Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

EXHIBIT 10.43    
  

OFFICE LEASE  

LANDLORD:  

 LBA-VF III, LLC,

a Delaware limited liability company  

 TENANT:  

 CMD TECHNOLOGY,

a California corporation  

 
  
 

    TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	1.	 	Premises	 	1
	2.	 	Term	 	1
	3.	 	Rent	 	1
	4.	 	Common Areas; Operating Expenses; Real Property Taxes and Assessments; Insurance Costs	 	2
	5.	 	Security Deposit	 	7
	6.	 	Use	 	8
	7.	 	Payments and Notices	 	11
	8.	 	Brokers	 	12
	9.	 	Surrender; Holding Over	 	12
	10.	 	Taxes on Tenant's Property	 	13
	11.	 	Condition of Premises; Repairs	 	13
	12.	 	Alterations	 	15
	13.	 	Liens	 	17
	14.	 	Assignment and Subletting	 	18
	15.	 	Entry by Landlord	 	20
	16.	 	Utilities and Services	 	21
	17.	 	Indemnification and Exculpation	 	23
	18.	 	Damage or Destruction	 	24
	19.	 	Eminent Domain	 	26
	20.	 	Tenant's Insurance	 	27
	21.	 	Landlord's Insurance	 	29
	22.	 	Waiver of Claims; Waiver of Subrogation	 	29
	23.	 	Tenant's Default and Landlord's Remedies	 	30
	24.	 	Landlord's Default	 	32
	25.	 	Subordination	 	33
	26.	 	Estoppel Certificate	 	34
	27.	 	Satellite Dish/Antenna	 	34
	28.	 	Cure Rights of Landlord's Mortgagees	 	34
	29.	 	Quiet Enjoyment	 	34
	30.	 	Transfer of Landlord's Interest	 	35
	31.	 	Limitation on Landlord's Liability	 	35
	32.	 	Miscellaneous	 	35
	33.	 	Lease Execution	 	38
	34.	 	Waiver of Jury Trial	 	38

	
EXHIBITS
 
	
 	

 

	EXHIBIT "A"	 	Site Plan
	EXHIBIT "B"	 	Intentionally Omitted
	EXHIBIT "C"	 	Work Letter Agreement
	EXHIBIT "D"	 	Sample Form of Notice of Lease Term Dates
	EXHIBIT "E"	 	Rules and Regulations
	EXHIBIT "F-1"	 	Sample Form of Tenant Estoppel Certificate
	EXHIBIT "F-2"	 	Sample Form of Landlord Estoppel Certificate
	EXHIBIT "G"	 	Depiction of Building Top Sign and Description of Sign Criteria
	EXHIBIT "H"	 	Form of Subordination, Non-Disturbance and Attornment Agreement
	EXHIBIT "I"	 	Antenna License Agreement

	
RIDERS
 
	
 	

 

	No. 1	 	Extension Option Rider
	No. 2	 	Fair Market Rental Rate Rider
	No. 3	 	Options in General Rider
	No. 4	 	Right of First Refusal Rider
	No. 5	 	Termination Rider

(i)

 
 
 

INDEX    
  

	 
	 	Page(s)

	Abandonment	 	21
	Actual Commencement Date	 	1
	Actual Statement	 	4
	Basic Building Systems	 	10
	Brokers	 	2
	Building	 	1
	Building Holidays	 	2
	Common Areas	 	2
	days	 	25
	Environmental Law	 	8
	Environmental Permits	 	8
	Estimate Statement	 	4
	Estimated Commencement Date	 	1
	Extension Notice	 	1
	Force Majeure Delays	 	26
	Hazardous Materials	 	8
	HVAC Systems	 	10
	Indemnified Claims	 	17
	Landlord	 	1
	Landlord Indemnified Parties	 	8
	Lease	 	1
	Monthly Basic Rent	 	1
	Operating Expenses	 	2
	PCBs	 	8
	Permitted Transfer	 	13
	Permitted Use	 	2
	Pre-Approved Change	 	11
	Premises	 	1
	Real Property Taxes and Assessments	 	3
	rent	 	1
	Security Deposit	 	2
	Service Provider	 	16
	Site	 	1
	SNDA	 	24
	Summary	 	1
	Tenant	 	1
	Tenant Changes	 	11
	Tenant Parties	 	17
	Tenant's Parties	 	8
	Tenant's Percentage	 	1
	Tenant's Review Period	 	1
	Term	 	1
	Transfer	 	13
	Transfer Notice	 	13
	Transferee	 	13
	Work Cost Statement	 	Exhibit C
	worth at the time of award	 	22

(ii)

 
 

SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

        This
SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("Summary") is hereby incorporated into and made a part of the attached Office
Lease which pertains to the Building described in Section 1.4 below. All references in the Lease to the "Lease" shall include this Summary. All references in the Lease to any term defined in
this Summary shall have the meaning set forth in this Summary for such term. Any initially capitalized terms used in this Summary and any initially capitalized terms in the Lease which are not
otherwise defined in this Summary shall have the meaning given to such terms in the Lease. If there is any inconsistency between the Summary and the Lease, the provisions of the Lease shall control. 

        1.1    Landlord's Address:    

LBA-VF
III, LLC

c/o Layton-Belling & Associates

4440 Von Karman, Suite 150

Newport Beach, California 92660

Attn: Property Management—Jeronimo Road

Telephone: (949) 833-0400

Facsimile: (949) 955-9325 

        1.2    Tenant's Address (Pre-Commencement Date):    

CMD
TECHNOLOGY

19 Morgan

Irvine, California 92618

Attn: Mr. Kirk Andrews

Telephone: (949) 470-3130

Facsimile: (949) 454-8466 

                Tenant's Address (Post-Commencement Date):    

CMD
TECHNOLOGY

9501 Jeronimo Road

Irvine, California 92618

Attn: Mr. Kirk Andrews

Telephone: (949) 470-3130

Facsimile: (949) 454-8466 

        1.3    Site:    The Site consists of the parcel(s) of real property located at 9501 Jeronimo Road, Irvine, County of
Orange, State of California, as shown on the site plan attached hereto as Exhibit "A". 

        1.4    Building:    A two (2) story office building located on the Site, containing approximately 90,898
rentable square feet, the address of which is 9501 Jeronimo Road, Irvine, California. 

        1.5    Premises:    Consists of the Site and the Building. 

        1.6    Term:    Eighty-nine (89) months measured from Commencement Date 

        1.7    Estimated Commencement Date:    June 1, 2000;    Actual Commencement
Date: To be determined as provided in Exhibit "C" attached hereto. 

        1.8    Monthly Basic Rent:    Upon the commencement of the Term of this Lease, and on the first day of each month
thereafter during the Term of this Lease, Tenant shall pay to Landlord, in advance 

 

and without offset, deduction or demand as Monthly Basic Rent for the Premises the following monthly payments: 

	Months
 
	 	Monthly Basic Rent

	1-5	 	$	99,987.80
	6-35	 	$	99,987.80
	36-65	 	$	109,077.60
	66-89	 	$	116,349.44

	*
	Monthly
Basic Rent shall abate to $0.00 per month during months 1 through 5 of the Term; provided, however, if this Lease is terminated as a result of any default of Tenant where such
default first occurred on or before the last day of month 5 of the Term, the Monthly Basic Rent that will otherwise be due and payable hereunder (and that Landlord may claim as part of its damages
claim against Tenant) shall be the full Monthly Basic Rent due during months 1 through 5 notwithstanding any such abated amount. 

        1.9    Tenant's Percentage:    100%. Accordingly, as more particularly set forth in Section 4 hereof,
commencing upon the Commencement Date, Tenant shall pay to Landlord: (a) 100% of the "Operating Expenses" (as defined in Section 4.4) (b) 100% of Real Property Taxes and
Assessments (as defined in Section 4.5); and (c) 100% of Insurance Costs (as defined in Section 4.6). 

        1.10    Omitted.    

        1.11    Security Deposit:    $116,349.44 

        1.12    Permitted Use:    General office uses, sales office, engineering office, research and development
laboratories, light manufacturing of computer chips, assembly of computer chips, warehousing and storage of computer chips, and, subject to the terms and conditions of this Lease (including, without
limitation, Section 6 hereof), any other uses permitted under the existing zoning laws, rules and regulations in effect as of the Effective Date. 

        1.13    Brokers:    Voit Commercial Brokerage representing Landlord. Cushman & Wakefield of
California, Inc. representing Tenant. 

        1.14    Interest Rate:    The lesser of: (a) the rate announced from time to time by Wells Fargo Bank or, if
Wells Fargo Bank ceases to exist or ceases to publish such rate, then the rate announced from time to time by the largest (as measured by deposits) chartered bank operating in California, as its
"prime rate" or "reference rate", plus three percent (3%); or (b) the maximum rate permitted by law. 

        1.15    Tenant Improvements:    The tenant improvements installed or to be installed in the Premises as described in
the Work Letter Agreement attached hereto as Exhibit "C". 

        1.16    Parking:    Landlord shall provide Tenant the greater of two hundred sixty (260) unreserved parking
spaces or the number of parking spaces located at the Site at no monthly cost, other than the payment of Tenant's Percentage of Operating Expenses, Real Property Taxes and Assessments and Insurance
Costs attributable to the parking areas, subject to the provisions set forth in Section 6.2. 

        1.17    Business Hours for the Building.    7:00 a.m. to 6:00 p.m, Mondays through Fridays (except Building
Holidays) and 9:00 a.m. to 1:00 p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean New Year's Day, Labor Day,
Presidents' Day, Thanksgiving Day, Memorial Day, Independence Day and Christmas Day and such other national holidays as are adopted by Landlord as holidays for the Building. Notwithstanding the
foregoing, subject to factors beyond Landlord's control and subject to the other provisions of this Lease, including, without limitation, Sections 4.2, 18, 19 and 27, Tenant shall have access to the
Premises and entry access to the Building twenty-four (24) hours per day, seven (7) days per week year round. 

        1.18    Guarantors:    None. 

	
	 	

	Landlord's Initials	 	Tenants Initials

2

 
 

OFFICE LEASE    
  

        This LEASE, which includes the preceding Summary of Basic Lease Information and Definitions ("Summary") attached hereto and incorporated herein by this reference
("Lease"), is made as of the 20th day of April, 2000, by and between LBA-VF III, LLC, a Delaware limited liability company ("Landlord"), and CMD TECHNOLOGY, a California
corporation ("Tenant"). 

1.    Premises.  

        1.1    Premises.    Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises described
in Section 1.5 of the Summary above, improved or to be improved with the Tenant Improvements. Such lease is upon, and subject to, the terms, covenants and conditions herein set forth and each
party covenants, as a material part of the consideration for this Lease, to keep and perform their respective obligations under this Lease. 

        1.2    Measurement of Building.    Landlord and Tenant agree that the approximate square footage amount for the
Building set forth in Sections 1.4 and 1.5 above has been determined, and that neither party shall have the right to remeasure the rentable or usable square footages of the Building. 

2.    Term.  

        2.1    Term; Notice of Lease Dates.    The Term of this Lease shall be for the period designated in Section 1.6
of the Summary commencing on the Commencement Date (as determined pursuant to Exhibit "C"), and ending on the expiration of such period, unless the Term
is sooner terminated as provided in this Lease. Notwithstanding the foregoing, if the Commencement Date falls on any day other than the first day of a calendar month then the term of this Lease will
be measured from the first day of the month following the month in which the Commencement Date occurs. Within ten (10) days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and expiration date of the Term in the form of the Notice of Lease Term Dates attached hereto as Exhibit "D". The
Notice of Lease Term Dates shall be binding upon Tenant unless Tenant objects thereto in writing within such ten (10) day period. 

        2.2    Estimated Commencement Date.    It is estimated by the parties that the Term of this Lease will commence on the
Estimated Commencement Date set forth in Section 1.7 of the Summary. The Estimated Commencement Date is merely an estimate of the Commencement Date, which may occur earlier if Tenant commences
business operations in all or any portion of the Premises prior to the Estimated Commencement Date as more particularly provided in Exhibit "C". 

        2.3    Delivery of Building/Early Occupancy.    Landlord shall deliver the Building to Tenant in the manner and
time-frame required under the Work Letter Agreement attached hereto as Exhibit "C". Tenant's early occupancy prior to the Commencement Date
for buildout of Tenant's fixtures, cabling and telecommunications equipment shall be subject to all of the terms and conditions of this Lease, including, without limitation, the provisions of Sections
17, 20 and 22, except that provided Tenant does not commence the operation of business from the Premises, Tenant will not be obligated to pay Monthly Basic Rent or any utilities, common area expenses,
Operating Expenses, Real Property Taxes and Assessments, and Insurance Costs, or any other such additional rent during the period of such early occupancy. Tenant shall be entitled to enter the
Building to commence such work in the time frame and manner set forth in the Work Letter Agreement. 

3.    Rent.  

        3.1    Basic Rent.    Tenant agrees to pay Landlord, as basic rent for the Premises, the Monthly Basic Rent in the
amounts designated in Section 1.8 of the Summary. The Monthly Basic Rent shall be paid by Tenant in monthly installments in the amounts designated in Section 1.8 of the Summary in
advance by the first (1st) day of each and every calendar month during the Term, without demand, notice, deduction or offset except that the Monthly Basic Rent attributable to the sixth
(6th) month of the Term shall be paid upon Tenant's execution and delivery of this Lease to Landlord. Monthly Basic 

 

Rent for any partial month shall be prorated in the proportion that the number of days this Lease is in effect during such month bears to the actual number of days in such month. 

        3.2    Additional Rent.    All amounts and charges payable by Tenant under this Lease in addition to the Monthly Basic
Rent described in Section 3.1 above (including, without limitation, payments for insurance, repairs and parking, and Tenant's Percentage of Operating Expenses, Real Property Taxes and
Assessments and Insurance Costs, respectively) shall be considered additional rent for the purposes of this Lease, and the word "rent" in this Lease shall include such additional rent unless the
context specifically or clearly implies that only the Monthly Basic Rent is referenced. The Monthly Basic Rent and additional rent shall be paid to Landlord as provided in Section 7, without
any prior demand therefor and without any deduction or offset whatever, in lawful money of the United States of America. 

4.    Common Areas; Operating Expenses; Real Property Taxes and Assessments; Insurance Costs.  

        4.1    Definitions; Tenant's Rights.    During the Term of this Lease, Tenant shall have the exclusive right to use,
subject to the Rules and Regulations referred to in Section 6.1 below, the lobby, restrooms, stairways and accessways, loading docks, ramps, drives and platforms and any passageways and
serviceways; the parking areas (subject to Section 6.2 below), loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas on the Site, and
any city sidewalks adjacent to the Site that is open to the general public (collectively, "Common Areas"). 

        4.2    Landlord's Reserved Rights.    Landlord reserves the right from time to time to do any of the following, as
long as Landlord provides reasonable written notice to Tenant (which shall be no less than 48 hours prior notice except in the event of an emergency) of Landlord's intention to perform such
acts, Landlord performs such acts during non-business hours), and such acts do not unreasonably interfere with Tenant's use of or access to the Premises: 

	(a)
	make
reasonable changes, additions, improvements, repairs or replacements in or to the Premises (if required to do so by any law or regulation), including, without limitation:
(i) maintenance, replacement and relocation of pipes, ducts, conduits, wires and meters; and (ii) changes in the location, size, shape and number of driveways, entrances, loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas and walkways and, subject to Section 6.2, parking spaces and parking areas; and

	(b)
	close
temporarily any of the Common Areas while engaged in making repairs, improvements or alterations to the Premises (or any portion thereof); 

        4.3    Omitted.    

        4.4    Definition of Operating Expenses.    As used in this Lease, the term "Operating
Expenses" shall consist of all costs and expenses of operation, maintenance and repair of those portions of the Premises required to be maintained by Landlord under this Lease
as determined by standard accounting practices. Operating Expenses include the following costs by way of illustration but not limitation: (a) omitted; (b) costs, levies or assessments
resulting from statutes or regulations promulgated by any government authority after the date of this Lease in connection with the use or occupancy of the Premises (including the parking facilities on
the Site); (c) waste disposal and janitorial services which shall be competitively bid from time to time by Landlord (as reasonably determined by Landlord); (d) security (provided Tenant
has requested Landlord to engage a security service company for the Premises and then upon a competitive bid process by three (3) or more outside vendors); (e) costs incurred in the
management of the Premises, including, without limitation: (1) supplies, (2) wages of Landlord's building engineer, who is an employee of Landlord and will be used in the operation and
maintenance of those portions of the Premises required to be maintained by Landlord under this Lease (provided that such building engineer's wages will be charged at any hourly rate for 

2

 

purposes of determining Operating Expenses, which hourly rate is consistent with the hourly rate charged by other landlords of properties similar to the Premises for similar services being provided
by the building engineer), (3) the rental of personal property used by Landlord's personnel in the maintenance, repair and operation of those portions of the Premises required to be maintained
by Landlord under this Lease, (4) accounting fees, and (5) a monthly management/administrative fee equal to two percent (2%) of the Monthly Basic Rent (provided that if Tenant elects to
take over the Assignable Maintenance Obligations (as defined in Section 11.4 below), the monthly management fee shall be reduced to a fixed monthly fee of One Thousand Dollars ($1,000.00) from
and after the effective date of such election by Tenant and during such time as Tenant duly performs the obligations with respect to the Assignable Maintenance Obligations); (f) supplies,
materials, equipment and tools; (g) the cost of a standard maintenance contract and standard charges passed through under such contract respecting the repair and maintenance of the heating,
ventilating, air conditioning systems and equipment (the initial contract for which shall be with Control Air, but Tenant reserves the right to require Landlord to seek an alternative bid from a duly
licensed and qualified HVAC contractor/servicer approved by Landlord, not more frequently than once per calendar year, and to substitute such other contractor for the servicing of the HVAC equipment
and systems if such other bid is substantially less than the cost of the same services that are provided by Control Air), provided that Operating Expenses shall not include the costs associated with
the replacement of any HVAC coil, compressor or other major component (if any) that is replaced during the initial Lease Term except to the extent that such replacement is due to the failure of Tenant
to maintain the HVAC equipment and systems properly if and when Tenant elects to take over Landlord's repair, maintenance and replacement obligations with respect to the Assignable Maintenance
Obligations (as defined and described in Section 11.4 below), (h) repair and maintenance of the electrical systems and equipment; (i) repair and maintenance (but not replacement
during the initial Lease Term) of the roof of the Building (provided that Tenant's Percentage of such maintenance and repair costs shall not exceed Five Thousand Dollars ($5,000.00) per annum
cumulative, in the aggregate, during the initial Lease Term); (j) maintenance, costs and upkeep of all parking and other Common Areas; (k) amortization on a straight-line
basis over the useful life assuming interest at the Amortization Interest Rate (as defined below) on the unamortized balance of all costs of a capital nature (including, without limitation, capital
improvements, capital replacements, capital repairs, capital equipment): (1) reasonably intended to produce a reduction in operating charges or energy consumption; or (2) required after
the date of this Lease under any governmental law or regulation that was not applicable to the Building as of the date of this Lease; or (3) for repair or replacement of any equipment or
improvements other than structural portions of the Building needed to operate and/or maintain the Premises (or any portion thereof) at the same quality levels as of the date of this Lease;
(l) costs and expenses of gardening and landscaping; (m) maintenance of signs (including Tenant's signs); (n) personal property taxes levied on or attributable to personal
property used in connection with the Premises; and (o) costs and expenses of repairs,
resurfacing, repairing, maintenance, painting, lighting, cleaning, refuse removal, security and similar items. Operating Expenses shall not include Real Property Taxes and Assessments, Insurance Costs
which shall be separately accounted for. For purposes of this Section 4.4 the "Amortization Interest Rate" means the lesser of: (x) the rate announced from time to time by Wells Fargo
Bank or, if Wells Fargo Bank ceases to exist or ceases to publish such rate, then the rate announced from time to time by the largest (as measured by deposits) chartered bank operating in California,
as its "prime rate" or "reference rate", plus one and one-half percent (1.5%); or (y) the maximum rate permitted by law. 

        4.5    Definition of Real Property Taxes and Assessments.    As used in this Lease, the term  "Real Property Taxes and Assessments"
shall mean: any form of assessment, license fee, license tax, business license fee, commercial rental tax, levy,
charge, improvement bond, tax, water and sewer rents and charges, utilities and communications taxes and charges or similar or dissimilar imposition imposed by any authority having the direct power to
tax, including any city, county, state or federal government, or 

3

 

any school, agricultural, lighting, drainage or other improvement or special assessment district thereof, or any other governmental charge, general and special, ordinary and extraordinary, foreseen
and unforeseen, which may be assessed against any legal or equitable interest of Landlord in the Premises (or any portion thereof), including the following by way of illustration but not limitation: 

	(a)
	any
assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property
tax including assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for
other governmental services formerly provided without charge to property owners or occupants. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees,
levies and charges be included within the definition of "real property taxes" for the purposes of this Lease;

	(b)
	any
assessment, tax, fee, levy or charge allocable to or measured by the area of the Premises or any portion thereof or the rent payable by Tenant, including, without limitation, any
gross receipts tax or excise tax levied by state, city or federal government, or any political subdivision thereof, with respect to the receipt of such rent;

	(c)
	any
assessment, tax, fee, levy or charge upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises; and/or

	(d)
	any
assessment, tax, fee, levy or charge by any governmental agency related to any transportation plan, fund or system (including assessment districts) instituted within the
geographic area of which the Building is a part. 

        Tenant
may, at its option and at its cost and expense, in the name of Landlord, appeal or institute such other proceedings as it may consider appropriate to effect a reduction or
abatement in any Real Property Taxes and Assessment levied upon the Premises. If Tenant undertakes such an appeal, Landlord shall cooperate with Tenant in making such appeal, provided that Landlord
shall be under no obligation to incur any expenses or other liabilities in doing so and Tenant shall reimburse Landlord upon demand for all reasonable, out-of-pocket expenses
incurred by Landlord in connection therewith. 

        Notwithstanding
the foregoing provisions of this Section 4.5 above to the contrary, "Real Property Taxes and Assessments" shall not include Landlord's federal or state income,
franchise, inheritance or estate taxes. 

        4.6    Definition of Insurance Costs.    As used in this Lease, "Insurance Costs" shall mean the cost of insurance
obtained by Landlord pursuant to Section 21 (including any self-insured amounts and deductibles actually expended or reserved by Landlord) for the Premises (including the Tenant
Improvements); provided, however, Insurance Costs shall not include increases to Landlord's then existing Insurance Costs to the extent such increases are solely and directly a result of the unique
use of other properties which are owned by Landlord (or by Landlord's affiliates) and that are included within the same cost pool for purposes of determining Insurance Costs. Notwithstanding the
foregoing, (i) Tenant's liability for the cost of any deductible or self-insured retention solely relating to property insurance (and not any other insurance required under this
Lease, nor relating to earthquake insurance) shall not exceed Twenty-Five Thousand Dollars ($25,000) per occurrence; (ii) Tenant's liability for the cost of any deductible or
self-insured retention with respect to the restoration of the Premises following an earthquake shall not exceed One Hundred Thousand Dollars ($100,000); (iii) If the deductible or
self-insured retention for restoration following an earthquake exceeds Fifty Thousand Dollars ($50,000), that portion in excess of Fifty Thousand Dollars ($50,000) shall be payable by
Tenant, in advance of the first day of each month, in equal monthly installments (based upon a straight line amortization schedule over the then remaining Term of the Lease); and (iv) under no
circumstances will Tenant be liable for any deductible or self-insured retention respecting property 

4

 

insurance in the event that this Lease is terminated as a result of the casualty event giving rise to the adjustment of insurance proceeds. 

        4.7    Estimate Statement.    By the first day of April of each calendar year during the Term of this Lease, Landlord
shall endeavor to deliver to Tenant a statement ("Estimate Statement") estimating the Operating Expenses, Real Property Taxes and Assessments and
Insurance Costs for the current calendar year payable by Tenant. Landlord shall have the right no more than three (3) times in any calendar year to deliver a revised Estimate Statement for such
calendar year if Landlord determines that the Operating Expenses, Real Property Taxes and Assessments and/or Insurance Costs are greater than those set forth in the original Estimate Statement (or
previously delivered revised Estimate Statement) for such calendar year. The Operating Expenses, Real Property Taxes and Assessments and/or Insurance Costs shown on the Estimate Statement (or revised
Estimate Statement, as applicable) shall be divided into twelve (12) equal monthly installments, and Tenant shall pay to Landlord, concurrently with the regular monthly rent payment next due
following the receipt of the Estimate Statement (or revised Estimate Statement, as applicable), an amount equal to one (1) monthly installment of such Operating Expenses, Real Property Taxes
and Assessments and/or Insurance Costs multiplied by the number of months from January in the calendar year in which such statement is
submitted to the month of such payment, both months inclusive (less any amounts previously paid by Tenant with respect to any previously delivered Estimate Statement or revised Estimate Statement for
such calendar year). Subsequent installments shall be paid concurrently with the regular monthly rent payments for the balance of the calendar year and shall continue until the next calendar year's
Estimate Statement (or current calendar year's revised Estimate Statement) is received. 

        4.8    Actual Statement.    By the first day of April of each succeeding calendar year during the Term of this Lease,
Landlord shall endeavor to deliver to Tenant a statement ("Actual Statement") of the actual Operating Expenses, Real Property Taxes and Assessments and
Insurance Costs for the immediately preceding calendar year. If the Actual Statement reveals that Operating Expenses, Real Property Taxes and Assessments and/or Insurance Costs were
over-stated or under-stated in any Estimate Statement (or revised Estimate Statement) previously delivered by Landlord pursuant to Section 4.8 above, then within thirty
(30) days after delivery of the Actual Statement, Tenant shall pay to Landlord the amount of any such under-payment, or, Landlord shall credit Tenant against the next monthly rent falling due
(or, if the Term of the Lease has expired, Landlord shall pay to Tenant), the amount of such over-payment, as the case may be. Such obligation will be a continuing one which will survive
the expiration or earlier termination of this Lease. Prior to the expiration or sooner termination of the Lease Term and Landlord's acceptance of Tenant's surrender of the Premises, Landlord will have
the right to estimate the actual Operating Expenses, Real Property Taxes and Assessments and Insurance Costs for the then current Lease Year and to collect from Tenant prior to Tenant's surrender of
the Premises, Tenant's Percentage of any excess of such actual Operating Expenses, Real Property Taxes and Assessments and Insurance Costs over the estimated Operating Expenses, Real Property Taxes
and Assessments and Insurance Costs paid by Tenant in such Lease Year. 

        4.9    No Release.    Any delay or failure by Landlord in delivering any Estimate or Actual Statement pursuant to this
Section 4 shall not constitute a waiver of its right to receive Tenant's payment of Operating Expenses, Real Property Taxes and Assessments and Insurance Costs, nor shall it relieve Tenant of
its obligations to pay Operating Expenses, Real Property Taxes and Assessments and Insurance Costs pursuant to this Section 4, except that Tenant shall not be obligated to make any payments
based on such Estimate or Actual Statement until ten (10) business days after receipt of such statement and in no event may Landlord be permitted to retroactively bill for any such costs
following the second anniversary of the Actual Statement covering such cost. 

        4.10    Exclusions from Operating Expenses, Real Property Taxes and Assessments, Insurance Costs.    Notwithstanding
anything to the contrary contained elsewhere in this Section 4, the following 

5

 

items shall be excluded from Operating Expenses, Real Property Taxes and Assessments and Insurance Costs, as applicable: 

	(a)
	all
costs for which Tenant is being charged directly for other than pursuant to the operating expense clauses of this Lease for the Building;

	(b)
	the
cost of correcting defects in the construction of the Building or in the building systems or equipment, except that conditions (not occasioned by construction or equipment or
system defects) resulting from ordinary wear and tear will not be deemed defects for the purpose of this category;

	(c)
	to
the extent Landlord is reimbursed by third parties, the cost of repair made by Landlord because of the total or partial destruction of the Building or the condemnation of a portion
of the Building;

	(d)
	the
cost of any items for which Landlord is reimbursed by insurance or otherwise compensated by third parties (e.g., condemnation awards);

	(e)
	any
operating expense representing an amount paid to a related corporation, entity, or person which is in excess of the amount which would be paid in the absence of such relationship;

	(f)
	ground
rent or similar payments to a ground lessor;

	(g)
	legal
fees and related expenses incurred by Landlord (together with any damages awarded against Landlord) due to the negligence or willful misconduct of Landlord;

	(h)
	costs
arising from the presence of any Hazardous Materials within, upon or beneath the Premises existing prior to the date of this Lease or by reason of Landlord's acts;

	(i)
	costs
for sculpture, paintings or other objects of art in the Building;

	(j)
	salaries
of Landlord's officers and partners and manager and its headquarters staff and all other general corporate overhead and administrative expense of Landlord;

	(k)
	the
cost of any additions to the Premises after the date of this Lease (including a parking structure, if any) or operating costs generated by such additions after the date of this
Lease;

	(l)
	the
cost any repairs, alterations, additions, changes, replacements and the like which under generally accepted accounting principles are properly classified as capital expenditures,
capital repairs or capital improvements (other than as described in Section 4.4(k) above);

	(m)
	any
costs representing an amount paid to a related or affiliated person of Landlord which is in excess of the amount which would have been paid to an unrelated person at market rates;

	(n)
	any
expenses for repairs or maintenance which are actually covered by warranties, guarantees or service contracts (excluding any mandatory deductibles);

	(o)
	any
of the following items incurred by Landlord: (1) income tax, tax on excess profits or revenue tax, excise tax or inheritance tax, gift tax, franchise tax, corporation tax,
capital levy transfer, estate, succession or other similar tax or charge that may be payable by or chargeable to Landlord under any present or future laws; (2) interest or penalties imposed
upon Landlord for late payment of Real Estate Taxes except to the extent caused by Tenant's late payment of Tenant's Percentage of Real Estate Taxes; and (3) Real Estate Taxes resulting from
the expansion or renovation of the Premises;

	(p)
	governmental
fines and/or penalties incurred as a result of Landlord's negligence, inability or unwillingness to make payments when due;

	(q)
	charitable
or political contributions; 

6

 

	(r)
	costs
incurred in connection with the investigation, reporting, remediation or abatement of any Hazardous Material located (or alleged to be located) in, on, under or about the
Premises (other than de minimus costs to clean up and/or remove minor oil spills or minor amounts of other Hazardous Materials on or about the Common Areas).

	(s)
	the
cost of painting the exterior of the Building more frequently than once every seven (7) years and the costs of slurry sealing the parking lot more frequently than once
every three (3) years, except to the extent the need for painting or slurry sealing is caused by Tenant;

	(t)
	any
structural repairs to the Building, except to the extent the structural damage was caused by Tenant; and

	(u)
	costs
incurred due to any material violation by Landlord of a contract or permit relating to the Site, except to the extent caused by Tenant. 

        4.11    Audit Rights.    Notwithstanding anything to the contrary contained in this Section 4 or elsewhere in
this Lease, if Tenant reasonably disputes any amount set forth in any Actual Statement described above in Section 4.9, Tenant will have the right not later than three (3) years following
receipt of an Actual Statement and upon no less than ten (10) days notice to Landlord, to cause Landlord's books and records with respect to the immediately preceding calendar year only to be
audited, at no cost or expense to Landlord (except as provided below), by a party mutually acceptable to Landlord and Tenant. Any audit conducted by or on behalf of Tenant shall be performed at
Landlord's office during Landlord's normal business hours and in a manner so as to minimize interference with Landlord's business operations. Landlord shall have no obligation and Tenant shall have no
right to make photocopies of any of Landlord's ledgers, invoices or other items; Tenant's audit to be limited to an on-site review of Landlord's general ledger of accounts. Pending
completion of any such audit, Tenant agrees to pay Landlord any such disputed Operating Expenses, Real Property Taxes and Assessments and Insurance Costs amounts. The amounts payable under this
Section 4.12 by Landlord to Tenant or Tenant to Landlord, as the case may be, will be appropriately adjusted on the basis of such audit. If such audit discloses an overstatement of Operating
Expenses, Real Property Taxes and Assessments and/or Insurance Costs in excess of five percent (5%) of the actual total amount thereof for such calendar year, Tenant will receive a credit against
Tenant's future Operating Expense obligations for the reasonable cost of the audit performed by a third party; otherwise the cost of such audit will be borne by Tenant. Tenant agrees to keep, and to
cause its accountant and employees to keep, all information revealed by any audit of Landlord's books and records strictly confidential and not to disclose any such information or permit any such
information to be disclosed to anyone other than Landlord, unless compelled to do so by a court of law. Any dispute between the parties with respect to this Section 4.12 shall be submitted to
binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 

5.    Security Deposit.    Concurrently with the execution of this Lease, Tenant shall deposit with Landlord
the Security Deposit designated in Section 1.11 of the Summary. The Security Deposit shall be held by Landlord as security for the full and faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease to be performed by Tenant during the Term. If Tenant Defaults with respect to any of its obligations under this Lease, Landlord may (but shall not be required
to) use, apply or retain all or any part of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any other amount, loss or damage which Landlord may
spend, incur or suffer by reason of Tenant's default. If any portion of the Security Deposit is so used or applied, Tenant shall, within ten (10) days after demand therefor, deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its original amount. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall
not be entitled to interest on the Security Deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall
be returned to Tenant within two (2) weeks following the 

7

 

expiration of the Lease term, provided that Landlord may retain the Security Deposit until such time as any amount due from Tenant in accordance with Section 4.9 hereof has been determined and
paid in full. If Landlord sells its interest in the Building during the Term and if Landlord deposits with the purchaser the Security Deposit (or balance thereof), then, upon such sale, Landlord shall
be discharged from any further liability with respect to the Security Deposit. See Rider to Section 5

6.    Use.  

        6.1    General.    Tenant shall use the Premises solely for the Permitted Use specified in Section 1.12 of the
Summary, and shall not use or permit the Premises to be used for any other use or purpose whatsoever. Tenant shall observe and comply with the "Rules and Regulations" attached hereto as  Exhibit "E".
Tenant shall, at its sole cost and expense, observe and comply with all requirements of any board of fire underwriters or similar body
relating to the Premises, all recorded covenants, conditions and restrictions currently affecting the Premises, and all laws, statutes, codes, rules and regulations now or hereafter in force relating
to or affecting the condition, use, occupancy, alteration or improvement of the Premises, including, without limitation, the provisions of Title III of the Americans with Disabilities Act of 1990
("ADA") as it pertains to Tenant's use, occupancy, improvement and alteration of the Premises (whether, except as otherwise provided herein, structural or nonstructural, including unforeseen and/or
extraordinary alterations and/or improvements to the Premises, regardless of the period of time remaining in the Lease Term); provided, however, the foregoing sentence is not intended to limit
Landlord's obligations pursuant to the Work Letter Agreement and Section 6.2 (a) Parking. Tenant shall not use or allow the Premises to be used (a) in violation of any recorded
covenants, conditions and restrictions affecting the Site (provided Landlord acknowledges that Tenant's parking privileges over the Adjacent Site, as defined and described in Section 6.2(a)
below, which privileges currently are not permitted under that certain Declaration of Restrictions, Grant of Easements and Maintenance Agreement dated September 11, 1985 and recorded in the
Official Records of Orange County, California on September 18, 1986 as Instrument No. 86-426178 (the "1986 Restrictions"), shall not be deemed to be a breach of Tenant's
obligation to comply with such recorded covenants, conditions and restrictions affecting the Site) or of any law or governmental rule or regulation, or of any certificate of occupancy issued for the
Premises or Building, or (b) for any improper, immoral, unlawful or reasonably objectionable purpose. Tenant shall not cause, maintain or permit any nuisance in, on or about the Premises (or
any portion thereof), nor commit or suffer to be committed any waste in, on or about the Premises (or any portion thereof). Notwithstanding any contrary provision contained in this Section 6.1
or elsewhere in this Lease, Tenant shall not be required to make any capital or structural improvements to the Premises except to the extent required because of any alterations to the Premises made by
Tenant or because of Tenant's specific and unique use of the Premises. 

        6.2    Parking.    

        (a)    Tenant's Parking Privileges.    During the Term of this Lease, Landlord shall make available to Tenant the
number of parking privileges specified in Section 1.16 of the Summary hereof (i.e., the greater of 260 spaces or the number of parking spaces located at the Site) for use by Tenant's employees
and visitors in the common parking areas for the Building, as designated by Landlord from time to time; provided, however, if the City's parking code requires more than 260 spaces (based upon the use
of the Premises as contemplated on the Approved Space Plans attached as Schedule 1 to Exhibit "C" but not any additional parking requirements
based upon changes to the Approved Space Plans or Tenant's use of the Premises that is not consistent with the uses contemplated on the Approved Space Plans), and the City requires additional parking
spaces as a condition to the issuance of a building permit, certificate of occupancy or other permit necessary to allow Tenant's use or occupancy of the Premises, Landlord shall make available to
Tenant the additional spaces so required by the City in excess of the
260 spaces (the "Additional Required Parking Spaces") on a portion of the parking area on the adjacent site on which the building 

8

 

commonly known as 9401 Jeronimo Road is located (the "Adjacent Site") designated by Landlord. Tenant acknowledges and agrees that the Additional Required Parking Spaces shall be provided on the
Adjacent Site, which is currently owned by an affiliate of Landlord, on an unreserved basis, in common with the other tenants of the Adjacent Site and that Landlord may, in its sole discretion,
reserve parking on the Adjacent Site for the other tenants of the Adjacent Site without providing Tenant with any such reserved parking rights, provided that the available parking shall be in
reasonable proximity to the Premises and shall satisfy City requirements. If and only if Landlord's affiliate sells the Adjacent Site to an unrelated third-party, Tenant's rights with regard to the
Additional Required Parking Spaces on the Adjacent Site shall be evidenced by a recorded Easement Agreement (the "Parking Easement") for the benefit of the Tenant, which shall be recorded in the
Official Records of Orange County, California prior to or concurrently with the closing of such third-party sale. Further, if and only if Landlord's affiliate sells the Adjacent Site to an unrelated
third-party, Landlord shall, subject to the approval by the City, cause the removal of the provision in the 1986 Restrictions requiring that vehicular parking within the parking area for the Adjacent
Site be solely for the owner and occupants of the Adjacent Site. Landlord shall at all times have the right to establish and modify the nature and extent of the parking areas for the Site and Adjacent
Site (including whether such areas shall be surface, underground and/or other structures) as long as Tenant is provided the number of parking privileges designated in Section 1.16 of the
Summary in reasonably comparable proximity to the Building. Except as provided below, Landlord shall not create any reserved parking spaces on the Site. 

        Notwithstanding
anything to the contrary contained hereinabove, if during the Term hereof, substantially all of Tenant's two hundred forty two hundred sixty (260) unreserved
parking privileges are not regularly available on the Site, Landlord, upon Tenant's written request, shall convert all of Tenant's spaces to reserved spaces by striping said spaces in Tenant's name.
Landlord shall thereafter be solely responsible for and shall use commercially reasonable best efforts to enforce Tenant's reserved parking at Landlord's expense such efforts to include the placement
of an on-site parking attendant and/or the installation of "No Parking" signage, if needed to protect Tenant's parking privileges granted hereunder. From time to time promptly upon
Landlord's request, Tenant shall provide the names, license plate numbers, and vehicle descriptions all those parties authorized by Tenant ("Authorized Users") to use Tenant's reserved parking spaces. 

        Notwithstanding
anything to the contrary in this Lease, vans and flatbed trucks may be operated and parked on the Premises and Tenant's employees may park vehicles overnight on the
Premises subject to any local laws and restrictions. 

        (b)    Visitor Parking.    In addition parking privileges for use by Tenant's employees, Landlord shall permit access
to the parking areas for Tenant's visitors free of charge to Tenant or such visitors, subject to availability of spaces. 

        (c)    Parking Rules.    The use of the parking areas shall be subject to the Parking Rules and Regulations contained
in Exhibit "E" attached hereto and any other reasonable, nondiscriminatory rules and
regulations adopted by Landlord and/or Landlord's parking operators from time to time, including any system for controlled ingress and egress. Tenant shall not permit or allow any vehicles that belong
to or are controlled by Tenant or Tenant's employees, suppliers, shippers, customers 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 herein, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost thereof to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord. 

        6.3    Signs and Auctions.    Except for the signs described below (which signs shall be consistent with the
Building's signage program and otherwise subject to Landlord's prior written approval), Tenant 

9

 

shall have no right to place any sign upon the Premises (or any portion thereof). Tenant shall have no right to conduct any auction in, on or about the Premises. 

        Tenant,
at its sole cost and expense, subject to Landlord's prior reasonable approval, the sign criteria for the Building (as described on Exhibit
"G" attached hereto), all covenants, conditions, and restrictions affecting the Premises and all applicable laws, rules, regulations, and local ordinances, and subject to
Tenant obtaining all necessary permits and approvals from the City of Irvine, shall have the following sign rights: (i) the exclusive right to have its name on the Building as generally
depicted on Exhibit "G" (the "Building Top Sign"), and (ii) the exclusive right to have its name on the monument sign to be located near the
Building (but not the monument sign that is located at or near the entrance to the Site) in accordance with the sign criteria described on Exhibit "G"  attached hereto ("Monument Sign"). 

        Tenant
shall maintain and repair all of Tenant's signs at Tenant's expense. Upon the expiration or earlier termination of this Lease, Tenant shall, at Tenant's sole cost and expense
(except as otherwise set forth hereinabove), (a) cause all of Tenant's signage to be removed from the exterior and interior of the Building and the Common Areas, (b) repair any damage
caused by the removal of Tenant's signs, and (c) restore the underlying surfaces to the condition existing prior to the installation of Tenant's signs. 

        The
sign rights granted herein are personal to the original Tenant executing this Lease and may not be assigned, voluntarily or involuntarily, to any person or entity, except that Tenant
may assign its sign rights hereunder to an assignee of all of Tenant's rights under this Lease. The rights granted to the original Tenant hereunder are not assignable separate and apart from this
Lease, nor may any right granted herein be separated from this Lease in any manner, either by reservation or otherwise. 

        6.4    Hazardous Materials.    Tenant will (i) obtain and maintain in full force and effect all Environmental
Permits that may be required from time to time under any Environmental Laws applicable to Tenant use of the Premises and (ii) be and remain in compliance in all material respects with all terms
and conditions of all such Environmental Permits and with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables contained in all Environmental Laws applicable to Tenant or the Premises. As used in this Lease, the term
"Environmental Law" means any past, present or future federal, state, local or foreign statutory or common law, or any regulation, ordinance, code,
plan, order, permit, grant, franchise, concession, restriction or agreement issued, entered, promulgated or approved thereunder, relating to (a) the environment, human health or safety,
including, without limitation, emissions, discharges, releases or threatened releases of Hazardous Materials (as defined below) into the environment (including, without limitation, air, surface water,
groundwater or land), or (b) the manufacture, generation, refining, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport, arranging for transport, or handling
of Hazardous Materials. "Environmental Permits" means, collectively, any and all permits, consents, licenses, approvals and registrations of any nature
at any time required pursuant to, or in order to comply with, any Environmental Law. Except for ordinary and general office supplies, such as copier toner, liquid paper, glue, ink and common household
cleaning materials (some or all of which may constitute "Hazardous Materials" as defined in this Lease), Tenant agrees not to cause or permit any
Hazardous Materials to be brought upon, stored, used, handled, generated, released or disposed of on, in, under or about the Premises by Tenant, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, "Tenant's Parties"), without the prior written consent of Landlord, which consent Landlord may
withhold in its sole and absolute discretion. Upon the expiration or earlier termination of this Lease, Tenant agrees to promptly remove from the Premises, at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous Materials which are installed, brought upon, stored, used, generated or released upon, in, under or about the Premises or
any portion thereof by Tenant or any of Tenant's Parties. To the fullest extent permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold 

10

 

harmless Landlord and Landlord's partners, officers, directors, employees, agents, successors and assigns (collectively, "Landlord Indemnified
Parties") from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees and court costs) which arise or result
from the presence of Hazardous Materials on, in, under or about the Premises or any portion thereof and which are caused or authorized by, through or under Tenant or any of Tenant's Parties. Tenant
agrees to promptly notify Landlord of any release of Hazardous Materials in the Premises or any portion thereof which Tenant becomes aware of during the Term of this Lease, whether caused by Tenant or
any other persons or entities. In the event of any release of Hazardous Materials caused or permitted by Tenant or any of Tenant's Parties, Landlord shall have the right, but not the obligation, to
cause Tenant to immediately take all steps Landlord deems necessary or appropriate to remediate such release and prevent any similar future release to the satisfaction of Landlord and Landlord's
mortgagee(s). At all times during the Term of this Lease, Landlord will have the right, but not the obligation, to enter upon the Premises to inspect, investigate, sample and/or monitor the Premises
to determine if Tenant is in compliance with the terms of this Lease regarding Hazardous Materials. Tenant will, upon the request of Landlord or any mortgagee, cause to be performed an environmental
audit of the Premises, at Landlord's expense (except as otherwise provided below), by an established environmental consulting firm reasonably acceptable to Tenant, Landlord and the mortgagee. If the
audit discloses that there has been a release or discharging of any Hazardous Materials during the Term of this Lease, or that Tenant has not otherwise complied with its obligations under this
Section 6.4 with regard to the handling and/or storage of Hazardous Materials, Tenant agrees to pay for the fees and costs of any such audit. As used in this Lease, the term  "Hazardous Materials"
shall mean and include any hazardous or toxic materials, substances or wastes as now or hereafter designated under any law,
statute, ordinance, rule, regulation, order or ruling of any agency of the State, the United States Government or any local governmental authority, including, without limitation, asbestos, petroleum,
petroleum hydrocarbons and petroleum based products, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and freon and other
chlorofluorocarbons, but shall exclude standard office products commonly used in
standard office leases, which may contain Hazardous Materials (such as photocopy toner, "whiteout", and similar items), provided that Tenant uses such products in accordance with applicable
Environmental Laws. The provisions of this Section 6.4 will survive the expiration or earlier termination of this Lease. 

        Landlord
represents and warrants to Tenant to Landlord's actual knowledge that as of the date of this Lease, the Premises are not in violation of any Environmental Laws. Tenant shall
have no responsibility for any environmental liability or hazardous conditions not caused by Tenant or its employees, agents or contractors, or its use or occupancy of the Premises. Landlord shall
defend, indemnify and hold Tenant harmless from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties or fines arising from Hazardous Materials
which were present at the Premises prior to the date of this Lease or were thereafter caused to be present at the Premises by Landlord or its employees, agents or contractors. 

        6.5    Occupancy Level.    Tenant acknowledges that Tenant's parking privileges hereunder are expressly limited to the
parking spaces provided in Section 1.16 of the Summary and Tenant shall limit the occupancy of the Building so as to not utilize more than the number of parking spaces permitted in
Section 1.16, unless Tenant implements measures reasonably satisfactory to Landlord (e.g., securing additional offsite parking, carpooling or rotational shifts) and satisfaction of the City to
ensure that Tenant does not utilize more than its allotted parking spaces under Section 1.16. 

7.    Payments and Notices.    All rent and other sums payable by Tenant to Landlord hereunder shall be paid
to Landlord at the first address designated in Section 1.1 of the Summary, or to such other persons and/or at such other places as Landlord may hereafter designate in writing. Any notice 

11

 

required or permitted to be given hereunder must be in writing and may be given by personal delivery (including delivery by nationally recognized overnight courier or express mailing service),
facsimile transmission sent by a machine capable of confirming transmission receipt, with a hard copy of such notice delivered no later than one (1) business day after facsimile transmission by
another method specified in this Section 7, or by registered or certified mail, postage prepaid, return receipt requested, addressed to Tenant at the address(es) designated in
Section 1.2 of the Summary, or to Landlord at the address(es) designated in Section 1.1 of the Summary. Either party may, by written notice to the other, specify a different address for
notice purposes. Notice given in the foregoing manner shall be deemed given (i) upon confirmed transmission if sent by facsimile transmission, provided such transmission is prior to
5:00 p.m. on a business day (if such transmission is after 5:00 p.m. on a business day or is on a non-business day, such notice will be deemed given on the following business
day), (ii) when actually received or refused by the party to whom sent if delivered by a carrier or personally served or (iii) if mailed, on the day of actual delivery or refusal as
shown by the certified mail return receipt or the expiration of three (3) business days after the day of mailing, whichever first occurs. For purposes of this Section 7, a "business day"
is Monday through Friday, excluding holidays observed by the United States Postal Service. 

8.    Brokers.    The parties recognize that the broker(s) who negotiated this Lease are stated in
Section 1.13 of the Summary (the "Brokers"), and agree that Landlord shall be solely responsible for the payment
of brokerage commissions to said Brokers pursuant to the terms of a separate commission agreement. Each party represents and warrants to the other, that, to its knowledge, no other broker, agent or
finder (a) negotiated or was instrumental in negotiating or consummating this Lease on its behalf, and (b) is or might be entitled to a commission or compensation in connection with this
Lease. Any broker, agent or finder of Tenant whom Tenant has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify, defend (by counsel reasonably approved in writing by Landlord)
and hold Landlord harmless from and against any and all claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including attorneys' fees and court costs) resulting from
any breach by Tenant of the foregoing representation, including, without limitation, any claims that may be asserted against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, defend (by counsel reasonably approved in writing by Tenant) and hold Tenant harmless from and against any and all claims, judgments, suits, causes of action, damages,
losses, liabilities and expenses (including attorneys' fees and court costs) by the Brokers or resulting from any breach by Landlord of the foregoing representation, including, without limitation, any
claims that may be asserted against Tenant by any broker, agent or finder undisclosed by Landlord herein. The foregoing indemnities shall survive the expiration or earlier termination of this Lease. 

9.    Surrender; Holding Over.  

        9.1    Surrender of Premises.    Upon the expiration or sooner termination of this Lease, Tenant shall surrender all
keys for the Premises to Landlord, and exclusive possession of the Premises to Landlord broom clean and in first-class condition and repair, reasonable wear and tear excepted (and casualty damage
excepted if this Lease is terminated as a result thereof pursuant to Section 18), with all of Tenant's TI Systems (as defined in Section 18.2 below), Tenant's personal property (and
those items, if any, of Tenant Changes Identified by Landlord pursuant to Section 12.2 below) removed therefrom and all damage caused by such removal repaired, as required pursuant to
Sections 12.2 and 12.3 below. If, for any reason, Tenant fails to surrender the Premises on the expiration or earlier termination of this Lease (including upon the expiration of any subsequent
month-to-month tenancy consented to by Landlord pursuant to Section 9.2 below), with such removal and repair obligations completed, then, in addition to the provisions
of Section 9.3 below and Landlord's rights and remedies under Section 12.4 and the other provisions of this Lease, Tenant shall indemnify, protect, defend (by counsel approved in writing
by Landlord) and hold Landlord harmless from and against any and all claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including attorneys, 

12

 

fees and court costs) resulting from such failure to surrender, including, without limitation, any claim made by any succeeding tenant based thereon. The foregoing indemnity shall survive the
expiration or earlier termination of this Lease. 

        9.2    Hold Over.    If, with Landlord's express written consent, Tenant remains in possession of the Premises after
the expiration or earlier termination of the Lease Term, Tenant shall become a tenant from month-to-month upon the terms and conditions set forth in this Lease (including
Tenant's obligation to pay all Operating Expenses, Real Property Taxes and Assessments and Insurance Costs, and any other additional rent under this Lease) but at a Monthly Basic Rent equal to one
hundred twenty-five percent
(125%) of the Monthly Basic Rent applicable to the Premises immediately prior to the date of such expiration or earlier termination. Tenant shall pay an entire month's Monthly Basic Rent calculated in
accordance with this Section 9.2 for any portion of a month it holds over and remains in possession of the Premises pursuant to this Section 9.2, if Landlord has given its written
consent for Tenant to become a tenant from month-to-month as referenced above; otherwise. Monthly Basic Rent will be prorated for any partial month holdover. This
Section 9.2 shall not be construed to create any expressed or implied right to holdover beyond the expiration of the Lease Term or any extension thereof. 

        9.3    No Effect on Landlord's Rights.    The foregoing provisions of this Section 9 are in addition to, and do
not affect, Landlord's right of re-entry within 24-hours prior notice or any other rights of Landlord hereunder or otherwise provided by law or equity. 

10.    Taxes on Tenant's Property.    Tenant shall be liable for, and shall pay before delinquency, all
taxes and assessments (real and personal) levied against (a) any personal property or trade fixtures placed by Tenant in or about the Premises (including any increase in the assessed value of
the Premises based upon the value of any such personal property or trade fixtures): and (b) any Tenant Improvements or alterations in the Premises (whether installed and/or paid for by Landlord
or Tenant) to the extent such items are assessed at a valuation higher than the valuation at which tenant improvements conforming to the Building's standard tenant improvements are assessed. If any
such taxes or assessments are levied against Landlord or Landlord's property, Landlord may, after written notice to Tenant (and under proper protest if requested by Tenant) pay such taxes and
assessments, and Tenant shall reimburse Landlord therefor within ten (10) business days after demand by Landlord; provided, however, Tenant, as its sole cost and expense, shall have the right,
with Landlord's cooperation, to bring suit in any court of competent jurisdiction to recover the amount of any such taxes and assessments so paid under protest. 

11.  Condition of Premises; Repairs.  

        11.1    Condition of Premises.    Tenant acknowledges that, except as otherwise expressly set forth in this Lease and
in the Work Letter Agreement, neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises or its condition, or with respect to the suitability
thereof for the conduct of Tenant's business. Subject to any latent defects (if any) not discoverable upon a reasonable inspection of the Premises, the taking of possession of the Premises by Tenant
shall conclusively establish that the Premises were at such time complete and in good, sanitary and satisfactory condition and repair with all work required to be performed by Landlord, if any,
pursuant to Exhibit "C" completed and without any obligation on Landlord's part to make any alterations, upgrades or improvements thereto. 

        11.2    Landlord's Repair Obligations.    Subject to Article 4 and Sections 11.4, 18.1 and 18.2 of this Lease,
Landlord shall, as part of the Operating Expenses, repair, maintain and replace, as necessary (a) the Building shell and other structural portions of the Building, including the roof and the
foundations,
(b) the basic heating, ventilating and air conditioning equipment and systems ("HVAC Systems") (subject to Tenant's obligations set forth in
Section 16.2 below), sprinkler and electrical 

13

 

systems within the Building core and standard conduits, connections and distribution systems thereof within the Premises (collectively, the "Basic Building
Systems") (but any above-standard improvements installed in the Premises such as, for example, but not by way of limitation, custom lighting, special or supplementary plumbing
systems or distribution extensions, heating and ventilating and/or air conditioning systems or equipment installed by Tenant, special or supplemental electrical panels or distribution systems, or
kitchen or restroom facilities and appliances to the extent such facilities and appliances are installed by Tenant shall be Tenant's sole obligation to repair, maintain and replace as provided in
Section 11.3 below), and (c) the Common Areas. Without limiting the generality of the foregoing, the HVAC Systems shall be maintained in a good and properly functioning condition,
including the replacement of all coils, compressors and other major components (if any) that Landlord's HVAC maintenance provider recommends for immediate replacement, which replacement shall not be
included as an Operating Expense during the initial Lease Term, except to the extent that such replacement is due to the failure of Tenant to maintain the HVAC Systems properly if and when Tenant
elects to take over Landlord's repair, maintenance and replacement obligations with respect to the Assignable Maintenance Obligations (as defined and described in Section 11.4 below). Except
for any rental abatement pursuant to Section 16.4 below, Landlord shall not be liable to Tenant for failure to perform any such maintenance, repairs or replacements, unless Landlord shall fail
to make such maintenance, repairs or replacements and such failure shall continue for an unreasonable time following written notice from Tenant to Landlord of the need therefor. Without limiting the
foregoing, except as expressly provided in this Lease, Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect (including the
provisions of California Civil Code Section 1942 and any successive sections or statutes of a similar nature). 

        11.3    Tenant's Repair Obligations.    Except for Landlord's obligations specifically set forth in this Lease, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, clean, repair, preserve and replace, as necessary, the Premises and all parts thereof including, without limitation, all
Tenant Improvements, Tenant Changes, utility meters, any above-standard improvements installed in the Building such as, for example, but not by way of limitation, custom lighting, special or
supplementary plumbing systems or distribution extensions, heating and ventilating and/or air conditioning systems or equipment installed by Tenant, special or supplemental electrical panels or
distribution systems, or kitchen or restroom facilities and appliances to the extent such facilities and appliances are installed by Tenant, all fixtures, furniture and equipment, Tenant's storefront,
Tenant's signs, locks, closing devices, security devices, windows, window sashes, casements and frames, floors and floor coverings, shelving, kitchen and/or restroom facilities and appliances located
within the Building, and any alterations, additions and other property located within the Building in first-class condition and repair, reasonable wear and tear excepted. Tenant shall replace, at its
expense, any and all plate and other glass in and about the Building, which is damaged or broken from any cause whatsoever except due to the gross negligence or willful misconduct of Landlord, its
agents or employees. Tenant shall deliver full and complete copies of all of the Service Contracts to Landlord upon Landlord's request. Such maintenance and repairs shall be performed with due
diligence, lien-free and in a first-class and workmanlike manner, by licensed contractor(s) which are selected by Tenant and approved by Landlord, which approval Landlord shall not
unreasonably withhold or delay. Except as otherwise expressly provided in this Lease, Landlord shall have no obligation to alter, remodel, improve, repair, renovate, redecorate or paint all or any
part of the Premises. 

14

   
        11.4    Tenant's Right to Take Over Certain Maintenance Obligations.    Tenant shall have the right, upon no less
than
sixty (60) days prior written notice to Landlord, to take over the repair, maintenance and replacement responsibilities of Landlord with respect to all (but not a part of) the Assignable
Maintenance Obligations (as defined below), as such obligations are more particularly described in Sections 11.2 and 16.1 hereof. For purposes of this Lease, the "Assignable Maintenance Obligations"
are comprised of the following repair, maintenance and replacement obligations of Landlord: (i) the HVAC Systems, and (ii) the janitorial services described in Section 16.1 below.
If Tenant duly elects to take over the repair, maintenance and replacement responsibilities of Landlord with respect to the Assignable Maintenance Obligations, Tenant shall enter into regularly
scheduled preventive maintenance/service contracts ("Service Contracts") with maintenance contractors reasonably acceptable to Landlord for servicing and maintaining the HVAC Systems, and a contract
for janitorial services with a janitorial service provider reasonably acceptable to Landlord (provided that Tenant may elect to hire an employee to perform the janitorial services subject to
Landlord's reasonable approval of the scope and frequency of the janitorial work to be performed by such employee). Without limiting the generality of the foregoing, if Tenant duly elects to take over
the Assignable Maintenance Obligations, the HVAC Systems shall be maintained in a good and properly functioning condition, including the replacement, at Landlord's cost during the initial Lease Term,
of all coils, compressors and other major components (if any) that the HVAC maintenance provider selected by Tenant and approved by Landlord recommends for immediate replacement only after Landlord's
reasonable review and approval of such recommendation, which replacement shall not be included as an Operating Expense during the initial Lease Term, except to the extent that such replacement is due
to the failure of Tenant to maintain the HVAC Systems properly. 

12.  Alterations.  

        12.1    Tenant Changes; Conditions.    After installation of the initial Tenant improvements for the Premises pursuant
to Exhibit "C", Tenant may, at its sole cost and expense, make alterations, additions, improvements and decorations to the interior of the Building
(collectively, "Tenant Changes") subject to and upon the following terms and conditions: 

	(a)
	Notwithstanding
any provision in this Section 12 to the contrary. Tenant is absolutely prohibited from making any alterations, additions, improvements or decorations which:
(i) affect any area outside the Building; (ii) affect the Building's structure, equipment, systems, or the proper functioning thereof, or Landlord's access thereto; (iii) affect
the outside appearance, character or use of the Building or the Common Areas; (iv) weaken or impair the structural strength of the Building; (v) in the reasonable
opinion of Landlord, lessen the value of the Premises; or (vi) will violate or require a change in any occupancy certificate applicable to the Premises.

	(b)
	Before
proceeding with any Tenant Change which is not otherwise prohibited in Section 12.1(a) above, Tenant must first obtain Landlord's written approval thereof (including
approval of all plans, specifications and working drawings for such Tenant Change), which approval shall not be unreasonably withheld or delayed. However, Landlord's prior approval shall not be
required for any Tenant Change which satisfies the following conditions (hereinafter a "Pre-Approved Change"); (i) the costs of such
Tenant Change does not exceed Twenty-Five Thousand Dollars ($25,000) individually; (ii) the costs of such Tenant Change when aggregated with the costs of all other Tenant Changes
made by Tenant during the Term of this Lease do not exceed One Hundred Thousand Dollars ($100,000,00); (iii) Tenant delivers to Landlord final plans, specifications and working drawings for
such Tenant Change at least ten (10) days prior to commencement of the work thereof; (iv) no building permit or other authorization from the City of other governmental or
quasi-governmental authority is 

15

 

required
for the Tenant Change; and (v) Tenant and such Tenant Change otherwise satisfy all other conditions set forth in this Section 12.1 

	(c)
	After
Landlord has approved the Tenant Changes and the plans, specifications and working drawings therefor (or is deemed to have approved the Pre-Approved Changes as set
forth in Section 12.1(b) above). Tenant shall: (i) enter into an agreement for the performance of such Tenant Changes with such contractors and subcontractors selected by Tenant and
approved by Landlord, which approval shall not be unreasonably withheld or delayed; (ii) before proceeding with any Tenant Change (including any Pre-Approved Change), provide
Landlord with ten (10) days' prior written notice thereof; and (iii) pay to Landlord, within ten days after written demand, the costs of any increased insurance premiums incurred by Landlord to
include such Tenant Changes in the fire and extended coverage insurance obtained by Landlord pursuant to Section 21 below. However, Landlord shall be required to include the Tenant Changes
under such insurance only to the extent such insurance is actually obtained by Landlord and such Tenant Changes are insurable under such insurance; if such Tenant Changes are not or cannot be included
in Landlord's insurance, Tenant shall insure the Tenant Changes under its casualty insurance pursuant to Section 20.1(a) below. In addition, before proceeding with any Tenant Change, Tenant's
contractors shall obtain, on behalf of Tenant and at Tenant's sole cost and expense, all necessary governmental permits and approvals for the commencement and completion of such Tenant Change.
Landlord's approval of any contractor(s) and subcontractor(s) of Tenant shall not release Tenant or any such contractor(s) and/or subcontractor(s) from any liability for any conduct or acts of such
contractor(s) and/or subcontractor(s).

	(d)
	Tenant
shall pay to Landlord, as additional rent, the reasonable costs (not to exceed $500 per submittal) of Landlord's engineers and other consultants (but not Landlord's
on-site management personnel) for review of all plans, specifications and working drawings for the Tenant Changes, within ten (10) business days after Tenant's receipt of invoices
either from Landlord or such consultants. In addition to such costs, Tenant shall pay to Landlord, within ten (10) business days after completion of any Tenant Change, the actual, reasonable
costs incurred by Landlord for services rendered by Landlord's management personnel and engineers to coordinate and/or supervise any of the Tenant Changes but only to the extent such services are
provided in excess of or after the normal on-site hours
of such engineers and management personnel due to Tenant's desire to have work respecting the Tenant Changes performed after such normal on-site hours.

	(e)
	All
Tenant Changes shall be performed: (i) in accordance with the approved plans, specifications and working drawings; (ii) lien-free and in a good
workmanlike manner; (iii) in compliance with all laws, rules, regulations of all governmental agencies and authorities including, without limitation, the provisions of the ADA; (iv) in
such a manner so as not to impose any additional expense upon nor delay Landlord in the maintenance and operation of the Building; and (v) at such times, in such manner and subject to such
rules and regulations as Landlord may from time to time reasonably designate.

	(f)
	Throughout
the performance of the Tenant Changes, Tenant shall obtain, or cause its contractors to obtain, workers compensation insurance and general liability insurance in compliance
with the provisions of Section 20 of this Lease. 

        12.2    Removal of Tenant Changes and Tenant Improvements.    All Tenant Changes and the initial Tenant Improvements
in the Building whether installed or paid for by Landlord or Tenant, but excluding Tenant's TI Systems, shall become the property of Landlord and shall remain upon and be surrendered with the Premises
at the end of the Term of this Lease; provided, however, Landlord may, by written notice delivered to Tenant at any time prior to the date which is thirty (30) days before the 

16

 

expiration of the Lease Term (or immediately upon any sooner termination of this Lease) identify those items of the Tenant Changes which Landlord shall require Tenant to remove at the end of the Term
of this Lease. If Landlord requires Tenant to remove any Tenant Changes, Tenant shall, at its sole cost, remove the identified items on or before the expiration on sooner termination of this Lease and
repair any damage to the Premises caused by such removal (or, at Landlord's option, shall pay to Landlord all of Landlord's costs of such removal and repair). Notwithstanding the foregoing, Tenant
shall not be required to remove those alterations, improvements or additions approved by Landlord pursuant to this Article 12, unless Landlord, at the time of its approval, advised Tenant in
writing that Landlord would require removal of such work upon the expiration of the Lease Term. 

        12.3    Removal of Personal Property.    All articles of personal property owned by Tenant or installed by Tenant at
its expense in the Premises (including business and trade fixtures, furniture, Tenant's TI Systems and other moveable partitions) shall be, and remain, the property of Tenant, and shall be removed by
Tenant from the Premises, at Tenant's sole cost and expense, on or before the expiration or sooner termination of this Lease. Tenant shall promptly repair any damage caused by such removal. 

        12.4    Tenant's Failure to Remove.    If Tenant fails to remove by the expiration or sooner termination of this Lease
all of its personal property, or any Tenant Changes identified by Landlord for removal pursuant to Section 12.2 above, or if Tenant fails to comply with its obligations under
Section 12.3, Landlord may (without liability to Tenant for loss thereof, at Tenant's sole cost and in addition to Landlord's other rights and remedies under this Lease, at law or in equity:
(a) remove and store such items in accordance with applicable law; and/or (b) upon ten (10) days' prior notice to Tenant, sell all or any such items at
private or public sale for such price as Landlord may obtain as permitted under applicable law. Landlord shall apply the proceeds of any such sale to any amounts due to Landlord under this Lease from
Tenant (including Landlord's attorneys' fees and other costs incurred in the removal, storage and/or sale of such items), with any remainder to be paid to Tenant. 

13.    Liens.    Tenant shall not permit any mechanic's, materialmen's or other liens to be filed against
all or any part of the Premises, nor against Tenant's leasehold interest in the Premises, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or
undertaken by Tenant or any other act or omission of Tenant or Tenant's agents, employees, contractors, licensees or invitees. Tenant shall, at Landlord's request, use good faith efforts to provide
Landlord with enforceable, unconditional and final lien releases (and other evidence reasonably requested by Landlord to demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all reasonable times to post on the Premises and record any notices of non-responsibility which it deems necessary
for protection from such liens. If any such liens are filed, Tenant shall, at its sole cost, immediately cause such lien to be released of record or bonded to Landlord's reasonable satisfaction so
that it no longer affects title to the Premises. If Tenant fails to cause such lien to be so released or bonded within twenty (20) days after filing thereof, Landlord may, without waiving its
rights and remedies based on such breach, and without releasing Tenant from any of its obligations, cause such lien to be released by any means it shall deem proper, including payment in satisfaction
of the claim giving rise to such lien. Tenant shall pay to Landlord within five (5) days after receipt of invoice from Landlord, any sum paid by Landlord to remove such liens, together with
interest at the Interest Rate from the date of such payment by Landlord. NOTICE IS HEREBY GIVEN THAT (EXCEPT FOR LANDLORD'S OBLIGATION TO PAY THE TENANT ALLOWANCE TO TENANT IN ACCORDANCE WITH  EXHIBIT "C") LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING THE PREMISES
THROUGH OR UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN THE PREMISES. 

17

 

14.  Assignment and Subletting.  

        14.1    Restriction on Transfer.    Except as otherwise expressly provided in the Section 14, Tenant shall not,
without the prior written consent of Landlord, which consent Landlord will not unreasonably withhold, condition or delay, assign this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use or occupancy of the Premises by any party other than Tenant (any such assignment, encumbrance, sublease, license or the like shall sometimes be referred to as a
"Transfer"). In no event may Tenant encumber this Lease. Any Transfer without Landlord's consent (except for a Permitted Transfer pursuant to
Section 14.2 below) shall constitute a default by Tenant under this Lease, and in addition to all of Landlord's other remedies at law, in equity or under this Lease, such Transfer shall be
voidable at Landlord's election. In addition, this Lease shall not, nor shall any interest of Tenant
herein, be assignable by operation of law without the written consent of Landlord. For purposes of this Section 14, other than with respect to a Permitted Transfer under Section 14.2 and
transfers of stock of Tenant if Tenant is a publicly-held corporation and such stock is transferred publicly over a recognized security exchange or over-the-counter
market. If Tenant is a corporation, partnership or other entity, any transfer, assignment, encumbrance or hypothecation of twenty-five percent (25%) or more (individually or in the
aggregate) of any stock or other ownership interest in such entity, and/or any transfer, assignment, hypothecation or encumbrance of any controlling ownership or voting interest in such entity, shall
be deemed an assignment of this Lease and shall be subject to all of the restrictions and provisions contained in this Section 14. 

        14.2    Permitted Controlled Transfers.    Notwithstanding the provisions of Sections 14.1 above to the contrary,
Tenant may assign this Lease or sublet the Premises or any portion thereof (herein, a "Permitted Transfer"), without Landlord's consent and without
extending any sublease or termination option to Landlord, to any entity which controls, is controlled by or is under common control with Tenant, or to any entity resulting from a merger or
consolidation with Tenant, any wholly-owned subsidiary of Tenant or to any person or entity which acquires substantially all the assets of Tenant's business as a Tenant or to any person or entity
which acquires substantially all the assets of Tenant's business as a going concern, provided that: (a) prior to the effective date of such assignment or sublease, Tenant delivers to Landlord
the financial statements and other financial and background information of the assignee or sublease described in Section 14.3 below; (b) if an assignment, the assignee assumes, in full,
the obligations of Tenant under this Lease (or if a sublease, the sublessee of a portion of the Premises or Term assumes, in full, the obligations of Tenant with respect to such portion);
(c) the financial net worth of the assignee is sufficient to meet the obligations of the Tenant hereunder; (d) Tenant remains fully liable under this Lease; and (e) the use of the
Premises under Article 6 remains unchanged. 

        14.3    Landlord's Options.    If at any time or from time to time during the Term Tenant desires to effect a Transfer
(other than a Permitted Transfer), Tenant shall deliver to Landlord written notice ("Transfer Notice") setting forth the terms and provisions of the
proposed Transfer and the identity of the proposed assignee, sublessee or other transferee (sometimes referred to hereinafter as a "Transferee"). Tenant
shall also deliver to Landlord with the Transfer Notice, a current financial statement and financial statements for the proceeding two (2) years of the Transferee (or other reasonable evidence
of financial condition) which have been certified by a corporate officer of the Transferee or audited by a reputable independent accounting firm acceptable to Landlord, and such other information
concerning the business background and financial condition of the proposed Transferee as Landlord may reasonably request. Except with respect to a Permitted Transfer, Landlord shall have the option,
exercisable by written notice delivered to Tenant within twenty (20) days after Landlord's receipt of the Transfer Notice, such financial statements and other information, either to: 

	(a)
	approve
or disapprove such Transfer, which approval shall not be unreasonably withheld; or 

18

 

	(b)
	if
Tenant proposes to sublease more than 25% of the Premises, sublet from Tenant that portion of the Premises which Tenant has requested to sublease at the rental and on the other
terms set forth in this Lease prorated for the portion of the Premises to be sublet and for the term set forth in Tenant's Notice, or, in the case of an assignment or encumbrance, terminate this Lease
with respect to the entire Premises and recapture the Premises, which termination shall be effective thirty (30) days after Tenant's receipt of Landlord's notice. 

        If
Landlord exercises its option to sublease any such space from Tenant following Tenant's request for Landlord's approval of the proposed sublease of such space, (i) Landlord
shall be responsible for the construction of any partitions which Landlord reasonably deems necessary to separate such space from the remainder of the Premises, and (ii) Landlord and any
sub-subtenant or assignee of Landlord with respect to such subleased space shall have the right to use in common with Tenant all lavatories, corridors and lobbies which are within the
Premises and which are reasonably required for the use of such space. 

        14.4    Additional Conditions; Excess Rent.    If for a Transfer other than a Permitted Transfer Landlord does not
exercise its sublease or termination option and instead approves of the proposed Transfer pursuant to Section 14.3(a) above, Tenant may enter into the proposed Transfer with such proposed
Transferee subject to the following further conditions: 

	(a)
	the
Transfer shall be on substantially the same terms set forth in the Transfer Notice delivered to Landlord (if the terms have materially changed, Tenant must submit a revised
Transfer Notice to Landlord and Landlord shall have another seven (7) business days after receipt thereof to make the election in Sections 14.3(a) or 14.3(b) above);

	(b)
	no
Transfer shall be valid and no Transferee shall take possession of the Premises until an executed counterpart of the assignment, sublease or other instrument affecting the Transfer
has been delivered to Landlord pursuant to which the Transferee shall expressly assume all of Tenant's obligations under this Lease (or with respect to a portion of the Premises or for a portion of
the Term, all of Tenant's obligations applicable to such portion) from and after the effective date of such assignment;

	(c)
	no
Transferee shall have a further right to assign, encumber or sublet, except on the terms herein contained; and

	(d)
	fifty
percent (50%) of any rent or other economic consideration received by Tenant as a result of such Transfer which exceeds, in the aggregate, (i) the total rent which Tenant
is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to any portion of the Premises subleased), plus (ii) any reasonable brokerage commissions, attorneys'
fees, reasonable tenant improvement or renovation costs and other reasonable out-of-pocket costs actually paid by Tenant in connection with such Transfer, shall be paid to
Landlord within ten (10) days after receipt thereof as additional rental under this Lease, without affecting or reducing any other obligations of Tenant hereunder; provided, however, that this
subsection 14.4(d) shall not apply to any permitted Transfers made pursuant to Section 14.2 above. 

        14.5    Reasonable Disapproval.    Landlord and Tenant hereby acknowledge that Landlord's disapproval of any proposed
Transfer (other than a Permitted Transfer) pursuant to Section 14.3(a) shall be deemed reasonably withheld if based upon any reasonable factor, including, without limitation, any or all of the
following factors: (a) the proposed Transferee is an existing tenant of the Landlord or an affiliate of Landlord; (b) the proposed Transferee is a governmental entity; (c) the use
of the Premises by the Transferee (i) is not permitted by the use provisions in Section 6 hereof, or (ii) violates any exclusive use granted by Landlord to another tenant in the
Building; (d) the Transfer would likely result in significant increase in the use of the parking areas or Common Areas by the Transferee's employees or visitors beyond the amounts allotted to
Tenant hereunder; (e) the Transferee does not 

19

 

have the financial capability to fulfill the obligations imposed by the Transfer; or (f) the Transferee is not in Landlord's reasonable opinion of reputable or good character. 

        14.6    No Release.    No Transfer shall release Tenant of Tenant's obligations under this Lease or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be performed by Tenant hereunder. From and after the occurrence of a Default by Tenant under this Lease, Landlord may
require that any Transferee remit directly to Landlord on a monthly basis, all monies due Tenant by said Transferee, and each sublease or lease assignment shall provide that if Landlord gives said
sublessee or assignee written notice that Tenant is in Default under this Lease, said sublessee or assignee will thereafter make all payments due under the sublease or assignment directly to or as
directed by Landlord, which payments will be credited against any payments due under this Lease. Tenant hereby irrevocably and unconditionally assigns to Landlord all rents and other sums payable
under any sublease or assignment of the Premises; provided, however, that Landlord hereby grants Tenant a license to collect all such rents and other sums so long as Tenant is not in Default under
this Lease. Tenant shall, within ten (10) days after the execution and delivery of any assignment or sublease, deliver a duplicate original copy there of to Landlord. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision hereof. Consent by Landlord to one Transfer shall not be deemed consent to any subsequent Transfer. In
the event of a Default by any Transferee of Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against such Transferee or successor. Landlord may consent to the following without obtaining its or their consent thereto and any such actions shall not relieve Tenant of
liability under this Lease: (i) subsequent assignments of the Lease or sublettings of the Premises provided the prior assignee or sublessee is not released from its obligations under the
applicable assignment or sublease agreements; or (ii) amendments or modifications to the Lease with assignees of Tenant, but only to the extent such amendments or modifications do not
materially increase Tenant's liabilities, duties or obligations hereunder. 

        14.7    Administrative and Attorneys' Fees.    If Tenant effects a Transfer or requests the consent of Landlord to any
Transfer, then Tenant shall, upon demand, pay Landlord a non-refundable administrative fee of Five Hundred Dollars ($500.00), plus reasonable attorneys' and paralegal fees and costs
incurred by Landlord in connection with such Transfer or request for consent (Whether attributable to Landlord's in-house attorneys or paralegals or otherwise, not to exceed $1,000).
Acceptance of the $500.00 administrative fee and/or reimbursement of Landlord's attorneys' and paralegal fees shall in no event obligate Landlord to consent to any proposed Transfer. The foregoing fee
and reimbursements shall not apply if Landlord exercises its first right to sublease or recapture all or a portion of the Premises. 

        14.8    Material Inducement.    Tenant understands, acknowledges and agrees that (a) Landlord's option to
sublease from Tenant any space which Tenant proposes to sublease or terminate this Lease upon any proposed assignment or encumbrance of this Lease by Tenant as provided in Section 14.3(b) above
rather than approve the proposed sublease assignment or encumbrance, and (b) Landlord's right to receive fifty percent (50%) of any excess consideration paid by a Transferee in connection with
an approved Transfer as provided in Section 14.4(d) above, are a material inducement for Landlord's agreement to lease the Premises to Tenant upon the terms and conditions herein set forth. 

15.    Entry by Landlord.    Landlord and its employees and agents shall at all reasonable times have the
right to enter the Premises to inspect the same, to supply janitorial service and any other service required to be provided by Landlord to Tenant under this Lease, to exhibit the Premises to
prospective lenders or purchasers (or during the last nine (9) months of the Term, to prospective tenants upon 24-hours prior written notice), to post notices of
non-responsibility, and/or to alter, Improve or repair the Premises or any portion thereof, all without being deemed guilty of or liable for any breach of Landlord's covenant of quiet
enjoyment or any eviction of Tenant, and without abatement of rent. In 

20

 

exercising such entry rights, Landlord shall endeavor to minimize, as reasonably practicable, the interference with Tenant's business, and shall provide Tenant with reasonable advance written notice
of such entry (except in emergency situations and for scheduled services). For each of the foregoing purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Tenant's vaults and safes, and Landlord shall have the means which Landlord may deem proper to open said doors in an emergency in order to obtain entry to
the Premises. Any entry to the Premises obtained by Landlord by any of said means or otherwise shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof, or grounds for any abatement or reduction of rent and Landlord shall not have any liability to Tenant for
any damages or losses on account of any such entry by Landlord except, subject to the provisions of Section 22.1, to the extent of Landlord's negligence or willful misconduct. 

16.  Utilities and Services.  

        16.1    Standard Utilities and Services.    As long as Tenant has not committed an uncured Default under any of the
provisions of this Lease, and subject to the terms and conditions of this Lease, and the obligations of Tenant as set forth hereinbelow, Landlord shall furnish or cause to be furnished to the Premises
the following utilities and services: 

	(a)
	Landlord
shall, as part of Operating Expenses, furnish janitorial services to the Premises five (5) days per week pursuant to janitorial and cleaning specifications as may be
adopted by Landlord from time to time. No person(s) other than those persons approved by Landlord shall be permitted to enter the
Premises for such purposes. Janitor service shall include ordinary dusting and cleaning by the janitor assigned to do such work and shall not include cleaning of carpets or rugs, except normal
vacuuming, or moving of furniture, interior window cleaning, coffee or eating area cleaning and other special services. Such additional services may be rendered by Landlord pursuant to written
agreement with Tenant as to the extent of such services and the payment of the cost thereof. Janitor service will not be furnished on nights when rooms are occupied after 7:30 p.m. or to rooms
which are locked unless a key is furnished to the Landlord for use by the janitorial contractor. Window cleaning shall be done only by Landlord, at such time and frequency as is in accordance with
industry standards comparable for buildings in the area. Tenant shall pay to Landlord the cost of removal of any of Tenant's refuse and rubbish to the extent that the same exceeds the refuse and
rubbish usually attendant upon the use of the Premises as offices. Notwithstanding the foregoing, Tenant shall have the right to contract directly for its janitorial service in accordance with the
provisions of Section 11.4 above, in which event janitorial services shall be eliminated from Operating Expenses charged to Tenant.

	(b)
	Intentionally
omitted.

	(c)
	Subject
to the provisions of this subsection (c), Landlord shall provide Tenant with reasonable access to and exclusive use of (a) any Intra-Building communications network
cabling and equipment within the control of Landlord (if any), (b) intre-Building risers and conduits (if any) and (c) the Common Areas outside the Building to allow installation,
alteration, repair, maintenance and replacement of such telecommunications cabling and conduit as Tenant may require to operate its telecommunications system. Tenant's installation of such
telecommunications cabling, equipment and/or systems shall be subject to Landlord's review and approval (not to be unreasonably withheld) of the plans and specifications therefor and precise manner
and location of the installation of the same. Further, all such cabling, equipment and/or systems installed by or for Tenant shall not be offered or provided to any subtenant or other occupant of the
Building without Landlord's written consent (which will not be unreasonably withheld). 

21

 

        16.2    Tenant's Obligations.    

	(a)
	Tenant
shall control, at its sole cost and expense, the operation of the HVAC Systems for the Building at such times and in such manner as Tenant reasonably determines, provided that
Tenant shall not be obligated to pay for such utilities until the Commencement Date of the Lease Term, and provided further that, until such time that Tenant elects to take over the repair and
maintenance obligations with respect the Assignable Maintenance Obligations, Landlord shall be responsible, as part of Operating Expenses, to maintain and repair the HVAC Systems for the Building.
Tenant shall also contract directly for, furnish and control the electrical power for the Premises at such times and in such manner as Tenant reasonably determines, provided that Landlord shall
provide and pay for such utilities until the Commencement Date of the Lease Term.

	(b)
	Tenant
shall, at its sole cost and expense, contract directly for domestic water, sewer, electric current, gas, telecommunication and all other utilities as required for Tenant's use
of the Premises, provided that Tenant shall not be obligated to pay for such utilities until the Commencement Date of the Lease Term. Tenant shall have the right at any time and from
time-to-time during the Lease Term to contract for service from any company or companies providing electricity service ("Service
Provider"), subject to Landlord's prior approval, which will not be unreasonably withheld. Tenant and Landlord shall cooperate with the Service Provider at all times and, as
reasonably necessary, shall allow the Service Provider reasonable access to the Building's electric lines, feeders, risers, wiring, and any other machinery within the Premises. Landlord shall in no
way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by reason of any change, failure, interference, disruption, or defect in the supply or character of the
electric energy furnished to the Premises, or if the quantity or character of the electric energy supplied by the Service Provider is no longer available or suitable for Tenant's requirements, no such
change, failure, defect, unavailability, or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of rent (other than
as provided in Section 16.4 below), or relieve Tenant from any of its obligations under the Lease.

	(c)
	In
no event shall Tenant's use of electric current ever exceed the capacity of the feeders to the Building or the risers or wiring installation of the Building. Notwithstanding
anything to contrary herein, (i) in no event shall the electrical capacity of the Building be reduced from that in effect at the date of this Lease unless such reduction has been approved in
writing by Tenant and Landlord, and (ii) Tenant shall have the right, at its sole cost and expense, to install a back-up generator or alternative power source for the Premises
(provided that Tenant shall not install the same until it has first received Landlord's approval, not to be unreasonably withheld, of the precise plans and specifications for and location of such
generator or alternative power source).

	(d)
	Tenant
shall cooperate fully at all times with Landlord, and abide by all reasonable regulations and requirements which Landlord may prescribe for the proper functioning and
protection of the Building's services and systems. In addition, Tenant shall not connect any conduit, pipe, apparatus or other device to the Building's water, waste or other supply lines or systems
for any purpose. 

        16.3    Failure to Provide Utilities.    Subject to any abatement of Rent pursuant to Section 16.4 below,
Landlord's failure to furnish any of the utilities and services described in Section 16.1 above when such failure is caused by all or any of the following shall not result in any liability of
Landlord: (a) accident, breakage or repairs; (b) strikes, lockouts or other labor disturbances or labor disputes of any such character; (c) governmental regulation, moratorium or
other governmental action; (d) inability, despite the exercise of reasonable diligence, to obtain electricity, water or fuel; or (e) any other cause beyond Landlord's reasonable control.
In addition, in the event of the failure of any said 

22

 

utilities or services, Tenant shall not be entitled to any abatement or reduction of rent (except as expressly provided in Sections 16.4, 18.3 and 19.2 if such failure is a result of a damage or
taking described therein), no eviction of Tenant shall result, and Tenant shall not be relieved from the performance of any covenant or agreement in this Lease. In the event of any stoppage or
interruption of services or utilities, Landlord shall diligently attempt to resume such services or utilities as promptly as practicable. Tenant hereby waives the provisions of California Civil Code
Section 1932(1) or any
other applicable existing or future law, ordinance or governmental regulation permitting the termination of this Lease due to an interruption, failure or inability to provide any services. 

        16.4    Abatement of Rent.    If Tenant is prevented from using (and does not actually use) the Premises (or any
material portion thereof) for more than eight (8) consecutive hours for three (3) or more consecutive business days (the "Eligibility Period") as a result of the interruption of
electrical, HVAC, water, telecommunication, telephone, gas, sewer or other essential utility services used and required as a material part of Tenant's business operations from the Premises, and the
interruption is a result of the negligent act of Landlord, then Tenant's Rent (which for this purpose includes Base Rent and Additional Rent) shall be abated or reduced (as the case may be) after
expiration of the Eligibility Period for such time that Tenant is prevented from using the Premises (or a portion thereof) after expiration of the Eligibility Period in proportion that the rentable
area of the Premises that Tenant is prevented from using and, in fact, does not use, bears to the total rentable area of the Premises; provided, however, that if Landlord is diligently pursuing the
repair of such utilities or services and Landlord provides substitute services reasonably suitable for Tenant's purposes, such as for example, bringing in portable air-conditioning
equipment, then there shall not be any abatement of rent. However, if Tenant is prevented from conducting Tenant's business in any portion of the Premises for a period of time in excess of the
Eligibility Period, and the remaining portion of the Premises is not substantially sufficient to allow Tenant to effectively conduct Tenant's business therein for a period of time in excess of the
Eligibility Period, then Tenant's Rent for the entire Premises shall be abated for such time after expiration of the Eligibility Period during which Tenant is so prevented from effectively conducting
Tenant's business therein. 

17.  Indemnification and Exculpation.  

        17.1    Tenant's Assumption of Risk and Waiver.    Except to the extent such matter is not covered by the insurance
required to be maintained by Tenant under this Lease and such matter is attributable to the negligence or willful misconduct of Landlord, Landlord shall not be liable to Tenant, Tenant's employees,
agents or invitees for: (i) any damage to property of Tenant, or of others, located in, on or about the Premises, nor for (ii) the loss of or damage to any property of Tenant or of
others by theft or otherwise, (iii) any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or leaks from any part of
the Premises or from the pipes, appliance of plumbing works or from the roof, street or subsurface or from any other places or by dampness or by any other cause of whatsoever nature, or
(iv) any such damage caused by other persons in the Premises, occupants of adjacent property, or the public, or caused by operations in construction of any private, public or quasi-public work.
Landlord shall in no event be liable to Tenant for any consequential damages or for loss of revenue or income and Tenant waives any and all claims for any such damages. Notwithstanding anything to the
contrary contained in this Section 17.1, all property of Tenant, its agents, employees and invitees kept or stored on the Premises, whether leased or owned by any such parties, shall be so kept
or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including subrogation claims by Tenant's insurance carriers, unless such
damage shall be caused by the negligence or willful misconduct of Landlord or its breach of this Lease. Landlord or its agents shall not be liable for interference with the light or other intangible
rights. 

23

 

        17.2    Tenant's Indemnification of Landlord.    Tenant shall be liable for, and shall indemnify, defend, protect and
hold Landlord and Landlord's members, partners, officers, directors, shareholders, employees, agents, successors and assigns (collectively, "Landlord Indemnified
Parties") harmless from and against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including attorneys' fees and court
costs (collectively, "Indemnified Claims"), arising or resulting from (a) any occurrence at the Premises following the date Landlord delivers all
or any portion of the Premises to Tenant, (b) any act or omission of Tenant or any of Tenant's agents, employees, contractors, subtenants, assignees, licensees or with respect to acts or
omissions within the Premises only, Tenant's invitees (collectively, "Tenant Parties"); and/or (c) the use of the Premises and Common Areas and
conduct of Tenant's business by Tenant or any Tenant Parties, in or about the Premises unless caused by the negligence or willful misconduct of Landlord or its agents, employees or contractors or its
breach of this Lease. The foregoing indemnification shall include, but not be limited to, any injury to, or death of, any person, or any loss of, or damage to, any property on the Premises, or on
adjoining sidewalks, streets or ways, or connected with the use, condition or occupancy thereof, whether or not Landlord or its mortgagee has or should have knowledge or notice of the defect or
conditions causing or contributing to such injury, death, loss or damage. In case any action or proceeding is brought against Landlord or any Landlord Indemnified Parties by reason of any such
Indemnified Claims, Tenant, upon notice from Landlord, shall defend the same at Tenant's expense by counsel approved in writing by Landlord, which approval shall not be unreasonably withheld. 

        17.3    Landlord's Indemnification of Tenant.    Notwithstanding anything to the contrary contained in
Paragraph 17.2 or elsewhere in the Lease, Tenant shall not be required to protect, defend, save harmless or indemnify Landlord from any liability for injury, loss, accident or damage to any
person resulting from Landlord's negligent acts or omissions or willful misconduct or that of its agents, contractors, servants, employees or licensees, in connection with Landlord's activities on or
about the Project ("Landlord Responsible Claims"), and Landlord hereby indemnifies and agrees to protect, defend and hold Tenant and the Tenant Parties harmless from and against, but only to the
extent of Landlord's Responsible Claims. Such exclusion from Tenant's indemnity and such agreement by Landlord to so indemnify and hold Tenant harmless are not intended to and shall not relieve any
insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease to the extent that such policies cover (or, if such policies would have
been carried as required, would have covered) such Landlord Responsible Claims. Landlord's and Tenant's indemnification obligations hereunder may or may not be coverable by insurance, but the failure
of either Landlord or Tenant to carry insurance covering the indemnification obligation shall not limit their indemnity obligations hereunder. 

        17.4    Survival; No Release of Insurers.    The indemnification obligations under Section 17.2 and 17.3 shall
survive the expiration or earlier termination of this Lease. Landlord's and Tenant's covenants, agreements and indemnification in Sections 17.1, 17.2 and 17.3 above are not intended to and shall not
relieve any insurance carrier of its obligations under policies required to be carried by Landlord and Tenant pursuant to the provisions of this Lease. 

18.  Damage or Destruction.  

        18.1    Landlord's Rights and Obligations.    In the event any part of the Building is damaged by fire or other
casualty to an extent not exceeding twenty-five percent (25%) of the full replacement cost thereof and (i) such damage can feasibly be repaired, reconstructed or restored to
substantially its condition immediately prior to such damage within two hundred seventy (270) days after the date of such casualty and (ii) Landlord will receive insurance proceeds
sufficient (not taking into account the costs of any deductible or self-insured retention for which Tenant is obligated to reimburse Landlord pursuant to this Lease) to cover the costs of
such repairs, reconstruction and restoration (including proceeds from Tenant and/or Tenant's insurance which Tenant is required to deliver to Landlord 

24

 

pursuant to Section 18.2 below), then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration and this Lease shall continue in full force and
effect. If, however, any part of the Building is damaged to an extent exceeding twenty-five percent (25%) of the full replacement cost thereof, or such work of repair, reconstruction and
restoration will require longer than two hundred seventy (270) days after the date of the casualty to complete, or Landlord will not receive insurance proceeds (and/or proceeds from Tenant, as
applicable) sufficient to cover the costs of such repairs, reconstruction and restoration, then either party may terminate this Lease effective as of the date of such casualty. Under any of the
conditions of this Section 18.1, Landlord and/or Tenant shall give written notice to the other of its intention to terminate within the later of thirty (30) days after the occurrence of
such casualty. 

        18.2    Tenant's Costs and Insurance Proceeds.    In the event of any damage or destruction of all or any part of the
Premises, Tenant shall immediately: (a) notify Landlord thereof; and (b) unless this Lease is terminated as permitted in this Section 18, deliver to Landlord (i) all
insurance proceeds received by Tenant with respect to any Tenant Changes in the Premises should Tenant desire that Landlord restore such Tenant Changes as part of Landlord's restoration of the
Premises, and (ii) all insurance proceeds respecting Tenant's movable office furniture systems that were installed as part of the initial Tenant Improvements (the "TI Systems") (excluding
proceeds for Tenant's furniture and other personal property) should Tenant desire that Landlord replace such TI Systems as part of Landlord's restoration of the Premises. If, for any reason (including
Tenant's failure to obtain insurance for the full replacement cost of any Tenant Changes and TI Systems which Tenant is required to insure pursuant to Sections 12.1(c) and/or 20.1(a) hereof), Tenant
fails to receive insurance proceeds covering the full replacement cost of such Tenant Changes or TI Systems which are damaged, Tenant shall be deemed to have self-insured the replacement
cost of such Tenant Changes or TI Systems, as applicable, and upon any damage or destruction thereto, Tenant shall immediately pay to Landlord the full replacement cost of such items, less any
insurance proceeds actually received by Landlord from Landlord's or Tenant's insurance with respect to such items. In the event this Lease is terminated in accordance with Section 18.1 above,
Tenant shall be entitled to receive all insurance proceeds for any Tenant Changes in the Premises, for Tenant's TI Systems and for Tenant's furniture and other personal property, as well as a pro rata
share of the casualty insurance proceeds received by Landlord and directly attributable to the Tenant Improvements (as defined in the Work Letter Agreement) based upon the Depreciated Value of
Tenant's TI Expenditures (defined below). For purposes of this Section 18.2, the "Depreciated Value of Tenant's TI Expenditures" shall equal the costs of the initial Tenant Improvements
(excluding
the TI Systems, as Tenant is responsible for insuring the same under Section 20.1 below) that were paid for by Tenant (excluding costs reimbursed by Landlord pursuant to the Tenant Allowance,
as defined in the Work Letter Agreement, or otherwise), depreciated on a straight line basis over the initial sixty-five (65) months of the Term of this Lease. For example, if
Tenant expends $500,000.00 on the Tenant Improvements (excluding sums respecting the TI Systems) that is not otherwise reimbursed by Landlord, Landlord actually receives insurance proceeds in the
amount of $500,000 that are directly attributable to the Tenant Improvements and the Lease is terminated at the end of the fifty-third (53) month of the Lease Term, thereby leaving one year
left on the applicable depreciation period, the Depreciated Value of Tenant's TI Expenditures would equal approximately $92,307.60. 

        18.3    Abatement of Rent.    In the event that as a result of any such damage, repair, reconstruction and/or
restoration of the Building, Tenant is prevented from using, and does not use, the Building or any portion thereof, then the rent shall be abated or reduced, as the case may be, during the period that
Tenant continues to be so prevented from using and does not use the Building or portion thereof, in the proportion that the Rentable Square Feet of the portion of the Building that Tenant is prevented
from using, and does not use, bears to the total Rentable Square Feet of the Building. Except for abatement of rent as provided hereinabove, Tenant shall not be entitled to any compensation or 

25

 

damages for loss of, or interference with, Tenant's business or use or access of all or any part of the Premises resulting from any such damage, repair, reconstruction or restoration. 

        18.4    Inability to Complete.    Notwithstanding anything to the contrary contained in this Section 18, in the
event Landlord is obligated or elects to repair, reconstruct and/or restore the damaged portion of the Building or Premises pursuant to Section 18.1 above, but is delayed from completing such
repair, reconstruction and/or restoration beyond the date which is six (6) months after the date estimated by Landlord's contractor for completion thereof pursuant to Section 18.1, by
reason of any causes beyond the reasonable control of Landlord (including, without limitation, delays due to Force Majeure events as defined in Section 32.15, and delays caused by Tenant or any
Tenant Parties), then Landlord may elect to terminate this Lease upon thirty (30) days' prior written notice to Tenant. 

        18.5    Damage Near End of Term.    In addition to its termination rights in Sections 18.1 and 18.4 above, either
party shall have the right to terminate this Lease if any damage to the Building occurs (i) during the last twelve (12) months of the Term of this Lease or (ii) within the twelve
(12) months prior to Tenant's Termination Option, and Landlord's contractor estimates in a writing delivered to the parties that the repair, reconstruction or restoration of such damage cannot
be completed within the earlier of (a) the scheduled expiration date of the Lease Term or the Termination Date (as defined in Rider No. 5 attached to this Lease), or (b) sixty
(60) days after the date of such casualty. If Tenant exercises its right to terminate this Lease pursuant to clause (ii) above, Tenant shall reimburse Landlord for the unamortized
portion of the Additional TI Allowance (as defined in the Work Letter) concurrently with the delivery of such termination notice. If Landlord exercises its right to terminate this Lease pursuant to
clause (ii) above, Tenant shall have the right to waive Landlord's termination by delivering written notice to Landlord, within five (5) business days of receipt of Landlord's notice,
wherein Tenant unconditionally elects to waive its right to terminate this Lease pursuant to Rider No. 5. 

        18.6    Waiver of Termination Right.    This Lease sets forth the terms and conditions upon which this Lease may
terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the provisions of California Civil Code Section 1932, Subsection 2, and Section 1933,
Subsection 4 (and any successor statutes thereof permitting the parties to terminate this Lease as a result of any damage or destruction). 

19.  Eminent Domain.  

        19.1    Substantial Taking.    Subject to the provisions of Section 19.4 below in case the whole of the
Premises, or such part thereof as shall substantially interfere with Tenant's use and occupancy of the Premises, shall be taken for any public or quasi-public purpose by any lawful power or authority
by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, either party shall have the right to terminate this Lease effective as of the date possession
is required to be surrendered to said authority. 

        19.2    Partial Taking; Abatement of Rent.    In the event of a taking of a portion of the Premises which does not
substantially interfere with the conduct of Tenant's business, then, except as otherwise provided in the immediately following sentence, neither party shall have the right to terminate this Lease and
Landlord shall thereafter proceed to make a functional unit of the remaining portion of the Premises (but only to the extent Landlord receives proceeds therefor from the condemning authority), and
rent shall be abated with respect to the part of the Premises which Tenant shall be so deprived on account of such taking. 

        19.3    Condemnation Award.    Subject to the provisions of this Section 19.3 and Section 19.4 below, in
connection with any taking of the Premises or Building, Landlord shall be entitled to receive the entire amount of any award which may be made or given in such taking or condemnation, without
deduction or apportionment for any estate or interest of Tenant, it being expressly understood and 

26

 

agreed by Tenant that no portion of any such award shall be allowed or paid to Tenant for any so-called bonus or excess value of this Lease, and such bonus or excess value shall be the
sole property of Landlord. Tenant shall not assert any claim against Landlord or the taking authority for any compensation because of such taking (including any claim for bonus or excess value of this
Lease); provided, however, if any portion of the Premises is taken, Tenant shall be granted the right to recover from the condemning authority (but not from Landlord) any compensation as may be
separately awarded or recoverable by Tenant for the taking of Tenant's furniture, fixtures, equipment and other personal property within the Premises, for Tenant's relocation expenses, and for any
loss of goodwill or other damage to Tenant's business by reason of such taking. 

        19.4    Temporary Taking.    In the event of a taking of the Premises or any part thereof for temporary use,
(a) this Lease shall be and remain unaffected thereby and rent shall not abate, and (b) Tenant shall be entitled to receive for itself such portion or portions of any award made for such
use with respect to the period of the taking which is within the Term, provided that if such taking shall remain in force at the expiration or earlier termination of this Lease, Tenant shall perform
its obligations under Section 9 with respect to surrender of the Premises and shall pay to Landlord the portion of any award which is attributable to any period of time beyond the Term
expiration date. For purpose of this Section 19.4, a temporary taking shall be defined as a taking for a period of two hundred seventy (270) days or less. 

        19.5    Waiver of Termination Right.    This Lease sets forth the terms and conditions upon which this Lease may
terminate in the event of a taking. Accordingly, the parties waive the provisions of the California Code of Civil Procedure Section 1265.130 and any successor or similar statutes permitting the
parties to terminate this Lease as a result of a taking. 

20.  Tenant's Insurance.  

        20.1    Types of Insurance.    On or before the earlier of the Commencement Date or the date Tenant commences or
causes to be commenced any work of any type in or on the Premises pursuant to this Lease, and continuing during the entire Term, Tenant shall obtain and keep in full force and effect, the following
insurance: 

	(a)
	Special
Form (formerly known as All Risk) insurance, including fire and extended coverage, sprinkler leakage, vandalism, malicious mischief upon property of every description and kind
owned by Tenant and located in the Premises or Building, or for which Tenant is legally liable or installed by or on behalf of Tenant including, without limitation, the TI Systems, furniture,
equipment and any other personal property, and any Tenant Changes (but excluding the Initial Tenant Improvements other than the TI Systems), in an amount not less than the full replacement cost
thereof.

	(b)
	Commercial
general liability insurance coverage on an occurrence basis, including personal injury, bodily injury (including wrongful death), broad form property damage, operations
hazard, owner's protective coverage, contractual liability (including Tenant's indemnification obligations under this Lease, including Section 17 hereof), products and completed operations
liability, and owned/non-owned auto liability, with an initial combined single limit of liability of not less than Two Million Dollars ($2,000,000.00). The limits of liability of such
commercial general liability insurance shall be increased every five (5) years during the Term of this Lease to an amount reasonably required by Landlord (which reasonableness standard shall be
based upon similarly situated landlords that own commercial real estate projects in South Orange County, California that is comparable to the Premises).

	(c)
	Worker's
compensation and employer's liability insurance, in statutory amounts and limits, covering all persons employed in connection with any work done on or about the Premises for 

27

 

which
claims for death or bodily injury could be asserted against Landlord, Tenant or the Premises. 

	(d)
	Loss
of income, extra expense and business interruption insurance in such amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of access to the Premises, Tenant's parking areas or to the Building as a result of such perils.

	(e)
	Any
other form or forms of insurance as Tenant or Landlord or the mortgagees of Landlord may reasonably require from time to time, in form, amounts and for insurance risks against
which a prudent tenant would protect itself, but only to the extent such risks and amounts are available in the insurance market at commercially reasonable costs and are typically carried by similar
tenants of similar properties in the vicinity of the Premises. 

        20.2    Requirements.    Each policy required to be obtained by Tenant hereunder shall: (a) be issued by
insurers which are authorized to do business in the state in which the Building is located and rated not less than financial class X, and not less than policyholder rating A in the most recent
version of Best's Key Rating Guide (provided that, in any event, the same insurance company shall provide the coverages described in Sections 20.1(a) and 20.1(d) above); (b) name Tenant as
named insured thereunder and shall name Landlord and, at Landlord's request, Landlord's mortgagees and property manager of which Tenant has been informed in writing, as additional insureds thereunder,
all as their respective interests may appear (provided that Tenant shall not be obligated to name Landlord or any other party as an additional insured on Tenant's worker's compensation and employer's
liability insurance policies); (c) shall not have a deductible amount exceeding Ten Thousand Dollars ($10,000.00) which deductible amount will be deemed self-insured with full
waiver of subrogation; (d) specifically provide that the insurance afforded by such policy for the benefit of Landlord and any other additional insureds shall be primary, and any insurance
carried by Landlord or any other additional insureds shall be excess and non-contributing; (e) contain an endorsement that the insurer waives its right to subrogation as described
in Section 22 below; (f) require the insurer to notify Landlord (and any other additional insureds) in writing not less than thirty (30) days prior to any material change,
reduction in coverage, cancellation or other termination thereof; (g) contain a cross liability or severability of interest endorsement; and (h) be in amounts sufficient at all times to
satisfy any coinsurance requirements thereof. Each such policy shall also provide that any loss otherwise payable thereunder shall be payable notwithstanding (i) any act or omission of Landlord
or Tenant which might, absent such provision, result in a forfeiture of all or a part of such insurance payment, (ii) the occupation or use of the Premises for purposes more hazardous than
permitted by the provisions of such policy, (iii) any foreclosure or other action or proceeding taken by any mortgagee pursuant to any provision of the mortgage upon the happening of a Default
thereunder, or (iv) any change in title or ownership of the Premises. Tenant agrees to deliver to Landlord, as soon as practicable after the placing of the required insurance, but in no event
later than the date Tenant is required to obtain such insurance as set forth in Section 20.1 above, certified copies of each such insurance policy (or certificates from the insurance company
evidencing the existence of such insurance and Tenant's compliance with the foregoing provisions of this Section 20). Tenant shall cause replacement policies or certificates to be delivered to
Landlord not less than thirty (30) days prior to the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s) specified herein, Tenant shall be deemed to be in material default under this Lease without the benefit of any additional
notice or cure period provided in Section 23.1 below, and Landlord shall have the right, but not the obligation, to procure such policies and certificates at Tenant's expense. 

        20.3    Effect on Insurance.    Tenant shall not do or permit to be done anything which will violate or invalidate any
insurance policy required to be maintained by Landlord or Tenant hereunder. If Tenant's occupancy or conduct of its business in or on the Premises results in any increase in premiums 

28

 

for any insurance carried by Landlord with respect to the Premises, Tenant shall pay such increase as additional rent within ten (10) days after being billed therefor by Landlord. If any
insurance coverage carried by Landlord pursuant to Section 21 or otherwise with respect to the Premises shall be canceled or materially reduced (or cancellation or reduction thereof shall be
threatened) by reason of the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant to be upon the Premises, and if Tenant fails to remedy such condition within five
(5) business days after written notice thereof, Tenant shall be deemed to be in default under this Lease, without the benefit of any additional notice or cure period specified in
Section 23.1 below, and Landlord shall have all remedies provided in this Lease, at law or in equity, including, without limitation, the right (but not the obligation) to enter upon the
Premises and attempt to remedy such condition at Tenant's cost. 

21.    Landlord's Insurance.    During the Term, Landlord shall insure the Premises (including the Tenant
Improvements initially installed in the Premises pursuant to Exhibit "C" but excluding, however, Tenant's furniture, equipment and other personal
property and any Tenant Changes) against damage by fire and standard extended coverage perils and with vandalism and malicious mischief endorsements, rental loss coverage, at Landlord's option,
earthquake damage coverage. Landlord shall also carry commercial general liability insurance, in such reasonable amounts and with such reasonable deductibles as would be carried by a prudent owner of
a similar building in the state in which the Building is located provided such insurance is typically carried by comparable institutional owners of real property in the vicinity of the Premises. At
Landlord's option, all such insurance may be carried under any blanket or umbrella policies which Landlord has in force for other buildings and projects. Landlord may, but shall not be obligated to,
carry any other form or forms of insurance as Landlord or the mortgagees or ground lessors of Landlord may reasonably determine is advisable provided such insurance is typically carried by comparable
institutional owners of real property in the vicinity of the Premises. The cost of insurance obtained by Landlord pursuant to this Section 21, including the deductible and/or
self-insured retention amounts (but subject to the limitation on the deductibles and/or self-insured retention amounts that may be passed through to Tenant as provided in
Section 4.6 above), shall be included in Insurance Costs, including any increase in the premium for the property insurance attributable to the replacement cost of the Tenant Improvements. 

22.  Waiver of Claims; Waiver of Subrogation.  

        22.1    Mutual Waiver of Parties.    Landlord and Tenant hereby waive their rights against each other with respect to
any claims or damages or losses which are caused by or result from (a) any occurrence insured against under any insurance policy (other than commercial general liability insurance) carried by
Landlord or Tenant (as the case may be) pursuant to the provisions of this Lease and enforceable at the time of such damage or loss, or (b) any occurrence which would have been covered under
any insurance (other than commercial general liability insurance) required to be obtained and maintained by Landlord or Tenant (as the case may be) under Sections 20 and 21 of this Lease (as
applicable) had such insurance been obtained and maintained as required therein. The foregoing waivers shall be in addition to, and not a limitation of, any other waivers or releases contained in this
Lease. 

        22.2    Waiver of Insurers.    Each party shall cause each insurance policy (other than commercial general liability
insurance) required to be obtained by it pursuant to Sections 20 and 21 to provide that the insurer waives all rights of recovery by way of subrogation against either Landlord or Tenant, as the case
may be, in connection with any claims, losses and damages covered by such policy. If either party fails to maintain any such insurance required hereunder, such insurance shall be deemed to be
self-insured with a deemed full waiver of subrogation as set forth in the immediately preceding sentence. 

29

 

23.  Tenant's Default and Landlord's Remedies.  

        23.1    Tenant's Default.    The occurrence of any one or more of the following events shall constitute a "Default"
under this Lease by Tenant: 

	(a)
	the
abandonment of the Premises by Tenant. "Abandonment" is herein defined to include, but is not limited to, any absence by Tenant
from the Premises for sixty (60) days or longer while in Default of any other provision of this Lease;

	(b)
	the
failure by Tenant to make any payment of rent or additional rent or any other payment required to be made by Tenant hereunder, seven (7) days after written notice thereof
from Landlord that such payment was not received when due;

	(c)
	the
failure by Tenant to observe or perform any of the covenants or provisions of this Lease to be observed or performed by Tenant in any material respect, other than as specified in
Sections 23.1(a) or (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Landlord to Tenant; provided, however, that, if the
nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said thirty (30) day period and thereafter diligently and continuously prosecute such cure to completion.

	(d)
	(i) the
making by Tenant or any guarantor hereof of any general assignment for the benefit of creditors, (ii) the filing by or against Tenant or any guarantor hereof of
a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against the Tenant or the
guarantor, the same is dismissed within sixty (60) days), (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within sixty (60) days, or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease where such seizure is not discharged within sixty (60) days.

	(e)
	any
material representation or warranty made by Tenant in this Lease proves to be incorrect in any material respect; and

	(f)
	Tenant
shall be liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution. 

        Any
notice sent by Landlord to Tenant pursuant to this Section 23.1 shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure,
Section 1161. 

        23.2    Landlord's Remedies; Termination.    In the event of any Default by Tenant, in addition to any other remedies
available to Landlord under this Lease, at law or in equity, Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder. In the event that Landlord shall elect
to so terminate this Lease, then Landlord may recover from Tenant: 

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

	(b)
	the
worth at the time of the award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus

	(c)
	the
worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves
could be reasonably avoided; plus 

30

 

	(d)
	any
other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which, in the ordinary
course of things, would be likely to result therefrom including, but not limited to: attorneys' fees; brokers' commissions; the costs of refurbishment, alterations, renovation and repair of the
Premises; and removal (including the repair of any damage caused by such removal) and storage (or disposal) of Tenant's personal property, equipment, fixtures, Tenant Changes, and any other items
which Tenant is required under this Lease to remove but does not remove. 

        As
used in Sections 23.2(a) and 23.2(b) above, the "worth at the time of award" is computed by allowing interest at the interest Rate set
forth in Section 1.14 of the Summary. As used in Section 23.2(c) above, the "worth at the time of award" is computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%). 

        23.3    Landlord's Remedies; Re-Entry Rights.    In the event of any such Default by Tenant, in addition
to any other remedies available to Landlord under this Lease, at law or in equity, Landlord shall also have the right, with or without terminating this Lease, to re-enter the Premises and
remove all persons and property from the Premises; such property may be removed, stored and/or disposed of pursuant to Section 12.4 of this Lease or any other procedures permitted by applicable
law. No re-entry or taking possession of the Premises by Landlord pursuant to this Section 23.3, and no acceptance of surrender of the Premises or other action on Landlord's part,
shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction. 

        23.4    Landlord's Remedies; Continuation of Lease.    In the event of any such Default by Tenant, in addition to any
other remedies available to Landlord under this Lease, at law or in equity, Landlord shall have the right to continue this Lease in full force and effect, whether or not Tenant shall have abandoned
the Premises. The foregoing remedy shall also be available to Landlord pursuant to California Civil Code Section 1951.4 and any successor statute thereof in the event Tenant has abandoned the
Premises. In the event Landlord elects to continue this Lease in full force and effect pursuant to this Section 23.4, then Landlord shall be entitled to enforce all of its rights and remedies
under this Lease, including the right to recover rent as it becomes due. Landlord's election not to terminate this Lease pursuant to this Section 23.4 or pursuant to any other provision of this
Lease, at law or in equity, shall not preclude Landlord from subsequently electing to terminate this Lease or pursuing any of its other remedies. 

        23.5    Landlord's Right to Perform.    Except as specifically provided otherwise in this Lease, all covenants and
agreements by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any abatement or offset of rent. If Tenant Defaults in performing an obligation
hereunder, Landlord may, without waiving or releasing Tenant from any of Tenant's obligations, make
such payment or perform such act on behalf of Tenant. All sums so paid by Landlord and all necessary incidental costs incurred by Landlord in performing such other acts shall be payable by Tenant to
Landlord within ten (10) days after written demand therefor as additional rent. 

        23.6    Interest.    If any monthly installment of Rent or Operating Expenses, or any other amount payable by Tenant
hereunder is not received by Landlord within five (5) days of the date when due, it shall bear interest at the Interest Rate set forth in Section 1.14 of the Summary from the date due
until paid. All interest, and any late charges imposed pursuant to Section 23.7 below, shall be considered additional rent due from Tenant to Landlord under the terms of this Lease. 

        23.7    Late Charges.    Tenant acknowledges that, in addition to interest costs, the late payments by Tenant to
Landlord of any Monthly Basic Rent or other sums due under this Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such other costs include, without limitation, processing, administrative and 

31

 

accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage, deed of trust or related loan documents encumbering the Premises (or any portion thereof or interest
therein). Accordingly, if any monthly installment of Monthly Basic Rent or Operating Expenses or any other amount payable by Tenant hereunder is not received by Landlord within five (5) days of
the due date thereof, Tenant shall pay to Landlord an additional sum of five percent (5%) of the overdue amount as a late charge, but in no event more than the maximum late charge allowed by law. The
parties agree that such late charge, but in no event more than the maximum late charge allowed by law. The parties agree that such late charge represents a fair and reasonable estimate of the costs
that Landlord will incur by reason of any late payment as hereinabove referred to by Tenant, and the payment of late charges and interest are distinct and separate in that the payment of interest is
to compensate Landlord for the use of Landlord's money by Tenant, while the payment of late charges is to compensate Landlord for Landlord's processing, administrative and other costs incurred by
Landlord as a result of Tenant's delinquent payments. Acceptance of a late charge or interest shall not constitute a waiver of Tenant's Default with respect to the overdue amount or prevent Landlord
from exercising any of the other rights and remedies available to Landlord under this Lease or at law or in equity now or hereafter in effect. Notwithstanding the foregoing, no late charge shall apply
to the first delinquency in the payment of rent or additional rent in any calendar year provided that Tenant pays the delinquent sum within five (5) business days of receipt of written notice
from Landlord of such delinquent payment. 

        23.8    Rights and Remedies Cumulative.    All rights, options and remedies of Landlord contained in this
Section 23 and elsewhere in this Lease (including Section 28 below) shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall
have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law or in equity, whether or not stated in this Lease. Nothing in this Section 23
shall be deemed to limit or otherwise affect Tenant's indemnification of Landlord pursuant to any provision of this Lease. 

        23.9    Tenant's Waiver of Redemption.    Tenant hereby waives and surrenders for itself and all those claiming under
it, including creditors of all kinds, (i) any right and privilege which it or any of them may
have under any present or future law to redeem any of the Premises or to have a continuance of this Lease after termination of this Lease or of Tenant's right of occupancy or possession pursuant to
any court order or any provision hereof, and (ii) the benefits of any present or future law which exempts property from liability for debt or for distress for rent. 

24.  Landlord's Default.  

        24.1    The occurrence of any of the following shall constitute a default (a "Landlord Default") of this Lease by Landlord: 

	(a)
	Any
failure by Landlord to make any payment required to be made by Landlord hereunder when due, where such failure continues for thirty (30) days after delivery of written
notice of such failure by Tenant to Landlord; or

	(b)
	Any
failure by Landlord to perform or comply with any other material provision of this Lease, to be performed or complied with by Landlord where such failure continues for thirty
(30) days after delivery of written notice of such failure by Tenant to Landlord; provided, however, that if the nature of such default is such that the same cannot reasonably be cured within
such thirty (30) day period, there shall not be a Landlord Default if Landlord shall, within thirty days of such notice commence such cure, and thereafter diligently prosecute such cure to
completion. 

        24.2    Upon
the occurrence of a Landlord Default, Tenant may, except as otherwise specifically provided in or limited by this Lease to the contrary, exercise any of its rights
provided at law or in equity; 

32

 

        24.3    In
addition to the rights and remedies provided under this Section 24, if Tenant provides written notice to Landlord of a material event or circumstance which
respects an obligation of Landlord under the Lease with respect to repair and/or maintenance of the Premises or systems and equipment serving the Premises (including, but not limited to, any
obligation of Landlord under this Lease to cure a material violation of law), and Landlord fails to undertake such obligation as required by the terms of this Lease within thirty (30) days
after receipt of such written notice (provided, however, that if the nature of repairs and/or maintenance is such that the same cannot reasonably be completed within such thirty (30) day
period, then Landlord shall have such reasonable additional time to so repair and/or maintain, provided Landlord commences such repairs and/or maintenance within said thirty (30) day period,
and thereafter diligently prosecutes the same to completion), then Tenant may, but shall not be obligated to, perform the required repairs and/or maintenance upon the following terms and conditions. 

	(a)
	If
such repairs or maintenance will affect the Building systems or equipment, or the structural integrity of the Building, then Tenant shall use only those contractors used by
Landlord in the Building for such systems, equipment or structural work (unless such contractors are unwilling or unable to perform such work, in which event Tenant may utilize the service of any
other qualified, licensed contractor which normally and regularly performs similar work in comparable buildings in the area).

	(b)
	Nothing
contained in this paragraph shall be interpreted to mean that Tenant shall be excused from paying rent or any other amount due under this Lease in the event of any alleged
default by Landlord, except as provided below.

	(c)
	Before
performing any repair on Landlord's behalf, Tenant shall simultaneously give Landlord and Landlord's Mortgagee (provided Tenant has been provided written notice of the address
of such Mortgagee) an additional written notice specifying Landlord's default and containing the following phrase on page 1 of the notice in all capital letters and boldface type (or it shall not be
deemed validly given to Landlord) "YOUR FAILURE TO COMMENCE THE CURE OF LANDLORD'S REPAIR OBLIGATION SET FORTH IN THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL ENTITLE
THE UNDERSIGNED TO CURE SUCH DEFAULT AT LANDLORD'S EXPENSE WITHOUT FURTHER NOTICE". Landlord shall thereupon have five (5) business days in which to commence to cure the
applicable repair obligation. If Landlord fails to commence to cure the applicable repair obligation, Tenant may thereafter do so subject to the provisions of subparagraphs (a) and
(b) above, in which event Landlord shall reimburse Tenant for all reasonable costs incurred by Tenant in performing such repair on Landlord's behalf, together with interest on such amounts
incurred by Tenant at the Interest Rate from the date incurred by Tenant until repaid by Landlord. 

25.    Subordination.    At the election of Landlord or any mortgagee of a mortgage or a beneficiary of a
deed of trust now or hereafter encumbering all or any portion of the Building or Site, or any lessor of any ground or master lease now or hereafter affecting all or any portion of the Building or Site
(such mortgages, beneficiaries and/or lessor collectively being referred to as "Mortgagee(s)"), this Lease shall be subject and subordinate at all times
to such ground or master leases (and such extensions and modifications thereof), and to the lien of such mortgages and deeds of trust (as well as to any advances made thereunder and to all renewals,
replacements, modifications and extensions thereof), provided that Tenant is provided with a subordination, non-disturbance and attornment agreement in favor of Tenant
("SNDA"), substantially in the form of the agreement attached hereto as Exhibit "I". Notwithstanding the
foregoing, Landlord and any Mortgagee shall have the right to subordinate or cause to be subordinated any or all ground or master leases or the lien of any or all mortgages or deeds of trust to this
Lease. In the event that any ground or master lease terminates for any reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the
election of Landlord's successor in interest, Tenant shall attorn to and become the tenant 

33

 

of such successor. Tenant hereby waives its rights under any current or future law which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event of any such foreclosure proceeding or sale. Tenant covenants and agrees to execute and deliver to Landlord within ten (10) days after receipt of
written demand by Landlord, in form and substance substantially similar to Exhibit "H" attached hereto, additional documents evidencing the priority or
subordination of this Lease with respect to any such ground or master lease or the lien of any such mortgage or deed of trust or Tenant's agreement to
attorn. Should Tenant fail to sign and return any such documents within (5) days after any additional notice to Tenant requesting the delivery of the applicable documents, Tenant shall be in
default hereunder without the benefit of any additional notice or cure periods specified in Section 23.1 above. 

26.  Estoppel Certificate.  

        26.1    Delivery of Estoppel Certificate.    Within ten (10) business days following either party's (the
"Requesting Party") written request, the other party (the "Certifying Party") shall execute and deliver to the Requesting Party an estoppel certificate, in a form substantially similar to the form of  Exhibit
"F-1" attached hereto if Tenant is the Certifying Party, or Exhibit
"F-2" attached hereto if Landlord is the Certifying Party, certifying: (a) the Commencement Date of this Lease; (b) that this Lease is unmodified and
in full force and effect (or, if modified, that this Lease is in full force and effect as modified, and stating the date and nature of such modifications); (c) the date to which the rent and
other sums payable under this Lease have been paid; (d) that there are not, to the best of the Certifying Party's knowledge, any Defaults under this Lease by either Landlord or Tenant, except
as specified in such certificate; and (e) such other matters as are reasonably requested by the Requesting Party. Any such estoppel certificate delivered pursuant to this Section 26.1
may be relied upon by any Mortgagee, purchaser, prospective purchaser or assignee of any portion of the Site, or any Interest under this Lease. 

        26.2    Failure to Deliver.    A Certifying Party's failure to deliver such estoppel certificate within such time
shall constitute a Default hereunder without the applicability of the notice and cure periods specified in this Lease. 

27.    Satellite Dish/Antenna.    Subject to Landlord's prior reasonable approval of the size, plans and
specifications, and to all applicable governmental laws and regulations, and in accordance with the terms of Landlord's Antenna License Agreement in the form attached hereto as  Exhibit "I", which is
hereby incorporated into this Lease by this reference, Tenant shall have the right to install, maintain and operate, at Tenant's
sole cost and expense, a single satellite dish or antenna on the roof of the Building. Use of the roof top space shall be for Tenant's internal purposes only, and shall not interfere with any Building
systems or the roof top equipment of Landlord. 

28.    Cure Rights of Landlord's Mortgagees.    In the event of any default on the part of Landlord, Tenant
will give written notice by registered or certified mail to any Mortgagee covering the Premises whose address shall have been furnished to Tenant, and shall offer such Mortgagee a reasonable
opportunity to cure the default (not to exceed thirty (30) days after the date on which any cure period provided to Landlord under this Lease has expired or will otherwise expire); provided,
however, if Landlord, Tenant and any such Mortgagee have entered into an SNDA, the cure rights of such Mortgagee shall be governed by the terms of the SNDA. 

29.    Quiet Enjoyment.    Landlord covenants and agrees with Tenant that, upon Tenant performing all of the
covenants and provisions on Tenant's part to be observed and performed under this Lease (including payment of rent hereunder), Tenant shall have the right to use and occupy the Premises in accordance
with and subject to the terms and conditions of this Lease as against all persons claiming by, through or under Landlord. 

34

   30.    Transfer of Landlord's Interest.    The term "Landlord" as used in this Lease, so far as
covenants or
obligations on the part of the Landlord are concerned, shall be limited to mean and include only the owner or owners, at the time in question, of the fee title to, or a lessee's interest in a ground
lease of, the Site. In the event of any transfer or conveyance of any such title or interest (other than a transfer for security purposes only), the transferor shall be automatically relieved of all
covenants and obligations on the part of Landlord contained in this Lease accruing after the date of such transfer or conveyance provided that the new owner has expressly assumed the obligations of
the Landlord hereunder in writing accruing from and after the date of such transfer. Landlord and Landlord's transferees and assignees shall have the absolute right to transfer all or any portion of
their respective title and interest in the Site, the Building, the Premises and/or this Lease without the consent of Tenant, and such transfer or subsequent transfer shall not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease. 

31.    Limitation on Landlord's Liability.    Notwithstanding anything contained in this Lease to the
contrary, the obligations of Landlord under this Lease (including any actual or alleged breach or default by Landlord) do not constitute personal obligations of the individual partners, directors,
officers, members or shareholders of Landlord or Landlord's members or partners, and Tenant shall not seek recourse against the individual partners, directors, officers, members or shareholders of
Landlord or against Landlord's members or partners or any other persons or entities having any interest in Landlord, or any of their personal assets for satisfaction of any liability with respect to
this Lease. In addition, in consideration of the benefits accruing hereunder to Tenant and notwithstanding anything contained in this Lease to the contrary, Tenant hereby covenants and agrees for
itself and all of its successors and assigns that the liability of Landlord for its obligations under this Lease (including any liability as a result of any actual or alleged failure, breach or
default hereunder by Landlord), shall be limited solely to, and Tenant's and its successors' and assigns' sole and exclusive remedy shall be against, Landlord's interest in the Premises, and all
proceeds derived from the Premises after the date a final, non-appealable judgment is entered in favor of Tenant by a court of competent jurisdiction. 

32.    Miscellaneous.    

        32.1    Governing Law.    This Lease shall be governed by, and construed pursuant to, the laws of the state in which
the Building is located. 

        32.2    Successors and Assigns.    Subject to the provisions of Section 30 above, and except as otherwise
provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, personal
representatives and permitted successors and assigns; provided, however, no rights shall inure to the benefit of any Transferee of Tenant unless the Transfer to such Transferee is made in compliance
with the provisions of Section 14. 

        32.3    No Merger.    The voluntary or other surrender of this Lease by Tenant or a mutual termination thereof shall
not work as a merger and shall, at the option of Landlord, either (a) terminate all or any existing subleases, or (b) operate as an assignment to Landlord of Tenant's Interest under any
or all such subleases. 

        32.4    Professional Fees.    If either Landlord or Tenant should bring suit against the other with respect to this
Lease, including for unlawful detainer or any other relief against the other hereunder, then all costs and expenses incurred by the prevailing party therein (including, without limitation, its actual
appraisers', accountants', attorneys' and other professional fees and court costs), shall be paid by the other party. 

        32.5    Waiver.    The waiver by either party of any breach by the other party of any term, covenant or condition
herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant and condition herein contained, nor shall any custom or practice 

35

 

which may become established between the parties in the administration of the terms hereof be deemed a waiver of, or in any way affect, the right of any part to insist upon the performance by the
other in strict accordance with said terms. No waiver of any default of either party hereunder shall be implied from any acceptance by Landlord or delivery by Tenant (as the case may be) of any rent
or other payments due hereunder or any omission by the non-defaulting party to take any action on account of such default if such default persists or is repeated, and no express waiver
shall affect defaults other than as specified in said waiver. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of
such rent. 

        32.6    Terms and Headings.    The words "Landlord" and "Tenant" as used herein shall include the plural as well as
the singular. Words used in any gender include other genders. The Section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any
part hereof. Any deletion of language from this Lease prior to its execution by Landlord and Tenant shall not be construed to raise any presumption, canon of construction or implication, including,
without limitation, any implication that the parties intended thereby to state the converse of the deleted language. 

        32.7    Time.    Time is of the essence with respect to performance of every provision of this Lease in which time or
performance is a factor. All references in this Lease to "days" shall mean calendar days unless specifically modified herein to be "business" days. 

        32.8    Prior Agreements; Amendments.    This Lease (and the Exhibits and Riders attached hereto) contain all of the
covenants, provisions, agreements, conditions and understandings between Landlord and Tenant concerning the Premises and any other matter covered or mentioned in this Lease, and no prior agreement or
understanding, oral or written, express or implied, pertaining to the Premises or any such other matter shall be effective for any purpose. No provision of this Lease may be amended or added to except
by an agreement in writing signed by the parties hereto or their respective successors in interest. The parties acknowledge that all prior agreements, representations and negotiations are deemed
superseded by the execution of this Lease to the extent they are not expressly incorporated herein. 

        32.9    Separability.    The invalidity or unenforceability of any provision of this Lease (except for Tenant's
obligation to pay Monthly Basic Rent and Operating Expenses, Real Property Taxes and Assessments, Insurance Costs, and Common Utilities Costs) shall in no way affect, impair or invalidate any other
provision hereof, and such other provisions shall remain valid and in full force and effect to the fullest extent permitted by law. 

        32.10    Recording.    Neither Landlord nor Tenant shall record this Lease. In addition, neither party shall record a
short form memorandum of this Lease without the prior written consent (and signature on the memorandum) of the other, and provided that prior to recordation Tenant executes and delivers to Landlord,
in recordable form, a properly acknowledged quitclaim deed or other instrument extinguishing all of the Tenant's rights and interest in and to the site, Building and Premises, and designating Landlord
as the transferee, which deed or other instrument shall be held by Landlord and may be recorded by Landlord once the Lease terminates or expires (but not prior thereto). If such short form memorandum
is recorded in accordance with the foregoing, the party requesting the recording shall pay for all costs of or related to such recording, including, but not limited to, recording charges and
documentary transfer taxes. 

        32.11    Exhibits and Riders.    All Exhibits and Riders attached to this Lease are hereby incorporated in this Lease
as though set forth at length herein. 

36

 

        32.12    Accord and Satisfaction.    No payment by Tenant or receipt by Landlord of a lesser amount than the rent
payment herein stipulated shall be deemed to be other than on account of the rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease.
Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by any statute or at common law. 

        32.13    Financial Statements.    Upon ten (10) days prior written request from Landlord (which Landlord may
make at any time during the Term but only in connection with a proposed sale or financing of the Building by Landlord), Tenant shall deliver to Landlord (a) a current financial statement of
Tenant, and (b) financial statements of Tenant for the two (2) years prior to the current financial statement year; provided, however, Tenant shall not be obligated to deliver any such
information if Tenant is a publicly held company that has its stock traded on a stock exchange regulated by the U.S. Securities and Exchange Commission. Such statements shall be prepared in accordance
with generally acceptable accounting principles and certified as true in all material respects by Tenant (if Tenant is an individual) or by an authorized officer, member/manager or general partner of
Tenant (if Tenant is a corporation, limited liability company or partnership, respectively). In any case where Tenant delivers its financial information to Tenant, Landlord agrees to keep such
information (that is not otherwise publicly available) in strict confidence and agrees further to not disclose such information except as may be reasonably necessary in connection with any such
proposed sale or financing of the Building. 

        32.14    No Partnership.    Landlord does not, in any way or for any purpose, become a partner of Tenant in the
conduct of its business, or otherwise, or joint venturer or a member of a joint enterprise with Tenant by reason of this Lease. The provisions of this Lease relating to Percentage Rent payable
hereunder, if any, are included solely for the purpose of providing a method whereby rent is to be measured and ascertained. 

        32.15    Force Majeure.    In the event that either party hereto shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lock-outs, labor troubles, inability to procure materials, failure of power, governmental moratorium or other governmental
action of inaction (including failure, refusal or delay in issuing permits, approvals and/or authorizations), injunction or court order, riots, insurrection, war, fire, earthquake, flood or other
natural disaster or other reason of a like nature not the fault of the party delaying in performing work or doing acts required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "Force Majeure Delays"), then performance of such act shall be excused for the period of the delay and the period for
the performance of any such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section 32.15 shall not apply to nor operate to excuse Tenant from
payment of Monthly Basic Rent, Operating Expenses, additional rent or any other payments strictly in accordance with the terms of this Lease. 

        32.16    Counterparts.    This Lease may be executed in one or more counterparts, each of which shall constitute an
original and all of which shall be one and the same agreement. 

        32.17    Nondisclosure of Lease Terms.    Tenant acknowledges and agrees that the terms of this Lease are confidential
and constitute proprietary information of Landlord. Disclosure of the terms could adversely affect the ability of Landlord to negotiate other leases and impair Landlord's relationship with other
tenants. Accordingly, Tenant agrees that it, and its partners, officers, directors, employees, agents and attorneys, shall not intentionally and voluntarily disclose the terms and conditions of this
Lease to any newspaper or other publication or any other tenant of Landlord or apparent prospective tenant of Landlord, or real estate agent, either directly or indirectly, without the 

37

 

prior written consent of Landlord, provided, however, that Tenant may disclose the terms to prospective subtenants or assignees under this Lease. 

        32.18    Non-Discrimination.    Tenant acknowledges and agrees that there shall be no discrimination
against, or segregation of, any person, group of persons, or entity on the basis of race, color, creed, religion, age, sex, marital status, national origin, or ancestry in the leasing, subleasing,
transferring, assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion thereof. 

33.    Lease Execution.    

        33.1    Tenant's Authority.    If Tenant executes this Lease as a partnership, corporation or limited liability
company, then Tenant and the persons and/or entities executing this Lease on behalf of Tenant represent and warrant that: (a) Tenant is a duly organized and existing partnership, corporation or
limited liability company, as the case may be, and is qualified to do business in the state in which the Building is located; (b) such persons and/or entities executing this Lease are duly
authorized to execute and deliver this Lease on Tenant's behalf in accordance with Tenant's partnership agreement (if Tenant is a partnership), or a duly adopted resolution of Tenant's board of
directors and Tenant's by-laws (if Tenant is a corporation) or with Tenant's operating agreement (if Tenant is a limited liability company): and (c) this Lease is binding upon
Tenant in accordance with its terms. Concurrently with Tenant's execution and delivery of this Lease to Landlord and/or at any time during the Term within ten (10) days of Landlord's request,
Tenant shall provide to Landlord a copy of any documents reasonably requested by Landlord evidencing such qualification, organization, existence and authorization. 

        33.2    No Option.    The submission of this Lease for examination or execution by Tenant does not constitute a
reservation of or option for the Premises and this Lease shall not become effective as a Lease until it has been executed by Landlord and delivered to Tenant. 

34.    Waiver of Jury Trial.    EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR REMEDY
HEREUNDER.

        [signatures contained on following page]

38

 

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

	TENANT:	 	LANDLORD:	 
	

CMD TECHNOLOGY.

a California corporation	
 	

LBA-VF III, LLC,

a Delaware limited liability company
	

*By:	

/s/ Simon Huang
 Simon Huang

President and Chief Executive Officer	
 	

By:	

LBA-VF IIIA, LLC,

a Delaware limited liability company,

Its: Member-Manager
	

*By:	

/s/ Kirk E.Andrews
 Kirk E. Andrews

Corporate Secretary	
 	

 	

By:	

LBA-VF I, LLC,

a California limited partnership,

Its: Member-Manager
	

 	

 	
 	

 	

 	

By:	

Spectrum-VF I, L.P.,

a California limited partnership,

Its: Member-Manager
	

 	

 	
 	

 	

 	

 	

By:	

LBA Fund I, Inc.,

a California corporation

Its: General Partner
	

 	

 	
 	

 	

 	

 	

 	

By:	

    
 Its: Authorized

Signatory

        *NOTE:

        If Tenant is a California corporation, then one of the following alternative requirements must be satisfied: 

	(A)
	This
Lease must be signed by two (2) officers of such corporation: one being the chairman of the board, the president or a vice president, and  the other being the secretary, an assistant secretary, the
chief financial officer or an assistant treasurer. If one (1) individual is signing in two (2) of the
foregoing capacities, that individual must sign twice; once as one officer and again as the other officer.

	(B)
	If
there is only one (1) individual signing in two (2) capacities, or if the two (2) signatories do not satisfy the requirements of (A) above, then Tenant
shall deliver to Landlord a certified copy of a corporate resolution in a form reasonably acceptable to Landlord authorizing the signatory(ies) to execute this Lease. 

        If Tenant is a corporation incorporated in a state other than California, then Tenant shall deliver to Landlord a certified copy of a
corporate resolution in a form reasonably acceptable to Landlord authorizing the signatory(ies) to execute this Lease. 

39

  

 
 

EXHIBIT "A"    
    
    SITE PLAN    
  

[see
attached page that follows this page] 

A-1

 

[SITE PLAN GRAPHIC] 

A-2

 

[SITE PLAN GRAPHIC] 

A-3

  

 
 

EXHIBIT "B"    
    
    INTENTIONALLY OMITTED    
  

B-1

  

 
 

EXHIBIT "C"    
    
    WORK LETTER AGREEMENT    
    
    [Landlord Build w/Allowance]    
  

        This WORK LETTER AGREEMENT ("Work Letter Agreement") is entered into by and between LBA VF III, LLC, a Delaware limited liability company ("Landlord"), and CMD
TECHNOLOGY, a California corporation ("Tenant"). 

R E C I T A L S:  

        A.    Concurrently
with the execution of this Work Letter Agreement, Landlord and Tenant have entered into a lease (the "Lease") covering certain premises (the "Premises") more
particularly described in the Lease. All terms not defined herein have the same meaning as set forth in the Lease. To the extent applicable, the provisions of the Lease are incorporated herein by this
reference. 

        B.    In
order to induce Tenant to enter into the Lease and in consideration of the mutual covenants hereinafter contained, Landlord and Tenant agree as follows: 

1.    LANDLORD'S BASE BUILDING WORK.    Landlord shall, at
its sole cost, perform the following improvement work for the Building (the "Base Building Work"): 

        (a)  Prior
to the date the Premises are delivered to Tenant substantially complete (as defined in Section 9(c) below), Landlord shall cause the structure of the
Building to be free of defects and leaks and shall cause all Building systems and equipment (excluding the roof of the Building and the HVAC systems and equipment, each of which are addressed more
specifically in subsections (c) and (d) below) to be in a good and properly functioning condition, provided that Landlord shall have no responsibility or liability for any such defects
or leaks to the extent cause by Tenant's construction activities (including, without limitation, any leaks resulting from roof penetrations undertaken by or for Tenant). 

        (b)  Prior
to the date the Premises are delivered to Tenant substantially complete, Landlord shall cause the Building (including entrances), all restrooms within the Building
and all Common Areas to comply with all applicable laws, including, without limitation, all requirements of the Federal Americans with Disabilities Act, prior to the changes to the Premises made by or
for Tenant. 

        (c)  Prior
to the date the Premises are delivered to Tenant substantially complete, Landlord shall cause the HVAC systems and equipment to be in a good and properly
functioning condition (including the replacement of all coils and compressors that Landlord's HVAC maintenance provider, Control Air, recommends for immediate replacement after discussing the
particular need for any such replacement with Landlord), provided that Landlord shall have no responsibility or liability for defects in or other failures with respect to the HVAC equipment or system
resulting from Tenant's additions to or modifications of the HVAC system and equipment located at the Premises after the completion of Landlord's work. 

        (d)  Promptly
after the completion of any and all work on or to the Building by or for Tenant that requires roof penetrations or other activities on or near the roof of the
Building, Landlord shall cause, at Landlord's election, either the installation of a new roof membrane or the installation of a restored roof membrane (i.e., one that is installed over the existing
roof membrane) that, according the roof warranty received by Landlord, has a useful life at least equal to the initial Term of the Lease (as applicable, the "Replacement Roof Membrane"). Tenant
acknowledges that the installation of the Replacement Roof Membrane does not have to be completed prior to the Commencement Date or prior to Tenant's occupancy of the Premises, 

C-1

 

provided that if the installation is after the date Tenant takes occupancy of the Premises, Landlord and Tenant shall mutually arrange for the work to be completed on a weekend and Tenant will cause
its employees and all other personnel to not enter the Premises at any time the work is underway. 

2.    TENANT IMPROVEMENTS.    As used in the Lease and this
Work Letter Agreement, the term "Tenant Improvements" or "Tenant Improvement Work" or "Tenant's Work" means those items of general tenant improvement construction shown on the Final Plans (described
in Section 4 below), more particularly described in Section 5 below with respect to the Premises. 

3.    WORK SCHEDULE.    Landlord has delivered to Tenant a
schedule ("Work Schedule"), which will be attached to and incorporated in the Construction Contract (as defined below), that sets forth the timetable for the planning and completion of the
installation of the Tenant Improvements. 

4.    CONSTRUCTION REPRESENTATIVES.    Landlord hereby
appoints the following person(s) as Landlord's representative ("Landlord's Representative") to act for Landlord in all matters covered by this Work Letter Agreement: Steve Briggs. Tenant hereby
appoints the following person(s) as Tenant's representative ("Tenant's Representative") either of who may act for Tenant, independently, in all matters covered by this Work Letter Agreement: Kirk
Andrews or Sherry Fischbach. 

        All
communications with respect to the matters covered by this Work Letter Agreement are to be made to Landlord's Representative or Tenant's Representative, as the case may be, in
writing in compliance with the notice provisions of the Lease. Either party may change its representative under this Work Letter Agreement at any time by written notice to the other party in
compliance with the notice provisions of the Lease. 

5.    TENANT IMPROVEMENT PLANS  

        (a)    Approved Space Plans and Final Plans.    Landlord and Tenant hereby approve the layout
of the Premises as depicted on the space plans ("Approved Space Plans") attached hereto as Schedule 1. Landlord and Tenant also hereby approve
the architectural plans, drawings and specifications and complete engineered mechanical, structural and electrical working drawings for all of the Tenant Improvements for the Premises more
particularly described on Schedule 2 attached hereto (collectively, the "Final Plans"). 

        (b)    Submittal of Final Plans.    Tenant's architect will submit the Final Plans to the
appropriate governmental agencies for plan checking and the issuance of a building permit. Tenant's architect, with Landlord's cooperation, will make any changes to the Final Plans which are requested
by the applicable governmental authorities to obtain the building permit. After approval of the Final Plans no further changes may be made without the prior written approval of both Landlord and
Tenant, and then only after agreement by Tenant to pay any excess costs resulting from the design and/or construction of such changes. Landlord will approve or disapprove any changes to the Final
Plans submitted hereunder within two (2) business days after receipt of such submittal. If Landlord fails to respond to a submittal within such two (2) business day period, Landlord
shall be deemed to have approved those portions of the Final Plans so submitted to Landlord. 

        (c)    Changes to Shell of Building.    If the Final Plans or any amendment thereof or
supplement thereto shall require changes in the Building shell, the increased cost of the Building shell work caused by such changes will be paid for by Tenant or charged against the "Allowance"
described in Section 6 below. 

        (d)    Work Cost Estimate and Statement.    The parties acknowledge and agree that the fixed
fees of the general contractor plus the fixed general conditions costs and the change order fees of the general contractor and subcontractor markup on materials shall be as stated in the Construction
Contract (as defined below), but shall be subject to adjustment as expressly provided in the Construction Contract. 

C-2

 

Prior to the commencement of construction of any of the Tenant Improvements shown on the Final Plans that is to be performed by a subcontractor (as defined in the Construction Contract), Landlord
will submit to Tenant a written estimate of the cost to complete the applicable portion of the Tenant Improvement Work to be performed by such subcontractor (each, a "Work Cost Estimate"). Tenant will
either approve the applicable Work Cost Estimate or disapprove specific items and submit to Landlord revisions to the Final Plans to reflect deletions of and/or substitutions for such disapproved
items. Submission and approval of each Work Cost Estimate will proceed in accordance with the Work Schedule but in any event within two (2) business days after delivery to Tenant. Tenant's
failure to either approve or disapprove of any applicable Work Cost Estimate will be deemed to be Tenant's approval thereof. Upon Tenant's approval of the applicable Work Cost Estimate (such approved
Work Cost Estimate to be hereinafter known as a "Work Cost Statement"), Landlord will have right to purchase materials and to commence the construction of the items included in the applicable Work
Cost Statement pursuant to Section 7 hereof. 

6.    PAYMENT FOR THE TENANT IMPROVEMENTS  

        (a)    Allowance.    Landlord hereby grants to Tenant a tenant improvement allowance of
Seventeen and 70/100 Dollars ($17.70) per rentable square foot of the Premises, i.e., One Million Six Hundred Eight Thousand Eight Hundred Ninety-Four and 60/100 Dollars ($1,608,894.60)
(the "Allowance"). The Allowance is to be used only for: 

          (i)  Payment
of the cost of preparing the Space Plans and the Final Plans, including mechanical, electrical, plumbing and structural drawings and of all other aspects
necessary to complete the Final Plans. 

        (ii)  The
payment of plan check, permit and license fees relating to construction of the Tenant Improvements. 

        (iii)  Construction
of the Tenant Improvements, including, without limitation, the following: 

      (aa)  Installation
within the Premises of all partitioning, doors, floor coverings, ceilings, wall coverings and painting, millwork and similar items; 

      (bb)  All
electrical wiring, lighting fixtures, outlets and switches, and other electrical work necessary for the Premises; 

      (cc)  The
furnishing and installation of all duct work, terminal boxes, diffusers and accessories necessary for the heating, ventilation and air conditioning systems within
the Premises, including the cost of meter and key control for after-hour air conditioning; 

      (dd)  Any
additional improvements to the Premises required for Tenant's use of the Premises including, but not limited to, odor control, special heating, ventilation and air
conditioning, noise or vibration control or other special systems or improvements; 

      (ee)  All
fire and life safety control systems such as fire walls, sprinklers, halon, fire alarms, including piping, wiring and accessories, necessary for the Premises; 

        (ff)  All
plumbing, fixtures, pipes and accessories necessary for the Premises; 

      (gg)  Testing
and inspection costs; and 

      (hh)  Fees
for the contractor including, but not limited to, fees and costs attributable to general conditions associated with the construction of the Tenant Improvements. 

        (iv)  An
administrative and coordination fee charged by Landlord against the Allowance equal to two percent (2%) of the total cost to complete the design, permit process and
construction of the Tenant Improvements. 

C-3

 

        (v)  The
costs incurred by Tenant for the installation by Tenant of its cabling and telecommunications equipment. 

        (b)    Excess Costs.    The cost of each item referenced in Section 6(a) above
(collectively, the "Work Cost(s)") shall be charged against the Allowance. The parties acknowledge and agree further that it is currently estimated that the total Work Costs (as defined in
Section 6(b) below) may exceed the Allowance. At the time the parties approve the final bids for all or substantially all of the work to be performed by subcontractors in accordance with the
procedure established in Section 5(d) above, but in any event no later than April 24, 2000, Landlord shall estimate the total Work Costs taking into account the final bids approved as of
April 24, 2000. To the extent Landlord reasonably estimates that the total Work Costs will exceed the Allowance (as it may be increased below) (the "Original Estimated Overage"). Tenant agrees
to pay the Original Estimated Overage (less any amounts actually expended by Tenant for Work Costs that are chargeable against the Allowance as provided in Section 6(a) above and for which
Tenant has not and does not seek reimbursement form the Allowance) to Landlord no later than April 28, 2000. If at any time or from time to time the actual Work Costs exceed the Allowance,
Tenant agrees to pay to Landlord such excess including Landlord's two percent (2%) fee associated with the supervision of such excess work within five (5) business days after invoice therefor
(less the Original Estimated Overage previously paid by Tenant and less any amounts actually expended by Tenant for Work Costs that are chargeable against the Allowance as provided in
Section 6(a) above and for which Tenant has not and does not seek reimbursement from the Allowance). In no event will the Allowance be used to pay for Tenant's TI Systems, or Tenant's other
furniture, artifacts, equipment, telephone systems or any other item of personal property which is not affixed to the Premises. 

        Notwithstanding
the foregoing, Tenant shall have the right to amortize up to $5.00 per rentable square foot of any excess Work Costs above the Allowance, i.e., up to Four Hundred
Fifty-Four Thousand Four Hundred Ninety Dollars ($454,490.00) ("Additional TI Allowance"), over the initial sixty-five (65) months of the Term with interest at ten and
one-half percent (10.5%) per annum. Such amount shall be due and payable in equal monthly installments ("Monthly TI Amortized Rent") concurrently with Tenant's payments of Monthly Basic
Rent under the Lease. 

        (c)    Changes.    If, after the Final Plans have been approved by the City, Tenant requires
any changes or substitutions to the Final Plans, any additional costs related thereto including Landlord's seven percent (7%) change order fee and the applicable change order fee for the contractor
and tenant improvement coordinator associated with the supervision of such changes or substitutions are to be paid by Tenant to Landlord within five (5) business days after invoice therefor.
Any changes to the Final Plans will be approved by Landlord and Tenant in the manner set forth in Section 5 above and will, if necessary, require the applicable Work Cost Statement to be
revised and agreed upon between Landlord and Tenant in the manner set forth in Section 5(f) above. Landlord will have the right to decline Tenant's request for a change to the Final Plans if
such changes are inconsistent with the provisions of Section 5 above. 

        (d)    Governmental Cost Increases.    If Increases in the cost of the Tenant Improvements as
set forth in the Work Cost Statement are due to requirements of any governmental agency, Tenant agrees to pay Landlord the amount of such increase including Landlord's two percent (2%) fee for the
contractor and tenant improvement coordinator associated with the supervision of such additional work within five (5) business days of Landlord's written notice; provided, however, that
Landlord will first apply toward any such increase any remaining balance of the Allowance. 

        (e)    Unused Allowance Amounts.    Any unused portions of the Allowance shall be credited to
Tenant's obligations to pay Monthly Basic Rent until such unused amounts are recouped by Tenant. 

7.    CONSTRUCTION OF TENANT IMPROVEMENTS.    Following
Tenant's payment of the Original Estimated Overage and issuance of a building permit for the Tenant Improvements (which is to be 

C-4

 

obtained by Tenant's architect), Landlord's contractor will commence and diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as described in
Section 11 below) and Force Majeure Delays (as described in Section 12 below); provided, however, Landlord shall immediately commence, prior to the issuance of a building permit, and
shall diligently pursue demolition work and other Tenant Improvement work that Landlord reasonably believes may be performed prior to the issuance of a building permit so long as such work is kept
open and uncovered for inspection until building permits have been issued and the applicable inspections have occurred. Landlord shall use diligent efforts to cause its contractor to complete the
Tenant Improvements in a good and workmanlike manner substantially in accordance with the Final Plans and the Work Schedule and pursuant to that certain Abbreviated Standard Form of Agreement Between
Owner and Contractor for Construction Projects of Limited Scope (A--A Document A107 - 1997) by and between JLC Associates, Inc. and Landlord (as supplemented by
Exhibit A and all other addends and attachments thereto) (as so amended and supplemented, the "Construction Contract"), the form of which has been approved by Tenant, subject to Tenant Delays
and Force Majeure Delays. 

8.    OMITTED.  

9.    DELIVERY OF POSSESSION; TERM AND RENT COMMENCEMENT DATE  

        (a)    Delivery of Possession.    Landlord agrees to deliver possession of the Premises to
Tenant (free of any tenancies or occupants) as of the date of the mutual execution and delivery of the Lease by Landlord and Tenant. The actual date upon which Landlord turns over possession of the
Premises to Tenant is the "Turnover Date". 

        (b)    Term Commencement Date.    The Term of the Lease and Tenant's obligation to pay rent
will commence upon the earlier of (i) Tenant's commencement of business operations in all or any portion of the Premises, or (ii) July 1, 2000 (the "Commencement Date" and "Rent
Commencement Date"), regardless
of whether or not the Tenant Improvements have been substantially completed by such date and notwithstanding the fact that Landlord is coordinating the construction of the Tenant Improvement Work. 

        (c)    Substantial Completion; Punch-List.    For purposes hereof, the Tenant
Improvements will be deemed to be "substantially completed" when Landlord's contractor certifies in writing to Landlord and Tenant that Landlord has substantially performed all of the Tenant
Improvement Work required to be performed by Landlord under this Work Letter Agreement, other than decoration and minor "punch-list" type items and adjustments which do not materially
interfere with Tenant's use of the Premises; and Tenant has obtained a temporary certificate of occupancy or other required equivalent approval from the local governmental authority permitting
occupancy of the Premises. Within ten (10) days after receipt of such certificates, Tenant and Landlord will conduct a walk-through inspection of the Premises and the parties shall
develop a written punch-list specifying those decoration and other punch-list items which require completion, which items Landlord will thereafter diligently complete. 

        (d)    Delivery of Possession.    Landlord agrees to deliver possession of the Premises to
Tenant when the Tenant Improvements have been substantially completed in accordance with subsection 9(b) above. Landlord agrees to use its commercially reasonable efforts to cause the Premises to be
substantially completed on or before the Estimated Commencement Date, subject to Tenant Delays and Force Majeure Delays. Tenant agrees that if Landlord is unable to deliver possession of the Premises
to Tenant on or prior to the Estimated Commencement Date specified in Section 1.7 of the Summary (or if there are any other delays in the Work Schedule), the Lease will not be void or voidable.
Tenant agrees further that if Landlord is unable to deliver possession of the Premises to Tenant on or prior to the Estimated Commencement Date specified in Section 1.7 of the Summary (or if
there are any other delays in the Work Schedule), Landlord will not be liable to Tenant for any loss or damage resulting 

C-5

 

from such delay(s) so long as Landlord uses commercially reasonable efforts to cause the Premises to be substantially completed on or before the Estimated Commencement Date, subject to Tenant Delays
and Force Majeure Delays. 

10.    MOVING ALLOWANCE.    Provided Tenant is not in
default of any obligation under this Work Letter or the Lease, within thirty (30) days after Tenant's occupancy of the Premises, Landlord shall pay to Tenant One Hundred Thousand Dollars
($100,000.00) as compensation for Tenant's moving expenses (or a portion thereof). 

11.    TENANT DELAYS.    For purposes of this Work Letter
Agreement, "Tenant Delays" means any delay in the completion of the Tenant Improvements resulting from any or all of the following: (a) Tenant's failure to timely perform any of its obligations
pursuant to this Work Letter Agreement, including any failure to complete, on or before the due date therefor, any action item which is Tenant's responsibility pursuant to the Work Schedule delivered
by Landlord to Tenant pursuant to this Work Letter Agreement; (b) Tenant's changes to Space Plans or Final Plans after Landlord's approval thereof; (c) Tenant's request for materials,
finishes, or installations which are not readily available or which are incompatible with Landlord's standards; (d) any delay of Tenant in making payment to Landlord for Tenant's share of the
Work Cost; or (e) any other act or failure to act by Tenant, Tenant's employees,
agents, architects, independent contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant. 

12.    FORCE MAJEURE DELAYS.    For purposes of this Work
Letter, "Force Majeure Delays" means any actual delay in the construction of the Tenant Improvements, which is beyond the reasonable control of Landlord or Tenant, as the case may be, as described in
Section 32.15 of the Lease. 

13.    MISCELLANEOUS CONSTRUCTION COVENANTS    

        (a)    Compliance with Laws.    Subject to subsection 13(e) below, Landlord will construct the
Tenant Improvements in a safe and lawful manner. Subject to subsection 13(e) below, Landlord shall comply with all applicable laws and all regulations and requirements of, and all licenses and permits
issued by, all municipal or other governmental bodies with jurisdiction which pertain to the Installation of the Tenant Improvements. 

        (b)    Tenant's Early Entry Construction Activities.    Tenant shall have the right to enter
the Premises to install phone systems, furniture, fixtures and equipment prior to the date of substantial completion of the Tenant Improvements but only at such time Landlord reasonably determines
that such early entry will not interfere with Landlord's construction activities. Such early entry for such purposes shall not constitute occupancy for operation of Tenant's business and shall not
trigger the Rent Commencement Date. Tenant agrees (i) any such early entry by Tenant shall be at Tenant's sole risk, (ii) Tenant shall not interfere with Landlord or Landlord's
contractors completing work within the Premises or cause any labor difficulties; Tenant, together with its employees, agents and independent contractors will be subject to and will work under the
direction of Landlord's contractor, (iii) Tenant shall comply with and be bound by all provisions of this Lease during the period of any such early entry except for the payment of Rent,
(iv) prior to entry upon the Premises by Tenant, Tenant agrees to pay for and provide to Landlord certificates evidencing the existence and amounts of liability insurance carried by Tenant,
which coverage must comply with the provisions of this Lease relating to insurance, (v) Tenant and its agents and contractors agree to comply with all applicable laws, regulations, permits and
other approvals required to perform its work during the early entry on the Premises, and (vi) Tenant agrees to indemnify, protect, defend and save Landlord and the Premises harmless from and
against any and all liens, liabilities, losses, damages, costs, expenses, demands, actions, causes of action and claims (including, without limitation, attorney's fees and legal costs) arising out of
the early entry, use, construction, or occupancy of the Premises by Tenant or its agents, employees or contractors. 

C-6

 

        (c)    Coordination of Labor.    Without limiting the provisions of subsection
(b) above, Landlord and Tenant shall each cause its respective contractors, subcontractors, employees, servants and agents to work in harmony and not interfere with any contractors and
subcontractors engaged by the other party. Nothing in this Work Letter shall require Tenant to use union labor. 

        (d)    Coordination with Lease.    Nothing herein contained shall be construed as
(i) constituting Tenant as Landlord's agent for any purpose whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or provisions of the Lease. Any default by Tenant
following the giving of notice and the passage of any applicable cure period with respect to any portion of this Work Letter Agreement shall be deemed a Default in accordance with Section 23 of
the Lease. 

        (e)    Approval of Plans.    Landlord will not check Tenant drawings for building code
compliance. Approval of the Final Plans by Landlord is not a representation that the drawings are in compliance with the requirements of governing authorities, and it shall be Tenant's responsibility
to meet and comply with all federal, state, and local code requirements. Approval of the Final Plans does not constitute assumption of responsibility by Landlord or its architect for their accuracy,
sufficiency or efficiency, and Tenant shall be solely responsible for such matters. 

        (f)    Warranties.    Tenant acknowledges and agrees that the Tenant Improvements are intended
for use by Tenant and the specifications and design requirements for such Improvements are not within the special knowledge or experience of Landlord. Landlord's sole obligation shall be to arrange
the construction of the Tenant Improvements in accordance with the requirements of the Final Plans; and any additional costs or expense required for the modification thereof to more adequately meet
Tenant's use, whether during or after Landlord's construction thereof, shall be borne entirely by Tenant except as otherwise provided in this Work Letter. Notwithstanding the foregoing, Landlord
agrees to assign to Tenant the benefit of all construction warranties pertaining to the Tenant Improvements to the extent that they do not relate to structural or other portions of the Premises that
Landlord is required to maintain and repair under the Lease. 

C-7

 

        IN
WITNESS WHEREOF, the undersigned Landlord and Tenant have caused this Work Letter Agreement to be duly executed by their duly authorized representatives as of the date of the Lease. 

	LANDLORD	 	TENANT
	

LBA-VF III, LLC,

a Delaware limited liability company	
 	

CMD TECHNOLOGY,

a California corporation
	

By:	
 	

LBA-VF IIIA, LLC,

a Delaware limited liability company,

Its: Member-Manager	
 	

By:	
 	

/s/ Simon Huang
 Simon Huang

President and Chief Executive Officer
	

 	
 	

By:	
 	

LBA-VF I, LLC,

a California limited liability company,

Its: Member-Manager	
 	

By:	
 	

/s/ Kirk B. Andrews
 Kirk B. Andrews

Corporate Secretary
	

 	
 	

 	
 	

By:	
 	

Spectrum-VF 1, L.P.,

a California limited partnership,

Its: Member-Manager	
 	

 	
 	

 
	

 	
 	

 	
 	

 	
 	

By:	
 	

LBA Fund I, Inc.,

a California corporation

Its: General Partner	
 	

 	
 	

 
	

 	
 	

 	
 	

 	
 	

 	
 	

By:	
 	

    
 Its: Authorized Signatory	
 	

 	
 	

 

C-8

 
 
 

SCHEDULE 1    
    
    APPROVED SPACE PLANS    
  

[See
space plans that follow this page] 

C-9

[FLOORPLAN]  

SCHEDULE 1

TO

EXHIBIT "C"

1 of 2 

[FLOORPLAN]  

SCHEDULE 1

TO

EXHIBIT "C"

2 of 2 

  

 
 

SCHEDULE 2    
    
    APPROVED FINAL PLANS    
  

[see
attached page that follow this page] 

C-10

        The following working drawings prepared by H. Hendy & Associates dated April 3, 2000 

	ARCHITECTURAL PLANS
	

T	
 	

TITLE SHEET
	T-1	 	TITLE SHEET—GENERAL NOTES
	ST-1	 	SITE PLAN
	DM-1.1	 	FIRST FLOOR DEMOLITION PLAN
	DM-1.2	 	SECOND FLOOR DEMOLITION PLAN
	A-1.1	 	FIRST FLOOR PARTITION PLAN
	A-1.2	 	SECOND FLOOR PARTITION PLAN
	A-2.1	 	FIRST FLOOR REFLECTED CEILING PLAN
	A-2.2	 	SECOND FLOOR REFLECTED CEILING PLAN
	A-3.1	 	FIRST FLOOR TELEPHONE/ELECTRICAL PLAN
	A-3.2	 	SECOND FLOOR TELEPHONE/ELECTRICAL PLAN
	A-4.1	 	FIRST FLOOR—FINISH PLAN
	A-4.2	 	SECOND FLOOR—FINISH PLAN
	A-5	 	DETAILS AND DOOR SCHEDULE
	A-6	 	DETAILS AND ELEVATIONS SHEET
	A-7	 	DETAILS AND ELEVATIONS SHEET
	A-8	 	DETAILS AND ELEVATIONS SHEET
	A-9	 	RESTROOM PLANS AND ADA NOTES
	A-10	 	DOOR SCHEDULE
	
STRUCTURAL PLANS
	

S-1	
 	

ELECTRICAL SYMBOL LIST, FIXTURE SCHEDULE & ENERGY CAL'S
	S-2.1	 	SINGLE LINE DIAGRAM & DETAILS
	S-2.2	 	2ND FLOOR FRAMING PLAN
	S-2.3	 	2ND FLOOR PANEL SCHEDULE
	
ELECTRICAL PLANS
	

E-1	
 	

TYPICAL DETAILS SHEET
	E-2	 	1ST FLOOR PLAN
	E-3	 	1ST FLOOR PANEL SCHEDULE
	E-4	 	ROOF FRAMING PLAN
	E-5	 	1ST FLOOR ELECTRICAL LIGHTING PLAN
	E-6	 	2ND FLOOR ELECTRICAL LIGHTING PLAN
	E-7	 	1ST FLOOR ELECTRICAL POWER AND TELEPHONE PLAN
	E-8	 	2ND FLOOR ELECTRICAL POWER AND TELEPHONE PLAN
	E-9	 	ROOF ELECTRICAL PLAN
	
MECHANICAL PLANS
	

TAC-A	
 	

LEGEND & EQUIPMENT SCHEDULE
	TAC-B	 	TITLE 24 AND NOTES
	TAC-C	 	DETAILS AND WIRING
	TAC-D	 	SPECIFICATIONS
	TAC-2.1	 	1ST FLOOR MECHANICAL PLAN
	TAC-2.2	 	2ND FLOOR MECHANICAL PLAN
	TAC-2.3	 	MECHANICAL ROOF PLAN
	
PLUMBING PLANS
	

TP-A	
 	

LEGEND, SCHEDULE AND NOTES
	TP-B	 	SPECIFICATIONS
	TP-C	 	ENLARGED PLANS & DETAILS
	TAC-2.1	 	1ST FLOOR PLUMBING PLAN
	TAC-2.2	 	2ND FLOOR PLUMBING PLAN
	TAC-2.3	 	PLUMBING ROOF PLAN

SHEET INDEX  

SCHEDULE
2

TO

EXHIBIT "C" 

  

 
 

EXHIBIT "D"    
  

 
 

SAMPLE FORM OF NOTICE OF LEASE TERM DATES    
  

	To:	 	
	 	Date:	 	

Re:    Office Lease dated                         , 2000 between LBA-VF III, LLC, a
Delaware limited liability company, Landlord, and
                                         
       , a
                                         
       , Tenant, concerning Suite             
("Premises") located at
                                         
       . 

Gentlemen:

        In
accordance with the above-referenced Lease, we wish to acknowledge and/or confirm as follows: 

	1.
	That
the Premises has been accepted by Tenant with the Base Building Work (as defined in the Work Letter Agreement attached as Exhibit
"C" to the Lease) as being substantially complete in accordance with the Work Letter Agreement, and that, to Tenant's knowledge after a reasonably thorough Inspection of the
Premises and Building, there is no deficiency in construction (other than those Items, if any, identified on the Base Building Work punch-list and any other latent deficiencies, if any).
The foregoing is not intended to limit or reduce Landlord's warranties (if any) and maintenance obligations provided in the Lease or Work Letter Agreement.

	2.
	That
Tenant has accepted and is in possession of the Premises, and acknowledges that under the provisions of the Lease, the Term of the Lease is for
                         (      ) years, with
                         (      ) options to renew for
                         (      ) years each, and commenced upon the
Commencement Date of
                        , 200   and is currently scheduled to expire on
                        ,
200  , subject to earlier termination as provided in the Lease.

	3.
	That
in accordance with the Lease, rental payment has commenced (or shall commence) on                         ,
200  .

	4.
	If
the Commencement Date of the Lease is other than the first day of the month, the first billing will contain a pro rata adjustment. Each billing thereafter, with the exception of the
final billing, shall be for the full amount of the monthly installment as provided for in the Lease.

	5.
	Rent
is due and payable in advance on the first day of each and every month during the Term of the Lease. Your rent checks should be made payable to
                                         
        at
                                         
       .
 

AGREED AND ACCEPTED 

	TENANT:	 	LANDLORD:
	

CMD TECHNOLOGY

a California corporation	
 	

LBA-VF III, LLC,

a Delaware limited liability company
	

By:	
 	

	
 	

 	
 	

By:	
 	

LBA-VF IIIA, LLC,
	Print Name:	 	
	 	 	 	 	 	a California limited liability company,
	Print Title:	 	
	 	 	 	 	 	Its: Member—Manager
	

By:	
 	

	
 	

 	
 	

 	
 	

By:	
 	

Spectrum-VF I, L.P.,
	Print Name:	 	
	 	 	 	 	 	 	 	a California limited partnership,
	Print Title:	 	
	 	 	 	 	 	 	 	Its: Member—Manager
	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

By:	
 	

LBA Fund I, Inc.,

a California corporation

Its: General Partner
	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

By:	
 	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Its:	 	Authorized Signatory

SAMPLE
ONLY [NOT FOR EXECUTION] 

D-1

  

 
 

EXHIBIT "E"    
    
    RULES AND REGULATIONS

        1.    No
sign, advertisement, name or notice shall be installed or displayed on any part of the outside or inside of the Building without the prior written consent of Landlord.
Landlord shall have the right to remove, at Tenant's expense and without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls shall be
printed, painted, affixed or inscribed at the expense of Tenant by a person reasonably approved by Landlord, using materials and in a style and format approved by Landlord. 

        2.    Tenant
shall not place anything or allow anything to be placed near the glass of any window, door, partition or wall which may appear unsightly from outside the Building.
No awnings or other projection shall be attached to the outside walls of the Building without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of the Building, other than Building standard materials, without the prior written consent of Landlord. 

        3.    Tenant
shall not obstruct any sidewalks, or halls, passages, exits, entrances or stairways of the Building. Except as otherwise expressly provided in the Lease, Tenant
and no employee, invitee, agent, licensee or contractor of Tenant shall go upon or be entitled to use any portion of the roof of the Building. 

        4.    Except
for losses caused by Landlord's negligence or willful misconduct, Landlord shall not be responsible to Tenant for loss of property on the Premises, however
occurring, or for any damage to Tenant's property by the janitors or any other employee or any other person. 

        5.    Landlord
will furnish Tenant, free of charge, with two keys to each door lock in the Premises. Landlord may impose a reasonable charge for any additional keys. Tenant may
not make or have made additional keys, and Tenant shall not alter any lock or install a new additional lock or bolt on any door
or window of its Premises. Tenant, upon termination of its tenancy, shall deliver to Landlord the keys of all doors which have been furnished to, or otherwise procured by Tenant, and, in the event of
loss of any keys, shall pay Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change. 

        6.    Electric
wires, telephones, telegraphs, burglar alarms or other similar apparatus shall not be installed in the Premises without the reasonably approval of Landlord. 

        7.    Tenant
shall not place a load upon any floor of the Building which exceeds the load per square foot which such floor was designed to carry and which is allowed by law.
Landlord shall have the right to prescribe the weight, size and position of all equipment, materials, furniture or other property brought into the Building. Heavy objects, if such objects are
considered necessary by Tenant, as determined by Landlord, shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight. Landlord will not be responsible
for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the
expense of Tenant. 

        8.    Tenant
shall not use or keep in the Building any kerosene, gasoline or inflammable or combustible fluid or material other than those limited quantities necessary for the
operation or maintenance of office equipment. Tenant shall not use or permit to be used in the Premises any foul or noxious gas or substance, or permit or allow the Premises to be occupied or used in
a manner offensive or objectionable to Landlord by reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or about the Premises any birds or animals. 

        9.    Landlord
reserves the right to exclude from the Building between the hours of 6:00 p.m. and 7:00 a.m., or such other hours as may be established from time
to time by Landlord, and on legal 

E-1

 

holidays, any person unless that person has a pass or is properly identified. Landlord shall not be liable for damages for any error with regard to the admission to or exclusion from the Building of
any person. Tenant shall be responsible for all persons for whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord reserves the right to prevent access to the
Building in case of invasion, mob, riot, public excitement or other commotion by closing the doors or by other appropriate action. 

        10.  Except
as prohibited by law, Tenant shall close and lock all doors of the Building and entirely shut off all water faucets or other water apparatus, and, except with
regard to Tenant's computers and other equipment which reasonably require electricity on a 24-hour basis, all electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by its employees or other occupants of the Building or by Landlord for noncompliance with this rule. 

        11.  The
toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed, and no foreign
substances of any kind whatsoever shall be thrown therein. 

        12.  Tenant
shall not sell, or permit the sale at retail, of newspapers, magazines, periodicals, theater tickets, or any other goods or merchandise to the general public in
or on the Premises, except in the ordinary course of Tenant's business. Tenant shall not use the Premises for any business or activity other than that specifically provided for in the Lease. 

        13.  Except
as expressly permitted in the Lease, Tenant shall not mark, drive nails, screw or drill into the partitions, window mullions, woodwork or plaster, or in any way
deface the Premises or any part thereof, except to install normal wall hangings. Tenant shall repair any damage resulting from noncompliance under this rule. 

        14.  Tenant
shall not install, maintain or operate upon the Common Areas any vending machines without the prior written consent of Landlord, which shall not be unreasonably
withheld. 

        15.  Landlord
reserves the right to exclude or expel from the Premises any person who, in Landlord's judgment, is intoxicated or under the influence of liquor or drugs or who
is in violation of any of the other Rules and Regulations described in this Exhibit "E." 

        16.  Tenant
shall store all its trash and garbage within areas reasonably designated by Landlord for trash/garbage storage and/or disposal. Tenant shall not place in any
trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with
directions reasonably issued from time to time by Landlord. 

        17.  The
Premises shall not be used for the storage of merchandise held for sale to the general public, or for lodging or for manufacturing of any kind, except for Tenant's
merchandise held for collateral sale to the public. No cooking shall be done or permitted by Tenant on the Premises, except that use of equipment for brewing coffee, tea, hot chocolate and similar
beverages shall be permitted and the use of a microwave shall be permitted, provided that such equipment and use is in accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations. Notwithstanding anything to the contrary contained herein, Tenant shall be permitted to hold outdoor barbecues form employees up to six (6) times per year. 

        18.  Tenant
agrees that it shall comply with all fire and security regulations that may be reasonably issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible employee to represent Tenant in all matters pertaining to such fire or security regulations.
Tenant shall cooperate fully with Landlord in all matters concerning fire and other emergency procedures. 

E-2

 

        19.  Tenant
assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage. Such responsibility shall include keeping doors locked and other
means of entry to the Premises closed. 

        20.  Landlord
may waive any one or more of these Rules and Regulations for the benefit of Tenant. 

        21.  These
Rules and Regulations shall not be construed in any way to modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease. 

        22.  Landlord
reserves the right to make such other and reasonable Rules and Regulations as, in its judgment, may from time to time be needed for safety, security, care and
cleanliness of the Building and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations hereinabove stated and any additional rules and regulations which
are so adopted. 

        23.  Tenant
shall be responsible for the observance of all of the foregoing rules by Tenant's employees, agents, clients, customers, invitees or guests. 

        24.  Tenant
shall not lay linoleum, tile, carpet or other similar floor covering so that the same shall be affixed to the floor of the Building in any manner except by a
paste, or other material which may easily be removed with water, the use of cement or other similar adhesive materials being expressly prohibited. The method of affixing any such linoleum, tile,
carpet or other similar floor covering shall be subject to the approval of Landlord. The expense of repairing any damage resulting from a violation of this rule shall be borne by Tenant. 

        25.  Tenant
shall not without Landlord's consent, which may be given or withheld in Landlord's sole and absolute discretion, receive, store, discharge, or transport firearms,
ammunition, or weapons or explosives of any kind or nature at, on or from the Premises. 

        26.  To
the extent of any inconsistency between the terms and conditions of these Rules and Regulations and the terms and conditions of the Lease, the terms and conditions of
the Lease shall supersede and apply. 

E-3

 
 
 

PARKING RULES AND REGULATIONS

        In
addition to the parking provisions contained in the Lease to which this Exhibit "E" is attached, the following rules and regulations
shall apply with respect to the use of the Building's parking facilities. Nothing in these Parking Rules and Regulations shall materially diminish Tenant's allotted parking privileges as expressly set
forth in the Lease. 

        1.    Every
parker is required to park and lock his/her own vehicle. All responsibility for damage to or loss of vehicles is assumed by the parker and Landlord shall not be
responsible for any such damage or loss by water, fire, defective brakes, the act or omissions of others, theft, or for any other cause. 

        2.    Tenant
shall not leave vehicles in the parking areas overnight nor park any vehicles in the parking areas other than automobiles, motorcycles, motor driven or
non-motor driven bicycles or four wheeled trucks. 

        3.    Vehicles
must be parked entirely within painted stall lines of a single parking stall. 

        4.    All
directional signs and arrows must be observed. 

        5.    The
speed limit within all parking areas shall be five (5) miles per hour. 

        6.    Parking
is prohibited: (a) in areas not striped for parking; (b) in aisles; (c) where "no parking" signs are posted; (d) on ramps;
(e) in cross-hatched areas; and (f) in reserved spaces and in such other areas as may be designated by Landlord or Landlord's parking operator. 

        7.    Washing,
waxing, cleaning or servicing of any vehicle in any area not specifically reserved for such purpose is prohibited. 

        8.    If
the Lease terminates for any reason whatsoever, Tenant's right to park in the parking facilities shall terminate concurrently therewith. 

E-4

  

 
 

EXHIBIT "F-1"    
  

 
 

SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE    
  

        The
undersigned ("Tenant") hereby certifies to                        ,
a                                    
("Landlord"),
                        and                 
       , as follows: 

        1.    Attached
hereto is a true, correct and complete copy of that certain Office Lease dated                        ,
20    between Landlord and Tenant (the  "Lease"), which demises Premises which are located
at                        . The Lease is now in full force and effect and has not been amended, modified or
supplemented, except as set forth in Section 6 below. 

        2.    The
term of the Lease commenced on                        , 20    . 

        3.    The
term of the Lease is currently scheduled to expire on                        , 20    . 

        4.    Tenant
has no option to renew or extend the Term of the Lease
except:                                        
        .
 

        5.    Tenant
has no preferential right to purchase the Premises or any portion of the Building or Site upon which the Premises are located, and Tenant has no rights or options
to expand into other space in the Building except:                        . 

        6.    The
Lease has: (Initial One) 

(    )
not been amended, modified, supplemented, extended, renewed or assigned. 

(    )
been amended, modified, supplemented, extended, renewed or assigned by the following described agreements, copies of which are attached
hereto:                                        
        .
 

        7.    Tenant
has accepted and is now in possession of the Premises and has not sublet, assigned or encumbered the Lease, the Premises or any portion thereof except as follows:
                                         
       . 

        8.    The
current Monthly Basic Rent is
$                                         
 . 

        9.    Tenant's
Percentage is                        %, and Tenant's Percentage of Operating Expenses, Real Property Taxes and Assessments,
Insurance Costs, and currently billed to and
payable by Tenant is
$                                         
 per month (based upon Landlord's estimate of anticipated costs for the calendar year            ), which amount is Landlord's current estimate
of Tenant's Percentage of Operating Expenses, Real Property Taxes and Assessments, and Insurance Costs. 

        10.  The
amount of security deposit (if any) is
$                                         
 . No other security deposits have been made. 

        11.  All
rental payments payable by Tenant have been paid in full as of the date hereof. No rent under the Lease has been paid for more than thirty (30) days in
advance of its due date. 

        12.  All
work required to be performed by Landlord under the Lease has been completed and has been accepted by Tenant, and all tenant improvement allowances have been paid in
full. Although Tenant has no knowledge of any defective work to be performed by Landlord under the Lease, the foregoing representation shall not limit or reduce any warranties provided by or
maintenance obligations of Landlord under the Lease. 

        13.  To
Tenant's actual knowledge, as of the date hereof, there are no defaults on the part of Landlord or Tenant under the Lease. Although Tenant has no actual knowledge of
any default by Landlord under the Lease, the foregoing representation shall not limit or reduce any duties or 

F-1-1

 

obligations of Landlord under the Lease if, in fact, there are any such defaults existing as of the date hereof. 

        14.  Tenant
has no defense as to its obligations under the Lease and claims no set-off or counterclaim against Landlord. 

        15.  Tenant
has no right to any concession (rental or otherwise) or similar compensation in connection with renting the space it occupies, except as expressly provided in the
Lease. 

        16.  All
insurance required of Tenant under the Lease has been provided by Tenant and all premiums have been paid. 

        17.  There
has not been filed by or against Tenant a petition in bankruptcy, voluntary or otherwise, any assignment of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States or any state thereof, or any other action brought pursuant to such bankruptcy laws with respect to Tenant. 

        18.  Tenant
pays rent due Landlord under the Lease to Landlord and does not have any knowledge of any other person who has any right to such rents by collateral assignment or
otherwise. 

        The
foregoing certification is made with the knowledge that is about to [fund a loan to Landlord or purchase the Building from Landlord], and that is relying upon
the representations herein made in [funding such loan or purchasing the Building]. 

	Dated:                        , 20    .	 	 	 
	

"TENANT"	

 	

 	

 
	 	

	 	a	 	 
	 	 	

	

 	

By:	

 	

 
	 	 	

	 	 	Print Name:	 
	 	 	 	

	 	 	Its:	 
	 	 	 	

F-1-2

  

 
 

EXHIBIT "F-2"    
  

 
 

SAMPLE FORM OF LANDLORD ESTOPPEL CERTIFICATE    
  

        The undersigned ("Landlord") hereby certifies to
                                    , a
                                     ("Tenant"), and
                                         
                                          
             , as follows:
 

        1.    Attached
hereto is a true, correct and complete copy of that certain Office Lease dated                         ,
20     between Landlord and Tenant (the "Lease"), which demises Premises which are located at
                                    . The Lease is now in full
force and effect and has not been amended, modified or supplemented, except as set forth in Section 6 below. 

        2.    The
term of the Lease commenced on                         , 20    . 

        3.    The
term of the Lease is currently scheduled to expire on                         , 20    .

        4.    Tenant
has no option to renew or extend the Term of the Lease except:

 

                                         
                                          
                                          
                                         
      

                                         
                                          
                                          
                                         
      .
 

        5.    The
Lease has: (Initial One) 

        (    )    not
been amended, modified, supplemented, extended, renewed or assigned. 

        (    )    been
amended, modified, supplemented, extended, renewed or assigned by the following described agreements, copies of which are attached hereto: 

        6.    The
current Monthly Basic Rent is $                        . 

        7.    Tenant's
Percentage is             %, and Tenant's Percentage of Operating Expenses, Real Property Taxes and Assessments and Insurance
Costs and currently billed to and payable by Tenant is $                         per month (based upon Landlord's estimate
of anticipated costs for the calendar year
        ), which amount is Landlord's current estimate of Tenant's Percentage of Operating Expenses, Real Property Taxes and Assessments and Insurance Costs. 

        8.    The
amount of security deposit (if any) is $                        . No other security deposits have been made. 

        9.    All
rental payments payable by Tenant have been paid in full as of the date hereof. No rent under the Lease has been paid for more than thirty (30) days in
advance of its due date. 

        10.  To
Landlord's actual knowledge, as of the date hereof, there are no defaults on the part of Landlord or Tenant under the Lease. Although Landlord has no actual knowledge
of any default by Tenant under the Lease, the foregoing representation shall not limit or reduce any duties or obligations of Tenant under the Lease if, in fact, there are any such defaults existing
as of the date hereof. 

        The
foregoing certification is made with the knowledge that                          is relying upon the representations herein
made. 

Dated:
                        , 20    . 

	"TENANT"	 	

	 	 	a	 	

	

 	
 	

By:	
 	

	 	 	 	 	Print Name:	 	

	 	 	 	 	Its:	 	 

F-2-1

  

 
 

EXHIBIT "G"    
    
    DESCRIPTION OF SIGN CRITERIA    
  

[See
attached pages that follow this page] 

G-1

  

 
 

EXHIBIT "H"
  
    FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT    
  

	RECORDING REQUESTED BY:	 	 
	

	
 	

 
	

AND WHEN RECORDED MAIL TO:	
 	

 
	

	
 	

 
	

	
 	

 
	

	
 	

 
	Attn:	 	 
	
	 	 
	

	Space above this line for Recorder's use.

 
 

SUBORDINATION, NONDISTURBANCE
  AND ATTORNMENT AGREEMENT    
  

        NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND
OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

        THIS
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement") is entered into as
of                        , 200    by
and among CMD TECHNOLOGY, a                        ("Tenant"),
                        ,
a                        ("Borrower"),
and                        (in such capacity, the "Agent") for the lenders (each, a
"Bank" and collectively,
the "Banks") from time to time party to that certain Credit Agreement of even date herewith among Borrower, the Agent and the Banks. 

 
 

RECITALS    
  

        A.    Borrower
is the owner of certain real property and improvements (the "Improvements") situated thereon (collectively, the
"Property" or the "Premises") located in the City of Irvine, County of Orange, State of California,
commonly known as 9501 Jeronimo Road, and more particularly described in Exhibit A attached hereto. 

        B.    Borrower
is the lessor and Tenant is the lessee under that certain Lease Agreement dated             , 2000 (the
"Lease"), pursuant to which Borrower, as landlord, leased to Tenant the Property. 

        C.    The
Banks have made a loan (the "Loan") to Borrower in the principal amount
of                        Dollars ($
                        ). The Loan is evidenced by that certain Promissory Note Secured By Deed of Trust
dated                        , which Borrower has executed in favor of Agent (the
"Note"). Repayment of the Note is secured by, among other things, a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated as of                        , encumbering the Property, which Borrower has executed for the benefit of Agent (the
"Deed of Trust"). The Note, the Deed of
Trust, and any other agreement, document or instrument executed in connection therewith or in connection with the Loan are hereinafter collectively referred to as the "Loan
Documents." 

        D.    The
Banks are willing to make or continue the Loan to Borrower, provided that Tenant agrees, among other things, to subordinate the Lease and Tenant's rights thereunder
to the lien or charge of the Deed of Trust and to attorn to Agent on the terms and conditions hereinafter set forth. Tenant is willing to agree to such subordination and attornment, provided that
Agent agrees, among other things, not to disturb Tenant's right to possession under the Lease, all as more specifically set forth below. 

H-1

 

 
 

AGREEMENT    
  

        NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby declare, covenant and agree as follows: 

        1.    Subordination of Lease.    Tenant hereby intentionally and unconditionally subordinates
the Lease and any extensions, renewals, replacements or modifications thereof, and all of its right, title and interest thereunder and in and to the Premises, including, without limitation, any right,
whether arising out of the Lease or otherwise, to exercise any option or right of first refusal to purchase the Premises or the Property or any interest therein or portion thereof, in favor of the
lien or charge of the Deed of Trust, and the same is, and shall at all times continue to be, subject and subordinate in each and every respect to the lien or charge of the Deed of Trust and any
supplements, renewals, amendments, modifications, replacements, substitutions, consolidations and extensions thereof. 

        2.    Nondisturbance of Tenant's Right to Possession.    In the event Agent comes into
possession of or acquires title to the Property as a result of the foreclosure or other enforcement of the Deed of Trust, or by delivery of a deed in lieu of foreclosure, or as a result of any other
means, and provided that (i) Tenant is not in default (beyond any applicable notice, cure or grace period, if any, with respect to such default) in the payment of rent or in the performance of
any of the other terms, covenants or conditions of the Lease to be performed by Tenant, and (ii) Tenant observes the terms and conditions of this Agreement, Agent agrees that: 

        2.1    Joinder.    Tenant will not be named or joined in any foreclosure, trustee's sale or
other summary proceeding to enforce the Deed of Trust unless such joinder is required by law in order to perfect such foreclosure, trustee's sale or other proceeding; 

        2.2    Possession.    A foreclosure of the lien of the Deed of Trust, the exercise of the
power of sale or of any other remedy provided for therein, the delivery of a deed to the Property in lieu of foreclosure, or the Institution of any other proceeding or action taken to enforce the
terms and conditions of the Deed of Trust shall not terminate or otherwise affect the Lease or the leasehold estate created thereby, or disturb or interfere with Tenant's right to possession,
occupancy and use of the Premises during the term of the Lease and any extension thereof duly exercised by Tenant; 

        2.3    Obligations of Agent.    If Agent succeeds to Borrower's interest in the Property by
dispossession, judicial foreclosure, exercise of the power of sale, conveyance in lieu of foreclosure or otherwise, Agent, its successors and assigns, or any purchaser at a foreclosure or trustee's
sale, shall thereby automatically succeed to Borrower's Interest as landlord under the Lease and shall be bound by all of the obligations imposed by the Lease upon the landlord therein;  provided,
however, that neither Agent nor any of the
Banks, nor any of their respective successors and assigns, nor any purchaser at a foreclosure or trustee's sale, shall be: 

        2.3.1    Personally
liable for any act or omission of a prior landlord (including Borrower) under the Lease, or liable for any consequential damages arising from any such act
or omission of a prior landlord; 

        2.3.2    Subject
to any offsets or defenses which Tenant might have against any prior landlord (including Borrower) under the Lease, except as expressly provided for in the
Lease, provided that Agent or Banks have been given notice of and do not timely cure the respective act or omission by the prior landlord giving rise to any such offset or defense; 

        2.3.3    Bound
by any prepayment by Tenant of more than one month's installment of rent, additional rent or advance rent to any prior landlord (including Borrower), excluding
any security deposit, any letter of credit provided in lieu of a security deposit or any proceeds 

H-2

 

therefrom, and all such rent shall remain due and owing notwithstanding such advance payment; 

        2.3.4    Bound
by any amendment or modification of or to the Lease made without the written consent of Agent involving changes in the leased Premises, the amount of rent
payable under the Lease, the term of the Lease or any options (provided that nothing herein shall prevent Tenant from exercising any option currently provided in the Lease, including, without
limitation, any option to extend the term of the Lease or to expand the Premises); 

        2.3.5    Bound
to commence or complete any construction or to make any contribution toward the construction or installation of any improvements upon the Premises or any
expansion or rehabilitation of existing improvements thereon, except as expressly provided for in the Lease; 

        2.3.6    Bound
by any restriction on competition beyond the Premises; 

        2.3.7    Bound
by any notice of termination given by Borrower to Tenant under the Lease without Agent's prior written consent thereto. 

        2.3.8    Personally
liable for any environmental representation, warranty or covenant contained in the Lease beyond its ownership interest in the Property; 

        2.3.9    Personally
liable under the Lease, its liability thereunder being limited to its ownership interest in the Property; or 

        2.3.10    Liable
or responsible under or pursuant to the terms of the Lease or this Agreement after it ceases to own an interest in the Property with respect to the period
after its ownership in the Property ceases. 

        3.    Attornment By Tenant.    Tenant hereby agrees that if, dispossession, judicial
foreclosure, exercise of the power of sale or otherwise, including but not limited to Agent's exercise of its rights under the assignment of rents and leases contained in the Deed of Trust, Agent, its
successors or assigns, or any purchaser at a foreclosure sale or otherwise, shall come into possession of or become the owner of the Premises, such person shall succeed to the interest of Borrower
under the Lease, and, if no default then exists under the terms, conditions and provisions of the Lease or this Agreement on the part of Tenant to be performed, the Lease shall remain in full force
and effect, and Tenant shall attorn to and accept such person as landlord under the Lease and be bound by all of the terms, covenants and conditions of the Lease for the balance of the Lease term and
any extensions or renewals thereof duly exercised by Tenant. This attornment shall be effective and self-operative without the execution of any further instruments on the part of any of
the parties hereto immediately upon Agent succeeding to the interest of Borrower as landlord under the Lease. 

        4.    Acknowledgments and Agreements of Borrower. Borrower hereby specifically acknowledges and agrees
that nothing contained in this Agreement shall impair, affect, lessen, abrogate or otherwise modify the obligations of Borrower as landlord to Tenant under the Lease. 

        5.    Covenants of Tenant.    Tenant hereby covenants and agrees for the benefit of Agent and
the Banks that during the term of the Lease and any extension or renewal thereof, it will not, without Agent's prior written consent: (i) pay any rent or additional rent more than one month in
advance to any landlord (including Borrower) under the Lease, (ii) cancel, terminate or surrender the Lease, except upon the expiration of the term thereof and except as expressly provided for
in the Lease, (iii) enter into any amendment, modification or other agreement relating to the Lease involving changes in the leased Premises, the term of the Lease, the amount of rent payable
under the Lease or any options, or (iv) assign the Lease or sublet all or any portion of the Premises, except as expressly provided for in the Lease; provided,
however, that Agent shall not unreasonably withhold its consent to the actions described in clause (iv) so long as Tenant remains liable under the Lease. Tenant further 

H-3

 

agrees that during the term of the Lease and any extension or renewal thereof, it will, at the request of Agent, send to Agent copies of all material notices given to any landlord (including
Borrower) under the Lease. 

        6.    Agent's Right To Cure.    In the event that Borrower shall default in the performance or
observance of any of the terms, conditions or agreements in the Lease, Tenant shall give written notice thereof to
Agent and Agent shall have the right (but not the obligation) to cure such default. Tenant shall not take any action with respect to such default under the Lease, including, without limitation, any
action in order to terminate, rescind or void the Lease, to claim a partial or total eviction, or to withhold any rental thereunder, for a period of thirty (30) days after receipt of such
written notice by Agent (provided, that in the case of any default which cannot be cured by the payment of money and cannot with diligence be cured within such thirty (30) day period because of
the nature of such default, if Agent shall proceed promptly to cure the same and thereafter shall prosecute the curing of such default with diligence and continuity, then the time within which such
default may be cured shall be extended for such period as may be reasonably necessary to complete the curing of the same with diligence and continuity, but in no event later than thirty
(30) days after the expiration date of the applicable cure period under the Lease). Nothing herein, however, shall be construed as a promise or undertaking by Agent to cure any default of
Borrower as landlord under the Lease. 

        7.    Payment of Rents Upon Borrower's Default.    Borrower has agreed in the Deed of Trust
that the rentals payable under the Lease shall be paid directly by Tenant to Agent upon the occurrence of a default by Borrower thereunder or under any of the other Loan Documents. Accordingly, after
notice is given by Agent to Tenant that the rentals under the Lease shall be paid directly to Agent, Tenant shall pay to Agent, or in accordance with the directions of Agent, all rentals and other
moneys due and to become due to Borrower as landlord under the Lease. Tenant shall have no responsibility to ascertain whether such demand by Agent is permitted under the Deed of Trust. Borrower
hereby authorizes Tenant to accept such direction from Agent and waives any right, claim or demand it may now or hereafter have against Tenant by reason of such payment to Agent, and any such payment
to Agent shall discharge the obligations of Tenant to make such payment to Borrower. Such payments of rent by Tenant to Agent shall continue until the first to occur of the following: 

        7.1    Rent No Longer Due.    No further rent is due or payable under the Lease; 

        7.2    Borrower's Default Cured.    Agent gives Tenant notice that the default of Borrower
under the Loan Documents has been cured and instructs Tenant that the rents shall thereafter be payable to Borrower; or 

        7.3    Property Transferred.    A transfer of Borrower's interest in the Property occurs as a
result of the foreclosure of the lien of the Deed of Trust, the exercise of the power of sale, the delivery of a deed to the Property in lieu of foreclosure or otherwise, and Tenant receives from
Agent, its successors and assigns, or any purchaser at a foreclosure or trustee's sale, as the case may be, notice of such transfer, whereupon such person shall succeed to the interest of Borrower
under the Lease as provided for in Section 2 above, and thereafter all such rents shall be payable to such person. 

        8.    Limitations on Agent's Obligations.    Nothing in this Agreement shall be deemed or
construed to be an agreement by Agent or any Bank to perform any covenant of Borrower as landlord under the Lease unless and until Agent exercises its rights and remedies under the Deed of Trust and
the other Loan Documents and obtains title to the Property by foreclosure, exercise of the power of sale or the conveyance of the Property by deed in lieu of foreclosure, or otherwise obtains
possession of the
Property under the terms of the Deed of Trust, and then only during the time that Agent holds title to the Property. 

H-4

 

        9.    No Merger.    Borrower, Tenant and Agent hereby agree that unless Agent shall otherwise
consent in writing, Borrower's estate in and to the Property and the leasehold estate created by the Lease shall not merge, but shall remain separate and distinct, notwithstanding the union of such
estates either in Borrower or Tenant or any third party by purchase, assignment or otherwise. 

        10.    Entire Agreement.    This Agreement is the whole and only agreement between the parties
hereto with regard to the subordination of the Lease and the leasehold estate created thereby to the lien or charge of the Deed of Trust, and supersedes and controls any prior agreements as to such
subordination, including any provisions of the Lease which provide for the subordination of the Lease and the leasehold estate created thereby to a deed or deeds of trust or a mortgage or mortgages. 

        11.    Attorneys' Fees.    If any lawsuit, reference or arbitration is commenced which arises
out of or relates to this Agreement, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys' fees
in the action, reference or arbitration, including the allocated costs for the services of in-house counsel, in addition to costs and expenses otherwise allowed by law. 

        12.    Choice of Law.    This Agreement shall be construed under and in accordance with the
statutory, administrative and judicial laws of the State of California. 

        13.    Amendments and Waivers.    This Agreement may not be modified or amended except by a
written agreement signed by the parties hereto or their respective successors in interest or assigns, and no provision herein shall be waived except in writing signed by the party against whom
enforcement of any such modification or amendment is sought. 

        14.    Successors and Assigns.    This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns. 

        NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON THE REAL PROPERTY WHICH YOU LEASE TO
OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE LAND.

H-5

 

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

	"BORROWER"	 	"TENANT"	 
	

 	
 	

 	
,	

 	
 	

 	
,
	
	 	
	 
	

a	
 	

    
	
 	

a	
 	

    
	
 
	

By:	
 	

    
	
 	

By:	
 	

    
	
 
	

Name:	
 	

    
	
 	

Name:	
 	

    
	
 
	

Title:	
 	

    
	
 	

Title:	
 	

    
	
 
	
"AGENT"	
 	

 	
 	

 	
 
	

  

	
 	

, as Agent	
 
	

By:	
 	

    
	
 	

 	
 	

 	
 
	

Name:	
 	

    
	
 	

 	
 	

 	
 
	

Title:	
 	

    
	
 	

 	
 	

 	
 

H-6

  

 
 

EXHIBIT "I"    
    
    ANTENNA LICENSE AGREEMENT    
  

        This ANTENNA LICENSE AGREEMENT ("Agreement") is entered by and between LBA-VF III, LLC, a Delaware limited liability company ("Licensor"), and CMD
TECHNOLOGY, a California corporation ("Licensee"), with reference to the following Recitals: 

R  E  C  I  T  A  L  S:  

        A.    Licensor
is the owner of certain real property located in Irvine, California (the "Project"). Within the Project is an office building located at 9501 Jeronimo Road,
Irvine, California (the "Building"). 

        B.    Licensor
and Licensee are parties to that certain Lease Agreement to which this Agreement is attached and is hereby incorporated into and made a part of, covering a
portion of the Building (the "Lease"). 

        C.    Licensee
desires to obtain permission to place one satellite dish or antenna on the roof of the Building during the Lease Term. 

        D.    The
parties agree that Licensee's right to perform certain acts within the Project will be upon and subject to the terms, covenants and conditions herein set forth, and
Licensee covenants as a material part of the consideration for this Agreement to keep and perform each and all said terms, covenants and conditions and the parties further agree that this Agreement is
made upon condition of such performance. 

A  G  R  E  E  M  E  N  T:  

        NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties hereto agree that the Lease contains the following agreements of the
parties as follows: 

        1.    Incorporation of Recitals.    The foregoing Recitals are incorporated herein by this reference. 

        2.    Grant of License.    Licensor hereby grants to Licensee an exclusive license to place on the roof of the
Building, a single satellite dish or antennae together with related cabling and hardware, the height, diameter and specific plans and specifications of which are approved by Landlord in writing
("Antenna") during the Lease Term. The Antenna may be changed or modified during the Lease Term so long as the Antenna does not use more of the Building roof than contemplated by this Agreement and
approved by Landlord. The Antenna will be installed on the roof of the Building at the location and in a manner approved by Landlord. Prior to Licensee's installation of the Antenna, Licensee shall
submit to Licensor for its review and approval, not to be unreasonably withheld, conditioned or delayed, the specific height, diameter and specific plans and specifications for the Antenna and the
proposed location for placement on the roof. Tenant shall not so install or place any part of the Antenna on the roof or elsewhere in the Building until it has obtained Landlord's written approval of
the same. 

        3.    Term.    This Agreement shall be coterminous with the Lease. Licensee's failure to comply with any terms and
conditions of this Agreement or the Lease may be treated by Licensor as a default under the Lease and this Agreement. If Licensor terminates this agreement due to a default hereunder or under the
Lease by Licensee, such termination will be a remedy available to Licensor in addition to all other rights and remedies available to Licensor hereunder or under the Lease, or at law or in equity by
reason of such a default. 

        4.    Description of License.    Licensee hereby assumes any and all costs, expenses, liabilities and risks associated
with the installation, use, maintenance, repair and removal of the Antenna, and the 

I-1

 

restoration of the Building upon removal of the Antenna therefrom, and any other costs and expenses related thereto. Licensee agrees to operate, maintain and repair the Antenna so as not to cause any
interference with the normal operation of the Building, or the installation, operation, maintenance and removal of other communication equipment owned by Licensor or third parties. Licensee agrees
(a) to use the original roofing contractor for installation of the Antenna if Tenant's installation will attach to or penetrate the roof, or another licensed contractor reasonably approved by
Licensor, (b) to secure approval from Licensor's structural engineer prior to installation, which approval shall not be unreasonably withheld or delayed, and (c) to paint all corrosive
surfaces of the Antenna prior to installation. Licensee acknowledges that (i) Licensor retains the right to use the roof of the Building for
any purpose whatsoever (except that Licensor will not interfere with Licensee's use of the Antenna) including but not limited to the right to use the roof of the Building for the installation of other
communication facilities, and (ii) the signal which is to be received and/or sent by the Antenna may be lost or impaired as a result of on-going or future construction of nearby
buildings or parking facilities within or about the Project or the commercial development of which the Project is a part. Licensee hereby assumes any and all risks associated with any loss or
impairment of the signal, or any other related cost or inconvenience resulting therefrom. Licensee agrees to protect, defend, indemnify and hold Licensor free and harmless from and against any
obligation to any party which may claim any right as to the maintenance or use of the Antenna, or the receipt or delivery of any signal therefrom. The indemnity obligations of Licensee under this
Agreement will survive the termination or expiration of this Agreement. 

        5.    Assignment.    The license granted herein is personal to Licensee, and may not be transferred to any party,
except to an assignee of all of Licensee's rights, title and interests, as tenant, in and to the Lease that has been approved by Landlord (or to an assignee in connection with a Permitted Transfer, as
defined in the Lease). 

        6.    License Fee.    No separate license fee shall be due or payable for the license granted herein. 

        7.    Maintenance and Repair.    Licensee will be solely responsible for the costs of installing, maintaining,
repairing and removing the Antenna. Licensee agrees to maintain the Antenna in a clean, neat and sightly condition. Additionally, Licensee agrees, upon removal of the Antenna, to repair and restore
the roof and any other affected portions of the Building to their original condition as existed prior to the installation of the Antenna, including, but not limited to, the removal of any and all
cables and the repair and restoration of any damage caused thereby. Licensor, in its reasonable discretion, will have the right, upon the termination of this Agreement, to require that all cables
installed by Licensee in and through the Building in connection with the installation and use of the Antenna (which cables shall be shielded to prevent interference with other tenants' cables) be left
in place and abandoned to the benefit of Licensor. If Licensee elects to abandon the cables, Licensor will pay to Licensee the sum of one dollar ($1.00) as payment in full for purchase of all such
cables. 

        8.    Insurance.    Licensee's insurance to be maintained pursuant to the Lease shall include coverage for Tenant's
property rights and potential liabilities arising out of this License Agreement. 

        9.    Utilities.    Licensee agrees to pay for all utilities hook-up charges necessary for the
installation of the Antenna, if any, and shall pay for the maintenance and service of said utilities, as reasonably determined by Licensor. Licensor will allow Licensee, at Licensee's sole cost, to
hook up the Antenna to the Building electrical system in accordance with the provisions hereof, and under the supervision of Licensor. 

        10.    Governmental Approvals.    Licensee acknowledges that its right to install, operate, maintain, and repair the
Antenna shall be subject to all applicable governmental laws, rules and regulations and agrees to
obtain, at its own costs and expense, all governmental approvals and permits required for the installation and operation of the Antenna, and to submit same to Licensor prior to the installation of the
Antenna (including, without limit, evidence that the Antenna and the location thereof on the 

I-2

 

Building and all appurtenances thereto comply with all local zoning and building codes), and Licensee agrees to maintain same in effect throughout the term of this Agreement. Licensee acknowledges
that Licensor has made no representations or warranties to Licensee concerning the appropriateness of the Antenna under applicable building or zoning codes. 

        11.    Notice Before Installation.    Licensee agrees to pay when due all claims for labor or materials furnished or
alleged to have been furnished in connection with the Antenna or the installation thereof. Licensee agrees to give Licensor not less than ten (10) days written notice prior to the commencement
of any work by Licensee at the Building. All work performed in connection with the installation of the Antenna is to be performed strictly in accordance with the plans and specifications approved by
Landlord in accordance with Section 1 above. Licensor will have the right to post notices of non-responsibility in or on the Building as provided by law. 

        12.    Removal.    Upon termination of the Lease Term for any reason whatsoever including, but not limited to, the
imposition of any governmental law or regulation which may require removal, Licensee agrees to immediately remove the Antenna, cables (unless Landlord elects otherwise, as provided herein) and all
other improvements associated therewith at Licensee's own cost and expense, and Licensee agrees to repair any damage to the Building or the Project occasioned by the installation or removal thereof.
If Licensee fails to perform its obligations pursuant to this Paragraph 12, then Licensor may, at its option, perform such obligations and, upon demand, Licensee agrees to reimburse Licensor
for the costs and expenses incurred by Licensor in performing such obligations of Licensee, with interest at the Maximum Rate (as defined in the Lease). 

        13.    Indemnification.    Licensee agrees to protect, defend, indemnify and hold harmless Licensor against and from
any and all claims arising from or relating to (i) the Antenna and its related improvements and the installation, operation, maintenance and repair thereof, (ii) electrical power
interruptions in the Building or interruption with communication facilities of other Building tenants, and (iii) any breach or default in the performance of any obligation on Licensee's part to
be performed under the terms of this Agreement, or arising from or relating to any negligence or willful misconduct of Licensee relating to the Antenna. For the purposes hereof, "claims" is defined to
include, without limitation, obligations, liabilities, claims, liens, encumbrances, actions, causes of action, losses, damages, costs, expenses and reasonable attorneys' fees and costs; and in case
any action or proceeding is brought against Licensor by reason of any such claim. Licensee, upon notice from Licensor, agrees to defend the same at Licensee's sole cost and expense by counsel
reasonably satisfactory to Licensor. Licensee, as a material part of the consideration to Licensor, hereby assumes all risk of damage to property or injury to person in, upon or about the Property and
the Antenna from any cause whatsoever, except to the extent of the gross negligence or willful misconduct of Licensor. 

I-3

  

 
 

RIDER 1    
    
    EXTENSION OPTION RIDER    
    
    RIDER NO. 1 TO OFFICE LEASE    
  

        This Rider No. 1 is made and entered into by and between LBA-VF III, LLC, a Delaware limited liability company
("Landlord"), and CMD TECHNOLOGY, a California corporation ("Tenant"), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth
below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider to the "Lease" shall be construed to mean the
Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized terms not defined in this Rider shall have the same meaning as set forth in the Lease. 

        1.    Landlord
hereby grants to Tenant two (2) options (individually, an "Extension Option" and collectively, the
"Extension Options") to extend the Term of the Lease for additional periods of five (5) years each (individually, an
"Option Term" and collectively, the "Option Terms"), on the same terms, covenants and conditions as
provided for in the Lease during the initial eighty-nine (89) month Term, except for the Monthly Basic Rent, which shall equal the "fair market rental rate" for the Premises for the
applicable Option Term as defined and determined in accordance with the provisions of the Fair Market Rental Rate Rider attached to the Lease as Rider No. 2. 

        2.    Each
Extension Option must be exercised, if at all, by written notice ("Extension Notice") delivered by Tenant to Landlord
no sooner than that date which is two hundred seventy (270) days and no later than that date which is one hundred eighty (180) days prior to the expiration of the
then-applicable Term of the Lease. The Extension Options shall, at Landlord's sole option, not be deemed to be properly exercised if, at the time the applicable Extension Option is
exercised or on the scheduled commencement date for the Option Term, (a) an uncured Tenant Default exists (and the cure period has expired pursuant to Section 23 of the Lease,) or
(b) Tenant has assigned its interest under the Lease to a party other than in connection with a Permitted Transfer (as defined in the Lease). Provided Tenant has properly and timely exercised
an Extension Option, the then-applicable Term of the Lease shall be extended by the applicable Option Term and all terms, covenants and conditions of the Lease
shall remain unmodified and in full force and effect, except that the Monthly Basic Rent shall be as set forth above. 

Rider 1-1

  

 
 

RIDER 2    
    
    FAIR MARKET RENTAL RATE RIDER    
    
    RIDER NO. 2 TO OFFICE LEASE    
  

        This Rider No. 2 is made and entered into by and between LBA-VF III, LLC, a Delaware limited liability company
("Landlord"), and CMD TECHNOLOGY, a California corporation ("Tenant"), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth
below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider to the "Lease" shall be construed to mean the
Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized terms not defined in this Rider shall have the same meaning as set forth in the Lease. 

        1.    The
term "fair market rental rate" as used in the Lease and any Rider attached thereto shall mean the annual amount per
square foot, projected during the applicable Option Term, that a willing, comparable, non-equity tenant (excluding sublease and assignment transactions) would pay, and a willing,
institutional landlord of a comparable quality office building located in the Irvine Spectrum area of Irvine, or in Lake Forest or the Foothill Ranch area of California ("Comparison Area") would
accept, in an arm's length transaction (what Landlord is accepting in then current transactions for the Building may be used for purposes of projecting rent for the applicable Option Term), for space
of comparable size, quality and floor height as the Premises, taking into account the age, quality and layout of the existing improvements comprising a portion of the Premises (including, without
limitation, the condition of the roof of the Building), and taking into account items that professional real estate brokers or professional real estate appraisers customarily consider, including, but
not limited to, rental rates, space availability, free rent, build-out allowances and other tenant inducements, tenant size, parking allotments and charges and any other lease
considerations, if any, then being charged or granted by Landlord or the lessors of such similar office buildings. The fair market rental rate will be an effective rate, no specifically including, but
accounting for, the appropriate economic considerations described above. 

        2.    In
the event where a determination of fair market rental rate is required under the Lease, Landlord shall provide written notice of Landlord's determination of the fair
market rental rate not later than ninety (90) days after Tenant exercises the applicable Extension Option. Tenant shall have twenty (20) days ("Tenant's Review
Period") after receipt of Landlord's notice of the fair market rental rate within which to accept such fair market rental rate or to object thereto in writing. Failure of
Tenant to so object to the fair market rental rate submitted by Landlord in writing within Tenant's Review Period shall conclusively be deemed Tenant's approval and acceptance thereof. If within
Tenant's Review Period Tenant objects to, Landlord and Tenant will meet together with their respective legal counsel to present and discuss their individual determinations of the fair market rental
rate for the Premises under the parameters set forth in Paragraph 1 above and shall diligently and in good faith attempt to negotiate a rental rate on the basis of such individual
determinations. Such meeting shall occur no later than ten (10) days after the expiration of Tenant's Review Period. The parties shall each provide the other with such supporting information
and documentation as they deem appropriate. At such meeting if Landlord and Tenant are unable to agree upon the fair market rental rate, they shall each submit to the other their respective best and
final offer as to the fair market rental rate. If Landlord and Tenant fail to reach agreement on such fair market rental rate within ten (10) business days following such a meeting (the
"Outside Agreement Date"), Tenant's application Extension Option 

Rider 2-1

 

will be deemed null and void unless Tenant demands appraisal, in which event each party's determination shall be submitted to appraisal in accordance with the provisions of Section 3 below. 

	

 	
 	

3.	
 	

(a)	
 	

Landlord and Tenant shall each appoint one (1) independent appraiser who shall by profession be an M.A.I. certified real estate appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the
leasing of commercial (including office) properties in the Comparison Area. The determination of the appraisers shall be limited solely to the issue of whether Landlord's or Tenant's last proposed (as of the Outside Agreement Date) best and final
fair market rental rate for the Premises is the closest to the actual fair market rental rate for the Premises as determined by the appraisers, taking into account the requirements specified in Section 1 above. Each such appraiser shall be
appointed within fifteen (15) days after the Outside Agreement Date.
	

 	
 	

 	
 	

(b)	
 	

The two (2) appraisers so appointed shall within fifteen (15) days of the date of the appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth hereinabove
for qualification of the initial two (2) appraisers.
	

 	
 	

 	
 	

(c)	
 	

The three (3) appraisers shall within thirty (30) days of the appointment of the third appraiser reach a decision as to whether the parties shall use Landlord's or Tenant's submitted best and final fair market rental rate, and shall notify
Landlord and Tenant thereof. During such thirty (30) day period, Landlord and Tenant may submit to the appraisers such information and documentation to support their respective positions as they shall deem reasonably relevant and Landlord and
Tenant may each appear before the appraisers jointly to question and respond to questions from the appraisers.
	

 	
 	

 	
 	

(d)	
 	

The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party shall have the right to reject the decision or to undo the exercise of the applicable Extension Option. If either Landlord or
Tenant fails to appoint an appraiser within the time period specified in Section 3(a) hereinabove, the appraiser appointed by one of them shall within thirty (30) days following the date on which the party failing to appoint an appraiser
could have last appointed such appraiser reach a decision based upon the same procedures as set forth above (i.e., by selecting either Landlord's or Tenant's submitted best and final fair market rental rate), and shall notify Landlord and Tenant
thereof, and such appraiser's decision shall be binding upon Landlord and Tenant and neither party shall have the right to reject the decision or to undo the exercise of the applicable Extension Option.
	

 	
 	

 	
 	

(e)	
 	

If the two (2) appraisers fail to agree upon and appoint a third appraiser, both appraisers shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under the provisions of the Commercial Arbitration Rules of
the American Arbitration Association based upon the same procedures as set forth above (i.e., the decision shall be limited to selecting either Landlord's or Tenant's submitted best and final fair market rental rate).
	

 	
 	

 	
 	

(f)	
 	

The cost of each party's appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Landlord and Tenant.

Rider 2-2

 

	

 	
 	

 	
 	

(g)	
 	

If the process described hereinabove has not resulted in a selection of either Landlord's or Tenant's submitted best and final fair market rental rate by the commencement of the applicable lease term, then the Base Rental in effect for the last month
of the initial term will be used until the appraiser(s) reach a decision, with an appropriate adjustments for any underpayments or overpayments of Monthly Basic Rent or other amounts if the appraisers select Tenant's submitted best and final estimate
of the fair market rental rate. Upon a final determination of the fair market rental rate hereunder, the parties shall promptly enter into an amendment to this Lease confirming the terms of the decision.

Rider 2-3

  

 
 

RIDER 3    
    
    OPTIONS IN GENERAL    
    
    RIDER NO. 3 TO OFFICE LEASE    
  

        This Rider No. 3 is made and entered into by and between LBA-VF III, LLC, a Delaware limited liability company
("Landlord"), and CMD TECHNOLOGY, a California corporation ("Tenant"), as of the day and year of the
Lease between Landlord and Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth
below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider to the "Lease" shall be construed to mean the
Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized terms not defined in this Rider shall have the same meaning as set forth in the Lease. 

        (a)    Definition.    As used in this Lease and any Rider or Exhibit attached hereto, the word
"Option" has the following meaning: 

          (i)  The
Extension Option pursuant to Rider 1 herein; 

        (ii)  The
Termination Option Rider pursuant to Rider 4 herein; and 

        (iii)  The
Right of First Refusal Rider pursuant to Rider 5 herein. 

        (b)    Options Personal.    Each Option granted to Tenant is personal to the original Tenant
executing this Lease (or an assignee of such party following a Permitted Transfer or an assignment of all of such original Tenant's rights and interests in and under this Lease that is otherwise
approved by Landlord).
Each such Option may be exercised only by the original Tenant executing this Lease (or by an assignee of such party following a Permitted Transfer or an assignment of all of such original Tenant's
rights and interests in and under this Lease that is otherwise approved by Landlord; provided in the case of the Extension Option, that the requirements set forth in Rider 1 for Transferee's net worth
are met) while occupying at least 75% the Premises and may not be exercised, voluntarily or involuntarily, by any other person or entity. The Options, if any, granted to Tenant under this Lease are
not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise. 

        (c)    Effect of Default on Options.    Tenant will have no right to exercise any Option,
notwithstanding any provision of the grant of option to the contrary, and Tenant's exercise of any Option may be nullified by Landlord and deemed of no further force or effect, if (i) Tenant is
in material Default under the terms of this Lease as of Tenant's exercise of the Option in question or at any time after the exercise of any such Option and prior to the commencement of the Option
event. 

Rider 3-1

  

 
 

RIDER 4    
    
    RIGHT OF FIRST REFUSAL RIDER    
    
    RIDER NO. 4 TO OFFICE LEASE    
  

        This Rider No. 4 is made and entered into by and between LBA-VF III, LLC, a Delaware limited liability company ("Landlord"), and CMD
TECHNOLOGY, a California corporation ("Tenant"), as of the day and year of the Lease between Landlord and Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in
the Lease and in this Rider to the "Lease" shall be construed to mean the Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized terms not
defined in this Rider shall have the same meaning as set forth in the Lease. 

        Subject
to Rider No. 3 entitled Options in General, so long as LBA-VF II, LLC or another affiliate of Landlord, the management of which is controlled by the same party
or parties that control the management of Landlord ("Landlord's Affiliate"), is the owner of the adjacent real property commonly known as 9401 Jeronimo Road, Irvine, California (the "Adjacent
Building"), Tenant (but not any assignee or subtenant) shall have the right, subject to the terms and conditions set forth below, to lease the remaining approximately 10,000 square feet on the first
floor of the Building ("Right of First Refusal Space") before it is leased to any third party ("Right of First Refusal"). Tenant's Right of First Refusal is subject and subordinate to all expansion,
rights of first refusal, extension rights and other rights to lease, as applicable, of Continuus Software Corporation, a Delaware corporation (and its successors and assigns) (collectively,
"Continuus"). 

        In
the event any third party expresses interest in leasing all or any portion of the Right of First Refusal Space during the Lease Term (other than Continuus) ("Third Party Interest"),
Landlord shall offer the entire Right of First Refusal Space to Tenant (but only if Continuus elects not to lease the Right of First Refusal Space) upon the same terms, covenants and conditions as
provided in the bona fide third-party offer for the Right of First Refusal Space (including the term set forth in the Right of First Refusal, regardless of the then-remaining Term of this
Lease). If Tenant notifies Landlord in writing of the acceptance of such offer within five (5) business days after Landlord has delivered such offer to
Tenant, Landlord and Tenant shall enter into a written agreement modifying and supplementing the Lease and specifying that such Right of First Refusal Space accepted by Tenant is a part of the
Premises demised pursuant to the Lease for the applicable Lease Term described in Landlord's notice, and containing other terms and conditions relating to the addition of the Right of First Refusal
Space to this Lease as described in Landlord's offer; or, at Landlord's election, the parties shall enter into a separate lease for the Right of First Refusal Space. If Tenant does not notify Landlord
in writing of its acceptance of such offer within such five (5) business day period, then Tenant's rights under this paragraph with respect to the Right of First Refusal Space shall terminate
and Landlord shall thereafter be free to Lease the Right of First Refusal Space or any portion thereof to any third party upon economic terms not materially more favorable than those offered to Tenant
hereunder. Any termination of the Lease shall terminate all rights of Tenant with respect to the Right of First Refusal Space. The rights of Tenant with respect to the Right of First Refusal Space
shall not be severable from the Lease, nor may such rights be assigned or otherwise conveyed in connection with any assignment of the Lease other than a proper party following a Permitted Transfer.
Nothing herein contained should be construed so as to limit or abridge Landlord's ability to deal with the Right of First Refusal Space or to lease the Right of First Refusal Space to other tenants,
provided Landlord first offers to lease such space to Tenant as provided herein, and if such offer is accepted, delivers the Right of First Refusal Space to Tenant in accordance with this provision.
As provided above, Tenant's Right of First Refusal is subject to all expansion rights, rights of first refusal, extension rights and other rights to lease, as applicable, which Landlord's Affiliate
has granted to Continuus. Thus, the Right of First Refusal will be delivered to Tenant only after Landlord's Affiliate has appropriately notified and received negative responses from Continuus with
rights in the First Offer Space superior to Tenant's rights. 

Rider 4-1

  

 
 

RIDER 5    
    
    RIGHT TO TERMINATE LEASE    
    
    RIDER NO. 5 TO OFFICE LEASE    
  

        This Rider No. 5 is made and entered into by and between LBA VF III, LLC, a Delaware limited liability company ("Landlord"), and CMD TECHNOLOGY, a
California corporation ("Tenant"), as of the day and year of the Lease between Landlord and Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding anything
contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease
and in this Rider to the "Lease" shall be construed to mean the Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized terms not defined in
this Rider shall have the same meaning as set forth in the Lease. 

        Subject
to the terms of this Rider No. 5 and Rider No. 3, entitled "Options In General", and notwithstanding anything to the contrary contained in the Lease, Tenant will
have the option to terminate and cancel the Lease ("Termination Option"), effective as of the last day of the sixty-fifth (65th) full calendar month of the Term ("Termination Date"), by
delivering to Landlord, on or before the last day of the fifty-sixth (56th) of the Term, written notice of Tenant's exercise of its Termination Option. As a condition to the
effectiveness of Tenant's exercise of its Termination Option and in addition to Tenant's obligation to satisfy all other monetary and non-monetary obligations arising under this Lease
through to the Termination Date, on or before the end of the calendar month preceding the month in which the Termination Date occurs. Tenant shall pay to Landlord the sum of One Hundred Thousand
Dollars ($100,000.00) (the "Termination Consideration"). If Tenant properly and timely exercises its Termination Option and properly and timely delivers the Termination Consideration to Landlord and
satisfies all other monetary and non-monetary obligations under this Lease including, without limitation, the provisions regarding surrender of the Premises, all of which must be
accomplished on or before the Termination Date, then the Lease will terminate as of midnight on the Termination Date. 

Rider 5-1

 
 

RIDER TO SECTION 5
  OF CMD TECHNOLOGY LEASE    
  

        Notwithstanding the forgoing or any other provision in this Lease to the contrary, in the event that a notice of default is recorded against the Premises by any
Mortgagee (as defined below) of the Premises, Tenant shall have the right to immediately apply the Security Deposit towards any rent payable by Tenant hereunder (including Monthly Basic Rent and
additional rent). If such notice of default is subsequently removed of record, Tenant shall, within ten (10) days after written demand therefor and Tenant's receipt of reasonable written
evidence from the Mortgagee that such default has been cured, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. 

	INITIAL	 	    
	 	INITIAL	 	/s/  SH      

QuickLinks

EXHIBIT 10.43

TABLE OF CONTENTS

INDEX

SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

OFFICE LEASE

EXHIBIT "A" SITE PLAN

EXHIBIT "B" INTENTIONALLY OMITTED

EXHIBIT "C" WORK LETTER AGREEMENT [Landlord Build w/Allowance]

SCHEDULE 1 APPROVED SPACE PLANS

SCHEDULE 2 APPROVED FINAL PLANS

EXHIBIT "D"

SAMPLE FORM OF NOTICE OF LEASE TERM DATES

EXHIBIT "E" RULES AND REGULATIONS

PARKING RULES AND REGULATIONS

EXHIBIT "F-1"

SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE

EXHIBIT "F-2"

SAMPLE FORM OF LANDLORD ESTOPPEL CERTIFICATE

EXHIBIT "G" DESCRIPTION OF SIGN CRITERIA

EXHIBIT "H" FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

RECITALS

AGREEMENT

EXHIBIT "I" ANTENNA LICENSE AGREEMENT

RIDER 1 EXTENSION OPTION RIDER RIDER NO. 1 TO OFFICE LEASE

RIDER 2 FAIR MARKET RENTAL RATE RIDER RIDER NO. 2 TO OFFICE LEASE

RIDER 3 OPTIONS IN GENERAL RIDER NO. 3 TO OFFICE LEASE

RIDER 4 RIGHT OF FIRST REFUSAL RIDER RIDER NO. 4 TO OFFICE LEASE

RIDER 5 RIGHT TO TERMINATE LEASE RIDER NO. 5 TO OFFICE LEASE

RIDER TO SECTION 5 OF CMD TECHNOLOGY LEASEQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.1  

  
 

    AGREEMENT CONCERNING TERMINATION OF
  EMPLOYMENT, SEVERANCE PAY AND RELATED MATTERS    
  

        This Agreement Concerning Termination of Employment, Severance Pay and Related Matters (this "Agreement") is made as of January 17, 2002 (the "Effective
Date") by and between FairMarket, Inc., a Delaware corporation with its headquarters located in Woburn, Massachusetts ("FairMarket"), and Nanda Krish ("Executive"). In consideration of the
mutual covenants contained in this Agreement, FairMarket and Executive agree as follows: 

        WHEREAS,
FairMarket desires to employ Executive and Executive desires to be employed by FairMarket; and 

        WHEREAS,
Executive and FairMarket desire to reach an amicable resolution of any matters relating to any future termination of Executive's employment. 

        1.    RIGHT
TO TERMINATE EMPLOYMENT.    FairMarket and Executive agree that Executive is employed at-will and that either party may terminate the
employment relationship at any time, for any reason or no reason, subject to the terms of this Agreement. 

        2.    TERMINATION
AND TERMINATION BENEFITS.    Executive's employment with FairMarket and its subsidiaries shall terminate under the circumstances and with the effect
set forth in this Section 2. 

        a.    TERMINATION
BY FAIRMARKET FOR CAUSE.    Executive's employment with FairMarket and its subsidiaries may be terminated for cause without liability on the part of
FairMarket and its subsidiaries effective immediately upon written notice by FairMarket to Executive. Upon the giving of notice of termination of Executive's employment pursuant to this Section,
FairMarket and its subsidiaries shall have no further obligation or liability to Executive, except as specifically set forth in Section 2(e)(i) below. For purposes of this Agreement, the
following shall constitute "cause" for such termination: 

        i.      any
material breach by Executive of any provision of this Agreement or of any other agreement between Executive and FairMarket, including without limitation any agreement
referred to in this Agreement; 

        ii.    the
commission of, conviction of or plea of nolo contendere by Executive to (A) a felony or (B) a misdemeanor involving moral turpitude, deceit, dishonesty
or fraud; 

        iii.    any
other materially dishonest act or statement of Executive or insubordination of Executive with respect to FairMarket or any of its affiliates; or 

        iv.    any
material misconduct, willful or deliberate non-performance or gross negligence in the performance (other than by reason of disability, as determined by
FairMarket) by Executive of any of Executive's duties and responsibilities to FairMarket or any of its affiliates or otherwise with respect to FairMarket or any of its affiliates. 

For
purposes of this Agreement, no act, or failure to act, on Executive's part shall be considered "willful" unless such act, or failure to act, was without reasonable belief that Executive's action
or omission was in the best interest of FairMarket. 

        b.    TERMINATION
BY EXECUTIVE.    Executive's employment with FairMarket and its subsidiaries may be terminated by Executive by written notice to the Board of
Directors of FairMarket at least thirty (30) days prior to such termination. After receiving written notice, FairMarket shall have the right in its sole discretion to accelerate the timing of
such termination by Executive, and such acceleration shall not affect the treatment of such termination as a termination by Executive pursuant to this Section 2(b). Upon the termination of
Executive's employment pursuant to this Section, FairMarket and its subsidiaries shall have no further obligation or liability to Executive, except as specifically set forth in
Section 2(e)(i) below. 

 

        c.    TERMINATION
BY FAIRMARKET WITHOUT CAUSE.    FairMarket may terminate Executive's employment with FairMarket and its subsidiaries without cause by written notice
by FairMarket to Executive. In addition, if Executive's employment with FairMarket and its subsidiaries terminates as a result of the liquidation or other dissolution of FairMarket, then Executive's
employment shall be
deemed to have been terminated by FairMarket without cause. If any such termination occurs before or after a Change of Control Period (as defined in Section 2(f) below), then Executive shall
receive only the termination benefits set forth in Section 2(e) below, subject in the case of Section 2(e)(ii) to compliance by Executive with the provisions of that Section. If
such termination occurs during a Change of Control Period, then Executive shall receive only the termination benefits specified in Sections 2(e)(i) and 2(f) below, subject in the case of
Section 2(f) to compliance by Executive with the provisions of that Section. 

        d.    TERMINATION
BY EXECUTIVE FOR GOOD REASON.    During a Change of Control Period, Executive may terminate Executive's employment with FairMarket and its
subsidiaries for Good Reason and receive only the termination benefits specified in Sections 2(e)(i) and 2(f) below, subject in the case of Section 2(f) to compliance by Executive with
the provisions of that Section. 

For
purposes of this Agreement, "Good Reason" shall mean: 

        i.      a
reduction in Executive's annual base salary of more than 15%, except for an across-the-board salary reduction similarly affecting all or
substantially all employees, or any material failure of FairMarket to provide Executive with such other material employee benefits to which Executive is entitled, except for an
across-the-board change in benefits affecting all or substantially all employees; or 

        ii.    the
relocation of the offices at which Executive is principally employed to a location more than 50 miles from such offices without Executive's consent. 

If
such termination occurs other than during a Change of Control Period by reason of any of the events listed above in this Section 2(d), Executive shall provide FairMarket with at least thirty
(30) days notice and opportunity to cure such events and shall not be entitled to benefits pursuant to Section 2(e)(ii) below unless FairMarket fails to cure within such
30-day period. 

        e.    CERTAIN
TERMINATION BENEFITS.    

        i.      In
the event of the termination of Executive's employment pursuant to any provision of this Agreement, then no later than the next payroll date following the date of
termination of Executive's employment for any reason, FairMarket shall pay Executive for all salary and vacation time accrued as of such date of termination. Except as otherwise specifically provided
in any compensation and benefit programs in which Executive participated, all compensation and benefits payable to Executive shall terminate on the date of termination of Executive's employment. 

        ii.    Notwithstanding
the foregoing, in the event of termination of Executive's employment with FairMarket pursuant to Section 2(c) above (other than during a Change of
Control Period, in which case the provisions of Section 2(f) shall apply), FairMarket shall provide to Executive the following termination benefits, provided that Executive executes a General
Release (as defined in Section 2(g) below) and, if a revocation period is provided in the General Release, does not revoke the same within the period stated in the General Release, and subject
to Section 3 below: 

        A.    if
such termination occurs prior to July 17, 2002, then continuation of Executive's base salary at the annualized rate then in effect for eight (8) months
following the date of termination, and if such termination occurs on or after July 17, 2002, then 

2

 

continuation of Executives base salary at the annualized rate then in effect for twelve (12) months following the date of termination; 

        B.    continuation
of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. Section 1161 ET SEQ. (commonly known as "COBRA"), with
payments for such benefits made by FairMarket in the same proportion as made during Executive's employment; and 

        C.    if
such termination occurs on or after July 17, 2002, then vesting of the portion of all stock options granted to Executive by FairMarket (and not yet exercised,
expired, surrendered or canceled) that is not vested as of Executive's termination date and that would otherwise have vested by the date that is the one (1) year anniversary of Executive's
termination date. 

        f.      TERMINATION
PURSUANT TO A CHANGE OF CONTROL.    

        i.      If
a Change of Control (as defined below) occurs and if during the period beginning on the date such Change of Control occurs and ending on the first anniversary thereof
(a "Change of Control Period"), FairMarket terminates Executive's employment pursuant to Section 2(c) or Executive terminates Executive's employment with FairMarket pursuant to
Section 2(d) and, in either event, Executive executes a General Release and, if a revocation period is provided in the General Release, does not revoke the same within the period stated in the
General Release, and subject to Section 3 below, then: 

        A.    FairMarket
shall pay Executive an amount equal to the sum of Executive's annualized base salary then in effect plus Executive's Target Bonus (as defined below), payable
as provided below; 

        B.    FairMarket
shall provide Executive with continuation of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. Section 1161 ET SEQ.
(commonly known as "COBRA"),
with payments for such benefits made by FairMarket in the same proportion as made during Executive's employment; and 

        C.    any
and all stock options granted Executive by FairMarket and not yet exercised, expired, surrendered or canceled shall automatically vest in full as of Executive's
termination date. 

Any
decrease in Executive's Target Bonus and any decrease in Executive's annualized base salary that occur after the date a Change of Control occurs, other than an
across-the-board decrease affecting all or substantially all employees, shall be disregarded for purposes of the calculation set forth in the preceding clause (A). The
Change of Control Payment shall be in lieu of any payments to or on behalf of Executive that may otherwise be required pursuant to Sections 2(e)(ii). As used above, "Target Bonus" means the annual
target amount of any cash compensation paid by FairMarket and its subsidiaries to Executive under any cash incentive or bonus compensation plan or arrangement. 

        ii.    "Change
of Control" shall mean the occurrence of one or more of the following events: 

        A.    the
stockholders of FairMarket approve a merger, reorganization or consolidation in which the outstanding shares of FairMarket's common stock are converted into or
exchanged for a different kind of securities of the successor entity and the holders of FairMarket's outstanding voting power immediately prior to such transaction do not own a majority of the
outstanding voting power of the successor entity immediately upon completion of such transaction; or 

3

 

        B.    the
sale of all of the outstanding common stock of FairMarket to an unrelated person or entity. 

        iii.    FairMarket
shall promptly reimburse Executive for the amount of all reasonable attorneys' fees and expenses incurred by Executive in successfully obtaining or enforcing
any right or benefit provided Executive under this Section 2(f). 

        g.    GENERAL
RELEASE.    Executive's entitlement to benefits pursuant to Section 2(e)(ii) or 2(f) is conditioned on Executive's execution of and the
effectiveness of a General Release. For purposes of this Agreement, a "General Release" means a release of any and all claims against FairMarket and related persons and entities: (i) in a form
identical to or substantially the same as the release attached as Exhibit A hereto, provided, however, that FairMarket reserves the right to change any provision concerning notice and
revocation to conform to legal requirements; or (ii) any other form of general release acceptable to FairMarket. 

        3.    REDUCTION
OF PAYMENTS.    

        a.    Anything
in this Agreement to the contrary notwithstanding, if any compensation, payment or distribution by FairMarket to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Severance Payments"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the following provisions shall apply: 

        i.      If
the Severance Payments, reduced by the sum of (A) the Excise Tax (as defined below) and (B) the total of the federal, state and local income and
employment taxes payable by Executive on the amount of the Severance Payments which are in excess of the Threshold Amount (as defined below), are greater than or equal to the Threshold Amount,
Executive shall be entitled to the full benefits payable under this Agreement. 

        ii.    If
the Threshold Amount is less than (A) the Severance Payments, but greater than (B) the Severance Payments reduced by the sum of (1) the Excise
Tax and (2) the total of the federal, state and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the benefits payable
under this Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum Severance Payments shall not exceed the Threshold Amount. To the extent that there is more than
one method of reducing the payments to bring them within the Threshold Amount, Executive shall determine which method shall be followed; provided that if Executive fails to make such determination
within forty-five (45) days after the delivery by FairMarket to Executive of written notice of the need for such reduction, FairMarket may determine the amount of such reduction in
its sole discretion. 

For
the purposes of this Section 3: "Threshold Amount" shall mean three (3) times Executive's "base amount" within the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00); and "Excise Tax" shall mean the excise tax imposed by Section 4999 of the Code, or any interest or penalties incurred by Executive
with respect to such excise tax. 

        b.    The
determination as to which of the alternative provisions of Section 3(a) shall apply to Executive shall be made by PricewaterhouseCoopers, L.L.P. or any other
nationally recognized accounting firm selected by FairMarket (the "Accounting Firm"), which shall provide detailed supporting calculations both to FairMarket and Executive within fifteen
(15) business days of the date of termination of Executive's employment, if applicable, or at such earlier time as is reasonably requested by FairMarket or Executive. For purposes of
determining which of the alternative provisions of Section 3(a) shall apply, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation
applicable to individuals for the 

4

 

calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of Executive's residence on the
date of termination of Executive's employment, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Any determination by the
Accounting Firm shall be binding upon FairMarket and Executive. 

        4.    CONFIDENTIAL
INFORMATION, NONCOMPETITION AND INTELLECTUAL PROPERTY.    This Agreement incorporates by reference the terms of the Employee Agreement Regarding
Inventions, Confidentiality and Non-Competition dated as of                        , 200    (the "Inventions,
Confidentiality and Non-Competition Agreement") and Executive's
obligations contained therein apply both during and following the termination of Executive's employment. In addition, and without limiting the obligations of Executive set forth in the Inventions,
Confidentiality and Non-Competition Agreement, Executive agrees as follows: 

        a.    CONFIDENTIAL
INFORMATION.    As used in this Agreement, "Confidential Information" means information belonging to FairMarket and its affiliates which is of
value to FairMarket in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to FairMarket. Confidential Information includes, without
limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software;
market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been
discussed or considered by the management of FairMarket. Confidential Information includes information developed by Executive in the course of Executive's employment by FairMarket, as well as other
information to which Executive may have access in connection with Executive's employment. Confidential Information also includes the confidential information of others with which FairMarket or any of
its affiliates has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless due to breach of Executive's duties under
this Section 4. 

        b.    CONFIDENTIALITY.    Executive
understands and agrees that Executive's employment creates a relationship of confidence and trust between Executive and FairMarket
with respect to all Confidential Information. At all times, both during Executive's employment with FairMarket and after its termination, Executive will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential Information without the prior written consent of FairMarket, except as necessary in the ordinary course of performing
Executive's duties to FairMarket. 

        c.    DOCUMENTS,
RECORDS, ETC.    All documents, records, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information,
which are furnished to Executive by FairMarket or any of its affiliates or are produced by Executive in connection with Executive's employment will be and remain the sole property of FairMarket.
Executive will return to FairMarket all such materials and property as and when requested by FairMarket. In any event, Executive will return all such materials and property immediately upon
termination of Executive's employment for any reason. Executive will not retain with Executive any such material or property or any copies thereof after such termination. 

        d.    NONCOMPETITION
AND NONSOLICITATION.    During the term of Executive's employment with FairMarket and for one (1) year thereafter, Executive:
(i) will not, directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate or invest in any Competing
Business (as defined below); (ii) will refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or influencing any person to leave
employment or cease a consulting 

5

 

relationship with FairMarket or any of its affiliates (other than terminations of employment of subordinate employees and terminations of consulting relationships undertaken in the ordinary course of
Executive's employment with FairMarket); and (iii) will refrain from soliciting or encouraging any customer or supplier to terminate or otherwise modify adversely its business relationship with
FairMarket or any of its affiliates. Executive understands that the restrictions set forth in this Section 4(d) are intended to protect FairMarket's interest in its Confidential Information and
established employee, consultant, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For purposes of this Agreement,
the term "Competing Business" shall mean a business conducted anywhere in the world which is competitive with any business which FairMarket or any of its affiliates conducts or proposes to conduct at
any time during the employment of Executive. Executive acknowledges that the business of FairMarket and its affiliates is international in scope. Notwithstanding the foregoing, Executive may own up to
one percent (1%) of the outstanding stock of a publicly held corporation which constitutes or is affiliated with a Competing Business. 

        e.    INJUNCTION.    Executive
agrees that it would be difficult to measure any damages caused to FairMarket which might result from any breach by Executive of the
promises set forth in this Section 4 or in the Confidentiality, Inventions and Non-Competition Agreement, and that in any event money damages would be an inadequate remedy for any
such breach. Accordingly, Executive agrees that if Executive breaches, or proposes to breach, any portion of this Agreement or the Confidentiality, Inventions and Non-Competition
Agreement, FairMarket shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or
proving any actual damage to FairMarket. 

        5.    NONDISPARAGEMENT.    Executive
agrees not to make any statements that disparage or otherwise criticize FairMarket or any of its affiliates, products, services,
employees, officers or directors following the termination of employment. Notwithstanding the foregoing, statements made in the course of sworn testimony in legal proceedings or other statements
required by law shall not be subject to this Section 5. 

        6.    LITIGATION
AND REGULATORY COOPERATION.    During and after Executive's employment, Executive shall cooperate fully with FairMarket and its affiliates in the
defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of FairMarket or any of its affiliates which relate to events or occurrences
that transpired while Executive was employed by FairMarket. Executive's full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial, to act as a witness on behalf of FairMarket, and if called to testify, to testify truthfully and in good faith about events that happened during Executive's
employment. During and after Executive's employment, Executive also shall cooperate fully with FairMarket in connection with any investigation
or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by FairMarket.
FairMarket shall make reasonable efforts to schedule any cooperation required pursuant to this Section 6 at such times that will not unreasonably interfere with Executive's search for other
employment or performance of other employment services. FairMarket shall (a) reimburse Executive for reasonable expenses incurred by Executive in connection with Executive's performance of
obligations pursuant to this Section 6 based on the standards and procedures applicable to expense reimbursement for FairMarket's employees and (b) compensate Executive for any required
cooperation pursuant to this Section 6 by paying Executive for Executive's time at an hourly rate of 125% of Executive's final annual base salary rate when last employed by FairMarket divided
by 2,080, provided that FairMarket shall not be obligated to pay for any of Executive's time spent testifying or that otherwise could have been required to be expended pursuant to a subpoena. 

6

 

        7.    WITHHOLDING.    All
payments made by FairMarket under this Agreement shall be reduced by any tax or other amounts that FairMarket reasonably determines to be
required to be withheld under applicable law. 

        8.    CONSENT
TO JURISDICTION.    To the extent that any court action is permitted consistent with or to enforce this Agreement, the parties hereby consent to the
jurisdiction of the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts. Accordingly, with respect to any such court action,
Executive (a) submits to the personal jurisdiction of such courts, (b) consents to service of process and (c) waives any other requirement (whether imposed by statute, rule of
court, or otherwise) with respect to personal jurisdiction or service of process. 

        9.    INTEGRATION.    This
Agreement and the Inventions, Confidentiality and Non-Competition Agreement, which is incorporated by reference herein,
constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements between the parties with respect to such or any related subject matter. 

        10.  ASSIGNMENT;
SUCCESSORS AND ASSIGNS, ETC.    Neither FairMarket nor Executive may make any assignment of this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of the other party; provided that FairMarket may assign its rights under this Agreement without the consent of Executive in the event that
FairMarket shall effect a reorganization, consolidate with or merge into any other corporation, partnership, organization or other entity, or transfer all or substantially all of its properties or
assets to any other corporation, partnership, organization or other entity. This Agreement shall inure to the benefit of and be binding upon FairMarket and Executive, their respective successors,
executors, administrators, heirs and permitted assigns. 

        11.  ENFORCEABILITY.    If
any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law. 

        12.  ARBITRATION
OF DISPUTES.    Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of Executive's
employment or the termination of that employment during a Change of Control Period (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise)
shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American
Arbitration Association ("AAA") in Boston, Massachusetts in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to
the selection of arbitrators. In the event that any person or entity other than Executive or FairMarket may be a party with regard to any such controversy or claim, such controversy or claim shall be
submitted to arbitration subject to such other person or entity's agreement. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This
Section 12 shall be specifically enforceable. Notwithstanding the foregoing, this Section 12 shall not preclude either party from pursuing a court action for the sole purpose of
obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 12. 

        13.  WAIVER.    No
waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not 

7

 

prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach. 

        14.  NOTICES.    Any
notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or
sent by a nationally recognized overnight mail service or by registered or certified mail, postage prepaid, return receipt requested, to Executive at the last address Executive has filed in writing
with FairMarket or, in the case of FairMarket, at its headquarters office, attention of the Chief Financial Officer, and shall be effective on the earliest of the date of actual receipt, deposit at
the address for delivery or postal notice of the availability of the communication. 

        15.  AMENDMENT.    This
Agreement may be amended or modified only by a written instrument signed by Executive and by a duly authorized representative of FairMarket. 

        16.  GOVERNING
LAW.    This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such Commonwealth. 

        17.  COUNTERPARTS.    This
Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document. 

        IN
WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by FairMarket, by its duly authorized officer, and by Executive, as of the Effective Date. 

	 	 	FAIRMARKET, INC.
	

 	
 	

By:	
 	

/s/  RORY J. COWAN      
 Name: Rory J. Cowan

Title: Director
	

 	
 	

 	
 	

/s/  NANDA KRISH      
 Nanda Krish

8

  

 
 

Appendix A
  
    GENERAL RELEASE OF CLAIMS    
  

        In exchange for and as a condition to those promises of FairMarket, Inc. ("FairMarket") in the Agreement Concerning Termination of Employment, Severance
Pay and Related Matters between FairMarket and me (the "Agreement") that are subject to my agreement to a General Release, I agree as follows: 

        I
hereby irrevocably and unconditionally release, acquit and forever discharge FairMarket, its predecessors, successors, affiliates, other related entities and assigns, and the
directors, officers, employees, shareholders and representatives of any of the foregoing, and any persons acting on behalf or through any of the foregoing (any and all of whom or which are hereinafter
referred to as the "Company"), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys' fees and costs actually incurred), of any nature whatsoever, known or unknown (collectively, "Claims"), that I now have, own or hold, or claim
to have, own or hold, or that I at any time had, owned or held, or claimed to have had, owned or held against the Company. This General Release of Claims includes, without implication of limitation,
the complete release of all Claims of breach of express or implied contract, including, without limitation, all Claims arising from any employment offer letter from the Company; all Claims of wrongful
termination of employment whether in contract or tort; all Claims based on actions or omissions leading to this General Release of Claims; all Claims of intentional, reckless or negligent infliction
of emotional distress; all Claims of breach of any express or implied covenant of employment, including the covenant of good faith and fair dealing; all Claims of interference with contractual or
advantageous relations, whether those relations are prospective or existing; all Claims of deceit or misrepresentation; all Claims of discrimination under state or federal law, including, without
implication of limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e ET SEQ., as amended, the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621
ET SEQ., as amended, and Chapter 151B of the Massachusetts General Laws; all Claims of defamation or damage to reputation; all Claims for reinstatement; all Claims for punitive or emotional distress
damages; all Claims for wages, bonuses, severance, back or front pay or other forms of compensation; and all Claims for attorneys' fees and costs. This General Release of Claims shall not be construed
to include a release of Claims that arise from the Company's obligations under the Agreement. 

        I
acknowledge that I have been advised to consult with an attorney before signing this General Release. 

        I
FURTHER UNDERSTAND THAT I HAVE BEEN GIVEN AN ADEQUATE OPPORTUNITY, IF I SO DESIRED, TO CONSIDER THIS GENERAL RELEASE FOR UP TO TWENTY-ONE (21) DAYS BEFORE DECIDING
WHETHER TO SIGN IT. IF I SIGNED THIS GENERAL RELEASE BEFORE THE EXPIRATION OF THAT TWENTY-ONE (21) DAY PERIOD, I ACKNOWLEDGE THAT SUCH DECISION WAS ENTIRELY VOLUNTARY UNDERSTAND
THAT FOR A PERIOD OF SEVEN (7) DAYS AFTER I EXECUTE THIS GENERAL RELEASE I HAVE THE RIGHT TO REVOKE IT BY A WRITTEN NOTICE TO BE RECEIVED BY THE DIRECTOR, HUMAN RESOURCES OF FAIRMARKET BY THE
END OF THAT PERIOD. I ALSO UNDERSTAND THAT THIS GENERAL RELEASE SHALL NOT BE EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF THAT PERIOD. 

        Notwithstanding
the foregoing, I agree that nothing in this General Release of Claims is intended to affect any of my obligations that continue after the termination of my employment
contained in the Agreement or in any written agreement entered into between FairMarket and myself with respect to confidentiality, ownership of inventions, non-competition and/or
non-solicitation. 

9

 

        I
represent and agree that I have carefully read and fully understand all of the provisions of this General Release and that I am voluntarily agreeing to such provisions. 

	 	 	
 Nanda Krish

Date:

10

QuickLinks

AGREEMENT CONCERNING TERMINATION OF EMPLOYMENT, SEVERANCE PAY AND RELATED MATTERS

Appendix A GENERAL RELEASE OF CLAIMS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]