Document:

Exhibit
10.20

 

LEASE

BETWEEN

Arturo J. Gutierrez and John A. Cataldo,

Trustees of Auburn-Oxford Trust

u/d/t dated October 19, 1983

and recorded with the

Middlesex South Registry of the Land Court

as Document No. 652932

AND

Zoran Corporation,

a Delaware corporation.

FOR

 54,736
Square Feet

within One Wall Street

Burlington, Massachusetts

 

I N D E X

 

	
  ARTICLE 1 - REFERENCE DATA

  	
   

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Subject Referred To

  	
  4

  	
   

  
	
  1.2

  	
   

  	
  Exhibits

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2 - PREMISES
  AND TERM:

  	
   

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Premises

  	
  7

  	
   

  
	
  2.2

  	
   

  	
  Term

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 -
  CONSTRUCTION:

  	
   

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Initial Construction

  	
  8

  	
   

  
	
  3.2

  	
   

  	
  Preparation of Premises
  for Occupancy

  	
  8

  	
   

  
	
  3.3

  	
   

  	
  General Provisions
  Applicable to Construction

  	
  9

  	
   

  
	
  3.4

  	
   

  	
  Representatives

  	
  10

  	
   

  
	
  3.5

  	
   

  	
  Arbitration by Architects

  	
  10

  	
   

  
	
  3.6

  	
   

  	
  Warranty of Landlord’s
  Work

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 - RENT:

  	
   

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Rent

  	
  11

  	
   

  
	
  4.2

  	
   

  	
  Operating Cost
  Escalation

  	
  11

  	
   

  
	
  4.3

  	
   

  	
  Payments

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 - LANDLORD’S
  COVENANTS:

  	
   

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Landlord’s Covenants
  during the Term

  	
  19

  	
   

  
	
  5.2

  	
   

  	
  Interruptions

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 - TENANT’S
  COVENANTS:

  	
   

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Tenant’s Covenants
  during the Term

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 - CASUALTY
  AND TAKING:

  	
   

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Casualty and Taking

  	
  31

  	
   

  
	
  7.2

  	
   

  	
  Reservation of Award

  	
  31

  	
   

  
	
  7.3

  	
   

  	
  Additional Casualty Provisions

  	
  32

  	
   

  
																			

 

 2
 

 

I N D E X

(Continued)

	
  

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 - RIGHTS OF
  MORTGAGEE:

  	
   

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Priority of
  Lease

  	
  33

  	
   

  
	
  8.2

  	
   

  	
  Limitation on
  Mortgagee’s Liability

  	
  33

  	
   

  
	
  8.3

  	
   

  	
  Mortgagee’s
  Election

  	
  33

  	
   

  
	
  8.4

  	
   

  	
  No Prepayment or
  Modification, etc.

  	
  33

  	
   

  
	
  8.5

  	
   

  	
  No Release or
  Termination

  	
  34

  	
   

  
	
  8.6

  	
   

  	
  Continuing Offer

  	
  34

  	
   

  
	
  8.7

  	
   

  	
  Mortgagee’s
  Approval

  	
  34

  	
   

  
	
  8.8

  	
   

  	
  Submittal of
  Financial Statement

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 - DEFAULT: 

  	
   

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Events of
  Default

  	
  35

  	
   

  
	
  9.2

  	
   

  	
  Tenant’s
  Obligations After Termination

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 -
  MISCELLANEOUS:

  	
   

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Titles

  	
  37

  	
   

  
	
  10.2

  	
   

  	
  Notice of Lease

  	
  37

  	
   

  
	
  10.3

  	
   

  	
  Relocation

  	
  37

  	
   

  
	
  10.4

  	
   

  	
  Notices from One
  Party to the Other

  	
  37

  	
   

  
	
  10.5

  	
   

  	
  Bind and Inure

  	
  38

  	
   

  
	
  10.6

  	
   

  	
  No Surrender

  	
  38

  	
   

  
	
  10.7

  	
   

  	
  No Waiver, etc.

  	
  38

  	
   

  
	
  10.8

  	
   

  	
  No Accord and
  Satisfaction

  	
  38

  	
   

  
	
  10.9

  	
   

  	
  Cumulative
  Remedies

  	
  38

  	
   

  
	
  10.10

  	
   

  	
  Partial
  Invalidity

  	
  39

  	
   

  
	
  10.11

  	
   

  	
  Landlord’s Right
  to Cure

  	
  39

  	
   

  
	
  10.12

  	
   

  	
  Estoppel
  Certificate

  	
  40

  	
   

  
	
  10.13

  	
   

  	
  Waiver of Subrogation

  	
  40

  	
   

  
	
  10.14

  	
   

  	
  Brokerage

  	
  40

  	
   

  
	
  10.15

  	
   

  	
  Covenants
  Independent

  	
  40

  	
   

  
	
  10.16

  	
   

  	
  Access

  	
  40

  	
   

  
	
  10.17

  	
   

  	
  Entire Agreement

  	
  41

  	
   

  
	
  10.18

  	
   

  	
  Governing Law

  	
  41

  	
   

  
	
  10.19

  	
   

  	
  Additional
  Representations

  	
  41

  	
   

  
	
  10.20

  	
   

  	
  Signage

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11 - SECURITY:

  	
   

  	
   

  	
  42

  	
   

  
													

 

 3
 

 

Date of Lease Execution: 
February  8, 2007

 

REFERENCE DATA

1.1           SUBJECTS REFERRED TO:

Each reference in this
Lease to any of the following subjects shall incorporate the data stated for
that subject in this Section 1.1.

	
  Landlord:

  	
   

  	
  Arturo J. Gutierrez and John A. Cataldo,

  
	
   

  	
   

  	
  as Trustees of Auburn-Oxford Trust u/d/t

  
	
   

  	
   

  	
  dated October 19, 1983 and recorded with

  
	
   

  	
   

  	
  Middlesex South Registry District of the

  
	
   

  	
   

  	
  Land Court as Document No. 652932

  
	
   

  	
   

  	
   

  
	
  Managing Agent:

  	
   

  	
  The Gutierrez Company

  
	
   

  	
   

  	
   

  
	
  Landlord’s and Managing Agent’s

  	
   

  	
  Burlington Office Park

  
	
  Address:

  	
   

  	
  One Wall Street

  
	
   

  	
   

  	
  Burlington, Massachusetts 01803

  
	
   

  	
   

  	
   

  
	
  Landlord’s Representative:

  	
   

  	
  John A. Cataldo

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Zoran Corporation, a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  Tenant’s Address (for Notice &

  	
   

  	
   

  
	
  Billing):

  	
   

  	
  1390 Kifer Road

  
	
   

  	
   

  	
  Sunyvale, CA 94086

  
	
   

  	
   

  	
  Attn: Shungo Goto, Corporate Controller

  
	
   

  	
   

  	
   

  
	
  Tenant’s Representative:

  	
   

  	
  Lori Johnson, Senior HR  Director

  
	
   

  	
   

  	
   

  
	
  Building:

  	
   

  	
  One Wall Street, Burlington, Massachusetts

  
	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  Entire third Floor and a portion of fourth

  
	
   

  	
   

  	
  Floor, as depicted on Exhibit A and subject 

  
	
   

  	
   

  	
  to expansion under Exhibit L, and subject to 

  
	
   

  	
   

  	
  the exclusions set forth in Section 2.1.

  
	
   

  	
   

  	
   

  
	
  Rentable Floor Area of Tenant’s Premises:

  	
   

  	
  54,736 Rentable Square Feet.

  
	
   

  	
   

  	
   

  
	
  Total Rentable Floor Area of the

  	
   

  	
   

  
	
  Building:

  	
   

  	
  192,000 Rentable Square Feet

  
	
   

  	
   

  	
   

  
	
  Scheduled Term Commencement Date:

  	
   

  	
  August 1, 2007

  

 4
 

 

	
  Term Commencement Date:

  	
   

  	
  Per Section 2.2.

  
	
   

  	
   

  	
   

  
	
  Outside Delivery Date:

  	
   

  	
  Per Section 3.2

  
	
   

  	
   

  	
   

  
	
  Term Expiration Date:

  	
   

  	
  The last day of the tenth (10th) Year (as

  
	
   

  	
   

  	
  defined below) following the Term

  
	
   

  	
   

  	
  Commencement Date, subject to extension

  
	
   

  	
   

  	
  in accordance with Exhibit F or earlier 

  
	
   

  	
   

  	
  termination pursuant to Exhibit K.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  The “Initial Term”
  shall mean the period of

  
	
   

  	
   

  	
  approximately ten (10) years commencing 

  
	
   

  	
   

  	
  on the Term Commencement Date and

  
	
   

  	
   

  	
  ending on the original Term Expiration

  
	
   

  	
   

  	
  Date.  The
  Initial Term is subject to

  
	
   

  	
   

  	
  extension in accordance with Exhibit F or

  
	
   

  	
   

  	
  earlier termination pursuant to Exhibit K.

  
	
   

  	
   

  	
  The Initial Term, as the same may be

  
	
   

  	
   

  	
  extended or earlier terminated herein, is

  
	
   

  	
   

  	
  referred to as the “Term”.

  
	
   

  	
   

  	
   

  
	
  Rent Commencement Date:

  	
   

  	
  The date that is the later of
  (i) November 1,

  
	
   

  	
   

  	
  2007, or (ii) the date ninety (90) days after 

  
	
   

  	
   

  	
  the Term Commencement Date.

  
	
   

  	
   

  	
   

  
	
  Fixed Rent (excludes tenant electricity):

  	
   

  	
  Years 1 - 3: $1,231,560.00/Year;

  
	
   

  	
   

  	
  $102,630.00/Month;

  
	
   

  	
   

  	
  $22.50/RSF

  
	
   

  	
   

  	
  (subject, however, to Section 4.1)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Years 4-7: $1,286,296.00/Year;

  
	
   

  	
   

  	
  $107,191.33/Month;

  
	
   

  	
   

  	
  $23.50/RSF

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Years 8-10: $1,341,032.00/Year;

  
	
   

  	
   

  	
  $111,752.67/Month;

  
	
   

  	
   

  	
  $24.50/RSF

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As used herein, the first “Year”
  shall 

  
	
   

  	
   

  	
  commence on the Term Commencement 

  
	
   

  	
   

  	
  Date and (if such date does not occur on the 

  
	
   

  	
   

  	
  first day of the month) shall include the 

  
	
   

  	
   

  	
  balance of any partial calendar month in

  
	
   

  	
   

  	
  which the first anniversary of the Term 

  
	
   

  	
   

  	
  Commencement Date occurs, and each

  

 

 5
 

 

 

	
  

  	
   

  	
  subsequent Year shall mean each successive 

  
	
   

  	
   

  	
  twelve (12) calendar month period thereafter.

  
	
   

  	
   

  	
   

  
	
  Estimated Cost of Electrical Service to

  	
   

  	
   

  
	
  Tenant’s Space (Excluded from Fixed Rent):

  	
   

  	
  $1.00 per rentable square foot  -

  
	
   

  	
   

  	
  Payable by Tenant pursuant to Exhibit D,

  
	
   

  	
   

  	
  Paragraph IX

  
	
   

  	
   

  	
   

  
	
  Base Year Operating Costs:

  	
   

  	
  The amount of Operating Costs for the

  
	
   

  	
   

  	
  calendar year ending December 31, 2008

  
	
   

  	
   

  	
  (the “Base Year”), grossed up
  to reflect

  
	
   

  	
   

  	
  95% occupancy in accordance with

  
	
   

  	
   

  	
  Section 4.2.

  
	
   

  	
   

  	
   

  
	
  Security Deposit:

  	
   

  	
  $102,630.00 per Article 11 hereof.

  
	
   

  	
   

  	
   

  
	
  Guarantor:

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Permitted Uses:

  	
   

  	
  General Office, Computer Laboratory,

  
	
   

  	
   

  	
  Research and Development, and shipping 

  
	
   

  	
   

  	
  and receiving, and other lawful uses that are 

  
	
   

  	
   

  	
  ancillary and accessory thereto

  
	
   

  	
   

  	
   

  
	
  Real Estate Broker(s):

  	
   

  	
  Richards, Barry Joyce & Partners, LLC and 

  
	
   

  	
   

  	
  Studley, Inc.

  
	
   

  	
   

  	
   

  
	
  Public Liability Insurance -

  	
   

  	
   

  
	
  Bodily Injury and Property Damage:

  	
   

  	
  Each Occurrence: $1,000,000

  
	
   

  	
   

  	
            
  Aggregate: $2,000,000

  
	
   

  	
   

  	
   

  
	
  Special Provisions:

  	
   

  	
  Option to Extend (per Exhibit F)

  
	
   

  	
   

  	
  Rent Abatement (per Section 4.1)

  
	
   

  	
   

  	
  Right to Terminate (per Exhibit K)

  
	
   

  	
   

  	
  Right of First Refusal (per Exhibit L)

  

 

1.2           EXHIBITS

The Exhibits listed below in this Section are
incorporated in this Lease by reference and are to be construed as part of this
Lease:

	
  EXHIBIT A

  	
  Plan Showing Tenant’s Space

  
	
  EXHIBIT B

  	
  Estoppel Certificate

  
	
  EXHIBIT C

  	
  Preliminary Plans and Outline Specifications of
  Landlord’s Work

  
	
  EXHIBIT C-1

  	
  List of Landlord’s Work (Base Building)

  
	
  EXHIBIT C-2

  	
  Additional Work

  

 6
 

 

	
  EXHIBIT C-3 

  	
  Zoran Relocation Project Schedule

  
	
  EXHIBIT D

  	
  Landlord’s Services

  
	
  EXHIBIT E

  	
  Rules and Regulations

  
	
  EXHIBIT F

  	
  Option to Extend

  
	
  EXHIBIT G

  	
  Notice of Lease

  
	
  EXHIBIT H

  	
  Definition of Market Rent

  
	
  EXHIBIT I

  	
  Letter of Credit Form

  
	
  EXHIBIT J

  	
  Form of SNDA

  
	
  EXHIBIT K

  	
  Right to Terminate

  
	
  EXHIBIT L

  	
  Right of First Refusal

  

 

 7
 

 

ARTICLE 2

PREMISES
AND TERM

 

2.1           PREMISES

Subject to and with the benefit of the provisions of
this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord,
the Premises.  The Premises exclude the
exterior faces of exterior walls, the common facilities area and building
service fixtures and equipment serving exclusively or in common other parts of
the Building.

Tenant shall have, as appurtenant to the Premises, the
right to use in common with others entitled thereto, subject to reasonable
rules of general applicability to tenants of the Building from time to time
made by Landlord of which Tenant is given notice (provided such reasonable
rules do not materially increase Tenant’s obligations or diminish Tenant’s
rights under this Lease):  (a) the common
areas and  facilities included in the
Building or on the parcel of land (the “Lot”) on which
the Building is located, including, without limitation, a fitness center,
locker rooms (including shower facilities) and a cafeteria, and within
Burlington Office Park I (the “Park”) and all
means of access to and from the Premises and the Building to the common areas
and facilities, including without limitation the service, loading and parking
areas (i.e., having a ratio of approximately 3.0 cars per 1,000 rentable square
feet), all sidewalks, roads, driveways and the like, to the extent from time to
time designated by Landlord; and (b) the Building service fixtures and
equipment serving the Premises.  Without
limiting the generality of the foregoing, Tenant may use the internal building
fire stairs for access to and from the floors on which the Premises are located
and (subject to the provisions of Article 3) may install, at Tenant’s sole
cost, security access equipment to permit entry by its employees from the fire
stairs into the Premises, subject to Landlord’s reasonable approval.

Landlord reserves the right from time to time, without
unreasonable interference with Tenant’s occupancy and use of the Premises or
use of the common areas and facilities of the Building and the Park, (a) to
install, repair, replace, use, maintain and relocate for service to the
Premises and to other parts of the Building or either, building service
fixtures and equipment wherever located in the Building, and (b) to alter or
relocate any other common facility provided that substitutions are
substantially equivalent or better.  Landlord’s
exercise of the foregoing rights shall not materially increase Tenant’s
obligations or diminish Tenant’s rights hereunder, or materially interfere with
Tenant’s parking rights.

2.2           TERM

To have and to hold for a period (the “Term”) commencing two (2) business days after the Premises
are Ready for Occupancy as provided in Section 3.2 (said date being hereafter
referred to as the “Commencement Date”
or the “Term Commencement Date”) and continuing
until the Term Expiration Date, unless sooner terminated as provided in Section
3.2, Section 7.1, Article 9, or in Exhibit K, or extended as provided in
Exhibit F.  Notwithstanding anything to
the contrary contained in this Lease, in no event shall Tenant be obligated to
pay Fixed Rent prior to the Rent Commencement Date, even if the Commencement Date
has occurred prior to the Scheduled Term Commencement Date.

 8
 

 

ARTICLE 3

CONSTRUCTION

 

3.1           INITIAL CONSTRUCTION

Landlord shall, at its sole cost and expense, cause
(a) certain leasehold improvements to be substantially completed in the
Premises in accordance with the preliminary plans and outline specifications,
which plans and specifications are attached hereto as Exhibit C and made a part
hereof and (b) certain other improvements to be made as set forth in Exhibit
C-1 attached hereto and made a part hereof (collectively, all such work under
clauses (a) and (b) is referred to herein as “Landlord’s
Work”) prior to the Scheduled Term Commencement Date set forth in
Section 1.1 hereof.  All of the Landlord’s
Work shall be performed by Landlord’s general contractor, Gutierrez
Construction Co., Inc. (“GCCI”).  Any additional work beyond the Landlord’s
Work (“Additional Work”) requested by Tenant
shall be performed by Landlord, at Tenant’s expense, in an amount equal to the
incremental additional direct cost to GCCI of the Additional Work (exclusive of
any GCCI fees or general conditions) plus a mark-up of six (6%) percent of such
direct cost.  In no event shall any
Additional Work be a condition of substantial completion of Landlord’s Work as
hereafter provided in Section 3.2, to the extent the same would delay the
schedule for completing Landlord’s Work. 
Landlord acknowledges that (i) Tenant may include one or more of the
items of Additional Work listed on Exhibit C-2 attached hereto, (ii) that the
same shall not delay the schedule, provided that Landlord is notified in
writing on or before the Tenant’s Plan Submission Deadline which item(s) Tenant
wishes to include and provides Landlord all relevant necessary information
relating thereto prior to such time and (iii) that the same may remain in the
Premises at the expiration or earlier termination of the Term.

In connection therewith, ADD Inc. (“Tenant’s Architect”)
shall, on Tenant’s behalf and at Tenant’s expense but subject to the allowance
set forth below, prepare a set of design development control documents (as
described hereafter) (the “Tenant’s Plans”)
incorporating the preliminary plans and specifications attached hereto as
Exhibit C for Landlord’s review and approval on or before March 19, 2007
(the “Tenant’s Plan Submission Deadline”).  The parties shall review and approve Tenant’s
Plans, each acting diligently and in good faith, and shall initial the
development control plans upon approval by both parties.  Landlord’s review and approval of Tenant’s Plans
shall not be unreasonably withheld, conditioned or delayed, and Landlord shall
provide comments on or an approval of Tenant’s Plans within five (5) business
days after the date that such Tenant’s Plans are first submitted to Landlord
for Landlord’s review and approval and within three (3) business days after the
date that any revisions to Tenant’s Plans are submitted to Landlord for
Landlord’s review and approval.  Landlord’s
failure to provide comments within such time periods shall be deemed Landlord’s
approval of Tenant’s Plans.  Landlord
hereby agrees to provide Tenant with an allowance equal to $21,500 to be
applied by Tenant towards the cost of having Tenant’s Architect prepare and
complete the Tenant’s Plans.  Such
reimbursement shall be made by Landlord to Tenant within 20 days after receipt
of an invoice therefore containing reasonable back-up documentation evidencing
same.  Upon final approval of Tenant’s
Plans, Landlord shall, at its expense, utilize the final, approved Tenant’s
Plans to produce the final set of construction plans and specifications
necessary to price the cost of Landlord’s Work (collectively, the “Construction Documents”), which shall be

 9
 

 

consistent
in all respects with the final approved Tenant’s Plans.  Landlord shall provide Tenant with copies of
the complete set of the Construction Document promptly upon completion thereof
for Tenant’s review and approval, and Tenant shall provide any comments on the
Construction Documents within five (5) business days after the date that such
Construction Documents are first submitted to Tenant for Tenant’s review and
approval and within three (3) business days after the date that any revisions
to the Construction Documents are submitted to Tenant for Tenant’s review and
approval.  Any failure by Tenant to
provide comments within such time periods shall be deemed to be a Tenant
Delay.  The final, approved Construction
Documents shall replace the preliminary set of plans and outline specifications
attached hereto as Exhibit C, whereupon said final set of Construction
Documents shall be known and referred to hereunder as the “Landlord’s
Plans.”  Tenant may thereafter
submit change orders to the Landlord’s Plans, which Landlord shall review and
approve in accordance with the foregoing procedures (i.e., within five (5)
business days for any submission and three (3) business days for any
revisions), and Landlord’s response shall advise Tenant of any anticipated cost
increases (or decreases in which case an appropriate credit shall be given to
Tenant) or Tenant Delay associated with such change order.  Landlord shall not charge any costs to Tenant
for the review of plans or management or oversight of the design process.

All Tenant improvements, changes and additions shall
be part of the Premises and shall remain therein at the end of the Term, except
that Tenant’s business fixtures, equipment and personal property (which shall
include, without limitation, Tenant’s demountable partitions, business
equipment, and telephone or computer systems, but exclude telephone and
computer systems wiring) shall remain the property of Tenant and shall be
removed at the expiration of the Term. 
Tenant agrees to repair, at its sole cost and expense, any damage to the
Premises caused by any such removal by Tenant in accordance with this
paragraph.

3.2           PREPARATION OF PREMISES FOR
OCCUPANCY

Landlord agrees to use reasonable good faith efforts
to have the Premises Ready for Occupancy on or before the Scheduled Term
Commencement Date, which shall, however, be extended for a period equal to that
of any delays due to (i) Acts of God, (ii) changes in governmental regulations,
(iii) casualty, (iv) strike or other such labor difficulties, (v) unusual
weather conditions, (vi) unusual scarcity of or inability to obtain supplies, parts
or employees to furnish such services, or (vii) other acts reasonably beyond
Landlord’s, Tenant’s or GCCI’s (or its subcontractor’s) reasonable control, but
in no event shall the term include economic or financing difficulties or
failure by GCCI or its subcontractors to perform its obligations in a timely
manner except to the extent caused by any of the foregoing (i) — (vii) above
(each, a “Force Majeure Delay”), or any Tenant
Delay.  Landlord acknowledges its sole
responsibility for causing the existing tenant (Cooper) on the 3rd floor to
vacate such space in order to perform the Landlord’s Work by the Scheduled Term
Commencement Date, and any delay in such tenant’s departure shall not be deemed
a Force Majeure Delay.  Landlord shall
promptly notify Tenant of the occurrence of any Force Majeure Delay or Tenant
Delay.  For purposes of this Lease, a “Tenant Delay” shall mean any one of the following:  (i) changes requested by Tenant to Landlord’s
Plans to the extent such changes actually delay the date on which the Premises
shall be deemed Ready for Occupancy (as defined below); (ii) Tenant’s failure
to comply with any of its obligations under this Lease, including a delay without
limitation in providing the

 10
 

 

Tenant’s
Plans to Landlord, provided such failure delays the completion of Landlord’s
Work; (iii) a written request by Tenant to stop work, or (iv) the specification
of any materials or equipment comprising the Landlord’s Work with lead times
that, given the Tenant’s Plan Submission Deadline, make it unreasonable for
Landlord to substantially complete Landlord’s Work by the Scheduled Term
Commencement Date provided that Landlord notifies Tenant of the expected delay
due to such long-lead items in its approval of Tenant’s Plans.

The Premises shall be deemed ready for occupancy (“Ready for Occupancy”) on the earlier of:

(a)                                  the
date on which Tenant occupies all of the Premises for its operations for the
regular conduct of its business (which shall not be deemed to have occurred by
virtue of Tenant’s installation or testing of computers, equipment, furniture,
or other personal property); or

(b)                                 the
date on which all of the following have occurred:  (i) the Landlord’s Work is substantially
completed in compliance with Landlord’s Plans as certified by Landlord’s
contractor and architect, except for punch list items which do not interfere
with Tenant’s use of the Premises for its operations, and Landlord has obtained
a Certificate of Occupancy (temporary or final) for the Premises and has
provided Tenant with a copy thereof; provided, however, that if Landlord is
unable to substantially complete construction by the Scheduled Term
Commencement Date due to any Tenant Delay, then the Premises shall be deemed
substantially completed on the date the Premises would have been completed, but
for a Tenant Delay, subject to Tenant’s right to dispute the same as
hereinafter provided; (ii) Landlord has delivered legal possession of the
Premises and the Landlord’s Work to Tenant, with the Building, Premises and
exterior areas in good operating condition and free and clear of debris and
ready for Tenant’s use and occupancy; (iii) Tenant has had a reasonable period
of time (consistent with the periods of time more particularly set forth in the
Zoran Relocation Project Schedule on the attached Exhibit C-3) for early
access to the Premises prior to the Commencement Date for the purposes set
forth in the next grammatical paragraph below; and (iv) Landlord has obtained
all approvals and permits from the appropriate governmental authorities
required for the legal occupancy of the Premises and the Landlord’s Work.  Landlord and Tenant acknowledge and agree
that the schematic plans attached hereto as Exhibit C shall be deemed replaced
by final plans and construction documents when finally approved by Landlord and
Tenant pursuant to Section 3.1.

During the construction period, Landlord shall hold
weekly job meetings with GCCI and Tenant may have one or more representatives
present at such meetings.  Tenant
(including its contractors, agents or employees) shall have access to the
Premises prior to the Commencement Date for purposes of telephone/data cabling,
installation of security systems, installation of modular furniture, computer
equipment and related data center equipment, wiring, and other purposes
reasonably approved by Landlord, provided that (i) Tenant’s contractors,
agents or employees work in a harmonious labor relationship with GCCI, (ii)
reasonable prior notice is

 11
 

 

given to GCCI (if such entry is not made in accordance
with the Zoran Relocation Project Schedule), and (iii) no work, as reasonably
determined by Landlord, shall be done or fixtures or equipment installed by
Tenant in such manner as to unreasonably interfere with any work being done by
or for Landlord on the Premises.  During
the period of such entry into the Premises by Tenant prior to the Commencement
Date, no Fixed Rent, additional rent or other charges shall accrue or be
payable, but otherwise such entry by Tenant shall be subject to all the terms,
covenants and conditions contained in this Lease, other than terms that are
inapplicable to or inconsistent with a non-exclusive entry into the Premises by
Tenant for the foregoing installation and set-up purposes.

If
the Premises are not Ready for Occupancy on or before the Outside Delivery Date
(as defined below) for whatever reason, Tenant may (i) cancel this Lease at any
time thereafter while the Premises are not deemed Ready for Occupancy by giving
notice to Landlord of such cancellation which shall be effective ten (10) days
after such notice, unless within such ten (10) day period Landlord delivers the
Premises Ready for Occupancy, in which event such notice of cancellation shall
be rendered null and void and of no further force or effect, or (ii) enforce
Landlord’s covenants to construct the Premises in accordance with the terms of
this Lease.  In the event the Premises
are not Ready for Occupancy on or before the Outside Delivery Date and the
parties mutually agree on a revised schedule for Landlord to substantially
complete Landlord’s Work by a revised Outside Delivery Date, then Tenant shall
also have the right to terminate this Lease if Landlord fails to substantially
complete the Premises within such additional period of time.  In the event Landlord’s Work is not
substantially completed on or before such date which is thirty (30) days beyond
the Scheduled Term Commencement Date (as extended for the period of any Tenant
Delay and/or Force Majeure Delay), then the Fixed Rent shall be abated by one
day after the Rent Commencement Date for each day of such delay beyond
expiration of said thirty (30) day period. 
The foregoing rights shall be the Tenant’s sole remedy at law or in
equity for Landlord’s failure to have the Premises Ready for Occupancy as
required hereunder.

For purposes hereof, the “Outside Delivery Date” shall
be deemed to refer to that certain date which is sixty (60) days following the
Scheduled Term Commencement Date, as such date may be extended for a period
equal to that of (i) any Force Majeure Delay (not to exceed a total of sixty
(60) days), or (ii) the number of days of any Tenant Delay.

Landlord and Tenant agree to resolve any disputes
under this Article 3 pursuant to the provisions of Article 3.5 hereof, unless
the parties agree otherwise.

3.3           GENERAL PROVISIONS APPLICABLE TO
CONSTRUCTION

All construction work required or permitted by this
Lease, whether by Landlord or by Tenant, shall be done in a good and
workmanlike manner and in compliance with all applicable laws and all lawful
ordinances, regulations and orders of governmental authority and insurers of
the Building.  Either party may inspect
the work of the other at reasonable times. 
Landlord and Tenant shall perform a walk-through of the Premises at a
mutually convenient time prior to the substantial completion date, and Landlord
shall promptly thereafter provide Tenant with a draft punchlist for review and
comment.  Tenant shall give Landlord
notice of any incomplete or defective items in the Landlord’s Work that are
observed by Tenant (including, without

 12
 

 

limitation,
punch list items, which shall be added to Landlord’s punchlist) within thirty
(30) days after the Commencement Date, and Landlord shall diligently cause such
items to be completed within thirty (30) days after such notice.  If Tenant shall not have identified any
uncompleted items within thirty (30) days after receipt of a certificate by a
licensed architect or registered engineer (as to either, not affiliated with
Landlord) stating that all required work has been completed, such certificate
shall be conclusive evidence that Landlord has performed all such obligations
except for items stated in such certificate to be incomplete or not in
conformity with such requirements, and punch list items of which Tenant has
notified Landlord and Landlord has not yet completed.  Tenant shall give notice to Landlord of any
other incomplete or defective items thereafter observed no later than the end
of the standard one-year warranty period for Landlord’s Work under Landlord’s
construction contract with GCCI, and after receipt of such notice Landlord
shall diligently cause any such items to be corrected in accordance with
Section 3.6.

3.4           REPRESENTATIVES

Each party authorizes the other to rely in connection
with their respective rights and obligations under this Article 3 upon approval
and other actions on the party’s behalf by Landlord’s Representative in the
case of Landlord or Tenant’s Representative in the case of Tenant or by any
person designated in substitution or addition by notice to the party relying.

3.5        ARBITRATION BY
ARCHITECTS

Whenever there is
a disagreement between the parties with respect to construction by Landlord of
Landlord’s Work, such disagreement shall be definitively determined by the
following procedure: Each of Landlord and Tenant shall appoint one (1)
architect, such two (2) architects will then (within five (5) days of their
appointment) appoint a third architect licensed in the Commonwealth of
Massachusetts with not less than ten (10) years experience.  Each architect shall establish within ten
(10) days of their appointment the matter in dispute.  In case of any dispute with respect to dollar
amounts or lengths of time or dates such as the date of Substantial Completion,
the dollar amount or length of time or date shall be the average of the two
closest determinations by the three (3) architects, with the determination of
the architect which was not closest to another architects’ determination
excluded from such calculation.  In case
of any dispute not involving dollar amounts or lengths of time or dates (i.e.
the approval of plans) the determination by at least two (2) of the three (3)
architects shall be required in order to resolve the matter in dispute.  Landlord and Tenant shall each bear the cost
of the architect selected by them respectively and shall share equally the cost
of the third architect.  During such
arbitration period, the parties agree to cooperate with one another so as to
proceed with construction and with their respective obligations hereunder in a timely
manner.  Each determination under this
Section 3.5 shall be binding upon Landlord and Tenant.

3.6                       WARRANTY
OF LANDLORD’S WORK

Notwithstanding
anything to the contrary contained in this Lease, Landlord hereby warrants and
guarantees, at Landlord’s sole cost and expense, that the Landlord’s Work shall
be free from defects in workmanship and materials for a period of one (1) year
after the Term

 13
 

 

Commencement
Date.  Upon expiration of said one (1)
year period, Landlord shall assign to Tenant any and all warranties and
guarantees with respect to Landlord’s Work and, to the extent that any such
warranties and guarantees are not assignable, Landlord agrees to enforce the
same for the benefit of Tenant, at Tenant’s sole cost and expense.  Tenant shall not be responsible to pay for
any such warranties of less than one (1) year duration or enforcement by
Landlord against its own employees or against Gutierrez Construction Co., Inc.,
or against any of its other affiliates (including their respective employees).  Landlord agrees to repair, at its sole cost
and expense, any latent defects in Landlord’s Work promptly after receipt of
notice therefrom from Tenant, provided that such notice from Tenant is received
by Landlord within said one (1) year period. 
In connection therewith, Tenant shall notify Landlord promptly after it
becomes aware of any such defects.  Any
repairs or replacements or alterations to Landlord’s Work after said initial
one (1) year period shall be chargeable to Tenant in accordance with and subject
to the provisions of Section 4.2 hereof.

ARTICLE 4

RENT

 

4.1           RENT

Tenant agrees to pay, without any offset or reduction
whatever, Fixed Rent equal to 1/12th of the annual Fixed Rent set forth in
Section 1.1 hereof in equal installments in advance on or before the first day
of each calendar month included in the Term; and for any portion of a calendar
month at the beginning or end of the Term, at the rate payable for such portion
in advance.  The term “Rent” shall at all times be used herein to mean Fixed Rent
plus additional rent or other sums of money payable under the Lease (including,
without limitation, Section 4.2 hereof and electricity pursuant to Exhibit D,
Paragraph IX hereof).

Notwithstanding the foregoing and anything to the
contrary in Section 1.1, (a) no monthly Fixed Rent shall be due for
the Premises from and after the Term Commencement Date through the day
immediately preceding the Rent Commencement Date (the “Free Rent
Period”) (b) during the Free Rent Period, Tenant shall pay to
Landlord additional rent equal to (i) the costs of electricity used in the
Premises under Exhibit D, paragraph IX, during the Free Rent Period, plus
(ii) the costs of supplying HVAC and cleaning services to the Premises
during the Free Rent Period [as set forth on Exhibit D], currently estimated at
$.42/RSF per month for the items referenced in clauses (i) and (ii) above and
(c) Tenant’s obligation to pay Fixed Rent shall be phased in at the
following rates, regardless of Tenant’s occupancy of space:

Year 1
(for the portion of Year 1 following the Rent Commencement Date):

$900,000/Year;
$75,000/Month; $22.50/RFF based on 40,000 RSF

 

Year 2:                    $1,012,500.00/Year;
$84,375.00/Month; $22.50 based on 45,000 RSF

Year 3:                    $1,231,560.00/Year;
$102,630.00/Month; $22.50/RSF based on 54,736

If Tenant shall at any time during the Free Rent Period
materially default under this

 14
 

 

Lease
beyond any applicable notice and cure period, then Tenant’s abatement hereunder
shall cease and Tenant shall immediately pay to Landlord all sums abated
hereunder.

4.2                                                         OPERATING
COST ESCALATION

With respect to each Fiscal Year (as defined below) of
the Term commencing on or after January 1, 2009, Tenant shall pay to Landlord,
as additional rent, Tenant’s share of the Operating Cost Escalation (as defined
below), if any, on or before the thirtieth (30th) day following receipt by Tenant of
Landlord’s Statement (as defined below). 
As soon as practicable after the end of each such Fiscal Year during the
Term and after Lease termination, Landlord shall render a statement (“Landlord’s Statement”) in reasonable detail and according to
usual accounting practices certified by Landlord and showing for the preceding
Fiscal Year or fraction thereof, as the case may be, Landlord’s Operating Costs
(as defined below) and Tenant’s share of the Operating Cost Escalation.

“Landlord’s Operating Costs”
shall include all commercially reasonable expenses of operating, repairing, and
maintaining the Building and the Lot, including without limitation:  real estate taxes on the Building and Lot;
installments and interest on assessments levied on the Building or Lot for
public betterments or public improvements; expenses of any proceedings for
abatement of taxes and assessments with respect to any Fiscal Year or fraction
of a Fiscal Year; premiums for insurance in commercially reasonable amounts,
coverages, and deductibles; compensation and all fringe benefits, workmen’s
compensation, insurance premiums and payroll taxes paid by Landlord to, for or
with respect to all persons engaged in the operating, maintaining, or cleaning
of the Building and Lot; water, sewer, gas, telephone and the electricity to
operate the base building heating, ventilating, air conditioning systems,
elevators and parking lot lighting, and other utility charges not billed
directly or to tenants by Landlord or the utility companies (the cost for the
electricity consumed by the tenant for interior lighting, plugs, equipment,
supplemental air conditioning and fixtures in shall be billed monthly to Tenant
by Landlord as set forth in Paragraph IX of Exhibit D, and the cost of
electricity for such services provided to other tenants shall not be included
in Operating Costs); costs of building and cleaning supplies and equipment
(including rental); cost of maintenance, cleaning and repairs; cost of snow
plowing or removal, or both, and care of landscaping; payments to independent
contractors under service contracts for cleaning, operating, managing,
maintaining and repairing the Building and Lot (which payments may be to
affiliates of Landlord provided the same are at reasonable rates consistent
with the type of occupancy and the services rendered and are consistently
applied in the Base Year and future years); the Building’s pro rata share (i.e.
68.84% as hereinafter provided) of the cost of operating, maintaining and
repairing the common areas and facilities within the Park (such as, but not
limited to, snow plowing, sanding, sand removal, lot sweeping, landscaping,
common area and street lighting, and management); and all other reasonable and
necessary expenses paid in connection with the operation, cleaning,
maintenance, and repair of the Building and Lot, or either, and properly
chargeable against income.   If Landlord
(i) installs a new, used or replacement capital item for the purposes of
reducing Landlord’s Operating Costs, or otherwise improving the efficiency of
the Building (such that the annual cost savings exceed the annual amortized
cost of such capital item as set forth below), or (ii) is required to perform
capital repairs or replacements or to install capital items in order to comply
with changes in applicable law first effected after the Commencement Date (each
a

 15
 

 

“Capital Item”), the costs thereof as reasonably amortized by
Landlord over their useful life in accordance with generally accepted
accounting principles, consistently applied, with legal interest (not to exceed
seven percent (7%) per annum) (“Agreed Interest Rate”)
on the unamortized amount, shall be included in “Landlord’s Operating Costs”.  Landlord agrees that all of such services to
be included in Landlord’s Operating Costs shall be obtained by Landlord at
commercially reasonable, competitive market rates consistent with the operation
and management of comparable “Class A” office buildings in the suburban Boston
area.

Notwithstanding
anything to the contrary contained herein, in no event shall Landlord’s
Operating Costs include (nor shall Tenant have any obligation to pay any
Operating Cost Escalation on account of) the following:

(a)                                  Costs,
expenses and fees relating to solicitation of, advertising for and entering
into leases and other occupancy arrangements for space in the Park, including
but not limited to legal fees, space planners’ fees, lease concessions,
improvement costs or allowances, real estate brokers’ leasing commissions and
advertising expenses.

(b)                                 All
costs and expenses associated with (i) any lawsuits or disputes with any
mortgagee (except as the actions of Tenant may be in issue); (ii) selling,
syndicating, financing, mortgaging or hypothecating any of Landlord’s interest
in the Park (or any part thereof); (iii) any lawsuits or disputes between
Landlord and its employees, over Landlord’s title to the Building, Lot or Park
or any part thereof,  between Landlord
and building management, or between Landlord and other tenants, invitees or
adjacent property owners.

(c)                                  Costs
of correcting defects in the Building or the Building equipment or replacing
defective equipment solely to the extent such costs relate to items covered by
warranties of manufacturers, suppliers or contractors or are otherwise borne by
parties other than Landlord and for which Landlord receives reimbursement.

(d)                                 Costs
of installations paid by or constructed for specific tenants or other
occupants.

 (e)                               Interest, points, other
finance charges and principal payments on mortgages, and other costs of
indebtedness, if any.

(f)                                    All
amounts which are allocable to, specifically charged to or otherwise paid by
any other tenant or other occupant of the Building or the Park, or for items or
services which Landlord provides selectively to one or more tenants (other than
Tenant) without reimbursement.

(g)                                 Any
bad debt loss, rent loss or reserves for bad debts or rent loss.

(h)                                 The
salary and indirect compensation (including, without limitation, all fringe
benefits, workmen’s compensation, insurance premiums and payroll taxes) of any 

 16
 

 

                                                employee
above the trade of property manager, and the wages and indirect compensation of
any employee to the extent such employee devotes his or her time to property
other than the Building.

(i)            Amounts, if any, paid as ground
rental by Landlord.

(j)                                     Costs
and expenses related to third-party landlord-tenant disputes.

(k)                                  Any
cost of any service or items sold or provided to tenants of the Building or
Park or other occupants for such service or has been or is entitled to be
reimbursed by insurance or otherwise compensated by parties (e.g. easement
holders) other than tenants of the Building and for which Landlord receives
reimbursement.

(l)                                     The
costs of repair, replacement, or restoration work occasioned by any casualty or
condemnation above the deductible amount on the insurance policy or
condemnation award.

(m)                               Any
depreciation allowance or expense, expense reserve and other non-cash items
including reserves for Landlord’s repair, replacement or improvement of the Building,
Lot, Park or common areas or any portions thereof.

(n)                               The
costs of management fees to the extent that they exceed comparable fees in
comparable office buildings in other comparable office building projects in the
relevant market area and/or to the extent that they exceed comparable fees
charged to other tenants in the Building (except that the parties agree that,
as of the Commencement Date, a management fee of 5% of collected rents is
acceptable, which such rate is being charged on the date hereof and will be
reflected in the Base Year Operating Costs as though no free rent or phase in
rent applied).

(o)                               Except
for management fees, Landlord’s general overhead and any overhead or profit
increment to any subsidiary or affiliate of Landlord for services on or to the
Building, Common Areas, and/or the Park, to the extent that the cost of such
service exceeds competitive costs for such services rendered by persons or
entities of similar skill, competence and experience other than a subsidiary or
affiliate of Landlord.

(p)                               Any
costs or expenses representing any amount paid for services and/or materials to
a person, firm, or entity that is personally related to any person associated with
Landlord or affiliated with Landlord to the extent such amount exceeds the
amount that would have been paid for such service or materials at the then
existing market rates in the absence of such relationship.

(q)                               Costs
incurred in connection with the presence of any Hazardous Materials in, on,
under or about the Premises, Building, Lot or Park, except to the extent caused
by

 17
 

 

                                                the
release or emission of the Hazardous Materials in question by Tenant, in which
event the provisions of Section 6.1.17 shall control.

(r)                                    The
cost of any work or service furnished to any tenant or occupant of the Building
to a materially greater extent or in a materially more favorable manner than
that furnished generally to the tenants and other occupants of the Building, or
the costs of work or services furnished exclusively for the benefit of any
tenant or occupant of the Building or at such tenant’s cost.

(s)                                The
costs for items and services which any tenant is required to reimburse Landlord
or pay third persons.

(t)                                  The
costs of repairs or maintenance which are covered by warranties or service
contracts and to the extent such maintenance and repairs are made at no cost to
Landlord.

(u)                                 The
costs of repairs, alterations and general maintenance necessitated by the
negligence or willful misconduct of Landlord or its agents, employees, or
contractors or invitees.

(v)                               Interest
or penalties due to the late payment of taxes, utility bills or other Landlord’s
Operating Costs, unless caused by Tenant, in which event Tenant shall be
responsible for same.

(w)                               Any
other cost or expense which, under generally accepted accounting principles,
consistently applied, would not be a normal maintenance or operating expense of
the Building, including bad debt expenses and charitable contributions and
donations.

(x)                                   The
costs and expenses attributable to Landlord’s breach of the following warranty:

                                                As
of the Commencement Date, Landlord shall warrant to Tenant that (a) the roof,
foundation, footings, slab, structural walls, exterior windows and skylights
(including seals), plumbing, fire sprinkler/life safety system, lighting,
heating, ventilation and air conditioning systems, electrical systems, and the
passenger and freight elevators serving the Premises shall be in good operating
condition and repair (except to the extent modified or otherwise impaired by
any improvements constructed by Tenant); (b) the Premises, Building and Lot
shall be free of all mold, comply with all laws, codes and regulations and free
of latent defects in the construction thereof. 
Landlord shall promptly correct any non-

 18
 

 

                                                compliance
with the foregoing warranty, at its sole cost and expense (i.e., not as part of
Landlord’s Operating Costs), provided that Tenant shall notify Landlord of such
non-compliance not later than one hundred twenty (120) days from and after the
Commencement Date.

(y)                                 The
costs and expenses associated with any capital improvement, repair or
replacement except for Capital Items as permitted by the second full paragraph
of this Section 4.2.

(z)                                   Any
costs, fines, interest, or penalties incurred due to violations by Landlord of
any governmental rule or authority or failure to make any payment when due,
except if caused by Tenant hereunder in which event Tenant shall be responsible
for such costs.

(aa)                            The
cost of any service provided to Tenant or other occupants of the Building or
Park for which Landlord is actually reimbursed.

(bb)                          Costs or
fees payable to public authorities in connection with any future construction,
renovation and/or improvements to the Park (other than the Landlord’s Work or
any improvements made to the Premises by or for Tenant).

(cc)                            Organizational
expenses associated with the creation, maintenance and operation of the entity
which constitutes Landlord.

(dd)                          Any item
of Landlord’s Operating Costs which is duplicative of any other item of
Landlord’s Operating Costs.

(ee)                            Taxes
on Landlord’s income from all sources.

In case of services which are not rendered to all
areas of the Building on a comparable basis, the proportion allocable to the
Premises shall be the same proportion which the Rentable Floor Area of Tenant’s
Premises bears to the total rentable floor area to which such service is so
rendered (such latter to be determined in the same manner as the Total Rentable
Floor Area of the Building), or shall be re-allocated by Landlord on a
reasonable basis taking into consideration such factors as usage of a
particular tenant in the Park and/or such other pertinent factors as reasonably
determined by Landlord.

Landlord’s Operating Costs shall also include the
costs of maintaining and operating the exterior common areas and facilities of
the Park that serve the Building and other buildings in the Park in common
(subject to the exclusions and limitations set forth above), which shall be allocated
by Landlord between the Building and such other buildings in the Park in a
consistent, commercially reasonable manner based upon the following:  upon the ratio of the square footage of the
Premises to the aggregate square footage of all completed buildings in the
Park, as such buildings are completed from time to time (i.e., the Building’s
current share of Park-related costs is 68.84% based on the fact that the Park
currently contains 278,908 Rentable Square Feet).

“Tenant’s Proportionate
Share” shall mean the proportion that the Rentable Floor Area of
Tenant’s Premises bears to the Total Rentable Floor Area of the Building (i.e.,
initially,

 19
 

 

28.51%).

“Operating Cost Escalation”
shall mean the product of (i) Tenant’s Proportionate Share and (ii) an
amount equal to the excess, if any, of:

(a)                                  Landlord’s
Operating Costs for the Fiscal Year in question; over

(b)                                 the
Base Year Operating Costs (as grossed up in accordance with this
Section 4.2).

In calculating both the Base Year Operating Costs and
Landlord’s Operating Costs for any Fiscal Year, if the Building not fully
occupied during such year, the actual costs of the elements of Landlord’s
Operating Costs that vary with occupancy shall be adjusted to the amount of
Landlord’s Operating Costs that would have been incurred had the Building been
95% occupied.

If, with respect to any Fiscal Year or fraction
thereof during the Term, Tenant is obligated to pay Operating Cost Escalation,
then Tenant shall pay, as additional rent, on the first day of each month of
ensuing Fiscal Year (until Landlord’s Statement for an ensuing Fiscal Year
reflects an adjusted Operating Cost Escalation), “Estimated
Monthly Escalation Payments” equal to 1/12th of the annualized
Operating Cost Escalation for the immediately preceding Fiscal Year.  Estimated Monthly Escalation Payments for
each ensuing Fiscal Year shall be made retroactively from the first day of such
Fiscal Year and on account of the payment to be made pursuant to the first sentence
of this Section 4.2 for such Fiscal Year, with an appropriate additional
payment or refund to be made at the time such payment is due for the previous
year.

The term “Fiscal Year” as
used in this Article shall mean the period of twelve (12) consecutive months
commencing on January 1st and ending on December 31st.

The term “real estate taxes” as used above shall mean
all taxes of every kind and nature assessed by any governmental authority on
the Lot, the Building and improvements, or both, and in the common areas of the
Park (allocated among the Building and other buildings as set forth above),
which the Landlord shall become obligated to pay because of or in connection
with the ownership, leasing and operation of the Lot, the Building and
improvements, or both, and the Park, subject to the following:  there shall be excluded for such taxes all
income taxes, excess profits taxes, excise taxes, franchise taxes, gift,
estate, succession, inheritance and transfer taxes, provided, however, that if
at any time during the Term the present system of ad valorem taxation of real
property shall be changed so that in lieu of the whole or any part of the ad
valorem tax on real property, there shall be assessed on Landlord a capital
levy or other tax on the gross rents received with respect to the Lot, Building
and improvements, or both, a federal, state, county, municipal, or other local
income, franchise, excise or similar tax, assessment, levy or charge (distinct
from any now in effect) measured by or based, in whole or in part, upon any
such gross rents, then any and all of such taxes, assessments, levies or
charges, to the extent so measured or based, shall be deemed to be included
within the term “real estate taxes”.

 20
 

 

If the total of
the monthly payments paid by Tenant with respect to any Fiscal Year exceeds the
actual Operating Cost Escalation for such Fiscal Year, then, at Landlord’s
option, such excess shall be either (i) credited against the next due payments
of Fixed Rent, or (ii) refunded by Landlord to Tenant no later than 120 days
after the end of the Fiscal Year in question, unless the Term shall expire on
or prior to said 120-day period, in which event Landlord shall refund such
excess on the last day of the Term.

Tenant
shall have the right, but not the obligation, to contest (or request that
Landlord so contest on behalf of all tenants of the Building) in good faith by
appropriate proceedings diligently pursued the imposition or amount of any real
estate taxes assessed against the Lot or the Building or such personal property
taxes payable by it hereunder, including the right on behalf of, and in the
name of the Landlord, to seek abatements thereto.  The Landlord shall reasonably cooperate with
Tenant, at Tenant’s sole expense, in any such contest or abatement
proceedings.  In the event that Tenant
determines not to contest such taxes and Landlord desires to file such contest
(or Tenant requests that Landlord file such contest), Landlord shall give
written notice of that fact to all affected tenants, including Tenant, and
shall have the sole right as to such tax bill to contest in good faith by
appropriate proceedings diligently pursued the imposition or amount of any real
estate taxes assessed against the Lot or the Building or such other taxes
payable by Tenant hereunder, including the right to seek abatements
thereto.  In such event, the Tenant shall
reasonably cooperate with Landlord, at no cost to Tenant, in any such contest
or abatement proceedings.  Landlord shall
also reasonably cooperate and assist Tenant, at no cost to Landlord, in procuring
any applicable tax credits or incentives.

If
Landlord shall receive on behalf of the Lot or the Building a rebate or
abatement on any tax with respect to which a payment is made by Tenant, then
after deducting therefrom any costs reasonably incurred by Landlord in
obtaining such rebate or abatement, all of such net rebate or abatement
relating to the Lot or the Building shall promptly be returned to Tenant to the
extent that such rebate or abatement relates to payment made by the Tenant and
not reimbursed by Landlord.  If Tenant
shall receive on behalf of the Lot or the Building a rebate or abatement on any
tax with respect to which a payment is made by Tenant, then after deducting
therefrom any costs reasonably incurred by Tenant in obtaining such rebate or
abatement, all of such net rebate or abatement related to the Lot, the Building
or to personal property taxes assessed against the Tenant’s property shall be
retained by Tenant, as its sole property, to the extent such rebate or
abatement relates to a payment made by Tenant and not reimbursed by
Landlord.  The remaining portion of such
net rebate or abatement shall promptly be returned to Landlord.

In the event that
Landlord receives a refund on account of real estate taxes after the expiration
of the Term, which refund relates to a Fiscal Year during the Term, the amount
of such refund fairly allocable to Tenant shall promptly be refunded to Tenant
by Landlord with a reasonably detailed accounting of the payments, abatement
and costs, as aforesaid.  All references
to real estate taxes “for” a particular Fiscal Year shall be deemed to refer to
real estate taxes due and payable during such Fiscal Year without regard to
when such impositions are assessed or levied.

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All records that
the Landlord is required to maintain hereunder shall be maintained by the
Landlord for a period of three (3) years following the expiration of the Fiscal
Year to which such records relate. 
Tenant shall have the right, through its representatives, to examine,
copy and audit such records at reasonable times upon not less than thirty (30)
days prior written notice to Landlord given within one hundred and eighty (180)
days of receipt of Landlord’s Statement. 
Such records shall be maintained at Landlord’s Address set forth in Section
1.1, or such other place within the Commonwealth of Massachusetts as Landlord
shall designate from time to time for the keeping of such records.  The costs of such audits shall be borne by
Tenant; provided, however, that if such audit establishes that the actual
Operating Cost Escalation for the Fiscal Year in question is less than the
Landlord’s final determination of the Operating Cost Escalation as set forth in
the Landlord’s Statement submitted to Tenant by at least five percent (5%),
then Landlord shall pay the reasonable cost of such audit.  If, as a result of such audit, it is
determined that Tenant must pay additional amounts to Landlord on account of
the Operating Cost Escalation, or that Tenant has overpaid Landlord on account
of the Operating Cost Escalation, then the undercharged or overpaid party shall
promptly reimburse the other party for the payment due.

Notwithstanding
anything contained to the contrary in this Lease, the responsibility for the
payment of all real estate taxes with respect to the Building and the Park
shall be upon the Landlord and the Landlord agrees to pay the same as required
by law.  Landlord shall provide Tenant
with copies of all tax bills and a computation of Tenant’s pro rata share
thereof, and upon Tenant’s request, copies of all tax bills.  In the event that any special assessments are
assessed and payable, the allocation of the same to Landlord’s Operating Costs
shall be calculated as if such assessments were being paid by Landlord over the
longest period of time permitted by applicable law.

Landlord shall have the right from time to time to
change the periods of accounting under this Section 4.2 to any annual period
other than the Fiscal Year and upon any such change all items referred to in
this Section shall be appropriately apportioned.  In all Landlord’s Statements, rendered under
this Section, amounts for periods partially within and partially without the
accounting periods shall be appropriately apportioned, and any items which are
not determinable at the time of a Landlord’s Statement shall be included
therein on the basis of Landlord’s estimate, and with respect thereto Landlord
shall render promptly after determination a supplemental Landlord’s Statement,
and appropriate adjustment shall be made according thereto.   All Landlord’s Statements shall be prepared
on an accrual basis of accounting and shall be certified either by a certified
public accountant or by an officer of Landlord.

Notwithstanding any other provision of this Section
4.2, if the Term expires or is terminated as of a date other than the last day
of a Fiscal Year at the end of the Term, Tenant’s last payment to Landlord
under this Section 4.2 shall be made on the basis of Landlord’s best estimate
of the items otherwise includable in Landlord’s Statement and shall be made on
or before the later of (a) twenty (20) days after Landlord delivers such
estimate to Tenant, or (b) the last day of the Term, with an appropriate
payment or refund to be made upon submission of Landlord’s Statement.  Without limitation, the obligation of Tenant
to pay the Operating Cost Escalation with respect to any Fiscal Year during the
Term (or portion thereof) or the Landlord’s obligation to make a refund
therefore, as applicable, shall survive the expiration or earlier

 22
 

 

termination
of the Term.

4.3           PAYMENTS

All payments of Fixed Rent and additional rent shall
be made to Managing Agent, or to such other person as Landlord may from time to
time designate by notice to Tenant.  If
any installment of rent, fixed or additional, or on account of leasehold
improvements is paid after the due date thereof, at Landlord’s election, it
shall bear interest at the rate of the “Prime Rate” then being charged by the
major banks in Boston, Massachusetts, plus two percent (2.0%) per annum from
such due date, which interest shall be immediately due and payable as further
additional rent; provided, however, Landlord hereby acknowledges and agrees
that Tenant shall have one (1) grace period of an additional five (5) days
after notice per each calendar year of the Term before which such interest
shall be charged by Landlord.

ARTICLE 5

LANDLORD’S
COVENANTS

 

5.1           LANDLORD’S COVENANTS DURING THE
TERM

Landlord covenants during the Term:

5.1.1        Building Services - To furnish,
through Landlord’s employees or independent contractors, the services listed in
Exhibit D (which are common services provided to all tenants of the Building).

5.1.2        Additional Building Services - To
furnish, through Landlord’s employees or independent contractors, reasonable
additional Building operation services upon reasonable advance request of
Tenant at reasonable and competitive rates from time to time established by
Landlord to be paid by Tenant;

5.1.3        Repairs - Except as otherwise
provided in Article 7, except as resulting from Tenant’s negligence or misuse,
except as resulting from settling or sagging within standard engineering
tolerance (provided that the settling or sagging does not affect the surface or
structural integrity of the Building or in any way materially affect the
ordinary and customary use of the Premises, or any part thereof by Tenant),
Landlord shall maintain the structural integrity of the Building, including but
not limited to the roof, exterior walls, and windows and skylights. Landlord
shall also be responsible for (i) all exterior maintenance, repairs and
replacements necessary to keep in good condition and working order all common
areas of the Building and the Park, and the trees, shrubs, plants, landscaping,
parking areas, driveways and walkways on the Lot or elsewhere in the Park,
including but not limited to, all lighting and other fixtures and equipment
serving such parking areas, driveways and walkways, (ii) providing the services
to the Building and Premises (including all utilities) and performing the
maintenance work set forth in Section 4.2 and Article V hereof, and (iii)
performing necessary repairs and replacements to maintain the watertight
integrity of the Building, including but not limited to the

 23
 

 

roof, exterior
wall, windows and skylights.  Landlord
shall also maintain, repair and replace the HVAC equipment in the Building,
such that it shall be in good operation condition throughout the Term,
reasonable wear and tear excepted. 
Landlord shall make all of such repairs and replacements necessary to
maintain the foregoing in good condition and working order and in compliance
with all laws and all costs and expenses under this Section 5.1.3 shall be
included in Landlord’s Operating Costs pursuant to the provisions of Section
4.2, except as set forth therein to the contrary. All other repairs and
maintenance, except as specifically otherwise provided for herein, shall be the
responsibility of Tenant.

In the event that Tenant gives notice to Landlord of a
condition which Tenant believes requires Landlord’s repairs or a condition
which, if left uncorrected, will necessitate Landlord’s repair, then, in
accordance with the terms of this Section 5.1.3, Landlord shall respond
promptly to investigate such condition, and, if such repairs are Landlord’s obligation
hereunder, Landlord shall commence promptly to repair same and to diligently
complete said repair.  Tenant agrees
during the Term to provide Landlord notice as soon as reasonably possible of
any condition known to Tenant which might require, or if left uncorrected will
necessitate Landlord’s repair pursuant to this Section 5.1.3. Tenant shall have
the right to require, at reasonable times and with reasonable advance notice, a
representative of Landlord to inspect the Premises for repairs which may be the
responsibility of Landlord;

5.1.4        Quiet Enjoyment - That Landlord
has the right to make this Lease and that Tenant, on paying the rent and
performing its obligations hereunder, shall peacefully and quietly have, hold
and enjoy the Premises throughout the Term without any manner of hindrance or
molestation from Landlord or anyone claiming under Landlord, subject, however,
to all the terms and provisions hereof;

5.1.5        Landlord’s Insurance - Beginning
with the commencement of Landlord’s Work and thereafter throughout the Term,
Landlord shall purchase and keep in force, broad-form commercial general
liability insurance, or the equivalent then-customary form providing comparable
coverages, written out on an occurrence basis containing provisions adequate to
protect the Landlord from and against claims for bodily injury, including death
and personal injury and claims for property damage occurring within the Park
and/or the Building, such insurance having body injury and property damage
combined limits of not less than five million dollars ($5,000,000) per
occurrence.  In addition, Landlord shall
procure and continue in force during the Term, as the same may be extended
hereunder, fire and extended coverage insurance, including vandalism, sprinkler
leakage and malicious mischief, upon the Building on a full replacement cost
basis, agreed cost value endorsement with agreed values for the Building and
tenant improvements initially installed by Landlord, as determined annually by
the Landlord’s insurer.  Landlord shall
also procure and continue in force during the Term (including without
limitation during the Base Year), as the same may be extended hereunder, rental
interruption insurance for twelve (12) months. 
Copies of certificates of insurance evidencing the foregoing shall be
furnished to Tenant, upon Tenant’s reasonable request.  All insurance required of Landlord pursuant
to this Section shall be effected under policies issued by insurers or
recognized responsibility (which are rated A or A+ by Best’s Rating Service or
a comparable rating by an equivalent service). 
The coverages required by this Section 5.1.6 may be provided by a single
“package policy” or by a combination of “package policy” and umbrella;

 24
 

 

5.1.6        Landlord’s Indemnity - Landlord
covenants and agrees to defend, with counsel reasonably acceptable to Tenant,
save harmless and indemnify Tenant from any liability for  injury, loss, accident or damage to any
person or property on the Premises, the Building or the Park, and from any
claims, actions, proceedings and reasonable expenses and costs in connection
therewith (including, without implied limitation, reasonable counsel fees), to
the extent arising from the negligent acts and/or omissions or willful acts of
Landlord, its agents, employees, contractors or licensees, not caused by the
negligent acts, omissions and/or willful acts of Tenant, its agents, employees,
contractors or licensees.  In no event
shall Landlord be obligated to indemnify Tenant for any willful or negligent
act or omission of Tenant or of any of Tenant’s employees, agents, contractors
or licensees.  Notwithstanding anything
to the contrary contained in this Lease, in no event shall Landlord be liable
to Tenant for any indirect, consequential, special, exemplary, incidental or punitive
damages arising from or relating to this Lease. The covenants and
indemnifications set forth in this Section 5.1.6 shall survive the expiration
or earlier termination of this Lease;

5.1.7        Hazardous Materials - Landlord
represents and warrants that, to the best of Landlord’s knowledge having made
no independent inquiry as of the date of this Lease (i) there does not
exist  any leak, spill, release,
discharge, emissions or disposal of Hazardous Materials (as defined in Section
6.1.17 below) on the Lot (including the Building to be located thereon), and
(ii) the Premises do not contain any Hazardous Materials, except as may be
contained in customary cleaning supplies or in such other supplies (e.g.,
paint) that are necessary for Landlord to perform its obligations
hereunder.  In the event that any such
leak, spill, release, discharge, emission or disposal of Hazardous Materials
not caused by Tenant, its agents, employees or contractors, shall occur on the
Lot or (apart from de minimis amounts of such materials used for cleaning and
maintenance purposes or in connection with the operation of loading docks) the
Park, Landlord, at no cost to Tenant, shall take any and all actions necessary
to bring the Premises, the Park and/or the Building (excluding all portions
thereof leased to tenants) into compliance with applicable law and other
governmental requirements relating thereto; and

5.1.8        Tenant’s Costs - In case Tenant
shall, without any fault on its part, be made party to any litigation commenced
by or against Landlord or by or against any parties in possession of the
Premises or any part thereof claiming under Landlord, Landlord agrees to
reimburse Tenant for all reasonable costs, including without implied
limitation, reasonable counsel fees and costs incurred by or imposed upon
Tenant in connection with such litigation and to pay all such reasonable costs
and fees incurred in connection with the successful enforcement by Tenant of
any obligations of Landlord under this Lease.

Except as specifically provided to the contrary in
Section 4.2, Landlord shall include in Landlord’s Operating Costs under the
provisions of Section 4.2 (and subject to the exclusions and limitations set
forth therein) the costs incurred by Landlord in connection with the services
and/or repairs set forth in Section 5.1.1, 5.1.2, 5.1.3 and 5.1.5 above, except
as otherwise specifically provided in this Lease.

5.2           INTERRUPTIONS

 25
 

 

Except as expressly set forth in this Lease, Landlord
shall not be liable to Tenant for any compensation or reduction of rent by
reason of inconvenience or annoyance or for loss of business arising from power
losses or shortages or from the necessity of Landlord’s entering the Premises
for any of the purposes in this Lease authorized, or for repairing the Premises
or any portion of the Building or Lot, provided such inconvenience or annoyance
is not caused by the willful misconduct or negligence of Landlord or Landlord’s
agents, employees or contractors.  In
case Landlord is prevented or delayed from making any repairs, alterations or
improvements, or furnishing any service or performing any other covenant or
duty to be performed on Landlord’s part, by reason of any cause reasonably
beyond Landlord’s control, Landlord shall not be liable to Tenant therefor,
nor, except as expressly otherwise provided below or in Article 7, shall Tenant
be entitled to any abatement or reduction of rent by reason thereof, nor shall
the same give rise to a claim in Tenant’s favor that such failure constitutes,
actual or constructive, total or partial, eviction from the Premises.

Notwithstanding
any language to the contrary, if electricity, heat, air conditioning, water or
any other service or utility that Tenant is entitled to receive under this
Lease is interrupted, and such interruption renders the Premises (or any
portion thereof) untenantable, or any portion thereof is reasonably
inaccessible by Tenant, or makes it impracticable for Tenant to conduct its
business in the Premises, and such interruption is caused due to Landlord’s
failure to perform any of its obligations under Article 5 of this Lease
(expressly excluding, however, any interruptions caused by reasons beyond
Landlord’s reasonable control, such as, for example, failure to provide
utilities due to third party actions [e.g. Town damages lines during
performance of work on Cambridge Street]), then if such interruption or
cessation shall continue for a period of five (5) consecutive days after notice
thereof from Tenant to Landlord that the Premises are untenantable, or reasonably
inaccessible, or Tenant cannot conduct its business as a result thereof, then
the Fixed Rent shall be proportionately abated for each successive day such
interruption or cessation continues to the extent that Tenant’s operations in
the Premises are adversely affected by such interruption (other than for
reasons of casualty or eminent domain where the provisions of Article VII shall
govern).  For purposes of this Section,
Landlord and Tenant hereby acknowledge and agree that if the Premises (or
portion thereof) is accessible by at least one passenger elevator, then the
Premises (or such portion) will not be deemed “reasonably inaccessible” for the
purposes hereof.

Landlord reserves the right to stop any service or
utility system when necessary by reason of accident or emergency or until
necessary repairs have been completed. 
Except in case of emergency repairs, Landlord will give Tenant
reasonable advance notice of any contemplated stoppage and will use reasonable
efforts to avoid unnecessary inconvenience to Tenant by reason thereof.  The foregoing rights shall be Tenant’s sole
and exclusive remedies for any interruptions described in this Section 5.2.

ARTICLE 6

TENANT’S
COVENANTS

 

6.1           TENANT’S COVENANTS DURING THE TERM

 26
 

 

Tenant
covenants during the Term and such further time as Tenant occupies any part of
the Premises:

6.1.1        Tenant’s Payments - Except during
Tenant’s early entry pursuant to Section 3.2 above, to pay when due (a) all
Fixed Rent and additional rent, (b)  all
taxes which may be imposed on Tenant’s personal property in the Premises
(including, without limitation, Tenant’s fixtures and equipment) regardless to
whomever assessed, (c) all charges by public utility for telephone and other
utility services (including service inspections therefore and the charges as
may be imposed pursuant to Exhibit D hereof) rendered to the Premises not
otherwise required hereunder to be furnished by Landlord without charge and not
consumed in connection with any services required to be furnished by Landlord
without charge, and (d) as additional rent, all charges due for Operating Cost
Escalations under Section 4.2 (including on account of services rendered
by Landlord pursuant to Sections 5.1.1, 5.1.2, 5.1.3 and 5.1.5 hereof);

6.1.2        Repairs and Yielding Up.  Except as otherwise provided in Article 7 and
Section 5.1.3, to keep the Premises in as good order, repair and condition as
exist on the date the Premises are Ready for Occupancy (excepting only
reasonable wear; damage by fire, casualty or act of God; the effect of eminent
domain; Hazardous Materials not stored, used, released or disposed of by
Tenant, its agents, employees, contractors or invitees; and damage caused by
the act or omission of Landlord or its employees, agents, or contractors), and
at the expiration or termination of this Lease peaceably to yield up the
Premises and all changes and additions therein made by Tenant after the date
the Premises are Ready for Occupancy as designated by Landlord pursuant to its
right to do so as improvements to be removed on termination in such order,
repair and condition, first removing all goods and effects of Tenant and any
items, the removal of which is required by Section 3.1 above or specified to be
removed at Tenant’s election and which Tenant elects to remove, and repairing
all damage caused by such removal and restoring the Premises and leaving them
clean and neat; any property not so removed shall be deemed abandoned and may,
upon five (5) days’ prior written notice to Tenant,  be removed and disposed of by Landlord, in
such manner as Landlord shall determine, and Tenant shall pay Landlord the
entire reasonable cost and expense incurred by it by effecting such removal and
disposition and in making any incidental repairs and replacements to the
Premises for use and occupancy during the period after the expiration of the
term; it being agreed that the acceptance of reasonable use and wear shall not
apply so as to permit Tenant to keep the Premises in anything less than
suitable, tenantable and usable condition, considering the nature of the
Premises and the use reasonably made thereof, or in less than good and
tenantable repair.  Notwithstanding the
foregoing, (a) under no circumstances shall Tenant be obligated to restore the Premises
to the condition existing prior to the date on which the Premises are Ready for
Occupancy and (b) Tenant shall have the right, exercisable in Tenant’s sole
discretion, to remove any personal property the purchase of which was paid for
by Tenant or financed by Tenant through Fixed Rent provided Tenant repairs any
damage caused by such removal;

6.1.3        Occupancy and Use — Not to use
and occupy the Premises for any purpose other than the Permitted Uses; and not
to injure or deface the Premises, Building or Lot or Park; and not to permit in
the Premises any auction sale, nuisance, or the emission from the Premises of
any objectionable noise or odor; nor any use thereof which is, in Landlord’s
reasonable judgment, improper or offensive, or contrary to law or ordinances, or
invalidates or increases the

 27
 

 

premiums for any
insurance on the Building or its contents or liable to render necessary any
alteration or addition to the Building unless Tenant agrees to pay the cost of
the increased premiums or required alteration or addition;

6.1.4        Rules and Regulations - To comply
with the Rules and Regulations set forth in Exhibit E and all other reasonable
Rules and Regulations hereafter made by Landlord (provided such reasonable
rules do not materially increase Tenant’s obligations or diminish Tenant’s rights
under this Lease), of which Tenant has been given notice, for the care and use
of the Building, Lot and Park and their facilities and approaches, it being
understood that Landlord shall not be liable to Tenant for the failure of other
tenants of the Building or Park to conform to such Rules and Regulations,
provided that Landlord enforces such rules against all tenants of the Building
in a non-discriminatory fashion;

6.1.5        Compliance with Laws and Safety
Appliances - To keep the Premises equipped with all safety appliances
required by law or ordinance or any other regulation of any public authority
(other than life safety equipment required for the Premises to be Ready for
Occupancy as set forth in Section 3.2) because of any particular manner of use
made by Tenant other than Tenant’s Permitted Use and to procure all licenses
and permits so required because of such use, it being understood that the
foregoing provisions shall not be construed to broaden in any way Tenant’s
Permitted Uses.  Tenant shall have the
right, upon giving notice to the Landlord, to contest any obligation imposed
upon it pursuant to the provisions of this Section 6.1.5, and provided the
enforcement of such requirement or law is stayed during such contest and such
contest will not subject the Landlord to penalty or jeopardize the title to the
Premises or otherwise affect the Premises in any adverse way. Landlord shall
cooperate with Tenant in such contest and shall execute any documents
reasonably required in the furtherance of such purpose.  Notwithstanding the foregoing, or any other
contrary provision set forth in this Lease, Tenant shall not be required to
construct or pay the cost of complying with any private restrictions, laws or
insurance underwriter’s requirements requiring construction of improvements to
the Premises or to any other portion of the Building, common area or the Park,
unless such compliance is necessitated solely because of Tenant’s particular
and unique use of the Premises or any alterations to the Premises made by or
for Tenant;

6.1.6        Assignment and Subletting -Tenant
shall have the right, subject to the requirement of obtaining Landlord’s prior
written consent, such consent not to be unreasonably withheld, conditioned or
delayed by Landlord, to assign this Lease or sublet the whole or any portion of
the Premises, which assignment or sublease shall be only for the Permitted
Uses, it being understood that Tenant shall, as additional rent, reimburse
Landlord promptly for reasonable legal and other out-of-pocket expenses
incurred by Landlord in connection with any request by Tenant for consent to
assignment or subletting, not to exceed $1,500.00 per request for consent.  No assignment or subletting shall affect the
continuing primary liability of Tenant (which, following assignment, shall be
joint and several with the assignee). 
Such consent by Landlord to any of the foregoing in a specific instance
(i) shall be reasonable, subject to the provisions hereinafter provided, and
(ii) shall be subject to the prior written approval of Landlord’s mortgagee(s)
if specifically required under the applicable mortgage(s).  Landlord’s consent shall not be treated as
having been withheld unreasonably if, in connection with any such proposed
assignment or subletting:  (i) the terms
of the proposed assignment or subletting do not prohibit further

 28
 

 

assignments of the
Lease or subletting of the Premises without the written consent of Landlord,
the granting of which consent shall be subject to the terms and conditions
hereof, and in any event shall not be unreasonably withheld or delayed; and
(ii) in connection with an assignment of this Lease, the assignee does not
agree directly with Landlord, by written instrument in form reasonably
satisfactory to Landlord, to be bound by all the obligations of Tenant
hereunder arising from and after the effective date of such assignment,
including, without limitation, the covenant against further assignment and
subletting without the written consent of Landlord, subject to the terms and
conditions of this Section..  No consent
to any of the foregoing in a specific instance shall operate as waiver in any
subsequent instance.  If an assignment or
subletting is proposed to be made and Landlord’s consent is required as
hereinabove provided, Tenant shall give Landlord prior notice of such proposal,
which such notice shall include the terms of the proposed transaction as well
as such information (including creditworthiness information for any proposed
assignee or subtenant of all or substantially all of the Premises) as Landlord
may reasonably request relative to facts which would bear upon the factors
entering into the determination whether Landlord’s approval is to be
granted.  Within ten (10) days of
Landlord’s receipt of such information, Landlord shall (1) notify Tenant in
writing if it refuses to consent to the proposed transaction (which such notice
shall explain the reason for such refusal) and (2) provide Tenant with a draft
consent form, if required by Landlord for Tenant’s review and comments.  If Landlord fails to deliver such notice
within the time set forth above, and such failure continues for an additional
five (5) day period after Tenant’s notice to Landlord of such failure, Landlord
shall be deemed to have approved the proposed transaction.  Notwithstanding the foregoing, such time
period for Landlord’s approval shall be reasonably extended if Landlord’s
mortgagee so requests an extension, Landlord hereby agreeing to use diligent
efforts to obtain approval as quickly as possible.

Notwithstanding
any provision contained in this Lease, no consent of Landlord shall be required
for the assignment of this Lease or the subletting of any portion (or the
whole) of the Premises (each of which shall be a “Permitted
Transfer”), (i) to any person(s) or entity who controls, is
controlled by or is under common control with Tenant, (ii) to any entity
resulting from the merger, acquisition, consolidation or other reorganization
with Tenant, whether or not Tenant is the surviving entity, (iii) to any person
or legal entity which acquires all or substantially all of the assets or stock
of Tenant (each of the foregoing is hereinafter referred to as a “Tenant Affiliate”); provided that before such transfer shall
be effective, (x) the Tenant Affiliate shall assume in writing, in full, the
obligations of Tenant under the Lease (in the case of an assignment of the
Lease), (y) Landlord shall be given written notice of such transfer and (z) the
use of the Premises by the Tenant Affiliate shall be as set forth in Section 1.1
above.  For purposes of this Section, a
sale or offering of Tenant securities is a Permitted Transfer and the term “control”
means possession, directly or indirectly, of the power to direct or cause the
direction of the management, affairs and policies of anyone, whether through
the ownership of voting securities, by contract or otherwise.

If
this Lease shall be assigned, or if the Premises or any part hereof shall be
sublet or occupied by any person other than Tenant, Landlord may, at any time
and from time to time, following an uncured, continuing Event of Default,
collect rent (or any amounts due to Landlord hereunder) from the assignee,
subtenant or occupant and apply the net amount collected to the annual Fixed
Rent, additional rent and all other charges herein reserved, but no such
assignment,

 29
 

 

subletting,
occupancy or collection shall be deemed a waiver of the provisions of this
Section 6.1.6, or acceptance of the assignee, subtenant or occupant as tenant,
or a release of Tenant from the further performance of the terms, covenants and
conditions of this Lease on the part of Tenant to be performed.  In such event, after deducting Landlord’s
share of the Rent Differential, equitably determined on a monthly basis, if
applicable as hereinafter provided, Landlord agrees to remit to Tenant any
excess on a month to month basis.

If Landlord’s approval of
a sublease or assignment is necessary and Landlord  approves a sublease or assignment, and said
sublease or assignment is for a total rental amount which on an annualized
basis is greater than the Fixed Rent and additional rent due from Tenant to
Landlord under this Lease, the following provisions of this paragraph shall
apply (it being agreed that none of the provisions of this paragraph shall
apply to any Permitted Transfer, regardless of the size of the space
involved).  For any such approved
sublease(s) totaling up to twenty five percent (25%) of the Premises in the
aggregate, Tenant shall retain all sublease profits, if any.  To the extent any such approved assignment or
approved sublease(s) totalling more than twenty five percent (25%) of the
Premises in the aggregate, Tenant shall pay to Landlord, forthwith upon Tenant’s
receipt of each installment of such excess rent, during the term of any
approved sublease or assignment, as additional rent hereunder (in addition to
the Fixed Rent and other payments due under this Lease), an amount equal to
fifty percent (50%) of the positive excess of (x) all Fixed Rent and
additional rent received by Tenant under the sublease or assignment over
(y) the Fixed Rent and the additional rent due hereunder for the space in
question (the “Rent Differential”), after Tenant
has recouped, in full, its reasonable out-of-pocket expenses with respect to
such sublease or assignment, including without limitation, reasonable real
estate brokerage commissions, reasonable legal fees, reasonable free rent,
reasonable marketing costs and the reasonable costs of refurbishment of the
Premises for such sublease or assignment, and the unamortized costs of tenant
improvements paid for by Tenant. 
Further, the parties agree that Landlord shall have the right to
recapture the Premises proposed to be sublet and/or assigned for the period of
time so proposed, provided that Tenant shall sublease and/or assign more than
fifty percent (50%) of the Premises, exercisable by giving Tenant written
notice thereof within thirty (30) days after receipt of such request, whereupon
this Lease shall terminate as of the date set forth in Landlord’s notice to
Tenant unless Tenant notifies Landlord in writing within ten (10) days after
receipt of Landlord’s recapture notice that it does not desire to consummate
the sublease and/or assignment that entitled Landlord to recapture the Premises
in which case the Lease shall remain in full force and effect.  The Rent Differential shall not include the
sales or rental proceeds received by Tenant in connection with the sale or
lease of its personal property to a proposed transferee.  In the event the sublease is for less than the
full Premises hereunder, the rent payable by Tenant shall be proportionately
adjusted in determining the excess (but all expenses to be recouped will be
deducted) pro rated on a square foot basis. 
Anything contained in the foregoing provisions of this section to the
contrary notwithstanding, neither Tenant nor any other person having interest
in the possession, use, occupancy or utilization of the Premises shall enter
into any lease, sublease, license, concession or other agreement for use,
occupancy or utilization of space in the Premises which provides for rental or
other payment for such use, occupancy or utilization based, in whole or
primarily on the net income or profits derived by any person from the Premises
leased, used, occupied or utilized (other than an amount based on a fixed
percentage or percentages of receipts or sales), and any such purported lease,
sublease, license, concession or other agreement shall be absolutely void and
ineffective as a conveyance of any right or interest in the possession use,
occupancy or utilization of any part of the Premises;

 30
 

 

6.1.7        Indemnity - To defend, with
counsel reasonably acceptable to Landlord, save harmless, and indemnify
Landlord  from any liability for injury,
loss, accident or damage to any person or property occurring on the Premises,
in the Building or the Lot, or elsewhere in the Park, and from any claims,
actions, proceedings and expenses and costs in connection therewith (including,
without implied limitation, reasonable counsel fees):  (i) to the extent arising from the negligent
acts, omissions and/or willful misconduct of Tenant or any of Tenant’s
employees, agents, contractors, subtenants, assignees, licensees or invitees,
not caused by the negligent acts, omissions and/or willful acts of Landlord,
its agents, employees, contractors or invitees or (ii) resulting from the
failure of Tenant to perform and discharge its covenants and obligations under
this Lease.  In no event shall Tenant be
obligated to indemnify Landlord for any willful or negligent act or omission of
Landlord or of any of Landlord’s employees, agents, contractors or
licensees.  Notwithstanding anything to
the contrary contained in this Lease, in no event shall Tenant be liable to
Landlord for any indirect, consequential, special, exemplary, incidental or
punitive damages arising from or relating to this Lease, except that the
damages set forth in Section 6.1.16 for a holdover shall be deemed to be
damages that are recoverable by Landlord so long as Landlord shall give Tenant
at least thirty (30) days prior written notice before which any such damage may
occur (e.g., Landlord loses a lease in place due to Tenant’s holding over), as
more particularly set forth in Section 6.1.16 hereof.  The covenants and indemnifications set forth
in this Section 6.1.7 shall survive the expiration or earlier termination of
this Lease;

6.1.8        Tenant’s Liability Insurance - To
maintain public liability insurance in the Premises in amounts which shall, at
the beginning of the Term, be at least equal to the limits set forth in Section
1.1 and, not more than two times during the Term, shall be for such higher
limits, if any, as are customarily carried in the area in which the Premises
are located on property similar to the Premises and used for similar purposes
and to furnish Landlord (and/or its mortgagees) with the certificates thereof,
prior to occupancy hereunder, evidencing such coverage and providing that the
insurance indicated therein shall not be cancelled without at least ten (10)
days’ prior written notice to Landlord. 
Landlord and its mortgagee shall be named as additional insureds on any
such policies;

6.1.9        Tenant’s Workmen’s Compensation
Insurance - To keep all Tenant’s employees working in the Premises covered
by workmen’s compensation insurance in statutory amounts;

6.1.10      Landlord’s Right of Entry — Upon
not less than twenty-four (24) hours notice or other reasonable notice and
during regular business hours (except in the event of an emergency), to permit
Landlord and Landlord’s agents entry for the following purposes: (a) to
examine the Premises at reasonable times and, if Landlord shall so elect, to
make repairs or replacements; (b) to remove, at Tenant’s expense, any
changes, additions, signs, curtains, blinds, shades, awnings, aerials, flagpoles,
or the like not consented to in writing; and (c) to show the Premises to
prospective tenants during the twelve (12) months preceding expiration of the
Term and to prospective purchasers and mortgagees at all reasonable times.  Notwithstanding anything to the contrary
contained in this Lease, any entry by Landlord and Landlord’s agents shall not
impair Tenant’s operations more than reasonably necessary and shall comply with
Tenant’s reasonable

 31
 

 

security
procedures, and Tenant shall have the right to have an employee accompany
Landlord and/or its agents at all times that Landlord and/or its agents are
present on the Premises;

6.1.11      Loading - Not to place a load upon
the Premises exceeding an average rate of fifty (50) pounds of live load per
square foot of floor area; and not to move any safe, vault or other heavy
equipment in, about or out of the Premises except in such a manner and at such
times as Landlord reasonably shall in each instance approve; Tenant’s business
machines and mechanical equipment which cause vibration or noise that may be
transmitted to the Building structure or to any other leased space in the
Building shall be placed and maintained by Tenant in settings of cork, rubber,
spring, or other types of vibration eliminators sufficient to eliminate such
vibration or noise;

6.1.12      Landlord’s Costs - In case Landlord
shall, without any fault on its part, be made party to any litigation commenced
by or against Tenant or by or against any parties in possession of the Premises
or any part thereof claiming under Tenant, to pay, as additional rent, all
reasonable costs including, without implied limitation, reasonable counsel fees
incurred by or imposed upon Landlord in connection with such litigation and as
additional rent, also to pay all such costs and fees incurred by Landlord in
connection with the successful enforcement by Landlord of any obligations of
Tenant under this Lease;

6.1.13      Tenant’s Property - All the
furnishings, fixtures, equipment, effects and property of every kind, nature and
description of Tenant and of all persons claiming by, through or under Tenant
which, during the continuance of this Lease or any occupancy of the Premises by
Tenant or anyone claiming under Tenant, may be on the Premises or elsewhere in
the Building or on the Lot or elsewhere in the Park shall be at the sole risk
and hazard of Tenant, and if the whole or any part thereof shall be destroyed
or damaged by fire, water or otherwise, or by the leakage or bursting of water
pipes, steam pipes, or other pipes, by theft, or from any other cause, no part
of said loss or damage is to be charged to or to be borne by Landlord except to
the extent arising from Landlord negligence or willful misconduct, or that of
its agents, employees or contractors, as required by law;

6.1.14      Labor or Materialmen’s Liens - To
pay promptly when due the entire cost of any work done on the premises by
Tenant, its agents, employees, or independent contractors; not to cause or
permit any liens for labor or material performed or furnished in connection
therewith to attach to the Premises; and immediately to discharge any such
liens which may so attach within twenty (20) days after receipt of written
notice of such attachment;

6.1.15      Changes or Additions — Except in
connection with the construction of Landlord’s Work hereunder, not to make any
material changes or additions to the Premises without Landlord’s prior written
consent, which such consent shall not be unreasonably withheld, conditioned or
delayed.  Notwithstanding the foregoing,
Tenant may, from time to time, at its own cost and expense and without the
consent of Landlord, make non-structural alterations, additions or improvements
to the Premises that are decorative in nature, so long as they do not affect
any of the mechanical, electrical or plumbing systems of the Building
(collectively herein called “Permitted  Alterations”) whose cost in any one instance is Fifteen
Thousand Dollars ($15,000.00) or less, provided that Tenant first notifies Landlord
in writing of any such

 32
 

 

Alterations.  If Tenant desires to make any alterations
costing in excess of Fifteen Thousand Dollars ($15,000.00) in any one instance
or any other alteration, including any structural alteration or alteration
affecting any of the mechanical, electrical or plumbing systems of the Building
(each an “Approval Alteration”; Permitted
Alterations and Approval Alterations are collectively referred to herein as “Alterations”), Tenant must first obtain the consent of
Landlord thereto, which consent shall not be unreasonably withheld, conditioned
or delayed.  If Landlord reasonably
concludes that the Approval Alterations involve any construction, alterations
or additions requiring unusual expense to readapt the Premises to normal office
use on the Term Expiration Date, Landlord shall notify Tenant in writing at the
time of approval that such re-adaptation will be required to be made by Tenant
prior to such Term Expiration Date without expense to Landlord.  Landlord’s failure to so notify Tenant shall
mean that no such re-adaptation shall be required on or before the Term
Expiration Date in connection with such Alteration.

To secure Landlord’s consent for an Approval
Alteration, Tenant shall submit to Landlord working drawings and specifications
prepared by an architect or such other information regarding the Approval
Alteration as Landlord may reasonably request (collectively, the “Working Drawings and Specifications”).  Within ten (10) business days following
Tenant’s initial submission of the Working Drawings and Specifications, and
within five (5) business days for any other submission to Landlord, Landlord
shall approve (by signing a copy thereof) or shall disapprove the Working
Drawings and Specifications.

Any
and all Alterations shall be performed by GCCI at Tenant’s expense, which shall
equal the direct cost to GCCI (without fees or general conditions) plus a
markup equal to six percent (6%) of such direct costs and shall be on a “competitive
bid” and “open book” basis, unless GCCI elects not to so perform the same.  In such event that GCCI elects not to perform
the same, Tenant may engage another contractor provided such contractor is
reputable, bondable by reputable bonding companies, carries the kind of
insurance and in the amounts set forth herein, and will work in harmony with
Landlord’s contractors and laborers in the Building and such contractor is
reasonably approved by Landlord (each an “Approved Contractor”).  Notwithstanding the foregoing, no such
bonding is required for any such work.

Tenant
in making any Alterations  shall cause
all work to be done in a good and workmanlike manner using all new materials
substantially equal to or better than those used in the construction of the
Premises and shall comply with or cause compliance with all laws and with any
direction given by any public officer pursuant to law and GCCI’s standard
consistent with other similarly situated Class A buildings in the area in which
the Building is located.  Tenant shall
obtain or cause to be obtained and maintain in effect, as necessary, all
building permits, licenses, temporary and permanent certificates of occupancy
and other governmental approvals which may be required in connection with the
making of the alterations, including the Alterations.  Landlord shall cooperate with Tenant in the obtaining
thereof and shall execute any documents reasonably required in furtherance of
such purpose, provided any such cooperation shall be without expense and/or
liability to Landlord, unless Landlord elects to have GCCI perform the same in
which event it agrees to cause GCCI to comply with the foregoing provisions,
including the obligation of GCCI to use all new materials in connection with
any construction hereunder, and other provisions set forth herein applicable to
Tenant’s contractor.

 33
 

 

At
least annually if such Alterations or any other alterations hereunder have
occurred during the past calendar year, Tenant shall furnish to Landlord
as-built sepias and, if applicable, operating manuals, or, at Landlord’s option
and only if Tenant’s computer system is compatible with that of Landlord’s,
computer disk specifications compatible with Landlord’s computer system of the
work done by Tenant during such past year and copies of all permits issued in
connection therewith.

Tenant
shall have its contractor procure and maintain in effect during the term of
such alterations, including Alterations, reasonably satisfactory insurance
coverages with an insurance company or companies authorized to do business in
the Commonwealth of Massachusetts, and shall, upon Landlord’s request, furnish
Landlord with certificates thereof;

6.1.16      Holdover - To pay to Landlord one
hundred seventy five (175%) percent of the Fixed Rent, together with the
additional rent, then applicable for each month or portion thereof Tenant shall
retain possession of the Premises or any part thereof after the termination of
this Lease, whether by lapse of time or otherwise, and also to pay all damages
proximately sustained by Landlord on account thereof, except that the holdover
rent for the first thirty (30) days shall be at only one hundred fifty (150%)
percent of the Fixed Rent, and no damages shall be due except after holdover by
Tenant exceeding thirty (30) days and after receipt of at least thirty (30)
days’ prior written notice (which such notice may be given prior to the
expiration of said period or the Term) notifying Tenant that Landlord has
entered into a lease with a new tenant and that damages may be incurred if
Tenant continues to holdover.  The provisions
of this subsection shall not operate as a waiver by Landlord of any right of
re-entry provided in this Lease;

6.1.17      Hazardous Materials - Tenant shall
not (either with or without negligence) cause or permit the escape, disposal or
release of any Hazardous Materials onto, in or under the Premises, the Lot or
Park, except in accordance with the requirements of applicable laws and
regulations.  Tenant shall not allow the
storage or use of such substances or materials in any manner not sanctioned by
law or by the highest standards prevailing in the industry for the storage and
use of such substances or materials, nor allow to be brought into the Premises
any such materials or substances except to use in the ordinary course of Tenant’s
business, and then only after written notice is given to Landlord of the
identity of such substances or materials. 
Landlord hereby consents to Tenant’s use of ordinary office and cleaning
products in amounts reasonably necessary for Tenant’s Permitted Use of the
Premises.  Without limitation, “Hazardous Materials” shall include those hazardous materials
and substances described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et seq., the Massachusetts Hazardous Waste Management Act, as amended,
M.G.L. c.21C, the Massachusetts Oil and Hazardous Material Release Prevention
and Response Act, as amended, M.G.L. c.21E, any applicable local ordinance or
bylaw, and the regulations adopted under these acts, (collectively, the “Hazardous Waste Laws”). 
If any lender or governmental agency shall ever require testing to
ascertain whether or not there has been any release of any Hazardous Materials,
then the reasonable costs thereof shall be reimbursed by Tenant to Landlord
within twenty (20) days after receipt of demand as additional charges if and
only if the following conditions are satisfied: 
(i) if such requirement applies to the Premises, and 

 34
 

 

(ii) if an
independent, reputable third party engineer employed by Landlord or persons
acting under Landlord conclusively determines that such release has been or is
likely to have been solely and exclusively caused by Tenant or persons acting
under Tenant.  If Tenant receives from
any federal, state or local governmental agency any notice of violation or
alleged violation of any Hazardous Waste Law, or if Tenant is obligated to give
any notice under any Hazardous Waste Law, Tenant agrees to forward to Landlord
a copy of any such notice within five (5) business days of Tenant’s receipt or
transmittal thereof.  In addition, Tenant
shall execute reasonable affidavits, representations and the like from time to
time at Landlord’s reasonable request concerning Tenant’s best actual knowledge
or belief regarding the presence of Hazardous Materials on the Premises.  In all events, Tenant shall indemnify
Landlord in the manner elsewhere provided in this Lease from any release of
hazardous materials on the Premises or elsewhere in the Park occurring while
Tenant is in possession if caused by Tenant or persons acting under
Tenant.  Landlord retains the right to
inspect the Premises at all reasonable times, upon reasonable notice to Tenant,
to ensure compliance with this paragraph. 
The within covenants shall survive the expiration or earlier termination
of the Term;

6.1.18      Tenant’s Authority - Tenant has the
power and authority to enter into this Lease and perform the obligations of
Tenant hereunder.  This Lease and all
other documents executed and delivered by Tenant in connection herewith
constitute legal, valid, binding and enforceable obligations of Tenant; and

6.1.19      Confidentiality - This Lease
document is a confidential document by and between Landlord and Tenant and
Tenant agrees that this Lease shall not be copied and distributed or circulated
to any person(s) other than to such parties, and their respective mortgagees,
successors or assigns, their legal counsel or their accountants or to any
prospective sublessees and assignees or affiliates of Tenant, or to any
prospective acquirers, investors, or lenders of Tenant, or to regulatory
authorities, or to the directors, shareholders or officers of Tenant, unless
required by law or court order, without the prior written consent of Landlord.  All public announcements regarding this Lease
prior to Tenant’s occupancy hereunder must be approved by Landlord and Tenant
in advance.  Notwithstanding the
foregoing, Tenant may, if requested by Tenant’s outside counsel, file a copy of
this Lease with the Securities and Exchange Commission and any other regulatory
body without attempting to secure any confidential treatment for information in
this Lease.

6.1.20.  Signage - Tenant shall not, without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed so long as Tenant shall have not assigned the
Lease or sublet more than fifteen (15%) percent of the Premises in the
aggregate (excluding Permitted Transfers), (a) paint, place or replace any
signs on the Lot or the Premises or anywhere on the exterior of the Building,
or (b) place any curtains, blinds (other than standard vertical blinds),
shades, awnings, or flagpoles, or the like, in the Premises or anywhere on or
in the Building visible from outside the Building.  Tenant shall pay all expenses involved in the
erection of any signage and of obtaining the permits therefor, except as
provided in Exhibit D.  Tenant warrants that
it shall obtain (and furnish copies thereof to Landlord) all necessary permits
and approvals in compliance with local codes and ordinances prior to erecting
any such exterior sign(s) and, at Landlord’s request, Tenant shall remove said
sign(s) upon the termination of this Lease.

 35
 

 

In
connection with Tenant’s initial Building signage, Landlord shall use
reasonable efforts to obtain, on Tenant’s behalf, all necessary permits and
approvals required pursuant to local codes and ordinances for Tenant to place
an exterior sign on the Building, the location of which shall be mutually agreed
upon by Landlord and Tenant.  Tenant’s
signage on the Building shall be non-exclusive and shall at all times be
subject to the aforesaid leasing requirement. 
Tenant shall reimburse Landlord for the actual out-of-pocket third-party
reasonable costs and expenses incurred by Landlord in connection with obtaining
said permits and approvals, including reasonable attorneys fees and
disbursements.  Tenant agrees to
cooperate with Landlord during the permitting process by (i) promptly executing
the necessary documentation reasonably requested by Landlord, and (ii) by
furnishing the same to Landlord promptly upon Landlord’s request, but in no
event later than seven (7) days following Landlord’s request.  Further, the construction and erection of the
Building signage for Tenant shall be Tenant’s sole responsibility and at Tenant’s
sole cost and expense.  In no event shall
such Building exterior signage be part of Landlord’s Work hereunder.

ARTICLE 7

CASUALTY
AND TAKING

 

7.1           CASUALTY AND TAKING

In case during the Term any substantial part of the
Premises, or all or any substantial part of the Building, or Lot or any one or
more of them, are, in the reasonable, good faith judgment of Landlord’s
architect, damaged materially by fire or any other cause, or by action of
public or other authority in consequence thereof or are taken by eminent domain
or Landlord receives compensable damage by reason of anything lawfully done in
pursuance of public or other authority, this Lease shall terminate at Landlord’s
or Tenant’s election, which may be made, notwithstanding Landlord’s entire
interest may have been divested, by notice given to the other within sixty (60)
days after the occurrence of the event giving rise to the election to
terminate, which notice shall specify the effective date of termination which
shall be not less than thirty (30) nor more than sixty (60) days after the date
of notice of such termination.  Landlord
shall cause its architect to deliver to Tenant a certification as to such
restoration period within forty-five (45) days after the casualty.  For purposes of this Section 7.1, a
substantial part of the Building or Lot or material damage to the Premises or
Building shall be damage that a will take, using reasonable diligence, more
than nine (9) months from the date of such casualty to repair.  If in any such case the Premises are rendered
unfit for use and occupation and the Lease is not terminated, Landlord shall
promptly commence and diligently prosecute the restoration of the Premises, or
in case of taking, what may remain thereof, 
into substantially the condition immediately prior to the casualty,
subject to applicable law to the extent permitted by the net award of insurance
or damages, and a just proportion of the Fixed Rent and additional rent
according to the nature and extent of the injury shall be abated until the
Premises or such remainder shall have been put by Landlord in such condition;
and in case of a taking which permanently reduces the area of the Premises, a
just proportion of the Fixed Rent and additional rent shall be abated for the
remainder of the Term and an appropriate adjustment shall be made to the Annual
Estimated Operating Expenses.  In the
event that such restoration is not completed within twelve (12) months after
the date of such casualty (as such period may be extended by

 36
 

 

Force
Majeure Delays [not to exceed an additional thirty (30) days] and/or Tenant
Delays), Tenant shall have the right to terminate the Lease by notice to
Landlord.

7.2           RESERVATION OF AWARD

Landlord reserves to itself any and all rights to
receive awards made for damages to the Premises, Building or Lot and the
leasehold hereby created, or any one or more of them, accruing by reason of
exercise of eminent domain or by reason of anything lawfully done in pursuance
of public or other authority.  Tenant
hereby releases and assigns to Landlord all Tenant’s rights to such awards, and
covenants to deliver such further assignments and assurances thereof as
Landlord may from time to time reasonably request, hereby irrevocably
designating and appointing Landlord as its attorney-in-fact to execute and
deliver in Tenant’s name and behalf all such further assignments thereof.  It is agreed and understood, however, that
Landlord does not reserve to itself, and Tenant does not assign to Landlord,
any damages payable for (i) Tenant’s Property (as defined in Section 7.3(a)
below, or (ii) relocation and moving expenses recoverable by Tenant from such
authority in a separate action.

7.3           ADDITIONAL
CASUALTY PROVISIONS

(a)           Landlord
shall not be required to repair or replace any of Tenant’s business machinery,
equipment, furniture, personal property or other installations not originally
installed by Landlord (collectively, “Tenant’s Property”).

(b)           In
the event of any termination of this Lease pursuant to this Article 7, the Term
of this Lease shall expire as of the effective termination date as fully and
completely as if such date were the date herein originally scheduled as the
Term Expiration Date.  Tenant shall have
access to the Premises at Tenant’s sole risk for a period of thirty (30) days
after the date of termination in order to remove Tenant’s personal property
except as prohibited by any applicable governmental agency or official.

(c)           Notwithstanding
any language to the contrary contained in this Article 7, if all or any
substantial or material part of the Premises and/or the Building or Lot or any
part thereof (as hereinabove defined), shall be damaged by fire or other
casualty or taken by eminent domain during the last twelve (12) months of the
Term of this Lease as the Lease may have theretofore been extended, then either
Landlord or Tenant may terminate this Lease effective as of the date of such
fire or other casualty or taking upon notice to the other as aforesaid.  Also notwithstanding anything to the contrary
contained in this Article 7, Tenant may render any notice of Landlord’s
termination null and void by exercising early an option to extend the initial
Term or then Extended Term of this Lease for five (5) additional years in
accordance with Exhibit F.  In the event
of such early exercise, Landlord and Tenant agree to determine the Fixed Rent
for the applicable Extended Term at least twelve (12) months prior to the
commencement date of the Extended Term in accordance with and in the manner set
forth in said Exhibits F and H.

(d)             Notwithstanding anything to the contrary
contained in this Lease:  (i) Landlord
shall not have the right to terminate this Lease if damage to or destruction of
the Premises or the Building, or both, results from a casualty ordinarily
covered by insurance required to be carried by

 37
 

 

Landlord under this Lease; or (ii) in the event of damage to the
Premises which is not required to be covered by insurance, and is not covered
by insurance actually carried or required to be carried, Landlord shall not
have the right to terminate this Lease (a) if the damage is minor (i.e. taking
less than 60 days to repair) or it would cost less than ten percent (10%) of
the replacement cost of the Premises, or (b) if Tenant agrees to pay the cost
of repair not covered by insurance; or (iii) if the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to its terms, then as soon as reasonably
practicable, Landlord shall furnish Tenant with a written opinion of Landlord’s
architect or construction consultant as to when the restoration work required
of Landlord may be completed.  Tenant
shall have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised by delivery to Landlord of a written
notice of election to terminate within thirty (30) days after Tenant receives
from Landlord the estimate of the time needed to complete such restoration: (y)
the Premises, with reasonable diligence, cannot be fully repaired by Landlord
within nine (9) months after the damage or destruction; or (z) if the Premises
are damaged by any peril within twelve (12) months of the last day of Term, and
cannot be substantially restored within sixty (60) days after the date of such
damage.

ARTICLE 8

RIGHTS OF
MORTGAGEE

 

8.1           PRIORITY OF LEASE

Landlord shall have the option to subordinate this
Lease to any future mortgagee or deed of trust of the Lot or Building, or both
(“the mortgaged premises”), provided that the holder thereof enters into a
commercially reasonable agreement with Tenant by the terms of which the holder
will agree to recognize the rights of Tenant under this Lease, assume the
obligations of Landlord under this Lease and to accept Tenant as tenant of the
Premises under the terms and conditions of this Lease in the event of
acquisition of title by such holder through foreclosure proceedings or
otherwise and Tenant will agree to recognize the holder of such mortgage as
Landlord in such event, which agreement shall be made to expressly bind and
inure to the benefit of the successors and assigns of Tenant and of the holder
and upon anyone purchasing the mortgaged premises at any foreclosure sale.  Any such mortgage to which this Lease shall
be subordinated may contain such terms, provisions and conditions as the holder
reasonably deems usual or customary. 
Further, Landlord agrees, as a condition to the effectiveness of this
Lease to obtain a Subordination, Non-Disturbance and Attornment Agreement from
its current lender, New England Teamsters and Trucking Industry Pension Fund,
substantially in accordance with Exhibit J attached hereto.

8.2           LIMITATION ON MORTGAGEE’S
LIABILITY

Upon entry and taking possession of the mortgaged
premises for any purpose other than foreclosure, the holder of a mortgage shall
have all rights of Landlord, and during the period of such possession, the duty
to perform all Landlord’s obligations hereunder.  Except during such period of possession, no
such holder shall be liable, either as mortgagee or as holder of a collateral
assignment of this Lease, to perform, or be liable in damages for failure to
perform any

 38
 

 

of the
obligations of Landlord unless and until such holder shall enter and take
possession of the mortgaged premises for the purpose of foreclosing a
mortgage.  Upon entry for the purpose of
foreclosing a mortgage, such holder shall be liable to perform all of the
obligations of Landlord accruing after said entry (including performance of
obligations arising prior to said entry but which constitute continuing
obligations), provided that a discontinuance of any foreclosure proceeding
shall terminate the liability of the holder as Landlord.

8.3           MORTGAGEE’S ELECTION

Intentionally Deleted.

8.4           NO PREPAYMENT OR MODIFICATION,
ETC.

No Fixed Rent, additional rent, or any other charge
shall be paid more than ten days prior to the due dates thereof, and payments
made in violation of this provision shall (except to the extent that such
payments are actually received by a mortgagee in possession or in the process
of foreclosing its mortgage) be a nullity as against such mortgagee, and Tenant
shall be liable for the amount of such payments to such mortgagee.  No assignment of this Lease and no agreement
to make or accept any surrender, termination or cancellation of this Lease and
no agreement to modify so as to reduce the rent, change the Term, or otherwise
materially change the rights of Landlord under this Lease, or to relieve Tenant
of any obligations or liability under this Lease, shall be valid as against a
mortgagee unless consented to in writing by such Landlord’s mortgagee and only
as to mortgagees of record, if any, which consent shall not be unreasonably
withheld, conditioned or delayed.

8.5           NO RELEASE OR TERMINATION

No act or failure to act on the part of Landlord which
would entitle Tenant under the terms of this Lease, or by law, to be relieved
of Tenant’s obligations hereunder or to terminate this Lease, shall result in a
release or termination of such obligations or a termination of this Lease
unless (i) Tenant shall have first given written notice of Landlord’s act or
failure to act to Landlord’s mortgagees of record, if any, the addresses for
whom previously have been provided in writing to Tenant, specifying the act or
failure to act on the part of Landlord which could or would give basis to
Tenant’s rights, and (ii) such mortgagees, after receipt of such notice, have
failed or refused to correct or cure the condition complained of within a
reasonable time thereafter, but nothing contained in this Section 8.5 shall be
deemed to impose any obligation on any such mortgagee to correct or cure any
such condition.  “Reasonable time” as
used above means and includes a reasonable time to obtain possession of the
mortgaged premises, if the mortgagee elects to do so, and a reasonable time to
correct or cure the condition if such condition is determined to exist.

8.6           CONTINUING OFFER

The covenants and agreements contained in this Lease
with respect to the rights, powers and benefits of a mortgagee (particularly,
without limitation thereby, the covenants and agreements contained in this
Article 8) constitute a continuing offer to any person, corporation or

 39
 

 

other
entity, which by accepting or requiring an assignment of this Lease or by entry
or foreclosure assumes the obligations herein set forth with respect to such
mortgagee, and such mortgagee shall be entitled to enforce such provisions in
its own name.  Tenant agrees on request
of Landlord to execute and deliver from time to time any agreement which may
reasonably be deemed necessary to implement the provisions of this Article 8
provided such agreement does not materially increase Tenant’s obligations or
diminish Tenant’s rights under this Lease.

8.7           MORTGAGEE’S APPROVAL

Landlord’s obligation to perform its covenants and
agreements hereunder is subject to the condition precedent that this Lease be
approved by the holder of any mortgage of which the Premises are a part and by
the issuer of any commitment to make a mortgage loan which is in effect on the
date hereof.  Unless Landlord gives
Tenant written notice within fifteen (15) days after the Date of Lease
Execution set forth on page 3 of this Lease that such holder or issuer, or
both, disapprove this Lease, then this condition shall be deemed to have been
satisfied or waived and the provisions of this Section 8.7 shall be of no
further force or effect.

8.8           SUBMITTAL OF FINANCIAL STATEMENT

At any time, but not more than annually, during the
Term of this Lease, within fifteen (15) days after request therefor by Landlord
and, if so requested and provided by Tenant, Landlord’s execution of a
commercially reasonable non-disclosure agreement, Tenant shall supply to
Landlord and/or Landlord’s mortgagee a current financial statement, which shall
include, without limitation, a balance sheet and income statement or such other
financial information as may be reasonably required by Landlord (or its
mortgagee).  Notwithstanding anything to
the contrary contained in this Section, Landlord acknowledges that Tenant is a
public company and that for as long a Tenant remains a public company Landlord
shall not request Tenant’s financial statements.

ARTICLE 9

DEFAULT

 

9.1           EVENTS OF DEFAULT

It shall be an “Event of Default”
under this Lease, if (i) Tenant fails to pay Fixed Rent or additional rent for
more than ten (10) days, after notice thereof specifying such failure and that
such failure may be an Event of Default hereunder; (ii) Tenant fails to perform
its other non-monetary obligations hereunder for more than thirty (30) days
after notice thereof from Landlord, together with such additional time, if any,
as is reasonably required to cure the default if the default is of such a
nature that it cannot reasonably be cured in thirty (30) days; or (iii) if
Tenant makes any assignment for the benefit of creditors, or files a petition
under any bankruptcy or insolvency law; or (iv) if such a petition is filed
against Tenant and is not dismissed within sixty (60) days; or (v) if a
receiver becomes entitled to Tenant’s leasehold hereunder and it is not
returned to Tenant within ninety (90) days; or (vi) such leasehold is taken on
execution or other process of law in any action

 40
 

 

against Tenant; Landlord and the agents and servants of Landlord may,
in addition to and not in derogation of any remedies for any preceding breach
of covenant, immediately or at any time thereafter while such default continues
and without further notice except as required by applicable law enter into and
upon the Premises or any part thereof in the name of the whole and repossess
the same as of Landlord’s former estate and expel Tenant and those claiming
through or under Tenant and remove its and their effects without being deemed
guilty of any manner of trespass and without prejudice to any remedies which
might otherwise be used for arrears of rent or prior breach of covenant, and
upon such entry or mailing as aforesaid, this Lease shall terminate, but Tenant
shall remain liable as hereinafter provided. 
After the occurrence of an Event of Default as aforesaid, Tenant hereby
waives all statutory rights of redemption, if any to the extent such rights may
be lawfully waived, and Landlord, without notice to Tenant, may store Tenant’s
effects and those of any person claiming through or under Tenant at the expense
and risk of Tenant and, if Landlord so elects, may sell such effects at public
auction or private sale and apply the net proceeds to the payment of all sums
due to Landlord from Tenant, if any, and pay over the balance, if any, to
Tenant.

9.2           TENANT’S
OBLIGATIONS AFTER TERMINATION

In the event that
this Lease is terminated under any of the provisions contained in Section 9.1
or shall be otherwise terminated for breach of any obligation of Tenant, Tenant
covenants as follows:

a)                  If Landlord
elects to liquidate its damages by notice to Tenant given within two (2) months
after the date of such termination to pay forthwith to Landlord, as
compensation, a sum equal to the present value of the total rent reserved
for the residue of the Term minus the rental value of the Premises for said
residue of the Term.  In calculating the
rent reserved, there shall be included, in addition to the Fixed Rent and all
additional rent, the value of all other consideration agreed to be paid or
performed by Tenant for said residue; and

b)                 as an additional
and cumulative obligation, to pay punctually to Landlord all of the sums and
perform all of the obligations which Tenant covenants in this Lease to pay and
to perform in the same manner and to the same extent and at the same time as if
this Lease had not been terminated.  In
calculating the amounts to be paid by Tenant under this sub clause (b), Tenant
shall be credited with: (i) any amount paid to Landlord as compensation as
provided in sub clause (a) of this Section 9.2; and (ii) the net proceeds of
any rents obtained by Landlord by reletting the Premises, after deducting all
of Landlord’s reasonable expenses in connection with such reletting, including,
without implied limitation, all repossession costs, brokerage commissions,
tenant improvements costs paid or tenant improvement allowances granted, fees
for legal services, and any other expenses of reletting the Premises or
preparing the Premises for the new tenant or tenants (which reletting costs
shall be amortized on a straight-line basis of the term of the new lease and
the only portion allocable to the terminated term of this Lease shall be
charged to Tenant).

 41
 

 

Landlord
agrees to use commercially reasonable efforts to relet the Premises following
termination provided, however, that Landlord: (x)
may relet the Premises or any part or parts thereof for a term or terms which
may, at Landlord’s option, be equal to or less than or exceed the period which
would otherwise have constituted the balance of the Term, and may grant such
concessions and free rent as Landlord in its sole judgment considers advisable
or necessary to relet same; (y) may make
such alterations, repairs and decorations in the Premises as Landlord, in its sole
judgment, considers advisable or necessary to relet the same, and no action of
Landlord in accordance with the foregoing sub clauses (x)
and/or (y), or Landlord’s failure to relet or to
collect the rent through reletting, shall operate or be construed to release or
reduce Tenant’s liability as aforesaid; and (z)
shall have no duty to relet the Premises to a prospective tenant who is also
interested in leasing other space that Landlord (or its affiliate(s)) then has
available in the Park.

So
long as at least twelve (12) months of the Term remain unexpired at the time of
such termination, in lieu of any other damage of indemnity and in lieu of full
recovery by Landlord of all sums payable under all the foregoing provisions of
this Section 9.2, Landlord may, by written notice to Tenant, at any time given
within thirty (30) days after this Lease is terminated under any of the
provisions contained in Section 9.1, or is otherwise terminated for breach of
any obligation of Tenant and before such full recovery, elect to recover, and
Tenant shall thereupon pay, as liquidated damages, an amount equal to the
aggregate of the Fixed Rent and additional rent accrued under Article IV in the
twelve (12) months ended next prior to such termination (or if the Term has not
yet commenced, the Fixed Rent and additional rent that would be due for said
time period) plus the amount of Fixed Rent and additional rent of any kind
accrued and unpaid at the time of termination and less the amount of any
recovery by Landlord under the foregoing provisions of this Section 9.2 up to
the time of payment of such liquidated damages.

Nothing contained in this Lease shall, however, limit or
prejudice the right of Landlord to prove and obtain in proceedings for
bankruptcy or insolvency by reason of the termination of this Lease, an amount
equal to the maximum allowed by any statute or rule of law in effect at the
time when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less than the amount
of the loss or damages referred to above.

ARTICLE
10

MISCELLANEOUS

 

10.1         TITLES

The titles of the Articles are for convenience and are
not to be considered in construing this Lease.

10.2         NOTICE OF LEASE

Concurrently with the execution of this Lease, both
parties shall execute and deliver, after the Term begins, a short form of this
Lease in the form attached hereto as Exhibit G. 
If this

 42
 

 

Lease
is terminated before the Term expires, the parties will execute an instrument
acknowledging the date of termination.

10.3         RELOCATION

Intentionally Deleted.

10.4         NOTICES FROM ONE PARTY TO THE OTHER

No notice, approval, consent requested or election
required or permitted to be given or made pursuant to this Lease shall be
effective unless the same is in writing. 
Communications shall be addressed, if to Landlord, at Landlord’s
Address, with a copy to Gloria M. Gutierrez, Esq., The Gutierrez Company, One
Wall Street, Burlington, MA 01803, or at such other address as may have been
specified by prior notice to Tenant and, if to Tenant, at Tenant’s Address, or
at such other place as may have been specified by prior notice to
Landlord.  Any communication so addressed
shall be deemed duly served if mailed by registered or certified mail, return
receipt requested, delivered by hand, or by overnight express service by a
carrier providing a receipt of delivery.

10.5         BIND AND INURE

The obligations of this Lease shall run with the land,
and this Lease shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Landlord named
herein and each successive owner of the Premises shall be liable only for the
obligations accruing during the period of its ownership, said liability
terminating as to future liability upon termination of such ownership and
passing to the successor in ownership. 
Neither the Landlord named herein nor any successive owner of the
Premises whether an individual, trust, a corporation or otherwise shall have
any personal liability beyond their equity interest in the Project, and the
sales, rental, insurance and condemnation proceeds therefrom.

10.6         NO SURRENDER

The delivery of keys to any employees of Landlord or
to Landlord’s agent or any employee thereof shall not operate as a termination
of this Lease or a surrender of the Premises.

10.7         NO WAIVER, ETC.

The failure of Landlord or of Tenant to seek redress
for violation of, or to insist upon the strict performance of any covenant or
condition of this Lease or, with respect to such failure of Landlord, any of
the Rules and Regulations referred to in Section 6.1.4, whether heretofore or
hereafter adopted by Landlord, shall not be deemed a waiver of such violation
nor prevent a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation.  The receipt by Landlord of Fixed Rent or
additional rent with knowledge of the breach of any covenant of this Lease
shall not be deemed a waiver of such breach by Landlord, unless such waiver be
in writing signed by Landlord.  No
consent or waiver, express or implied, by Landlord or Tenant to or of any
breach of any agreement or duty shall be construed as a waiver or consent to or
of any other breach of the same or any other agreement or

 43
 

 

duty.

10.8         NO ACCORD AND SATISFACTION

No acceptance by Landlord of a lesser sum than the
Fixed Rent and additional rent then due shall be deemed to be other than on
account of the earliest installment of such rent due, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as
rent be deemed as accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other remedy in this Lease provided.

10.9         CUMULATIVE REMEDIES

The specific remedies to which Landlord may resort
under the terms of this Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of this Lease.  In addition to the other
remedies provided in this Lease, Landlord or Tenant shall be entitled to the
restraint by injunction of the violation or attempted or threatened violation
of any of the covenants, conditions or provisions of this Lease or to a decree
compelling specific performance of any such covenants, conditions or
provisions.

10.10       PARTIAL INVALIDITY

If any term of this Lease, or the application thereof
to any person or circumstances shall to any extent be invalid or unenforceable,
the remainder of this Lease, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each term of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

10.11       RIGHT TO CURE

If Tenant shall at any time default, beyond applicable
notice and cure periods, in the performance of any obligation under this Lease,
Landlord shall have the right, but shall not be obligated, upon five (5) days’
prior notice to Tenant (except in the event of an emergency where at least
verbal notice will be given as soon as reasonably possible), to enter upon the
Premises and to perform such obligation, notwithstanding the fact that no
specific provision for such substituted performance by Landlord is made in this
Lease with respect to such default.  In
performing such obligation, Landlord may make any payment of money or perform
any other act.  All sums so paid by
Landlord (together with interest at the rate set forth in Section 4.3 hereof),
and all necessary incidental costs and expenses in connection with the
performance of any such acts by Landlord, shall be deemed to be additional rent
under this Lease and shall be payable to Landlord immediately on demand.  Landlord may exercise the foregoing rights
without waiving any other of its rights or releasing Tenant from any of its
obligations under this Lease.  Landlord
shall not be deemed to be in default of its obligations unless Landlord fails
to perform any covenant, condition or agreement contained in this Lease and
fails to cure the

 44
 

 

nonperformance
within a reasonable time under all the circumstances, but not later than thirty
(30) days after receiving written notice of the failure, provided, however,
that if the nature of Landlord’s failure to perform reasonably requires more
than thirty (30) days to cure, then Landlord shall not be deemed in default if
Landlord commences to cure such failure within said thirty (30) day period and
thereafter diligently and in good faith prosecutes such cure to completion.

10.12       ESTOPPEL CERTIFICATE

Tenant agrees on the Commencement Date, and from time
to time thereafter, upon not less than thirty (30) days’ prior written request
by Landlord, to execute, acknowledge and deliver to Landlord a statement in
writing in substantially the form attached hereto as Exhibit B, correcting as
appropriate any statements therein.   Landlord
agrees on the Commencement Date, and from time to time thereafter, upon not
less than thirty (30) days’ prior written request by Tenant, to execute,
acknowledge and deliver to Tenant a statement in writing in substantially the
form attached hereto as Exhibit B, correcting as appropriate any statements
therein.

10.13       WAIVER OF SUBROGATION

Landlord and Tenant mutually agree, with respect to any hazard which is
covered by casualty or property insurance then being carried by them, or
required to be carried hereunder (whether or not such insurance is then in
effect) to release each other from any and all claims with respect to such
loss; and they further mutually agree that their respective insurance companies
shall have no right of subrogation against the other on account thereof.  If extra premium is payable by either party
as a result of this provision, the other party shall reimburse the party paying
such premium the amount of such extra premium.

10.14       BROKERAGE

Landlord and Tenant each represent to the other that
they have dealt with no real estate brokers, finders, agents or salesmen in
connection with this transaction, except Studley, Inc., and Richards, Barry
Joyce & Partners, LLC representing Tenant, and Richards, Barry Joyce &
Partners, LLC, representing Landlord (“Brokers”).   Each party agrees to hold the other party
harmless from and against all claims for brokerage commissions, finder’s fees,
or other compensation made by any other agent, broker, salesman or finder as a
consequence of said party’s actions or dealings with such agent, broker,
salesman, or finder.  Landlord agrees to
pay a fee to Tenant’s broker pursuant to a separate agreement.

10.15       COVENANTS INDEPENDENT

Each
provision hereof constitutes an independent covenant, enforceable separately
from each other covenant hereof.  To the
extent any provision hereof or any application of any provision hereof may be
declared unenforceable, such provision or application shall not affect any
other provision hereof or other application of such provision.  Tenant acknowledges and agrees that Tenant’s
obligation to pay Fixed Rent and additional rent is independent of any and all
obligations of Landlord hereunder, with the result that Tenant’s sole remedy
for any alleged

 45
 

 

breach by Landlord
of its obligation hereunder shall be to commence a judicial proceeding against
Landlord seeking specific performance or damages, except as provided in this
Lease.

10.16       ACCESS

Subject to the terms and provisions of this Lease and
all laws applicable to the Premises, Tenant shall have twenty-four (24) hours,
seven (7) days per week, fifty-two (52) weeks per year, access to the Premises.

10.17       ENTIRE AGREEMENT

This
instrument contains the entire and only agreement between the parties as to the
Premises, and no oral statements or representations or prior written matter not
contained in this instrument shall have any force or effect.  This Lease shall not be modified in any way
except by a writing subscribed by both parties.

10.18       GOVERNING
LAW

This Lease shall be governed by and construed and
enforced in accordance with the laws and the Courts of the Commonwealth of
Massachusetts.

10.19       ADDITIONAL
REPRESENTATIONS

Landlord represents and warrants to Tenant as follows:

(a)                                  that
Landlord has the right and authority to enter into this Lease and grant Tenant
possession of the Premises and other rights set forth herein, and that the
person executing this Lease has the power to sign this Lease and bind Landlord
hereto; and

(b)                                 that
Landlord is the fee simple owner of the Lot and that Landlord (or its
affiliate(s) or an affiliate(s) of The Gutierrez Company) are the fee simple
owners of the Park; and

(c)                                  that the Building (including the Landlord’s
Work) and the Lot will, upon substantial completion of Landlord’s Work and the
Commencement Date hereunder and issuance of all necessary permits and approvals
required to be obtained from any and all necessary governmental agencies prior
to occupancy of the Premises by Tenant, if necessary, including without
limitation, a certificate of occupancy from the Town of Burlington, which
allows Tenant to use and occupy the Building as herein provided, comply with
all dimensional, use, parking, loading and other zoning requirements of the
Town of Burlington, and all applicable building codes and governmental requirements,
including, without limitation, all ADA, local and state requirements and
regulations promulgated thereunder and other applicable laws and rules
governing access to and use of

 46
 

 

                                                facilities by people with disabilities,
including the Massachusetts Architectural Access Board regulations; and

(d)                                 the Building (including the roof in
accordance with industry standards and all mechanical and electrical systems),
Premises, common areas, and Lot shall be, on the Commencement Date, be in good
operating condition and repair, free and clean of debris, and ready for Tenant’s
use and occupancy; and

(e)                                  that no other tenants of the Building will be
provided within their lease a parking ratio of greater than 3.0 spaces per
1,000 RSF leased throughout the Term (including any extensions hereof), and
that parking shall be free of charge throughout the Term (including any
extensions thereof); and

(f)                                    that Landlord shall, by the Term Commencement
Date, at its cost, repair and/or replace any windows or glazing in the Premises
which, as of this date, show water leakage or have failed in other ways,
including loose or damaged caulking, “fogged” glazing units or glazing units
with failed seals; and

(g)                                 that Landlord has, prior to the date of this
Lease, provided Tenant with full and complete copies of any and all reports or
information regarding any Hazardous Materials previously located or currently
located in, on, under or about the Premises, Building, Lot and Park currently
within its possession.

If any of the foregoing representations are untrue or warranties not
satisfied as of the Term Commencement Date, Landlord shall promptly correct the
same, at its sole cost and expense and not as a Landlord’s Operating Costs
following receipt of written notice from Tenant.

ARTICLE
11

SECURITY

 

     Security in the amount of One Hundred Two
Thousand Six Hundred Thirty Dollars ($102,630.00) shall be delivered by Tenant
to Landlord promptly following the effectiveness of this Lease which shall
occur upon the satisfaction of the conditions set forth in Sections 8.1 and 8.7
above (the “Security”).  Such Security shall be, at Tenant’s option,
in the form of (i) cash, or (ii) in substantially the form of the sample Letter
of Credit attached hereto as Exhibit I, and shall, if it is in the form of a
Letter of Credit, (a) name the Landlord as its beneficiary, (b) expire not less
than one (1) year after the issuance thereof, and (c) be drawn on an
FDIC-insured financial institution reasonably satisfactory to Landlord.  The Tenant shall have the right exercisable
at any time during the Term hereof to replace any cash Security with a Letter
of Credit, subject to the provisions of Article 11 hereof.  If the initial term of the Letter of Credit
will expire, Tenant shall from time to time, as necessary, renew or replace or
amend the original and any subsequent Letter of Credit no fewer than
twenty-five banking (25) days prior to the expiry date of the Letter of Credit
then held by Landlord, and if Tenant fails to renew or replace or amend said
Letter of Credit by not later than twenty-five (25) banking days prior to
expiry date, Landlord may draw upon such Letter of Credit and hold the proceeds
thereof in an account as Security, without

 47
 

 

interest until
Tenant provides to Landlord a replacement letter of credit complying with the
requirements for the original Letter of Credit as set forth above.

     Landlord may, from time to time, without
prejudice to any other remedy, use all or a portion of the Security to cure any
continuing Event of Default, including any uncured default in connection with
any arrearages of Rent, costs incurred by Landlord to repair damage to the
Premises caused by Tenant (subject to Section 10.13), and any reasonable
costs incurred by Landlord to repair (other than normal wear and tear or damage
caused by Landlord, its agents or employees) the Premises upon termination of
this Lease.  Following any such
application of the Security, Tenant shall, within five (5) business days after
receipt of written demand, restore the cash security or letter of credit to its
full amount, as applicable.  Tenant shall
not have the right to call upon Landlord to apply all or any part of the
Security to cure any continuing Event of Default, but such use shall be solely
in the discretion of Landlord.  If there
is no continuing Event of Default, at the termination of this Lease, after
Tenant surrenders the Premises to Landlord in accordance with this Lease and
all amounts then due Landlord from Tenant are finally determined and paid by
Tenant or through application of the Security, the balance of the Security,
either cash or the Letter of Credit, as applicable, shall be returned to Tenant
and in any event, within thirty (30) days of expiration of the Term of this
Lease and surrender of the Premises.  If
Landlord transfers its interest in the Building during the Term, Landlord shall
assign the Security to the transferee, Landlord shall notify Tenant of the
assignment and thereafter have no further liability for the return of the
Security so transferred to the transferee (as successor Landlord).  If the Security is in the form of a Letter of
Credit, Landlord shall have no further liability for the return of such Letter
of Credit once the assignee has assumed Landlord’s obligations with respect to
the return of the Letter of Credit and Landlord has notified Tenant of the
assignment. Upon any such delivery, Tenant hereby releases Landlord herein
named of any and all liability with respect to the Letter of Credit, its
application and return, and Tenant agrees to look solely to such grantee or
transferee.  It is further understood
that this provision shall also apply to subsequent grantees or
transferees.  Upon request by Tenant,
Landlord shall provide Tenant with a copy of the assignment and assumption or
other written documentation that was entered into to effectuate the transfer of
the Letter of Credit.  Landlord shall not
be required to segregate the Security from its other accounts or to pay
interest thereon, as aforesaid.

In
the event the Lease is assigned by Tenant, Tenant’s assignee may provide a
replacement Letter of Credit and the original Letter of Credit held by Landlord
shall be returned to Tenant, provided that such Letter of Credit shall remain
subject to all of the terms and conditions of this Article 11.  Landlord shall deliver the original prior
Letter of Credit to the prior tenant simultaneously upon the delivery of the
replacement letter of credit by Tenant’s assignee or as soon as possible
thereafter.

Remainder
of Page Intentionally Left Blank

Signature
Page to Follow

 

 48
 

 

EXECUTED
as a sealed instrument in two or more counterparts on the day and year first
above written.

	
  TENANT:

  	
   

  	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ZORAN CORPORATION,

  	
   

  	
   

  	
   

  	
  AUBURN-OXFORD TRUST

  
	
  a Delaware corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Karl Schneider

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John A. Cataldo

  
	
   

  	
   

  	
   

  	
   

  	
  John A. Cataldo,

  
	
  Duly Authorized Sr. VP,
  Finance & CFO

  	
   

  	
   

  	
   

  	
  as Trustee on behalf of
  himself and

  
	
   

  	
   

  	
   

  	
   

  	
  his co-Trustee, and not individually

  
											

 

 49
 

 

EXHIBIT “A”

Plan Showing Tenant’s Space

[SEE ATTACHED]

 50
 

 

 51
 

 

 52
 

 

EXHIBIT “B”

ESTOPPEL
CERTIFICATE

 

THIS CERTIFICATE is made to _____________________,
(the “Bank”) with respect to a lease between Auburn-Oxford Trust (“Landlord”)
and the undersigned, covering a building located at One Wall Street,
Burlington, Massachusetts, such lease being dated January ____, 2007 [as
amended] (the “Lease”).

The undersigned has been advised that the Bank is
about to enter into a transaction whereby the Bank is making a loan secured by
the aforesaid real estate and the Lease to the undersigned, and under which the
Bank may acquire an ownership interest in such real estate.  In connection with this transaction, the
entire interest of the Landlord under the Lease to the undersigned will be
assigned to the Bank.  The undersigned
acknowledges that the Bank is and will be relying upon the truth, accuracy and
completeness of this letter in proceeding with the transaction described above.

The undersigned, for the benefit of the Bank, their
successors and assigns, hereby certifies, represents, warrants, agrees and
acknowledges that:

1.                                       The
Lease is in full force and effect in accordance with its terms without
modification or amendment except as noted below and the undersigned is the
holder of the Tenant’s interest under the Lease.

2.                                       Except
as noted below, the undersigned is in possession of all of the Premises
described in the Lease under and pursuant to the Lease and is doing business
thereon; and the Premises are completed as required by the Lease.

3.                                       Except
as noted below, the undersigned has no claims or offsets with respect to any of
its obligations as Tenant under the Lease, and neither the undersigned nor the
Landlord is claimed to be in default under the Lease.

4.                                       Except
as noted below, the undersigned has not paid any rental or installments thereof
in advance of the due date as set forth in the Lease.

5.                                       Except
as noted below, the undersigned has no notice of prior assignment,
hypothecation or pledge of rents of the Lease or the Landlord’s interest thereunder
or of the Tenant’s interest thereunder.

6.                                       The
Term of the Lease has commenced and is presently scheduled to expire on
___________.  If there are any rights of
extension or renewal under the terms of the Lease, the same have not, as of the
date of this estoppel, been exercised.

7.                                       Until
such time as the Bank shall become the Landlord, if the undersigned should
assert a claim that the Landlord has failed to perform an obligation to the
undersigned under the terms of the Lease or otherwise, notice thereof shall

 53
 

 

                                                promptly
be furnished to the Bank at the following address: __________________________;
and the undersigned agrees that the undersigned will not exercise any rights
which the undersigned might otherwise have on account of any such failure until
notice thereof has been given to the Bank, and the Bank has had the same
opportunity to cure any such failure as the Landlord may have under the terms
of the Lease.

8.                                       Each
of the statements set forth in Paragraphs 1 through 7 are true, accurate and complete
except as follows (state specifically any exception):

	
  DATED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  Zoran Corporation,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  

 

 54
 

 

EXHIBIT “C”

PRELIMINARY
PLANS AND OUTLINE SPECIFICATIONS

OF
LANDLORD’S WORK

 

(TENANT IMPROVEMENT WORK FOR PREMISES)

See attached Preliminary Plans and the outline
specifications set forth below

GWB Partitions

·                  All partitions to be 3 5/8” studs 24”
o.c. with 5/8” GWB on each side to 6” above ceiling.

 

·                  Full height partitions (to deck
above) at: Conference Rooms, Training Room, V.P. offices, enclosed labs and
computer room/lab with sound insulation. 
Walls at corridors, storage rooms (unoccupied areas) do not need full
height partitions.

 

Flooring

·                  General flooring to be carpet
tile.  Include an allowance of $35/S.Y.
to furnish and install.

 

·                  Upgrade flooring at V.P. offices,
large conference rooms and training room to $40/S.Y. to furnish and install.

 

·                  VCT flooring (Armstrong Standard
Excellon) at enclosed labs, storage rooms, computer room/lab, utility rooms and
lunch room.

 

·                  Include 4” vinyl base at all vertical
surfaces

 

·                  The total allowance for all the
flooring and base is $191,000.00.

 

Wall Treatment

·                  Painted GWB eggshell finish all
areas.

 

·                  Fabric-wrapped panels to be F&I
by Tenant.

 

·                  Include an allowance of $6,000.00 to
F&I.  200 S.F. of

wood panels at the
lobby/reception.

 

Ceiling

·                  2x2x5/8 reveal edge ACT Armstrong
#704 in a standard “T” grid.   l
Manufacturers Standard White finish.

 

·                  Includes an allowance of $6,000 to
F&I 1,500 S.F. of GWB ceilings or/and soffits.

 

Doors/Frames&Glazing 

·                  Entrance doors, frames to be 3’-0” x
8’-4” plain sliced Red Oak Factory finished door in a K.D. hollow metal frame
w/heavy duty lever handle lockset, 2 pair bb hinges, door stop and electric
strike.

 

·                  Interior doors and frames to be 3’0”x7’0”
plain sliced Red Oak Factory finished door in a K.D. hollow metal frames
w/heavy duty latchset, 1 1⁄2 pair hinges and door stop.

 

·                  Side lights to be 2’x7’ welded hollow
metal frame painted with 1⁄4” clear safety glass and vertical blind at all
offices, conference rooms and training room. 
An allowance of $36,000.00 is included for 48 sidelights.

 

 55
 

 

Millwork

·                  Includes an allowance of $36,000.00
for plastic laminate countertops and base cabinets at mail room, copy room and
pantry.  Includes adjustable malamene
shelving above counters in the mail and copy rooms and overhead plastic
laminate cabinets in the pantry. 
Allowance also includes coat closet pole and shelf and adjustable
shelving.

 

Specialties

 

·                  Includes an allowance of $18,000.00
for recessed ceiling mounted projection screens.

 

·                  Includes and allowance of $3,000.00
for appliances.

 

·                  Includes an allowance of $6,000.00 to
add card readers to three existing elevators. 
Card Readers and wiring by Tenant’s security subcontractor.

 

·                  Marker Boards will be provided by
Tenant’s subcontractor.

 

·                  Video Conference Infrastructure will
be provided by Tenant’s subcontractor.

 

·                  Card Readers security system to be
provided by Tenant’s subcontractor.

 

·                  Systems Furniture to be provided by
Tenant’s subcontractor.

 

·                  Furniture will be provided by Tenant’s
subcontractor.

 

·                  Voice and Data Equipment and wiring
to be provided by Tenant’s subcontractor.

 

Electrical Lighting

·                  Linear Pendant Indirect-Large
Conference Rooms, “A” (VP) Offices.

 

·                  2x4 and 2x2 Recessed Indirect — Open
Office areas. “B” Offices, Pantry Areas, Training Room, Med&Small
Conference Rooms.

 

·                  2x4 Recessed Indirect — Enclosed
Labs.

 

·                  2x4 Recessed Acrylic Lens — Storage,
Computer Room.

 

·                  Dimming Systems for Large
Conf&Training Rooms.

 

·                  Includes and allowance of $100,000.00
for lighting fixtures with lamps and the lighting controls which consist of
programmable lighting relay control panels and occupancy sensors.  Also included are cast aluminum L.E.D. exit
signs.  This allowance is for the
material including sales tax not for the installation.

 

·                  Specialty lighting for
lobby/reception is included in the lighting fixture allowance.

 

·                  Includes an allowance of $7,500.00
for wiring special purpose LAB receptacles and/or equipment.

 

·                  Maintained lighting levels shall be
in accordance with the Illuminating Engineering Society of North America 9th Edition.

 

Power

·                  Distribution system panelboards,
cables and circuit breakers shall be sized for present loads and future
allowance.  Future allowance shall
include 20% spare/space for future feeder and branch circuit breakers in
all  panelboards.

 

·                  Unless otherwise specially approved,
all new wiring will be concealed.

 

·                  The minimum wire size for power will
be #12 AWG.

 

·                  Ground fault protection for
receptacles will be provided in accordance with National Electric Code
requirements.

 

 56
 

 

·                  All interior receptacles shall be
commercial grade, white thermoplastic with brushed stainless steel plates.

 

·                  Provide one single pole 10-amp
circuit breaker per 120 gross S.F. for general office loads and miscellaneous
power.  One duplex wall receptacle shall
be provided for every 500 square feet of open office area.  Each enclosed office and conference rooms
shall be provided with three duplex receptacles.

 

·                  Provide four (4) standard 120 volt
duplex wall outlets at each lab.  Provide
Eight (8) standard 120 volt duplex wall outlets at the large lab and the
computer room.

 

·                  A single common ground or grounding
bus shall be provided for the entire Premises.

 

·                  Lighting control panels shall be
provided for control of open area lighting in lobbies and open office
spaces.  System shall be provided with
low voltage override switches to control zones for “after hours” use.

 

·                  Occupancy sensors should be provided
for enclosed offices, conference rooms, etc, to achieve compliance with the
automatic lighting shutoff requirements of the Massachusetts Energy Code.

 

·                  Wall mounted occupancy sensor
switches will be provided in all full heights offices in conformance with The
Massachusetts Energy Code.

 

·                  All emergency life safety egress
lighting in exist corridors will be connected to the existing base building
life safety system.

 

·                  Exit lights and emergency path of
egress lighting will be provided in quantities in accordance with applicable
codes.

 

·                  Exit signs will be LED type.

 

·                  New fire alarm devices shall be
provided in compliance with all applicable codes and authorities having jurisdiction.  New devices shall match building standard.

 

·                  Smoke detectors will be installed in
new tel/data rooms and electric rooms and will be connected to remote
indicating lights located outside of the rooms.

 

·                  Telephone/data closets will have
plywood backboards and ground bar.

 

·                  Fire alarm interface shall be
provided to unlock all doors during fire alarm notification evacuation if
required by code.

 

·                  Provide tel/data/power floor boxes in
each large and Medium Conference Room.

 

Plumbing

·                  Includes an allowance of $7,000 to
provide stainless steel sink at Pantry areas with water connections for ice
maker and coffee service.

 

Mechanical

·                  The HVAC system will be sized to
maintain indoor conditions of 75o Fdb at 50% relative humidity during summer
conditions and  70o Fdb (no humidity
control) under heating conditions.  Use
outdoor conditions as published in the 1997 ASHRAE Fundamentals Handbooks, 1%
conditions for cooling and dehumidification design and 99.6% conditions for
heating design.

 

·                  Ductwork will be galvanized sheet
metal, low and medium pressure, in accordance with SMACNA standards.

 

·                  Interior partitioned offices shall
have at least one temperature zone per 10 offices.

 

·                  Perimeter partitioned offices shall
have at least one temperature zone per 5 offices.

 

 57
 

 

·                  Corner offices shall be provided with
their own temperature control zone.

 

·                  Conference rooms shall be provided
with their own temperature control zone, separate exhaust fans and acoustically
lined transfer ducts for return air.

 

·                  Testing and balancing of the system
will be performed by a certified contractor.

 

·                  Includes a Sanyo 36,000 BTU (3 Tons
A/C) wall mounted air conditioning unit for the computer room.

 

·                  Air conditioning for the labs will be
provided by the “House” system.

 

Telecommunications

·                  Provide a plaster ring and pull
string for each tel/data outlet.

 

·                  Provide (2) locations per each
office.

 

·                  Provide a minimum of (1) jack
location for any room or work area not noted above.

 

·                  Provide a minimum of (10) jack
locations for each Enclosed Lab.

 

·                  Provide power/data floor boxes in
each Large Conference Room.

 

·                  Provide (12) power/data floor boxes
in Training Room.

 

·                  Any floor feeds shall be in conduit
in the spaces below the tenant’s floor.

 

·                  Provide plywood backboards in telephone
rooms and data closets.

 

·                  Provide “rings & strings” from
recessed wall junction boxes to points above the ceiling for each tel/data
outlet, at a minimum one per 500 square feet of open floor area.

 

·                  Cableways shall be provided to link
the main telephone/data room to the building data closets.

 

 58
 

 

EXHIBIT “C-1”

LIST OF
LANDLORD’S WORK

(BASE
BUILDING)

 

In
addition to the work contemplated by the plans and specifications attached as
Exhibit C and to provide additional detail that may not be included in such
plans and specifications, Landlord shall perform the following work on or
before the Commencement Date at its sole cost and expense and not as a Landlord’s
Operating Cost:

·                  Inspect the roof, present evidence to Tenant
of current condition, describe all necessary repairs and perform such repairs
to the roof in a manner consistent with industry standards for such roofs.

·                  Ensure that all mechanical and electrical
systems in the Building are in good working order as of the Commencement Date
and present to Tenant records of such systems’ condition and evidence of all
maintenance and repairs has been performed.

·                  Perform all work necessary to achieve ADA
compliance.

·                  Repair and replace any windows or glazing
which show water leakage or have failed in other ways including loose or
damaged caulking, “fogged” glazing units or glazing units with failed seals.

·                  Renovate the existing rest rooms on both the
3rd and 4th floors of the Building in
accordance with specifications consistent with comparable first class office
buildings in the Burlington, Massachusetts market, which will include, at a
minimum, upgrading of the floors, walls, ceiling finishes, and lighting of such
rest rooms.

·                  Renovate the common lobby and hallway on the
4th floor
of the Building, including new carpeting, lighting, wall paint/covering, door
finishes and hardware, and ceilings in accordance with specifications
consistent with comparable first class office buildings in the Burlington,
Massachusetts market.

·                  Refinish/repaint the elevator doors and
frames on the 3rd and 4th floors of the Building.

·                  Replace or re-finish window sills in the
Premises, as necessary.

·                  Provide new window treatments for the
Premises, as necessary.

·                  Exterior landscaping, including pruning and
tree removal required to maximize Tenant’s views from the Premises.

 

 59
 

 

EXHIBIT C-2

Additional Work

	
  1.

  	
   

  	
  Computer room systems including supplemental air
  conditioning (beyond what is included within Landlord’s Work), UPS systems,
  and gaseous fire suppression equipment.

  
	
  2.

  	
   

  	
  Network equipment including racks, cable management
  and server equipment

  
	
  3.

  	
   

  	
  Audio visual equipment including projectors,
  motorized screens and speaker systems.

  
	
  4.

  	
   

  	
  Videoconferencing systems

  
	
  5.

  	
   

  	
  Enclosed lab supplemental air conditioning

  
	
  6.

  	
   

  	
  Lobby reception station

  
	
  7.

  	
   

  	
  Security system and access control devices

  
	
  8.

  	
   

  	
  Systems furniture

  
	
  9.

  	
   

  	
  Appliances

  
	
  10.

  	
   

  	
  Emergency Generator — Subject to the following
  provision: Subject to the provisions hereinafter provided, Tenant 

  
	
  shall have the right, at no additional charge, to
  place a generator and fuel supply on the Lot, at Tenant’s sole cost and
  expense. Subject to all applicable law, matters of title and the consent of
  Landlord and the first floor tenant, not to be unreasonably withheld,
  conditioned or delayed, Tenant has the right to install the same. The size
  and location of the installation shall not be unreasonably withheld or
  delayed by Landlord. All installations shall be in accordance with sound
  construction practices, and in accordance with applicable law, and in a good
  and workmanlike manner, and shall not materially interfere with other tenants
  of the Building or Park or decrease the number of parking spaces on the Lot.
  The cost of any environmental review of the proposed equipment shall be at
  Tenant’s expense. Tenant shall indemnify, defend and hold Landlord harmless
  from and against any and all liability or loss arising (except as a result of
  the negligence or willful misconduct or Landlord, its agents, employees or
  contractors) from or out of the installation, use or removal of such
  generator and fuel supply. Upon expiration of the Term, Tenant shall be
  responsible for the removal of the same and for repairing any damage caused
  therefrom. This Section shall survive the expiration or earlier termination
  of this Lease.

  

 

Note: Some items may be installed by Tenant’s
contractors prior to Commencement Date

 

 60
 

 

EXHIBIT C-3

Zoran Relocation
Project Schedule

[SEE ATTACHED]

 

 61
 

 

 62

 

EXHIBIT “D”

LANDLORD’S SERVICES

I.              CLEANING

A.            Building Lobbies and
Common Areas

1.                                       Entrance
doors and partition glass to be cleaned nightly.  Wipe down frames and fixtures as needed.

2.                                       Remove
entrance mats and clean sand and dirt from pits and floors, clean and replace
mats nightly.

3.                                       Floors
to be swept and washed nightly.  Maintain
a high luster finish following manufacturer’s specifications.

4.                                       Walls
to be dusted and spot cleaned as necessary, thoroughly washed twice a year.

5.                                       Empty
and wipe clean trash receptacles nightly including exterior smoker’s stations.

6.                                       Dust,
with treated cloth, security desks, window sills, directory frames, planters,
etc., nightly.

7.             Clean director glass nightly.

8.                                       Vacuum
all carpeted areas nightly, treat and spot clean stains, clean fully as needed.

9.                                       Vinyl
tile floors to be dry mopped nightly, spot washed with clean water as needed
and spray buffed weekly.

10.                                 Sweep
all stairwells in building nightly and keep in clean condition, washing same as
necessary.

11.                                 Do
all high dusting (not reached in nightly cleaning) quarterly, which includes
the following:

(a)           Dust all pictures, frames, charts,
graphs and similar wall hangings.

(b)                                 Dust
exposed piped, ventilation and air conditioning grilles, louvers, ducts and
high molding, as needed.

 63
 

 

12.                                 Clean
and maintain luster on ornamental metal work as needed within arm’s reach.

13.                                 Dust
all drapes and blinds as needed.

14.                                 Wash
and disinfect drinking fountains using a non-scented disinfectant nightly.  Polish all metal surfaces on the unit
nightly.

15.                                 Strip
and wax all resilient tile floors yearly.

16.                                 Shampoo
all common area carpets at additional contract price at least once per year.

B.                                    Lavatories
— Nightly

1.                                       Empty
paper towel receptacles, bag and transport waste paper to designated area,
disinfect receptacle and add new liner.

2.                                       Empty
sanitary napkin disposal receptacles, bag and transport waste, disinfect
receptacle and add new liner.

3.                                       Refill
toilet tissue, hand towel dispensers, and sanitary napkin dispensers.

4.                                       Scour,
wash and disinfect all basins, bowls and urinals using non-scented
disinfectants.

5.                                       Wash,
disinfect and wipe dry both sides of toilet seat using non-scented
disinfectants.

6.                                       Wash
and polish all mirrors, counters, faucets, flushometers, bright work and enameled
surfaces.

7.                                       Spot
clean toilet partitions, doors, door frames, walls, lights and light switches.

8.                                       Remove
all cobwebs from walls and ceilings.

9.                                       Sweep
and wash all floors, using proper non-scented disinfectants.

10.                                 Add
water to floor drains weekly, disinfect monthly.

11.                                 Turn
off lights.

 64
 

 

C.                                    Elevators
— Nightly

1.                                       Thoroughly
clean walls.

2.                                       Wipe
clean control panels, door frames and mirrors.

3.                                       Vacuum
cab and floor door tracks.

4.                                       Vacuum
floors, shampoo as needed, wash stone floors.

5.                                       Dust
ceilings.

D.                                    General
Cleaning (Monday through Friday — Holidays Excluded)

Tenant
Areas Nightly — Unless Noted

 

1.                                       Empty
and clean all waste receptacles nightly and remove waste paper and waste
materials, including folded paper boxes and cartons, to designated area.  Replace liners as needed.  Check and wash waste baskets if soiled.  Abnormal waste removal (e.g. computer
installation paper, bulk packaging, wood or cardboard crates, refuse from
cafeteria operation, etc.) shall be Tenant’s responsibility.

2.                                       Weekly
hand dust with treated cloth and wipe clean or feather dust[er] all accessible
areas on furniture, desks, files, telephones, fixtures and window sills.

3.                                       Clean
all table tops and tenant entrance glass. 
Spot clean partitions.

4.                                       Spot
clean all walls, door frames and light switches.

5.                                       Wipe
clean and polish all bright metal work as needed within arm’s reach.

6.                                       All
stone, ceramic, tile, marble, terrazzo and other unwaxed flooring to be swept,
using approved dust-down preparation.

7.                                       All
wood, linoleum, rubber asphalt, vinyl and other similar type of floors to be
swept, using approved dust-down preparation and mopped or cleaned with dry
system cleaner nightly.

8.                                       Reception
areas, halls, high traffic areas to be vacuumed nightly.

9.                                       Offices
and cubicles to be spot vacuumed nightly. 
Complete vacuum weekly.

10.                                 Spot
clean carpet stains.

 65
 

 

11.                                Wash
and clean all water fountains and coolers nightly.  Sinks and floors adjacent to sinks to be
washed nightly.

12.                                 Dust
blinds as needed.

13.                                Vinyl
tile floors to be dry mopped nightly, spot washed with clean water as needed
and spray buffed every two weeks.

14.           Start
dishwasher. (To be billed separately by Landlord to Tenant)

15.           Wipe
down microwaves. (To be billed separately by Landlord to Tenant)

16.                                Wash
whiteboards with whiteboard cleaner supplied by Tenant. (To be billed
separately by Landlord to Tenant)

E.                                      Common
Showers

1.                                       Wash
shower walls and floors nightly, using proper non-scented disinfectants.

2.                                       Clean
and disinfect shower curtains weekly.

3.                                       Scrub
showers with bleach weekly.

4.                                       Wash
tile walls with proper grout cleaning compound as needed.

5.                                       Add
water to floor drains weekly, disinfect monthly.

6.                                       Turn
off lights.

Note:  Landlord
agrees that the aforesaid janitorial/general management services under this
Section I shall be provided to all multi-tenant/single tenant floors and the
costs (i.e. the initial costs only as such costs can increase over the Term)
thereof are included in the Base Year Operating Costs.

II.            HEATING, VENTILATING AND AIR
CONDITIONING

1.                                       Heating,
ventilation and air conditioning as required to provide reasonably comfortable
temperatures for normal business day occupancy (except holidays), Monday
through Friday, from 8:00 AM to 6:00 PM, and Saturday from 8:00 AM to 1:00 PM,
if so requested by Tenant, by providing at least 24 hours notice.  HVAC services beyond the aforesaid hours of
operation can be made available to

 66
 

 

                                                Tenant,
if so requested by Tenant, by providing at least 24 hours prior written notice
and at a cost of $25.00 per hour per unit.

2.                                       Maintenance
on any additional or special air conditioning equipment, and the associated
operating cost thereof, will be at Tenant’s expense.

III.           WATER

Hot water for lavatory and kitchen purposes and cold
water for drinking, kitchen, lavatory and toilet purposes.

IV.           ELEVATORS

Elevators for the use of all tenants and the general
public for access to and from all floors of the Building, programming of
elevators (including, but not limited to, service elevators), shall be as
Landlord from time to time determines best for the Building as a whole.

V.            SECURITY/ACCESS

Twenty-four (24) hour entry to the Building is
available to Tenant and Tenant’s employees, after normal Building hours of
operation.  Tenant shall have
unrestricted access to its Premises at all times, and not just during normal
building hours and operation.  All
security within the Premises shall be the responsibility of the Tenant and
Tenant shall have the right to control its space, including the right to
install additional security measures.

VI.           BUILDING HOURS

Normal building hours of operation are Monday through
Friday from 8:00 AM to 6:00 PM.  The
Building operates on Saturday from 8:00 AM to 1:00 PM, with access to the
Building subject to the provisions as outlined in Item V contained herein.  Except for the heating, ventilating and air
conditioning system, which operates in accordance with the schedule as
described in Item II contained herein, all Building systems, including but not
limited to electrical, mechanical, elevator, fire safety and sprinkler, and
water, operates 24 hours per day, 7 days per week, subject to repairs, failures
and interrupted service beyond Landlord’s control.

VII.                             CAFETERIA,
VENDING AND PLUMBING INSTALLATIONS/INTERIOR LAVATORIES AND SHOWERS

 67
 

 

1.                                       Except
as expressly set forth in this Exhibit, any space to be used primarily for
lunchroom or cafeteria operation within the Premises shall be Tenant’s
responsibility to keep clean and sanitary. 
Cafeteria, vending machines or refreshment service installations by
Tenant must be approved by Landlord in writing, which approval shall not be
unreasonably withheld, conditioned or delayed. 
All maintenance, repairs and additional cleaning necessitated by such
installations shall be at Tenant’s expense.

2.                                       Tenant
is responsible for the maintenance and repair of plumbing fixtures and related
equipment installed in the Premises for its exclusive use (such as in coffee
room, cafeteria or employee exercise area within the Premises), except for the
Base Building restrooms which Landlord shall maintain on multi-tenant and
single tenant floors.

VIII.        SIGNAGE

Tenant shall be entitled to the Building’s standard
signage at Tenant’s main entry and on the Building’s lobby directories.  See also Section 6.1.20.

IX.           ELECTRICITY

Tenant shall, in addition to paying Fixed Rent, pay
for all electricity consumed in the Premises during the Term pursuant to a
Landlord installed electric sub-meter or check meter to measure Tenant’s actual
usage consumed within the Premises. 
Tenant shall reimburse Landlord for any costs of such electricity
(without any mark-up) on a monthly basis, specifically within thirty (30) days
upon receipt of Landlord’s invoice therefor. 
Common area electricity and Building HVAC electric charges are included
in the Landlord’s Operating Costs set forth in Section 4.2 of this Lease.

Tenant’s use of electrical service in the Premises
shall not at any time exceed the capacity of any of the electrical conductors
or other equipment in or otherwise serving the Premises or the Building standard,
as hereinafter provided.  To ensure that
such capacity is not exceeded and to avert possible adverse effects upon the
Building’s electrical system, Tenant shall not, without at least thirty (30)
days prior written notice to and consent of Landlord as set forth in Section
6.1.15 of the Lease in each instance, connect to the Building electric
distribution system any fixtures, appliances or equipment which operates on a
voltage in excess of 277/480 volts nominal, or make any alteration or addition
to the electric system of the Premises. 
In the event Tenant shall use (or request that it be allowed to use)
electrical service in excess of that reasonably deemed by Landlord to be
standard for the Building, Landlord may condition its consent to such service upon
such conditions as Landlord reasonably requires (including, but not limited to,
the installation of utility service upgrades, sub-meters, air handlers or
cooling units), and all such additional usage (except to the extent prohibited
by law), installation and maintenance thereof shall be paid for by Tenant, as
additional rent, upon Landlord’s demand, so long as no other tenants are
receiving excess usage.

 68
 

 

It is understood that the electrical generated service
to the Premises may be furnished by one or more generators of electrical power
and that the cost of electricity may be billed as a single charge or divided
into and billed in a variety of categories, such as distribution charges,
transmission charges, generation charges, congestion charges, public good
charges, and other similar categories, and may also include a fee, commission
or other charge by an unaffiliated broker, aggregator or other intermediary for
obtaining or arranging the supply of generated electricity.  Landlord shall have the right to select the
generator of electricity to the Premises and to purchase generated electricity
for the Premises through a broker, aggregator or other intermediary and/or
buyers group or other group and to change the generator of electricity and/or
manner of purchasing electricity from time to time. Under no circumstances
shall Landlord charge Tenant any mark-up on electricity provided to the
Premises, Building or Park.

If Landlord successfully undertakes activities for the
purpose of reducing Tenant’s operating costs (such as negotiating an agreement
with a utility or another energy generator or engaging an energy consultant or
undertaking conservation or other energy efficient measures that may require
capital expenditures), the reasonable out of pocket costs and expenses
associated with such actions shall be included in Landlord’s Operating Costs
(subject to the provisions of Section 4.2) [including, but not limited to,
brokers’ commissions and legal fees, but excluding capital expenditures, which
shall be amortized as set forth in Section 4.2 of the Lease]).

As used herein, the term “generator of electricity”
shall mean one or more companies (including, but not limited to, an electric
utility, generator, independent or non-regulated company) that provides generated
power to the Premises or to the Landlord to be provided to the Premises, as the
case may be.

X.            OTHER UTILITIES

Tenant shall be responsible for the payment of all
other utilities consumed by Tenant in the Premises, including telephone, cable,
and other communications.  Tenant shall
pay for such consumption directly to the provider of such utilities.

 

 69

 

EXHIBIT E

RULES AND REGULATIONS

 

1.                                       The
entrance, lobbies, passages, corridors, elevators and stairways shall not be
encumbered or obstructed by Tenant, Tenant’s agents, servants, employees,
licensees, and visitors, or be used by them for any purpose other than for
ingress and egress to and from the Premises. 
The moving in or out of all safes, freight, furniture, or bulky matter
of any description must take place during the hours which Landlord may
reasonably determine from time to time. 
Landlord reserves the right to inspect all freight and bulky matter to
be brought into the Building and to exclude from the Building all freight and
bulky matter which violates any of these Rules and Regulations or the Lease of
which these Rules and Regulations are a part.

2.                                       No
curtains, blinds, shades, screens, advertisements, or signs, other than those
furnished by Landlord, shall be attached to, hung in, or used in connection
with any window or door of the Premises without the prior written consent of
the Landlord.  Interior signs on doors
shall be painted or affixed for Tenant by Landlord or by sign painters first
approved by Landlord, at the expense of Tenant, and shall be of a size, color
and style reasonably acceptable to Landlord.

3.                                       Tenant
shall furnish Landlord with master keys or access devices for any security
(door access) system provided and installed by Tenant, so long as the same has
been approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed.  Tenant shall be
allowed to place additional locks or bolts upon doors and windows within the
Premises, as long as Tenant provides master keys to Landlord as aforesaid as
these additional locks and bolts could prove to be a hindrance to Landlord
providing building services, such as cleaning and maintenance.  Tenant must, upon the termination of its
tenancy, remove all additional locks and bolts and restore all original door
hardware (unless Landlord has approved the installation of such hardware and
notified Tenant at the time that Landlord approved the hardware that the
hardware need not be removed upon the expiration or earlier termination of the
Lease) and provide Landlord all Building keys either furnished to or otherwise
procured by Tenant; and in the event of the loss of any keys so furnished,
Tenant shall pay to Landlord the reasonable replacement cost thereof.

4.                                       Canvassing,
soliciting and peddling in the Building, or on the Lot or in the Park if
applicable, are prohibited, and Tenant shall cooperate to prevent the same.

5.                                       Tenant
shall comply with all reasonably necessary security measures from time to time
established by Landlord for the Building or Park, if applicable.

6.                                       Tenant
agrees that there shall be no smoking allowed anywhere in the Premises or
Building.

 70
 

 

7.                                       No
animals, with the exception of “assistance animals” (e.g., seeing eye dogs)
shall be brought into the Building by Tenant, Tenant’s agents, servants,
employees, invitees, subtenants and assigns.

8.                                       Users
of any common fitness room or shower facilities within the Building (if
applicable) shall only place a lock on a locker only during the time
they are using the fitness, locker room and/or shower facilities.

 71
 

 

EXHIBIT “F”

OPTIONS TO EXTEND

The Tenant has the options to extend the Initial Term
of this Lease for two (2) successive five (5) year term(s) (each an “Extended Term” or collectively, the “Extended
Terms”), the exercise of which shall automatically extend the Term
of this Lease without the necessity of additional documentation.  So long as there does not exist any
continuing, uncured Event of Default hereunder at such time of exercise, the
option to extend the first Extended Term shall be deemed to have been exercised
by Tenant’s notification to Landlord that it elects to exercise its option to
extend at least twelve (12) months, but not more than eighteen (18) months,
prior to the end of the Initial Term hereunder and, as to the second Extended
Term, at least twelve (12) months, but not more than eighteen (18) months,
prior to the end of the first Extended Term. 
The Extended Term(s) shall be upon the same terms and conditions as are
set forth in this Lease, including, without limitation, the Tenant’s
obligations to pay Operating Cost Escalation as set forth in Section 4.2,
except that (i) there shall be no additional option to extend after the
termination of the second Extended Term or the failure to exercise the first or
second option, as applicable option, whichever shall first occur, (ii) the
annual Fixed Rent for the Extended Terms shall be equal to ninety-five percent
(95%) of the Market Rent (as defined in and determined in accordance with
Exhibit H), and (iii) there shall be no allowances, abatements or initial
rental concessions as may have been provided for herein with respect to the
Initial Term and (iv) the Base Year Operating Costs for such Extended Term
shall be the amount of Landlord’s Operating Costs for the calendar year ending
December 31 of the first year of such Extended Term (grossed up to reflected
95% occupancy as set forth in Section 4.2). 
Notwithstanding the foregoing, in no event, however, shall the annual
Fixed Rent for the first Extended Term be less than the annual Fixed Rent and
additional rent payable during the last year of the Initial Term (after taking
into account the free rent and other concessions applicable to the Initial
Term, which for such purposes shall be amortized on a straight line basis over
the Initial Term), and in no event shall the annual Fixed Rent for the second
Extended Term be less than the annual Fixed Rent and additional rent payable
during the last year of the first Extended Term.

 72
 

 

EXHIBIT “G”

NOTICE OF LEASE

 

In accordance with
the provisions of Massachusetts General Laws (Ter. Ed.) Chapter 183, Section 4,
as amended, notice is hereby given of a certain lease (hereinafter referred to
as the “Lease”) dated as of February __, 2007 by and between Arturo J.
Gutierrez and John A. Cataldo, as trustees of Auburn-Oxford Trust, u/d/t dated
October 19, 1983, and recorded with the Middlesex South Registry District of
the Land Court as Document No. 652932 (hereinafter referred to as “Landlord”)
and Zoran Corporation, a Delaware corporation (hereinafter referred to as “Tenant”).

W I T N E S S E T
H:

1.                                       The
address of the Landlord is c/o The Gutierrez Company, One Wall Street,
Burlington, Massachusetts 01803.

2.             The address of the Tenant is  1390 Kifer Road, Sunnyvale, California 94086.

3.             The Lease was executed on February
__, 2007.

4.                                       The
Term of the Lease is a period of ten (10) years beginning on the Commencement
Date determined in accordance with Section 3.2 of the Lease, currently
scheduled for August 1, 2007.

5.                                       Subject
to the provisions of the Lease, the Tenant has the option to extend the Term of
the Lease for two 5-year term pursuant to Exhibit “F” of the Lease.

6.                                       The
demised premises is approximately 54,736 square feet within a six-story
building containing approximately 192,000 rentable square feet located at One
Wall Street, Burlington, Massachusetts 01803 (the “Building”), and the areas of
which are the subject of all appurtenant rights and easements set forth in
Section 2.1 of the Lease.  Tenant has a
right of first refusal on space on floors 4 and 5 of the Building, in
accordance with the terms of the Lease.

7.             The lot upon which the Building is
located is described in Exhibit “A” attached.

This Notice of
Lease has been executed merely to give notice of the Lease, and all of the
terms, conditions and covenants of which are incorporated herein by
reference.  The parties hereto do not
intend this Notice of Lease to modify or amend the terms, conditions and
covenants of the Lease which are incorporated herein by reference.

 73
 

 

IN WITNESS
WHEREOF, the parties hereto have duly executed this Notice of Lease as of this
___ day of _____________, 2007.

	
  LANDLORD:

  
	
   

  
	
  AUBURN-OXFORD
  TRUST

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Arturo J. Gutierrez, as
  trustee

  	
   

  
	
   

  	
  in his capacity as said
  trustee

  	
   

  
	
   

  	
  and not individually

  	
   

  
				

 

COMMONWEALTH OF
MASSACHUSETTS

MIDDLESEX, SS

On
this ____  day of
____________, 2007, before me, the undersigned notary public, personally
appeared Arturo J. Gutierrez, as Trustee of Auburn-Oxford Trust, proved to me
through satisfactory evidence of identification, which was personal knowledge
of the undersigned, to be the person whose name is signed on the preceding or
attached document(s), and acknowledged to me that he signed it voluntarily for
its stated purpose.

(official
seal)

 

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ZORAN CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

 74
 

 

STATE OF ________________

County of _________________________

 

On this _______ day of
______________, 2007, before me, the undersigned notary public, personally
appeared ___________________________, the _________________ of Zoran
Corporation, proved to me through satisfactory evidence of identification,
which was o photographic
identification with signature issued by a federal or state governmental agency,
o oath or affirmation of a credible witness, o
personal knowledge of the undersigned, to be the person whose name is signed on
the preceding or attached document(s), and acknowledged to me that he/she
signed it voluntarily for its stated purpose.

 

 

	
  (official seal)

  
	
   

  
	
   

  
	
  Notary Public

  

 

 75
 

 

EXHIBIT “A” TO
EXHIBIT “G”

A parcel of land
with the buildings and improvements thereon located off of Cambridge Street and
Wall Street in Burlington, Middlesex County, Massachusetts, being shown as Lot
15B on the plan entitled “Plan of Land in Burlington, Massachusetts (Middlesex
County)” prepared for Auburn-Oxford Trust, Scale 1” = 40’ dated November 23,
1999 by The BSC Group, Inc., which plan is recorded with the Middlesex South
Registry of Deeds as Plan No. 20 of 2000. 
Portions of said Lot 15B are registered land being Lot 3 and Lot 4 as
shown on Land Court Plan 34820A and Lot 5 as shown on Land Court Plan 24820B.

 76
 

 

EXHIBIT “H”

 

MARKET RENT

The market rent
for the Premises shall mean the then fair market rent for the Premises for the
applicable Extended Term,
including annual increases (if any), being charged at the time for renewals
similar in kind for similar office/R&D buildings in the area, taking into
account the location, age and condition of the buildings, lease term length,
inducements (e.g., improvement allowances, rent concessions, etc.),
brokerage commissions and all other relevant factors (the “Market Rent”).  Market Rent shall be determined as
follows:

(a)                                  The
Market Rent shall be proposed by Landlord within fifteen (15) days of receipt
of Tenant’s notice that it intends to exercise its option to extend the Term as
specified in Exhibit F, which such proposal shall also include market
comparables (the “Landlord’s Proposed Market
Rent”).  The Landlord’s Proposed
Market Rent shall be the Market Rent unless Tenant notifies Landlord, within
thirty (30) days of Tenant’s receipt after Landlord’s Proposed Market Rent,
that Landlord’s Proposed Market Rent is not satisfactory to Tenant and (a) that
Tenant desires to revoke its election to extend the Term pursuant to Exhibit F
(whereupon receipt the same shall be treated as if no initial notice had been
sent by Tenant pursuant to Exhibit F) or (b) that Tenant elects to continue to
have discussions with Landlord and proceed to a binding arbitration pursuant to
subparagraph (b) below (“Tenant’s Rejection Notice”).

(b)                                 If
Tenant delivers Tenant’s Rejection Notice and the Market Rent is not otherwise
agreed upon by Landlord and Tenant within forty-five (45) days after Landlord’s
receipt of Tenant’s Rejection Notice, then the Market Rent shall be determined
by the following appraisal procedure:

1.                                       Within
five (5) days of the expiration of said forty-five (45) day period, Tenant
shall give notice to Landlord, which notice shall specify the name and address
of the appraiser designated by Tenant (the “Tenant’s
Appraisal Notice”).  Landlord
shall within five (5) days after receipt of Tenant’s Appraisal Notice, notify
Tenant of the name and address of the appraiser designated by Landlord.  Such two appraisers shall, within twenty (20)
days after the designation of the second appraiser, make their determinations
of the Market Rent in writing and give notice thereof to each other and to
Landlord and Tenant.  Such two (2)
appraisers shall have twenty (20) days after the receipt of notice of each
other’s determination to confer with each other and to attempt to reach
agreement as to the determination of the Market Rent.  If such appraisers shall concur in such
determination, they shall give notice thereof to Landlord and Tenant and such
concurrence shall be final and binding upon Landlord and Tenant.  If such appraisers shall fail to concur as to
such determination within said twenty (20) day period, they shall give notice
thereof to Landlord and Tenant and shall immediately designate a third
appraiser.  If the two appraisers shall
fail to agree upon the designation of such third appraiser within five (5) days
after said twenty (20) day period, then they or either of them shall give
notice of such failure to agree to Landlord and 

 77
 

 

                                                Tenant
and if Landlord and Tenant fail to agree upon the selection of such third
appraiser within five (5) days after the appraiser(s) appointed by the parties
give notice as aforesaid, then either party on behalf of both may apply to the
American Arbitration Association or any successor thereto, or on his or her
failure, refusal or inability to act, to a court of competent jurisdiction, for
the designation of such third appraiser.

2.                                       All
appraisers shall be independent real estate appraisers or consultants who shall
have had at least seven (7) years continuous experience in the business of
appraising real estate in the suburban Boston area.

3.                                       The
third appraiser shall conduct such hearings and investigations as he or she may
deem appropriate and shall, within ten (10) days after the date of his or her
designation, make an independent determination of the Market Rent.  For purposes of the determination of Market
Rent it shall be assumed the Landlord and Tenant are each ready, willing and
able to enter into such a lease but are under no compulsion to do so.

4.                                       If
none of the determinations of the three appraisers varies from the mean of the
determinations of the other appraisers by more than ten percent (10%), the average
of the determinations of the three (3) appraisers shall be the Market Rent for
the Premises.  If, on the other hand, the
determination of any single appraiser varies from the average of the
determinations of the other three (3) appraisers by more than ten percent
(10%), the average of the determination of the two (2) appraisers whose
determinations are closest shall be the Market Rent.

5.                                       The
determination of the appraisers, as provided above, shall be conclusive upon
the parties and shall have the same force and effect as a judgment made in a
court of competent jurisdiction.

6.                                       Each
party shall pay fees, costs and expenses of the appraiser selected by it, its
own counsel fees, and one-half (1/2) of all other expenses and fees of
any such appraisal.

 78
 

 

EXHIBIT “I”

FORM OF LETTER OF CREDIT

[subject to Zoran’s bank’s review]

IRREVOCABLE STANDBY LETTER OF CREDIT
NUMBER:                                                                                                      

DATE:                                                                                                                                      DELIVERY
BY COURIER SERVICE

	
  BENEFICIARY:

  	
   

  	
   

  	
   

  	
  APPLICANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  AMOUNT:

  	
   

  	
  USD

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  EXPIRY

  
	
  DATE:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  AT OUR COUNTERS IN 

  	
   

  	
   

  
											

 

LADIES AND GENTLEMEN:

 

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
__________ IN YOUR FAVOR EFFECTIVE IMMEDIATELY, BY ORDER AND FOR THE ACCOUNT OF
__________ FOR A SUM OR SUMS NOT EXCEEDING A TOTAL OF
________________________________________________ (USD ________) AVAILABLE BY
YOUR DRAFT(S) AT SIGHT DRAWN ON US AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:

1.                                       THE
ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENTS THERETO, IF ANY.

2.                                       A
NOTARIZED STATEMENT FROM [INSERT LANDLORD] AS  
FOLLOWS:

“REFERENCE IS
HEREBY MADE TO THAT CERTAIN LEASE (THE “LEASE”) DATED _____________, 200_
BETWEEN _________ AND ____________ AS LANDLORD (THE “LANDLORD”).  I HEREBY CERTIFY THAT I AM AN AUTHORIZED
REPRESENTATIVE OF LANDLORD OR PERMITTED TRANSFEREE AND FURTHER CERTIFY THAT:

(I)                                    EITHER
(A) AN EVENT OF DEFAULT (AS DEFINED IN THE LEASE) HAS OCCURRED AND REMAINS
UNCURED BEYOND THE APPLICABLE CURE PERIOD, OR (B)  HAS NOT RENEWED, REPLACED OR AMENDED THE
LETTER OF CREDIT BY NOT LATER THAN TWENTY-FIVE (25) BANKING DAYS PRIOR TO THE
EXPIRATION THEREOF, IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION _ OF THE
LEASE; AND

(II)                                THIS
DRAWING IN THE AMOUNT OF USD ___________ (INSERT AMOUNT, NOT TO EXCEED AVAILABLE
CREDIT) REPRESENTS FUNDS DUE TO LANDLORD UNDER AND PURSUANT TO THE LEASE.”

 79
 

 

THIS LETTER OF CREDIT IS TRANSFERABLE IN ITS ENTIRETY (BUT NOT IN PART)
TO ANY PERSON OR ENTITY THAT SUCCEEDS LANDLORD UNDER THE LEASE [AND TO
_________________________, AS THE HOLDER OF A FIRST MORTGAGE ON THE PROPERTY TO
WHICH THE LEASE RELATES AND TO ANY PERSON OR ENTITY THAT SUCCEEDS
_________________________ AS HOLDER OF THE FIRST MORTGAGE ON SUCH
PROPERTY.]  TRANSFER OF THIS LETTER OF
CREDIT TO SUCH TRANSFEREE SHALL BE EFFECTED ONLY BY PRESENTATION TO THE ISSUING
BANK OF THE ORIGINAL OF THIS LETTER OF CREDIT TOGETHER WITH AMENDMENTS, IF ANY,
ACCOMPANIED BY A SIGNED AND COMPLETED TRANSFER CERTIFICATE IN THE FORM ATTACHED
HERETO AS EXHIBIT “A” AND PAYMENT OF A TRANSFER FEE EQUAL TO
_________________________.  UPON SUCH
PRESENTATION, THE BANK SHALL FORTHWITH TRANSFER THE LETTER OF CREDIT TO THE
DESIGNATED TRANSFEREE, OR IF SO REQUESTED BY SUCH TRANSFEREE, ISSUE A NEW
LETTER OF CREDIT TO THE TRANSFEREE IN THE SAME FORM AS THIS LETTER OF
CREDIT.  THIS LETTER OF CREDIT MAY NOT BE
TRANSFERRED TO ANY PERSON OR ENTITY WITH WHICH U.S. PERSONS ARE PROHIBITED FROM
DOING BUSINESS UNDER U.S. FOREIGN ASSETS REGULATIONS OR OTHER APPLICABLE U.S.
LAWS AND REGULATIONS.

ADDITIONAL CONDITION:  PARTIAL
DRAWINGS ARE ALLOWED.

ALL DOCUMENTS INCLUDING DRAFT(S) MUST INDICATE THE NUMBER AND DATE OF
THIS CREDIT.

EACH DRAFT PRESENTED HEREUNDER MUST BE ACCOMPANIED BY THIS ORIGINAL
LETTER OF CREDIT FOR OUR ENDORSEMENT THEREON OF THE AMOUNT OF SUCH DRAFT(S).

THE LEASE AGREEMENT MENTIONED ABOVE IS FOR IDENTIFICATION PURPOSES ONLY
AND IT IS NOT INTENDED THAT SAID LEASE AGREEMENT BE INCORPORATED HEREIN OR FORM
PART OF THIS CREDIT.

DOCUMENTS MUST BE SENT TO US VIA OVERNIGHT
COURIER (I.E. FEDERAL EXPRESS, UPS, DHL OR ANY OTHER EXPRESS COURIER) AT OUR
ADDRESS: 
________________________________________

ATTENTION: ___________________________.

 

WE HEREBY ENGAGE WITH DRAWERS AND/OR BONAFIDE HOLDERS THAT DRAFT(S)
DRAWN UNDER AND NEGOTIATED IN CONFORMANCE WITH THE TERMS AND CONDITIONS OF THE
SUBJECT CREDIT WILL BE DULY HONORED ON PRESENTATION.

EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF
CREDIT IS SUBJECT TO THE “UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDIT
(1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500”.

	
  VERY TRULY YOURS,

  
	
   

  
	
   

  
	
  AUTHORIZED
  OFFICIAL

  

 

 80
 

 

Exhibit “A”

	
  TO:

  	
  BANK

  	
   

  	
   

  	
  DATE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RE: LETTER OF CREDIT
  ISSUED BY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  LETTER OF CREDIT NO.

  
	
   

  	
  ATTN:

  	
   

  	
   

  	
  AVAILABLE AMOUNT

  
						

 

GENTLEMEN:

FOR VALUE
RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

_________________________

(NAME OF
TRANSFEREE)

_________________________

(ADDRESS)

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE
LETTER OF CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF
THIS TRANSFER.

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH
LETTER OF CREDIT ARE TRANSFERRED TO THE TRANSFEREE.  TRANSFEREE SHALL HAVE THE SOLE RIGHTS AS
BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS, WHETHER
INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE.  ALL AMENDMENTS ARE TO BE
ADVISED DIRECT TO THE TRANSFEREE WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE
TO THE UNDERSIGNED BENEFICIARY.

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK
YOU TO ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECT TO
THE TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

	
  

  	
  YOURS VERY TRULY,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (BANK)

  	
   

  	
  SIGNATURE OF

  
	
   

  	
   

  	
  BENEFICIARY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  	
   

  
						

 

 81

EXHIBIT “J”

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

This Subordination,
Non-Disturbance and Attornment Agreement (the “Agreement”) is dated as of the
___ day of __________, 200__, among New England Teamsters and Trucking Industry
Pension Fund, having a place of business at One Wall Street, Burlington,
Massachusetts 01803 (“Lender”), and
__________________________________________________________, under Declaration
of Trust dated ______________________ and recorded with the Middlesex South Registry
District of the Land Court as Document No. ___________, having a place of
business at c/o The Gutierrez Company, One Wall Street, Burlington,
Massachusetts 01803 (“Landlord” or “Borrower”), and Zoran Corporation, a
____________ Corporation, having a place of business at
__________________________ (“Tenant”).

RECITALS

A.            Tenant
is the tenant under a certain lease (the “Lease”) dated ________ _, 200__ with
Landlord, of premises described in the Lease (the “Premises”) located in a
certain office building known as ________________ located in Burlington, County
of Middlesex, Commonwealth of Massachusetts and more particularly described in
Exhibit A attached hereto and made a part hereof (such office building,
including the Premises, is hereinafter referred to as the “Property”).

B.            This
Agreement is being entered into in connection with a mortgage loan (the “Loan”)
made by Lender (or its predecessor in interest) to Landlord, secured by, among
other things: (a) a first mortgage, deed of trust or deed to secure debt on and
of the Property (the “Mortgage”) recorded with the registry or clerk of the
county in which the Property is located; and (b) a first assignment of leases
and rents on the Property (as amended, the “Assignment of Leases and Rents”) to
be recorded. The Mortgage and the Assignment of Leases and Rents are
hereinafter collectively referred to as the “Security Documents”.

C.            Tenant
acknowledges that Lender will rely on this Agreement in making the Loan to
Landlord.

AGREEMENT

For mutual consideration,
including the mutual covenants and agreements set forth below, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1.             Tenant
agrees that the Lease is and shall be subject and subordinate to the lien of
the Security Documents and to all present or future advances under the
obligations secured thereby and all renewals, amendments, modifications,
consolidations, replacements and extensions of the secured obligations and the
Security Documents, to the full extent of all amounts secured by the Security
Documents from time to time. Said subordination is to have the same force and
effect as if the Security Documents and such renewals, modifications,
consolidations, replacements and extensions thereof had been executed,
acknowledged, delivered

 82
 

and recorded prior to the Lease, any amendments or
modifications thereof and any notice thereof.

2.             Lender
agrees that, if the Lender exercises any of its rights under the Security
Documents, including an entry by Lender pursuant to the Mortgage or a
foreclosure of the Mortgage, then (i) Lender shall not disturb Tenant’s right
of quiet possession of the Premises (or Tenant’s right to use the appurtenant
areas under the Lease) under the terms of the Lease so long as Tenant is not in
default beyond any applicable grace period of any term, covenant or condition
of the Lease, (ii) Lender shall not join Tenant as a party defendant in any
foreclosure proceeding with respect to the Mortgage (unless required by law)
and (iii) Lender shall, subject to the terms and provisions of this Agreement
(including, without limitation, Section 4 below), recognize Tenant as the
tenant under the Lease. In addition, if Lender (or the purchaser at
foreclosure) succeeds to Landlord’s interest under the Lease and acquires title
to the Premises, then, provided Tenant is not in default under the Lease beyond
any applicable grace period set forth in the Lease and subject to the other
terms and provisions of this Agreement (including, without limitation, Section
4 below), the Lease shall continue in lull force and effect as a direct lease
between Lender (or such purchaser), as landlord, and Tenant, upon the terms and
conditions of the Lease, for the balance of the term of the Lease.

3.             Tenant
agrees that, in the event of a foreclosure of the Mortgage by Lender or the
acceptance of a deed in lieu of foreclosure by Lender or any other succession
of Lender to fee ownership, Tenant will attorn to and recognize Lender (or such
purchaser) as its landlord under the Lease for the remainder of the term of the
Lease (including all extension periods which have been or are hereafter
exercised) upon the same terms and conditions as are set forth in the Lease,
and Tenant hereby agrees to pay and perform all of the obligations of Tenant
pursuant to the Lease thereafter arising.

4.             Tenant
agrees that, in the event Lender succeeds to the interest of Landlord under the
Lease, Lender shall not be:

(a)                                  liable
for any act or omission of any prior Landlord (including, without limitation,
the then defaulting Landlord), except as specifically set forth in the last
paragraph of this Section 4, or

(b)                                 subject
to any defense or offsets which Tenant may have against any prior Landlord
(including, without limitation, the then defaulting Landlord), except as
specifically set forth in the last paragraph of this Section 4, or

(c)                                  bound
by any payment of rent or additional rent which Tenant might have paid for more
than one month in advance of the due date under the Lease to any prior Landlord
(including, without limitation, the then defaulting Landlord), or

(d)                                 accountable
for any monies deposited with any prior Landlord (including security deposits),
except to the extent such monies are actually received by Lender, or

 83
 

(e)                                  bound
by any surrender, termination, amendment or modification of the Lease made
without the consent of Lender, except as expressly set forth in the Lease.

Nothing contained in
Section 4(a) above shall relieve Lender from its obligation to cure any repair
or maintenance default under the Lease by any prior landlord under the Lease
(including Landlord) which is continuing when Lender succeeds to Landlord’s
interest under the Lease and acquires title to the Premises, provided that (i)
Lender had written notice of such default in accordance with Section 6 below
prior to succeeding to Landlord’s interest under the Lease and acquiring title
to the Premises, (ii) Lender had an opportunity to cure such default in
accordance with Section 6 below prior to succeeding to Landlord’s interest under
the Lease and acquiring title to the Premises, and (iii) Lender’s obligation to
cure such default shall be limited solely to performing the repair or
maintenance obligation as required pursuant to the terms of the Lease (and in
no event shall Lender have any other liability or obligation with respect to
such default).

5.             Tenant
agrees that, notwithstanding any provision hereof to the contrary, the terms of
the Mortgage shall continue to govern with respect to the disposition of any
insurance proceeds or eminent domain awards, and any obligations of Landlord to
restore the real estate of which the Premises are a part shall, insofar as they
apply to Lender, be limited to insurance proceeds or eminent domain awards
received by Lender after the deduction of all costs and expenses incurred in
obtaining such proceeds or awards.

6.             Tenant
hereby agrees to give to Lender copies of all notices of Landlord default(s)
under the Lease in the same manner as, and whenever, Tenant shall give any such
notice of default to Landlord, and no such notice of default shall be deemed
given to Landlord unless and until a copy of such notice shall have been so
given to Lender. Lender shall have the right to remedy any Landlord default
under the Lease, or to cause any default of Landlord under the Lease to be
remedied, and for such purpose Tenant hereby grants Lender such additional
period of time as may be reasonable to enable Lender to remedy, or cause to be
remedied, any such default in addition to the period given to Landlord for
remedying, or causing to be remedied, any such default. Tenant shall accept
performance by Lender of any term, covenant, condition or agreement to be
performed by Landlord under the Lease with the same force and effect as though
performed by Landlord.  No Landlord
default under the Lease shall exist or shall be deemed to exist (i) as long as
Lender, in good faith, shall have commenced to cure such default within the
above referenced time period and shall be prosecuting the same to completion
with reasonable diligence, subject to force majeure, or (ii) if possession of
the Premises is required in order to cure such default, or if such default is
not susceptible of being cured by Lender, as long as Lender, in good faith,
shall have notified Tenant that Lender intends to institute proceedings under
the Security Documents, and, thereafter, as long as such proceedings shall have
been instituted and shall be prosecuted with reasonable diligence. In the event
of the termination of the Lease by reason of any default thereunder by
Landlord, upon Lender’s written request, given within thirty (30) days after
any such termination, Tenant, within fifteen (15) days after receipt of such
request, shall execute and deliver to Lender or its designee or nominee a new
lease of the Premises for the remainder of the term of the Lease upon all of
the terms, covenants and conditions of the Lease. Lender shall have the right,
without Tenant’s consent, to foreclose the Mortgage or to accept a deed in lieu
of foreclosure of the Mortgage or to exercise any other

 84
 

remedies under the Security Documents.  Lender shall have no obligation to cure any
default under the Lease.

7.             Tenant
hereby consents to the Assignment of Leases and Rents from Landlord to Lender
in connection with the Loan, Tenant acknowledges that the interest of the
Landlord under the Lease is to be assigned to Lender solely as security for the
purposes specified in said assignments, and Lender shall have no duty,
liability or obligation whatsoever under the Lease or any extension or renewal
thereof, either by virtue of said assignments or by any subsequent receipt or
collection of rents thereunder, unless Lender shall specifically undertake such
liability in writing or unless Lender or its designee or nominee becomes, and then
only with respect to periods in which Lender or its designee or nominee
becomes, the fee owner of the Premises. Tenant agrees that upon receipt of a
written notice from Lender of a default by Landlord under the Loan, Tenant will
thereafter, if requested by Lender, pay rent to Lender in accordance with the
terms of the Lease. By its signature below, Landlord agrees that delivery by
Tenant of any amounts to Lender pursuant to the immediately preceding sentence
shall satisfy Tenant’s obligations under the Lease with respect to the payment
of rent.

8.             The
Lease shall not be assigned by Tenant, or terminated (except for an assignment
or a termination that is permitted in the Lease without Landlord’s consent)
without Lender’s prior written consent in each instance. In addition, Tenant
shall not enter into a Material Amendment without Lender’s prior written
consent. “Material Amendment” means any amendment or modification of the Lease
which (i) amends the term of the Lease, (ii) reduces the rent or additional rent
payable under the Lease, (iii) materially increases Landlord’s obligations
under the Lease or materially decreases Tenant’s obligations under the Lease,
or (iv) otherwise materially amends any other provision of the Lease.
Notwithstanding anything contained in this Section 8, Lender’s consent shall
not be required pursuant to this Section 8 for any document which simply
memorializes and documents the exercise by Tenant of any right or option
specifically granted to Tenant in the Lease.

9.             Tenant
understands that Lender is relying upon the following estoppel representations,
statements and agreements in connection with making and maintaining the Loan.
The Tenant hereby represents and certifies to, and agrees with, Lender as set
forth below.

(a)                                  The
Lease has not been assigned, amended or modified in any way except for the  following:

(b)                                 A
true and complete copy of the Lease, including, if any, all amendments and
modifications, is attached hereto as Exhibit A. 
There are no side letters or other arrangements relating to the Premises
or the Property.

(c)                                  The
Lease is presently in full force and effect according to its terms and is the
valid and binding obligation of Tenant.

(d)                                 To
the best of Tenant’s knowledge, Tenant is not in default under the Lease nor to
the best of Tenant’s knowledge does any state of facts exist which with the
passage of time or the giving of notice, or both, could constitute any such
default under the Lease.

 85
 

(e)                                  All
conditions under the Lease to be performed by Landlord including, without
limitation, all work, if any, to be performed by Landlord in the Premises or
the Property will be satisfied in accordance with the terms of the Lease, and
all contributions, if any, required to be paid by Landlord will be paid in
accordance with the terms of the Lease.

(f)                                    Tenant
will be in possession of the premises on the Term Commencement Date and will be
fully obligated to pay and is paying the rent and other charges due under the
Lease and is fully obligated to perform and is performing all of the other
obligations of Tenant under the Lease, in accordance with the terms of the
Lease.

(g)                                 On
this date, to the best of Tenant’s knowledge, there are no existing defenses or
off-sets which Tenant has against the enforcement of the Lease by Landlord or
claims by Tenant against Landlord for any reason (including as a result of any
default by Landlord under the Lease).

(h)                                 No
rent has been paid more than one (1) month in advance of the due date and no
security has been deposited with the Landlord.

(i)                                     The
Tenant has no options to extend the Lease, to lease additional space at the
Property, or to purchase the Property, and the Tenant has no right of refusal
with respect to leasing additional space or with respect to purchasing the
Property, except as outlined in the Lease.

(j)                                     There
are no actions, whether voluntary or otherwise, pending or threatened against
the Tenant, or any guarantor of the Tenant’s obligations under the Lease,
pursuant to the bankruptcy or insolvency laws of the United States or any
similar state laws.

(k)                                  The
interest of the Tenant in the Lease has not been assigned or encumbered, and no
part of the Premises has been sublet.

10.           Any
notice, election, communication, request or other document or demand required
or permitted under this Agreement shall be in writing and shall be deemed
delivered on the earlier to occur of (a) receipt or (b) the date of delivery,
refusal or nondelivery indicated on the return receipt, if deposited in a
United States Postal Service Depository, postage prepaid, sent certified or
registered mail, return receipt requested, or if sent via a recognized
commercial courier service providing for a receipt, addressed to Tenant or
Lender, as the case may be, at the following addresses:

If to Tenant:

 86
 

with a copy to:

 

and with a further
copy to:

 

If to Lender:

 

New England
Teamsters and Trucking Industry Pension Fund

One Wall Street

Burlington,
Massachusetts 01803

Telephone:            781-345-4400

Facsimile:               781-345-4423

 

with a copy to:

 

11.           The
term “Lender” as used herein includes any successor or assign of the named
Lender herein, including without limitation, any co-lender at the time of
making the Loan, any purchaser at a foreclosure sale and any transferee
pursuant to a deed in lieu of foreclosure, and their successors and assigns,
and the terms “Tenant” and “Landlord” as used herein include any successor and
assign of the named Tenant and Landlord herein, respectively; provided,
however, that such reference to Tenant’s or Landlord’s successors and assigns
shall not be construed as Lender’s consent to any assignment or other transfer
by Tenant or Landlord.

12.           If
any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, such provision shall be deemed modified to the
extent necessary to be enforceable, or if such modification is not practicable,
such provision shall be deemed deleted from this Agreement, and the other
provisions of this Agreement shall remain in full force and effect, and shall
be liberally construed in favor of Lender.

13.           Neither
this Agreement nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but only by an instrument in writing
executed by the party against which enforcement of the termination, amendment,
supplement, waiver or modification is sought.

This Agreement shall be
construed in accordance with the laws of the state of in which the Property is
located.

 87
 

The person executing this
Agreement on behalf of Tenant is authorized by Tenant to do so and execution
hereof is the binding act of Tenant enforceable against Tenant.

[Signature Pages
Follow]

 88
 

Witness the execution hereof under seal as of the date
first above written.

	
  

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEW ENGLAND
  TEAMSTERS AND

  TRUCKING INDUSTRY PENSION FUND

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date executed by
  Lender:

  	
   

  	
   

  
							

 

 

	
  

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ZORAN
  CORPORATION, a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date executed by
  Lender:

  	
   

  	
   

  
							

 

The undersigned Landlord
hereby consents to the foregoing Agreement and confirms the facts stated in the
foregoing Agreement.

	
  

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AUBURN-OXFORD
  TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  John A. Cataldo,
  as Trustee on behalf of himself

  and his co-Trustee and not individually

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date executed by
  Borrower:

  	
   

  	
   

  
							

 

 89
 

THE COMMONWEALTH
OF MASSACHUSETTS

MIDDLESEX,
SS

On this     
day of                                , 2007, before me, the
undersigned notary public, personally appeared _______________________________
of New England Teamsters and Trucking Industry Pension Fund, proved to me
through satisfactory evidence of identification, which was o photographic identification with signature
issued by a federal or state governmental agency, o oath
or affirmation of a credible witness, o
personal knowledge of the undersigned, to be the person whose name is signed on
the preceding or attached document(s), and acknowledged to me that he signed it
voluntarily for its stated purpose.

	
  

  	
  (official
  seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission
  Expires:

  

 

THE STATE OF ______________

____________,
SS

On this ____ day of __________, 2007, before me, the
undersigned notary public, personally appeared ________________________________,
of Zoran Corporation, proved to me through satisfactory evidence of
identification, which was o
photographic identification with signature issued by a federal or state
governmental agency, o oath or affirmation of a credible witness, o personal knowledge of the undersigned, to be
the person whose name is signed on the preceding or attached document(s), and
acknowledged to me that he signed it voluntarily for its stated purpose.

	
  

  	
  (official
  seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission
  Expires:

  

 

 90
 

THE
COMMONWEALTH OF MASSACHUSETTS

MIDDLESEX, SS

On
this ____ day of ___________________, 2007, before me, the undersigned notary
public, personally appeared John A. Cataldo, as Trustee on behalf of himself
and his co-Trustee and not individually, proved to me through satisfactory
evidence of identification, which was personal knowledge of the undersigned, to
be the person whose name is signed on the preceding or attached document(s),
and acknowledged to me that he/she signed it voluntarily for its stated
purpose.

	
  

  	
  (official
  seal)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  My Commission
  Expires:

  

 

 91
 

EXHIBIT A

Legal Description

A parcel of land
with the buildings and improvements thereon located off of Cambridge Street and
Wall Street in Burlington, Middlesex County, Massachusetts, being shown as Lot
15B on the plan entitled “Plan of Land in Burlington, Massachusetts (Middlesex
County)” prepared for Auburn-Oxford Trust, Scale 1” = 40’ dated November 23,
1999 by The BSC Group, Inc., which plan is recorded with the Middlesex South
Registry of Deeds as Plan No. 20 of 2000. 
Portions of said Lot 15B are registered land being Lot 3 and Lot 4 as
shown on Land Court Plan 34820A and Lot 5 as shown on Land Court Plan 24820B.

 92
 

EXHIBIT “K”

RIGHT TO
TERMINATE

So long as there does not then exist an uncured,
continuing Event of Default as defined in Section 9.1 of this Lease, Tenant
may, at its sole option, terminate this Lease (the “Termination
Option”) effective on the fifth (5th)
year anniversary or seventh (7th) year anniversary of the  Commencement Date (the “Early
Termination Date”), by delivering notice of its election to
terminate the Lease (the “Termination Notice”)
to Landlord at least twelve (12) months in advance, and paying on or before the
effective date of such Termination Option the applicable “Termination
Fee” as set forth below.  If
Tenant fails to timely deliver its Termination Notice and pay the Termination
Fee, Tenant will be deemed to have waived such Termination Option.  The Termination Fee shall be equal to
$2,534,116.35 if Tenant exercises the Termination Option effective on the fifth
(5th) year anniversary of the  Commencement Date or $1,608,046.78 if Tenant
exercises the Termination Option effective on the seventh (7th) year anniversary of the 
Commencement Date.  If Tenant
properly exercises its Termination Option in accordance with the foregoing,
then this Lease shall automatically terminate as of the Early Termination Date
(with the same effect as if such Early Termination Date were the Term
Expiration Date set forth in Section 1.1) without the necessity of any
additional documentation.

 93
 

EXHIBIT L

RIGHT OF FIRST REFUSAL

In no event shall Landlord, during the Term
hereunder, lease or decide to lease, agree to lease, or accept any offer to
lease space that from time to time becomes available during said period on all
or any portion of the fourth (4th)
and fifth (5th) floors within the Building (each and
collectively, the “ROFR Space”), unless Landlord first affords Tenant an opportunity to
lease such area in accordance with the provisions of this Exhibit L and only
after written notice to Tenant, provided  that there does not then
exist an uncured, continuing Event of Default under this Lease.  Such notice shall contain Landlord’s summary
of the essential terms and conditions of any bonafide, third party written
offer received by Landlord (i.e., description of such rentable area, the term
and any options to extend or cancel the term, the annual fixed rent amounts,
the basic operating cost provisions, and the allowances and other monetary
concessions, if any) with respect to such rentable area (such summary shall
herein in this Exhibit L be referred to as the “Offer”).  Upon receipt of such notice and the Offer
from Landlord, and as aforesaid, provided further that there does not then
exist an uncured, continuing Event of Default under this Lease, then Tenant
shall have a right to lease any such space on the terms set forth in the Offer
(except as hereinafter provided) by giving notice to Landlord to such effect
within seven (7) business days after Tenant’s receipt of Landlord’s notice of
such Offer.  If such notice is not so
timely given by Tenant, then Landlord shall be free to lease the subject space,
or portion thereof, to any third party on the terms and conditions contained in
the Offer (or such greater price or more favorable lease terms to Landlord or
such lower price or less favorable terms to Landlord so long as such less
favorable terms are within five percent (5%) of the net effective rent (e.g.
taking into account the Rent, free rent, other comparable concessions and TIA,
Term) offered to Tenant at any time after the expiration of said five (5) day
period).  If Tenant declines to lease the
space covered by the Offer and Landlord fails to close the leasing transaction
contemplated within the Offer within six months after Tenant’s receipt of the
Offer, Landlord shall repeat the process set forth above prior to leasing the
space covered by the Offer.  The
non-exercise by Tenant of its rights under this Exhibit L as to any one Offer
by Landlord shall not be deemed to waive any of Tenant’s rights of first
refusal as to the remainder of space that becomes available within the ROFR
Space, or as to the rentable area described in the Offer if Landlord determines
to substantially modify or substantially amend the terms by more than five
percent (5%) of the aforesaid net effective rent offered in such notice and
Offer given by Landlord to Tenant hereunder (in which event Tenant’s rights
hereunder shall revive and continue with respect to such modified or amended
terms) or the space covered by the Offer following expiration of any lease
executed with respect to such space.

In the event that Tenant accepts Landlord’s offer to
lease such rentable space within the ROFR Space, then Landlord and Tenant
hereby agree that they shall enter into a mutually acceptable amendment to this
Lease, specifying that such rentable area is a part of the Premises under this
Lease and demising said premises to Tenant on the terms of the Offer with
respect to such rentable space.  Such
amendment shall also contain other appropriate terms and provisions relating to
the addition of such rentable space to this Lease or the leasing of such rentable
space, as applicable, and as mutually agreed upon by the parties.  The amendment shall be signed by

 94
 

Tenant within twenty (20) days of receipt of the
proposed agreement from the Landlord in the form as hereinabove required,
Landlord and Tenant hereby agreeing to use good faith efforts to finalize the
form of amendment as quickly as possible and within said twenty day
period.  In no event shall the foregoing
affect the Tenant’s obligation to lease such space once Tenant provides
Landlord with its notice exercising its option hereunder as aforesaid, as the
parties hereby agree that Tenant’s notice shall serve as Tenant’s acceptance of
Landlord’s offer to lease such space and that the amendment merely serves as
confirmation that the parties shall enter into a written amendment to
memorialize the previously accepted terms.

Notwithstanding anything to the contrary in this
Exhibit L, if Tenant notifies Landlord of its election to lease such rentable
space within the ROFR Space and then fails to execute and deliver the required
amendment to this Lease once the terms of the amendment have been mutually
agreed upon by Landlord and Tenant in accordance with this Exhibit L, and such
failure continues for more than five (5) days, then (i)  Tenant shall be deemed to have waived its
rights under this Exhibit L, (ii) Tenant’s right of first refusal as to any
other rentable space within the ROFR Space hereunder shall terminate and be of
no further force and effect.  The
recording by the Landlord of an affidavit to such effect shall be conclusive
evidence of the termination or waiver of Tenant’s first refusal hereunder.

Notwithstanding
any language to the contrary, Tenant’s rights hereunder are subject to Nuance
Communications, Inc.’s Right of First Refusal to lease 10,000 square feet on
the fifth floor of the Building pursuant to its lease with Landlord dated
October 11, 2006.

 

 95Exhibit 10.21

LEASE

THIS LEASE (“Lease”) is made on the 19th day of May,
2006 by and between WTA Kifer LLC, a California limited liability company
(hereinafter called “Lessor”) and Zoran Corporation, a Delaware corporation
(hereinafter called “Lessee”).

IN CONSIDERATION OF THE MUTUAL PROMISES HEREIN
CONTAINED, THE PARTIES AGREE AS FOLLOWS:

1.             Premises.  Lessor leases to Lessee, and Lessee leases
from Lessor, upon the terms and conditions herein set forth, those certain
Premises (“Premises”) situated in the City of Sunnyvale, County of Santa Clara,
California, as outlined in Exhibit “A” attached hereto and described as
follows: approximately 88,924 rentable square foot building located at 1390
Kifer Road, Sunnyvale, California. 
Square footage is calculated from exterior face of the building.  Lessee’s pro-rata share of the building is
100%.  Lessee’s Pro-Rata Share (“Pro-Rata
Share”) of the project (the “Project”) is +/- 53.73% based on the rear building
of the project being approximately 76,573 rentable square feet (the “Rear
Building”).

2.             Term.  The term of this Lease shall be for ten (10)
years, commencing October 1, 2006 (“Lease Commencement Date”) and terminating
September 30, 2016, subject to Lessee’s right to extend the term pursuant to
Section 4 below.

Lessee shall have the one time right to terminate the
Lease at the end of the seventh (7th) lease year upon providing nine (9) months’
prior written notice to Lessor.  In the
event Lessee exercises its right to terminate, Lessee shall pay to Lessor $895,188
in addition to the unamortized balance of (a) the cost of the tenant
improvement allowance set forth in Section 7 and (b) any leasing commissions
payable in connection with this Lease amortized at a rate of eight percent (8%)
over the ten (10) year term of the Lease.

3.             Rent.  Lessee shall pay to Lessor rent for the
Premises in lawful money of the United States of America, as provided for in
the schedule below.  Except as set forth
herein, Rent shall be paid without deduction or offset, prior notice, or
demand, at such place as may be designated from time to time by Lessor.  A deposit of $185,000.00 as a Security
Deposit shall be made by Lessee and held by Lessor pursuant to Paragraph 5 of
this Lease, and shall be paid upon full execution and delivery of the
Lease.  Notwithstanding that the Premises
shall consist of approximately 88,924 rentable square feet throughout the term,
for purposes of determining Base Rent, the Premises shall be deemed to consist
of 75,000 rentable square feet during Months 1 - 12, 80,000 rentable square
feet during Months 13 - 18 and 88,924 rentable square feet for the
remainder of the Term thereafter for purposes of providing Lessee with a
partial rent abatement.

Monthly rent (referred to herein as “Monthly Rent” or “Base
Rent”) shall be paid in advance on the first (1st) day of each calendar month
as follows:

	
  Period

  	
   

  	
  Per RSF/mo

  	
   

  	
  Monthly Rent

  	
   

  
	
  Months 1 - 2
  (75,000 RSF)

  	
   

  	
  $

  	
  1.275

  	
   

  	
  $ 

  	
  128,125.00 

  	
  **

  
	
  Months 3 -12
  (75,000 RSF)

  	
   

  	
  $

  	
  1.275

  	
   

  	
  $

  	
  95,625.00

  	
   

  

 

 

	
  Period

  	
   

  	
  Per RSF/mo

  	
   

  	
  Monthly Rent

  	
   

  
	
  Months 13 -18
  (80,000 RSF)

  	
   

  	
  $

  	
  1.326

  	
   

  	
  $

  	
  106,080.00

  	
   

  
	
  Months 19 - 24
  (88,924 RSF)

  	
   

  	
  $

  	
  1.326

  	
   

  	
  $

  	
  117,913.22

  	
   

  
	
  Months 25 — 36
  (88,924 RSF)

  	
   

  	
  $

  	
  1.379

  	
   

  	
  $

  	
  122,626.19

  	
   

  
	
  Months 37 -48
  (88,924 RSF)

  	
   

  	
  $

  	
  1.434

  	
   

  	
  $

  	
  127,517.01

  	
   

  
	
  Months 49 60
  (88,924 RSF)

  	
   

  	
  $

  	
  1.492

  	
   

  	
  $

  	
  132,674.60

  	
   

  
	
  Months 61 72
  (88,924 RSF)

  	
   

  	
  $

  	
  1.551

  	
   

  	
  $

  	
  137,921.12

  	
   

  
	
  Months 73 84
  (88,924 RSF)

  	
   

  	
  $

  	
  1.613

  	
   

  	
  $

  	
  143,434.41

  	
   

  
	
  Months 85 — 96
  (88,924 RSF)

  	
   

  	
  $

  	
  1.678

  	
   

  	
  $

  	
  149,214.47

  	
   

  
	
  Months 97 -108
  (88,924 RSF)

  	
   

  	
  $

  	
  1.745

  	
   

  	
  $

  	
  155,172.38

  	
   

  
	
  Months 109 -120 (88,924
  RSF)

  	
   

  	
  $

  	
  1.815

  	
   

  	
  $

  	
  161,397.06

  	
   

  

** Rent for months 1-2 include $32,500.00 for early
termination of Yahoo lease.

Rent for any period during the term hereof which is
for less than one (1) full month shall be a pro-rata portion of the monthly
rent payment.  Lessee acknowledges that
late payment by Lessee to Lessor of rent or any other payment due Lessor will
cause Lessor to incur costs not contemplated by this Lease, the exact amount of
such costs being extremely difficult and impracticable to fix.  Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Lessor by the terms of any encumbrance and note secured by any encumbrance
covering the Premises.  Therefore, if any
installment of rent or other payment due from Lessee is not received by Lessor
within ten (10) days following the date it is due and payable, Lessee shall pay
to Lessor an additional sum of seven percent (7%) of the overdue amount as a
late charge.  Notwithstanding anything
contained in this paragraph, if Lessee is delinquent in the payment of Rent and
is subject to a late charge, Lessor agrees to waive the late charge if the Rent
or Additional Rent due is paid within five (5) days of Lessor’s written notice
to Lessee of the delinquent amount owed and provided Lessee has not been
delinquent in its payment of Rent or Additional Rent owed under this Lease
during the twelve (12) month period preceding the rent delinquency in question,
However, Lessor shall only be obligated to notify Lessee once of its intent to
assess a late charge in any twelve (12) month period.  The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Lessor will incur
by reason of late payment by Lessee. 
Acceptance of any late charge shall not constitute a waiver of Lessee’s
default with respect to the overdue amount, nor prevent Lessor from exercising
any of the other rights and remedies available to Lessor.

All taxes, insurance premiums, Outside Area Charges,
late charges, costs and expenses which Lessee is required to pay hereunder,
together with all interest and penalties that may accrue thereon in the event
of Lessee’s failure to pay such amounts, and all reasonable damages, costs, and
attorney’s fees and expenses which Lessor may incur by reason of any default of
Lessee or failure on Lessee’s part to comply with the terms of this Lease,
shall be deemed to be additional rent (hereinafter, “Additional Rent”), and, in
the event of non-payment by Lessee, Lessor shall have all of the rights and
remedies with respect thereto as Lessor has for the non-payment of monthly
installment of rent.

 2
 

4.             Option to Extend Term.

A.            Lessee shall have the option to extend the term on all
the provisions contained in this Lease for one (1) five (5) year period (“extended
term”) at an adjusted rental calculated as provided in Subparagraph B below on
the condition that:

(1)                                  Lessee
has given to Lessor written notice of exercise of that option (“option notice”)
at least fourteen (14) months but no more than fifteen (15) months before
expiration of the initial term.

(2)                                  Lessee
is not in default in the performance of any of the terms and conditions of the
Lease beyond any applicable cure period on the date of giving the option
notice, and Lessee is not in default beyond any applicable cure period on the
date that the extended term is to commence.

B.            RENT FOR OPTION PERIOD:  The rent during the extended term shall be
the then current fair market monthly rent (“Fair Market Rent”) for the Premises
as of the commencement date of the extended term.  Lessee shall include with its option notice
Lessee’s estimate of Fair Market Rent. 
Within fifteen (15) business days of receipt of the option notice,
Lessor shall either accept Lessee’s estimate of Fair Market Rent (in which case
the parties shall execute a mutually acceptable amendment extending the term of
the Lease) or notify Lessee in writing that Lessor disagrees with Lessee’s
estimate and propose Lessor’s own estimate of Fair Market Rent.  If Lessor disagrees with Lessee’s estimate,
the parties shall negotiate in good faith to promptly resolve their
differences.  if the parties cannot agree
within thirty (30) from receipt of notice, then the Fair Market Rent shall be
determined by commercial real estate brokers as detailed below.  In determining the Fair Market Rent, the
parties (and in the absence of their agreement, the brokers) shall determine
the Fair Market Rent by taking into consideration the rents being charged at
the time such determination is to be made for similar office/R&D space in
similar properties in the Sunnyvale area pursuant to leases with terms and
provisions substantially similar to those contained in this Lease, taking into
account the location, age, and condition of the Building, lease term length,
inducements (e.g., improvement allowances, rent concessions, etc.), brokerage
commissions and all other relevant factors. 
All other terms and conditions contained in the Lease, as the same may
be amended from time to time by the parties in accordance with the provisions
of the Lease, shall remain in full force and effect and shall apply during the
extended term.

If it becomes necessary to determine the Fair Market
Rent with the assistance of commercial real estate brokers, all of whom shall
have at least five (5) years experience specializing in leasing commercial
space located in the vicinity of the Premises and none of whom shall have
worked for either Lessor or Lessee in the five (5) year period preceding the commencement
date of the extended term, such brokers shall be appointed and shall act in
accordance with the following procedures:

1.             If the parties are unable to agree on the Fair Market
Rent within the allowed time, either party may demand a determination by
brokers by giving written notice to the other party, which demand to be
effective must state the name, address and qualifications of a broker selected
by the party demanding a determination (the

 3
 

“Notifying Party”). 
Within ten (10) days following the Notifying Party’s determination
demand, the other party (the “Non-Notifying Party”) shall either approve the
broker selected by the notifying party or select a second properly qualified
broker by giving written notice of the name, address and qualification of said
broker to the Notifying Party.  If the
Non-Notifying Party fails to select a broker within the ten (10) day period,
the broker selected by the Notifying Party shall be deemed selected by both
parties and no other broker shall be selected. 
If two brokers are selected, they shall select a third appropriately
qualified broker.

2.             If only one broker is selected, that broker shall notify
the parties in simple letter form of its determination of the Fair Market Rent
for the Premises within fifteen (15) days following his selection.

3.             If multiple brokers are selected, the brokers shall meet
no later than ten (10) days following the selection of the last brokers.  At such meeting the brokers shall attempt to
determine the Fair Market Rent for the Premises as of the commencement date of
the extended term by the agreement of at least two (2) of the brokers.

4.             If two (2) or more of the brokers agree on the Fair
Market Rent for the Premises at the initial meeting, the agreeing brokers
shall, in simple letter form executed by the agreeing brokers, notify both
Lessor and Lessee of the amount set by such agreement.  If multiple brokers are selected and two (2)
brokers are unable to agree on the Fair Market Rent for the Premises, all
brokers shall submit to Lessor and Lessee an independent determination of the
Fair Market Rent for the Premises in simple letter form within twenty (20) days
following appointment of the final broker. 
The parties shall then determine the Fair Market Rent for the Premises
by averaging the determinations.

5.             The brokers’ determination of Fair Market Rent shall be
based on rental for similar office/R&D space in similar properties in the
Sunnyvale area pursuant to leases with terms and provisions substantially
similar to those contained in this Lease, taking into account the location,
age, and condition of the Building, lease term length, inducements (e.g.,
improvement allowances, rent concessions, etc.), brokerage commissions and all
other relevant factors.  In determining
Fair Market Rent, the brokers shall take into account the improvements that
have been installed in the Premises at Lessor’s expense but shall not consider
any improvements or alterations that have been installed in the Premises at
Lessee’s expense.

6.             If only one broker is selected, then each party shall
pay one-half of the fees and expenses of that broker, If three brokers are
selected, each party shall bear the fees and expenses of the broker it selects
and one-half of the fees and expenses of the third broker.

7.             If the parties are unable to agree upon the fair market
rent within ninety (90) days after Lessor’s receipt of Lessee’s option notice,
neither party shall have any obligation to extend the term of the lease.

 4
 

8.             Neither party shall be bound by any determination of
market rent by any third party.

C.            The option to extend shall be personal to Lessee, and
shall not be transferable or assignable to any other person or entity other
than a person or entity to which this Lease was assigned or to which the
Premises were subleased in connection with a Permitted Transfer as provided for
in Section 21.  If Lessee has exercised
its option to extend, the phrase “Lease term” as used in this Lease shall mean
the initial term of the Lease and the extended term.

5.             Security
Deposit.  Lessor acknowledges that
Lessee has deposited with Lessor a Security Deposit in the sum of One Hundred
Eighty-Five Thousand and 00/100 Dollars ($185,000.00) to secure the full and
faithful performance by Lessee of each term, covenant, and condition of this
Lease.  If Lessee shall at any time fail
to make any payment or fail to keep or perform any term, covenant, or condition
on its part to be made or performed or kept under this Lease, Lessor may, but
shall not be obligated to and without waiving or releasing Lessee from any
obligation under this Lease, use, apply, or retain the whole or any part of
said Security Deposit (a) to the extent of any sum due to Lessor; or (b) to
compensate Lessor for any loss, damage, attorneys’ fees or expense sustained by
Lessor due to Lessee’s default.  In such
event, Lessee shall, within five (5) business days of written demand by Lessor,
remit to Lessor sufficient funds to restore the Security Deposit to its
original sum.  No interest shall accrue
on the Security Deposit.  Should Lessee
comply with all the terms, covenants, and conditions of this Lease and, at the
end of the term of this Lease, leave the Premises in the condition required by
this Lease, then said Security Deposit or any balance thereof, less any sums
owing to Lessor, shall be returned to Lessee within fifteen (15) days after the
termination of this Lease and vacancy of the Premises by Lessee.  Lessor can maintain the Security Deposit
separate and apart from Lessor’s general funds, or can co-mingle the Security
Deposit with the Lessor’s general and other funds.

6.             Use
of the Premises.  The Premises shall
be used exclusively for the purpose of general office, computer laboratory,
research and development, shipping and receiving.

Lessee shall not use or permit the Premises, or any
part thereof, to be used for any purpose or purposes other than the purpose for
which the Premises are hereby leased; and no use shall be made or permitted to
be made of the Premises, nor acts done, which will increase the existing rate of
insurance upon the building in which the Premises are located, or cause a
cancellation of any insurance policy covering said building, or any part
thereof, nor shall Lessee sell or permit to be kept, used, or sold, in or about
the Premises, any article which may be prohibited by the standard form of fire
insurance policies.  Lessee shall not
commit or suffer to be committed any waste upon the Premises or any public or
private nuisance or other act or thing which may disturb the quiet enjoyment of
any other tenant in the building in which the Premises are located; nor,
without limiting the generality of the foregoing, shall Lessee allow the
Premises to be used for any improper, immoral, unlawful, or objectionable
purpose,

Lessee shall not place any harmful liquids in the
drainage system of the Premises or of the building of which the Premises form a
part.  No waste materials or refuse shall
be dumped upon or permitted to remain upon any part of the Premises outside of the
building proper except in trash containers placed inside exterior enclosures
designated for that purpose by Lessor, or inside the building proper where
designated by Lessor.  No materials,
supplies, equipment,

 5
 

finished or semi-finished products, raw materials, or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the building proper.

Lessor represents and warrants to Lessee that to the
best of its knowledge there are no Toxic or Hazardous materials present on, at
or under the Premises, which shall be deemed to include underlying land and
groundwater, at the time of Lessee’s occupancy. 
Lessor shall be responsible for and indemnify, defend and hold harmless
Lessee, its partners, directors, officers, employees, lenders, and successors
against all claims, obligations, liabilities, demands, damages, judgments, and
costs, including reasonable attorneys’ fees arising from or in connection with
any prior Toxic or Hazardous Materials (as defined below) that existed prior to
Lessee’s occupancy of the Premises or not caused by Lessee, its agents,
employees, invitees or contractors.  This
indemnity shall survive the termination of the Lease.  Lessee in turn represents to Lessor that it
does not now and will not in the future permit the use or storage on the
Premises of Toxic or Hazardous Materials, excluding, however basic janitorial,
maintenance and office supplies, and materials commonly used in connection with
Lessee’s business as described in paragraph 6 hereof.  For purposes of this Section 6, ‘Toxic or
Hazardous Materials” shall mean any product, substance, chemical, material or
waste whose presence, nature, quality and/or intensity or existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises,
is either (i) potentially injurious to the public health, safety or welfare,
the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Lessee and
Lessor to any governmental agency or third party under any applicable statute
or common law theory.  “Toxic or
Hazardous Materials” shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof.

Lessee hereunder shall be responsible for and
indemnify, and hold Lessor and its partners, directors, officers, employees,
lenders, successors and assigns harmless from all claims, obligations,
liabilities, demands, damages, judgments and costs, including reasonable
attorneys’ fees arising at any time during or in connection with Lessee’s
causing or permitting any Toxic or Hazardous Materials to be brought upon,
stored, manufactured, generated, handled, disposed, or used on, under or about
the Premises.  Lessee’s and Lessor’s
obligations hereunder shall survive the termination of this Lease.

If, at any time during the term of this Lease, Lessor
suspects that any Toxic or Hazardous Materials may be present on the Premises,
Lessor may order a soils report, or its equivalent, at Lessee’s expense and
Lessee shall pay such costs if it is determined that Lessee or Lessee’s agents,
employees or contractors released or caused Toxic or Hazardous Materials on or
about the Premises.  If any such Toxic or
Hazardous Materials are found on or about the Premises and it is determined
that Lessee or Lessee’s agents, employees or contractors caused such
contamination, Lessor shall consult with Lessee regarding remediation plans and
Lessee shall deposit with Lessor, within fifteen (15) days of notice from
Lessor to Lessee to do so, the amount necessary to remove the substances and
remedy the problem in accordance with applicable law, which Lessor shall use to
do the required remediation and shall return to Lessee any unused monies.

 6
 

Lessee shall abide by all laws, ordinances, and
statutes, as they now exist or may hereafter be enacted by legislative bodies
having jurisdiction thereof, relating to its use and occupancy of the Premises.

7.             Improvements:  Lessee currently occupies the Premises and
therefore accepts the Premises in its “AS IS” condition.  However, Lessor shall provide Lessee with a
tenant improvement allowance of Five and 00/100 Dollars ($5.00) per rentable
square foot, or $444,620.00 total, for mutually agreed upon tenant improvements
to be installed by a licensed and insured contractor reasonably acceptable to
Lessor (the ‘Tenant improvements”).  in
addition, Lessor shall provide Lessee with an allowance of One and 00/100
Dollar ($1.00) per rentable square foot, or $88,924.00 total, to be used for
the installation of a generator.  All
tenant improvement work shall be competitively bid.  Lessee shall have the right, in its sole
discretion, to identify the improvements for which the allowance shall
pay.  Lessor will not charge any
supervisory, management or other fee, or require union labor in connection with
the Tenant Improvements.

8.             Taxes
and Assessments.

A.            Lessee shall pay before delinquency any and all taxes,
assessments, license fees, and public charges levied, assessed, or imposed upon
or against Lessee’s fixtures, equipment, furnishings, furniture, appliances,
and personal property installed or located on or within the Premises.  Lessee shall cause said fixtures, equipment,
furnishings, furniture, appliances, and personal property to be assessed and
billed separately from the real property of Lessor.  If any of Lessee’s said personal property
shall be assessed with Lessor’s real property, Lessee shall pay to Lessor the
taxes attributable to Lessee within ten (10) days after receipt of a written
statement from Lessor setting forth the taxes applicable to Lessee’s property.

B.            All property taxes or assessments levied or assessed by
or hereafter levied or assessed by any governmental authority against the
Premises or any portion of such taxes or assessments which becomes due or
accrued during the term of this Lease shall be paid by Lessor.  Lessee shall pay to Lessor Lessee’s Pro-Rata
Share of such taxes or assessments twenty (20) days after receipt of an invoice
therefor.  Lessee’s liability hereunder
shall be prorated to reflect the commencement and termination dates of this
Lease.  Lessee shall have the right, in
good faith, to contest any tax or assessment, provided that Lessee indemnifies
Lessor from any loss or liability in connection therewith.  Lessor shall use its best efforts to assist
Lessee in its efforts to contest any tax or assessment.  Said right does not preclude Lessee from
paying such taxes by the date due.

C.            During the first two (2) years of the Lease term, Lessee
shall not be obligated to pay any portion of the increase in property taxes
resulting from the sale, refinance or change in ownership of 1390 Kifer Road or
any other part of the Project.

9.             Insurance.

A.            Indemnity. 
Lessee agrees to indemnify, defend and save Lessor against and hold
Lessor harmless from any and all demands, claims, causes of action, judgments,
obligations, or liabilities, and all reasonable expenses incurred in
investigating or resisting the same (including

 7
 

reasonable attorneys’ fees) on account of, or arising
out of, the condition, use, or occupancy of the Premises by Lessee, its
employees, agents or contractors, except to the extent of Lessor’s gross
negligence or intentional misconduct. 
This Lease is made on the express condition that, except as otherwise
provided herein, Lessor shall not be liable for, or suffer loss by reason of,
injury to person or property, from whatever cause, in any way connected with
the condition, use, or occupancy of the Premises, specifically including,
without limitation, any liability for injury to the person or property of
Lessee, its agents, officers, employees, licensees, and invitees, except to the
extent of Lessor’s gross negligence or intentional misconduct.  Notwithstanding anything to the contrary in
this Lease, Lessor agrees to indemnify, defend and save Lessee against and hold
Lessee harmless from any and all demands, claims, causes of action, judgments,
obligations, or liabilities, and all reasonable expenses incurred in
investigating or resisting the same (including reasonable attorneys’ fees) on
account of, or arising out of, the operation, maintenance or repair of the
Project’s common areas or the negligence or willful misconduct of Lessor, its
employees, agents, contractors or invitees.

B.            Liability Insurance.  Lessee shall, at its expense, obtain and keep
in force during the term of this Lease a policy of Commercial General Liability
insurance insuring Lessor and Lessee, with cross-liability endorsements, against
any liability arising out of the condition, use, or occupancy of the Premises
and all areas appurtenant thereto, including parking areas.  Such insurance shall be in an amount
satisfactory to Lessor of not less than three million dollars ($3,000,000) for
bodily injury or death as a result of one occurrence, and one million dollars
($1,000,000) for damage to property as a result of any one occurrence.  The insurance shall be with an insurance
company who carries a financial rating of not less than “A-VII”, as designated
in the most current Best’s Insurance Reports.  Prior to possession, Lessee shall deliver to
Lessor a certificate of insurance evidencing the existence of the policy which
(1) names Lessor as an additional insured, (2) shall not be canceled or altered
without thirty (30) days’ prior written notice to Lessor, (3) insures
performance of the indemnity set forth in this Section 9(A), and (4) coverage
is primary and any coverage by Lessor is in excess thereto.

C.            Lessor’s Insurance.  Lessor shall obtain and keep in force during
the term of this Lease a policy or policies of insurance covering loss or
damage to the Premises (which may include earthquake and/or flood insurance),
in the amount of the full replacement value thereof.  Lessee shall pay to Lessor its Pro-Rata Share
of the cost of said insurance (including deductibles) within twenty (20) days
of Lessee’s receipt of Lessor’s invoice demanding such payment.  In no event shall the annual premium for
earthquake insurance be more than one and on-half (1-1/2) times the premium for
the property insurance.  Lessor shall
also carry, on the Project, during the term, Commercial General Liability
Insurance with an insurance company who carries a financial rating of not less
than “A-VII”, as designated in the most current Best’s Insurance Reports,
providing coverage of not less than Five Million Dollars ($5,000,000.00) in
combined Bodily Injury and Property Damage Liability.

D.            Waiver of Subrogation.  Notwithstanding anything to the contrary in
this Lease, the parties hereto release each other and their respective agents,
employees, successors, assigns and sublessees from all liability for damage to
any property that is caused by or results from a risk which is actually insured
against or which is required to be insured against under this Lease, without
regard to the negligence or willful misconduct of the entity so released.  Each party shall use its best efforts to
cause each insurance policy it obtains to provide that the insurer thereunder

 8
 

waives all rights of recovery by way of subrogation as
required herein in connection with any injury or damage covered by the
policy.  If the insurance policy cannot
be obtained with the waiver of subrogation, or if the waiver of subrogation is
available only at additional cost and the party for whose benefit the waiver is
not obtained does not pay the additional cost, then the party obtaining the
insurance immediately shall notify the other party of that fact.

10.           Reimbursable
Expenses and Utilities.  Lessee shall
pay its Pro-Rata Share of all water, gas, light, heat, power, electricity,
telephone (for the fire safety system), trash removal, landscaping, sewer
charges, and all other services, including normal and customary property
management fees capped at 2.5% of the Base Rent (“Management Fee”), supplied to
or consumed on the Premises.  .  All capital expenditures shall be amortized
over the useful life of the applicable item; as used herein, “capital
expenditures” means expenditures which, in accordance with generally accepted
accounting principles, are not fully chargeable to current expense in the year
the expenditure is incurred.  In the
event that any such services are billed directly to Lessor, then Lessee shall
pay Lessor for such expenses within twenty (20) days of Lessee’s receipt of
Lessor’s invoice demanding payment.  In
the event that utilities to the Premises are interrupted to the Premises for
more than three (3) days, Lessee’s Rent shall abate for the time that utilities
are down to the extent that insurance proceeds are available to Lessor.

Notwithstanding the foregoing, Reimbursable Expenses
and Utilities shall not, however, include:

(A)                              any
payments under a ground lease or master lease;

(B)                                the
cost of any item reimbursable under the terms of any insurance policy or
condemnation proceeds or which would be reimbursable from insurance required to
be maintained by Lessor under this Lease provided that such proceeds are
actually received.  Lessor will use its
best efforts to obtain any such proceeds it is entitled to;

(C)                                marketing
and promotional costs, including but not limited to leasing commissions, real
estate brokerage commissions, and attorneys’ fees in connection with the
negotiation and preparation of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs, and other costs and
expenses incurred in connection with lease, sublease and/or assignment
negotiations and transactions with present or prospective tenants;

(D)                               costs
incurred by Lessor due to any violation of the terms and conditions of any
other lease of space or occupancy agreement in the Project (excluding the
Premises);

(E)                                 interest,
principal, attorneys’ fees, environmental investigations or reports, points,
fees and other lender costs and dosing costs on debts or amortization on any
mortgage or mortgages or any other debt instrument encumbering the Project or
any part thereof or on any unsecured debt;

(F)                                 Lessor’s
general corporate overhead and general and administrative expenses, including
costs relating to accounting, payroll, legal and computer services;

 9
 

(G)                                except
for the Management Fee, salaries of officers, executives or other employees of
Lessor, any affiliate of Lessor, or partners or affiliates of such partners or
affiliates, excluding the hourly rate of Lessor’s maintenance personnel for
services provided to the Project or Premises;

(H)                               advertising
and promotional expenditures, including but not limited to tenant newsletters
and promotional gifts, events or parties for existing or future occupants, and
the costs of signs (other than the Buildings’ directory) in or on the Buildings
identifying the owner of the buildings or other tenants’ signs and any costs
related to the celebration or acknowledgment of Holidays;

(I)                                    electric
power or other utility costs for which any other tenant directly contracts with
the local public service company;

(J)                                   costs,
penalties, fines, or awards and interest incurred from (i) the negligence, or
intentional misconduct of Lessor or its agents, or of any other tenant, or any
vendors, contractors or providers of materials or services selected, hired or
engaged by Lessor or its agents, (ii) Lessor’s violations of law, or (iii)
negligence or inability or unwillingness to make payments and/or to file any
income tax, other tax or informational returns when due;

(K)                               costs
which are paid under any contractor, manufacturer or supplier warranty; .

(L)                                 except
to the extent caused by Lessee, its employees, agents or contractors, costs
arising from the presence or removal of Hazardous Substances located in the
Project, including, without limitation, any costs incurred pursuant to the
requirements of any governmental laws, ordinances, regulations or orders
relating to health, safety or environmental conditions, including but not
limited to regulations concerning asbestos, soil and ground water conditions or
contamination regarding Hazardous Substances;

(M)                            costs
arising from Lessor’s charitable or political contributions;

(N)                               costs
arising from any type of insurance maintained by Lessor which is nor required
or allowed to be maintained by Lessor pursuant to Section 9 of this Lease;

(0)                                  the
cost of maintaining (excluding routine maintenance costs) of any sculpture,
paintings or other objects of art, the costs for sculpture, paintings or other
objects of art or the insuring (except if such insurance is part of Lessor’s
standard insurance and does not require any additional premium), repair or
maintenance thereof;

(P)                                 subject
to Section 26, the costs (including in connection therewith all attorneys’ fees
and costs of settlement judgments and payments in lieu thereof) arising from
claims, disputes or potential disputes in connection with potential or actual
claims; litigation or arbitrations pertaining to Lessor and/or the Project

 10
 

(Q)                               costs
incurred in removing and storing the property of former tenants or occupants of
the Project;

(R)                                (i)
the cost of installing, operating and maintaining any specialty service,
observatory, broadcasting facilities, luncheon club, museum, athletic or recreational
club, or child care facility, and (ii) the cost of installing, operating and
maintaining any other service operated or supplied by or normally operated or
supplied by a third party under an agreement between a third party and a
landlord, provided that none of the above are imposed on Lessee;

(S)                                 reserves
of any kind, including but not limited to replacement reserves, and reserves
for bad debts or lost rent or any similar charge not involving the payment of
money to third parties, excluding however impounds for property taxes and/or
insurance if required by Lessor’s lender,

(T)                                Lessee’s
pro-rata share for expenses in maintaining and repairing the parking lot only
shall be approximately 54.73% (based on Lessee receiving 330 parking spaces of
the total of 603 spaces in the Project).

Lessor shall maintain at all times during the term of
this Lease, at the office of Lessor, complete and accurate books of account and
records prepared in accordance with generally accepted accounting principles
with respect to Reimbursable Expenses and Utilities and property taxes, and
shall retain such books and records, as well as contracts, bills, vouchers, and
checks, and such other documents as are reasonably necessary to properly audit
the Reimbursable Expenses and Utilities and property taxes.  Lessee shall have the right, at its own cost
and expense (except as provided below) to audit or inspect Lessor’s records
with respect to Reimbursable Expenses and Utilities and property expenses for
any Lease year.  Lessee’s right to audit
must commence within ninety (90) days from Lessee’s receipt of an invoice from
Lessor.  Lessee shall give Lessor not
less than thirty (30) days prior written notice of its intention to conduct
such audit.  Lessor shall cooperate with
Lessee during the course of any such audit, which shall be conducted during
normal business hours.  If such audit
discloses that the amount paid by Lessee as Reimbursable Expenses and/or
Utilities and/or property taxes has been overstated by more than ten percent
(10%), then, in addition to immediately repaying such overpayment to Lessee
with interest, Lessor shall also pay the reasonable costs by Lessee in
connection with such audit.

11.           Repairs
and Maintenance.

A.            Subject to provisions of Section 15, Lessor shall keep
and maintain in good order, condition and repair the structural elements of the
Premises including the roof, roof membrane, paving, floor slab, foundation,
exterior walls, landscaping, irrigation and elevators.  Lessor shall make such repairs, replacements,
alterations or improvements as Lessor deems reasonably necessary with respect
to its obligations above.  Lessee shall
pay to Lessor, within twenty (20) days of Lessor’s invoice to Lessee therefore,
Lessee’s Pro-Rata Share of such repairs, replacements, alterations or
improvements.  In the event that the cost
of any replacement or improvement required pursuant to the above obligation
exceeds $20,000 per occurrence, the amount in excess of $20,000 shall be amortized
over the useful life of such replacements or

 11
 

improvements. 
Lessee shall be responsible to pay its pro-rata share of such excess on
a monthly basis, as Additional Rent, for as long as the useful life coincides
with the lease term.  Notwithstanding the
foregoing, if the reason for any repair, replacement, alteration or improvement
is caused by Lessee or arises because of a breach of Lessee’s obligations under
this Lease, then Lessee shall pay 100% of the costs or expense to remedy the
same.

B.            Except as expressly provided in Section 11(A) above,
Lessee shall, at its sole cost, keep and maintain the entire Premises and every
part thereof, including, without limitation, the windows, window frames, plate
glass, glazing, truck doors, doors, all door hardware, interior of the
Premises, interior walls and partitions, and electrical, plumbing, lighting,
heating, and air conditioning systems in good and sanitary order, condition,
and repair.  Lessee shall, at all times
during the Lease term and at his expense, have in effect a service contract for
the maintenance of the heating, ventilating, and air-conditioning (HVAC)
equipment with an HVAC repair and maintenance contractor approved by Lessor
which provides for periodic inspection and servicing at least once every three
(3) months during the term hereof. 
Lessee shall further provide Lessor with a copy of such contract and all
periodic service reports.

Should Lessee fail to maintain the Premises or make
repairs required of Lessee hereunder within ten (10) days after written notice
from Lessor, lessor, in addition to all other remedies available hereunder or
by law, and without waiving any alternative remedies, may make the same, and in
that event, Lessee shall reimburse Lessor as additional rent for the cost of
such maintenance or repairs on the next date upon which rent becomes due.

12.           Alterations
and Additions.  Lessee shall not
make, or suffer to be made, any alterations, improvements, or additions in, on,
or about, or to the Premises or any part thereof, except those improvements
that are nonstructural in nature and do not affect the building mechanical
systems including but not limited to the electrical, plumbing, and HVAC systems
without prior written consent of Lessor, which consent shall not be
unreasonably withheld, conditioned or delayed, and without a valid building
permit issued by the appropriate governmental authority.  In the event of any alteration, addition or
improvements to the Premises, Lessee shall provide Lessor notification by
submission of plans.  As it pertains to
structural alterations or improvements, Lessor retains, at his sole option, the
right to retain a General Contractor of his own choosing, provided that said
General Contractor is competitive in its costs, to perform all repairs,
alterations, improvements, or additions in, on, about, or to said Premises or
any part thereof.  As a condition to
giving such consent, Lessor may require that Lessee agree to remove any such
alterations, improvements, or additions made by Lessee at the termination of
this Lease and to restore the Premises to their prior condition, provided that
Lessor notifies Lessee of its obligation to do so at the time of providing its
consent to such alterations.  Any
alteration, addition, or improvement to the Premises shall become the property
of Lessor upon installation, and shall remain upon and be surrendered with the
Premises at the termination of this Lease. 
Alterations and additions which are not to be deemed as trade fixtures
include heating, lighting, electrical systems, air conditioning, partitioning,
carpeting, or any other installation which has become an integral part of the
Premises (except for Lessee’s signage).

Notwithstanding anything to the contrary herein, if,
during the term hereof, any alteration, addition, or change of any sort through
all or any portion of the Premises or of the building of which the Premises
form a part, is required by law, regulation, ordinance, or order of

 12
 

any public agency then if such legal requirement is
not imposed because of Lessee’s specific use of the Premises and is not “triggered”
by Lessee’s alterations or Lessee’s application for a building permit or any
other governmental approval (in which instance Lessee shall be responsible for
100% of the cost of such improvement) and if such legal requirement was not in
effect on the Lease Commencement Date, Lessor shall be responsible for
constructing such improvement and Lessee shall be responsible for its
proportional share of the cost for said improvement, amortized over the useful
life of such improvement that coincides with the remaining Lease term including
any extensions.

13.           Acceptance
of the Premises and Covenant to Surrender. 
By entry and taking possession of the Premises pursuant to this Lease,
Lessee accepts the Premises as being in good and sanitary order, condition, and
repair, and accepts the Premises in their condition existing as of date of such
entry.

Lessee agrees on the last day of the term hereof, or
on sooner termination of this Lease, to surrender the Premises, together with
all alterations, additions, and improvements which may have been made in, to,
or on the Premises by Lessor or Lessee, unto Lessor in good and sanitary order,
condition, and repair, excepting for such wear and tear as would be normal for
the period of the Lessee’s occupancy and damage and destruction.  Lessee, on or before the end of the term or
sooner termination of this Lease, shall remove all its personal property and
trade fixtures from the Premises, and all property not so removed shall be
deemed abandoned by Lessee.  Lessee
further agrees that at the end or sooner termination of this Lease, Lessee, at
its sole expense, shall have the carpets steamed cleaned, the walls and columns
painted, the flooring waxed, any damaged ceiling tiles replaced, the windows
cleaned, the drapes cleaned, and any damaged doors replaced if necessary to
restore the Premises to its original condition, normal wear and tear excepted.

If the Premises are not surrendered at the end of the
term or sooner termination of this Lease, Lessee shall indemnify Lessor against
loss or liability resulting from delay by Lessee in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant founded on such delay.

14.           Default.  The occurrence of any one or more of the
following events shall constitute a material default and breach of the Lease by
Lessee:

Monetary Default.  Failure by Lessee to make any payment
required within ten (10) days following written notice that the same is past
due;

Non-Monetary Default.  Failure by Lessee to observe or perform any
of the covenants, conditions, or provisions of this Lease, other than the
making of any payment, where such failure shall continue for a period of thirty
(30) days after written notice from Lessor; provided, that if the nature of
Lessee’s obligation is such that more than thirty (30) days are required for
performance, Lessee shall not be in default if Lessee commences performance
within thirty (30) days of Lessor’s written notice and thereafter diligently
completes Lessee’s performance within a period of not more than ninety (90)
days.

 13
 

In the event of any breach of this Lease by the
Lessee, the Lessor has the option of (1.) removing all persons and property
from the Premises and repossessing the Premises, in which case any of the
Lessee’s property which the Lessor removes from the Premises may be stored in a
public warehouse or elsewhere at the cost of, and for the account of, Lessee;
or (2.) allowing the Lessee to remain in full possession and control of the
Premises.  If the Lessor chooses to
repossess the Premises, the Lease will automatically terminate in accordance
with the provisions of the California Civil Code, Section 1951.2.  In the event of such termination of the
Lease, the Lessor may recover from the Lessee: (a) the worth at the time of
award of the unpaid rent which had been earned at the time of termination,
including interest at Bank of America’s Prime Rate plus 2%, (b) the worth at
the time of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided,
including interest at Bank of America’s Prime Rate plus 2%, (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 the
Lessee proves could be reasonably avoided; and (d) any other amount necessary
to compensate the Lessor for all the detriment proximately caused by the Lessee’s
failure to perform his obligations under the Lease or which, in the ordinary
course of things, would be likely to result therefrom.  ‘The worth at the time of award,” as used in
(a) and (b) of this Paragraph, is to be computed by allowing interest at Bank
of America’s Prime Rate plus 2%.  “The
worth at the time of award,” as used in (c) of this Paragraph, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award, plus one percent (1%).

If the Lessor chooses not to repossess the Premises,
but allows the Lessee to remain in full possession and control of the Premises,
then, in accordance with provisions of the California Civil Code, Section
1951.4, the Lessor may treat the Lease as being in full force and effect, and
may collect from the Lessee all rents as they become due through the
termination date of the Lease, as specified in the Lease.  For the purpose of this paragraph, the
following do not constitute a termination of Lessee’s right to possession: (1.)
acts of maintenance or preservation, or efforts to relet the property; (2.) the
appointment of a receiver on the initiative of the Lessor to protect his
interest under this Lease.

If Lessor elects to relet the Premises as provided in
this Paragraph, rent that Lessor receives from reletting shall be applied to
the payment of: (1.) any indebtedness from Lessee to Lessor other than rent due
from Lessee; (2.) all costs, including for maintenance, incurred by Lessor in
reletting; (3.) rent due and unpaid under this Lease.  After deducting the payments referred to in
this Paragraph, any sum remaining from the rent Lessor receives from reletting
shall be held by Lessor and applied in payment of future rent as rent becomes
due under this Lease.  In no event shall
Lessee be entitled to any excess rent received by Lessor, provided such excess
rent shall be applied to all amounts due and owing under this Lease.  If, on the date rent is due under this Lease,
the rent received from reletting is less than the rent due on that date, Lessee
shall pay to Lessor, in addition to the remaining rent due, all costs,
including for maintenance, Lessor incurred in reletting that remain after
applying the rent received from the reletting, as provided in this Paragraph.

Lessor, at any time after Lessee commits a default,
shall have the right to cure the default at Lessee’s cost, after giving Lessee
at least ten (10) days’ written notice of such default.  If

 14
 

Lessor at any time, by reason of Lessee’s default,
pays any sum or does any act that requires the payment of any sum, the sum paid
by Lessor shall be due immediately from Lessee to Lessor at the time the sum is
paid, and if paid at a later date shall bear interest at Bank of America’s
Prime Rate plus 2% from the date the sum is paid by Lessor until Lessor is
reimbursed by Lessee.  The sum, together
with interest on it, shall be additional rent.

Rent not paid when due shall bear interest at Bank of
America’s Prime Rate plus 2% from the date due until paid.

15.           Destruction.

A.            Repair of Damage to Premises by Lessor.  If the Premises or any common areas of the
Project serving or providing access to the Premises shall be damaged by fire or
other casualty, Lessor shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Lessor’s reasonable
control, and subject to all other terms of this Section 15, restore the
Premises and the common areas of the Project serving or providing access to the
Premises.  Such restoration shall be to
substantially the same condition of the Project, the Premises, and common areas
prior to the casualty, except for modifications required by zoning and building
codes and other laws, provided access to the Premises and any common restrooms
serving the Premises shall not be materially impaired.  Upon the occurrence of any damage to the
Premises, Lessor shall repair any injury or damage to the Tenant Improvements
and alterations installed in the Premises pursuant to Section 12, and shall
return such Tenant Improvements and alterations to their original
condition.  In connection with such
repairs and replacements, Lessee shall, prior to the commencement of
construction, submit to Lessor for Lessor’s review and approval, all plans, specifications
and working drawings relating thereto, and Lessor shall select the contractors
to perform such improvement work with the input of Lessee.  Lessor shall not be liable for any
inconvenience or annoyance to Lessee or its visitors, or injury to Lessee’s
business resulting from such damage or the repair thereof, provided however,
that if such fire or other casualty shall have damaged the Premises or common
areas necessary to Lessee’s occupancy, Lessor shall allow Lessee a
proportionate abatement of Rent during the time and to the extent the Premises
are unfit for occupancy for the purposes permitted under this Lease, and not
occupied by Lessee as a result thereof; provided, however, that if the Premises
is damaged such that the remaining portion thereof is not sufficient to allow
Lessee to conduct its business operations from such remaining portion and
Lessee does not conduct its business operations therefrom, Lessor shall allow
Lessee a total abatement of Rent during the time and to the extent the Premises
are unfit for occupancy for the purposes permitted under this Lease, and not
occupied by Lessee as result of the subject damage.

B.            Damage Near End of Term.  In the event that the Premises are destroyed
or damaged to any substantial extent (i.e. fifty (50%) or more of the Premises)
during the last twelve months of the Lease Term, and Lessee does not exercise
an available option to extend the Term (which Extension Option in the event of
such substantial damage, notwithstanding the terms of Section 4, must be
exercised within ninety (90) of the date of such damage), then notwithstanding
anything contained in this Section 15, either Lessor or Lessee shall have the
option to terminate this Lease by giving written notice to the other party of
the exercise of such option within sixty (60) days after such damage or
destruction, or if the damage has occurred such that Lessee has not yet been
obligated to exercise its Extension Option, then within thirty

 15
 

(30) days following the lapse of Lessee’s ninety (90)
day period to exercise its Extension Option, in which event this Lease shall
cease and terminate as of the date of such notice, Lessee shall pay the Rent
properly apportioned up to such date of damage, and both parties hereto shall
thereafter be freed and discharged of all further obligations hereunder, except
as provided for in provisions of this Lease which by their terms survive the
expiration or earlier termination of the Term.

C.            Uninsured Risks. 
If the Premises is damaged as a result of any casualty not covered by
Lessor’s insurance required to be maintained pursuant to Section 9 above, and
if the cost to Lessor of repair would exceed fifteen percent (15%) of the
replacement cost of the Premises, Lessor may within sixty (60) days following
the date of such damage commence repair, reconstruction or restoration of the
Premises and prosecute the same diligently to completion, in which event this
Lease shall continue in full force and effect; or within said sixty (60) day
period elect not to so repair, reconstruct or restore the Premises, in which
event this Lease shall terminate with respect to the Premises effective as of
the date of such damage or destruction. 
If the cost to Lessor of repair would not exceed fifteen percent (15%)
of the replacement cost of the Premises, Lessor shall be obligated to repair
such damage as soon as reasonably possible. 
In the event Lessor has the right to terminate this Lease, Lessor shall
give Lessee written notice of its intention within said sixty (60) day
period.  In the event Lessor provides
Lessee written notice of Lessor’s intention to terminate the Lease pursuant to
the above provision, Lessee shall have the right within sixty (60) days after
receipt of such notice to give Lessor written notice of Lessee’s intention to
pay for the repair of the portion of said damage in excess of fifteen percent
(15%) of the replacement cost of the Premises so damaged, in which event this
Lease shall continue in full force and effect; and Lessee shall promptly
deposit with Lessor the amount necessary to pay for the repairs of the portion
of said damage in excess of fifteen percent (15%) of the replacement cost of
the Premises or provide other suitable security for the payment of such costs,
and thereafter Lessor shall proceed to make such repairs as soon as reasonably
possible.

D.            Lessee’s Right to Terminate.  If Lessor does not elect to terminate this
Lease pursuant to Lessor’s termination night as provided above, and the repairs
cannot be completed within twenty-four (24) months after the date of damage (as
mutually agreed by Lessor and Lessee), Lessee may elect, no earlier than sixty
(60) days after the date of the damage and not later than the later of (A)
Lessor’s delivery of notice to Lessee that Lessor is not electing to terminate this
Lease or (B) ninety (90) days after the date of such damage, to terminate this
Lease by written notice to Lessor effective as of the date specified in the
notice, which date shall not be less than thirty (30) days nor more than sixty
(60) days after the date such notice is given by Lessee.  Furthermore, if neither Lessor nor Lessee
have terminated this Lease, and the repairs are not actually completed within
such twenty-four (24) month period, Lessee shall have the right to terminate
this Lease during the first five (5) business days of each calendar month
following the end of such period until such time as the repairs are complete,
by notice to Lessor (the “Damage Termination Notice”), effective as of a date
set forth in the Damage Termination Notice (the “Damage Termination Date”),
which Damage Termination Date shall not be earlier than the end of each such
month.  Lessee may at any time prior to
any Damage Termination Date void any previously delivered Damage Termination
Notice.  Notwithstanding the foregoing,
if Lessee delivers a Damage Termination Notice to Lessor, then Lessor shall
have the right to suspend the occurrence of the Damage Termination Date for a
period ending thirty (30) days after the Damage Termination Date set forth in
the Damage Termination Notice by delivering to

 16
 

Lessee, within five (5) business days of Lessor’s
receipt of the Damage Termination Notice, a certificate of Lessor’s contractor
responsible for the repair of the damage certifying that it is such contractor’s
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date.  If repairs shall be substantially completed
prior to the expiration of such thirty day period, then the Damage Termination
Notice shall be of no force or effect, but if the repairs shall not be
substantially completed within such thirty-day period, then this Lease shall
terminate upon the expiration of such thirty-day period.  At any time, from time to time, after the
date occurring sixty (60) days after the date of the damage, Lessee may request
that Lessor inform Lessee of Lessor’s reasonable opinion of the date of
completion of the repairs and Lessor shall respond to such request within five
(5) business days.

E.             Obligations Upon Termination.  Upon termination of this Lease with respect
to one or both Buildings under any provisions of this Section 15, the parties
shall be released thereby without further obligations to the other party with
respect to the Premises so damaged with the surrender of possession of the
Premises to Lessor, except for items which have theretofore accrued and be then
unpaid.  In the event of any termination,
all proceeds from the fire and extended coverage insurance under Section 9,
excluding only proceeds for trade fixtures, merchandise, other personal
property, and that portion of such proceeds equal to the unamortized cost of
Tenant Improvements paid by Lessee, such amortization to be over the period of
the initial term of this Lease, shall be disbursed to Lessor (and in the event
that the total insurance proceeds shall be less than the cost of restoring the
damaged Premises, Lessee shall be entitled to receive a pro rata share of the
unamortized cost of the Tenant Improvements paid by Lessee, such pro rata share
to be based upon the proportion that the insurance proceeds paid by the insurer
bears to the total cost of restoring the damaged Premises).

16.           Condemnation.  If any part of the Premises or parking areas
associated with the Premises shall be taken for any public or quasi-public use,
under any statute of by right of eminent domain, or private purchase in lieu
thereof, and a part thereof remains, which is susceptible of occupation
hereunder, this Lease shall, as to the part so taken, terminate as of the date title
shall vest in the condemnor or purchaser, and the rent payable hereunder shall
be adjusted so that the Lessee shall be required to pay for the remainder of
the term only such portion of such rent as the value of the part remaining
after taking such bears to the value of the entire Premises prior to such
taking.  Lessor, or Lessee if 30% or more
of the Premises is taken, shall have the option to terminate this Lease in the
event that such taking causes a reduction in rent payable hereunder by fifty
percent (50%) or more.  If all of the
Premises or such part thereof be taken so that there does not remain a portion
susceptible for occupation hereunder, as reasonably necessary for Lessee’s
conduct of its business as contemplated in this Lease, this Lease shall
thereupon terminate.  If a part of all of
the Premises be taken, all compensation awarded upon such taking shall go to
the Lessor, and the Lessee shall have no claim thereto, and the Lessee hereby
irrevocably assigns and transfers to the Lessor any right to compensation or
damages to which the Lessee may become entitled during the term hereof by
reason of the purchase or condemnation of all or a part of the Premises, except
that Lessee shall have the right to recover its share of any award or consideration
for (1.) moving expenses; (2.) loss or damage to Lessee’s trade fixtures,
furnishings, equipment, and other personal property; and (3.) business goodwill
and (4.) Tenant Improvements paid for by Lessee.  Each party waives the provisions of the Code
of Civil Procedure, Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial taking of the
Premises.

 17
 

17.           Free
from Liens.  Except for Tenant
Improvements which Lessor is responsible, Lessee shall (1.) pay for all labor
and services performed for materials used by or furnished to Lessee, or any
contractor employed by Lessee with respect to the Premises, and (2.) indemnify,
defend, and hold Lessor and the Premises harmless and free from any liens, claims,
demands, encumbrances, or judgments created or suffered by reason of any labor
or services performed for materials used by or furnished to Lessee or any
contractor employed by Lessee with respect to the Premises, and (3.) give
notice to Lessor in writing five (5) days prior to employing any laborer or
contractor to perform services related, or receiving materials for use upon the
Premises, and (4.) shall post, on behalf of Lessor, a notice of
non-responsibility in accordance with the statutory requirements of the
California Civil Code, Section 3904, or any amendment thereof.  In the event an improvement bond with a
public agency in connection with the above is required to be posted, Lessee
agrees to include Lessor as an additional obligee.

18.           Compliance
with Laws.  Subject to Section 12,
Lessee shall, at its own cost, comply with and observe all requirements of all
municipal, county, state, and federal authority now in force, or which may
hereafter be in force, pertaining to the use and occupancy of the Premises.

19.           Subordination.  Lessee agrees that this Lease shall, at the
option of Lessor, be subjected and subordinated to any mortgage, deed of trust,
or other instrument of security, which has been or shall be placed on the land
and building, or land or building of which the Premises form a part, and this
subordination is hereby made effective without any further act of Lessee or
Lessor.  The Lessee shall, at any time
hereinafter, on demand, execute any commercially reasonable instruments,
releases, or other documents that may be required by any mortgagee, mortgagor,
trustor, or beneficiary under any deed of trust, for the purpose of subjecting
or subordinating this Lease to the lien of any such mortgage, deed of trust, or
other instrument of security.  If Lessee
fails to execute and deliver any such documents or instruments, Lessee
irrevocably constitutes and appoints Lessor as Lessee’s special
attorney-in-fact to execute and deliver any such documents or instruments.  Any such subordination shall be conditioned
upon Lessor obtaining a Non-disturbance Agreement in lender’s standard form.

20.           Abandonment.  Lessee shall not abandon the Premises at any
time during the term; and if Lessee shall abandon or surrender said Premises,
or be dispossessed by process of law, or otherwise, any personal property
belonging to Lessee and left on the Premises shall be deemed to be abandoned,
at the option of Lessor, except such property as may be mortgaged to Lessor;
provided, however, that Lessee shall not be deemed to have abandoned the
Premises so long as Lessee continues to pay all rents as and when due, and
otherwise performs pursuant to the terms and conditions of this Lease.

21.           Assignment
and Subletting.

A.            Definitions. 
For purposes of this Paragraph 21, the following terms shall be defined
as follows:

(i)                                     Sublet.  The term “Sublet” shall mean any transfer,
sublet, assignment, license or concession agreement, change of ownership,
mortgage, or hypothecation of this Lease or the Lessee’s interest in the Lease
or in and to all or a portion of the Premises.

 18
 

(ii)                                  Subrent.  The term “Subrent” shall mean any
consideration of any kind received, or to be received, by Lessee from a
Sublessee if such sums are related to Lessee’s interest in this Lease or in the
Premises, including, but not limited to, bonus money and payments (in excess of
book value) for Lessee’s assets including its trade fixtures, equipment and
other personal property, goodwill, general intangibles, and any capital stock
or other equity ownership of Lessee.

(iii)                               Sublessee.  The term “Sublessee” shall mean the person or
entity with whom a Sublet agreement is proposed to be or is made.

B.            Lessor’s Consent. 
Lessee shall not enter into a Sublet without Lessor’s prior written
consent, which consent’ shall not be unreasonably withheld, conditioned or
delayed.  Any attempted or purported
Sublet without Lessor’s prior written consent shall be void and confer no
rights upon any third person and, at Lessor’s election, shall terminate this
Lease.  In determining whether or not to
consent to a proposed Sublet, Lessor may consider the following factors, among
others, all of which shall be deemed reasonable: (i) whether the proposed
Sublessee has a net worth sufficient to allow it to meet its obligations under
the proposed sublease; (ii) whether the proposed use of the Premises by the
proposed Sublessee is consistent with the permitted use for the Premises set
forth in Paragraph 6 of this Lease; (iii) whether the rent payable by the
Sublessee under the proposed Sublet is set below the current fair market rent
for the subleased Premises as a subterfuge to avoid paying Lessor its share of
the profit on such transaction; (iv) whether Lessor’s consent will result in a
breach of any other lease or agreement to which Lessor is a party affecting the
Building; and (v) whether the proposed Sublet requires any non-standard
building modifications.  Each Sublessee
shall agree in writing, for the benefit of Lessor, to assume, to be bound by,
and to perform the terms and conditions and covenants of this Lease to be
performed by Lessee.  Notwithstanding
anything contained herein, Lessee shall not be released from liability for the
performance of each term, condition and covenant of this Lease by reason of
Lessor’s consent to a Sublet unless Lessor specifically grants such release in
writing.  Consent by Lessor to any Sublet
shall not be deemed a consent to any subsequent Sublet.  Lessee shall reimburse Lessor for all
reasonable costs and reasonable attorneys’ fees incurred by Lessor in connection
with the evaluation, processing and/or documentation of any requested Sublet,
whether or not Lessor’s consent is granted; provided, however such costs and
fees shall not exceed Five Thousand Dollars ($5,000.00), Lessor’s reasonable
costs shall include the cost of any review or investigation by Lessor of any
hazardous or toxic materials which may be used, stored, or disposed of at the
Premises by the Sublessee, including fees paid to consultants hired to perform
such review or investigation.

C.            Information to be Furnished.  If lessee desires at any time to Sublet the
Premises or any portion thereof, it shall first notify Lessor of its desire to
do so and shall submit in writing to Lessor. 
(i) the name and legal composition of the proposed Sublessee, (ii) the
nature of the proposed Sublessee’s business to be carried on in the Premises;
(iii) the terms and provisions of the proposed Sublet and a copy of the
proposed Sublet form containing a description of the subject premises; (iv) a
statement of all consideration to be paid by the Sublessee in connection with
the Sublet; (v) a current financial statement of Lessee; and (vi) such
financial information, including financial statements, as Lessor may reasonably
request concerning the proposed Sublessee.

 19
 

D.            Lessor’s Alternatives.  At any time within ten (10) business days
after the Lessor’s receipt of the information specified in Section 21.C, Lessor
may, by written notice to Lessee, elect: (i) to consent to the Sublet by
Lessee; (ii) to refuse its consent to the Sublet, or (iii) elect to terminate
this Lease, or in the case of a partial Sublet for the entire remainder of the
term, terminate this Lease as to the portion of the Premises proposed to be
Sublet, provided, however, Lessor shall not have the right to terminate this
Lease in connection with a Permitted Transfer. 
if Lessor consents to the Sublet, Lessee may thereafter enter into a
valid Sublet of the Premises.  or portion
thereof, upon the terms and conditions and. 
with the proposed Sublessee set forth in the information furnished by
Lessee to Lessor pursuant to Section 21.8., subject, however, at Lessor’s
election, to the condition that seventy-five percent (75%) of any excess of the
Subrent over the Rent (after deducting Lessee’s brokers’ fees, attorneys’ fees
and costs of tenant improvements associated with the Sublet) be required to be
paid by Lessee to Lessor, provided, however, Lessee shall not be required to
pay such excess in connection with a Permitted Transfer.

E.             Proration. 
If a portion of the Premises is Sublet, the pro rata share of the Rent
attributable to such partial area of the Premises shall be determined by Lessor
by dividing the Rent payable by Lessee hereunder by the total square footage of
the Premises and multiplying the resulting quotient (the per square foot rent)
by the number of square feet of the Premises which are Sublet.

F.             Exempt Sublets. 
Notwithstanding the other provisions of this Section, any
reorganization, merger, sale, assignment, transfer or hypothecation of any ownership
interest in Lessee, the sale of all or substantially all of the assets of
Lessee, the sale of Lessee’s stock to an individual(s) or to the public or the
assignment or sublease of the Premises, or any portion thereof, to any
subsidiary, parent company or affiliate (collectively, “Permitted Transfers”)
shall not be deemed an assignment of this Lease or subletting of the Premises,
provided, that such transaction is not a subterfuge by Lessee to avoid its
obligations under this Lease and, further, provided that if Lessee exists as an
entity after such transaction, it shall remain liable to Lessor for its
obligations under this Lease.

22.           Parking
Charges.  Lessee agrees to pay upon
demand, based on its percent of occupancy of the entire Premises, its pro-rata
share of any parking charges, surcharges, or any other cost hereafter levied or
assessed by local, state, or federal governmental agencies in connection with
the use of the parking facilities serving the Premises, including, without
limitation, parking surcharge imposed by or under the authority of the Federal
Environmental Protection Agency.  Lessor
represents that at the time of Lease execution, there are no such parking
charges.  Lessor agrees to use its best
efforts to challenge any such parking charges that may arise.  Other than parking charges that may be
imposed by a governmental agency, Lessor shall not charge Lessee any fees or
charges for parking in the Project.

23.           Insolvency
or Bankruptcy.  Either (1.) the
appointment of a receiver to take possession of all or substantially all of the
assets of Lessee, or (2.) a general assignment by Lessee for the benefit of
creditors, or (3.) any action taken or suffered by Lessee under any insolvency
or bankruptcy act shall constitute a breach of this Lease by Lessee.  Upon the happening of any such event, this
Lease shall terminate ten (10) days after written notice of termination from

 20
 

Lessor to Lessee. 
This section is to be applied consistent with the applicable state and
federal law in effect at the time such event occurs.

24.           Lessor
Loan or Sale.  Lessee agrees promptly
following request by Lessor to (1.) execute and deliver to Lessor any
documents, including estoppel certificates presented to Lessee by Lessor, (a.)
certifying that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect and the date to which the
rent and other charges are paid in advance, if any, and (b.) acknowledging that
there are not, to Lessee’s knowledge, any uncured defaults on the part of
Lessor hereunder, and (c.) evidencing the status of the Lease as may be
required either by a lender making a loan to Lessor, to be secured by deed of
trust or mortgage covering the Premises, or a purchaser of the Premises from
Lessor, and (2.) deliver to Lessor the current financial statements (annual
report or 10K) of Lessee.  Lessee’s
failure to deliver an estoppel certificate within ten (10) business days following
such request shall constitute a default under this Lease and shall be
conclusive upon Lessee that this Lease is in full force and effect and has not
been modified except as may be represented by Lessor.  Failure of Lessee to deliver the estoppel
certificates within the ten (10) business days shall be deemed a breach of this
Lease.

25.           Surrender
of Lease.  The voluntary or other
surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not
work a merger nor relieve Lessee of any of Lessee’s obligations under this
Lease, and shall, at the option of Lessor, terminate all or any existing
Subleases or Subtenancies, or may, at the option of Lessor, operate as an
assignment to it of any or all such Subleases or Subtenancies.

26.           Attorneys’
Fees.  If, for any reason, any suit
be initiated to enforce any provision of this Lease, the prevailing party shall
be entitled to legal costs, expert witness expenses, and reasonable attorneys’
fees, as fixed by the court.

27.           Notices.  All notices to be given to Lessee may be
given in writing, personally, or by depositing the same in the United States
mail, postage prepaid, and addressed to Lessee at the said Premises, whether or
not Lessee has departed from, abandoned, or vacated the Premises.  Any notice or document required or permitted
by this Lease to be given Lessor shall be addressed to Lessor at the address
set forth below, or at such other address as it may have theretofore specified
by notice delivered in accordance herewith:

	
  

  	
  LESSOR:

  	
  WTA Kifer LLC

  
	
   

  	
   

  	
  900 Welch Road,
  Suite 10

  
	
   

  	
   

  	
  Palo Alto,
  California 94304

  
	
   

  	
   

  	
   

  
	
   

  	
  LESSEE:

  	
  Zoran Corporation

  
	
   

  	
   

  	
  1390 Kifer Road

  
	
   

  	
   

  	
  Sunnyvale, CA
  94086

  

 

28.           Transfer
of Security.  If any security be
given by Lessee to secure the faithful performance of all or any of the
covenants of this Lease on the part of Lessee, Lessor shall either deliver the
security, as such, to the purchaser of the reversion or return it to Lessee, in
the event that the reversion be sold, and thereupon Lessor shall be discharged
from any further liability in

 21
 

reference thereto, provided in the event the security
is delivered to such purchaser, such purchaser agrees to assume in writing
Lessor’s obligations under this Lease.

29.           Waiver.  The waiver by Lessor or Lessee of any breach
of any term, covenant, or condition, herein contained shall not be deemed to be
a waiver of such term, covenant, or condition, or any subsequent breach of the
same or any other term, covenant, or condition herein contained.  The subsequent acceptance of rent hereunder
by Lessor shall not be deemed to be a waiver of any preceding breach by Lessee
of any term, covenant, or condition of this Lease, other than the failure of
Lessee to pay the particular rental so accepted, regardless of Lessor’s
knowledge of such preceding breach at the time of acceptance of such rent.

30.           Holding
Over.  Any holding over after the
expiration of the term or any extension thereof, with the consent of Lessor,
shall be construed to be a tenancy from month-to-month, at a rental of one and
one-half (1-1/2) times the previous month’s rental rate per month, and shall
otherwise be on the terms and conditions herein specified, so far as
applicable.

31.           Covenants,
Conditions, and Restrictions.  Not
applicable.

32.           Limitation
on Lessors Liability.  If Lessor is
in default of this Lease, and, as a consequence, Lessee recovers a money
judgment against Lessor, the judgment shall be satisfied only out of the
interest of Lessor in the Premises, or in the building, other improvements, and
land of which the Premises are part, and out of rent or other income from such
real property receivable by Lessor or out of the consideration received by
Lessor from the sale or other disposition of all or any part of Lessor’s right,
title, and interest in the Premises or in the building, other improvements, and
land of which the Premises are part. 
Neither Lessor nor any of the partners comprising the partnership
designated as Lessor shall be personally liable for any deficiency.

33.           Disclosure.  Lessor’s listing brokers, Dennis Chamber and
Steve Horton of CPS, are minority members of WTA Kifer LLC, the ownership
entity of the Project.

34.           Recording
of Lease.  Neither party may record
this Lease.  However, Lessee shall have
the right to record a Memorandum of Lease provided that Lessee removes any such
Memorandum of Lease upon Lease expiration.

35.           Signage.  Lessee, at Lessee’s sole cost and expense,
shall have the right to display its corporate name and logo on the top of the
building in which the Premises are located and in the front of the project
entrance.  In addition, Lessee shall have
the right to signage (its Pro-Rata Share on the top position) on a monument at
the street entrance.  Lessor shall
provide the monument for said signage. 
All signage shall comply with City of Sunnyvale rules and regulations
and must be approved by Lessor, which consent shall not be unreasonably
withheld.  Lessee shall be responsible
for removing all building signage (excluding the monument signage) and
restoring the affected areas at the termination of the Lease.

36.           Use
of the Roof.  Lessee shall have the
nonexclusive right to use the roof of the Premises at no charge to place and
maintain telecommunications antennas, microwave or satellite dishes and other
communications equipment.  Such use of
the roof shall be subject to receipt of all required government approvals, at
Lessee’s sole cost and expense.  The
placements of any such

 22
 

antennas or satellite dishes or other communications
equipment on the roof, the modifications of the roof to accommodate such
equipment, and the installation of any such equipment shall be subject to
Lessor’s reasonable prior approval of plans and methods therefor.  Such use of the roof shall not restrict,
impair or negate any warranty relating to the roof and Lessee shall be
responsible for any and all damage, leakage or extraordinary wear and tear to
the roof occurring as a result of such use of the roof.  Installation of such equipment shall be
supervised by Lessor and performed in a first class workmanlike manner.  Lessee shall remove any such equipment at the
termination of the Lease and repair and restore the affected areas.

Lessee shall not be allowed to rent or lease the roof
to third parties.

37.           Option
to Purchase.  Lessee shall have a one
time right of first offer to purchase the Project (1390 and 1400 Kifer
Road).  In the event Lessor decides to
sell the Project, Lessor shall notify Lessee of its intent in writing.  If Lessor and Lessee cannot agree on a
purchase price and business terms within fifteen (15) calendar days of Lessee’s
receipt of Lessor’s notice, then Lessor shall have no further obligation to
Lessee and shall have the right to market the building for sale to any third
party.

38.           Brokers.  Each party represents and warrants to the
other that it has had no dealing with any broker or agent other than Studley
and CPS (the “Brokers”), who shall be compensated by Lessor in accordance with
a separate agreement between Lessor and the Brokers.  Lessee and Lessor shall each indemnify, defend
and hold the other party harmless from and against any and all liabilities for
commissions or other compensation or charges claimed by any other broker or
agent based on dealings with the indemnifying party with respect to this Lease.  The foregoing indemnity shall survive
termination or earlier expiration of this Lease.

39.           Miscellaneous.

A.                                   Time
is of the essence of this Lease, and of each and all of its provisions.

B.                                     The
term “building” shall mean the building in which the Premises are situated.

C.                                     If
the building is leased to more than one tenant, then each such tenant, its
agents, officers, employees, and invitees, shall have the non-exclusive right
(in conjunction with the use of the part of the building leased to such tenant)
to make reasonable use of any driveways, sidewalks, and parking areas located
on the parcel of land on which the building is situated, except such parking
areas as may from time to time be leased for exclusive use by other tenant(s),
provided that at all times 330 parking spaces shall be assigned, on a
nonexclusive basis, to Lessee.

D.                                    The
term “assign” shall include the term “transfer.”

E.                                      The
invalidity or unenforceability of any provision of this Lease shall not affect
the validity or enforceability of the remainder of this Lease.

F.                                      All
parties hereto have equally participated in the preparation of this Lease.

 23
 

G.                                     The
headings and titles to the Paragraphs of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part thereof.

H.                                    Lessor
has made no representation(s) whatsoever to Lessee (express or implied) except
as may be expressly stated in writing in this Lease instrument.

I.                                         This
instrument contains all of the agreements and conditions made between the
parties hereto, and may not be modified orally or in any other manner than by
agreement in writing, signed by all of the parties hereto or their respective
successors in interest.

J.                                        It
is understood and agreed that the remedies herein given to Lessor shall be
cumulative, and the exercise of any one remedy by Lessor shall not be to the
exclusion of any other remedy.

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

L.                                      This
Lease has been negotiated by the parties hereto and the language hereof shall
not be construed for or against either party.

M.                                 All
exhibits to which reference is made are deemed incorporated into this Lease,
whether covenants or conditions, on the part of Lessee shall be deemed to be
both covenants and conditions.

IN WITNESS WHEREOF, Lessor and Lessee have executed
this Lease on the date first above-written.

	
  LESSOR:

  WTA Kifer LLC

  	
   

  	
  LESSEE:

  Zoran Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Carolee White,
  Trustee

  WTA Kifer LLC

  Managing Member

  	
   

  	
   

  	
   

  	
  Kan Schneider

  Senior Vice President, Finance and CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Christopher Denten

  Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
   

  
									

 

 24

EXHIBIT
A

 

Site
plan to be attached

EXHIBIT B - page 4 (see First Floor Plan page 1)

Tenant
Improvement Restoration Summary for 1390 Kifer Road

Lessor retains the right to have the Lessee restore
the premises, as noted, at the term of the lease:

Restoration shall include the removal of the Theater
and Demo Room finishes and improvements and related use rooms to convert back
to the Open Office/Conference Room building standards and shall include but,
not be limited to;

1.                                       Removal
of all fixed theater seating, floor lighting strips, raised stage platform
& steps, projection and display equipment, speakers, screens and curtains.

2.                                       Removal
of all walls that block the exterior windows including patching of the portion
of walls to remain.

3.                                       Removal
of curtain pocket wall (Rm.1008) and related patching to enclose room.

4.                                       Replacement
of the building standard white ceiling grid & tiles including the removal
of the secondary can and spot lighting system. 
Lighting shall be provided with building standard switching.  HVAC grills shall be white.  Fire sprinkler heads and escutcheons shall
match the building standard.

5.                                       Removal
of all acoustical wall panels, including the patching of wall due to removal.

6.                                       Removal
of all display casework and free-standing displays.

The Lessee shall provide all necessary design and
permit fees, construction restoration drawings, supervision, and clean-up as
required for move-out.  Lessee shall
coordinate the complete scope of work with H&S, Inc. property managers and
obtain approval from the Lessor, prior to beginning any of the work.

 

FIRST
AMENDMENT TO LEASE AGREEMENT

FIRST AMENDMENT dated as of the 19th day of May, 2006
by and between Wta Kifer LLC (hereinafter called “Lessor”) and Yahoo! Inc.
(hereinafter called “Lessee”).

RECITALS

A.            Lessor
and Lessee entered into that certain Lease Agreement (hereinafter referred to
as the “Lease”) dated the 1st day of March, 1999, covering the Premises
situated in the City of Sunnyvale, County of Santa Clara, California: +/-
88,924 square foot building known as 1390 Kifer Road, Sunnyvale, California for
a lease term expiring November 30, 2006.

Lessee subsequently entered into that certain Sublease
Agreement (hereinafter referred to as the “Sublease Agreement”) dated the 18th
day of June, 2001 by and between Yahoo! Inc. and Oak Technology, Inc. (predecessor-in-interest
to Zoran Corporation (“Sublessee”)).

B.            Lessor
and Lessee desire to amend the Lease for the purpose of mutual cancellation of
the Lease as of September 30th, 2006 (“Early Termination Date”).

NOW THEREFORE, in consideration of the mutual
covenants and conditions herein contained, Lessor and Lessee hereby agree as
follows:

1.             The
Lease shall be terminated and the Premises surrendered as of the Early
Termination Date pursuant to the following terms and conditions:

a.                                       All
Rent and operating expenses shall be paid by Lessee through the Early
Termination Date.

b.                                      Lessee
shall have no obligation to remove any alterations pursuant to Section 12 of
the Lease.

c.                                       Lessor
shall pay to Lessee, on or before September 30, 2006, $65,000 as a termination fee
and not as a penalty.

2.             Pursuant
to Section 8 (Termination of Master Lease) of the Sublease Agreement, Lessor,
Lessee and Sublessee acknowledge and agree the Sublease Agreement shall also be
terminated effective as of September 30, 2006.

3.             Provided
that the provisions contained in Sections 1 and 2 above are satisfied, the
Lease and Sublease Agreement shall be terminated as of the Early Termination
Date.

4.             Except
for the obligations which survive the expiration of the term of the Lease and
the obligations set forth in this First Amendment to Lease Agreement, Lessor
and Lessee, effective as of the Early Termination Date, do hereby mutually
release each other, their respective heirs, personal representatives,
successors and assigns of and from all claims, demands, actions and causes of
actions of every kind and nature whatsoever arising out of the Lease.

Except as modified herein, all other terms and
conditions of the Lease remain in full force and effect.

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

	
  WTA Kifer LLC

  (“Lessor”)

  	
   

  	
  YAHOO! INC.

  (“Lessee”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Carolee White,
  Trustee

  Managing Member

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acknowledged and
  Agreed to by:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ZORAN
  CORPORATION

  (“Sublessee”)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Karl Schneider,
  Senior Vice

  President, Finance and CFO

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 2

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