned by
Tenant, Tenant's invitees or anyone in the employ or control of Tenant. 

        Additionally,
Landlord hereby warrants that all Building systems (the "Premises Systems"), including the electrical, life safety, plumbing and heating,
ventilation and air conditioning, security alarm, and doors, windows and skylights, to the extent existing therein, are and will be in good working order and condition for the period commencing on the
Commencement Date hereunder and expiring on the date six full calendar months thereafter (the "Warranty Period"). During the Warranty Period, upon written notice given by
Tenant to Landlord of a failure or faulty operation of the Premises Systems, Landlord shall repair the failed or improperly operating Premises Systems at Landlord's sole cost and expense as long as
such failure was not caused by Tenant's willful or negligent misconduct. Upon expiration of the Warranty Period, and after completion of any repair earlier noticed, and except as may otherwise be
required pursuant to the Work, Landlord shall have no further obligation to repair or correct any failure of the Premises Systems during the Term of this Lease. Tenant hereby waives the provisions of
California Civil Code Sections 1941 and 1942 with respect to Landlord's obligations under the Lease. 

        20.    Repairs By Tenant.    Except as described in
Section 19 above, Tenant shall, at its own cost and expense, maintain the Premises in good repair and in a neat and clean condition, including making all necessary repairs and replacements;
provided, however, that the cost of any capital repair or replacement in excess of $10,000 (and not made as a result of the negligence or willful misconduct of Tenant's or its employees, guests,
agents or invitees), the cost and necessity of which repair or replacement has been approved in writing by Landlord prior to its making, which approval shall not be unreasonably withheld, shall be
amortized on a straight-line basis over the useful life of the item in question, as reasonably determined by Landlord, and, as long as Tenant is not in default of this Lease (beyond any
applicable cure period) at any time after such repair or replacement is made, Landlord shall reimburse Tenant for the portion of such cost that relates to the period of time from and after the
expiration of the Lease Term upon such natural expiration. Tenant shall provide Landlord with appropriate evidence of such costs promptly after making such repair or replacement. Tenant shall further,
at its own cost and expense, repair or restore any damage or injury to all or any part of the Premises or Building or Property caused by Tenant or Tenant's agents, employees, invitees, licensees,
visitors or contractors, including but not limited to any repairs or replacements necessitated by (i) the construction or installation of improvements to the Premises by or on behalf of Tenant,
and (ii) the moving of any property into or out of the Premises. If Tenant fails to make such repairs or replacements promptly, Landlord may, at its option, upon prior reasonable written notice
to Tenant (except in an emergency) make the required repairs and replacements and the costs of such repair or replacements shall be charged to Tenant as Additional Rent and shall become due and
payable by Tenant with the monthly installment of Base Rent next due hereunder. Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract with
a maintenance contractor for serving all hot water, heating and air conditioning systems and equipment within the Premises. The maintenance contractor and the contract must be approved in writing by
Landlord in 

16

 

advance.
The service contract shall include all services recommended by the equipment manufacturer within the operation/maintenance manual and shall become effective (and a copy thereof delivered to
Landlord) within thirty (30) days following the date Tenant takes possession of the Premises. 

        21.    Alterations and Improvements.    Except for minor,
decorative alterations which do not affect the Building structure or systems, are not visible from outside the Premises and do not cost in excess of $20,000.00 in the aggregate, Tenant shall not make
or allow to be made any alterations, physical additions or improvements in or to the Premises without first obtaining in writing Landlord's written consent for such alterations or additions, which
consent may be granted or withheld in Landlord's sole discretion if the alterations will affect the Building structure or systems or will be visible from outside the Premises, but which consent shall
not be unreasonably withheld if the alterations will not affect the Building structure or systems and will not be visible from outside the Premises. Upon Landlord's request, Tenant shall deliver to
Landlord plans and specifications for any proposed alterations, additions or improvements and shall reimburse Landlord for Landlord's reasonable cost to review such plans. Any alterations, physical
additions or improvements shall automatically become the property of Landlord upon the termination of the Lease Term; provided, however, that Landlord, at its option, may require Tenant to remove any
alterations, additions or improvements in order to restore the Premises to the condition existing on the Commencement Date (provided Landlord notified Tenant at the time of Landlord's consent to any
such alterations, additions or improvements that Landlord reserved the right to require the removal thereof). All costs of any such alterations, additions or improvements shall be borne by Tenant. All
alterations, additions or improvements shall be made in a good, first-class, workmanlike manner and in a manner that does not disturb other tenants, if any, and Tenant must maintain adequate liability
and builder's risk insurance throughout the construction. Tenant does hereby
indemnify and hold Landlord harmless from and against any and all claims for damages or death of persons or damage or destruction of property arising out of or relating to the performance of any such
alterations, additions or improvements made by or on behalf of Tenant. Under no circumstances shall Landlord be required to pay, during the Term of this Lease and any extensions or renewals hereof,
any ad valorem or Property tax on such alterations, additions or improvements, Tenant hereby covenanting to pay all such taxes when they become due. In the event any alterations, additions,
improvements or repairs are to be performed by contractors or workmen other than Landlord's contractors or workmen, any such contractors or workmen must first be approved, in writing, by Landlord
(which approval shall not be unreasonably withheld). Landlord agrees to assign to Tenant and itself, for the Term of this Lease, any rights Landlord may have against the contractor of the Premises
with respect to any work performed by such contractor in connection with improvements made by Landlord at the request of Tenant. The cost of the Alterations to be paid by Tenant shall include a
reasonable charge for the administration, by Landlord or an agent, of the construction or installation of the Alterations, the amount of which shall bear a reasonable relationship to the scope of the
Alterations and the costs of performing the administration. 

        22.    Liens.    Tenant shall have no authority, express or
implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind, the interest of Landlord or Tenant in the Premises, the Building or the Property or
to charge the Rent payable hereunder for any claim in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction repairs. Tenant shall pay
or cause to be paid all sums legally due and payable by it on account of any labor performed or materials furnished in connection with any work performed by Tenant on the Premises. Tenant shall
discharge of record by payment, bonding or otherwise any lien filed against the Premises, the Building or the Property on account of any labor performed or materials furnished in connection with any
work performed by Tenant on the Premises immediately upon the filing of any claim of lien. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all liability, loss, cost
or expense based on or arising out of asserted claims or liens against the leasehold estate or against the right, title and interest of Landlord in the Premises, the Building or the Property or this
Lease arising from the act or agreement 

17

 

of
Tenant. Tenant agrees to give Landlord immediate written notice of the placing of any lien or encumbrance against the Premises, the Building or the Property. If such lien is not paid or discharged
(by bond or otherwise) within ten (10) days after notice from Landlord, Landlord shall have the right, at Landlord's option, of paying and discharging the same or any portion thereof without
inquiry as to the validity thereof, and any amounts so paid, including expenses and applicable late charge, shall be Additional Rent immediately due and payable by Tenant upon rendition of a bill
therefor. 

        23.    Destruction or Damage.    

        (a)   If
the Building or the Premises are totally destroyed by storm, fire, earthquake, or other casualty, or damaged to the extent that, in Landlord's reasonable opinion, the
damage cannot be restored within one hundred eighty (180) days of the date Landlord provides Tenant written notice of Landlord's reasonable estimate of the time necessary to restore the damage,
then Tenant and Landlord shall each have the right to terminate this Lease. Further, if such damage is not covered by standard "all risks" property insurance, or if the Landlord's lender requires that
the insurance proceeds be applied to its loan, Landlord shall have the right to terminate this Lease. In either case, such termination shall be effective as of the date of such destruction or damage,
by written notice delivered to the other party on or before thirty (30) days following Landlord's notice described in the next sentence and Rent shall be accounted for as between Landlord and
Tenant as of that date. Landlord shall provide Tenant with written notice no later than sixty (60) days following the date of such damage of the estimated time needed to restore, whether the
loss is covered by Landlord's insurance coverage and whether or not Landlord's lender requires the insurance proceeds be applied to its loan. 

        (b)   If
the Premises are damaged by any such casualty or casualties but neither Tenant nor Landlord is entitled to or does not terminate this Lease as provided in
subparagraph (a) above, this Lease shall remain in full force and effect, Landlord shall notify Tenant in writing no later than sixty (60) days after the date of such damage that such
damage will be restored (and will include Landlord's good faith estimate of the date the restoration will be complete), in which case Rent shall abate as to any portion of the Premises which is not
usable for the period of such untenantability, and Landlord shall promptly commence to diligently restore the Premises to substantially the same condition as before such damage occurred as soon as
practicable, whereupon full Rent shall recommence. Notwithstanding any contrary expression or implication in the foregoing or anywhere else in this Lease, Landlord shall have no obligation whatsoever
to repair or replace any alterations made to the Premises by Tenant pursuant to Section 21 above unless or only to the extent that Tenant provides Landlord with all funds necessary to repair or
replace any such alterations prior to such repair or replacement. 

        (c)   If
material damage occurs within the last twelve (12) months of the Term, either party shall have the right, upon delivery of written notice to the other party
within thirty (30) days following such damage, to cancel and terminate this Lease as of the date of such damage, provided, however, that Tenant may not elect to terminate this Lease if such
damage was caused by the intentional act of Tenant, its agents, servants, employees or invitees, and Landlord may not elect to terminate this Lease if such damage was caused by the intentional act of
Landlord, its agents, servants, employees or invitees. 

        (d)   Tenant
agrees that Landlord's obligation to restore, and the abatement of Rent provided herein, or Tenant's right to terminate as above set forth in this
Section 23, shall be Tenant's sole recourse in the event of such damage, and waives any other rights Tenant may have under any applicable Law to terminate the Lease by reason of damage to the
Premises or Property. If prior to any such election to terminate Tenant has elected to extend the Term pursuant to the provisions of this Lease and such election may not then according to its terms be
rescinded or terminated, then for purposes of this Section 23 the Term shall be deemed to expire on such extended date. 

        24.    Eminent Domain.    If the whole of the Building or
Premises or the Property, or such portion thereof as will make the Building or Premises or common areas unusable in the reasonable judgment 

18

 

of
Landlord for their intended purposes, is condemned or taken by any legally constituted authority for any public use or purpose, then in either of such events, this Lease shall terminate and the
Term hereby granted shall cease from that time when possession thereof is taken by the condemning authorities, and Rent shall be accounted for as between Landlord and Tenant as of such date. If a
portion of the Building or Premises or Property is so taken, but not such amount as will make the Premises or common areas unusable in the reasonable judgment of Landlord for the purposes herein
leased, or if this Lease has not terminated, this Lease shall continue in full force and effect and the Rent shall be reduced prorata in proportion to the amount of the Premises or common areas so
taken. Tenant shall have no right or claim to any part of any award made to or received by Landlord for such condemnation or taking, and all awards for such condemnation or taking shall be made solely
to Landlord, provided however that Tenant shall have the right to pursue any separate award for loss of its equipment and trade fixtures and for moving expenses so long as such action does not reduce
the award to which Landlord is entitled. Landlord and Tenant hereby waive the provisions of California Code of Civil Procedure Section 1265.130 to the extent inconsistent with this Lease. 

        25.    Damage or Theft of Personal Property.    All personal
property brought into the Premises shall be at the risk of the Tenant only and Landlord shall not be liable for theft thereof or any damage thereto occasioned by any acts of co-tenants, or
other occupants of the Building, or any other person, except, with respect to damage to the Premises, as may be occasioned by the negligent or willful act of the Landlord, its employees and agents
(but subject to the insurance and waiver of subrogation provisions set forth in Section 26 below). 

F.    Insurance/Indemnities/Waiver/Estoppel.  

        26.    Insurance; Waivers.    

        (a)   Tenant
covenants and agrees that from and after the date of delivery of the Premises from Landlord to Tenant, Tenant will carry and maintain, at its sole cost and
expense, the following types of insurance, in the amounts specified and in the form hereinafter provided for: 

19

  

        (i)    Commercial
General Liability ("CGL") Insurance written on an occurrence basis, covering the Premises and all operations of the Tenant in or about the
Premises against claims for bodily injury, property damage and product liability and to include contractual liability coverage insuring Tenant's indemnification obligations under this Lease, to be in
combined single limits of not less than $1,000,000 each occurrence for bodily injury and property damage, $1,000,000 for products/completed operations aggregate, $1,000,000 for personal injury, and to
have general aggregate limits of not less than $2,000,000 (per location) and Umbrella Liability Insurance in an amount not less than $4,000,000 for each policy year. The general aggregate limits under
the Commercial General Liability insurance policy or policies shall apply separately to the Premises and to Tenant's use thereof (and not to any other location or use of Tenant) and such policy shall
contain an endorsement to that effect. The certificate of insurance evidencing the CGL form of policy shall specify all endorsements required herein and shall specify on the face thereof that the
limits of such policy apply separately to the Premises. 

        (ii)   Insurance
covering all of the items included in Tenant's leasehold improvements, heating, ventilating and air conditioning equipment maintained by Tenant, trade
fixtures, merchandise and personal property from time to time in, on or upon the Premises, and alterations, additions or changes made by Tenant pursuant to Section 21, in an amount not less
than one hundred percent (100%) of their full replacement value from time to time during the Term, providing protection against perils included within the standard form of "all-risks" fire
and casualty insurance policy. Any policy proceeds from such insurance shall be held in trust by Tenant's insurance company for the repair, construction and restoration or replacement of the property
damaged or destroyed unless this Lease shall cease and terminate under the provisions of Section 23 of this Lease. 

        (iii)  Workers'
Compensation and Employer's Liability insurance affording statutory coverage and containing statutory limits with the Employer's Liability portion thereof to
have minimum limits of $500,000.00. 

        (iv)  Business
Interruption Insurance equal to not less than fifty percent (50%) of the estimated gross earnings (as defined in the standard form of business interruption
insurance policy) of Tenant at the Premises which insurance shall be issued on an "all risks" basis (or its equivalent). 

        (b)   All
policies of the insurance provided for in Section 26(a) above shall be issued in form acceptable to Landlord by insurance companies with a rating and
financial size of not less than A-VIII in the most current available "Best's Insurance Reports", and licensed to do business in the state in which the Building is located. Each and every
such policy: 

        (i)    shall
name Landlord as an additional insured (as well as any mortgagee of Landlord and any other party reasonably designated by Landlord), except with respect to the
insurance described in Section 26(a)(iii) above; 

        (ii)   shall
be evidenced by a certificate delivered to Landlord at or prior to the execution of the Lease and any such other parties in interest within thirty
(30) days after delivery of possession of the Premises to Tenant and thereafter within five (5) days after the inception (or renewal) of each new policy, and as often as any such policy
shall expire or terminate. Renewal or additional policies shall be procured and maintained by Tenant in like manner and to like extent; 

        (iii)  shall
contain a provision that the insurer will give to Landlord and such other parties in interest at least thirty (30) days notice in writing (and ten days in
the case of non-payment) in advance of any material change, cancellation, termination or lapse, or the effective date of any reduction in the amounts of insurance; and 

        (iv)  shall
be written as a primary policy which does not contribute to and is not in excess of coverage which Landlord may carry. 

20

 

        (c)   Any
insurance provided for in Section 26(a) may be maintained by means of a policy or policies of blanket insurance, covering additional items or locations or
insureds, provided, however, that: 

        (i)    Landlord
and any other parties in interest from time to time designated by Landlord to Tenant shall be named as an additional insured thereunder as its interest may
appear; 

        (ii)   the
coverage afforded Landlord and any such other parties in interest will not be reduced or diminished by reason of the use of such blanket policy of insurance; and 

        (iii)  the
requirements set forth in this Section 26 are otherwise satisfied. 

        (d)   During
the Term hereof, Landlord shall in a manner comparable to other comparable industrial buildings in the market where the Building is located keep in effect
(i) commercial property insurance on the Building, its fixtures and equipment, and rent loss insurance for a period and amount of not less than one (1) year of rent (such commercial
property insurance policy shall, at a minimum, cover the perils insured under the ISO special causes of loss form which provides "all risk" coverage, and include replacement cost coverage), and
(ii) a policy or policies of commercial general liability insurance insuring against liability arising out of the risks of death, bodily injury, property damage and personal injury liability
with respect to the Building and Property. 

        (e)   Notwithstanding
anything to the contrary in this Lease, Landlord and Tenant do hereby waive any and all claims against one another for damage to or destruction of real
or personal property to the extent such damage or destruction can be covered by "all risks" property insurance of the type described in Section 26(a)(ii) and
Section 26(d)(i) above. Each party shall also be responsible for the payment of any deductible amounts required to be paid under the applicable "all risks" fire and casualty insurance
carried by the party whose property is damaged. These waivers shall apply if the damage would have been covered by a customary "all risks" insurance policy, even if the party fails to obtain such
coverage. The intent of this provision is that each party shall look solely to its insurance with respect to property damage or destruction which can be covered by "all risks" insurance of the type
described in Section 26(a)(ii) and Section 26(d)(i). Each such policy shall include a waiver of all rights of subrogation by the insurance carrier against the other party, its
agents and employees with respect to property damage covered by the applicable "all risks" fire and casualty insurance policy. 

        (f)    In
the event that, as a result of changed circumstances from time to time, comparable landlords and/or tenants in the area in which the Building is located are typically
carrying kinds or amounts of insurance that exceed the requirements of this Lease or if, in the opinion of Landlord's lender or insurance broker, the amount of insurance then required under this Lease
is not adequate, Tenant shall, within thirty (30) days following written demand by Landlord, obtain and thereafter maintain in effect such additional insurance, which shall, to the extent
reasonably applicable, conform to, and be governed by, the existing insurance provisions of this Lease. 

        27.    Indemnities.    Tenant does hereby indemnify and save
harmless Landlord from and against all claims for damages to persons or property which are caused anywhere in the Premises, the Building or on the Property by the negligence or willful misconduct of
Tenant, its agents or employees or which occur in the Premises (or arise out of actions taking place in the Premises) unless such damage is caused by the negligence or willful misconduct of Landlord,
its agents, or employees. Landlord does hereby indemnify and hold Tenant harmless against all claims for damage to persons or property caused by the negligence or willful misconduct of Landlord, its
agents or employees which occur on the Property or common areas of the Building. The indemnities set forth hereinabove shall include the application to pay reasonable expenses incurred by the
indemnified party, including, without limitation, reasonable, actually incurred attorney's fees. The indemnities contained herein control over all other provisions in this Lease, except that they do
not override the waivers contained in Section 26(e) above. 

21

 

        28.    Acceptance and Waiver.    Except to the extent caused by
the negligence or willful misconduct of Landlord, its agents and employees (but subject to the insurance provisions in Section 26 above), Landlord shall not be liable to Tenant, its agents,
employees, guests or invitees (and, if Tenant is a corporation, its officers, agents, employees, guests or invitees) for any damage caused to any of them due to the Building or any part or
appurtenances thereof being improperly constructed or being or becoming out of repair, or arising from the leaking of gas, water, sewer or steam pipes, or from electricity, but Tenant, by moving into
the Premises and taking possession thereof, shall accept, and shall be held to have accepted the Premises as suitable for the purposes for which the same are leased, and shall accept and shall be held
to have accepted the Building and every appurtenances thereof, and Tenant by said act waives any and all defects therein, subject to the express warranties, representations and covenants of Landlord
under this Lease; provided, however, that this Section shall not preclude Tenant from seeking recovery from any third party responsible for such damage or injury. 

        29.    Estoppel.    Tenant shall, from time to time, upon not
less than ten (10) days prior written request by Landlord, execute, acknowledge and deliver to Landlord a written statement certifying that this Lease is unmodified and in full force and effect
(or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), the dates to which the Rent has been paid, that Tenant is not in default
hereunder and whether Tenant has any offsets or defenses against Landlord under this Lease, and whether or not to the best of Tenant's knowledge Landlord is in default hereunder (and if so, specifying
the nature of the default and any other facts relating to this Lease as may be reasonably requested by Landlord), it being intended that any such statement delivered pursuant to this paragraph may be
relied upon by a prospective purchaser of Landlord's interest or by a mortgagee of Landlord's interest or assignee of any security deed upon Landlord's interest in the Premises. 

G.    Default/Remedies/Surrender/Holding Over.  

        30.    Notices.    Any notice which is required or permitted to
be given by either party under this Lease shall be in writing and must be given only by certified mail, return receipt requested, by hand delivery or by nationally recognized overnight courier service
at the addresses set forth in Paragraph 13 of the Basic Lease Provisions. Each party shall further use reasonable efforts to provide the other party with a courtesy copy of any notice by fax
and by electronic mail. Any such notice shall be deemed given on the earlier of two business days after the date sent in accordance with one of the permitted methods described above or the date of
actual receipt thereof, provided that receipt of notice solely by fax or electronic mail shall not be deemed to be delivery of notice hereunder. The time period for responding to any such notice shall
begin on the date the notice is actually received, but refusal to accept delivery or inability to accomplish delivery because the party can no longer be found at the then current notice address, shall
be deemed receipt. Either party may change its notice address by notice to the other party in accordance with the terms of this Section 30. The initial notice addresses for each party are set
forth in the Basic Lease Provisions. 

        31.    Abandonment of Premises.    Tenant agrees not to abandon
or vacate (where such vacation is accompanied by a failure to maintain the Premises or secure it from unauthorized entry) the Premises during the Term of this Lease. If Tenant does abandon or vacate
(where such vacation is accompanied by a failure to maintain the Premises or secure it from unauthorized entry) the Premises for more than ninety (90) days, Landlord may terminate this Lease,
by written notice to Tenant at any time prior to Tenant reoccupying the Premises, but such termination shall not entitle Landlord to pursue any other remedies unless an uncured Default then exists, in
which case Landlord may pursue any and all remedies provided by this Lease, at law or in equity. 

22

 

        32.    Default.    

        The
following shall constitute events of default under this Lease: 

        (a)   If
Tenant shall default in the payment of Rent herein reserved when due and fails to cure such default within ten (10) days after the date due; 

        (b)   if
Tenant shall fail to perform any of the terms, conditions or provisions of this Lease (other than the provisions requiring the payment of Rent), and fails to cure
such non-monetary default within thirty (30) days after written notice of such default is given to Tenant by Landlord, provided however that if such
non-monetary default is of such a nature that it cannot through the exercise of diligent and reasonable efforts be cured within thirty (30) days, then Tenant shall not be in default
in such instance if Tenant promptly commences and diligently pursues the cure of such non-monetary default to completion as soon as possible and in all events within ninety
(90) days after such initial notice; 

        (c)   if
Tenant is adjudicated a bankrupt; 

        (d)   if
a permanent receiver is appointed for Tenant's property and such receiver is not removed within sixty (60) days after appointment thereof; 

        (e)   if,
whether voluntarily or involuntarily, Tenant takes advantage of any debtor relief proceedings under any present or future laws, whereby the Rent or any part thereof,
is, or is proposed to be, reduced or payment thereof deferred; 

        (f)    if
Tenant's effects should be levied upon or attached and such levy or attachment is not satisfied or dissolved within thirty (30) days after such levy or
attachment; or 

        (g)   if
Tenant is an individual, in the event of the death of the individual and the failure of the executor, administrator or personal representative of the estate of the
deceased individual to have assigned the Lease within three (3) months after such death to an assignee approved by Landlord. 

        In
any of such events, Landlord, at its sole option, may exercise any or all of the remedies set forth in Section 33 below. 

        33.    Landlord's Remedies.    Upon the occurrence of any default
set forth in Section 32 above which is not cured by Tenant within the applicable cure period provided therein, if any, Landlord may exercise all or any of the following remedies: 

        (a)   terminate
this Lease by giving Tenant written notice of termination, in which event this Lease shall terminate on the date specified in such notice and all rights of
Tenant under this Lease shall expire and terminate as of such date, Tenant shall remain liable for all obligations under this Lease up to the date of such termination and Tenant shall surrender the
Premises to Landlord on the date specified in such notice; and if Tenant fails to so surrender, Landlord shall have the right, by judicial process, to enter upon and take possession of the Premises
and to expel and remove Tenant and its effects without prejudice to any other remedies that Landlord may have by reason of Tenant's default or the termination of this Lease; 

        (b)   If
this Lease is terminated, Landlord shall have all of the rights and remedies of a landlord provided by Civil Code § 1951.2, in addition to any other
rights and remedies Landlord may have. The damages which Landlord may recover shall include, without limitation, (i) the worth at the time of award of the unpaid rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of the award exceeds the amount
of the rental loss that Tenant proves could have been reasonably avoided; (iii) the worth at the time of award computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%) of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of rental loss that
Tenant proves could be reasonably avoided; (iv) all reasonable 

23

 

legal
expenses and other related costs incurred by Landlord following Tenant's default; (v) all reasonable costs incurred by Landlord in restoring the Premises to good order and condition to
relet the Premises; and (vi) all reasonable costs, including without limitation, any brokerage commissions incurred by Landlord in reletting the Premises; 

        (c)   to
continue this Lease in effect for so long as Landlord does not terminate Tenant's right to possession, and Landlord may enforce all rights and remedies under this
Lease, including the right to recover the rental as it becomes due under this Lease. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this Lease shall not constitute a termination of Tenant's right to possession. 

        (d)   pursue
such other remedies as are available at law or in equity; and 

        (e)   Landlord
may, without waiving or releasing Tenant from any obligations of Tenant, make payment or perform other acts required by this Lease on Tenant's behalf and all
sums so paid by Landlord and all necessary incidental costs so incurred shall be payable to Landlord on demand and shall constitute Additional Rent under this Lease. 

        34.    Service of Notice.    Except as otherwise provided by law,
Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder, the person in charge of or occupying the Premises at the time of such
proceeding or notice; and if no person be in charge or occupying the Premises, then such service may be made by attaching the same to the front entrance of the Premises and depositing the same in the
United States mail for delivery by Tenant as provided by applicable law. 

        35.    Advertising.    Landlord may advertise the Premises as
being "For Rent" at any time following a default by Tenant which remains uncured following the expiration of all applicable notice and cure provisions and at any time within one hundred eighty
(180) days prior to the expiration, cancellation or termination of this Lease for any reason and during any such periods Landlord may exhibit the Premises to prospective tenants upon prior
reasonable notice to Tenant, subject to the terms of Section 42. 

        36.    Surrender of Premises.    Whenever under the terms hereof
Landlord is entitled to possession of the Premises, Tenant at once shall surrender the Premises and the keys thereto to Landlord in the same condition as on the Commencement Date hereof, normal wear
and tear only excepted, and Tenant shall remove all of its personalty therefrom and shall, if directed to do so by Landlord as permitted in accordance with Section 21, remove the specified
alterations and restore the Premises to its original condition prior to the construction of such alterations, excluding any improvements made prior to the Commencement Date. Tenant's obligation to
observe or perform these covenants shall survive the expiration or other termination of the Term of this Lease. If the last day of the Term of this Lease or any renewal falls on a Saturday, Sunday or
a legal holiday, this Lease shall expire on the business day immediately preceding. 

        37.    Cleaning Premises.    Upon vacating the Premises, Tenant
agrees to return the Premises to Landlord broom clean and in the same condition when Tenant's possession commenced, natural wear and tear and casualty not caused by Tenant excepted. 

        38.    Removal of Fixtures.    Tenant may, prior to the
expiration of the Term of this Lease, or any extension thereof, remove any fixtures and equipment which Tenant has placed in the Premises which can be removed without significant damage to the
Premises, provided Tenant promptly repairs all damages to the Premises caused by such removal. 

        39.    Holding Over.    In the event Tenant remains in possession
of the Premises after the expiration of the Term hereof, or of any renewal term, with Landlord's written consent, Tenant shall be a tenant at will and such tenancy shall be subject to all the
provisions hereof, except that the monthly 

24

 

rental
shall be at the following rates: (i) for the first sixty (60) days of any holdover period, 125% of the monthly Base Rent payable hereunder upon such expiration of the Term hereof,
or of any renewal term; and (ii) thereafter, 150% of the monthly Base Rent payable hereunder upon such expiration of the Term hereof, or of any renewal term. In the event Tenant remains in
possession of the Premises after the expiration of the Term hereof, or any renewal term, without Landlord's written consent, Tenant shall be a tenant at sufferance and be liable for any and all
damages Landlord suffers as a result of such holdover including, without limitation, the loss of a prospective tenant for such space. There shall be no renewal of this Lease by operation of law or
otherwise. Nothing in this Section shall be construed as a consent by Landlord for any holding over by Tenant after the expiration of the Term hereof, or any renewal term. 

        40.    Attorney's Fees.    In case Landlord shall, without fault
on its part, be made a party to any litigation commenced by or against Tenant, then Tenant shall pay all costs, expenses and reasonable attorneys' fees incurred or paid by Landlord in connection with
such litigation. In the event of any action, suit or proceeding brought by Landlord or Tenant to enforce any of the other's covenants and agreements in this Lease, the prevailing party shall be
entitled to recover from the non-prevailing party any costs, expenses and reasonable attorneys' fees incurred in connection with such action, suit or proceeding. 

        41.    Mortgagee's Rights.    

        (a)   Tenant
agrees that this Lease shall be subject and subordinate to (i) any mortgage, deed of trust or other security interest now encumbering the Property and to
all advances which may be hereafter made, to the full extent of all debts and charges secured thereby and to all renewals or extensions of any part thereof, and, subject to the delivery of an SNDA (as
defined below), to any mortgage, deed of trust or other security interest which any owner of the Property may hereafter, at any time, elect to place on the Property; (ii) any assignment of
Landlord's interest in the leases and rents from the Building or Property which includes the Lease which now exists or which any owner of the Property may hereafter, at any time, elect to place on the
Property; and (iii) any Uniform Commercial Code Financing Statement covering the personal property rights of Landlord or any owner of the Property which now exists or any owner of the Property
may hereafter, at any time, elect to place on the foregoing personal property (all of the foregoing instruments set forth in (i), (ii) and (iii) above being hereafter collectively
referred to as "Security Documents"). 

        Tenant
agrees upon request of the holder of any Security Documents ("Holder") to hereafter execute any documents which the counsel for Landlord or Holder may
reasonably deem necessary to evidence the subordination of the Lease to the Security Documents in a commercially reasonable, industry typical form (in each instance, an "SNDA"). Landlord agrees that
Tenant shall not have the obligation to execute any SNDA that does not contain an obligation by the Holder of the relevant Security Document not to disturb the possession of Tenant of the Premises so
long as Tenant observes and performs all of its obligations under this Lease. Within ten (10) days after request therefor, if Tenant fails to execute any such requested documents meeting the
requirements of this paragraph, Landlord or Holder is hereby empowered to execute such documents in the name of Tenant evidencing such subordination, as the act and deed of Tenant, and this authority
is hereby declared to be coupled with an interest and not revocable. 

        For
the benefit of Tenant, Landlord agrees to use commercially reasonable efforts to seek and obtain, as soon as reasonably possible following the execution of this Lease, an SNDA
meeting the above requirements from the Holder of any Security Document now encumbering the Property. 

        (b)   In
the event of a foreclosure pursuant to any Security Documents, Tenant shall at the election of the Landlord, thereafter remain bound pursuant to the terms of this
Lease as if a new and identical Lease between the purchaser at such foreclosure ("Purchaser"), as landlord, and Tenant, as tenant, had been entered into for the remainder
of the Term hereof and Tenant shall attorn to the Purchaser upon 

25

 

such
foreclosure sale and shall recognize such Purchaser as the Landlord under the Lease. Such attornment shall be effective and self-operative without the execution of any further
instrument on the part of any of the parties hereto. Tenant agrees, however, to execute and deliver at any time and from time to time, upon the request of Landlord or of Holder, any instrument or
certificate that may be necessary or appropriate in any such foreclosure proceeding or otherwise to evidence such attornment. 

        (c)   If
the Holder of any Security Document or the Purchaser upon the foreclosure of any of the Security Documents shall succeed to the interest of Landlord under the Lease,
such Holder or Purchaser shall have the same remedies, by entry, action or otherwise for the non-performance of any agreement contained in the Lease, for the recovery of Rent or for any
other default or event of default hereunder that Landlord had or would have had if any such Holder or Purchaser had not succeeded to the interest of Landlord. Any such Holder or Purchaser which
succeeds to the interest of Landlord hereunder, shall not be (a) liable for any act or omission of any prior Landlord (including Landlord) unless such act or omission is of a continuing nature;
or (b) subject to any offsets or defenses which Tenant might have against any prior Landlord (including Landlord); or (c) bound by any Rent which Tenant might have paid for more than the
current month to any prior Landlord (including Landlord); or (d) bound by any amendment or modification of the Lease made without its consent. 

26

   
        (d)    Notwithstanding anything to the contrary set forth in this Section 41, the Holder of any Security Documents shall have the right, at any time, to elect to make
this Lease superior and prior to its Security Document. No documentation, other than written notice to Tenant, shall be required to evidence that the Lease has been made superior and prior to such
Security Documents, but Tenant hereby agrees to execute any documents reasonably requested by Landlord or Holder to acknowledge that the Lease has been made superior and prior to the Security
Documents. 

H.    Landlord Entry/Relocation/Assignment and Subletting.  

        42.    Entering Premises.    Landlord may enter the Premises at
reasonable hours provided that Landlord's entry shall not unreasonably interrupt or interfere with Tenant's business operations and that prior notice is given when reasonably possible (and, if in the
opinion of Landlord any emergency exists, at any time and without notice): (a) to make repairs, perform maintenance and provide other services described in Section 19 above (no prior
notice is required to provide routine services) which Landlord is obligated to make to the Premises or the Building pursuant to the terms of this Lease or to the other premises within the Building
pursuant to the leases of other tenants; (b) to inspect the Premises in order to confirm that Tenant is complying with all of the terms and conditions of this Lease and with the rules and
regulations hereof; (c) to remove from the Premises any articles or signs kept or exhibited therein in violation of the terms hereof; (d) to run pipes, conduits, ducts, wiring, cabling
or any other mechanical, electrical, plumbing or HVAC equipment through the areas behind the walls, below the floors or above the ceilings in the Premises and elsewhere in the Building; and
(e) to exercise any other right or perform any other obligation that Landlord has under this Lease. In entering the Premises pursuant to the foregoing, Landlord shall (x) exercise
reasonable measures to minimize any disruption to Tenant's business operations or activities; (y) abide by all reasonable security measures and restrictions required by Tenant to protect the
safety and security of its personnel and confidential information; and (x) cooperate with any reasonable requests by Tenant to schedule the work at times that do not inconvenience Tenant's
business operations. Subject to compliance with the foregoing provisions of this Section 42: (i) Landlord shall be allowed to take all material into and upon the Premises that may be
required to make any repairs, improvements and additions, or any alterations, without in any way being deemed or held guilty of trespass and without constituting a constructive eviction of Tenant;
(ii) the Rent reserved herein shall not abate while such repairs, alterations or additions are being made and Tenant shall not be entitled to maintain a set-off or counterclaim for
damages against Landlord by reason of loss from interruption to the business of Tenant because of the prosecution of any such work; and (iii) unless any work would unreasonably interfere with
Tenant's use of the Premises if performed during business hours, all such repairs, decorations, additions and improvements shall be done during ordinary business hours, or, if any such work is at the
request of Tenant to be done during any other hours, the Tenant shall pay all overtime and other extra costs. 

        43.    Relocation.    Intentionally deleted. 

        44.    Assignment and Subletting    

        (a)    Except
as otherwise expressly permitted by this Lease, Tenant shall not, without the prior written consent of Landlord, which shall not be unreasonably withheld,
conditioned or delayed, voluntarily or involuntarily, assign or hypothecate this Lease or any interest in this Lease, sublet the Premises or any part of them, or license the use of the Premises by any
party other than Tenant. Any of the previous acts without consent shall be void and shall, at the option of Landlord, constitute a noncurable default under this Lease. 

        In
connection with each consent requested by Tenant, Tenant shall submit to Landlord the terms of the proposed transaction, the identity of the parties to the transaction, the proposed
documentation for the transaction, and all other information reasonably requested by Landlord concerning the proposed transaction and the parties involved. Tenant agrees that any instrument by which
Tenant assigns or 

27

 

sublets
all or any portion of the Premises shall expressly provide that the subtenant or assignee may not further assign or sublet the assigned or sublet space without Landlord's prior written consent
as provided herein, and that the assignee or subtenant (to the extent of the sublet space only) will assume and comply with all of the applicable provisions of this Lease and that Landlord may enforce
the Lease provisions directly against such assignee or subtenant. 

        For
purposes of this Section 44, the following events shall be deemed an assignment or sublease, as appropriate: (i) the issuance of equity interests (whether stock,
partnership interests or otherwise) in Tenant or any subtenant or assignee, or any entity controlling any of them, to any person or group of related persons, in a single transaction or a series of
related or unrelated transactions, such that, following such issuance, such person or group shall gain Control (as defined below) of Tenant; or (ii) a transfer of Control of Tenant or any
subtenant or assignee, or any entity controlling any of them, in a single transaction or a series of related or unrelated transactions, except that the transfer of outstanding capital stock or other
listed equity interests by persons or parties other than "insiders" within the meaning of the Securities Exchange Act of 1934, as amended, through the "over-the-counter" market
or any recognized national or international securities exchange, shall not be included in determining whether Control has been transferred. "Control" shall mean direct or indirect ownership of fifty
percent (50%) or more of all of the voting stock of such corporation or fifty percent (50%) or more of all the legal and equitable interest in any other business entity. 

        However,
Tenant may, without resulting in a default under this Lease and without notice to Landlord, license the use of the Premises by (i) any entity of which Tenant, any of
Tenant's subsidiaries, or
Tenant's parent is a limited partner, general partner, joint venturer, or shareholder; (ii) any other limited partner, general partner, joint venturer or shareholder in that entity;
(iii) any consultant, contractor, accountant, or counsel of Tenant; or (iv) any of the directors, officers, employees, contractors, accountants, or counsel of any of the foregoing. The
license or other permitted use does not in any way create in the licensee or any other party rights to possess or remain in the Premises beyond the termination of the Lease. 

        Further,
notwithstanding anything in this Section 44 to the contrary, provided that no Event of Default has occurred and is then continuing, Tenant shall have the right, upon
thirty (30) days prior written notice to Landlord (except where the proposed transaction is confidential, in which case Tenant shall give notice as soon as reasonably practicable following
public notification of the transaction), but without any requirement for prior written consent by Landlord, (i) to sublet all or part of the Premises to any person or entity which is Controlled
by, under common Control with, or which Controls Tenant (any of such persons entities being herein called an "Altigen Affiliate"); (ii) to assign this Lease to (x) an Altigen Affiliate
or (y) a successor corporation into which or with which Tenant is merged or consolidated or which acquires substantially all of Tenant's assets and property at the Premises, provided that, with
respect to an assignment pursuant to (ii)(y), such successor corporation assumes all of the obligations and liabilities of Tenant. With respect to any assignment under this paragraph, Tenant shall
provide in its notice to Landlord such information as may be reasonably required by Landlord to determine that the requirements of this paragraph have been satisfied. With respect to any assignment or
sublease to an Altigen Affiliate, Landlord will not be entitled to exercise the rights granted to Landlord in subparagraphs (e) or (f) regarding bonus rents. 

        (b)    Without
limiting other instances in which Landlord may reasonably withhold consent to an assignment or subletting, Landlord and Tenant acknowledge that it shall be
reasonable for Landlord to withhold consent in the following instances: 

        (i)    if
at the time consent is requested, or at any time following such request but prior to the granting of consent, an uncured Event of Default exists under this Lease
following all applicable notice and cure periods, or if Tenant is in monetary default under this Lease which default remains uncured following notice by Landlord; 

28

 

        (ii)    if
the proposed assignee or sublessee is a governmental agency that intends to use (or is not prohibited from using) the Premises to provide services to the public; 

        (iii)    if
the proposed assignee or sublessee is an existing tenant of the Industrial Center and Landlord then has space available at the Property which would meet such
existing tenant's needs; 

        (iv)    if
Landlord reasonably determines that circumstances warrant a consideration of the financial worth of a proposed assignee or sublessee, and the financial worth, in
Landlord's reasonable judgment, does not meet the credit standards applied by Landlord for other tenants under leases with comparable terms; and 

        (v)    if,
in Landlord's reasonable judgment, the character, reputation, or business of the proposed assignee or sublessee would detract from the quality of the other tenancies
in the Industrial Center. 

        (c)    If
at any time during the Term, Tenant desires to assign this Lease or to sublet all or any part of the Premises to a third party (i.e., a party other than an Altigen
Affiliate), Tenant shall notify Landlord of the date on which Tenant would first want to effect the same. Landlord shall have the option, exercisable by notice given to Tenant within thirty
(30) days after Tenant's notice is given, to (i) terminate this Lease in the event of a proposed assignment, effective as of the date proposed in Tenant's notice, or
(ii) recapture the space proposed for sublease in the event of a proposed subletting for ninety percent (90%) or more of the Premises to end within the last year of the Term, effective as of
the date proposed in the notice. If Landlord does not exercise this option, for a period of one hundred twenty (120) days following Landlord's election not to exercise this option, Tenant shall
be free to assign this Lease or to sublet the space to any assignee or sublessee, subject to obtaining Landlord's prior consent in accordance with this Section 44. If Tenant does not assign
this Lease or sublet the space within such 120-day period, Landlord's option shall be reinstated as if no earlier notice had been delivered. 

        (d)    No
sublessee shall have a right to further sublet or to assign its sublease without Landlord's prior consent, which consent shall not be withheld unreasonably, in the
same manner as if Tenant were entering into a new sublease. No sublease, once consented to by Landlord, shall be modified in any material way that could affect Landlord's interests, or be terminated
by Tenant and such sublessee, without Landlord's prior consent, which shall not be unreasonably withheld. 

        (e)    In
the case of an assignment, fifty percent (50%) of all of any sums or other economic consideration received by Tenant as a result of the assignment (excluding any
consideration reasonably attributed to assets or services other than this Lease) shall be paid to Landlord after first deducting the unamortized cost of leasehold improvements paid for by Tenant, and
the cost of any real estate commissions, reasonable attorney fees, or other third party professional services paid by Tenant in connection with the assignment. 

        (f)    In
the case of a subletting, fifty percent (50%) of all of any sums or economic consideration received by Tenant as a result of the subletting (excluding any
consideration reasonably attributed to assets or services other than this Lease) shall be paid to Landlord after first deducting (i) the rental due under this Lease, prorated to reflect only
rental allocable to the sublet portion of the Premises, (ii) the cost of leasehold improvements made to the sublet portion of the Premises at Tenant's cost, amortized over the term of this
Lease, except for leasehold improvements made for the specific benefit of the sublessee, which shall be amortized over the term of the sublease, and (iii) the cost of any real estate
commissions, reasonable attorney fees, or other third party professional services paid by Tenant in connection with the subletting. 

        (g)    Regardless
of Landlord's consent, no subletting or assignment shall release or alter Tenant's obligation or primary liability to pay the rental and perform all other
obligations under this Lease. The acceptance of rental by Landlord from any other person shall not be deemed a waiver by Landlord of 

29

 

any
provision of this Lease. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee or successor of
Tenant in the performance of any of the terms of this Lease, after notice of default to Tenant pursuant to Section 32 and the expiration of any applicable cure period, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against the assignee or successor. Landlord may consent to subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining consent. This action shall not relieve Tenant of liability under this
Lease provided, however, that Tenant shall not be liable for any increase in Tenant's obligations under this Lease because of any amendment or modification to this Lease, unless Tenant has consented
to it in writing. 

        Further,
no permitted subletting by Tenant shall be effective until there has been delivered to Landlord a counterpart of the sublease in which the subtenant agrees to be and remain
jointly and severally liable with Tenant for the payment of rent pertaining to the sublet space and for the performance of all of the terms and provisions of this Lease as applicable to the sublet
space; provided, however, that the subtenant shall be liable to Landlord for rent only in the amount set forth in the sublease. No permitted assignment shall be effective unless and until there has
been delivered to Landlord a counterpart of the assignment in which the assignee assumes all of Tenant's obligations under this Lease arising on or after the date of the assignment. The failure or
refusal of a subtenant or assignee to execute any such instrument shall not release or discharge the subtenant or assignee from its liability as set forth above. 

        (h)    If
Tenant assigns this Lease, sublets the Premises, or requests the consent of Landlord to any assignment, subletting, hypothecation, or other action requiring
Landlord's consent under this Lease, Tenant shall pay Landlord's reasonable attorney fees incurred in connection with the action, not to exceed $1,000 during the initial Term of this Lease, and $1,500
thereafter. 

I.    Sale of Building; Limitation of Liability.  

        45.    Sale.    In the event the original Landlord hereunder, or
any successor owner of the Building, shall sell or convey the Building and/or the Property, all liabilities and obligations on the part of the original Landlord, or such successor owner, under this
Lease accruing thereafter shall terminate, and thereupon all such liabilities and obligations shall be binding upon the new owner. Tenant agrees to attorn to such new owner. 

        46.    Limitation of Liability.    Landlord's obligations and
liability with respect to this Lease shall be limited solely to Landlord's interest in the Building and the Property, as such interest is constituted from time to time, and neither Landlord nor any
partner of Landlord, or any officer, director, shareholder, or partner or member of any partner or member of Landlord, shall have any individual or personal liability whatsoever with respect to this
Lease. 

J.    Brokers/Construction/Authority.  

        47.    Broker Disclosure.    The Landlord's Broker identified in
the Basic Lease Provisions, who is a real estate broker licensed in the State where the Building is located, has acted as agent for Landlord in this transaction and is to be paid a commission by
Landlord pursuant to a separate agreement. The Tenant's Broker identified in the Basic Lease Provisions, who is a real estate broker licensed in the State where the Building is located, has acted as
agent for Tenant in this transaction and shall be free to share in the commission paid to Landlord's Broker as may be agreed among Landlord's Broker and Tenant's Broker pursuant to a separate
agreement. Landlord represents that Landlord has dealt with no other broker other than the broker(s) identified herein. Landlord agrees that, if any other broker makes a claim for a commission based
upon the actions of Landlord, Landlord shall indemnify, defend and hold Tenant harmless from any such claim. Tenant represents that Tenant has dealt with no broker 

30

 

other
than the broker(s) identified herein. Tenant agrees that, if any other broker makes a claim for a commission based upon the actions of Tenant, Tenant shall indemnify, defend and hold Landlord
harmless from any such claim. 

        48.    Definitions.    "Landlord," as used in this Lease, shall
include the party named in the first paragraph hereof, its representatives, assigns and successors in title to the Premises. "Tenant" shall include the party named in the first paragraph hereof, its
heirs and representatives, and, if this Lease shall be validly assigned or sublet, shall also include Tenant's assignees or subtenants, as to the Premises, or portion thereof, covered by such
assignment or sublease. "Landlord" and "Tenant" include male and female, singular and plural, corporation, partnership, limited liability company (and the officers, members, partners, employees or
agents of any such entities) or individual, as may fit the particular parties. 

        49.    Construction of this Agreement.    No failure of Landlord
to exercise any power given Landlord hereunder, or to insist upon strict compliance by Tenant of its obligations hereunder, and no custom or practice of the parties at variance with the terms hereof
shall constitute a waiver of Landlord's right to demand exact compliance with the terms hereof. Time is of the essence of this Lease. The waiver by either party of any agreement, condition, or
provision contained in this Lease shall not be deemed to be a waiver of any subsequent breach of the agreement, condition, or provision or any other agreement, condition, or provision contained in the
Lease, nor shall any custom or practice that may arise between the parties in the administration of the terms of this Lease be construed to waive or to lessen the right of either party to the
performance by the other party in strict accordance with these terms. The subsequent acceptance of rental under this Lease by Landlord shall not be deemed to be a waiver of any preceding breach by the
other party of any agreement, condition, or provision of this Lease, other than the failure of Tenant to pay the particular accepted rental, regardless of knowledge of the preceding breach at the time
of the rental acceptance. 

        50.    No Estate In Land.    This contract shall create the
relationship of landlord and tenant between Landlord and Tenant; no estate shall pass out of Landlord (other than a leasehold estate); Tenant has only a right of possession and use, not subject to
levy or sale, and not assignable by Tenant except with Landlord's consent. The surrender of this Lease by Tenant, or a mutual cancellation of it, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or operate as an assignment to Landlord of all subleases or subtenancies. 

        51.    Paragraph Titles; Severability.    The paragraph titles
used herein are not to be considered a substantive part of this Lease, but merely descriptive aids to identify the paragraph to which they refer. Use of the masculine gender includes the feminine and
neuter, and vice versa, where necessary to impart contextual continuity. If any paragraph or provision herein is held invalid by a court of competent jurisdiction, all other paragraphs or severable
provisions of this Lease shall not be affected thereby, but shall remain in full force and effect. 

        52.    Cumulative Rights.    All rights, powers and privileges
conferred hereunder upon the parties hereto shall be cumulative but not restrictive to those given by law. 

        53.    Waiver of Jury Trial.    Landlord and Tenant shall and do
hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, or any statutory remedy. 

        54.    Entire Agreement.    This Lease contains the entire
agreement of the parties and no representations, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. 

31

 

        55.    Submission of Agreement.    Submission of this Lease to
Tenant for signature does not constitute a reservation of space or an option to acquire a right of entry. This Lease is not binding or effective until execution by and delivery to both Landlord and
Tenant. 

        56.    Authority.    If Tenant executes this Lease as a
corporation, limited partnership, limited liability company or any other type of entity, Tenant does hereby represent and warrant that Tenant is a duly organized and validly existing corporation,
limited partnership, limited liability company or other type of entity, that Tenant is qualified to do business in the state where the Building is located, that Tenant has full right, power and
authority to enter into this Lease, and that each person signing on behalf of Tenant is authorized to do so. Upon Landlord's request, Tenant shall provide Landlord with evidence reasonably
satisfactory to Landlord confirming the foregoing representations and warranties. 

        57.    Good Faith; Consents.    The parties acknowledge and agree
that, to the fullest extent applicable under California law, this Lease is subject to the "covenant of good faith and fair dealing" which requires that each party will do all things reasonably
contemplated by the terms of the contract to accomplish its purposes. Additionally, wherever this Lease calls for the consent or approval by either party, that party shall not unreasonably withhold,
condition or delay the granting of such consent or approval unless this Lease expressly provides that such consent or approval may be withheld in such party's sole discretion, or words to that effect.
Notwithstanding any contrary expression or implication in the foregoing, wherever in this Lease, a party has a right to exercise an option to do something, such party shall have the unfettered
discretion and right to exercise or not exercise that option for any reason or no reason, without reference a to any subjective or objective standard or good faith or reasonableness under the
circumstances. 

        58.    Joint and Several Obligations.    If there is more than
one Tenant, the obligations imposed on Tenant shall be joint and several. 

        59.    Name of Building.    Tenant shall not, without consent of
Landlord, use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the Premises. 

        60.    Governing Law.    This Lease shall be governed by and
construed pursuant to law of the State of California. The headings and titles to the paragraphs of this Lease are for convenience only and are
not to be used to interpret or construe this Lease. Wherever the term "including" or "includes" is used in this Lease it shall be construed as if followed by the phrase "without limitation." 

        61.    Obligations Independent.    The obligations of each party
hereunder are independent and do not constitute conditions to the effectiveness of the other party's obligations. The nonperformance by either party of any of its obligations shall not excuse any
nonperformance by the other party except to the extent that it makes such other party's performance impossible or impracticable. 

        62.    Exhibits.    The exhibits and addendum, if any, specified
in the Table of Contents set forth at the beginning of this Lease are attached to this Lease and by this reference made a part of it. 

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

        64.    Reservations.    Landlord reserves the right, from time to
time, to grant, without the consent or joinder of Tenant, such easements, rights of way, utility raceways, and dedications that Landlord deems necessary, and to cause the recordation of parcel maps
and restrictions, so long as such easements, rights of way, utility raceways, dedications, maps and restrictions do not materially adversely affect the use and enjoyment of the Premises or common
areas by Tenant. Tenant agrees to sign any 

32

 

documents
reasonably requested by Landlord to effectuate any such easement rights, dedication, map or restrictions. 

        65.    Interruption of Services.    In the event of an
interruption in, or failure or inability to provide any utilities serving the Premises due to any cause other than Landlord's wanton or willful misconduct, such interruption, failure or inability
shall not constitute an eviction of Tenant, constructive or otherwise, or impose upon Landlord any liability whatsoever, including, but not limited to, liability for consequential damages or loss of
business by Tenant. Tenant hereby waives the provisions of California Civil Code Section 1932(1) or any other applicable existing or future law, ordinance or governmental regulations permitting
the termination of this Lease due to such interruption, failure or inability. However, in the event of any such interruption or failure, arising from any cause other than Tenant's acts, that lasts for
five (5) business days or longer, and materially interferes with Tenant's ability to conduct business in the Premises, starting on the sixth (6th) business day after such
interruption or failure and continuing until such utility service has been restored and Tenant is able to conduct business therefrom without material interference, all Rent payable under this Lease
shall be abated. 

        66.    Furniture.    

        (a)    Landlord
hereby leases to Tenant the items of personal property identified in Exhibit "F" hereto, together with all Cat 5 Wiring attached
thereto (the "Furniture"). The term of this lease of the Furniture shall commence on the Commencement Date, and shall be co-terminus with the Lease. Possession
of the Furniture shall be delivered to Tenant on the Commencement Date and shall be returned to Landlord upon the expiration or earlier termination of this Lease. 

        (b)    Tenant
accepts the Furniture in its "as is" "where is" condition and Tenant acknowledges that Landlord makes no warranty as to the condition of the Furniture or its
present or future suitability for Tenant's purposes except as follows: Landlord hereby warrants that the Furniture is and will be in good working order and condition for the period commencing on the
Commencement Date hereunder and expiring on the date thirty (30) days thereafter (the "Warranty Period"). Upon written notice given by Tenant to Landlord prior to
the expiration of the Warranty Period, of a material defect in the operation, installation or performance of the Furniture, Landlord shall correct such defect at Landlord's sole cost and expense. 

        (c)    This
lease of the Furniture is a net lease, and as such, Tenant shall pay maintenance, insurance and taxes on all Furniture leased hereunder. The Furniture shall be held
at all times during the term hereof at the sole risk of Tenant from injury, loss or destruction with the obligation of restoration or reimbursement to Landlord. Tenant agrees to procure and maintain
throughout the term of this Lease insurance covering the Furniture against all risk of physical loss, theft, damage and destruction, which insurance may be under the same policy required pursuant to
Section 26(a)(ii) hereof. Such insurance shall be procured in commercially reasonable amounts naming Landlord as an additional insured. Tenant shall deliver to Landlord a certificate
evidencing such insurance at the Commencement Date. Such insurance shall provide for payment for loss to Landlord (the proceeds of any such policy shall be held by Landlord and made available to
Tenant for repair or replacement of the Furniture during the Term of this Lease). If Tenant fails to procure such insurance, Landlord shall have the right to procure such insurance at Tenant's cost.
Tenant shall not take any steps or allow to be invalidated the insurance required to be maintained hereunder. 

        (d)    Upon
the termination of this Lease, Tenant shall return the Furniture to Landlord in the same condition as when received, ordinary wear and tear excepted (it being
understood that occasionally chairs, drawer mechanisms and other mechanical features may malfunction over time with normal use), conditioned on the obligations set forth in the next sentence having
been accomplished. Tenant is responsible for performing all maintenance, repair and cleaning of the Furniture, which may be necessary to maintain the Furniture in the condition in which it was
initially provided to Tenant. Tenant shall use the Furniture in a careful and proper manner, and shall comply with all laws and 

33

 

regulations
relating to the possession and use of the Furniture. Landlord shall have the right to inspect the Furniture during business hours, subject to the provisions of Section 42. 

        (e)    Tenant
covenants that: (i) Tenant will not, without the prior written consent of Landlord, assign, pledge, loan, mortgage, or part with possession of any of the
Furniture, or in any other manner attempt to dispose of it, or permit its use by others (other than to another occupant of the Premises as permitted under Section 44) or suffer any liens or
legal process to be incurred or levied thereon; (ii) Tenant will not make any alterations or permit any alterations to be made on or to the Furniture (other than reconfigurations of the
Furniture within the Premises) without the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; and (iii) Tenant will keep and maintain the
Furniture at 4555 Cushing Parkway, Fremont, California and will not permit any of the Furniture to removed from such location without Landlord's prior written consent. 

(f)    (i) In
addition to any other obligations of Tenant hereunder, Tenant shall indemnify and hold harmless Landlord from and against any and all claims arising from Tenant's use of
the Furniture, and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action
or proceeding be brought against Landlord by reason of any such claim, Tenant, upon written notice from Landlord, shall defend the same at Tenant's expense by counsel satisfactory to Landlord. Tenant,
as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to persons arising from any cause connected with the Furniture and waives all claims in
respect thereof against Landlord. This paragraph shall not include anything resulting from Landlord's own negligence or willful misconduct. 

        (ii)   In
addition to any other obligation of Tenant hereunder, Tenant agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom
or for damage to the goods, wares, merchandise or other property of Tenant, Tenant's employees, invitees, customers, or any other person occasioned by or in connection with Tenant's possession of use
of any of the Furniture, nor shall Landlord be liable for injury to the person of Tenant, Tenant's employees, agents, or contractors occasioned by or in connection with Tenant's possession or use of
any of the Leased Furniture. 

        (g)    The
Furniture shall at all times be and remain the exclusive property of Landlord, and Tenant shall have no title therein. Tenant shall, at its sole cost and expense, at
all times protect and defend the title of Landlord in the Furniture from and against all liens, claims and legal processes of the creditors of Tenant and keep the Furniture free of such liens, claims
and encumbrances. The Furniture or any of Tenant's rights under this Lease shall not be assigned or transferred by Tenant to any person, firm or corporation without the prior written consent of
Landlord (except pursuant to Section 44) and any attempted assignment or transfer in violation thereof shall, at the option of Landlord, be void. Nothing contained herein, however, shall be
deemed to limit or otherwise restrict Landlord's right to transfer in any manner its interest in any or all of the Furniture or in this Lease, subject to the rights of Tenant under this Lease. 

        (h)    Tenant
shall, during the term of this Lease, pay and discharge all license fees, assessments and sales, use, property and other tax or taxes now or hereafter imposed by
any state, Federal or local government upon the ownership, leasing, renting, sale, possession or use of the Furniture whether the same be assessed to Landlord or Tenant, together with any penalties or
interest in connection therewith, excepting Federal, state or local governmental taxes, or payments in lieu thereof, imposed upon or measured by the income of Landlord. If any tax is, by law, to be
assessed or billed to
Landlord, Tenant at its expense will do any and all things required to be done by Landlord in connection with the levy, assessment, billing or payment of such taxes and is hereby authorized by
Landlord to act for and on behalf of Landlord in any and all respects. Tenant will cause all billings of such taxes to Landlord to be made to it in care of Tenant and will from time to time, on
request of Landlord, submit written evidence of the payment of all of the governmental obligations mentioned in this paragraph. 

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

34

  

 
 

EXHIBIT "A"
  
    PROPERTY    
    

All
that certain real property situated in the City of Fremont, County of Alameda, State of California, described as follows: 

PARCEL ONE:  

Lot
17, Tract 5048, filed July 5, 1983, Map Book 139, Pages 61, 62 and 63, Alameda County Records. 

PARCEL TWO:  

THAT
PORTION of Cushing Road abandoned by Resolution No. 5824 adopted by The City Council of Fremont, a certified copy of which recorded August 29, 1983 as Instrument
No. 83-15971 and Re-recorded on September 26, 1983 as Instrument No. 83-178013, Alameda County Records, described as follows: 

BEGINNING
at a point 307.45 feet easterly of the southwesterly corner of Lot 11 of said Tract 5048, said point also being the intersection of the southerly line of said Lot 11 with the southerly
boundary line of said Tract 5048 thence westerly along the southerly lines of Lot 11 and Lot 17 of said Tract 5048, south 82o 48' 27" west 727.45 feet to a tangent curve concave
northeasterly along said tangent curve through a central angle of 90o 00' 00" a distance of 62.83 feet to a point tangent with the westerly line of said Lot 17, thence leaving the
westerly line of said Lot 17 on a southerly prolongation of said
westerly line south 07o 11' 33" east 2.00 feet to a tangent curve concave northeasterly having a radius of 40.00 feet, thence southerly and easterly along last said tangent curve through
a central angle of 90o 00' 00" a distance of 62.83 feet to a point, thence leaving last said curve tangent and parallel to the southerly line of said Lot 17 north 82o 48'
27" east 713.32 feet to the southerly boundary of said Tract 5048, thence northeasterly along said boundary of said Tract 5048 north 74o 45' 11" east 14.28 feet to the point of
beginning. 

EXCEPTING
THEREFROM that portion thereof lying easterly of the southerly prolongation of said Lot 17. 

Commonly
known as: 4555 Cushing Parkway

Alameda County Account Nos: 525-1350-26-01 

A-1

 
 
 

EXHIBIT "A-1"  
    

  

A-2

  

 
 

EXHIBIT "B"
  
    (WORK LETTER)    
    

        To induce Tenant to enter into the Lease (to which this Exhibit "B" is attached) and in consideration of the mutual covenants
hereinafter contained, Landlord and Tenant agree as follows: 

        1.    (a)    Landlord
shall construct, or cause to be constructed, at Landlord's sole cost and expense, leasehold improvements to the Premises (the
"Work") in accordance with the Space Plan attached to and made a part of this Lease as Exhibit "G" and in accordance with the additional
specifications set forth in that certain Orchard Commercial Construction Project Budget, Project Altigen Tenant Improvement, Project Location Cushing Parkway Fremont Ca., dated
[9/15/03] Rev.[0.1] (the "Budget"), which is attached to and made a part of this Lease as Exhibit "G-1"). The
Budget is referenced herein for purposes of further describing the Work, and shall not be interpreted to limit Landlord's costs and expenses in the event that the actual costs and expenses of the Work
exceed the amounts budgeted therefor. 

        (b)    Landlord
shall prepare, or cause to be prepared, working drawings for the construction of the Work, adequate in detail to perform the Work and shall have mechanical
(sprinkler, air conditioning, heating, electrical and plumbing) drawings prepared by Landlord's mechanical engineer covering mechanical elements of the Work all in keeping with the Space Plan and the
Budget (the working drawings, including the mechanical drawings, are referred to as the "Plans"). The Plans (and any modifications thereof) shall comply with all
governmental standards, regulations and requirements, and shall be subject to Tenant's approval (which approval shall not be unreasonably withheld). Tenant's failure to approve or disapprove the Plans
within five (5) days of submission shall be deemed an approval. Tenant shall not unreasonably withhold its approval of the Plans or any part thereof. 

        2.    (a)    Any
other work desired by Tenant, and approved by Landlord (which approval shall not be unreasonably withheld), shall be performed by Landlord or
Landlord's contractors, unless Landlord otherwise consents in writing. If Tenant desires any work in addition to the Work described in Section 1 hereof ("Additional
Work"), Tenant shall advise Landlord and Landlord shall, upon approval of such request, cause the necessary drawings, plans and specifications for the Additional Work to be included on
the Plans as soon as reasonably possible after request and approval, or shall submit to Landlord or Landlord's agent (at Tenant's sole cost and expense) the necessary drawings, plans and
specifications for the Additional Work. Any requests for Additional Work not made by Tenant within five (5) days of submission of the Plans for the Work to Tenant for approval may cause delay
in the Work, and any such delay shall be deemed tenant delay. Prior to commencing any such Additional Work requested by
Tenant, Landlord or Landlord's agent shall submit to Tenant a written estimate of the cost of such Additional Work, as well as the amount of delay reasonably expected to result therefrom. If Tenant
shall fail to approve said estimate within five (5) days from the receipt thereof, the same shall be deemed disapproved in all respects by Tenant and Landlord shall not be authorized to proceed
thereon nor shall Landlord be obligated to construct such Additional Work, and no such failure shall be deemed in any way a delay in completion of the Work. 

        (b)    No
material changes, modifications or alterations in the Plans or the Work or Additional Work (a "Change") shall be made by either party without the prior written
consent of the other party, which consent shall not be unreasonably withheld or delayed. If Tenant desires a Change, Landlord or Landlord's agent shall submit to Tenant a written estimate of the cost
of such Change, as well as the amount of delay reasonably expected to result therefrom. If Tenant shall fail to approve said estimate within five (5) days from the receipt thereof, the same
shall be deemed disapproved in all respects by Tenant and Landlord shall not be authorized to proceed thereon nor shall Landlord be obligated to make such Change, and no such failure shall be deemed
in any way a delay in completion of the Work. 

B-1

 

        3.    (a)    The
Tenant Improvement Allowance and the Supplemental Allowance provided in Paragraph 10 of the Basic Lease Provisions and Section 17 of
the Lease, includes funds to be applied toward (i) the cost of preparing the Plans for any Additional Work, (ii) the cost of any Changes to the Plans requested by Tenant and
(iii) any costs necessary to file the Plans for Additional Work not included in the Plans for the Work or for Changes, and to obtain the necessary permits and approvals of, any governmental
authority having jurisdiction thereof for any Additional Work or Changes. 

        (b)    Any
costs in excess of the funds available in the Tenant Improvement Allowance or the Supplemental Allowance for preparation of Plans for Additional Work or Changes
requested by Tenant shall be due and payable by Tenant to Landlord within ten (10) days after receipt by Tenant of a statement therefor. Any costs of such Additional Work or Changes in excess
of the Tenant Improvement Allowance and the Supplemental Allowance specified in the Lease shall be due and payable as provided in the Lease. 

        (c)    Landlord
shall be solely responsible for (i) the cost of preparing the Space Plan, the Budget, and the Plans for the Work, (ii) the cost of any changes to
the Plans requested by Landlord and (iii) any costs necessary to file the Plans for the Work, and to obtain the necessary permits and approvals of, any governmental authority having
jurisdiction thereof for the Work, including the cost of satisfying any requirements "triggered" by the Work to comply with the ADA, or building or fire codes, or other governmental requirements that
must be satisfied as a condition of approval of the Work. 

        4.    (a)    Upon
obtaining all necessary governmental permits and approvals, Landlord shall commence construction of and diligently pursue the completion of the Work
and any Additional Work in conformance with the Plans and this Lease, and in compliance with all conditions necessary for lawful occupancy of the Premises. 

        (b)    Substantial
completion of the Work shall be deemed to occur on the date when the Work has been completed as required herein (except for Punch List items which do not
materially, adversely affect Tenant's use) and a Temporary Certificate of Occupancy has been issued for the Premises. If the substantial completion of the Work is delayed due to (i) any
interference or hindrance by Tenant or Tenant's representatives in the progress of construction, (ii) the inclusion of any Additional Work in the Premises (following the date specified in
Paragraph 2(a) above), or (iii) any Changes requested by Tenant, the Work shall be deemed substantially completed on the date when the Work would have been substantially completed but
for such delay. Landlord shall use all commercially reasonable efforts to notify Tenant promptly after the occurrence of a delay, in order to provide Tenant an opportunity to mitigate the delay at
Tenant's sole cost and expense 

        5.    Within
fifteen (15) business days after Landlord notifies Tenant that the Work and/or Additional Work is substantially complete, Tenant shall conduct a
walk-through inspection of the Premises with Landlord and provide to Landlord a statement describing all items of the Work or Additional Work that still remain to be completed (the "Punch
List"). Upon receipt of the Punch List, Landlord shall notify Tenant promptly if Landlord disagrees with any items, in which case the parties shall meet and confer in good faith to resolve such
disagreement. Landlord shall promptly commence correction of the agreed-upon items and proceed diligently to complete the same. 

        6.    In
addition to the foregoing, if Tenant, during the first twelve (12) months after substantial completion, notifies Landlord, in writing, of any defects, errors or
omissions in the Work or the Additional Work, Landlord shall promptly commence and diligently pursue the correction of all such items at Landlord's sole cost and expense. This Paragraph 6 shall
not apply to equipment or materials that were specified by Tenant, but in such case Landlord shall assign to Tenant for the Term of this Lease Landlord's interest in any warranty from a subcontractor
or supplier regarding such equipment or materials. If any latent defects in the Work or the Additional Work are discovered after the twelve month period described above, Landlord shall have the option
of either (i) correcting such defects at Landlord's sole cost and expense, or (ii) pursuing, on Tenant's behalf, all remedies available under any existing construction warranties
regarding such improvements, or (iii) if such warranties are assignable, assigning Landlord's rights thereunder to Tenant for the Term of this Lease. 

B-2

  

 
 

EXHIBIT "C"
  
    SUBSTANTIAL COMPLETION/ACCEPTANCE LETTER    
    

Date
                                         
     

	Re:
	Lease
dated as of                         ,       , by and between Landlord, and
                        ,
as Tenant, for                          rentable square feet at the Building located at
                        .
 

Dear
                                        :

        In
accordance with the terms and conditions of the above referenced Lease, Tenant accepts possession of the Premises and agrees: 

	1.
	The
Commencement Date of the Term of the Lease is                         ;

	2.
	The
Termination Date of the Term of the Lease is                         . 

        Please
acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning
2 fully executed counterparts to my attention. 

	Sincerely,	 	Agreed and Accepted:
	

 Property Manager	
 	

 	
 	

 
	 	 	Tenant:	 	  

	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

	 	 	Address:	 	  
  
  

C-1

  

 
 

EXHIBIT D
  
    HAZARDOUS MATERIALS QUESTIONNAIRE    
    

This
questionnaire is designed to solicit information regarding your proposed use of hazardous or toxic materials. If your use of materials or generation of wastes is considered to be significant,
further information may be requested regarding your plans for hazardous and toxic materials management. 

I.    Proposed
Tenant 

	
 Name (Corporation, Individual, Corporate, or Individual DBA, or Public Agency)
	

 Standard Industrial Classification Code ("SIC")
	

 Street Address
	

 City, State, Zip Code
	

Contact Person & Title:	

  

	

Telephone Number:	

(            )

	

Facsimile Number:	

(            )

II.    Location and address of Proposed Lease 

	
 Street Address
	

 City, State, Zip Code

III.    Description of Proposed Facility Use 

Describe
proposed use and operation of Premises including principal products or service to be conducted at facility: 

Does
the operation of your business involve the use, generation, treatment, storage, transfer, or disposal of hazardous wastes or materials? Yes     
No      If yes, or if your SIC code number is between 2000 to 4000, please complete Section IV. 

IV.    Permit
Disclosure 

Does
the operation of your business require permits, a license, or plan approval from any of the following agencies? 

	o
	U.S.
Environmental Protection Agency

	o
	City
or County Sanitation District

	o
	State
Department of Health Services 

D-1

 
	o
	U.S.
Nuclear Regulatory Commission

	o
	Air
Quality Management District

	o
	Bureau
of Alcohol, Firearms and Tobacco

	o
	City
or County Fire Department

	o
	Regional
Water Quality Control Board

	o
	Any
Laboratory Certification Agency (Indicate permit or license numbers, issuing agency, and expiration date or renewal date, if
applicable.) 

If
your answer is yes to any of the above questions, please complete Sections V and VI. 

V.    Hazardous
Materials Disclosure 

Will
any hazardous or toxic materials or substances be stored on site? Yes      No      If yes, please
describe the materials or substances to be stored, quantities and proposed method of storage (i.e., drums, aboveground or underground storage tanks, cylinders, or other), and whether the material is a
Solid (S), Liquid (L) or Gas (G): 

	Material
 
	 	Storage Method
	 	Quantity On

A Monthly Basis

	

	

	

	

Attach
additional sheets if necessary. 

Is
any facility modification required or planned to mitigate the release of toxic or hazardous substance or wastes into the environment? Yes     
No      If yes, please describe the proposed facility modifications. 

VI.    Hazardous
Waste Disclosure 

Will
any hazardous waste, including recyclable waste, be generated by the operation of your business? Yes      No      If
yes, please state the hazardous waste that will be generated at the facility, its hazard class, and volume/frequency of generation on a monthly basis 

	Waste Name
 
	 	Hazard Class
	 	Volume/Month

	

	

	

	

D-2

 

If
yes, please also describe the method(s) of disposal for each waste. Indicate where disposal will take place and the method of transportation to be used: 

Is
any treatment or processing of hazardous wastes to be conducted on site? Yes      No      If yes, please
describe proposed treatment/processing methods: 

Which
agencies are responsible for monitoring and evaluating compliance with respect to the storage and disposal of hazardous materials or wastes at or from the Premises? 

(Please
list all agencies) 

Has
an environmental audit ever been conducted at any of your company's existing facilities? Yes     
No      If yes, please describe: 

Does
your company carry environmental impairment insurance? Yes      No     . If yes, what is the name of
the carrier and what are the effective periods and monetary limits of that coverage? 

This
Hazardous Materials Questionnaire is certified as being true and accurate and has been completed by the party whose signature appears below on behalf of Tenant as of the date set forth below. 

	Dated:	 	  
	 	Signature:	 	  

	 	 	 	 	Print Name:	 	  

	 	 	 	 	Title:	 	  

D-3

  

 
 

EXHIBIT "E"  
    
    RULES AND REGULATIONS    
    

        1.     Tenant
will not place any signs on the Property without Landlord's prior written consent. All signage must comply with all applicable laws, codes and regulations,
including, without limitation, zoning and building codes. No advertisements, pictures or signs of any sort may be displayed on or outside the Premises without the prior written consent of Landlord.
This prohibition includes any portable signs or vehicles placed within the parking lot, common areas or on streets adjacent thereto for the purpose of advertising or display. Landlord has the right to
remove any such unapproved item without notice and at Tenant's expense. 

        2.     Tenant
may not park or store motor vehicles, trailers or containers outside the Premises after the conclusion of normal daily business activity except in approved areas
specifically designated by Landlord; provided, however, that Tenant's employees may park their Permitted Size Vehicles in their usual parking areas on a 24x7 basis for as long as such employee is
concurrently working in the Premises. 

        3.     Tenant
may not use any method of heating or air-conditioning other than that supplied by Landlord without the prior written consent of Landlord. 

        4.     All
window coverings and window films or coatings installed by Tenant and visible from outside of the Building require the prior written approval of Landlord. Except for
dock shelters and seals as may be expressly permitted by Landlord, no awnings or other projections may be attached to the outside walls of the Building. 

        5.     Tenant
may not use, keep or permit to be used or kept any foul or noxious gas or substance on, in or around the Premises unless approved by Landlord. Tenant may not use,
keep or permit to be used or kept any flammable or combustible materials without proper governmental permits and approvals. 

        6.     Tenant
may not use, keep or permit to be used or kept food or other edible materials in or around the Premises in such a manner as to attract rodents, vermin or other
pests. Tenant may not permit cooking in or about the Premises other than in microwave ovens; provided, however, that, subject to compliance with further reasonable rules and regulations promulgated by
Landlord regarding the conduct, location, timing and coordination of same, Tenant may occasionally use the common areas in the vicinity of the Premises to conduct company events, including barbecues,
further subject to Tenant's compliance with all applicable laws and regulations and assurance that Tenant has procured appropriate insurance relating thereto. 

        7.     Tenant
may not use or permit the use of the Premises for lodging or sleeping, for public assembly, or for any illegal or immoral purpose. 

        8.     Tenant
may not alter any lock or install any new locks or bolts on any door at the Premises without the prior written consent of Landlord. Tenant agrees not to make any
duplicate keys without the prior consent of Landlord. 

        9.     Tenant
will park motor vehicles only in those general parking areas as designated by Landlord except for active loading and unloading. During loading and unloading of
vehicles or containers, Tenant will not unreasonably interfere with traffic flow within the Property and loading and unloading areas of other tenants. 

        10.   Storage
of propane tanks, whether interior or exterior, will be in secure and protected storage enclosures approved by the local fire department and, if exterior, shall
be located in areas specifically designated by Landlord. Safety equipment, including eye wash stations and approved neutralizing 

E-1

 

agents,
will be provided in areas used for the maintenance and charging of lead-acid batteries. Tenant will protect electrical panels and building mechanical equipment from damage from
forklift trucks. 

        11.   Tenant
will not disturb, solicit or canvas any occupant of the Building or Property and will cooperate to prevent same. 

        12.   No
person may go on the roof of the Building without Landlord's permission except to perform obligations under its lease. 

        13.   No
animals (other than seeing eye dogs) or birds of any kind may be brought into or kept in or about the Premises. 

        14.   Machinery,
equipment and apparatus belonging to Tenant which cause noise or vibration that may be transmitted to the structure of the Building to such a degree as to be
objectionable to Landlord or other tenants or to cause harm to the Building will be placed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate the transmission of such noise and vibration. Tenant will cease using any such machinery which causes objectionable noise and vibration which can not be sufficiently mitigated. 

        15.   All
goods, including material used to store goods, delivered to the Premises of Tenant will be immediately moved into the Premises and will not be left in parking or
exterior loading areas overnight. 

        16.   Tractor
trailers which must be unhooked or parked with dolly wheels beyond the concrete loading areas must use steel plates or wood blocks of sufficient size to prevent
damage to the asphalt paving surfaces. No parking or storing of such trailers will be permitted in the auto parking areas of the industrial park or on streets adjacent thereto. 

        17.   Forklifts
which operate on asphalt paving areas may not have solid rubber tires and may use only tires that do not damage the asphalt. 

        18.   Tenant
will be responsible for the safe storage and removal of all pallets. Pallets will be stored behind screened enclosures at locations approved by the Landlord. 

        19.   Tenant
will be responsible for the safe storage and removal of all trash and refuse. All such trash and refuse will be contained in suitable receptacles stored behind
screened enclosures at locations approved by Landlord. Landlord reserves the right to remove, at Tenant's expense and without further notice, any trash or refuse left elsewhere outside of the Premises
or on the Property. 

        20.   Tenant
may not store or permit the storage or placement of goods or merchandise in or around the common areas surrounding the Premises. No displays or sales of
merchandise is allowed in the parking lots or other common areas. 

        21.   Tenant
will appoint an Emergency Coordinator who shall be responsible for assuring notification of the local fire department in the event of an emergency, assuring that
sprinkler valves are kept open and implementing the Factory Mutual "Red Tag Alert" system including weekly visual inspection of all sprinkler system valves on or within the Premises. Tenant will
provide Landlord access to fire protection and any related communications equipment in the Premises at all times. 

E-2

  

 
 

EXHIBIT "F"  
    
    FURNITURE    
    

[Remainder of Page Intentionally Left Blank.]

F-1

  

 
 

EXHIBIT "G"  
    
    SPACE PLAN    
    

         

  

G-1

  

 
 

EXHIBIT "G-1"  
    

ORCHARD COMMERCIAL

CONSTRUCTION PROJECT BUDGET  

	DATE

9/29/03

Rev.02

 
	 	 
	 	 
	 	 

	 	PROJECT ALTIGEN

TENANT IMPROVEMENT

 
	 	 
	 	PROJECT LOCATION

CUSHING PARKWAY FREMONT, CA.

 

	COST

CODE
	 	 

	 	TASK
	 	 
	 	DESCRIPTION

	 	 	 	 	 	 	 	 
	11200	 	PROJECT SUPERVISION	 	 	7,244	 	Onsite Project Superintendent & Project Management services.
	14050	 	TEMP. ELECT POWER	 	 	—	 	By Owner.
	17100	 	PROGRESSIVE CLEAN UP	 	 	2,420	 	Onsite Laborers for course of construction cleaning.
	17250	 	DUMP FEES	 	 	1,880	 	 
	20700	 	INTERIOR DEMOLITION	 	 	12,424	 	Demo walls, doors.
	20770	 	CONCRETE SAWCUT/PATCH	 	 	—	 	Excluded.
	20800	 	ASBESTOS REMOVAL	 	 	—	 	Excluded.
	25200	 	SITE CONCRETE	 	 	—	 	Excluded.
	28300	 	FENCING	 	 	—	 	Excluded.
	28450	 	MONUMENT SIGNAGE	 	 	3,000	 	Allowance.
	61200	 	STRUCTURAL STEEL	 	 	—	 	Excluded.
	61000	 	ROUGH CARPENTRY	 	 	—	 	Excluded.
	62200	 	MILLWORK/CABINETS	 	 	 	 	Excluded.
	72000	 	INSULATION	 	 	2,473	 	Installed at (N) manufacturing area walls & front office sidewalls.
	75000	 	MEMBRANE ROOFING	 	 	—	 	Excluded.
	82000	 	DOOR\FRAMES\HARDWARE	 	 	10,428	 	Install (N) doors & relocate doors per plan.
	88000	 	GLASS/GLAZING	 	 	5,860	 	Install (N) sidelights & glass sections per plan.
	92500	 	METAL STUDS/DRYWALL	 	 	27,420	 	New walls, patch wall scars per plan.

Finish to match existing.
	95000	 	ACOUSTIC CEILINGS	 	 	2,458	 	Minor demo & restoration as required to accommodate (N) layout
	96800	 	FLOORING	 	 	11,754	 	Install (N) VCT flooring at production area, Install base at new walls. VCT to be: Armstrong Standard Excelon Imperial texture, color TBD 12 x 12 tiles, 1/8th in. thick,

Install Building standard direct glue carpet & new base at all office, open office, conf. Areas. Carpet to be Pacificrest "Strategy" pattern loop 28 oz psy Dupont DSDN solution dyed, Royal guard soil resist treatment 5 year colorfastness to
Atmospheric contaminants and limited life of carpet anti static warranties
	99000	 	PAINTING	 	 	5,987	 	Repainting of all existing walls to match building standard flat latex material Painting of (N) walls & all walls affected by Construction, gyp board ceilings warehouse walls full height, exposed
columns
	 	 	 	 	 	 	 	 

G-1-1

 

	99500	 	CUBICLES	 	 	—	 	Provide & install approx. 51 building standard 8' x 8' cubicles
	125100	 	MINI BLINDS	 	 	—	 	Excluded.
	153300	 	FIRE PROTECTION	 	 	8,923	 	Demo & relocate sprinkler drops to accommodate (N) layout.
	154000	 	PLUMBING	 	 	—	 	Excluded.
	154800	 	PROCESS PIPING/MECHANICAL	 	 	—	 	Excluded.
	165000	 	HVAC	 	 	20,116	 	Seperation & reduct (E) system as required to accommodate (N) layout, including galvanized spiral ducting & air to service warehouse area

Provide seperate unit for 24 hr HVAC to (E) server room
	155250	 	EXHAUST SYSTEM	 	 	—	 	Excluded.
	157500	 	RIGGING	 	 	—	 	Excluded.
	157550	 	MOVING RELOCATION	 	 	—	 	Excluded.
	160000	 	ELECTRICAL	 	 	51,824	 	Electrical demolition, relocate & add lites, reswitch & (N) switching to accommodate (N) layout, standard electrical office fit up at all (N) offices, Panel & x-former relocation to adjacent (N)
suite (N) subpanel to feed (N) circuits, dedicated 4-plex cord drop grid in manufacturing area.

Plan, permits
	167200	 	SECURITY/ALARM	 	 	—	 	Excluded.
	167400	 	COM/DATA EQUIPMENT	 	 	—	 	As may be required is Excluded.
	167400	 	COMMUNICATION/DATA LINES	 	 	12,280	 	Completion of Cat 5 cabling to all cubes, (E) & (N) offices
	 	 	 	 	
	 	 
	 	 	SUB-TOTAL>>>	 	 	186,491	 	 
	17875	 	HAZMAT CONSULTANT	 	 	—	 	Excluded.
	18100	 	ARCHITECTURE	 	 	7,577	 	Permit set / Construction drawings.
	18200	 	STRUCTURAL ENGINEERING	 	 	—	 	 
	19200	 	BUILDING PERMITS	 	 	8,019	 	 
	19925	 	DESIGN, COORDINATION FEE	 	 	7,460	 	 
	19975	 	PROFIT & OVERHEAD	 	 	11,189	 	 
	19990	 	CONTINGENCY	 	 	13,987	 	 
	 	 	 	 	
	 	 
	 	 	TOTAL COST>>>	 	$	234,723	 	 
	 	 	 	 	
	 	 
	 	 	Unit square footage            31,925	 	 	7.35	 	Cost Per sq. ft.
	Move allowance	 	$50,000                                31,925	 	 	1.57	 	Cost Per sq. ft.
	 	 	Total Cost	 	 	 $8.92	 	Per sq. ft.

G-1-2

QuickLinks

TABLE OF CONTENTS LEASE AGREEMENT

LIST OF EXHIBITS

BASIC LEASE PROVISIONS

INDUSTRIAL LEASE AGREEMENT

EXHIBIT "A" PROPERTY

EXHIBIT "A-1"

EXHIBIT "B" (WORK LETTER)

EXHIBIT "C" SUBSTANTIAL COMPLETION/ACCEPTANCE LETTER

EXHIBIT D HAZARDOUS MATERIALS QUESTIONNAIRE

EXHIBIT "E" RULES AND REGULATIONS

EXHIBIT "F" FURNITURE

EXHIBIT "G" SPACE PLAN

EXHIBIT "G-1"QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.27  

 
 
 

ALTIGEN COMMUNICATIONS INC.
  
    DISTRIBUTION AGREEMENT    
    

        THIS DISTRIBUTION AGREEMENT ("Agreement") is made and entered into as of this 22nd day of December,
1999, (the "Effective Date") by and between ALTIGEN COMMUNICATIONS INC., a California corporation, with principal offices at 47427 Fremont Blvd.,
Fremont, CA 94538 ("AltiGen") and Synnex Information Technologies, Inc., a California corporation, with principal offices at 3797 Spinnaker
Court, Fremont, California, 94538 ("Distributor"); both jointly referred to herein as "The Parties". 

        1.    DEFINITIONS    

        1.1 Dealer means any individual or entity which acquires the Products for the express purpose of resale to others, whether such resale is
of the Product as a standalone product, as bundled and sold with other software or hardware products, as integrated with other software or hardware products or as sold with associated services. 

        1.2 End User means a licensee who acquires Products for Internal Use (rather than distribution or resale) in accordance with the terms of
an End-User License Agreement substantially in the form of the End-User License Agreement attached hereto as Exhibit A (the "End-User Agreement"). 

        1.3 Internal Use means use for purposes which do not directly produce revenue for the End User. "Internal Use" does not include
timesharing. 

        1.4 Intellectual Property means any patent, copyright, trade name, trademark, trade secret, know-how, mask work or any other
intellectual property right or proprietary information or technology, whether registered or unregistered. 

        1.5 Product means software program packages and physical computer hardware, including (1) a program code, in object code form only,
on diskette(s) or CD-ROM (the "Program"); (2) physical computer hardware including computer boards, computer power supply, computer cables (the "PC Hardware");
(3) instruction booklets and other information prepared for End-Users concerning the use of the program and computer hardware ("Documentation"); (4) an End-User
Agreement. The Products include only those listed by title and functional description on the "Product and Price List" attached hereto as Exhibit B. 

        1.6 Purchase Objectives means the minimum quantity of each Product which Distributor commits to purchase quarterly during the term of this
Agreement, as mutually agreed upon and set forth in Exhibit C attached hereto. These quarterly purchase objectives are to serve as goals and a means to track progress but are nonbinding. 

        1.7 Territory shall be described in Exhibit E. 

        1.8 Grant of Distribution Right Subject to the terms and conditions set forth in this Agreement, AltiGen hereby grants to Distributor a
non-exclusive, non-transferable right to (a) market and distribute the Products solely to Dealers located in the Territory as stated in Exhibit E and
(b) use the Products for those purposes set forth in the Agreement. Distributor shall not, knowingly directly or indirectly, solicit sales of the Products outside of the Territory without the
prior written consent of AltiGen. AltiGen retains the right to sell the Products directly to other parties in the Territory, including, by way of illustration but not limitation, distributors,
Dealers, and original equipment manufacturers. Distributor shall have no right to modify the Product or Documentation without the prior written approval of AltiGen. Distributor agrees not to
(a) reverse engineer, decompile, disassemble or otherwise reduce the Product to human-perceivable form, or to knowingly encourage or assist third parties in doing so or (b) distribute
the Product by rental or lease to end users. All rights not expressly granted herein are retained by AltiGen. Distributor shall have no right to grant a Dealer 

 

the
right to make copies from a golden master absent further agreement between AltiGen and the Distributor. 

        2.    OWNERSHIP    

        Except
as specified in this agreement, AltiGen does not grant to the distributor any rights in or to any intellectual property related to the product or to any materials furnished
hereunder. The intellectual property embodied in the product all modifications thereto, and all documentation thereof, are proprietary to AltiGen, and AltiGen retains all right, title and interest in
and to such intellectual property. 

        3.    PRICES AND PAYMENTS    

        3.1 Prices.    Distributor shall pay AltiGen, for each Product and upgrade, the list price for the Product as set forth on
Exhibit B, less any Distributor discount listed in Exhibit B. Both the AltiGen standard list price and the Distributor's discount levels are subject to change by AltiGen from time to
time in its sole discretion upon [*****] written notice to Distributor. Orders requesting delivery after the  [*****] of written notice of price or discount
change will be charged at the new price or discount level. 

        3.2 Distributor Pricing.    Distributor is free to determine its own resale prices for the Products. Although AltiGen may
publish suggested list prices, these are suggestions only and are not binding in any way. However, Distributor agrees that any discounts it may offer (from suggested applicable list prices that may be
published by AltiGen) shall be commercially reasonable and consistent with industry practices providing Distributor commercially reasonable margins for its resale activities with respect to the
Products. Manufacturer agrees to extend to Distributor equal pricing as is given to other like Distributors. 

        3.3 Dealer Pricing.    Distributor shall inform each of its Dealers that it is free to determine its own retail prices and that,
although AltiGen may publish suggested retail price lists, they are suggestions only and are not binding in any way. 

        3.4 Initial Order.    Within [*****] of the Effective
Date, Distributor shall deliver to AltiGen a purchase order for an aggregate price of [*****]. This order will include a onetime
only payment term of [*****] and an unconditional return of any items not sold within the initial  [*****]. 

        3.5 Payment.    Upon approval of credit by AltiGen, payment for additional orders shall be due and payable within  [*****] days following receipt of invoice or on such terms as may be otherwise specified in AltiGen's invoice. All Products
ordered in excess of any credit limit shall be paid for as agreed upon by AltiGen and Distributor. These terms and conditions will be communicated in writing within forty-eight hours to Distributor to
resolve or accept currency in
advance of shipment, by a letter of credit drawn upon a bank acceptable to AltiGen and Distributor, a bank cashier's check, or a bank wire transfer. AltiGen reserves the right to vary, change, or
limit the amount or duration of credit to be allowed to Distributor, either generally or with respect to a particular order. In the event AltiGen does not extend credit to Distributor, payment for all
purchases hereunder shall be made in advance of shipment or, at AltiGen's option, C.O.D. If Distributor fails to meet its payment obligations under the Agreement and such failure continues for  [*****]
following receipt of written notice from AltiGen this Agreement will or may be terminated which is described in
section 12.2 of this Agreement. 

        (a) Right to Withhold. Notwithstanding any other provision in this Agreement to the contrary, Distributor shall not be deemed
in default if it withholds any specific amount to AltiGen because of a legitimate dispute between the parties as to that specific amount pending the timely resolution of the disputed amount. 

2

 

        3.6 Price Protection.    

        (a) Distributor Price Protection. AltiGen shall notify Distributor of the effective date of a  [*****] for any of the Products covered herein. All inventory
acquired by Distributor from AltiGen prior to the effective date
of the [*****] and not yet sold or under a contract for sale will be granted price protection as set forth herein. This will
also include any product order accepted by AltiGen that has not shipped, all product in transit from AltiGen to Distributor's warehouse and product in transit between Distributor's warehouses during
the less than [*****] period before the effective date of the  [*****] and not yet sold or under a contract for sale will be granted price protection as set
forth herein. For each such copy
of Product, the [*****]will be credited to Distributor's account. To obtain price protection, within  [*****] of receipt of AltiGen's notice of the
[*****],
Distributor shall provide to AltiGen a written inventory report showing by part number the quantity of each AltiGen Product in the Distributor's inventory as of the effective date of the  [*****].
[*****]. 

        (b) Dealer Price Protection. On a case by case basis, AltiGen will grant price protection for Distributor's dealers at
AltiGen's discretion. To obtain price protection for its Dealers, Distributor (i) shall provide to AltiGen a written shipment report showing by part number the quantity of each AltiGen Product
shipped to a Dealer less than [*****] before the effective date of this  [*****], including the identity of each Dealer, the Products sold, and the date of
shipment and (ii) shall provide, or
require its Dealers to provide, a written Dealer inventory report showing by part number the quantity of each AltiGen Product in Dealer's inventory as of the effective date of the  [*****]. If
Distributor provides such reports to AltiGen within  [*****] of Distributor's receipt
of AltiGen's notice of a [*****], AltiGen shall credit the Distributor's account for the  [*****]. [*****].
 [*****]. 

        3.7 Stock Rotation.    

        (a) Inventory Balancing. Provided that the Distributor issues a simultaneous offsetting purchase order, Distributor may, once
during each quarter, return for credit Product purchased for up to a maximum of [*****] of net dollar sales invoiced by AltiGen
during the immediately preceding quarter. The credit issued for the returned inventory will be based on the [*****]at which the
Products were available to Distributor during the period commencing with the date on which the Product was purchased and ending on the date the Product was returned, and may be used on a
dollar-for-dollar basis solely to purchase additional Product pursuant to the offsetting purchase order. The right to balance inventory granted herein must be exercised by the
last day of the second month of the quarter. Distributor shall submit a request for authorization to return Product for inventory balancing which shall state the quantity of Product to be returned.
Upon receipt of such request, AltiGen shall issue a Return of Materials Authorization (RMA) number no later than 1 week after the request is acknowledged by AltiGen, Inc. Inventory returned
under this section must be accompanied by a return of materials authorization number assigned by AltiGen and (i) in merchantable condition, in its factory-sealed packaging. All Product returned
under this subsection (a) shall be returned within thirty (30) days of the date of issuance of the return of materials authorization number. AltiGen shall pay for the shipping of
returned Products to AltiGen and Distributor shall pay for the shipping of replacement Product sent to Distributor. 

        (b) Defective Product/Dead on Arrival (DOA). Distributor may return any product to AltiGen that its customer finds defective
as detailed in the End User Agreement described in Exhibit A. Inventory returned under this section must be accompanied by a return of materials authorization number assigned by AltiGen. All
Product returned under this section shall be returned within thirty (30) days of the date of issuance of the return of materials authorization number, and if the returned Product is returned
because defective by virtue of being in breach of the warranty provided for in the End User Agreement, returned with the entire contents of such Product 

3

 

package.
The credit issued for the returned products will be based on the Product's purchase price, less any discounts or credits previously received. AltiGen shall pay for the shipping of returned
Products to AltiGen and for the shipping of replacement Product sent to Distributor. AltiGen will specify account number and carrier at time of RMA issuance. 

        (c) Product Refresh. AltiGen may, at its sole discretion, modify the Products. For purposes of this Agreement, AltiGen shall
have sole discretion as to whether a Product is deemed to be a new version of an existing Product to be provided to Distributor under the terms of this Agreement or a new product requiring execution
of an appendix to this Agreement prior to distribution. Once a new version
of a Product covered by this Agreement begins shipping, Distributor shall have thirty (30) days from the first AltiGen shipment date of the new version to Distributor, or from written
notification by AltiGen of the new version, whichever is later, (i) to submit an offsetting purchase order for an equal dollar-for-dollar value of the new version of the
Product and (ii) to return Product from the prior release from Distributor's inventory that was shipped by AltiGen to Distributor within the previous ninety (90) days. Such returns shall
be shipped at AltiGen expense using AltiGen Communication's account number and carrier which will be specified at time of RMA issuance, and the offsetting Purchase Order shipment will be paid for by
Distributor as described in section 5.7 and 5.8 of this agreement. Returned Product will be exchanged by AltiGen on a dollar for dollar basis, proportional with any price increase or decrease,
with the new version of the Product and shipped to Distributor at AltiGen expense. Product returned under this provision must be in merchantable condition and in its original factory-sealed packaging.
The right to refresh Product under this subsection (b) shall be in addition to Distributor's inventory balancing right under subsection (a) above. 

        (d) Product Discontinuation. AltiGen shall provide Distributor with thirty (30) days written notice prior to AltiGen's
discontinuation of any Product. Upon receipt of such notice, Distributor shall have the right to return all discontinued Products purchased within sixty (60) days of the notice of
discontinuation for a credit to Distributor's account of the Product's purchase price less any discounts or credits previously received. The rights to return discontinued Product under this subsection
(d) shall be in addition to Distributor's inventory balancing right under subsection (a) above. 

        3.8 Distributor Financial Condition.    Distributor represents and warrants that it is and at all times during the term of this
Agreement shall remain in good financial condition, solvent and able to pay its bills when due. Distributor further represents and warrants that it has and at all times during the term of this
Agreement shall retain the ability to order and pay for all Product purchased. From time to time, on reasonable notice from AltiGen, Distributor shall furnish Annual Reports, 10K, 10Q reports or other
similar reports that are supplied to other partners of Distributor. 

        3.9 Taxes.    Prices calculated in accordance with Exhibit B are exclusive of all applicable taxes. Distributor agrees to
pay all taxes associated with the marketing, distribution and delivery of the Products ordered, including but not limited to sales, use, excise, added value and similar taxes and all customs, duties
or governmental impositions, but excluding taxes on AltiGen's net income. Any tax or duty AltiGen may be required to collect or pay upon the marketing or delivery of the Products shall be paid by
Distributor and such sums shall be due and payable to AltiGen upon delivery. If claiming a tax exemption, Distributor must provide AltiGen with valid tax exemption certificates at the time of
invoicing. 

        4.    PRODUCT CHANGES    

        AltiGen
shall have the right, in its sole discretion, without liability to Distributor, with written thirty (30) day notice, to (a) change the Products available on the
Product List, (b) change the design, or discontinue developing, producing, licensing or distributing any of the Products covered by this Agreement, and (c) announce new products to which
the terms and conditions of this Agreement do 

4

 

not
apply. The parties agree that additional Products may be added to the Agreement by execution of an appendix to this Agreement setting forth any special terms, conditions, modifications or
deletions necessary for the additional Products. Additional Products shall be deemed to be added to this Agreement to the extent AltiGen accepts any purchase orders for Products not otherwise listed
on the Product List. 

        5.    ORDERS    

        5.1 Procedure.    All orders for Products placed by Distributor shall be in writing, or if placed orally, shall be confirmed in
writing within ten (10) business days after such oral order. 

        5.2 Acceptance of Orders.    All orders for Products by Distributor shall be subject to acceptance by AltiGen and shall not be
binding on AltiGen until the earlier of written confirmation or shipment and, in the case of acceptance by shipment, only as to the portion of the order actually shipped. If a rejection is not
provided within (5) days of written receipt of the order, it shall be deemed accepted. 

        5.3 Controlling Terms.    The terms and conditions of this Agreement and of the applicable AltiGen order confirmation pursuant
to Section 5.2 ("Acceptance of Orders") above, shall apply to each order accepted or shipped by AltiGen hereunder. Any terms or conditions appearing on the face or reverse side of any purchase
order, acknowledgment, or confirmation other than confirmation pursuant to Section 5.2 above that are different from or in addition to those required hereunder shall not be binding on the
parties, even if signed and returned, unless both parties hereto expressly agree in a separate writing to be bound by such separate or additional terms and conditions. 

        5.4 AltiGen Order Cancellation & Obligation to Ship in Presence of Breach.    Even where AltiGen accepts a purchase
order, AltiGen reserves the right to cancel or suspend any orders placed by Distributor and accepted by AltiGen, or to refuse or delay shipment thereof, at the time of scheduled shipment if
Distributor (a) fails to make any payment as provided herein or in any invoice, (b) fails to meet credit or financial requirements established by AltiGen, or (c) otherwise fails
to comply with the terms and conditions of this Agreement. If Distributor has a legitimate dispute of an invoice under section 3.5b, orders will not be held or canceled as a result. 

        5.5 Distributor Order Cancellation.    Orders accepted by AltiGen may be canceled without penalty if written notice of
cancellation is given to AltiGen and the notice is received by AltiGen at least [*****] prior to the scheduled shipment date. In
no event may Distributor cancel any order or any portion of an order after shipment. 

        5.6 Product Availability.    AltiGen will use reasonable efforts to fill orders for Products and meet requests for shipment
dates subject to Product availability and AltiGen production and supply schedules. Should orders for Products exceed AltiGen's available inventory, AltiGen will allocate its available inventory on an
even and equitable basis, without liability to Distributor on account of the method of allocation chosen or its implementation. AltiGen shall not be liable to Distributor or any third party for any
damages due to AltiGen's failure to for any orders or for any delay in delivery or error in filing any orders for any reason whatsoever. 

        (a)   Distributor requires concurrent with the execution of this Agreement Export Administration Regulations product
classification and supporting documentation: Certificate of Origin (General Use and/or NAFTA), Export Commodity Control Number's; (ECCN's), General License and/or Individual Validated License
information and Schedule "B"/Harmonized Numbers. This applies when distribution rights granted under Section 1.7 are outside the United States for the initial Product/s and when additions or
changes to these Products occurs. 

        (b)   Product Marking AltiGen will clearly mark each unit of Product with the Product name and computer compatibility. Such
packaging will also bear a machine-readable bar code identifier 

5

 

scannable
in standard Uniform Product Code (UPC) format. The bar code must identify the Product as specified by the Uniform Code Council (UCC). If the AltiGen or Distributor customers require serial
number tracking, the serial number must be clearly marked and bar coded on the outside of the individual selling unit. The bar code shall fully comply with all conditions regarding standard product
labeling set forth in Exhibit B in the then-current Distributor Guide to Bar Code: The Product Label. AltiGen may be assessed a
reasonable per unit charge for all Product not in conformance herewith. 

        5.7 Delivery.    AltiGen will ship Products FOB Destination, unless otherwise agreed in writing, to Distributor's North American
designated location or freight forwarder via ground transport. Distributor may change the designated locations by providing AltiGen with written notice of such change, and the notice is received by
AltiGen at least fifteen (15) days prior to the estimated shipment dates. AltiGen shall ship all Product in accordance with instructions specified in Distributor's AltiGen Routing Guide
attached hereto as Exhibit F. AltiGen shall, to the extent possible, assist Distributor in making claims with carriers in the event of loss or damage in transit. 

        5.8 Risk of Loss.    In the case of shipments to shipping destinations within the United States, exclusive of the rights
retained under the Agreement in trademarks, patents, copyrights, trade names, trade secrets and intellectual property, and all risk of loss or damage for any Product shall pass to Distributor upon
delivery by AltiGen to the freight carrier regardless of whether AltiGen or the Distributor has designated the carrier. Title to the Products will be passed to the Distributor once sold to dealer or
paid for by Distributor, whichever occurs first. 

        6.    DISTRIBUTION OBLIGATIONS    

        6.1 Distributor Distribution.    Distributor shall distribute or market Product: (i) solely to resellers approved by
AltiGen under its Authorized Dealer Program, (ii) subject to Distributor's standard terms and conditions of sale to its resellers which do not alter or contradict this Agreement and
(iii) in the form received from AltiGen, adhering to the conditions of the End User License Agreement, Exhibit A stating: You may not modify or translate the Program, the PC Hardware or
the Documentation without the prior written consent of AltiGen. You may not reverse assemble, reverse compile or otherwise attempt to create the source code from the Program or the PC Hardware.
Distributor shall neither add to nor remove any documentation included by AltiGen with the Product. 

        6.2 Authorized Dealer Program.    AltiGen has instituted an AltiGen Authorized Dealer Program. Distributor agrees to market the
Products in compliance with AltiGen's Authorized Dealer Program. 

        6.3 Business Plan.    Within ninety (90) days of the Effective Date of the contract, Distributor and AltiGen will
co-author a business plan setting forth Distributor's plans for promoting the Products, which will be reviewed semiannually, at which time objectives and performance will be evaluated.
Distributor agrees to provide an updated business plan in accordance with the schedule for updating such as specified by AltiGen. 

        6.4 Purchase Objectives; Inventory.    Distributor and AltiGen shall agree upon quarterly Purchase Objectives. The initial
Purchase Objectives are stated in Exhibit C with ongoing purchase and business objectives described in the business plan outlined in 6.3. Distributor shall warehouse and order to meet market
demand and will deliver to resellers in a timely manner. Distributor will inventory 30 days of product in each of its named warehouses or as deemed by market conditions. 

        6.5 Point of Sale and Inventory Reports.    During the term of this Agreement, Distributor will provide AltiGen standard
sales-out and inventory reports via its electronic Bulletin Board. Each report will be ready on the 1st Tuesday of the new month. This report will include the following: (i) State
and zip code*; (ii) Products purchased in this month's reporting, including returns; (iii) Current distributor's inventory on a weekly basis, reflecting the previous Friday's close of
business inventory; (iv) Six month 

6

 

trailing
history of product sold by region; (v) List of Distributor's open purchase orders. Such report, with respect to a calendar month, shall be posted. Distributor shall also provide
non-standard reporting data including reseller name and address subject to the terms and conditions of a separate Proprietary Information Non-Disclosure Agreement attached
hereto as Exhibit G. * POS to include Dealer name, city, state, zip code and authorization number. 

        6.6 Customer Satisfaction.    Distributor agrees that the Products marketed under this Agreement are technically complex and
require high-quality, individualized pre-marketing and post-marketing support. This support is necessary to achieve and maintain high customer satisfaction.
Therefore, Distributor agrees that high customer satisfaction is a condition of distribution authorization by AltiGen. The distribution channels established by AltiGen, and the obligations placed on
distributors, exist to ensure high customer satisfaction. Distributor agrees to market the Products only in accordance with this Agreement. In addition, in order to assure high customer satisfaction,
Distributor agrees to: 

	•
	Report
to AltiGen promptly and in writing all suspected and actual problems with any Product.

	•
	maintain
a shipment report identifying for each Dealer, the Products sold, the date of sale, and each Product's serial number;

	•
	Retain
all shipment reports for five years after the date of sale, and assist AltiGen, upon request, in tracing a Product to a Dealer, in order to distribute critical
Product information, locate a Product for safety reasons, or discover unauthorized marketing or infringing acts;

	•
	Conduct
business in a manner which reflects favorably at all times on the Products, goodwill and reputation of AltiGen.

	•
	Avoid
deceptive, misleading or unethical practices, which are or might be detrimental to AltiGen or its products.

	•
	Refrain
from making any false or misleading representations with regard to AltiGen or its products; and

	•
	Refrain
from making any representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of the Products
that are inconsistent with the literature distributed by AltiGen. 

        6.7 Promotional Efforts.    Distributor shall use reasonable commercial efforts to market and distribute the Products to Dealers
in the Territory. Distributor may advertise the Products in advertising media of Distributor's choice, provided that the primary audience or circulation is located in the Territory. Distributor shall
make full use of all promotional material supplied by AltiGen and make available literature and other information that AltiGen requires to be transmitted to such Dealers. In all advertising and
promotion of the Products, Distributor shall comply with AltiGen standard cooperative advertising policies as specified from time to time by AltiGen. 

        6.8 Demonstration System.    Distributor shall maintain a demonstration system, provided by AltiGen, capable of supporting the
most technically advanced Products. Distributor shall use such demonstration system both to facilitate its ability to fulfill its Dealer support obligations, and to support its sales efforts. 

        6.9 Distributor Personnel.    AltiGen will provide mutually agreed upon levels of training for Distributor's sales and technical
personnel. Distributor shall train and maintain a sufficient number of capable technical and sales personnel to serve the demands of Dealers for the Products, for service and support of the Products,
call on all Dealers with reasonable frequency and answer promptly all Dealer inquiries or requests for information regarding the Products. Distributor and its staff shall develop and maintain
sufficient knowledge of the industry, the Products, and competitive offerings (including specifications, features, and functions) so as to be able to demonstrate and support the Products for 

7

 

Dealers.
Distributor shall provide all Dealers with technical support and other assistance appropriate for the promotion, marketing, and distribution of the Products. Distributor shall attend AltiGen
distribution meetings, as appropriate. 

        7.    SUPPORT AND MAINTENANCE    

        AltiGen
shall provide Distributor (but not its Dealers, and not End Users which purchase from such Dealers) with the support and maintenance described in Exhibit D hereto free of
charge during the term of this Agreement. AltiGen may provide Dealers and End Users with support and maintenance under a separate agreement. In order to have a high degree of customer satisfaction and
technical expertise, Distributor and AltiGen will have to perform on-site training for Distributor's Technical Support personnel. This will be coordinated at a later date. 

        8.    TRADEMARKS AND CONFIDENTIAL INFORMATION    

        8.1 Trademarks.    AltiGen shall have and retain sole ownership of AltiGen's logo, trade names and trademarks ("Trademarks"),
including the goodwill pertaining thereto. AltiGen hereby grants to Distributor the right to use and display the Trademarks solely in connection with and solely to the extent reasonably necessary for
the marketing, distribution, and support of the Products within the Territory in accordance with the terms and conditions of this Agreement. Distributor shall not do or suffer to be done any act or
thing that would impair AltiGen's rights in its Trademarks or damage the reputation for quality inherent in the Trademarks. AltiGen's has the right to take all action which it deems necessary to
ensure that the advertising and promotional materials related to the Products utilized by Distributor are consistent with the reputation and prestige of the Trademarks. Distributor shall market,
distribute, and support the Products only under the Trademarks, and not any other trademark or logo. Distributor shall not use the Trademarks or any other trademarks or trade names of AltiGen or any
word, symbol, or design confusingly similar thereto, as part of its corporate name, or as part of the name of any product of Distributor. Distributor shall not (i) remove, alter or overprint
the Products' copyright notices, trademarks, and logos, or packaging, (ii) attach any additional trademarks to the Products without AltiGen's prior written consent or (iii) affix any of
the Trademarks to any non-AltiGen products. Distributor agrees that any goodwill which accrues because of Distributor's use of the Trademarks shall become AltiGen's property. Distributor
further agrees not to contest AltiGen's Trademarks or tradenames, or to make application for registration of any AltiGen Trademarks or tradenames. 

        8.2 Confidential Information.    During the term of this Agreement, and for a period of three (3) years thereafter, The
Parties will maintain in confidence any confidential or proprietary information of The Parties disclosed to one another including, without limitation, any information regarding scientific,
engineering, manufacturing, marketing, business plan, financial or personnel matter relating to The Parties, whether in oral, written, graphic or electronic form ("Confidential Information"). The
Parties will not use, disclose or grant use of such Confidential Information except as expressly authorized by The Parties. To the extent that disclosure is authorized by The Parties, The Parties will
obtain prior agreement from their employees, agents or consultants to whom disclosure is to be made to hold in confidence and not make use of such information for any purpose other than those
permitted by The Parties. The Parties will use at least the same standard of care as they use to protect its own Confidential Information to ensure that such employees, agents or consultants do not
disclose or make any unauthorized use of such Confidential Information. The Parties will promptly notify each other upon discovery of any unauthorized use or disclosure of the Confidential
Information. 

        8.3 Exceptions.    The obligations of confidentiality contained in Section 8.2 will not apply to the extent that it ran
be established by Distributor by competent proof that such Confidential Information: 

        (a)   was already known to the parties, other than under an obligation of confidentiality, at the time of disclosure; 

8

 

        (b)   was generally available to the public or otherwise part of the public domain at the time of its disclosure to the
parties; 

        (c)   became generally available to the public or otherwise part of the public domain after its disclosure and other than
through any act or omission of the parties in breach of this Agreement; 

        (d)   was disclosed to the parties, other than under an obligation of confidentiality, by a third party who had no obligation
to the disclosing party not to disclose such information to others. 

        9.    INDEMNIFICATION    

        9.1 AltiGen Infringement Indemnity.    Subject to the limitations set forth herein below, AltiGen shall defend Distributor with
respect to any claim, suit or proceeding brought against Distributor to the extent it is based upon a claim that any Product sold pursuant to this Agreement infringes upon any U.S. patent, U.S.
trademark, U.S. copyright or U.S. trade secret of any third party; provided, however, that Distributor (i) promptly notifies AltiGen in writing of such claim, suit or proceeding;
(ii) gives AltiGen the right to control and direct investigation, preparation, defense and settlement of any claim, suit or proceeding; and (iii) gives assistance and full cooperation
for the defense of same, and, further provided, that AltiGen's liability with respect to portions of Products provided by or licensed from third parties will be limited to the extent AltiGen is
indemnified by such third parties. AltiGen shall pay any resulting damages, costs and expenses finally awarded to a third party, but AltiGen shall not be liable for such amounts, or for settlements
incurred by Distributor, without AltiGen's prior written authorization. If a Product is, or in AltiGen's opinion might be, held to infringe as set forth above, AltiGen may, at its option, replace or
modify such Product so as to avoid infringement, or procure the right for Distributor to continue the use and resale of such Product. If neither of such alternatives is, in AltiGen's opinion,
reasonably possible, the infringing Product shall be returned to AltiGen, and AltiGen's sole liability, in addition to its obligation to reimburse any awarded damages, costs and expenses set forth
above, shall be to refund the purchase price paid for such Products by Distributor. 

        9.2 Exclusions.    The provisions of the indemnity provided in Section 9.1 (with respect to infringement) shall not apply
with respect to any instances of alleged infringement based upon or arising out of the use of such Products in any manner for which the Products were not designed, or for use of Products other than
the uses and distributions designated by AltiGen, for use of any Product that has been modified by Distributor or any third party, or for use of any Product in connection with or in combination with
any equipment, devices or software that have not been supplied by AltiGen. Notwithstanding any other provisions hereof, the foregoing indemnity shall not apply with respect to any infringement based
on Distributor's activities occurring subsequent to its receipt of notice of any claimed infringement unless AltiGen shall have given Distributor written permission to continue to market and
distribute the allegedly infringing Product. 

        9.3 Entire Liability and Limitation.    THE FOREGOING SECTIONS 10.1 AND 10.2 STATE THE SOLE AND EXCLUSIVE REMEDY OF DISTRIBUTOR
AND THE ENTIRE LIABILITY AND OBLIGATION OF ALTIGEN WITH RESPECT TO INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY PATENT, COPYRIGHT TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE PRODUCTS OR
ANY PART THEREOF. 

        9.4 Product Defect Indemnity:    Subject to the limitations set forth herein below, AltiGen shall defend Distributor with
respect to any claim, suit or proceeding brought against Distributor to the extent it is based upon a claim that any property damage, personal or bodily injury or other damage has resulted from a
defect in the Products; provided, however, that Distributor (i) promptly notifies AltiGen in writing of such claim, suit or proceeding; (ii) gives AltiGen the right to control and direct
investigation, preparation, defense and settlement of any claim, suit or proceeding; and (iii) gives assistance and full cooperation for the defense of same, and, further provided, that
AltiGen's liability with respect to portions of Products provided by or licensed from third parties will be limited to the 

9

 

extent
AltiGen is indemnified by such third parties. AltiGen shall pay any resulting damages, costs and expenses finally awarded to a third party, but AltiGen shall not be liable for such amounts, or
for settlements incurred by Distributor, without AltiGen's prior written authorization. 

        9.5 Indemnity by Distributor.    DISTRIBUTOR AGREES TO INDEMNIFY AND HOLD ALTIGEN HARMLESS FROM ANY CLAIMS, SUITS, PROCEEDINGS,
LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUSIVE OF ALTIGEN'S REASONABLE ATTORNEYS' FEES) MADE AGAINST OR INCURRED BY ALTIGEN AS A RESULT OF NEGLIGENCE, MISREPRESENTATION, OR ERROR OR
OMISSION ON THE PART OF DISTRIBUTOR OR REPRESENTATIVE OF DISTRIBUTOR. DISTRIBUTOR SHALL BE SOLELY RESPONSIBLE FOR, AND SHALL INDEMNIFY AND HOLD ALTIGEN HARMLESS FROM, ANY CLAIMS, WARRANTIES OR
REPRESENTATIONS MADE BY DISTRIBUTOR OR DISTRIBUTOR'S EMPLOYEES OR AGENTS WHICH DIFFER FROM THE WARRANTY PROVIDED BY ALTIGEN IN ITS END USER AGREEMENT. 

        9.6 Mutual Indemnity Regarding Personal Injury and Other Damages.    Each party shall indemnify and hold the other harmless from
and against any and all claims, actions, damages, demands, liabilities, costs and expenses, including reasonable attorney's fees and expenses, resulting from any act or omission of the acting party or
its employees or agents under this Agreement that causes or results in property damage, personal injury or death. 

        10.    WARRANTY    

        10.1 AltiGen Warranty.    AltiGen warrants the Products TO END-USERS ONLY pursuant to the terms and conditions of
the End User Agreement, provided, however, Distributor shall be entitled to rely on the End User Warranty for purposes of returns of Product and indemnities, a copy of which is attached to this
Agreement as Exhibit A. In addition AltiGen warrants the following: 

        (a)   It has good transferable title to the products. 

        (b)   There are no suits or proceedings pending or threatened which allege any infringement by the Products of any patents,
copyrights, trademarks, trade secrets or any other intellectual property rights of a third party Product sales to Distributor do not in any way constitute violation of any law, ordinance, rule or
regulation in the distribution territory. 

        (c)   The Products will properly (a) record, store, process, calculate or present calendar dates falling on or after
(and if applicable, spans of time including) January 1, 2000 as a result of the occurrence, or use of data consisting of such dates and (b) calculate any information dependent on or
relating to dates on or after January 1, 2000 in the same manner, and with the same functionality, data integrity and performance, as such Product records, stores, processes, calculates; and
presents calendar dates on or before December 31, 1999, or information dependent on or relating to such dates. 

        (d)   The Products have been or will be at the time of shipment certified as a Class B computing device as required by
the rules of the U.S.A. Federal Communications Commission. 

        (e)   AltiGen will not label any of its products as being "Made in America", "Made in USA," or with similar wording, unless
substantially all components of such Products are in fact made in the United States of America. 

        10.2 Limitations and Disclaimer.    EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 10.1 ABOVE, ALTIGEN EXPRESSLY
DISCLAIMS ALL WARRANTIES EXPRESSED OR IMPLIED RELATING TO THE PRODUCTS, AND FURTHER EXPRESSLY EXCLUDES ANY WARRANTY OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR
MERCHANTABILITY. 

10

 

        10.3    NO PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR REPRESENTATION CONCERNING THE PERFORMANCE OF THE PRODUCTS OTHER
THAN AS PROVIDED IN THE END USER AGREEMENT. DISTRIBUTOR SHALL MAKE NO OTHER WARRANTY, EXPRESS OR IMPLIED, ON BEHALF OF ALTIGEN. 

        10.4 Distributor's Warranty.    Distributor hereby represents and warrants to AltiGen that neither this Agreement (or any term
hereof) nor the performance of or exercise of rights under this Agreement, is restricted by, contrary to, in conflict with, ineffective under, requires registration or approval or tax withholding
under, or affects AltiGen's intellectual property rights (or the duration thereof) under, or will require any compulsory licensing under, any law or regulation of any organization, country, group of
countries or political or governmental entity to which Distributor is subject. 

        11.    LIMITATION ON LIABILITY    

        11.1 Limitation of Liability.    OTHER THAN AS PROVIDED IN SECTION 9 ABOVE THE TOTAL LIABILITY OF EITHER PARTY TO THE OTHER
HEREUNDER SHALL NOT EXCEED [*****]. 

        11.2 Waiver of Consequential Damages.    IN NO EVENT WILL ALTIGEN OR DISTRIBUTOR BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY LOSS OF INCOME, LOSS OF PROFITS OR LOSS OF DATA, EVEN IF ALTIGEN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF
OR IN CONNECTION WITH THE GRANT OF THE LICENSE HEREUNDER. 

        11.3 Third Party Claims.    AltiGen shall not be liable for any claim by Distributor based on any third party claim, except as
stated in Section 10 of the Agreement. 

        12.    TERM AND TERMINATION    

        12.1 Term.    Subject to the provisions of Sections 13.2 and 13.3 below, this Agreement is valid for a term of one year and
shall be renewed automatically for additional one year terms provided that each party shall have the right to terminate this Agreement for convenience upon ninety (90) days written notice prior
to the end of the initial term or any subsequent term of the Agreement. 

        12.2 Termination for Cause.    Either party may terminate this Agreement for cause upon thirty (30) days written notice
to the other party if such other party materially breaches this Agreement and such material breach is not cured within the thirty (30) day period following delivery of notice. Either party
shall have the right to terminate this Agreement immediately in the event the other party terminates its business, or becomes subject to any bankruptcy or insolvency proceeding under Federal or State
statute, and such petition is not dismissed within sixty (60) days. 

        12.3 Effect of Termination.    For a period of sixty (60) days following termination of this Agreement, Distributor may
distribute any Products in Distributor's possession at the time of termination or at its option return any product in inventory, provided, however, that if AltiGen has terminated the Agreement
pursuant to Section 12.2, Distributor's right to distribute the Products shall immediately terminate. Following any permitted distribution, Distributor shall return to AltiGen or, at AltiGen's
request, destroy the copies of the Products and Documentation then in its possession. In addition, Distributor shall be entitled to retain one (1) copy of the Product following termination
solely for the purposes of providing support to Dealers and End Users. AltiGen shall apply the value of any returned Products to any outstanding credit balance in Distributor's account. The
termination of this Agreement shall not act to terminate the licenses granted to Dealers or End Users pursuant to this Agreement. (i) For a ninety day (90) period after termination,
Distributor may send back inventory 

11

 

received
from its resellers to AltiGen. Product returned under this provision must be in merchantable condition and in its original factory-sealed packaging. 

        12.4 Payment upon Termination.    Upon termination of the Agreement by AltiGen for cause, the due dates of all outstanding
invoices for Products will become due and payable thirty (30) days from date of termination minus returns received, even if longer terms had been provided previously. After the ninety-
(90) day period a final true-up of inventory and monies will take place. If AltiGen owes Distributor monies, AltiGen will issue a check to Distributor. All orders or portions of
orders remaining unshipped as of the effective date of such termination shall automatically be canceled. 

        13.    MISCELLANEOUS    

        13.1 Nonexclusivity.    AltiGen retains the right to market, distribute, and support the Products in the Territory directly to
or through any person or entity on any terms deemed desirable by AltiGen in its sole discretion. Any discounts extended to other like distributors that exceed the discount schedule (see Exhibit "B")
in effect at the time between AltiGen and Distributor shall also be extended to distributor. 

        13.2 Modification and Amendment.    Except with respect to Exhibit B hereof, this Agreement may be modified or amended
only in writing by the consent of both parties. 

        13.3 Survival.    Sections 5.8, 8, 9, 10, 11, 12.3, 12.4, 13 shall survive termination of this Agreement for three
(3) years. 

        13.4 Governing Law.    This Agreement is made in accordance with and shall be governed and construed under the laws of the State
of California, as applied to agreements executed and performed entirely in California by California residents. 

        13.5 Toll Fraud.    Dealer is forbidden from stating or implying that AltiGen Products provide immunity from fraudulent
intrusion (Toll Fraud). Dealer must use this language on all sales materials and contract involving AltiGen Products. 

        13.6 Notices.    All notices, demands, or consents required or permitted under this Agreement shall be in writing and shall be
delivered personally or sent by a national overnight courier service or by registered or certified, return receipt requested mail to the other party at the addresses first set forth above. All
notices, demands, or consents shall be deemed effective upon personal delivery or five (5) days following dispatch via first class mail or day three (3) following deposit with any
national overnight courier service in accordance with this section. 

        13.7 No Partnership of Joint Venture.    No agency, employment, partnership, joint venture, or other joint relationship is
created hereby, it being understood that Distributor and AltiGen are independent contractors vis-à-vis one another and that neither has any authority to bind the
other in any respect whatsoever. 

        13.8 Force Majeure.    Neither party shall be deemed to be in default of or to have breached any provision of this Agreement as
a result of any delay, failure in performance, or interruption of service resulting directly or indirectly from acts of God, acts of civil or military authority, civil disturbance, war, strikes or
other labor disputes, fires, transportation contingencies, laws, regulations, acts or orders of any government agency or official thereof, other catastrophes or any other circumstances beyond the
party's reasonable control. 

        13.9 Export Control.    The parties acknowledge that the Products may be subject to the export control laws of the United States
of America, including the U.S. Bureau of Export Administration regulations, and hereby agree to obey any and all such laws. The parties agree to comply with the U.S. 

12

Foreign
Corrupt Practices Act of 1977, as amended, and with all applicable foreign laws relating to the use, importation, licensing or distribution of the Products. 

        13.10 Assignment.    Neither party may assign this Agreement or any of its rights, duties or obligations under this Agreement to
any third party without the other party's prior written consent, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, either party may assign its rights and delegate its
obligations under this Agreement without the consent of the other party to a purchaser of all or substantially all of its voting stock or capital assets or to an entity with which such party merges or
is consolidated. 

        13.11 Severability and Waiver.    In the event any provision of this Agreement is held to be invalid or unenforceable, the valid
or enforceable portion thereof and the remaining provisions of this Agreement will remain in full force and effect. Any waiver (express or implied) by any party of any default or breach of this
Agreement shall not constitute a waiver of any other or subsequent default or breach. 

        13.12 Entire Agreement.    This Agreement and all Exhibits referred to herein embody the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter
hereof. 

        13.13 Headings.    The section headings appearing in this Agreement are inserted only as a matter of convenience and in no way
define, limit, construe or describe the scope or intent of any such section nor in any way affect this Agreement. 

        13.14 Parties Advised by Counsel.    This Agreement has been negotiated between unrelated parties who are sophisticated and
knowledgeable in the matters contained in this Agreement and who have acted in their own self interest. In addition, each party has been represented by legal counsel. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the purpose of the parties, and this Agreement shall not be interpreted or construed against any party to this Agreement because that party or any
attorney or representative for that party drafted this Agreement or participated in the drafting of this Agreement. 

        13.15 Insurance.    AltiGen shall carry insurance coverage for product liability/completed operations of  [*****]
 primary each occurrence and [*****]. Within ten
(10) days of full execution of this Agreement, AltiGen shall provide Distributor with a Certificate of Insurance. This Certificate of Insurance must include: (i) a broad form endorsement
naming Distributor as an additional insured, and (ii) a mandatory thirty (30) day notice to Distributor of insurance cancellation. 

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, including the Exhibits hereto, and incorporated herein by
reference, as of the date first above written above. 

	ALTIGEN INC.	 	SYNNEX
	 	 	 	 	 
	By:	/s/  MICHELE SHANNON      
	 	By:	/s/  CHIH-KAI CHENG      

	Name:	Michele Shannon
	 	Name:	Chih-Kai Cheng

	Title:	VP of Sales
	 	Title:	S.V.P.

EXHIBIT  

	 
	 	 
	 
	 	 

	 	 	A	—	 	END USER AGREEMENT
	

 	
 	

B	

—	
 	

PRODUCT LIST AND DISCOUNT SCHEDULE
	

 	
 	

C	

—	
 	

PURCHASING OBJECTIVES
	

 	
 	

D	

—	
 	

SUPPORT AND MAINTENANCE
	

 	
 	

E	

—	
 	

TERRITORIES
	

 	
 	

F	

—	
 	

VENDOR ROUTING GUIDE
	

 	
 	

G	

—	
 	

PROPRIETARY INFORMATION NON-DISCLOSURE AGREEMENT

 
 
 

EXHIBIT A
  
    ALTIGEN®, INC.—END USER AGREEMENT
  
    NOTICE—READ THIS BEFORE OPENING THIS PACKAGE, INSTALLING THE PC HARDWARE OR USING THE SOFTWARE    
    

        OPENING THIS PACKAGE, INSTALLING THE PC HARDWARE OR USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE TERMS AND CONDITIONS. READ ALL
OF THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT PRIOR TO OPENING THIS PACKAGE OR USING THE SOFTWARE. IF YOU DO NOT ACCEPT THESE TERMS, YOU MUST RETURN THIS PACKAGE WITHIN 5 DAYS OF OBTAINING THE
PACKAGE, WITH YOUR RECEIPT, AND YOUR MONEY WILL BE RETURNED.

*
* * * 

        PLEASE
NOTE THAT YOU MAY NOT USE, COPY MODIFY OR TRANSFER THE PROGRAM THE PC HARDWARE OR DOCUMENTATION OR ANY COPY, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT. 

        LICENSE.    This software program (the "Program") and the documentation (the "Documentation") are licensed, not sold, to you.
The term "Program" shall also include any updates of the Program licensed to you by AltiGen. Subject to the terms of this agreement, you have a non-exclusive and nontransferable right to
use the Program, Personal Computer Card (the "PC Hardware") and Documentation. You agree to use your best efforts to prevent and protect the contents of the Program, the PC Hardware and Documentation
from unauthorized disclosure or use. AltiGen and its licensors reserve all rights not expressly granted to you. AltiGen's licensors are the intended third party beneficiaries of this agreement and
have the express right to rely upon and directly enforce the terms set forth herein. 

        LIMITATIONS ON USE.    You may not rent, lease. sell or otherwise transfer or distribute copies of the Program, the PC Hardware
or Documentation to others. You may not modify or translate the Program, the PC Hardware, or the Documentation without the prior written consent of AltiGen. You may not reverse assemble. reverse
compile or otherwise attempt to create the source code from the Program or the PC Hardware. You may not use AltiGen's name or refer to AltiGen directly or indirectly in any papers, articles,
advertisements, sales presentations, news releases or releases to any third party without the prior written approval of AltiGen for each such use. You may not release the results of any
performance or functional evaluation of any Program to any third party without prior written approval of AltiGen for each such release. 

        BACKUP AND TRANSFER.    You may make one copy of thr Program for backup purposes if AltiGen's copyright notice is included. You
may not sublicense, assign, delegate, rent, lease, time-share or otherwise transfer this license or any of the related rights or obligations for any reason. Any attempt to make any such
sublicense, assignment, delegation or other transfer by you shall be, void. You may physically transfer the program from one computer to another provided that you do not retain any copies of the
program, including any copies stored on a computer. 

        TOLL FRAUD.    Although this software provides passwords and blocking options for controlling telephone use, the software does
not provide a security system that would prevent unauthorized use. AltiGen does not warrant that the software will prevent, or can prevent, unauthorized and/or unlawful use. AltiGen will have no
responsibility and will not be liable for any unauthorized of unlawful use, including without limitation long distance charges, criminal or civil liabilities, or damages. 

        COPYRIGHT.    The Program, the PC Hardware and related Documentation are copyrighted by AltiGen and its licensors. You may make
one copy of the Documentation and print one copy of any on-line documentation or other materials provided to you in electronic form. Any and all other copies of the
Program and any copy of the Documentation made by you are in violation of this license.

 

        OWNERSHIP.    You agree that the Program and Documentation belong to AltiGen and its licensors. You agree that you neither own
nor hereby acquire any claim or right of ownership to the Program and Documentation or to any related patents, copyrights, trademarks or other intellectual property. You own only the magnetic or other
physical media (including Personal Computer Card) on which the Program and related Documentation are recorded or fixed. AltiGen and its licensors retain all right, title and interest in and to the
Documentation and all copies and the Program recorded on the original media and all subsequent copies of the Program at all times, regardless of the form or media in or on which the original or other
copies may subsequently exist. This license is not a sale of the original or any subsequent copy. All content assessed through the Program is the property of the applicable content owner and may be
protected by applicable copyright law. This license gives you no rights to such content. 

        TERM AND TERMINATION.    This license is effective until terminated. You may terminate this license at any time by destroying
the Program and Documentation and the permitted backup copy. This license automatically terminates if you fail to comply with its terms and conditions. You agree that, upon such termination, you will
either destroy (or permanently erase) all copies of the Program and Documentation, or return the original Program and Documentation to AltiGen, together with any other material (PC Hardware) you have
received from AltiGen in connection with the Program. 

        LIMITED WARRANTY.    AltiGen warrants the media on which the Program is furnished to be free from defects in materials and
workmanship under normal use for 30 days from the date that you obtain the Program. AltiGen warrants the PC Hardware for a period of one year from the date of consumer purchase to be free from
defects in materials and workmanship. EXCEPT FOR THIS LIMITED WARRANTY, ALTIGEN AND ITS LICENSORS PROVIDE THE PROGRAM, THE PC HARDWARE AND THE DOCUMENTATION "AS IS" WITHOUT WARRANTY OF ANY KIND EITHER
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 

        Some
states do not allow the exclusion of implied warranties, so the above exclusion may not apply to you. This warranty gives you specific legal rights and you may also have other
rights which vary from state to state. 

        LIMITATION OF REMEDIES.    AltiGen and its licensors' entire liability and your exclusive remedy in connection with the Program,
the PC Hardware and the Documentation shall be that you are entitled to return the defective media containing the Program together with the PC Hardware and Documentation to the merchant. At the option
of the merchant, you may receive replacement media containing the Program, the PC Hardware and Documentation that conforms with the limited warranty or a refund of the amount paid by you. IN NO EVENT
WILL ALTIGEN OR ITS LICENSORS BE LIABLE FOR ANY INDIRECT DAMAGES OR OTHER RELIEF ARISING OUT OF YOUR USE OR INABILITY TO USE THE PROGRAM INCLUDING, BY WAY OF ILLUSTRATION AND NOT LIMITATION, LOST
PROFITS, LOST BUSINESS OR LOST OPPORTUNITY, OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING LEGAL FEES, ARISING OUT OF SUCH USE OR INABILITY TO USE THE PROGRAM. EVEN IF
ALTIGEN, ITS LICENSORS OR AN AUTHORIZED ALTIGEN DEALER, DISTRIBUTOR OR SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY OTHER PARTY. 

        Some
states do not allow the exclusion or limitation of incidental or consequential damages so the above limitation or exclusion may not apply to you. 

        This
license will be governed by the laws of the State of California as applied to transactions taking place wholly within California between California residents. 

2

 

        U.S. GOVERNMENT END USERS.    The Program is a "commercial item" as that term is defined at 48 C.F.R. 2.101 (Oct. 1995),
consisting of "commercial computer software" and "commercial computer software documentation," as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48
C.F.R. 227.7202-1 through 227.7202-4 (June 1995), all U.S. Government End Users acquire the Program with only those rights set forth herein. 

3

 
 
 

EXHIBIT B
  
    PRODUCT LIST
  and
  DISCOUNT SCHEDULE    
    

	Quantum Boards
 

	Part Number
 
	 	Description
	 	Price

	ALTI-CD0408UD	 	CID Quantum Platform, 4 trunks & 8 extensions. Rev. D	 	$*** Each
	ALTI-CD0804UD	 	CID Quantum Platform, 8 trunks & 4 extensions. Rev. D	 	$*** Each
	ALTI-CD0012UD	 	CID Quantum Platform, 12 extensions. Rev. D	 	$*** Each
	ALTI-DID 0408UD	 	DID Quantum Platform, 4 DID trunks & 8 extensions. Rev. D	 	$*** Each
	 	 	 	 	 
	Demo
 

	Part Number
 
	 	Description
	 	Price

	ALTI-DMK4860	 	NFR CTI Demo Kit with AltiWare 2.1 Open Edition Software, AltiWare Console 2.1, Rev. D, CID Quantum board with 4 trunks & 8 extensions and on-board power supply	 	$*** Each
	 	 	 	 	 
	Software
 

	Part Number
 
	 	Description
	 	Price

	Alti-SS351E	 	AltiWare 3.51A System Software	 	$*** Each
	Alti-OED210E	 	AltiWare Open Edition 2.1 Software	 	$*** Each
	Alti-OAC210E	 	AltiConsole 2.1 Operator Console Software	 	$*** Each
	 	 	 	 	 
	Peripherals
 

	Part Number
 
	 	Description
	 	Price

	CBL-25M50-01	 	DB25 to 50-pin Telco cable, Male to Male	 	$*** Each
	CBL-MVIP6-01	 	MVIP cable with 6 connectors	 	$*** Each
	DOC-RFG01-04	 	4 User Pocket Reference Guides	 	$*** Pack
	DOC-ICM01-01	 	Installation Configuration & Maintenance Manual	 	$*** Each
	MSC-PANEL-02	 	12 Port Connection Panel with 50-pin F Telco connector	 	$*** Each

 
 
 

EXHIBIT C
  
    PURCHASE OBJECTIVES    
    

        AltiGen operates on a fiscal calendar.

	Q1

Oct., Nov., Dec.	 	Q2

Jan., Feb., March
	 	 	 
	
 (Qty. of boards per quarter)	 	
 (Qty. of boards per quarter)
	 	 	 
	 	 	 
	Q3

April, May, June	 	Q4

July, Aug., Sept.
	 	 	 
	
 (Qty. of boards per quarter)	 	
 (Qty. of boards per quarter)
	 	 	 
	 	 	 
	TOTAL FOR 2000:	 	 
	 	 	 
	
	 	 

 
 
 

EXHIBIT D
  
    SUPPORT AND MAINTENANCE    
    

        AltiGen will provide the following maintenance services: 

        Telephone Support. Telephone support from [*****]. 

        Email support. Email support available at "support@AltiGen.com" or a special address to be established for Distributor support. AltiGen
will respond to email [*****]. 

        Training. AltiGen may provide in-depth Product training to Distributor from time-to-time and
Distributor will use its best efforts to have appropriate support personnel attend such training sessions to the extent such training will assist Distributor in better supporting the channel. 

        Website. AltiGen will provide product information and technical tips at www.altigen.com. 

 
 
 

EXHIBIT E
  
    TERRITORIES    
    

        All Territories and possessions in:  

	•
	 [*****]

	•
	[*****] 

 
 
 

EXHIBIT F
  
    Routing Instructions for Synnex Information Technologies
  PM's and Buyers
  Contact: Danny Davis
  864-289-4250    
    

	 
	 	 

	Shipping to Fremont, Ca

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs. Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

151-10000 lbs. From (Ca) Viking Frt.

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 
	

Shipping To Glendale Heights, Ill

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

150-10000 lbs. From (California) Am-Can Transport	
 	

Northern CA 510-261-2900
	 	 	Southern CA 562-928-1555
	151-10000 lbs. From (IL, In, TN, Oh, MI, KY) R&L Carriers

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 
	

Shipping to Memphis, TN

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

150-10000 lbs. From (California) Am-Can Transport	
 	

Northern CA 510-261-2900
	 	 	Southern CA 562-928-1555
	151-10000 lbs. From (Il, In, TN, MI, Oh, GA, Al, Ms, AR, KY) R&L Carriers

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 
	

Shipping to Lyndhurst, NJ

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

150-10000 lbs. From (California) Am-Can Transport	
 	

Northern CA 510-261-2900
	 	 	Southern CA 562-928-1555
	151-10000 lbs. From (NY, NJ, RI, Mass., Pa, Oh, Md, De, Va) R&L Carriers

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 
	 	 	 

 

	

Shipping to Salt Lake City, UT

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

151-10000 lbs. From (Ca, Nv, Wa, Or, Az, Id) Viking Frt.

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	
 	

 
	

Shipping to Norcross, Ga

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

150-10000 lbs. From (California) Am-Can Transport	
 	

Northern CA 510-261-2900
	 	 	Southern CA 562-928-1555
	151-10000 lbs. From (Ill, In, Tn, Mi, Oh, Ga, AL, Ms, Ar, Ky, N.C., S.C., Fl) R&L Carriers

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 
	

Shipping to Richardson, Tx

1-150 lbs. Ground (All U.S. Points) FexEx 3rd Party Acct# [*****]

1-150 lbs.Air Freight (All U.S. Points) FedEx 3rd Party Acct# [*****]

150-10000 lbs. From (California) Am-Can Transport	
 	

Northern CA 510-261-2900
	 	 	Southern CA 562-928-1555
	151-10000 lbs. From (Tx, La, Ms, Ar,) R&L Carriers

151-10000 lbs. From (All other U.S. Points) Watkings (Primary) Roadway Frt (Secondary)

Over 10000 lbs Pup or Truckload Call Synnex Traffic

Air Freight / Expedited...Call Synnex Traffic	 	 

	 
	 	 
	 	 

	Notes:	 	1.	 	Shipments giving to unauthorized carriers, and unauthorized airfreight will be charged back to shipper.
	

 	
 	

2.	
 	

When preparing bills of lading please show number of pieces shipped in the left hand column of the bill and number of pallets in the body.
	

 	
 	

3.	
 	

If a single shipment results in a Pup or Truckload less than 10000 lbs contact Synnex Traffic.
	

 	
 	

4.	
 	

Shipments over 150 lbs. must be palletized.
	

 	
 	

5.	
 	

Synnex PO# must appear on bill of lading.

For routing on drop shipments to Synnex customers please call traffic dept.  

Revised
11-21-01 

Contact
Synnex Traffic if you have nay questions regarding these routing instructions. 

2

 
 
 

EXHIBIT G
  
    PROPRIETARY INFORMATION
  NON-DISCLOSURE AGREEMENT    
    

        This Agreement is made this 22 day of December, 1999, by and between Synnex Information Technologies, Inc., a California corporation with its
principal place of business at 3797 Spinnaker Court, Fremont, California, 94538 ("Distributor'), ALTIGEN COMMUNICATIONS INC., a California
corporation, with principal offices at 47427 Fremont Blvd., Fremont, CA 94538 ("AltiGen") 

        WHEREAS
Synnex has compiled and organized certain information relating to its sales which is proprietary and confidential, and such information includes, but is not limited to the "Point
of Sale (POS) Report" ("Proprietary Information"); and 

        WHEREAS
Synnex agrees to disclose Proprietary Information to AltiGen for the limited purpose set out herein; and 

        WHEREAS
AltiGen desires to inspect and use such Proprietary information for the purposes of calculating sales commissions and monitoring marketing programs only; 

        NOW,
THEREFORE, in consideration of the mutual promises set out herein, the parties hereby agree as follows: 

        1.     AltiGen
agrees not to communicate, disclose, or otherwise make available all or any part of the Proprietary Information to any third party, including, but not limited to
AltiGen's parent, subsidiaries, or affiliated companies. 

        2.     AltiGen
agrees not to use, or permit others to use, the Proprietary Information, other than for the purpose(s) stated above. AltiGen agrees to make no more than five
(5) copies of the Proprietary Information unless otherwise agreed in writing between the parties; and AltiGen agrees to limit distribution of and access to the Proprietary Information to those
of AltiGen's personnel who require access to Proprietary Information for the foregoing purpose. AltiGen agrees not to solicit, or sell Product to any customer or dealer listed in the Proprietary
Information that requests to purchase product from Synnex. 

        3.     The
term of this Agreement, unless terminated in accordance with paragraph 7 shall be concurrent with the term of that mutual Distribution Agreement between Synnex
and AltiGen Inc. dated December 22, 1999, incorporated by reference as if fully set forth herein. 

        4.     AltiGen
and Synnex mutually agree that all copies of the Proprietary Information and all written descriptions, extractions, or summaries thereof, whether made by AltiGen
or Synnex, shall be the property of Synnex, and shall, upon expiration of this Agreement or Synnex's request, be immediately returned to Synnex. 

        5.     AltiGen
and Synnex mutually agree that Synnex's public disclosure of the Proprietary Information, except pursuant to a confidential disclosure agreement, to any party
will release AltiGen from the obligation of confidentiality with respect to that portion of the Proprietary Information actually disclosed by Synnex. 

        6.     AltiGen
acknowledges the damage which Synnex may suffer in the event of AltiGen's breach of obligations set forth herein. AltiGen agrees to and shall indemnify Synnex
from and compensate Synnex for any and all damage or injury, including legal fees and costs incurred by Synnex because of AltiGen's misuse of any Proprietary Information or incurred by Synnex in
enforcing its rights hereunder. This provision shall survive the expiration or earlier termination of this Agreement for a period of one (1) year. 

        7.     Upon
termination of this Agreement by either party for any reason, AltiGen shall return all Proprietary Information to Synnex within thirty (30) days, irrespective
of format. For purposes of enforcing this provision, AltiGen's return obligation shall survive the termination of this Agreement. 

 

        8.     The
rights, promises, duties, and obligations set out herein, and the validity, interpretation, performance, and legal effect of the whole Agreement shall be governed and
determined by the laws of the State of California. In the event that any provision is found invalid or unenforceable pursuant to statutory or judicial decree, such provision shall be construed only to
the maximum extent permitted by law, and the remainder of the Agreement shall be valid and enforceable in accordance with its terms. 

2

QuickLinks

DISTRIBUTION AGREEMENT

EXHIBIT A

EXHIBIT B

EXHIBIT C

EXHIBIT D

EXHIBIT E

EXHIBIT F

EXHIBIT G

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