Document:

exv10w60

 

EXHIBIT
10.60

EXECUTIVE INCENTIVE PROGRAM

MAXTOR CORPORATION

January 2006

Purpose:

The purpose of the Executive Incentive Program ( the “Program”) is to advance the interests of
Maxtor Corporation (“Maxtor” or the “Company”) and its stockholders by creating an incentive for
key executives to achieve short-term corporate objectives.

Definitions:

Acquisition: Seagate’s acquisition of Maxtor pursuant to an Agreement and Plan of Merger
dated December 20, 2005 (“Merger Agreement”).

Closing Date: The Closing Date set forth in the Merger Agreement.

Cumulative Net Earnings: Net income/loss as reported excluding the impact of the Retention
Bonus Program and other specific components of net income/loss separately disclosed as part of GAAP
net income/loss in Maxtor’s publicly announced financial results.

Direct Material Commitment Target: The Direct Material Commitment means the amount as
established by the Compensation Committee of the Company’s Board of Directors.

Program Payment Date: Thirty (30) days after the Closing Date.

Retention Bonus Program: Program adopted by the Company on December 20, 2005 to retain
certain key employees.

Senior Executive Staff: The members of the Senior Executive Staff determined by the
Compensation Committee of the Board of Directors.

Eligibility:

All Senior Executive Staff members are eligible to participate in the Program and will be notified
in writing with details about each person’s specific objectives and associated target payouts. To
remain eligible, participants must remain in active employment or on an approved leave of absence
until the Closing Date.

Bonus
Targets:

The target bonus is established as a specific dollar amount and is based on a calendar year
commencing on January 1, 2006. Each member of the Senior Executive Staff will be classified by the
Compensation Committee in one of four Class Categories for participation. The Target Bonus for
each Class Category is as follows:

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Executive Incentive Program

	 	 	 	 	 
	Class Category	 	Target Bonus Amount
	Ÿ  Class I
	 	$	300,000	 
	Ÿ   Class II
	 	$	250,000	 
	Ÿ  Class III
	 	$	200,000	 
	Ÿ  Class IV
	 	$	150,000	 

Bonus
Objectives:

The Bonus Objectives will be based on achieving specified key corporate financial targets as
established by the Compensation Committee of the Company’s Board of Directors, which will be
derived from the Annual Operation Plan (the “AOP”) as presented to the Board of Directors. The
2006 Bonus Objectives and associated payment weightings are as follows:

	 	1.	 	Cumulative Net Earnings (Non GAAP)

	 	•	 	targets as established by the Compensation Committee
	 
	 	•	 	Weighted 50%

	 	2.	 	Revenue

	 	•	 	targets as established by the Compensation Committee
	 
	 	•	 	Weighted 15%

	 	3.	 	Cash

	 	•	 	targets as established by the Compensation Committee
	 
	 	•	 	Weighted 15%

	 	4.	 	Direct Material Commitments

	 	•	 	targets as established by the Compensation Committee
	 
	 	•	 	Weighted 20%

Final measurement to target is based on the last full quarter of financial performance for the
Cumulative Net Earnings, Revenue and Cash objectives. The impact of the Retention Bonus
Program and other specific components of net income/loss separately disclosed as part of GAAP
net income/loss in Maxtor’s publicly announced financial results will be excluded from the
calculations of targets.

Bonus
Payments:

Bonus payments are determined upon achievement of the Bonus Objectives. In order to receive
payment for achievement of a Bonus Objective the target must be met at 100% or greater. There
will be no payment for less than 100% target achievement. Achievement and payment of each Bonus
Objective will be measured independently. For each Bonus Objective achieved, payment will be
calculated based on the weight assigned to the objective multiplied by the target amount. For
example, if Bonus Objective 1 and Bonus Objective 3 are achieved, but Bonus Objective 2 and 4
are not achieved the calculation for a Class II participant would be as follows:

Objective 1 weight multiplied by Class II target equals Objective 1 Bonus Payment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	50%
	 	 	X	 	 	$	250,000	 	 	 	=	 	 	$	125,000	 

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Executive Incentive Program

Objective 3 weight multiplied by Class II target equals Objective 3 Bonus Payment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15%
	 	 	X	 	 	$	250,000	 	 	 	=	 	 	$	37,500	 

No payment for Bonus Objectives 2 and 4 because achievement is less than 100%

Total payment = $162,500

A bonus payment will be payable to each participant thirty (30) days after the Closing Date,
provided such participant has been employed in good standing with the Company until the Closing
Date.

All payments pursuant to the Program will be subject to applicable payroll withholding.

Program
Termination:

The Program shall terminate and be of no further force or effect, and no bonuses shall become
earned or payable hereunder after the Program Payment Date or upon termination of the Merger
Agreement.

3exv10w61

 

EXHIBIT 10.61

LEASE AGREEMENT

     THIS LEASE, made the 31st day of October 1989 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY TRUST) as amended, and
RICHARD T. PEERY, Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE
PROPERTY TRUST) as amended, hereinafter called Landlord and QUANTUM CORPORATION, a Delaware
corporation, hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit “A” attached hereto and incorporated herein by
this reference thereto more particularly described as follows:

All of that land containing approximately 10.531+ acres and that certain
155,734+ square foot one and two-story combination building (“Building 1”)
and parking appurtenant thereto, to be constructed and landscaping to be installed
by Landlord as shown within the area outlined in red (“Lot 1”) on Exhibit A to be
located at the corner of Bellew Drive and Magnolia Drive, Milpitas, California.
Said Premises (“Lot 1”) is more particularly shown within the area outlined in red
on Exhibit A attached hereto and incorporated herein by this reference. The entire
parcel containing approximately 37.096+ acres, of which the Premises is a
part, is shown within the area outlined in green on Exhibit A attached hereto and
incorporated herein by this reference. The interior of the leased Premises shall be
improved in the configuration as shown in red on Exhibit B to be attached hereto and
incorporated herein by this reference. The building shell shall be constructed in
accordance with the shell and site improvement specifications set forth on Exhibit
A, and the general building elevation set forth on Exhibit A. See Paragraph 49

     The word “Premises” as used throughout this lease is hereby defined to include the
nonexclusive use of sidewalks and driveways in front of or adjacent to the Premises and the
nonexclusive use of the area directly underneath or over such sidewalks and driveways. The gross
leasable area of the building shall be measured from outside of exterior walls to outside of
exterior walls, and shall include any atriums, covered entrances or egresses and covered loading
areas.

     Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE. Tenant shall use the Premises only in conformance with applicable governmental laws,
regulations, rules and ordinances for the purpose of Office, sales, R&D, light manufacturing and
related uses necessary for the use of Tenant or any approved assignee or subtenant to conduct its
business providing any and all uses of the Premises shall be subject to

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and in conformance with all governmental laws and ordinances, and for no other purpose without
Landlord’s prior written consent, Tenant shall not do or permit to be done in or about the Premises
nor bring or keep or permit to be brought or kept in or about the Premises anything which is
prohibited by or will in any way increase the existing rate of (or otherwise affect) fire or any
insurance covering the Premises or any part thereof, or any of its contents without the prior
written consent of Landlord, and provided Tenant bears any cost related to such increased rate, or
will cause a cancellation of any insurance covering the Premises or any part thereof, or any of its
contents Tenant shall not do or permit to be done anything in, on or about the Premises which will
in any way obstruct or interfere with the rights of other tenants or occupants of the Premises or
neighboring premises or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. No sale by auction shall be permitted on the Premises.
Tenant shall not place any loads upon the floors, walls or ceiling which endanger the structure, or
place any harmful fluids or other materials in the drainage system of the building, or overload
existing electrical or other mechanical systems. No waste materials or refuse shall be dumped upon
or permitted to remain upon any part of the Premises or outside of the building in which the
Premises are a part, except in trash containers placed inside exterior enclosures designated by
Landlord for that purpose or inside of the building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the Premises. Tenant
shall not place anything or allow anything to be placed near the glass of any window, door
partition or wall which may appear unsightly from outside the Premises. No loudspeaker or other
device system or apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any loss, expense, damage, reasonable attorneys’ fees, or liability arising out of
failure of Tenant to comply with any applicable law that governs, Tenant use of the Premises Tenant
shall comply with any covenant, condition, or restriction (“CC&R’s) affecting the Premises. The
provisions of this paragraph are for the benefit of Landlord only and shall not be construed to be
for the benefit of any tenant or occupant of the Premises.

     2. TERM AND COMMENCEMENT DATE OF LEASE. See Paragraphs 41, 42 & 43 of this Lease.

     3. POSSESSION. If Landlord, for any reason whatsoever other than Landlord’s default cannot
deliver possession of said premises to Tenant at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant shall be affected
thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of the Lease, and all
other dates affected thereby shall be revised to conform to the date of Landlord’s delivery of
possession, as specified in Paragraph 28, above; provided, however, it is agreed that in no event
shall this Lease commence sooner than December 15, 1990 unless the parties agree in writing to an
earlier date for the Lease to commence. The above is, however, subject to the provision that the
period of delay of delivery of the Premises shall not exceed 180 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities, governmental bodies,
weather, unavailable materials, and delays beyond Landlord’s control shall

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be excluded in calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease. See Paragraph 47

     4. RENT.

          A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may designate
without deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for
the leased Premises the total sum of the amount to be calculated pursuant to Paragraph 39 in lawful
money of the United States of America, payable as follows: See Paragraphs 39 through 43.

          B. Time for Payment. Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences on a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day of said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge. Notwithstanding any other provision of this Lease, if Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal five percent (5%) of each rental payment so in
default. See Paragraph 50.

          D. Additional Rent. Beginning with the commencement date of the term of this Lease, Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following:

               (a) All Taxes relating to the Premises as set forth in paragraph 9, and

               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.

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     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days after presentation of invoice from Landlord or Landlord’s agent setting forth such
Additional Rent and/or (ii) at the option of Landlord, Tenant shall pay to Landlord monthly, in
advance, Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s approximate
average monthly expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord’s actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, upon demand, any amount of actual expenses
expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant (providing
Tenant is not in default in the performance of any of the terms, covenants and conditions of the
Lease in which case such amount shall be held by Landlord as a credit for Tenant’s account until
such default has been cured any amount of estimated payments made by Tenant in excess of Landlord’s
actual expenditures for said Additional Rent items.

     The respective obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          E. Place of Payment of Rent and Additional Rent. All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Perry/Arrillaga, file 1504, P.O. Box 60000, San Francisco, CA 94160 Four Hundred Twenty Thousand
Four Hundred Eighty-One Dollars 80/100 Dollars ($420,481.80.) Said sum shall be held by Landlord
as a Security Deposit for the faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease to be kept and performed by Tenant during the term hereof. If Tenant
defaults with respect to any provision of this Lease, including, but not limited to, the provisions
relating to the payment of rent and any of the monetary sums due herewith, Landlord may (but shall
not be required to) use, apply or retain all or any part of this Security Deposit for the payment
of any other amount which Landlord may spend by reason of Tenant’s default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If
any portion of said Deposit is so used or applied, Tenant shall, within 10 days after written
demand, therefore, deposit cash with Landlord in the amount sufficient to restore the Security
Deposit to its original amount. Tenant’s failure to do so shall be a material breach of this
Lease. Landlord shall not be required to keep this Security Deposit separate from its general
funds. Tenant shall not be entitled to interest on such Deposit. If Tenant fully and faithfully
performs every provision of this Lease to be performed by it the Security Deposit or any balance
thereof shall be returned to Tenant or at Landlord’s option, to the last assignee of Tenant’s
interest hereunder at the expiration of Lease term and after Tenant has vacated the Premises. In
the event of termination of Landlord’s interest in this Lease. Landlord shall transfer said
Deposit Landlord’s successor in interest whereupon Tenant agrees to release Landlord from liability
for the return of such Deposit or the accounting therefore. See Paragraph 51.

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     5. ACCEPTANCE AND SURRENDER OF PREMISES. By entry hereunder, Tenant accepts the premises as
being in good and sanitary order, conditions and repair and accepts the building and improvements
included in the Premises in their present condition and without representation or warranty by
Landlord as to the condition of such building or as to the use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord and
Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed, all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed, the air conditioning and heating systems serviced by a
reputable and licensed service firm and in good operating condition and repair; the plumbing and
electrical systems and lighting in good order and repair, including replacement of any burned out
or broken light bulbs or ballasts; the lawn and shrubs in good condition including the replacement
of any dead or damaged plantings; the sidewalk, driveways and parking areas in good order,
condition and repair together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises (except movable trade fixtures installed at the expense of Tenant)
except that Tenant shall ascertain from Landlord within ninety (90) days before the end of the term
of this Lease whether Landlord desires to have the Premises or any part or parts thereof restored
to their condition and configuration as when the Premises were delivered to Tenant and if Landlord
shall so desire, then Tenant shall restore said Premises or such part or parts thereof before the
end of this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of the term or
sooner termination of this Lease, shall remove all of Tenant’s personal property and trade fixtures
from the Premises, and all property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to same shall thereupon
pass to Landlord without compensation to Tenant. Landlord may, upon termination of this Lease,
remove all movable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost, and
repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such delay. Nothing
contained herein shall be construed as an extension of the term hereof or as a consent of Landlord
to any holding over by Tenant. The voluntary or other surrender of this Lease or the Premises by
Tenant or a mutual cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies or operate as an
assignment to Landlord of all or any such subleases or subtenancies. See Paragraph 52

     6. ALTERATIONS AND ADDITIONS. Tenant shall not make, or suffer to be made, any alteration or
addition to the Premises, or any part thereof, without the written consent of Landlord first had
and obtained by Tenant (such consent not to be unreasonably withheld), but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture and trade fixtures,
shall at once become a part of the Premises and belong to Landlord. Landlord reserves the right to
approve all contractors and mechanics proposed by Tenant to make such alterations and additions.
Tenant shall retain title to all moveable furniture and trade fixtures placed in the Premises. All
heating, lighting, electrical, airconditioning, partitioning,

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drapery, carpeting, and floor installations made by Tenant, together with all property that
has become an integral part of the Premises, shall not be deemed trade fixtures. Tenant agrees
that it will not proceed to make such alteration or additions, without having obtained consent from
Landlord to do so, and until five (5) days from the receipt of such consent, in order that Landlord
may post appropriate notices to avoid any liability to contractors or material suppliers for
payment for Tenant’s improvements. Tenant will at all times permit such notices to be posted and
to remain posted until the completion of work. Tenant shall, if required by Landlord, secure at
Tenant’s own cost and expense, a completion and lien indemnity bond, satisfactory to Landlord, for
such work. Tenant further covenants and agrees that any mechanic’s lien filed against the Premises
for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond or otherwise, within ten (10) days after Tenant receives notice of
the filing thereof, at the cost and expense of Tenant. Any exceptions to the foregoing must be
made in writing and executed by both Landlord and Tenant. See Paragraph 52

     7. TENANT MAINTENANCE. Tenant shall, at its sole cost and expense, keep and maintain the
Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good and sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and airconditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of the building,
store fronts, roofs, downspouts, all interior improvements within the premises including but not
limited to wall coverings, window coverings, carpet, floor coverings, partitioning, ceilings, doors
(both interior and exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to landscaping,
sidewalks, driveways, parking lots including striping and sealing, sprinkler systems, lighting,
ponds, fountains, waterways, and drains. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by such rolling chairs
if such wear and tear exceeds that caused by normal foot traffic in surrounding areas. Areas of
excessive wear shall be replaced at Tenant’s sole expense upon Lease termination. Tenant hereby
waives all rights under, and benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of
the California Civil Code and under any similar law, statute or ordinance now or hereafter in
effect. In the event any of the above maintenance responsibilities apply to any other tenant(s) of
Landlord where there is common usage with other tenant(s), such maintenance responsibilities and
charges shall be allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord. See Paragraph 53

     8. UTILITIES. Tenant shall pay promptly, as the same become due, all charges for water, gas,
electricity, telephone, telex and other electronic communication service, sewer service, waste
pick-up and any other utilities, materials or services furnished directly to or used by Tenant on
or about the Premises during the term of this Lease, including, without limitation,

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any temporary or permanent utility surcharge or other exactions whether or not hereinafter
imposed. In the event the above charges apply to any other tenant(s) of Landlord where there is
common usage with other tenant(s), such charges shall be allocated to the leased Premises by square
footage or other equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES.

          A. As Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to
Landlord, or if Landlord so directs, directly to the Tax Collector, all Real Property Taxes
relating to the Premises. In the event the Premises leased hereunder consist of only a portion of
the entire tax parcel. Tenant shall pay to Landlord Tenant’s proportionate share of such real
estate taxes allocated to the leased Premises by square footage or other reasonable basis as
calculated and determined by Landlord cancellation of or nonresponsibility for payment of penalties
for nonpayment or late payment by Tenant. The term “Real Property Taxes” as used herein, shall
mean (i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general
and special, foreseen and unforeseen (including all installments of principal and interest required
to pay any general or special assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership of the Premises) now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed against, or with respect to the
value, occupancy or use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord’s interest therein; any
improvements located within the Premises (regardless of ownership); the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part of and located in the
Premises; or parking areas, public utilities, or energy within the premises; (ii) all charges,
levies or fees imposed by reason of environmental regulation or other governmental control of the
Premises; and (iii) all costs and fees (including reasonable attorney’s fees) incurred by Landlord
in reasonably contesting any Real Property Tax and in negotiating with public authorities as to any
Real Property Tax. If at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied, assessed or imposed
(whether by reason of a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Premises or Landlord’s interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Premises, on Landlord’s business of leasing the Premises, or
computed in any manner with respect to the operation of the Premises, then any such tax or charge,
however designated, shall be included within the meaning of the term “Real Property Taxes” for
purposes of this Lease. If any Real Property Tax is based upon the property or rents unrelated to
the Premises, then only that part of such Real Property Tax that is fairly allocable to the
Premises shall be included within the meaning of the term “Real Property Taxes”. Notwithstanding
the foregoing, the term “Real Property Taxes” shall not

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include estate, inheritance, gift or franchise taxes of Landlord or the federal or state net
income tax imposed on Landlord’s income from all sources. See Paragraph 54.

          B. Taxes on Tenant’s Property. Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion thereof on a value placed upon such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant. Tenant shall upon demand, as the case may be, repay to Landlord
the taxes so levied against Landlord, or the proportion of such taxes resulting from such increase
in the assessment; provided that in any event Tenant shall have the right, in the name of Landlord
and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction to
recover the amount of such taxes so paid under protest, and any amount so recovered shall belong to
Tenant.

     10. LIABILITY INSURANCE. Tenant at Tenant’s expense, agrees to keep in force during the term
of this Lease a policy of comprehensive general liability insurance for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped areas, in the
amount of $2,000,000 combined single limit. Such insurance shall be primary and noncontributory as
respects any insurance carried by Landlord. The policy or policies effecting such insurance shall
name Landlord as additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or invitees or otherwise
by any conduct or transactions of any of said persons in or about or concerning the Premises
including any failure of Tenant to observe or perform any of its obligations hereunder; shall be
issued by an insurance company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon thirty (30) days’
prior written notice to Landlord. A copy of said policy shall be delivered to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord’s Lender, insurance advisor,
or counsel, the amount of insurance described in this Paragraph 10 is not adequate, Tenant agrees
to increase said coverage to such reasonable amount as Landlord’s Lender, insurance advisor, or
counsel shall deem adequate.

     11. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE. Tenant shall
maintain a policy or policies of fire and property damage insurance in “all risk” form with a
sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement of such items so
insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE. Landlord shall purchase and keep in force, and as Additional Rent and
in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord Tenant’s proportionate
share (allocated to the leased premises by square footage or

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other equitable basis as calculated and determined by Landlord) of the cost of, policy or
policies of insurance covering loss or damage to the Premises (excluding routine maintenance and
repairs and incidental damage or destruction caused by accidents or vandalism for which Tenant is
responsible under Paragraph 7) in the amount of the full replacement value thereof, providing
protection against those perils included within the classification of “all risks” insurance and
flood and/or earthquake insurance, if available, plus a policy of rental income insurance in the
amount of one hundred (100%) percent of twelve (12) months Basic Rent, plus sums paid as Additional
Rent. If such insurance cost is increased due to Tenant’s use of the Premises, Tenant agrees to
pay to Landlord the full cost of such increase. Tenant shall have no interest in nor any right to
the proceeds of any insurance procured by Landlord for the Premises. See Paragraph 55.

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty; provided, however, that if the insurance policy of either
releasing party prohibits such waiver, then this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof.

     13. INDEMNIFICATION. Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, including, without limitation,
gas, fire, oil, electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises but excluding, however, the negligence of Landlord, its agents, servants,
employees, invitees, contractors of which negligence Landlord has knowledge and reasonable time to
correct. Except as injury to persons or damage of property the principal cause of which is the
negligence of the Landlord and subject to the last two sentences of Paragraph 12, Tenant shall hold
Landlord harmless from and defend Landlord against any and all expenses, including reasonable
attorney’s fees, in connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or any part thereof,
from any cause whatsoever.

     14. COMPLIANCE. Tenant at its sole cost and expense, shall promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now or hereafter in
effect; with the requirements of any board of fire underwriters of other similar body now or
hereafter constituted; and with any direction or occupancy certificate issued pursuant to law by
any public officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or rectify said failure.
The judgment of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement direction or provision shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its sole cost and
expense, comply with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability insurance covering
the Premises. See Paragraph 45 & 53.

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     15. LIENS. Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record. Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection therewith shall be
payable to Landlord by Tenant on demand with interest at the prime rate of interest as quoted by
the Bank of America.

     16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or hypothecate the leasehold
estate under this Lease, or any interest therein, and shall not sublet the Premises, or any part
thereof, or any right or privilege appurtenant thereto, or suffer any other person or entity to
occupy or use the Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the premises, with the prior written
consent of Landlord, no assignee, transferee or subtenant shall assign or transfer this Lease,
either in whole or in part, or sublet the whole or any part of the Premises, without also having
obtained the prior written consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not release Tenant from any
of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar or
dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other person.
Any such assignment, transfer, hypothecation, subletting, occupation or use without such consent
shall be void and shall constitute a breach of this Lease by Tenant and shall, at the option of
Landlord exercised by written notice to Tenant, terminate this Lease. The leasehold estate under
this Lease shall not, nor shall any interest therein, be assignable for any purpose by operation of
law without the written consent of Landlord. As a condition to its consent, Landlord may require
Tenant to pay all reasonable expenses in connection with the assignment, and Landlord may require
Tenant’s assignee or transferee (or other assignees or transferees) to assume in writing all of the
obligations under this Lease and for Tenant to remain liable to Landlord under the Lease. SEE
PARAGRAPHS 56 AND 57.

     17. SUBORDINATION AND MORTGAGES. In the event Landlord’s title or leasehold interest is now
or hereafter encumbered by a deed of trust, upon the interest of Landlord in the land and buildings
in which the demised Premises are located, to secure a loan from a lender (hereinafter referred to
as “Lender”) to Landlord, Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed or trust, or, if so
requested, agreeing that the lien of Lender’s deed of trust shall be or remain subject and
subordinate to the rights of Tenant under this Lease. Notwithstanding any such subordination,
Tenant’s possession under this Lease shall not be disturbed if Tenant is not in default and so long
as Tenant shall pay all rent and observe and perform all of the provisions set forth in this Lease.
See Paragraph 58.

     18. ENTRY BY LANDLORD. Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s): to submit the
Premises to prospective purchasers, mortgagors or tenants; to post notices of

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nonresponsibility; and to alter, improve or repair the Premises or other parts of the
building, all without abatement of rent, and may erect scaffolding and other necessary structures
in or through the Premises where reasonably required by the character of the work to be performed;
provided, however that the business of Tenant shall be interfered with to the least extent that is
reasonably practical. Any entry to the Premises by Landlord for the purposes provided for herein
shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into or
a detainer of the Premises or an eviction, actual or constructive, of Tenant from the Premises or
any portion thereof. See Paragraph 59.

     19. BANKRUPTCY AND DEFAULT. The commencement of a bankruptcy action or liquidation action or
reorganization action or insolvency action or an assignment of or by Tenant for the benefit of
creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant, shall, at
Landlord’s option, constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar action
elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in writing
of its election within thirty (30) days after an order for relief in a liquidation action or within
thirty (30) days after the commencement of any action.

     Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate assurance
of future performance, as used herein, includes, but shall not be limited to: (i) assurance of
source and payment of rent and other consideration due under this Lease (ii) assurance that the
assumption or assignment of this Lease will not breach substantially any provision, such as radius,
location, use, or exclusivity provision, in any agreement relating to the above described Premises.

     Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the benefit of creditors or
other similar act. Nothing contained in this Lease shall be construed as giving or granting or
creating an equity in the demised Premises to Tenant. In no event shall the leasehold estate under
this Lease, or any interest therein, be assigned by voluntary or involuntary bankruptcy proceeding
without the prior written consent of Landlord. In no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or reorganization
proceedings.

     The failure to perform or honor any covenant, condition or representation made under this
Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of written notice from
Landlord within which to cure any other default under this Lease. Upon an uncured default of this
Lease by Tenant Landlord shall have the following rights and remedies in addition to any other
rights or remedies available to Landlord at law or in equity:

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          (a) The rights and remedies provided for by California Civil Code Section 1951.2, including
but not limited to, recovery of 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 rental loss for the
same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b)
of said Section 1951.2.

          (b) The rights and remedies provided by California Civil Code Section which allows Landlord to
continue the Lease in affect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as Landlord does not terminate
Tenant’s right to possession, acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord’s initiative to protect its interest under this
Lease shall not constitute a termination of Tenant’s right to possession.

          (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable
law.

          (d) The right and power after compliance with all statutory requirements and in any event on
not less than three (3) business days prior written notice to enter the Premises and remove
therefrom all persons and property, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord may from time to time sublet the
Premises or any part thereof for such term or terms (which may extend beyond the term of this
Lease) and at such rent and such other terms as Landlord in its reasonable sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises. Upon each subletting
(i) Tenant shall be immediately liable to pay Landlord, in addition to indebtedness other than rent
due hereunder, the reasonable cost of such subletting, including, but not limited to, reasonable
attorneys’ fees, and any real estate commissions actually paid, and the cost of such reasonable
alterations and repairs incurred by Landlord and the amount, if any, by which the rent hereunder
for the period of such subletting (to the extent such period does not exceed the term hereof)
exceeds the amount to be paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment of indebtedness
other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such
subletting and of such alterations and repairs; third to payment of rent due and unpaid hereunder;
and the residue, if any, shall be held by Landlord and applied in payment of future rent as the
same becomes due hereunder. If Tenant has been credited with any rent to be received by such
subletting under option (i) and such rent shall not be promptly paid to Landlord by the
subtenant(s), or if such rentals received from such subletting under option (ii) during any month
be less than that to be paid during that month by Tenant hereunder. Tenant shall pay and such
deficient to Landlord. Such deficiency shall be calculated and paid monthly. No taking possession
of the Premises by Landlord shall be construed as an election on its part to terminate this Lease
unless a written notice of such intention be given to Tenant. Notwithstanding any such subletting
without termination, Landlord may at any time hereafter elect to terminate this Lease for such
previous breach.

          (e) The right to have a receiver appointed for Tenant upon application by Landlord, to take
possession of the Premises and to apply any rental collected from the

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Premises and to exercise all other rights and remedies granted to Landlord pursuant to
subparagraph d. above. See Paragraph 60.

     20. ABANDONMENT. Tenant shall not vacate or abandon the Premises at any time during the term
of this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be dispossessed
by the process of law, or otherwise, any personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord. See Paragraph 61.

     21. DESTRUCTION. In the event the Premises are destroyed in whole or in part from any cause,
except for routine maintenance and repairs and incidental damage and destruction caused from
vandalism and accidents for which Tenant is responsible under Paragraph 7. Landlord may, at its
option:

               (a) Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b) Terminate this Lease.

     If Landlord does not give Tenant notice in writing within thirty (30) days from the
destruction of the Premises of its election either rebuild and restore them or to terminate this
Lease, Landlord shall be deemed to have elected to rebuild or restore them, in which event Landlord
agrees, at its expense, promptly to rebuild or restore the Premises to their condition prior to the
damage or destruction. Tenant shall be entitled to a reduction in rent when such repair is being
made in the proportion that the area of the Premises rendered untenantable by such damage bears to
the total area of the Premises. If Landlord does not complete the rebuilding or restoration within
one hundred eighty (180) days following the date of destruction (such period of time to be extended
for delays caused by the fault or neglect of Tenant or because of Acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargos, rainy or stormy weather, inability to
obtain materials, supplies or fuels, acts of contractors or subcontractors, or delay of the
contractors or subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving fifteen (15) days
prior written notice to Landlord. Notwithstanding anything herein to the contrary. Landlord’s
obligation to rebuild or restore shall be limited to the building and interior improvements
constructed by Landlord as they existed as of the commencement date of the Lease and shall not
include restoration of Tenant’s trade fixtures, equipment, merchandise, or any improvements,
alterations or additions made by Tenant to the Premises, which Tenant shall forthwith replace or
fully repair at Tenant’s sole cost and expense provided this Lease is not cancelled according to
the provisions above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain
in full force and effect. Tenant hereby expressly waives the provisions of Section 1932,
Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

     In the event that the building in which the Premises are situated is damaged or destroyed to
the extent of not less than 33% of the replacement cost thereof. Landlord may elect to terminate
this Lease, whether the Premises be injured or not. In the event the destruction of the

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Premises is caused by Tenant, Tenant shall pay the deductible portion of Landlord’s insurance
proceeds. See Paragraph 62.

     22. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu thereof, the Lease
shall terminate as to any portion of the Premises so taken or conveyed on the date when title vests
in the condemnor and Landlord shall be entitled to any and all payment, income, rent, award, or any
interest therein whatsoever which may be paid or made in connection with such taking or conveyance,
and Tenant shall have no claim against Landlord or otherwise for the value of any unexpired term of
this Lease. Notwithstanding the foregoing paragraph, any compensation specifically awarded Tenant
for loss of business, Tenant’s personal property, moving cost or loss of goodwill shall be and
remain the property of Tenant.

     If any action or proceeding is commenced for such taking of the Premises or any part thereof,
or if Landlord is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall
have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60)
days of the date of receipt of said written advice or commencement of said action or proceeding, or
taking conveyance, which termination shall take place as of the first to occur of the last day of
the calendar month next following the month in which such notice is given or the date on which
title to the Premises shall vest in the condemnor.

     In the event of such a partial taking or conveyance of the Premises, if the portion of the
Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its
business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the
date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the calendar month next
following the month in which such notice is given, upon payment by Tenant of the rent from the date
of such taking or conveyance to the date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate the Lease as provided herein, this Lease shall continue
in full force and effect as to the part of the Premises not so taken or conveyed, and the rent
herein shall be apportioned as of the date of such taking or conveyance so that thereafter the rent
to be paid by Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking. See Paragraph 63

     23. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance of the Premises or
any interest therein, by any owner of the reversion then constituting Landlord, the transferor
shall thereby be released from any further liability upon any of the terms, covenants or conditions
(express or implied) herein contained in favor of Tenant, and in such event, insofar as such
transfer is concerned, Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. See Paragraph 64.

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     24. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of Landlord in the land
and buildings in which the leased Premises are located (whether such interest of Landlord is a fee
title interest or a leasehold interest is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale. Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term thereof at the same rental herein reserved and upon all the other
terms, conditions and conveyance herein contained.

     25. HOLDING OVER. Any holding over by Tenant after expiration or other termination of the
term of this Lease with the written consent of Landlord delivered to Tenant shall not constitute a
renewal or extension of the Lease or give Tenant any rights in or to the leased Premises except as
expressly provided in this Lease. Any holding over after the expiration or other termination of
the term of this Lease, with the consent of Landlord, shall be construed to be a tenancy from month
to month, on the same terms and conditions herein specified insofar as applicable except that the
monthly Basic Rent shall be increased to an amount equal to One Hundred Twenty-Five Percent (125%)
percent of the monthly Basic Rent required during the last month of the Lease term.

     26. CERTIFICATE OF ESTOPPEL. Either party shall at any time upon not less than ten (10) days
prior written notice from the other party, execute, acknowledge and deliver to the requesting
party, a statement in writing (i) 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 (ii) acknowledging that there are not, to the best of such party’s
knowledge, any uncured defaults on the part of the other party hereunder, or specifying such
defaults, if any, are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises. Tenant’s failure to deliver such statement
within such time shall be conclusive upon the party receiving such request that this Lease is in
full force and effect, without modification except as may be represented by Landlord; that there
are no uncured defaults in the requesting party’s performance, and that not more than one month’s
rent has been paid in advance.

     27. CONSTRUCTION CHANGES. It is understood that the description of the Premises and the
location of ductwork, plumbing and other facilities therein are subject to such minor changes as
Landlord or Landlord’s architect determines to be desirable in the course of construction of the
Premises, and no such changes shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of such drawing rests
with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of this Lease to be
performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s sole cost and
expense and without any reduction in rent. If Tenant shall fail to pay any sum of money, or other
rent, required to be paid by it hereunder or shall fail to

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perform any other term or covenant hereunder on its part to be performed, and such failure
shall continue for five (5) days after written notice thereof of Landlord. Landlord, without
waiving or releasing Tenant from any obligation of Tenant hereunder, may, but shall not be obliged
to, make any such payment or perform any such other term or covenant on Tenant’s part to be
performed. All sums so paid by Landlord and all necessary costs of such performance by Landlord
together with interest thereon at the rate of the prime rate of interest per annum as quoted by the
Bank of America from the date of such payment on performance by Landlord, shall be paid (and Tenant
covenants to make such payment) to Landlord on demand by Landlord, and Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies in the event of
nonpayment by Tenant as in the case of failure by Tenant in the payment of rent hereunder.

     29. ATTORNEYS’ FEES.

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the breach of any
provision of this Lease, or for any other relief against the other party hereunder, then all costs
and expenses, including reasonable attorneys’ fees incurred by the prevailing party therein shall
be paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action an shall be enforceable whether or not the
action is prosecuted to judgment.

          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

     30. WAIVER. The waiver by either party of the other party’s failure to perform or observe any
term, covenant or condition herein contained to be performed or observed by such waiving party
shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent failure
of the party failing to perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the parties hereto during
the term hereof shall be deemed a waiver of, or in any way, affect the right of either party to
insist upon performance and observance by the other party in strict accordance with the terms
hereof.

     31. NOTICES. All notices, demands, requests, advices or designations which may be or are
required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advices or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises or if sent by
United States certified or registered mail, postage prepaid, addressed to Tenant at the Premises.
All notices, demands, requests, advices or designations by Tenant to Landlord shall be sent by
United States certified or registered mail, postage prepaid, addressed to Landlord at its offices
at Peery/Arrillaga 2560 Mission College Boulevard, Suite 101, Santa Clara, CA 95054. Each notice,
request, demand advice or designation referred to in this paragraph shall be deemed received on the
date of the personal service or mailing thereof in the manner herein provided, as the case may be.

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     32. EXAMINATION OF LEASE. Submission of this instrument for examination or signature by
Tenant does not constitute a reservation of or option for a lease, and this instrument is not
effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event earlier than (30) days
after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations; provided, however,
that if the nature of Landlord’s obligations is such that more than thirty (30) days are required
for performance, then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY. If Tenant is a corporation (or a partnership), each individual
executing this Lease on behalf of said corporation (or partnership) represents and warrants that he
is duly authorized to execute and deliver this Lease on behalf of said corporation (or partnership)
in accordance with the by-laws of said corporation (or partnership in accordance with the
partnership agreement) and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty (30) days after
execution of this Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this Lease.

     35. INTENTIONALLY LEFT BLANK

     36. LIMITATION OF LIABILITY. In consideration of the benefits accruing hereunder, Tenant and
all successors and assigns covenant and agree that in the event of any actual or alleged failure,
breach or default hereunder by Landlord:

               (a) the sole and exclusive remedy shall be against Landlord and Landlord’s assets;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction of the partnership);

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process;

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

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               (g) no writ of execution will ever be levied against the assets of any partner of Landlord;

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreements either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS. No sign, placard, picture advertisement, name or notice shall be inscribed,
displayed or printed or affixed on or to any part of the outside of the Premises or any exterior
windows of the Premises without the written consent of Landlord, first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or
in any way place a sign in, on or about the Premises, upon expiration or other sooner termination
of this Lease, Tenant, at Tenant’s sole cost and expense shall both remove such sign and repair all
damage in such a manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign. All approved signs or lettering on outside doors
shall be printed, painted, affixed or inscribed at the expense of Tenant by a person reasonably
approved of by Landlord.

     Tenant shall not place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.

     38. MISCELLANEOUS AND GENERAL PROVISIONS.

          A. Use of Building Name. Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

          B. Choice of Law: Severability. This Lease shall in all respects be governed by and
construed in accordance with the laws of the State of California any provision of this Lease shall
be invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof
shall be and remain in full force and effect.

          C. Definition of Terms. The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as
well as the singular and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof, and the provisions of this Lease shall inure to the benefit of and
bind such heirs, executors, administrators, successors and permitted assigns.

     The term “person” includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations. Words used in any gender include other genders. If

18

 

there be more than one Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.

          D. Time of Essence. Time is of the essence of this Lease and of each and all of its
provisions.

          E. Quitclaim. At the expiration or earlier termination of this Lease. Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim deed or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

          F. Incorporation of Prior Agreements, Amendments. This agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.

          G. Recording. Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit D.

          H. Amendments for Financing. Tenant further agrees to execute any amendments reasonably
required by a lender to enable Landlord to obtain financing, so long as Tenant’s rights hereunder
are not materially and adversely affected and there is no change in the Basic Rent, Options to
Renew, Lease Term or Construction obligations of Landlord.

          I. Additional Paragraphs. Paragraphs 39 through 65 are added hereto and are included as a
part of this Lease.

          J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          K. Diminution of Light. Air or View. Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect his Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant.

19

 

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

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA	 	 	 	QUANTUM CORPORATION,
	SEPARATE PROPERTY TRUST	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ John Arrillaga
	 	 	 	By
	 	  /s/ Joseph C. Shepela
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title
	 	   VP Human Resources
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY	 	 	 	 	 	 
	SEPARATE PROPERTY TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ Richard Peery	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	
	 	Richard T. Peery, Trustee	 	 	 

20

 

Paragraphs 39 through 65 to Lease Agreement Dated October 31, 1989, By and Between JOHN ARRILLAGA
AND RICHARD T. PEERY SEPARATE PROPERTY TRUSTS, as Landlord, and QUANTUM CORPORATION, a Delaware
corporation, as Tenant for 155,734 ± Square Feet of Space Located at the corner of Bellew and
Magnolia Drive, Milpitas, California.

     39. BASIC RENT: In accordance with Paragraph 4A, subject to the provisions of
Paragraph 40 and 41, Basic Rent shall be payable as follows during the indicated months of the term
of the Lease based upon the gross leasable area within the building that is part of the Premises:

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-17 $1.00/sf
(plus the partial calendar
month, if any, following
the Commencement Date)
	 	$1.00/sf
	 
	 	 	 	 
	Months 18-29
	 	$1.05/sf
	 
	 	 	 	 
	Months 30-41
	 	$1.10/sf
	 
	 	 	 	 
	Months 42-53
	 	$1.15/sf
	 
	 	 	 	 
	Months 54-65
	 	$1.20/sf
	 
	 	 	 	 
	Months 66-77
	 	$1.25/sf
	 
	 	 	 	 
	Months 78-89
	 	$1.30/sf
	 
	 	 	 	 
	Months 90-101
	 	$1.35/sf
	 
	 	 	 	 
	Months 102-113
	 	$1.40/sf
	 
	 	 	 	 
	Months 114-125
	 	$1.45/sf
	 
	 	 	 	 
	Months 126-137
	 	$1.50/sf
	 
	 	 	 	 
	Months 138-149
	 	$1.55/sf
	 
	 	 	 	 
	Months 150- 161
	 	$1.60/sf
	 
	 	 	 	 
	Months 162-173
	 	$1.65/sf
	 
	 	 	 	 
	Months 174-185
	 	$1.70/sf

     Example of calculation for Basic Rent per month for the period commencing with the
first through the seventeenth month of said Lease:

21

 

	 	 	 	 	 
	Square footage of Building
	 	 	155,734	 
	Per square foot Basic Monthly Rent:
	 	 	x$1.00	 
	 
	 	 	 
	Basic Rent per Month:
	 	$	155,734	 
	 
	 	 	 

     40. BASIC RENT REDUCTION DURING PHASE IN PERIOD: For the period commencing on
[Illegible] basis. In the event Tenant does not occupy the entire building from the Commencement
Date of this Lease, it is agreed that Tenant’s monthly Basic Rent will be reduced by $1.00 per
square foot on the square footage not occupied. This reduction in Basic Rent is only allowed from
the Commencement Date through May 31, 1991 (but not under any circumstances after May 31, 1991).
In no event whatsoever shall Tenant be entitled to such reduction in rent and this Paragraph 40
shall not be considered in effect and binding on Landlord after May 31, 1991 regardless of the
Commencement Date of this Lease and regardless of the reason for any delays in the Commencement
date of this Lease. In the event Tenant occupies the Premises on a phased in basis in accordance
with the foregoing, Landlord and Tenant agree to execute an amendment to this Lease reflecting the
number of square feet so occupied and adjusting the Basic Rent accordingly. It is further agreed
that during the phase-in period Tenant will be responsible for paying all Additional Rent expense
as outlined in Paragraph 4D on the entire building from the Commencement Date.

     41. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as
defined herein) and shall continue for a period of fifteen (15) years and five (5) months, plus the
partial calendar month, if any, in which the Commencement Date occurs, subject to (i) earlier
termination in accordance with the provisions of this Lease, and (ii) extension pursuant to the
options to renew granted by Paragraphs 42 and 43. By way of example only, if the Commencement Date
occurs on December 15, 1990, the term of the Lease shall continue until May 30, 2006 (i.e., a
period of 15 years and 5 calendar months, along with the partial calendar month following December
15, 1990 until December 31, 1990).

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean
the later to occur of the following: (i) the date upon which the “Improvements” are “Substantially
Completed”; or (ii) December 15, 1990; provided, however, that if prior to the later of such dates
Tenant’s operating personnel enter into occupancy of the Premises and commence the operation of
Tenant’s business within the Premises, the Commencement Date shall be the date such personnel of
Tenant so enter into occupancy of the Premises. The term “Substantially Completed” and/or
“Substantial Completion” shall mean the date when all of the following have occurred with respect
to the Improvements in question: (i) the construction of the Improvements in question has been
substantially completed in accordance with the approved plans therefor except for punch list items
which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business; (ii)
Landlord. has executed a certificate or statement representing that the Improvements in question
have been substantially completed in accordance with the plans and specifications therefor except
for punch list items which do- net prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; and (iii) the Building Department of the City of Milpitas has completed its
final inspection of such Improvements and has “signed off” the building inspection card approving
such work as complete except for punch list items which do not prevent Tenant from reasonably using
the

22

 

Premises to conduct Tenant’s business. Notwithstanding the foregoing, Substantial Completion
of the Interior Improvements shall not be deemed to have occurred until Landlord has obtained final
or conditional approval from the Fire Department of the City of Milpitas that the Improvements have
been completed in accordance with such department’s requirements (subject only to conditions that
do not prevent Tenant from occupying the Improvements).

          C. Lease Terms Co-Extensive: It is acknowledged that [Illegible] adjacent property
upon which is to be constructed a building for Tenant’s use consisting of approximately 176,516
square feet (the “Companion Lease”), and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Companion Lease, such that the terms of both leases
expire on the same date. To that end, in the event that following the date upon which the
Commencement Date of this Lease and the comparable “Commencement Date” of the Companion Lease
become established as a date certain following completion of improvements and satisfaction of any
other conditions related to determining such dates, and if such dates are not the same, then
whichever date occurs later shall be the expiration date of the lease term for both leases (subject
to the right of Tenant to extend either lease pursuant to the options to extend granted in the two
leases). It is acknowledged that the implementation of this paragraph may result in an extension
of the term of this Lease, in which event Tenant shall continue to pay rent at the rate applicable
for the period immediately prior to the adjusted lease term expiration date. As soon as the
parties are able to implement the provisions of this paragraph because the Commencement Date of
this Lease and “Commencement Date” of the Companion Lease have been determined following completion
of improvements and satisfaction of other appropriate conditions, the parties shall execute
amendments to this Lease and the Companion Lease establishing the applicable Commencement Date, the
expiration date of the term of the leases in accordance with the foregoing provisions of this
Paragraph 41C, the actual rent based upon the measurements of the completed building covered by
such lease as certified prior to the Commencement Date by an architect or general contractor
reasonably approved by the parties, and the actual date for each rent adjustment provided for in
each lease, based upon the actual Commencement Date.

     42. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions:

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at least one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 42 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option asset forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

23

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly
	Period	 	Basic Rent
	Months
	 	 	1-12	 	 	$1.75/sf
	Months
	 	 	13-24	 	 	$1.80/sf
	Months
	 	 	25-36	 	 	$1.85/sf
	Months
	 	 	37-48	 	 	$1.90/sf
	Months
	 	 	49-60	 	 	$1.95/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to renew
granted by this Paragraph 42 at any time that Tenant is in material default of its obligations
under this Lease, if [Illegible] cured within the time period provided for in this Lease; provided,
however, that if such default of Tenant is not for money due under this Lease and cannot be cured,
and if Landlord does not elect to terminate this Lease as a result of such non-curable default by
Tenant, Tenant may exercise the option to extend granted by this Paragraph 42 notwithstanding such
non-curable default.

     43. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 42, Landlord hereby grants to Tenant an
option to extend the term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 42, in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this Paragraph 43A and subject
to the rental as set forth below. In the event that Tenant fails to timely exercise Tenant’s
option as set forth herein in writing, Tenant shall have no further option to extend this Lease,
and this Lease shall continue in full force and effect for the full remaining term hereof, absent
this Paragraph 43.

          B. The monthly rental for the option period shall be as follows in the event the option is
exercised:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly
	Period	 	Basic Rent
	Months
	 	 	1-12	 	 	$2.00/sf
	Months
	 	 	13-24	 	 	$2.05/sf
	Months
	 	 	25-36	 	 	$2.10/sf
	Months
	 	 	37-48	 	 	$2.15/sf
	Months
	 	 	49-60	 	 	$2.20/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 43 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this

24

 

Lease; provided, however, that if such default of Tenant is not for money due under this Lease
and cannot be cured, and if Landlord does not elect to terminate this Lease as a result of such
non-curable default by Tenant, Tenant may exercise the option to extend granted by this Paragraph
43 notwithstanding such non-curable default.

     44. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide for
construction contingencies and reserve funds. Interest will be earned on such funds created for
contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be credited on assessments otherwise due against the
demised premises, Tenant shall pay to Landlord, as additional [ Illegible].

     45. HAZARDOUS MATERIALS: The parties agree as follows with respect to the existence
or use of hazardous material on the Premises:

          A. Tenant shall have no obligation to “clean up”, to comply with any law regarding, or to
reimburse, release, indemnify, or defend Landlord with respect to any hazardous materials or wastes
which Tenant or other parties on the Premises did not store, dispose, or transport in, use, or
cause to be on the Premises in violation of applicable law during the term of this Lease. Any
handling, transportation, storage, treatment, disposal or use of hazardous materials by Tenant or
other parties in or about the Premises during the term of this Lease shall strictly comply with all
applicable laws and regulations. Tenant will be 100 percent liable and responsible for any and all
“clean up” of said toxic waste and/or hazardous materials contamination which Tenant, its agents,
or future subtenants, if any, does store, dispose, or transport in, use or-cause to be on the
Premises in violation of applicable law or governing agency(s) (or which originate on the Premises
during the term of this Lease from any manner whatsoever, including but not limited to, dumping by
others), and will indemnify Landlord and hold Landlord harmless from any liabilities, demands,
costs, expenses and damages, including attorney fees incurred as a result of any claims resulting
from such contamination, or from any claims for personal injury or property damage or diminution in
the value of the Premises caused by the use, storage, disposal or transportation of hazardous
materials on the Premises by Tenant or other parties during the term of this Lease. It is agreed
that the Tenant’s responsibilities related to toxic waste and hazardous materials will survive the
termination date of the Lease. Tenant agrees to complete compliance with governmental regulations
regarding use or removal or remediation of Hazardous Materials used, stored, disposed, transported
or caused to be on the Premises by Tenant or its agents or subtenants, or which originate on the
Premises during the term of this Lease, and prior to the termination of said Lease Tenant agrees to
follow the proper closure procedures and will obtain a clearance from the local fire department
and/or the appropriate city agency. Tenant also agrees to install such toxic waste and/or
hazardous materials monitoring devices as Landlord reasonably deems necessary to monitor any use of
hazardous materials by Tenant, its agents or subtenants, originating from the Premises during the
Lease term, if recommended by a qualified environmental consulting firm.

25

 

          B. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this Lease, without any
inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

               (1) The soil and ground water on or under the Premises does not contain hazardous materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such hazardous materials.

               (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the presence of hazardous
material on the Premises, or (iii) any pending investigation by any governmental agency concerning
the Premises relating to hazardous materials.

          C. Landlord [Illegible] received from any governmental authority concerning hazardous
materials which relates to the Premises, and (ii) any contamination of the Premises by hazardous
materials which constitutes a violation of any law. Attached as Exhibit “C”, hereto is a
list of hazardous materials that Tenant intends to use at the Premises. If during the Lease term
Tenant proposes to use other hazardous materials at the Premises, Tenant shall inform Landlord of
such use, identifying the hazardous materials and the manner of their use, storage and disposal,
and shall agree (i) to use, store and dispose of such materials strictly in compliance with all
laws and (ii) that the indemnity set forth in paragraph 45A shall be applicable to Tenant’s use of
such material.

          D. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of hazardous material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid for by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
hazardous materials laws, or Tenant or parties on the Premises during the term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to hazardous materials
laws, or that Tenant has liability to Landlord pursuant to paragraph 45A, then Tenant shall pay for
100% of the cost of the test and all related expense. Prior to the expiration of the Lease term,
Tenant shall remove any testing wells it has installed at the Premises, and return the Premises to
the condition existing prior to the installation of such wells, unless Landlord requests in writing
that Tenant leave all or some of the testing wells in which instance the wells requested to be left
shall not be removed.

          E. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
hazardous materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such materials at the Premises. The
Commencement Date shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.

26

 

          F. The obligations of Landlord and Tenant under this Paragraph 45 shall survive the expiration
or earlier termination of the term of this Lease. The rights and obligations of Landlord and
Tenant with respect to issues relating to hazardous materials are exclusively established by this
Paragraph 45.

     46. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall not be
unreasonably withheld or delayed.

     47. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can commence.
Therefore, it is agreed that in the event Landlord cannot obtain all the necessary building permits
for the building shell by June 1, 1990, then either Landlord or Tenant can terminate this Lease by
written notice to the other party given within thirty (30) days thereafter, without any liability
to the other party of any type whatsoever, and that this Lease Agreement will be null and void as
of the date of receipt of such notice. Landlord agrees to use its best efforts to obtain the
required permits by June 1, 1990.

     48. CROSS DEFAULT: As set forth in Paragraph 41C, Landlord and Tenant have entered
into another lease dated October 31, 1989 referred to herein as the “Companion Lease” affecting
property contiguous to the Premises leased hereunder. As a material part of the consideration for
the execution of this Lease by Landlord, it is agreed between Landlord and Tenant that a default
under this Lease, or a default under said Companion Lease dated October 31, 1989 may, at the option
of Landlord, be considered a default under both leases, in which event Landlord shall be entitled
(but in no event required) to apply all rights and remedies of Landlord under the terms of one
Lease to both Leases including, but not limited to, the right to terminate one or both of said
leases by reason of a default under said Companion Lease dated October 31, 1989 or hereunder.

     49. SUBDIVISION: With respect to the development of the Premises:

          A. The parties acknowledge that as of the date this Lease is signed by the last party (the
“Effective Date”) the Premises is not constituted as a separate legal parcel, but is part of a
larger parcel consisting of approximately 37.096 acres (“Larger Parcel”), all of which is shown by
the site plan attached to the lease as Exhibit “A”. Landlord agrees to use reasonable
efforts to cause the Premises to be constituted as a separate legal parcel containing approximately
10.531 acres in the approximate area and configuration shown and outlined within the area marked in
red on Exhibit “A”, and to use reasonable efforts to cause lot 2, as shown on Exhibit
“A” to the companion Lease and lots 3 through 5 as shown on Exhibit “A” to the Option
Agreement (the “Option”) between Landlord and Tenant of even date herewith to be subdivided by
means of the recordation of a subdivision map by July 1, 1990. In causing such property to be
subdivided, Landlord and Tenant agree to consent to reasonable lot line modifications as required
by the City of Milpitas; provided, however, that the configuration of the Premises shall be
established in such manner that does not result in a material reduction in the Improvements or in
parking, access, or landscape amenities which are shown on the site plan attached to this Lease as
Exhibit “A”. Tenant agrees to reimburse Landlord for actual expenses paid by Landlord in
the

27

 

preparation, processing and recordation of such subdivision map and to meet other requirements
necessary to make said lots 1-5 separate lots; provided, however, Tenant’s total reimbursement
obligation pursuant hereto, the Companion Lease and the Option shall not exceed Twenty Five
Thousand Dollars ($25,000). At such time is Landlord causes any such subdivision to be completed,
Landlord and Tenant shall execute an amendment to this Lease which shall set forth the description
of the Premises resulting from the subdivision.

          B. Landlord and Tenant agree that the Premises and the Larger Parcel during (and limited to)
the term of this Lease shall be developed and used only in accordance with a master plan, developed
by Landlord. The parties have mutually agreed to a Master Plan for the general development of the
entire 37.096 ± acre site which is attached hereto as Exhibit “A” and entitled “Master Site
Plan”. Said Master Site Plan sets forth the buildings and land to be leased under this Lease and
the Companion Lease (Building 1 and 2 on Lots 1 and 2), and the buildings and land proposed to be
developed on the remainder of the property (Building 3, 4, and 5 to be constructed on Lots 3, 4,
and 5 respectively) as well as the general location of the parking and landscaping pertaining
thereto. The parties agree that the Master Site Plan may be modified provided that (i) a perimeter
driveway is developed in front of each building which generally runs near and parallel with the
street surrounding the 37 ± acre site, (ii) a landscape and recreation area at the rear of Lot 4 (as
shown on the Site Plan) is developed when a building is constructed on Lot 4 [Illegible] streets
between the street and parking area closest to the street. The parties agree that (i) Landlord may
change the master plan, shape and sizes of the buildings, parking and landscaping as long as the
general development concept set forth above is generally followed by Landlord, and (ii) any
successor or assign of Landlord or Tenant shall be required to consent and agree to develop the
Premises and the Larger Parcel in accordance with the foregoing, and shall be deemed to have
assumed the obligation to so develop such property by acceptance of a deed, assignment or other
means of transfer of Landlord’s or Tenant’s interest in such property or any portion thereof, as
the case may be. Further, the memorandum of lease to be recorded by Landlord and Tenant pursuant
to paragraph 38G shall contain the following statement:

“The Lease provides that from and after the commencement date of the Lease and
continuing for a period of fifteen years, whichever first occurs, the Premises and
the larger 37.096 acre parcel in which the Premises were originally included, shall
be developed by the parties to the Lease or their successors or assigns, as more
particularly set forth in the Lease, so that (i) a perimeter, driveway is developed
in front of each building which generally runs near and parallel with the street
surrounding the 37 ± acre site, (ii) a landscape area is developed along the frontage
of all streets between the street and parking area closest to the street, (iii) a
landscape and recreation area at the rear of Lot 4 (as shown on the Site Plan
identified in the Lease) is developed when a building is constructed on Lot 4, and
(iv) all buildings will be similar and generally architecturally compatible, it
being agreed that Landlord may change the shape and sizes of the buildings, parking
and landscaping as long as the general development concept set forth above and in
the Lease is generally followed by Landlord. Tenant understands that the lots shown
on the Master Site Plan described in the Lease are for lease purposes only and that
the lots have not been legally subdivided and do not constitute separate legal lots,
but Landlord agrees to use reasonable efforts to cause Lots 1-5 to be

28

 

subdivided in accordance with the approved Master Plan by July 1, 1990. If a Public
Agency requires modifications to the lot lines as shown on the Master Plan, the
parties agree to reasonable lot line modifications. Tenant agrees to reimburse
Landlord for actual expenses paid by Landlord in the processing and recordation of
such subdivision map and to meet all other requirements necessary to make said Lots
1-5 separate lots; provided, however, Tenant’s total reimbursement obligation
(pursuant to all agreements between Landlord and Tenant) shall in no event exceed
Twenty-Five Thousand Dollars ($25,000.00).”

     50. LIMITATION ON IMPOSITION OF LATE CHARGE: Notwithstanding anything contained in
Paragraph 4C, if Tenant is delinquent in the payment of Basic Rent or Additional Rent and is
subject to a late charge, Landlord agrees to waive the late charge if the Basic Rent or Additional
Rent due is paid within five days of Landlord’s written notice to Tenant of the delinquent amount
owed and provided Tenant has not been delinquent in its payment of Basic Rent or Additional Rent
owed under said Lease during the twelve (12) month period preceding the rent delinquency in
question.

     51. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4F:

          A. Within thirty (30) days after the expiration or earlier [Illegible] Deposit except for
amounts that Landlord has deducted therefrom that are needed by Landlord to cure defaults of Tenant
under the Lease or compensate Landlord for damages for which Tenant is liable pursuant to this
Lease. The use or disposition of the Security Deposit shall be subject to the provisions of
California Civil Code Section 1950.7.

          B. Tenant shall have the option of satisfying its obligation with respect to an amount equal
to one-half (1/2) of the Security Deposit by providing to Landlord, at Tenant’s sole cost, a letter
of credit which (i) is drawn upon an institutional lender reasonably acceptable to Landlord, (ii)
is in the amount of one-half (1/2) of the Security Deposit, (iii) is for a term of at least twelve
(12) months, (iv) with respect to any letter of credit in effect within the six month period
immediately prior to the expiration of the Lease term, shall provide that the term of such letter
of credit shall extend at least thirty (30) days past the Lease expiration date, (v) may be drawn
upon by Landlord upon submission of a declaration of Landlord that Tenant is in default (as defined
in Paragraph 19 and as modified by Paragraph 60). Landlord shall not be obligated to furnish proof
of default to such institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit, (vi) shall provide that if the
letter of credit is not renewed, replaced or extended within twenty (20) days of its expiration
date the issuer of the credit shall automatically make payment of the amount of the letter of
credit directly to Landlord after the date which is twenty (20) days before the expiration date,
and no later than the expiration date, without Landlord being required to make demand upon the
letter of credit, and (vii) is otherwise in form and content reasonably satisfactory to Landlord.
If Tenant provides Landlord with a letter of credit meeting the foregoing requirements, one-half
(1/2) of the cash Security Deposit (i.e., $210,240.90 of the $420,481.80

29

 

Deposit) shall be returned to Tenant by Landlord inasmuch as the cash deposit remaining and
the Letter of Credit equal the total Security Deposit required in Paragraph 4F. If Tenant defaults
with respect to any provisions of this Lease, including but not limited to provisions relating to
the payment of rent, Landlord may (but shall not be required to) draw down on the letter of credit
for payment of any sum which Landlord may spend or become obligated to spend by reason of Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord may suffer by reason of
Tenant’s default. Landlord and Tenant acknowledge that such letter of credit will be treated as if
it were a cash security deposit, and such letter of credit may be drawn down upon by Landlord upon
demand and presentation of evidence of the identity of Landlord to the issuer, in the event that
Tenant defaults with respect to any provision of this Lease and such default is not cured within
any applicable cure period. Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to furnish proof of default to such institutional lender and Landlord is only
required to give the institutional lender written notification that Tenant is in default and upon
receiving such written notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant’s default, or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant’s default up to 1/2 of the total Security Deposit.
Landlord acknowledges that it is not entitled to draw down such letter of credit unless Landlord
would have been entitled to draw upon the cash security deposit pursuant to the terms of Paragraph
4.F of the Lease. Concurrent with the delivery of the [Illegible] the default upon which the draw
down was based, together with evidence that Landlord has provided to Tenant the written notice of
such default which was required under the applicable provision of the Lease, and evidence of the
failure of Tenant to cure such default within the applicable grace period following receipt of such
notice of default. Any proceeds received by Landlord by drawing upon the letter of credit shall be
applied in accordance with the provisions governing the Security Deposit imposed by Paragraph 4F
and this Paragraph 51. If Landlord draws upon the letter of credit, thereafter Tenant shall once
again shall have the right to post a letter of credit in place of one-half (1/2) of a cash Security
Deposit so long as Tenant is not then in default. In any event Tenant will be obligated to
replenish the amount drawn to restore the Security Deposit to its original amount as provided for
in paragraph 4F. If any portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from Landlord, restore and
replace the value of such security by either (i) depositing cash with Landlord in the amount equal
to the sum drawn down under the letter of credit, or (ii) increasing the letter of credit to its
value immediately prior to such application. Tenant’s failure to replace the value of the security
as provided in the preceding sentence shall be a material breach of its obligation under this
Lease.

     52. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 52 shall modify
Paragraphs 5 and 6:

          A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include Tenant’s trade
fixtures so long as such trade fixtures are not installed in such a manner that they have become an
integral part of the building.

          B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval if the total cost of such Alterations exceeds $20,000

30

 

per the scope of any single remodeling job to the Premises, or if such Alteration is
structural in nature. Any other non-structural Alteration of less than $20,000 for the total cost
of the remodeling job may be undertaken by Tenant without Landlord’s prior written approval but
with the understanding that Tenant shall be obligated to restore the Premises as set forth in
Paragraph 5 at the termination of this Lease, except as otherwise provided in Paragraph 52.D.
Notwithstanding the foregoing, Tenant shall have the right to reconfigure modular freestanding
walls and partitions without Landlord’s prior consent, which have been installed by Tenant and paid
for by Tenant.

          C. At all times during the Lease Term (i) Tenant shall maintain and keep up dated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

          D. Tenant shall have the right to remove at any time during the Lease term or prior to the
expiration thereof any (i) process equipment such as clean hoods, thermal cycling chambers, freon
piping, high temperature furnaces, air handlers and special air-conditioning, (ii) process systems
such as compressed air or processed exhaust systems and (iii) the clean room modules and all
related process equipment which are paid for 100% by Tenant (excluding building standard HVAC,
electrical, plumbing and other building standard systems which are an integral part of the building
not related to Tenant’s clean room modules or other [Illegible] Lease shall be deemed to be trade
fixtures, so long as Tenant repairs all damage caused by the installation and/or removal thereof,
returns the Premises prior to the termination of the Lease to the condition existing prior to the
installation of such item, and repairs and restores any so-called “doughnuts” or gaps in the roof
and/or floor tiles and/or ceiling and lighting resulting from such removal. At the time Tenant
requests the consent of Landlord to approve the installation of an Alteration requiring the consent
of Landlord, Tenant shall seek from Landlord a written statement of whether or not Landlord will
require Tenant to remove such Alteration and restore all or part of the Premises as required by
Landlord in accordance with this paragraph and Paragraph 5 at the expiration or earlier termination
of the term of the Lease. If Tenant does not obtain from Landlord a statement in writing that
Landlord will not require such Alteration to be removed, then at the expiration or sooner
termination of the term of the Lease, it is agreed that Tenant may be required to remove all or
part of such Alterations, and return the Premises to the condition existing prior to the
installation of such Alterations as provided for in Paragraph 5 above. In addition, if Tenant has
installed Alterations without Landlord’s consent, if Landlord so requires, Tenant shall also remove
all or part of such Alterations so installed without Landlord’s consent as Landlord may designate
and return the Premises to the condition existing prior to the installation of such Alteration.
Alterations for which Landlord has given its written consent to Tenant that such Alteration need
not be removed, shall not be removed by Tenant at the expiration or earlier termination of the term
of the Lease.

          E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such fixtures and repairs and restores any so
called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-floor and
appropriate floor covering for said area) and/or floor tiles and/or ceiling tiles and lighting
resulting from such removal.

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     53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF THIS
LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 42 and 43, or during either of the five (5) year extension
periods permitted by Paragraphs 42 and 43, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural improvements required by
laws enacted or legal requirements imposed by governmental agency(s) after the Commencement Date,
and the cost for each required work or improvement exceeds $100,000, then if such legal requirement
is not imposed because of Tenant’s specific use of the Premises and is not “triggered” by Tenant’s
Alterations or Tenant’s application for a building permit or any other governmental approval (in
which instance Tenant shall be responsible for 100% of the cost of such improvements), Landlord
shall be responsible for paying the cost of such improvement and constructing such improvement,
subject to a cash contribution from Tenant of a portion of the cost thereof as provided for and
calculated in Paragraph 53B.

          B. When Landlord makes an improvement pursuant to Paragraph 53A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost therefore prior to the [Illegible] 100% of the cost or the first
$100,000.00 worth of each improvement. After the first $100,000.00, all costs above $100,000.00
shall be divided by 15 and multiplied by the time period remaining in the last five years of the
Lease term from the date work on such improvement commences.

     For example, if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be responsible for
reimbursing Landlord in cash $130,000 computed as follows:

	 	 	 	 	 	 	 	 	 
	Total Cost of Work
	 	 	 	 	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	 	 	 	 	-100.000.00	 
	 
	 	 	 	 	 	 	 
	Total Amount To Be Amortized
	 	 	 	 	 	 	300,000.00	 
	 
	 	 	 	 	 	 	 	 
	$300,000.00/15
— $20,000/yr. x 1.5 yrs
	 	 	=	 	 	$	30,000.00	 
	 
	 	 	 	 	 	 	 	 
	Tenant responsible for $100,000 + 30,000
	 	 	=	 	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 53B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 42 or 43, upon the exercise of
any such option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total amount
of said improvement less the amount previously paid for by Tenant. Using the example in Paragraph
53B above, Tenant would owe Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00).

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     54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of hazardous materials on the Premises unless directly
related to Tenant’s activities, which subject is exclusively governed by Paragraph 45.

          B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond. If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on Tenant’s part to pay
such Real Property Taxes being so contested shall not constitute a default so long as Tenant
complies with the provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord. In that case Landlord shall join
in the proceedings or contest or permit it to be brought in Landlord’s name as long as Landlord is
not required to bear any cost. Tenant, on final determination of the proceeding or contest, shall
immediately pay or discharge its share of any Real Property Taxes determined by any decision or
judgment rendered, together with all costs, charges, interest, and penalties incidental to the
[Illegible] contests them as provided in this paragraph, before the commencement of the proceeding
or contest Tenant shall furnish to Landlord a surety bond in form reasonably satisfactory to
Landlord issued by an insurance company qualified to do business in California. The amount of the
bond shall equal 125% of the total amount of Real Property Taxes in dispute and any such bond shall
be assignable to any lender or purchaser of the Premises. The bond shall hold Landlord and the
Premises harmless from any damage arising out of the proceeding or contest and shall insure the
payment of any judgment that may be rendered.

     55. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

          A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga and Richard T. Peery Separate
Property Trusts or an affiliated entity; (ii) the insurance to be carried by Tenant to satisfy this
requirement strictly complies with all of the provisions of Paragraph 12; (iii) such insurance
shall name Landlord as the insured and provide that it is to be payable to Landlord in the same
manner as if such insurance had been carried by Landlord pursuant to Paragraph 12 (subject to the
rights of any lender holding a mortgage or deed of trust encumbering the Premises); (iv) each
lender holding a mortgage or deed or trust encumbering the Premises shall have given its written
consent to Tenant carrying such insurance and such insurance shall comply with the requirements of
any such lender; (v) Tenant must notify Landlord, by certified mail, no later than one hundred
eighty (180) days prior to the expiration

33

 

date of Landlord’s insurance policy (which expiration date is currently 3/13/xx of a given
year and is subject to change), that Tenant will directly obtain the required insurance coverage
for the insurance year commencing 3/14/XX through 3/13/XX and each insurance year through the
termination data of this Lease, or until Tenant is no longer able to comply with all of the
provisions of this paragraph 55; (vi) the annual premium must be paid in full at the commencement
of the policy; (vii) the insurance policy must be issued for a one-year period following the
expiration date of Landlord’s insurance policy (i.e., from 3/14/XX to 3/13/XX); (viii) any
and all deductibles required under the policy will be paid entirely by Tenant; (ix) the terms of
the coverage must be broad form and cover all items to be covered as set forth in Paragraph 12 of
this Lease; (x) the Building and Premises must be insured for their full replacement cost; (xi) the
insurance policy containing the required coverage in accordance with the provisions of this
paragraph must be sent to Landlord for retention within thirty (30) days prior to the expiration
date of Landlord’s insurance policy, and may not be terminated or altered without thirty (30) days
written notice to Landlord by the company providing such insurance (it is agreed that if the
insurance policy is cancelled or altered, Landlord will have the right to obtain the property
insurance coverage on said building, and Landlord will bill the Tenant for the related insurance
premium); and (xii) at all times while Tenant is so carrying such insurance, Tenant is Quantum
Corporation or a successor entity and the then net worth of such corporation is substantially the
same as the net worth of Quantum Corporation as of the date of this Lease is executed by Landlord
and Tenant. Tenant shall provide such evidence as is required by Landlord and any lender to
establish that the insurance that Tenant carries pursuant to this Paragraph 55 has been obtained
and meets the requirement of this Paragraph 55. Such insurance carried by Tenant shall be in form
and provided by an insurance company that is reasonably acceptable to Landlord, which must be rated
“A plus” or better by Best’s Insurance Service (or an equivalent rating from anther rating agency
should Best’s no longer provide [Illegible] insurance provided by Tenant does not satisfy the
requirements of paragraph 12, in the event of a subsequent casualty, Tenant shall be responsible
for and shall pay for that portion of the restoration cost, in excess of the insurance proceeds
actually available, that would have been covered by insurance satisfying the requirements of
paragraph 12.

          B. Tenant shall not obligated to contribute to the cost of earthquake insurance more than an
amount equal to six (6) times the then annual cost of fire and “all risk” insurance per year. For
example, if the 1993 annual premium for fire and “all risk” insurance is $9,000, then Tenant’s
share of the cost of any premium for earthquake insurance for the following year (1994) shall be
limited to $54,000 ($9,000 x 6). Tenant shall have the right to require earthquake insurance
providing it is available if Tenant agrees to pay full cost thereof.

     56. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i) to withhold its
consent to such assignment or sublease, as permitted pursuant to Paragraph 16, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its

34

 

obligations under the Lease, and the following shall apply (except the following shall not
apply to a “Permitted Transfer” described in Paragraph 57):

               (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all consideration received by
Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant under this
Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing commissions paid
to third parties not affiliated with Tenant in order to obtain the assignment or sublease in
question.

               (2) (If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the rental provided for in this Lease fifty percent (50%) of the positive difference,
if any, between (i) all rent and other consideration paid by the subtenant to Tenant, less (ii) all
rent paid by Tenant to Landlord pursuant to this Lease which is allocable to the area so sublet and
all Permitted Transfer Costs related to such sublease. After Tenant has recovered all Permitted
Transfer Costs Tenant shall pay to Landlord the amount specified in the preceding sentence on the
same basis, whether periodic or in lump sum that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by Tenant.

               (3) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the right to inspect
Tenant’s books and records relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to [Illegible]

               (4) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received, by Tenant as a result of the assignment or sublease, if such sums are
paid for Tenant’s interest in this Lease or in the Premises.

     57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 16, so long as Tenant otherwise complies with the provisions of Paragraph 16 and the
Permitted Transfer does not release Tenant from its obligations hereunder, Tenant may enter into
any of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent,
and the provisions of Paragraph 56A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of rent and full performance of the lease;

          B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
95% of all assets of Tenant are permanently transferred to such assignee.

35

 

In the event there is not a permanent transfer of 95% or more of the assets and liabilities
from Tenant to a third party, and Tenant continues to exist as a separate entity, both companies
shall be jointly and severally liable for the full terms and conditions of the Lease;

          C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets of Tenant are permanently transferred to
such assignee (in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of the Lease).

     58. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or
deed of trust enters into a written subordination, non-disturbance and attornment agreement in
which the Lender agrees that notwithstanding any subordination of this Lease to such Lender’s
mortgage or deed of trust, (i) such Lender shall recognize all of Tenant’s rights under this Lease,
and (ii) in the event of a foreclosure this Lease shall not be terminated so long as Tenant is not
in material default of its obligations under this Lease, but shall continue in effect and Tenant
and such Lender (or any party acquiring the Premises through such foreclosure) shall each be bound
to perform the respective obligations of Tenant and Landlord with respect to the Premises arising
after such foreclosure.

     59. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (i)
except in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior
to entering the Premises, agrees to comply with any reasonably safety and/or security regulations
imposed by Tenant with respect to such entry, and shall only enter the Premises when accompanied by
Tenant or its agent (so long as Tenant makes itself reasonably available for this purpose), and
(ii) Landlord may install “for lease” signs relating to the Premises only during the last 150 days
of the Lease term. Landlord agrees to use [Illegible].and invitees shall be performed in a manner
with as minimal interference as possible with Tenant’s business at the Premises. Subject to the
foregoing, Tenant agrees to cooperate with Landlord and Landlord’s agents, employees and
contractors so that responsibilities of Landlord under the Lease can be fulfilled in a reasonable
manner during normal business hours so that no extraordinary costs are incurred by Landlord.

     60. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30) days is
required to cure such non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

     61. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is
performing all of its other obligations under the Lease including the obligation to pay Basic Rent
and Additional Rent, (ii) Tenant provides on-site security during normal business hours for those
parts of the Premises left vacant, (iii) such vacancy does not materially and adversely affect the

36

 

validity or coverage of any policy of insurance carried by Landlord with respect to the
Premises, and (iv) the utilities and heating and ventilation system are operated to the extent
necessary to prevent damage to the Premises or its systems.

     62. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Except as provided in Paragraph 62B, Landlord may not terminate the Lease if the Premises
are damaged by a peril that is covered by the insurance carried by Landlord pursuant to Paragraph
12, but instead shall restore the Premises in the manner described by Paragraph 21.

          B. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of the
following conditions is satisfied: (i) the cost to repair or the damage exceeds thirty-three
percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs at a time
when there is less than five (5) years remaining in the term of the Lease. Notwithstanding the
foregoing, if such damage occurs at a time when there is less than five (5) years remaining in the
term of the Lease and Landlord notifies Tenant of Landlord’s election to terminate the Lease
pursuant to the provisions of this Paragraph 62B, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 42 or 43 such that the remaining term of the Lease
(including the option period) will be more than five (5) years following the date of such damage,
this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise of an
option to extend granted to Tenant by either Paragraph 42 or 43. In such event, this Lease shall
not terminate, the term shall be so extended, and Landlord shall restore the Premises in the manner
provided in Paragraph 21.

          C. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the [Illegible] completed. Tenant shall have the option to terminate
this Lease in the event any of the following occurs, which option may be exercised only by delivery
to Landlord of a written notice of election to terminate within seven (7) days after Tenant
receives from Landlord the estimate of the time needed to complete such restoration:

               (1) The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage; or

               (2) The Premises are damaged by any peril within twelve (12) months of the last day of the
Lease term and provided Tenant has not exercised an option to renew pursuant to the provisions of
Paragraph 42 or 43, and, in the reasonable opinion of Landlord’s architect or construction
consultant, the restoration of the Leased Premises cannot be substantially completed within sixty
(60) days after the date of such damage.

     63. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than 1/3 of the building is taken by condemnation
or if a taking by condemnation is only threatened.

37

 

     64. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the Security Deposit
to its successor in interest (transferee) in accordance with the provisions of California Civil
Code Section 1950.7, as amended or recodified.

     65. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably required by any
supplier, lessor, or lender in connection with the installation in the Premises of the Tenant’s
personal property or trade fixtures providing Landlord approves the form of any such waiver and
Landlord’s rights under this Lease are not materially and adversely affected.

	 	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION	 	 	 	JOHN ARRILLAGA SEPARATE PROPERTY
	a Delaware corporation	 	 	 	TRUST
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ Joseph C. Shepela
	 	 	 	By
	 	  /s/ John Arrillaga
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	John Arrillaga, Trustee
	 
	 	 	 	 	 	 	 	 
	By	 	  VP Human Resources	 	 	 	RICHARD T. PEERY SEPARATE PROPERTY
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TRUST
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	  /s/ Richard Peery
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Richard T. Peery, Trustee

38

 

AMENDMENT NO. 1

     THIS AMENDMENT NO. 1 is made and entered into this 24th day of April, 1990, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE
PROPERTY TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated
7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, as LANDLORD, and QUANTUM
CORPORATION, a Delaware corporation, as TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989, Landlord leased to Tenant all of that
certain 155,734 ± square foot building located at Bellew Drive and Magnolia Drive, Milpitas,
California, the details of which are more particularly set forth in said October 31, 1989 Lease
Agreement, and

     B. WHEREAS, it is now the desire of the parties hereto to amend said Lease to reflect the
delay of the Commencement Date of the Lease from December 15, 1990 to April 1, 1991 and to amend
the Basic Rent schedule accordingly; deletion of the Phase In Right of said Lease; and commencement
of payment of Additional Rent as of December 15, 1990; as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. LEASE TERM AND COMMENCEMENT DATE: Paragraph 41.B. of the Lease is amended by
changing the reference to the December 15, 1990 Commencement Date to April 1, 1991. Subject
paragraph will be amended to read as follows:

     “B. Commencement Date Defined: As used herein, the term “Commencement Date” shall
mean the later to occur of the following: (i) the date upon which the “Improvements” are
“Substantially Completed”; or (ii) April 1, 1991; provided, however, that if prior to the later of
such dates Tenant’s operating personnel enter into occupancy of the Premises and commence the
operation of Tenant’s business within the Premises, the Commencement Date shall be the date such
personnel of Tenant so enter into occupancy of the Premises. The term “Substantially Completed”
and/or “Substantial Completion” shall mean the date when all of the following have occurred with
respect to the Improvements in question: (i) the construction of the Improvements in question has
been substantially completed in accordance with the approved plans therefore except for punch list
items which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business;
(ii) Landlord has executed a certificate or statement representing that the Improvements in
question have been substantially completed in accordance with the plans and specifications
therefore except for punch list items which do not prevent Tenant from reasonably using the
Premises to conduct Tenant’s business; and (iii) the Building Department of the City of Milpitas
has completed its final inspection of such Improvements and has “signed off” the building
inspection card approving such work as complete except for punch list items

1

 

which do not prevent Tenant from reasonably using the Premises to Conduct-Tenant’s business.
Notwithstanding the foregoing, Substantial Completion of the Interior Improvements shall not be
deemed to have occurred until Landlord has obtained final or conditional approval from the Fire
Department of the City of Milpitas that the Improvements have been completed in accordance with
such department’s requirements (subject only to conditions that do not prevent Tenant from
occupying the Improvements).”

     2. DELETION OF “BASIC RENT REDUCTION DURING PHASE IN PERIOD”: As a material
inducement to Landlord to postpone the commencement of the Lease Agreement, Paragraph 40 shall be
deleted in its entirety, and Tenant will be responsible for paying Basic Rent to Landlord, from the
Commencement Date of said Lease, on the entire 155,734 ± square foot building.

     3. COMMENCEMENT OF PAYMENT OF ADDITIONAL RENT: Notwithstanding the commencement date
of this Lease as stated above, Tenant shall be responsible for paying one hundred percent (100%) of
the Additional Rent Expenses as outlined in Paragraph 4.D. of said Lease Agreement for the entire
155,734+ square foot Lease Premises commencing December 15, 1990.

     4. BASIC RENT SCHEDULE: Furthermore, as Landlord is accommodating Tenant in deferring
the Commencement Date of said Lease from December 15, 1990 to April 1, 1991, the parties have
agreed that the Basic Rent increases will be calculated from December 15, 1990 and that Paragraph
39 “Basic Rent” of said Lease Agreement shall be amended as follows:

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-13
	 	$1.00/sf
	Months 14-25
	 	$1.05/sf
	Months 26-37
	 	$1.10/sf
	Months 38-49
	 	$1.15/sf
	Months 50-61
	 	$1.20/sf
	Months 62-73
	 	$1.25/sf
	Months 74-85
	 	$1.30/sf
	Months 86-97
	 	$1.35/sf
	Months 98-109
	 	$1.40/sf
	Months 110-121
	 	$1.45/sf
	Months 122-133
	 	$1.50/sf

2

 

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months 134-145
	 	$1.55/sf
	Months 146-157
	 	$1.60/sf
	Months 158-169
	 	$1.65/sf
	Months 170-185
	 	$1.70/sf

     5. LANDLORD’S RIGHT TO TERMINATE: Paragraph 47 of the Lease is amended by deleting
the references to June 1, 1990 and adding in lieu thereof references to August 1, 1990. Subject
paragraph will be amended to read as follows:

     “It is understood that the Premises to be leased by Tenant are to be constructed by Landlord,
and that Landlord is required to obtain the necessary building permits for the building shell
before construction of said Premises can commence. Therefore, it is agreed that in the event
Landlord cannot obtain all the necessary building permits for the building shell by August 1, 1990,
then either Landlord or Tenant can terminate this Lease by written notice to the other party given
within thirty (30) days thereafter, without any liability to the other party of any the whatsoever,
and that this Lease Agreement will be null and void as of the date of receipt of such notice.
Landlord agrees to use its best efforts to obtain the required permits by August 1, 1990.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year first hereinabove set forth.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE	 	 	 	QUANTUM CORPORATION	 	 
	PROPERTY TRUST	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Joseph C. Shepala	 	 
	 

	 	 

John Arrillaga, Trustee
	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 	 	Title: 	 	VP Human Resources 
	 
	 	 	 	 	 	 	 	 	 	 
	By	 	/s/ Richard Peery	 	 	 	Dated: 	 	6/12/90
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 

3

 

AMENDMENT No. 2

     THIS AMENDMENT NO. 2 is made and entered into this 26th day of June, 1991, by and between JOHN
ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY
TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77
(RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, as LANDLORD, and QUANTUM CORPORATION, a
Delaware corporation, as TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to Tenant all of that
certain 155,734 ± square foot building located at 1130 Bellew Drive Milpitas, California, the
details of which are more particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, the Lease was amended by Amendment No. 1 dated April 24, 1990 to delay the
Commencement Date of the Lease from December 15, 1990 to April 1, 1991, and

     C. WHEREAS, the Lease was amended by Commencement Letter dated March 4, 1991 to commence the
Lease March 1, 1991, and

     D. WHEREAS, it is now the desire of the parties hereto to: (1) extend the Term for two (2)
months so the termination date of said Lease will coincide with the termination date of the
“Companion Lease” (additional premises leased from Landlord at 490 McCarthy Blvd., Milpitas,
California); and (2) amend the Basic Rent schedule and aggregate Rent of said Lease Agreement as
hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: Pursuant to Lease Paragraph 41.C. “Lease Terms Co-extensive”, it is
agreed between the parties that the term of said Lease Agreement shall be extended for an
additional two (2) months and the Lease termination date is hereby extended from July 31, 2006 to
September 30, 2006.

     2. BASIC RENTAL FOR EXTENDED TERM OF LEASE: The monthly Basic Rental for the Extended
Term of the Lease shall be as follows:

     On August 1, 2006 the sum of TWO HUNDRED SIXTY FOUR THOUSAND SEVEN HUNDRED FORTY SEVEN AND
80/100 DOLLARS ($264,747.80) shall be due, and a like sum due on the first day of each month
thereafter, through and including September 1, 2006.

     The aggregate rental for the lease shall be increased by $529,495.60 or from $39,058,087.20 to
$39,587,582.80.

1

 

     3. OPTION TO EXTEND PURSUANT TO PARAGRAPHS 42 AND 43 OF THE LEASE: Pursuant to
Paragraph 42 “First Five-Year Option to Extend” and Paragraph 43 “Second Five-Year Option to
Extend”, the latest dates Tenant may exercise its first and second five-year options to extend, as
specified in the aforementioned Paragraphs, are April 3, 2006 and April 3, 2011, respectively.

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the
day and year first hereinabove set forth.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE	 	 	 	QUANTUM CORPORATION
	PROPERTY TRUST	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Joseph C. Shepala
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 	 	Title:
	 	 VP Human Resources
	 
	 	 	 	 	 	 	 	 
	By	 	/s/ Richard Peery	 	 	 	Dated:
	 	7/19/91
	 

	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 

2

 

Quantum 2

AMENDMENT NO. 3

TO LEASE

     THIS AMENDMENT NO. 3 is made and entered into this 16th day of April, 1997, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/7’ (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware corporation, as
TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to Tenant all of that
certain 155,734 ± square foot building located at 1140 Technology Drive, Milpitas, California, the
details of which are more particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Letter Agreement dated October 31, 1989 which provided
for a Basic Rent Credit for the period commencing with the Lease Commencement Date and ending on
May 31, 1991, and

     C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24, 1990 which canceled the
reduction in Basic Rent Credit Letter dated October 31, 1989, and which delayed the Lease
Commencement Date from December 15, 1990 to April 1, 1991, and,

     D. WHEREAS, said Lease was amended by the Commencement Letter dated March 4, 1991 which
changed the Commencement Date of the Lease from April 1, 1991 to March 1, 1991, and established the
Termination Date of July 31, 2006, and,

     E. WHEREAS, said Lease was amended by Amendment No. 2 dated June 26, 1991 which extended the
Term of the Lease for an additional two month period, amended the Basic Rent schedule and Aggregate
Rent accordingly; and amended the deadlines in which Tenant could exercise its Optics to Extend
pursuant to Lease Paragraphs 42 and 43, and

     F. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) extending the
Term for five years, changing the Termination Date from September 30, 2006 to September 30, 2011,
(ii) amending the Basic Rent schedule and Aggregate Rent accordingly, (iii) adding a third Five
Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms Co-extensive”) and 48 (“Cross
Default”) and 53 (“Structural Capital Costs Regulated by Governmental Agencies After the
Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises” (v)
amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or replacing certain
provisions of the Lease commencing as of the commencement of the Third Extended Term of said Lease
as hereinafter set forth.

1

 

Quantum 2

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: It is agreed between the parties that Tenant has exercised its
First Five-Year Option to Extend the lease term of that certain lease agreement dated March 23,
1994 for premises located at 1101 Sumac Drive, Milpitas, California (the “Building 5 Lease”), as
detailed in Paragraph 41 of said Building 5 Lease. Paragraph 40C of said Building 5 Leases
provides that in the event the term of said Building 5 Lease is extended for any reason whatsoever,
the terms of the Existing Leases (i.e. two of said leases dated October 31, 1989 are for Premises
located at 1140 Technology Drive and 500 McCarthy Blvd., Milpitas, California (the “1989 Leases”);
one of said leases dated September 17, 1990 is for Premises located at 1000 Sumac Drive, Milpitas,
California) and one of said leases dated April 10, 1992 is for Premises located at 900 Sumac Drive,
Milpitas, California) shall also be extended so that all five Leases expire on the same date;
therefore, it is agreed between the parties that by exercising its Option to Extend the Building 5
Lease, Tenant has in effect exercised its Option to Extend under Lease Paragraph 42 (“First
Five-Year Option to Extend”), and that pursuant to said Lease Paragraph 42, the Term of this Lease
Agreement shall he extended for an additional five (5) year period, and the Lease Termination Date
shall be changed from September 30, 2006 to September 30, 2011.

     2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic Rental for the
First Extended Term of Lease shall be as follows:

     On October 1, 2006, the sum of TWO HUNDRED SEVENTY TWO THOUSAND FIVE HUNDRED THIRTY FOUR AND
50/100 DOLLARS ($272,534.50) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2007.

     On October 1, 2007, the sum of TWO HUNDRED EIGHTY THOUSAND THREE HUNDRED TWENTY ONE AND 20/100
DOLLARS ($280,321.20) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2008.

     On October 1, 2008, the sum of TWO HUNDRED EIGHTY EIGHT THOUSAND ONE HUNDRED SEVEN AND 90/100
DOLLARS ($288,107.90) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2009.

     On October 1, 2009, the sum of TWO HUNDRED NINETY FIVE THOUSAND EIGHT HUNDRED NINETY FOUR AND
60/100 DOLLARS ($295,894.60) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2010.

     On October 1, 2010, the sum of THREE HUNDRED THREE THOUSAND SIX HUNDRED EIGHTY ONE AND 30/100
DOLLARS ($303,681.30) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2011.

     The Aggregate Basic Rent for the Lease shall be increased by $17,286,474.00 or from
$39,587,582.80 to $56,874,056.80.

2

 

Quantum 2

     3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period pursuant to Lease Paragraph 43 (“Second Five Year Option To
Extend”), Landlord hereby grants to Tenant a third option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term as extended pursuant
to Lease Paragraph 43 (“Second Five Year Option To Extend”), in which event the Lease shall be
considered extended for an additional five (5) year period upon the same terms and conditions as
this Lease, absent this Paragraph 3 and subject to the Rental as set forth below. In the event
that Tenant fails to timely exercise Tenant’s option as set forth herein in writing, Tenant shall
have no further option to extend this Lease or the Other Leases, and this Lease shall continue in
full force and effect for the full remaining term hereof, absent this Paragraph 3.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months

	 	1-12
	 	$2.25/sf
	Months

	 	13-24
	 	$2.30/sf
	Months

	 	25-36
	 	$2.35/sf
	Months

	 	37-48
	 	$2.40/sf
	Months

	 	49-60
	 	$2.45/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 3 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 3 notwithstanding such non-curable default.

     4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C (“Lease Terms Co-extensive”) is
hereby deleted in its entirety and replaced with the following:

     “40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i) Landlord
and Tenant have previously executed four separate leases in addition to this Lease:
one of said leases dated October 31, 1989 is for Premises located at 500 McCarthy
Blvd., Milpitas, California (the “Building Two Lease”); one of said leases dated
September- 17, 1990 is for Premises located at 1000 Sumac Drive, Milpitas,
California (the “Building Four Lease”); one of said leases dated April 10, 1992 is
for Premises located at 900 Sumac Drive, Milpitas, California (the “Building 3
Lease”); and one of said leases dated March 23, 1994 is for premises

3

 

Qunatum 2

located at 1101 Sumac Drive, Milpitas, California (the “Building 5 Lease”)
(hereinafter collectively referred to as the “Other Leases”); and (ii) it is the
intention of the parties that the term of this Lease be co-extensive with the term
of the Other Leases, such that the terms of all five leases (“the Leases”) expire on
the same date. The provisions of this Paragraph 40C also requires the terms of all
the Leases to be extended accordingly if Tenant exercises its Option to Extend under
any of the Leases. The monthly Basic Rent during the extended term under each of
the Leases shall be increased by $.05 per square foot on the commencement date of
the extended term and thereafter on each and every anniversary of the respective
lease’s commencement date of the extended term.”

     5. CROSS DEFAULT: Lease Paragraph 48 (“Cross Default”) is hereby deleted in its
entirety and replaced with the following:

     “48. CROSS DEFAULT: It is agreed between Landlord and Tenant that a
default under this Lease, or a default under any of the Other Leases may, at the
option of Landlord, be considered a default under all Leases, in which event
Landlord shall be entitled (but in no event required) to apply all rights and
remedies of Landlord under the terms of one lease to all the Leases including, but
not limited to, the right to terminate any or all of the aforementioned Other Leases
or this Lease by reason of a default under the Leases or hereunder.

     Notwithstanding the above, Landlord shall have the option of considering a default
under this Lease or a default under any of the Other Leases to be a default under all such
leases, only with respect to such leases under which Landlord is also the ‘Landlord’ at the
time such default occurs. By way of example, if at the time a default of Tenant occurs
under this Lease, Landlord has sold the premises described in any of the Other Leases and is
no longer the ‘Landlord’ thereunder, then a default under this Lease shall not
constitute a default under any of such Other Leases so sold by Landlord (unless the premises
leased under this Lease and the Other Leases are sold to the same entity), and a default by
Tenant under any of such Other Leases so sold by Landlord shall not constitute a
default under this Lease or any other of the Other Leases then remaining between Landlord
and Tenant. However, if the Landlord under this Lease and the Other Leases is one in the
same at the time of said default, said cross default provisions shall apply.”

     6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANTS USES OR REMODELING OF THE PREMISES: Lease Paragraph
53 (“Structural Capital Costs Regulated by Governmental Agencies after the Commencement of this
Lease Not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) is hereby deleted and
replaced with the following:

     53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODLING OF THE
PREMISES: The provisions of this Paragraph 53 shall modify Paragraphs 7 and 14:

4

 

Quantum 2

     A. If (i) during the last five (5) years of the First Extended Term of the Lease if
said Lease has not been extended as provided for in Lease Paragraph 43 (“Second Five Year
Option To Extend”) or in Paragraph 3 (“Third Five Year Option to Extend”) or Paragraph 4
(“Lease Terms Co-Extensive”) above, or (ii) during either of the five (5) year extension
periods permitted by Lease Paragraph 43 or Paragraph 3, or Paragraph 4 above, it becomes
necessary (due to any governmental requirement for continued occupancy of the Premises) to
make structural improvements required by laws enacted or legal requirements imposed by
governmental agency(s) after the Commencement Date, and the cost for each required work or
improvements exceeds $100,000, then if such legal requirement is not imposed because of
Tenant’s specific use of the Premises and is not “triggered” by Tenant’s Alterations or
Tenant’s application for a building permit or any other governmental approval (collectively
“Tenant’s Actions”) in which instance Tenant shall be responsible for 100% of the cost of
such improvements, Landlord shall be responsible for paying the cost of such improvement and
constructing such improvement, subject to a cash contribution from Tenant of a portion of
the cost thereof as provided for and calculated in Paragraph 53B.

     B. When Landlord makes an improvement pursuant to Paragraph 53A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following
contribution in cash to Landlord for the cost thereof prior to the commencement of the work
by Landlord. It is agreed that Tenant shall pay to Landlord 100% of the cost of the first
$100,000.00 worth of each improvement. After the first $100,000.00, all costs above
$100,000.00 shall be divided by 15 and multiplied by the time period remaining in the last
five years of the Lease Term from the date work on such improvement commences.

     For example, if the improvement is not required as a result of Tenant’s Action and if
the cost of such improvement was $400,000 and there was one year and six months remaining in
the Lease term when the work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	-100.000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 - $20,000/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + 30,000 =
	 	$	130,000.00	 

     C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the
cost thereof pursuant to Paragraph 53B, and the term of this Lease is subsequently extended
pursuant to the exercise by Tenant of an option to renew pursuant to Lease Paragraph 43 or
Paragraph 3 above, upon the exercise of any such option by Tenant, Tenant shall pay to
Landlord an additional sum equal to the total amount of said

5

 

Quantum 2

     improvement less the amount previously paid for by Tenant. Using the example in
Paragraph 53B above, Tenant would owe Landlord the additional amount of $270,000.00
($400,000.00 — $130,000.00 = $270,000.00).”

     7. PROPERTY INSURANCE: Lease Paragraph 12 (“Property Insurance”) is hereby an to
include the following: “Tenant acknowledges that as part of the cost of insurance policies for the
Premises, Tenant is responsible for the payment of insurance deductibles on insurance claims as
they relate to the Premises subject to the limitations provided in Lease Paragraph 55 (“Property
Insurance”) which limitations are applicable only during the initial Lease Term and the First Lease
Extension Period and the Second Lease Extension Period. Said limitation provided for in Lease
Paragraph 55 are null and void at the commencement of the Third Lease Extended Term”.

     8. THIRD OPTION PERIOD — LEASE PROVISION CHANGES: In the event Tenant exercises its
Third Option to Extend as provided for in Paragraph 3 above, the following amendments (contained
within Paragraphs 9 through 19) are herein made to the Lease to be effective upon the commencement
of the third option period (“Third Option Period”), or during any period following expiration of
the Lease Term or expiration of the Lease when Tenant is in possession of the Premises.

     9. LATE CHARGE: Effective as of the first day of the Third Option Period, the Late
Charge referenced in Lease Paragraph 4.D (“Late Charge”) shall be changed from five percent (5%) to
ten percent (10%), and Lease Paragraph 50 (“Limitation on Late Charge”) shall be deleted in its
entirety and of no further force or effect.

     10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the Lease, effective
as of the first day of the Third Option Period, and on the first day of each month thereafter,
Tenant shall pay to Landlord, in addition to the Basic Rent and Additional Rent, a fixed monthly
manage fee (“Management Fee”) equal to one percent (1%) of the Basic Rent due for each month during
the Lease Term.

     11. HAZARDOUS MATERIALS: Effective as of the first day of the Third Option Period Lease
Paragraph 45 (“Hazardous Materials”) shall be deleted in its entirety and replaced with the
following:

     “45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
the existence or use of “Hazardous Materials” (as defined herein) on, in, under or about the
Premises and real property located beneath said Premises, which includes the entire parcel
of land on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the “Property”):

     A. As used herein, the term “Hazardous Materials shall mean any material, waste,
chemical, mixture or byproduct which is or hereafter is defined, listed or designated under
Environmental Laws (defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome, hazardous, toxic,
biohazardous, or radioactive material, waste, chemical, mixture or byproduct, or which is
listed, regulated or restricted by any Environmental

6

 

Quantum 2

Law (including, without limitation, petroleum hydrocarbons or any distillates or
derivatives or fractions thereof, polychlorinated biphenyls, or asbestos). As used herein,
the term “Environmental Laws” shall mean any applicable Federal, State of California or
local government law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement, or approval, or any determination, judgment,
directive, or order of any executive or judicial authority at any level of Federal, State of
California or local government (whether now existing or subsequently adopted or promulgated)
relating to pollution or the protection of the environment, ecology, natural resources, or
public health and safety.

     B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s Hazardous
Materials Activities (defined below). Landlord acknowledges that Tenant shall use, in
compliance with applicable Environmental Laws, customary household and office supplies
(Tenant shall first provide Landlord with a list of said materials use), such as mild
cleaners, lubricants and copier toner. Any and all of Tenant’s Hazardous Materials
Activities shall be conducted in conformity with this Paragraph, 45, Paragraph 14 of this
Lease, and in compliance with all Environmental Laws and regulations. As used herein, the
term “Tenant’s Hazardous Materials Activities” shall mean any and all use, handling,
generation, storage, disposal, treatment, transportation, release, discharge, or emission of
any Hazardous Materials on, in, beneath, to, from, at or about the Property, in connection
with Tenant’s use of the Property, or by Tenant or by any of Tenant’s agents, employees,
contractors, vendors, invitees, visitors or its future subtenants or assignees or other
third parties (including “dumping” by others) (or which Hazardous Materials originate on the
surface of the Premises any time on or after the Commencement Date of this Lease, but
excluding Hazardous Materials on the Premises prior to the Lease Commencement Date because
of the storage, use, disposal, or transportation of such materials or waste by any of
Landlord’s contractors or otherwise arising out of construction work performed by or under
the direction of Landlord on the Premises and Landlord shall be responsible for all required
actions with respect to such materials or wastes). Tenant agrees to provide Landlord with
prompt written notice of any spill or release of Hazardous Materials at the Property during
the term of the Lease of which Tenant becomes aware, and further agrees to provide Landlord
with prompt written notice of any violation of Environmental Laws in connection with
Tenant’s Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s
Hazardous Materials Activities involve Hazardous Materials other than normal use of
customary household and office supplies, Tenant also agrees at Tenant’s expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as may be
required by Environmental Laws, regulations and/or governing agencies; (ii) to provide
Landlord with a written inventory of such Hazardous Materials, including an update of same
each year upon the anniversary date of the Commencement Date of the Lease (“Anniversary
Date”); and (iii) on each Anniversary Date to provide to Landlord copies of all
documentation and records, required by applicable Environmental Laws to be prepared and
submitted to governmental authorities, relating to use at the Property of Hazardous
Materials or to Tenant’s Hazardous Materials Activities, if any. If upon completion of
Landlord’s review of said documentation and records, Landlord reasonably questions if Tenant
is in compliance with all applicable Environmental Laws with respect to Tenant’s Hazardous
Materials Activities, Tenant agrees within thirty (30) days following receipt of

7

 

Quantum 2

written notice from Landlord, to retain a qualified environmental consultant,
acceptable to Landlord, to evaluate whether Tenant is in compliance with all applicable
Environmental Laws with respect to Tenant’s Hazardous Materials Activities. Tenant, at its
expense, shall submit to Landlord a report from such environmental consultant which
discusses the environmental consultant’s findings within two (2) months of each Anniversary
Date. Tenant, at its expense, shall promptly undertake and complete any and all steps
necessary, and in full compliance with applicable Environmental Laws, to fully correct any
and all problems or deficiencies identified by the environmental consultant, and promptly
provide Landlord with documentation of all such corrections.

     C. Prior to termination or expiration of the Lease, Tenant, at its expense, shall (i)
properly remove from the Property all Hazardous Materials which come to be located at the
Property in connection with Tenant’s Hazardous Materials Activities, and (ii) fully comply
with and complete all facility closure requirements of applicable Environmental Laws
regarding Tenant’s Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure activities, and
(y) obtaining from the local Fire Department or other appropriate governmental authority
with any legal or regulatory jurisdiction a written concurrence that closure has been
completed in compliance with applicable Environmental Laws. Tenant shall promptly provide
Landlord with copies of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any such closure activities.

     D. If Landlord, upon consultation with Tenant, reasonably concludes that Property has
become contaminated as a result of Tenant’s Hazardous Materials Activities, Landlord in
addition to any other rights it may have under this Lease or under Environmental Laws or
other laws, may enter upon the Property and conduct inspection, sampling and analysis,
including but not limited to obtaining and analyzing samples of soil and groundwater, for
the purpose of determining the nature and extent of such contamination except to the extent
that such activities may be inconsistent with Tenant’s compliance with Environmental Laws.
Tenant shall promptly reimburse Landlord for the costs of such an investigation, including
but not limited to reasonable attorneys’ fees Landlord incurs with respect to such
investigation to the extent, and only to the extent, that it that discloses Hazardous
Materials contamination for which Tenant is liable under this Lease. Except as may be
required of Tenant by applicable Environmental Laws, Tenant shall not perform any sampling,
testing, or drilling to identify the presence of any Hazardous Materials at the Property,
without Landlord’s prior written consent which shall not be unreasonably withheld. Tenant
shall promptly provide Landlord with copies of any claims, notices, work plans, data and
reports prepared, received or submitted in connection with any sampling, testing or drilling
performed pursuant to the preceding sentence.

     E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord, whose
consent shall not unreasonably be withheld) and hold harmless Landlord, its employees,
assigns, successors, successors-in-interest, agents and representatives from and against any
and all claims (including but not limited to third party claims from a private party or a
government authority), liabilities, obligations,

8

 

Quantum 2

losses, causes of action, demands, governmental proceedings or directives, fines,
penalties, expenses, costs (including but not limited to reasonable attorneys’, consultants’
and other experts’ fees and costs), and damages, which arise from or relate to: (i)
Tenant’s Hazardous Materials Activities; (ii) any Hazardous Materials contamination caused
by Tenant prior to the Commencement Date of the Lease; or (iii) the breach of any obligation
of Tenant under this Paragraph 45 (collectively, “Tenant’s Environmental Indemnification”).
Tenant’s Environmental Indemnification shall include but is not limited to the obligation to
promptly and fully reimburse Landlord for losses in or reductions to rental income, and
diminution in fair market value of the Property. Tenant’s Environmental Indemnification
shall further include but is not limited to the obligation to diligently and properly
implement to completion, at Tenant’s expense, any and all environmental investigation,
removal, remediation, monitoring, reporting, closure activities, or other environmental
response action as may be required by applicable Environmental Laws, regulations or
governing agencies (collectively, “Response Actions”). Tenant shall promptly provide
Landlord with copies of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.

     F. Landlord hereby makes the following representations to Tenant, each of which is made
only to the best of Landlord’s knowledge as of the date Landlord executes this Lease,
without any inquiry or investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make inquiry regarding the
subject:

          (1) The soil and ground water on or under the Premises does not contain Hazardous
Materials in amounts which violate any laws to the extent that any governmental entity could
require either Landlord or Tenant to take any remedial action with respect to such Hazardous
Materials.

          (2) During the time that Landlord has owned the Premises, Landlord has received no
notice of (i) any violation, or alleged violation, of any law that has not been corrected to
the satisfaction of the appropriate authority, (ii) any pending claims relating to the
presence of Hazardous Material on the Premises, or (iii) any pending investigation by any
governmental agency concerning the Premises relating to Hazardous Materials.

     G. Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any governmental authority
concerning Hazardous Materials which relates to the Premises, and (ii) any contamination of
the Premises by Hazardous Materials which constitutes a violation of any law. Attached as
Exhibit “C” to the Lease is a list of Hazardous Materials that Tenant intends to use
at the Premises. If during the Lease Term Tenant proposes to use other Hazardous Materials
at the Premises, Tenant shall inform Landlord of such use, identifying the Hazardous
Materials and the manner of their use, storage disposal, and shall agree (i) to use, store
and dispose of such Hazardous Materials strictly in compliance with all laws, regulations
and governing agencies and (ii) that the indemnity set forth in Paragraph 45 shall be
applicable to Tenant’s use of such Hazardous Material.

9

 

Quantum 2

     H. Landlord or Tenant may, at any time, cause testing wells to be installed on the
Premises, and may cause the ground water to be tested to detect the presence of Hazardous
Material by the use of such tests as are then customarily used for such purposes. Testing
wells installed by Tenant shall be paid for by Tenant. If tests conducted by Landlord
disclose that Tenant has violated any Hazardous Materials laws, or Tenant or parties on the
Premises during the Term of this Lease have contaminated the Premises as determined by
regulatory agencies pursuant to Hazardous Materials laws, or that Tenant has liability to
Landlord pursuant to Paragraph 45A, then Tenant shall pay for 100 percent of the cost of the
test and all related expense. Prior to the expiration of the Lease Term, Tenant shall
remove any testing wells it hag installed at the Premises, and return the Premises to the
condition existing prior to the installation of such wells, unless Landlord requests in
writing that Tenant leave all or some of the testing wells in which instance the wells
requested to be left shall not be removed.

     I. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
Hazardous Materials at the Premises, Landlord at its expense will promptly take all
reasonable action required by law with respect to the existence of such Hazardous Materials
at the Premises. The Commencement Date shall not be delayed because of such action by
Landlord unless occupation of the Premises is prohibited by law.

     J. The obligations of Landlord and Tenant under this Paragraph 45 shall survive the
expiration or earlier termination of the Term of this Lease. The rights and obligations of
Landlord and Tenant with respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 45.”

     12. SECURITY DEPOSIT: Effective as of the first day of the Third Option Period, Lease
Paragraph 51 (“Security Deposit”) shall be deleted in its entirety and replaced with the following:

     “51. SECURITY DEPOSIT: The following provisions shall modify Lease Paragraph
4F:

     A. Within thirty (30) days after the expiration or earlier termination of the Lease
term and after Tenant has vacated the Premises, Landlord shall return to Tenant the entire
Security Deposit except for amounts that Landlord has deducted therefrom that are needed by
Landlord to cure defaults of Tenant under the Lease or compensate Landlord for damages for
which Tenant is liable pursuant to this Lease. The use or disposition of the Security
Deposit shall be subject to the provisions of California Civil Code Section 1950.7.

     B. During the first thirty (30) days following Tenant’s exercise of its Third Option to
Extend, and only during said thirty day period, Tenant shall have the one-time option of
satisfying its obligation with respect to an amount equal to one-half (1/2) ($210,240.90) of
the $420,481.80 Security Deposit required under Lease Paragraph 4F by providing to Landlord,
at Tenant’s sole cost, a letter of credit which: (1) is drawn upon an institutional lender
reasonably acceptable and accessible to Landlord in form and content reasonably satisfactory
to Landlord; (ii) is in the amount of one-half (1/2) of the

10

 

Quantum 2

Security Deposit; (iii) is for a term of at lease twelve (12) months; (iv) with respect
to any letter of credit in effect within the six month period immediately prior to the
expiration of the Lease term, shall provide that the term of such letter of credit shall
extend at least forty five (45) days past the Lease expiration date (including extensions
thereof); and (v) may be drawn upon by Landlord upon submission of a declaration of Landlord
that Tenant is in default (as defined in Paragraph 19 and as modified by Paragraph 60).
Landlord shall not be obligated to furnish proof of default to such institutional lender,
and Landlord shall only be required to give the institutional lender written notification
that Tenant is in default and upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to Landlord equal to the
amount Landlord may spend or become obligated to spend by reason of Tenant’s default or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s
default up to 1/2 of the total Security Deposit required under Lease Paragraph 4F. Said
letter of credit shall provide that if the letter of credit is not renewed, replaced or
extended within twenty (20) days prior to its expiration date the issuer of the credit shall
automatically issue a cashiers check payable to Landlord in the amount of the letter of
credit after the date which is twenty (20) days before the expiration date, and no later
than the expiration date, without Landlord being required to make demand upon the letter of
credit. If Tenant provides Landlord with a letter of credit, within thirty (30) days of the
execution of this Lease, meeting the foregoing requirements, one-half (1/2) of the cash
Security Deposit (i.e., $210.240.90 of the $420.481.80 Security Deposit) shall be
returned to Tenant by Landlord inasmuch as the cash deposit remaining and the Letter of
Credit equal the total Security Deposit required in Lease Paragraph 4F. If Tenant defaults
with respect to any provisions of this Lease, including but not limited to provisions
relating to the payment of Rent, Landlord may (but shall not be required to) draw down on
the letter of credit for payment of any sum which Landlord may spend or become obligated to
spend by reason of Tenant’s default, or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant’s default. Landlord and Tenant acknowledge that
such letter of credit will be treated as if it were a cash security deposit, and such letter
of credit may be drawn down upon by Landlord upon demand and presentation of evidence of the
identity of Landlord to the issuer, in the event that Tenant defaults with respect to any
provision of this Lease and such default is not cured within any applicable cure period.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be obligated to
furnish proof of default to such institutional lender and Landlord is only required to give
the institutional lender written notification that Tenant is in default and upon receiving
such written notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or become
obligated to spend by reason of Tenant’s default, or to compensate Landlord for any loss or
damage which Landlord may suffer by reason of Tenant’s default up to ‘ of the total Security
Deposit. Landlord acknowledges that it is not entitled to draw down such letter of credit
unless Landlord would have been entitled to draw upon the cash security deposit pursuant to
the terms of Paragraph 4F of the Lease. Concurrently with the delivery of the required
information to the issuer, Landlord shall deliver to Tenant written evidence of the default
upon which the draw down was based, together with evidence that Landlord has provided to
Tenant the written notice of such default which was required under the applicable provision
of the Lease,

11

 

Quantum 2

and evidence of the failure of Tenant to cure such default within the applicable grace
period following receipt of such notice of default. Any proceeds received by Landlord by
drawing upon the letter of credit shall be applied in accordance with the provisions
governing the Security Deposit imposed by Lease Paragraph 4F and this Paragraph 51. If
Landlord draws upon the letter of credit, thereafter Tenant shall once again have the right
to post a letter of credit in place of one-half (1/2) of a cash Security Deposit so long as
Tenant is not then in default. In any event Tenant will be obligated to replenish the
amount drawn to restore the Security Deposit to its original amount as provided for in
Paragraph 4F. If any portion of the letter of credit is used or applied pursuant hereto,
Tenant shall, within ten (10) days after receipt of a written demand therefor from Landlord,
restore and replace the value of such security by either (i) depositing cash with Landlord
in the amount equal to the sum drawn down under the letter of credit, or (ii) increasing the
letter of credit to its value immediately prior to such application. Tenant’s failure to
replace the value of the security as provided in the preceding sentence shall be a material
breach of its obligation under this Lease.”

     13. REAL ESTATE TAXES: Effective as of the first day of the Third Option Period,
Lease Paragraph 54 (“Real Estate Taxes”) shall be deleted in its entirety and replaced with the
following:

     “54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

     A. The term “Real Property Taxes” shall not include charges, levies or fees directly
related to the use, storage, disposal or release of Hazardous Materials on the Premises
unless directly related to Tenant’s Activities at this site or on other sites leased and/or
owned by Tenant; however, Tenant shall be responsible for general or special tax and/or
assessments (related to Hazardous Materials and/or toxic waste) imposed on the Property
provided said special tax and/or assessment is not imposed due to on-site originated
contamination on the Property (by third parties not related to Tenant) prior to the Lease
Commencement Date. Subject to the terms and conditions stated herein, Tenant shall be
responsible for paying one hundred percent (100%) of said taxes and/or assessments allocated
to the Property.

     B. If any assessments for public improvements are levied against the Premises, Landlord
may elect either to pay the assessment in full or to allow the assessment to go to bond. If
Landlord pays the assessment in full, Tenant shall pay to Landlord or any assignee or
purchaser of the Premises each time payment of Real Property Taxes is made a sum equal to
that which would have been payable (as both principal and interest) had Landlord allowed the
assessment to go to bond.

     C. Tenant at its cost shall have the right, at any time, to seek a reduction in the
assessed valuation of the Premises or to contest any Real Property Taxes that are to be paid
by Tenant. If Tenant seeks a reduction or contests such Real Property Taxes, the failure on
Tenant’s part to pay such Real Property Taxes being so contested shall not constitute a
default so long as Tenant complies with the provisions of this Paragraph. Landlord shall
not be required to join in any proceeding or contest brought by Tenant unless the provisions
of any law require that the proceeding or contest be brought by or in

12

 

Quantum 2

the name of Landlord. In that case Landlord shall join in the proceedings or contest
or permit it to be brought in Landlord’s name as long as Landlord is not required to bear
any cost Tenant, on final determination of the proceeding or contest, shall immediately pay
or discharge its share of any Real Property Taxes determined by any decision or judgment
rendered, together with all costs, charges, interest, and penalties incidental to the
decision or judgment. If Tenant does not pay the Real Property Taxes when due pursuant to
the Lease and Tenant seeks a reduction or contests them as provided in this paragraph,
before the commencement of the proceeding or contest Tenant shall furnish to Landlord a
surety bond in form reasonably satisfactory to Landlord issued by an insurance company
qualified to do business in California. The amount of the bond shall equal 125% of the
total amount of Real Property Taxes in dispute and any such bond shall be assignable to any
lender or purchaser of the Premises. The bond shall hold Landlord and the Premises harmless
from any damage arising out of the proceeding or contest and shall insure the payment of any
judgment that may be rendered.”

     14. PROPERTY INSURANCE: Effective as of the first day of the Third Option Period,
section B of Lease Paragraph 55 (“Property Insurance”) shall be deleted in its entirety and be of
no further force or effect.

     15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the Third Option
Period, Lease Paragraph 56 (“Assignment and Subletting”) shall be deleted in its entirety and
replaced with the following:

     “56. ASSIGNMENT AND SUBLETTING: The following modifications are made to
Paragraph 16:

     A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by
giving Tenant written notice of its election within fifteen (15) days after Tenant’s notice
of intent to assign or sublease has been given to Landlord, shall have the right to elect
(i) to withhold its consent to such assignment or sublease, as permitted pursuant to
Paragraph 16, or (ii) to permit Tenant to so assign the lease or sublease such part of the
Premises, in which event Tenant may do so, but without being released of its liability for
the performance of all of its obligations under the Lease, and the following shall apply
(except the following shall not apply to a “Permitted Transfer” described in Paragraph 57):

          (1) If Tenant assigns its interest in this Lease, then in addition to the rental
provided for in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all Rent and
other consideration received by Tenant over and above (i) the assignee’s agreement to assume
the obligations of Tenant under this Lease and (ii) all “Permitted Transfer Costs” (as
defined herein) related to such assignment. As used herein, the term “Permitted Transfer
Costs” shall mean all reasonable leasing commissions paid to, third parties not affiliated
with Tenant in order to obtain the assignment or sublease in question.

          (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the Rent provided for in this Lease fifty percent (50%) of the

13

 

Quantum 2

positive difference, if any, between (i) all rent and other consideration paid or
provided to Tenant by the subtenant, less (ii) all Rent paid by Tenant to Landlord pursuant
to this Lease which is allocable to the area so sublet and all Permitted Transfer Costs
related to such sublease. After Tenant has recovered all Permitted Transfer Costs Tenant
shall pay to Landlord the amount specified in the preceding sentence on the same basis,
whether periodic or in lump sum, that such rent and other consideration is paid to Tenant by
its subtenant, within seven (7) days after it is received by Tenant.

          (3) Tenant’s obligations under this subparagraph shall survive any assignment or
sublease. At the time Tenant makes any payment to Landlord required by this subparagraph,
Tenant shall deliver an itemized statement of the method by which the amount to which
Landlord is entitled was calculated, certified by Tenant as true and correct. Landlord
shall have the right to inspect Tenant’s books and records relating to the payments due
pursuant to this subparagraph. Upon request therefor, Tenant shall deliver to Landlord
copies of all bills, invoices or other documents upon which its calculations are based.

          (4) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received (including, but not limited to, services rendered and/or value
received) by Tenant as a result of the assignment or sublease, if such sums are paid or
provided to Tenant for Tenant’s interest in this Lease or in the Premises.

          (5) This Paragraph 56.A does not apply to a “Permitted Transfer”, as provided in
Paragraph 57 hereof. The parties agree that if any of the following transactions occur and
do not qualify as “Permitted Transfers”, Tenant must obtain Landlord’s consent to such
transaction and if Landlord consents to any of the following transactions which do not
otherwise qualify as “Permitted Transfers”, then the provisions of this Paragraph 56.A shall
not apply to the following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long as 95% of all assets
and liabilities of Tenant are permanently transferred to such assignee; and (ii) an
assignment of this Lease to a corporation which purchases or otherwise acquires 95% or more
of the assets of Tenant so long as 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee and Tenant remains liable and responsible under the
Lease to the extent Tenant continues in existence following such transaction.”

     16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day of the Third
Option Period, Lease Paragraph 57 (“Permitted Assignments and Subleases”) shall be deleted in its
entirety and replaced with the following:

     “57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained
in Paragraph 16, so long as Tenant otherwise complies with the provisions of Paragraph 16
and the Permitted Transfer does not release Tenant from its obligations hereunder, Tenant
may enter into any of the following transfers (a “Permitted Transfer”) without Landlord’s
prior written consent, and the provision Paragraph 56A shall not apply to any such Permitted
Transfer:

14

 

Quantum 2

     A. Tenant may sublease all or part of the Premises or assign its interest in this Lease
to any corporation which controls, is controlled by, or is under common control with Tenant
by means of an ownership interest of more than fifty percent (50%) providing Tenant remains
liable for the payment of Rent and full performance of the Lease;

     B. Tenant may assign its interest in the Lease to a corporation which results from a
merger, consolidation or other reorganization in which Tenant is not the surviving
corporation so long as (i) 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger, consolidation or
other reorganization, the corporation into which Tenant is, to be merged has a net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or at the
time of such assignment, merger, consolidation or reorganization (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of, or is otherwise
affiliated with, the corporation into which Tenant is to be merged, and (b) which has a
current net worth equal to or greater than the net worth of Tenant at the time of Lease
execution or at the time of such assignment, merger, consolidation or reorganization
(whichever is greater). In the event there is not a permanent transfer of 95% or more of
the assets and liabilities from Tenant to a third party, and Tenant continues to exist as a
separate entity, both companies shall be jointly and severally liable for the full terms and
conditions of the Lease;

     C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires
95% or more of the assets of Tenant so long as 95% of all assets and liabilities of Tenant
are permanently transferred to such assignee (in the event there is not a permanent transfer
of 95% or more of the assets and liabilities from Tenant to a third party and Tenant
continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease), and provided that immediately prior
to such assignment said corporation, has a net worth equal to or greater than the net worth
of Tenant (a) at the time of Lease execution or (b) at the time of such assignment
(whichever is greater), or Kit does not, Landlord is provided a guaranty of the Lease (in a
form reasonably acceptable to Landlord) from a corporation (a) that is the parent of, or is
otherwise affiliated with, said corporation and (b) which has a current net worth equal to
or greater than the net worth of Tenant at the time of Lease execution or at the time of
such assignment, (whichever is greater).”

     17. DESTRUCTION: Effective as of the first day of the Third Option Period, Lease
Paragraph 62 (“Destruction”) shall be deleted in its entirety and replaced with the following:

          “62. Destruction: Paragraph 21 is modified by the following:

          A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may terminate
this Lease in the event of an uninsured event or if insurance proceeds, net of the
deductible, are insufficient to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to contribute such excess
funds to permit Landlord to repair the Premises.

15

 

Quantum 2

     B. Except as provided in Paragraph 62C, Landlord may not terminate the Lease if the
Premises are damaged by a peril whereby the cost to replace and/or repair is one hundred
percent (100%) covered by the insurance carried by Landlord pursuant to Paragraph 12, but
instead shall restore the Premises in the manner described by Paragraph 21.

     C. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of
the following conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the Premises; and (ii) the damage
occurs at a time when there is less than five (5) remaining in the term of the Lease.

     D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12 and said
insurance would have been available to cover any damage or destruction to the Premises,
Landlord shall be required to rebuild, at its cost, net of the deductible which would have
been required under said insurance policy (which deductible Tenant is required to pay).

     E. If the Premises are damaged by any peril, then as soon as reasonably practicable,
Landlord shall furnish Tenant with the 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 only by delivery to Landlord of a written
notice of election to terminate within seven (7) days after Tenant receives from Landlord
the estimate of the time needed to complete such, restoration:

          (1) The Premises are damaged by any peril (not caused by or resulting from an action of
Tenant or Tenant’s agents, employees, contractors or invitees) and, in the reasonable
opinion of Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the date of such damage
(subject to force majeure conditions); or

          (2) The Premises are damaged by any peril (not caused by or resulting from an action of
Tenant or Tenant’s agents, employees, contractors or invitees) within twelve (12) months of
the last day of the Lease term, and, In the reasonable opinion of Landlord’s architect or
construction consultant, the restoration of the Leased Premises cannot be substantially
completed within sixty (60) days after the date of such damage and Tenant has not exercised
its Option to Extend said Term (or Extended Term as the case may be),”

     18. LIABILITY INSURANCE: Effective as of the first day of the Third Option Period,
the first sentence of Lease Paragraph 10 (“Liability Insurance”) shall be deleted and replaced with
the following: “Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease
a policy of commercial general liability insurance with combined single limit coverage of not less
than Two Million Dollars ($2,000,000) per occurrence for bodily injury and

16

 

Quantum 2

property damage occurring in, on or about the Premises, including parking and landscaped
areas.”

     19. LIMITATION OF LIABILITY: Effective as of the first day of the Third Option
Period, Lease Paragraph 36 (“Limitation of Liability”) shall be deleted in its entirety and
replaced with the following:

     “36. LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:

(i) the sole and exclusive remedy shall be against Landlord’s interest in the Premises
leased herein;

(ii) no partner of Landlord shall be sued or named as a party in any suit or action (except
as may be necessary to secure jurisdiction of the
partnership);

(iii) no service of process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction of the partnership);

(iv) no partner of Landlord shall be required to answer or otherwise plead to any service
of process;

(v) no judgment will be taken against any partner of
Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

(vii) no writ of execution will ever be levied against the assets of any partner of
Landlord;

(viii) these covenants and agreements are enforceable both by Landlord and also b any
partner of Landlord.

     Tenant agrees that each of the foregoing covenants and amendments shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

17

 

Quantum 2

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 3 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE PROPERTY TRUST	 	 	 	QUANTUM CORPORATION	 	 
	 	 	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Andrew Kryder	 	 
	 

	 	 

John Arrillaga, Trustee
	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Andrew Kryder	 	 
	 

	 	 

	 	 	 	Print or Type Name 

	 	 
	Date: 6/30/97	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 	 	Title:
	 	Finance &
Corporate General Counsel	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 
	By	 	/s/ Richard Peery	 	 	 	Dated:

	 	June 25, 1997	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 6/26/97	 	 	 	 	 	 	 	 

18

 

AMENDMENT NO. 4

TO LEASE

     THIS AMENDMENT NO.4 is made and entered into this 22nd day of March, 2001, by and between JOHN
ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S TRUST)
(previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD T.
PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and MAXTOR CORPORATION, a Delaware corporation, as
“ASSIGNEE” or “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to QUANTUM CORPORATION,
a Delaware corporation (the “ASSIGNOR” or “QUANTUM”) all of that certain 155,734 ± square foot
building located at 1140 Technology Drive, Milpitas, California (the “Premises”), the details of
which are more particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Letter Agreement dated October 31, 1989 which provided
for a Basic Rent Credit for the period commencing with the Lease Commencement Date and ending on
May 31, 1991, and

     C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24, 1990 which canceled the
reduction in Basic Rent Credit Letter dated October 31, 1989, and which delayed the Lease
Commencement Date from December 15, 1990 to April 1, 1991, and,

     D. WHEREAS, said Lease was amended by the Commencement Letter dated March 4, 1991 which
changed the Commencement Date of the Lease from April 1, 1991 to March 1, 1991, and established the
Termination Date of July 31, 2006, and,

     E. WHEREAS, said Lease was amended by Amendment No. 2 dated June 26, 1991 which extended the
Term of the Lease for an additional two month period, amended the Basic Rent schedule and Aggregate
Rent accordingly, and amended the deadlines in which the Tenant under the Lease (herein the
“Tenant”) could exercise its Option to Extend pursuant to Lease Paragraphs 42 and 43, and

     F. WHEREAS, said Lease was amended by Amendment No. 3 dated April 16, 1997, which amended the
Lease by (i) extending the Term for five years, changing the Termination Date from September 30,
2006 to September 30, 2011, (ii) amending the Basic Rent schedule and Aggregate Rent accordingly,
(iii) adding a third Five Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms
Co-extensive”) and 48 (“Cross Default”) and 53 (“Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling
of the Premises”), (v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or
replacing certain provisions of the Lease commencing as of the commencement of the Third Extended
Term of said Lease, and

1

 

     G. WHEREAS, the Lease, together with those certain Amendments described above in Recitals B
through F shall hereinafter collectively be referred to as “the Lease Agreement”, and

     H. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraph 43
(“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 3 dated April 16, 1997
(“Third Five Year Option to Extend”) as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary
contained in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to
Landlord, Landlord hereby acknowledges that the following transactions have occurred:

          A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

          B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement”), wherein they agreed that:

               (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

               (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock, such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

               (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

          C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be

2

 

assigned by Quantum to Insula and Insula will assume and agree to be liable for all of the
obligations of Quantum, as Tenant, under the Lease.

     As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated October 31, 1989, as amended.

     Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as
expressly set forth below, Landlord’s Consent shall in no way void or alter any of the terms of the
Lease Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or diminish
in any way Tenant’s obligations to Landlord.

     Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor,
and Landlord shall not be bound by any agreement other than the terms of the Lease Agreement
between Landlord and Tenant. Landlord does not make any warranties or representations as to the
condition of the Leased Premises or the terms of the Lease Agreement between Landlord and Quantum.
Landlord’s consent to the assignment shall in no way obligate Landlord to any further consents or
agreements between Quantum and/or Assignee. So long as Quantum continues to exist as a Delaware
corporation, it is agreed that both Quantum and Maxtor will be jointly and severally liable for all
the terms and conditions of the Lease and all Amendments thereto; provided, however, that so long
as Quantum remains liable for said Lease, no material amendment to the Lease Agreement after the
date hereof shall be binding upon Quantum without the prior written consent of Quantum, which
consent shall not be unreasonably withheld, and Quantum’s approval shall not be required on
transactions related to Landlord’s Waivers, Landlord’s Consents to Sublease and/or Landlord’s
Consents to Alterations. The foregoing, however, shall not prevent Tenant and Landlord from
entering into any such modification or amendment between themselves.

     It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     1. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 43 (“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 3 dated
April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall
be replaced with the following:

          A. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“Second
Extended Term”) upon the following terms and conditions:

               1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term pursuant to Paragraph
A hereof (not later than April 3, 2011), in which event the Term of the Lease shall be considered
extended for an additional five (5) years, subject to the Basic Rent set forth below and with: (i)
the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and the terms
and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion,
may, but is not required to, incorporate its then current Lease

3

 

provisions that are standard in Landlord’s leases for comparable buildings as of the date of
Tenant’s exercise of its Option to Extend); and (iii) this Paragraph 2.A thereafter deleted. In
the event that Tenant fails to timely exercise Tenant’s Option as set forth herein in writing,
Tenant shall have no further Option to Extend this Lease, and the Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 2.

               2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.A.l(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year
of the current Term) required for the Extended Term of the Lease to make the Basic Rent for the
Premises comparable to the then current market triple net basic rent for comparable properties
either (i) then owned in whole or in part by the above mentioned Landlord or by members of its
immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as
stated herein, other third party properties in the vicinity of the Premises. Tenant shall have
five (5) days after receipt from the Landlord of said new terms and conditions and Basic Rent in
which to accept said new terms and conditions and Basic Rent and enter into written documentation
confirming same. In the event Tenant fails to execute said written documentation confirming said
new teens and conditions and Basic Rent for the Second Extended Term of Lease within said five (5)
day period, Tenant shall have no further Option to Extend this Lease, and this Lease shall continue
in full force and effect for the full remaining term hereof absent of this Paragraph 2, with
Landlord having no further responsibility or obligation to Tenant with respect to Tenant’s Option
to Extend.

               3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

               4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

               5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

4

 

     B. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

          1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than April 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Third Extended Term”) subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee
and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In the event that Tenant fails
to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further
Option to Extend this Lease, and the Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 2.B.

          2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.1(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

          3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at its sole and
absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force
and effect for the full remaining Term hereof, absent of this Paragraph Z.B.

          4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or

5

 

transferred by Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments
and Subleases”), either voluntarily or by operation of law, in any manner whatsoever,

          5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement, as heretofore amended, shall remain in full force and effect.

6

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this, Amendment No. 4 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	LANDLORD:	 	ASSIGNEE/MAXTOR;	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIOR’S TRUST	 	MAXTOR CORPORATION	 	 
	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	/s/ John Arrillaga by Richard Perry
	 	By
	/s/ Glenn Stevens	 	 
	 

	 
	 	 	 	 	 
	 

	   John Arrillaga, Trustee	 	 	 	 	 	 
	 	 	 	 	Glenn H. Stevens	 	 
	 	 	 	 	 	 	 
	Date:	 	3/30/01	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	Title:	 	V.P., General Counsel & Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	By

	/s/ Richard Peery
	 	Date:
	 	4/1/01	 	 
	 

	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	3/30/01	 	 	 	 	 	 
	 	 	 	 	ASSIGNOR/QUANTUM:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	QUANTUM CORPORATION	 	 
	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	/s/ Norm Claus	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Norm Claus	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	V.P. Real Estate	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Dated:
	 	3/30/01	 
	 
	 	 	 	 	 	 	 	 

7

 

LEASE AGREEMENT

     THIS LEASE made this 31st day of October 1989 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY TRUST) as amended, and
RICHARD T. PEERY, Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE
PROPERTY TRUST) as amended, hereinafter called Landlord and QUANTUM CORPORATION, a Delaware
corporation, hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit A attached hereto and incorporated herein by
this reference thereto more particularly described as follows:

All of that land containing approximately 11.848 ± acres and that certain 176, 516 ±
square foot two story building (“Building 2”) and parking appurtenant thereto, to be
constructed and landscaping to be installed by Landlord as shown within the area
outlined in red (“Lot 2”) on Exhibit A to be located at the corner of Bellew Drive
and McCarthy Blvd., Milpitas, California. Said Premises (“Lot 2”) is more
particularly shown within the area outlined in red on Exhibit A attached hereto and
incorporated herein by this reference. The entire parcel containing approximately
37.096 ± acres, of which the Premises is a part, is shown within the area outlined in
green on Exhibit A attached hereto and incorporated herein by this reference. The
interior of the leased Premises shall be improved in the configuration as shown in
red on Exhibit B to be attached hereto and incorporated herein by this reference.
The building shell shall be constructed in accordance with the shell and site
improvement specifications set forth on Exhibit A, and the general building
elevation set forth on Exhibit A. See Paragraph 49

     The word “Premises” as used throughout this lease is hereby defined to include the
nonexclusive use of sidewalks and driveways in front of or adjacent to the Premises, and the
nonexclusive use of the area directly underneath or over such sidewalks and driveways. The gross
leasable area of the building shall be measured from outside of exterior walls to outside of
exterior walls and shall include any atriums, covered entrances or egresses and covered loading
areas.

     Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE. Tenant shall use the Premises only in conformance with applicable governmental laws,
regulations, rules and ordinances for the purpose of Office, sales, R & D, light manufacturing and
related uses necessary for the use of Tenant or any approved assignee or subtenant to conduct its
business providing any and all uses of the Premises shall be subject to and in conformance with all
governmental laws and ordinances, and for no other purpose without

1

 

Landlord’s prior written consent, Tenant shall not do or permit to be done in or about the
Premises nor bring or keep or permit to be brought or kept in or about the Premises anything which
is prohibited by or will in any way increase the existing rate of (or otherwise affect) fire or any
insurance covering the Premises or any part thereof, or any of its contents without the prior
written consent of Landlord, and provided Tenant bears any cost related to such increased rate, or
will cause a cancellation of any insurance covering the Premises or any part thereof, or any of its
contents. Tenant shall not do or permit to be done anything in, on or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or occupants of the Premises
or neighboring premises or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. No sale by auction shall be permitted on the Premises.
Tenant shall not place any loads upon the floors, walls, or ceiling which endanger the structure,
or place any harmful fluids or other materials in the drainage system of the building, or overload
existing electrical or other mechanical systems. No waste materials or refuse shall be dumped upon
or permitted to remain upon any part of the Premises or outside of the building in which the
Premises are a part, except in trash containers placed inside exterior enclosures designated by
Landlord for that purpose or inside of the building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the Premises. Tenant
shall not place anything or allow anything to be placed near the glass of any window, door
partition or wall which may appear unsightly from outside the Premises. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any loss, expense, damage, reasonable attorneys’ fees, or liability arising out of
failure of Tenant to comply with any applicable law that that governs Tenant use of the Premises.
Tenant shall comply with any covenant, condition, or restriction (“CC&R’s”) affecting the Premises.
The provisions of this paragraph are for the benefit of Landlord only and shall not be construed
to be for the benefit of any tenant or occupant of the Premises.

     2. TERM AND COMMENCEMENT DATE OF LEASE. See Paragraphs 41, 42 & 43 of this Lease

     3. POSSESSION. If Landlord, for any reason whatsoever other than Landlord’s default cannot
deliver possession of said premises to Tenant at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant shall be affected
thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of the Lease, and all
other dates affected thereby shall be revised to conform to the date of Landlord’s delivery of
possession, as specified in Paragraph 28 above; provided, however, it is agreed that in no event
shall the Lease commence sooner than December 15, 1990 unless the parties agree in writing to an
earlier date for the Lease to commence. The above is, however, subject to the provision that the
period of delay of delivery of the Premises shall not exceed 180 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities, governmental bodies,
weather, unavailable materials, and delays beyond Landlord’s control shall

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be excluded in calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease. See Paragraph 47

     4. RENT.

          A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may designate
without deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for
the leased Premises the total sum of the amount to be calculated pursuant to Paragraph 39 in lawful
money of the United States of America, payable as follows: See Paragraphs 39 through 43

          B. Time for Payment. Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences on a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day of said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge. Notwithstanding any other provision of this Lease, if Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal five percent (5%) of each rental payment so in
default. See Paragraph 50

          D. Additional Rent. Beginning with the commencement date of the term of this Lease, Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following:

               (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.

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     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days after presentation of invoice from Landlord or Landlord’s agent setting forth such
Additional Rent and/or (ii) at the option of Landlord. Tenant shall pay to Landlord monthly, in
advance, Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s approximate
average monthly expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord’s actual expenditure for said
Additional Rent terms, with Tenant paying to Landlord, upon demand, any amount of actual expenses
expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant (providing
Tenant is not in default in the performance of any of the terms, covenants and conditions of this
Lease in which case such amount shall be held by Landlord as a credit for Tenant’s account until
such default has been cured any amount of estimated payments made by Tenant in excess of Landlord’s
actual expenditures for said Additional Rent items.

     The respective obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          E. Place of Payment of Rent and Additional Rent. All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Peery/Arrillaga, File 1504, P.O. Box 60000, San Francisco, CA 94160 or to such other person or to
such other place as Landlord may from time to time designate in writing.

          F. Security Deposit. Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
with Landlord the sum of Four Hundred Seventy-Six Thousand Five Hundred Ninety-Three and 20/100
Dollars ($476,593.20.). Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the payment of rent and any
of the monetary sums due herewith, Landlord may (but shall not be required to) use, apply or retain
all or any part of this Security Deposit for the payment of any other amount which Landlord may
spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant’s default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its original amount. Tenant
failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest
on such Deposit. If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) at the expiration of the
Lease term and after Tenant has vacated the Premises. In the event of termination of Landlord’s
interest in this Lease, Landlord shall transfer

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said Deposit to Landlord’s successor in interest whereupon Tenant agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor. See Paragraph 51

     5. ACCEPTANCE AND SURRENDER OF PREMISES. By entry hereunder, Tenant accepts the Premises as
being in good and sanitary order, condition and repair and accepts the building and improvements
included in the Premises in their present condition and without representation or warranty by
Landlord as to the condition of such building or as to the use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord and
Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed: all carpets cleaned and shampooed; all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed; the air conditioning and heating systems serviced by a
reputable and licensed service firm and in good operating condition and repair the plumbing and
electrical systems and lighting in good order and repair, including replacement of any burned out
or broken light bulbs or ballasts; the lawn and shrubs in good condition including the replacement
of any dead or damaged plantings; the sidewalk, driveways and parking areas in good order,
condition and repair; together with all alterations, additions, and improvements which may have
been made in, to, or on the Premises (except moveable trade fixtures installed at the expense of
Tenant) except that Tenant shall ascertain from Landlord within ninety (90) days before the end of
the term of this Lease whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part or parts thereof
before the end of this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of
the term or sooner termination of this Lease, shall remove all of Tenant’s personal property and
trade fixtures from the Premises and all property not so removed on or before the end of the term
or sooner termination of this Lease shall be deemed abandoned by Tenant and title to same shall
thereupon pass to Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant at Tenant’s sole cost,
and repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not
surrendered at the end of the term or sooner termination of this Lease, Tenant shall indemnify
Landlord against loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding Tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the term hereof or as a
consent of Landlord to any holding over by Tenant. The voluntary or other surrender of this Lease
or the Premises by Tenant or a mutual cancellation of this Lease shall not work as a merger and, at
the option of Landlord, shall either terminate all or any existing subleases or subtenancies or
operate as an assignment to Landlord of all or any such subleases or subtenancies. See Paragraph
52.

     6. ALTERATIONS AND ADDITIONS. Tenant shall not make, or suffer to be made any alteration or
addition to the Premises, or any part thereof, without the written consent of Landlord first had
and obtained by Tenant (such consent not to be unreasonably withheld), but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture and trade fixtures,
shall at once become a part of the Premises and belong to Landlord.

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Landlord reserves the right to approve all contractors and mechanics proposed by Tenant to
make such alterations and additions. Tenant shall retain title to all moveable furniture and trade
fixtures placed in the Premises. All heating, lighting, electrical, air conditioning,
partitioning, drapery, carpeting, and floor installations made by Tenant, together with all
property that has become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions, without having
obtained consent from Landlord to do so, and until five (5) days from the receipt of such consent,
in order that Landlord may post appropriate notices to avoid any liability to contractors or
material suppliers for payment for Tenant’s improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant shall, if required
by Landlord, secure at Tenant’s own cost and expense, a completion and lien indemnity bond,
satisfactory to Landlord, for such work. Tenant further covenants and agrees that any mechanic’s
lien filed against the Premises for work claimed to have been done for, or materials claimed to
have been furnished to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after Tenant receives notice of the filing thereof, at the cost and expense of Tenant. Any
exceptions to the foregoing must be made in writing and executed by both Landlord and Tenant. See
Paragraph 52

     7. TENANT MAINTENANCE. Tenant shall, at its sole cost and expense, keep and maintain the
Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good and sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and air conditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers
heaters, supply and return grills), structural elements and exterior surfaces of the building,
store fronts, roofs, downspouts, all interior improvements within the premises including but not
limited to wall coverings, window coverings, carpet, floor coverings, partitioning, ceilings, doors
(both interior and exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to landscaping,
sidewalks, driveways, parking lots including striping and sealing, sprinkler systems, lighting,
ponds, fountains, waterways, and drains. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by such rolling chairs
if such wear and tear exceeds that caused by normal foot traffic in surrounding areas. Areas of
excessive wear shall be replaced at Tenant’s sole expense upon Lease termination. Tenant hereby
waives all rights under, and benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of
the California Civil Code and under any similar law, statute or ordinance now or hereafter in
effect. In the event any of the above maintenance responsibilities apply to any other tenant(s) of
Landlord where there is common usage with other tenant(s), such maintenance responsibilities and
charges shall be allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord. See Paragraph 53

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     8. UTILITIES. Tenant shall pay promptly, as the same become due, all charges for water, gas,
electricity, telephone, telex and other electronic communication service, sewer service, waste
pick-up and any other utilities, materials or services furnished directly to or used by Tenant on
or about the Premises during the term of this Lease, including, without limitation, any temporary
or permanent utility surcharge or other exactions whether or not hereinafter imposed. In the event
the above charges apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such charges shall be allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES.

          A. As Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to
Landlord, or if Landlord so directs, directly to the Tax Collector, all Real Property Taxes
relating to the Premises. In the event the Premises leased hereunder consist of only a portion of
the entire tax parcel, Tenant shall pay to Landlord Tenant’s proportionate share of such real
estate taxes allocated to the leased Premises by square footage or other reasonable basis as
calculated and determined by Landlord. If the tax billing pertains 100% to the leased Premises,
and Landlord chooses to have Tenant pay said real estate taxes directly to the Tax collector, then
in such event it shall be the responsibility of Tenant to obtain the tax and assessment bills and
pay, prior to delinquency, the applicable real property taxes and assessments pertaining to the
leased Premises, and failure to receive a bill for taxes and/or assessments shall not provide a
basis for cancellation of or nonresponsibility for payment of penalties for nonpayment or late
payment by Tenant. The term “Real Property Taxes” as used herein, shall mean (i) all taxes,
assessments, levies and other charges of any kind or nature whatsoever, general and special,
foreseen and unforeseen (including all installments of principal and interest required to pay any
general or special assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership of the Premises) now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed against, or with respect to the
value, occupancy or use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord’s interest therein; any
improvements located within the Premises (regardless of ownership); the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part and located in the
Premises; or parking areas, public utilities, or energy within the Premises, (ii) all charges,
levies or fees imposed by reason of environmental regulation or other governmental control of the
Premises; and (iii) all costs and fees (including reasonable attorney’s fees) incurred by Landlord
in reasonably contesting any Real Property Tax and in negotiating with public authorities as to any
Real Property Tax. If at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied, assessed or imposed
(whether by reason of a change in the method of taxation or

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assessment, creation of a new tax or charge, or any other cause) an alternate or additional
tax or charge (i) on the value use or occupancy of the Premises or Landlord’s interest therein or
(ii) on or measured by the gross receipts, income or rentals from the Premises, on Landlord’s
business of leasing the Premises, or computed in any manner with respect to the operation of the
Premises, then any such tax or charge, however designated, shall be included within the meaning of
the term “Real Property Taxes” for purposes of this Lease. If any Real Property Tax is based upon
property or rents unrelated to the Premises, then only that part of such Real Property Tax that is
fairly allocable to the Premises shall be included within the meaning of the term “Real Property
Taxes”. Notwithstanding the foregoing, the term “Real Property Taxes” shall not include estate,
inheritance, gift or franchise taxes of Landlord or the federal or state net income tax imposed on
Landlord’s income from all sources. See Paragraph 54

          B. Taxes on Tenant’s Property Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion therein of a value placed on such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant. Tenant shall upon demand, as the case may be, repay to Landlord
the taxes so levied against Landlord, or the proportion of such taxes resulting from such increase
in the assessment; provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction
to recover the amount of such taxes so paid under protest, and any amount so recovered shall belong
to Tenant.

     10. LIABILITY INSURANCE. Tenant at Tenant’s expense, agrees to keep in force during the term
of this Lease a policy of comprehensive general liability insurance for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped areas, in the
amount of $2,000,000 combined single limit. Such insurance shall be primary and noncontributory as
respects any insurance carried by Landlord. The policy or policies effecting such insurance shall
name Landlord as additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or invitees or otherwise
by any conduct or transactions of any said persons in or about or concerning the Premises,
including any failure of Tenant to observe or perform any of its obligations hereunder; shall be
issued by an insurance company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon thirty (30) days
prior written notice to Landlord. A copy of said policy shall be delivered to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord’s Lender insurance advisor, or
counsel, the amount of insurance described in this Paragraph 10 is not adequate, Tenant agrees to
increase said coverage to such reasonable amount as Landlord’s Lender, insurance advisor, or
counsel shall deem adequate.

     11. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE Tenant shall
maintain a policy or policies of fire and property damage insurance in “all risk” form with a
sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased

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Premises for the full replacement value thereof. The proceeds from any such policies shall be
used for the repair or replacement of such items so insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE. Landlord shall purchase and keep in force and as Additional Rent and
in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord Tenant’s proportionate
share (allocated to the leased Premises by square footage or other equitable-basis as calculated
and determined by Landlord) of the cost of, policy or policies of insurance covering loss or damage
to the Premises (excluding routine maintenance and repairs and incidental damage or destruction
caused by accidents or vandalism for which Tenant is responsible under Paragraph 7) in the amount
of the full replacement value thereof, providing protection against those perils included within
the classification of “all risks” insurance and flood and/or earthquake insurance, if available,
plus a policy of rental income insurance in the amount of one hundred (100%) percent of twelve (12)
months Basic Rent, plus sums paid as Additional Rent. If such insurance cost is increased due to
Tenant’s use of the Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance procured by
Landlord for the Premises. See Paragraph 55

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty; provided, however, that if the insurance policy of either
releasing party prohibits such waiver, then this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof.

     13. INDEMNIFICATION. Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, including, without limitation,
gas, fire, oil, electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises but excluding, however, the negligence of Landlord, its agents, servants,
employees, invitees, or contractors of which negligence Landlord has knowledge and reasonable time
to correct. Except as to injury to persons or damage to property the principal cause of which is
the negligence of Landlord and subject to the last two sentences of Paragraph 12, Tenant shall hold
Landlord harmless from and defend Landlord against any and all expenses, including reasonable
attorneys’ fees, in connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or any part thereof,
from any cause whatsoever.

     14. COMPLIANCE. Tenant, at its sole cost and expense, shall promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now or hereafter in
effect; with the requirements of any board of fire underwriters or other similar body now or
hereafter constituted; and with any direction or occupancy certificate issued pursuant to law by
any public officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or rectify said

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failure. The judgment of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
such law, statute, ordinance or governmental rule, regulation, requirement, direction or provision,
shall be conclusive of that fact as between Landlord and Tenant. Tenant shall, at its sole cost
and expense, comply with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability insurance covering
the Premises. See Paragraphs 45 & 53

     15. LIENS. Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it deem proper, including payment of the claim giving rise to such lien. All sums paid by
Landlord for such purpose, and all expenses incurred by it in connection therewith, shall be
payable to Landlord by Tenant on demand with interest at the prime rate as quoted by the Bank of
America.

     16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, transfer, or hypothecate the
leasehold estate under this Lease, or any interest therein, and shall not sublet the Premises, or
any part thereof, or any right or privilege appurtenant thereto, or suffer any other person or
entity to occupy or use the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld. In the event Tenant
is allowed to assign, transfer or sublet the whole or any part of the Premises, with the prior
written consent of Landlord, no assignee, transferee or subtenants shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any part of the Premises, without also
having obtained the prior written consent of Landlord. A consent of Landlord to one assignment,
transfer, hypothecation, subletting, occupation or use by any other person shall not release Tenant
from any of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar
or dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other
person. Any such assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of this Lease by Tenant and shall, at the
option of Landlord exercised by written notice to Tenant, terminate this Lease. The leasehold
estate under this Lease shall not, nor shall any interest therein, be assignable for any purpose by
operation of law without the written consent of Landlord. As a condition to its consent, Landlord
may require Tenant to pay all reasonable expenses in connection with the assignment, and Landlord
may require Tenant’s assignee or transferee (or other assignees or transferees) to assume in
writing all of the obligations under this Lease and for Tenant to remain liable to Landlord under
the Lease. See Paragraphs 56 & 57

     17. SUBORDINATION AND MORTGAGES. In the event Landlord’s title or leasehold interest is now
or hereafter encumbered by a deed of trust, upon the interest of Landlord in the land and buildings
in which the demised Premises are located, to secure a loan from a lender (hereinafter referred to
as “Lender”) to Landlord, Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to

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the lien of such deed of trust, or, if so requested, agreeing that the lien of Lender’s deed
of trust shall be or remain subject and subordinate to the rights of Tenant under this Lease.
Notwithstanding any such subordination, Tenant’s possession under this Lease shall not be disturbed
if Tenant is not in default and so long as Tenant shall pay all rent and observe and perform all of
the provisions set forth in this Lease. See Paragraph 58

     18. ENTRY BY LANDLORD. Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s); to submit the
Premises to prospective purchasers, mortgagers or tenants; to post notices of nonresponsibility;
and to alter, improve or repair the Premises or other parts of the building, all without abatement
of rent, and may erect scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided, however that the
business of Tenant shall be interfered with to the least extent that is reasonably practical. Any
entry to the Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. See Paragraph 59

     19. BANKRUPTCY AND DEFAULT. The commencement of a bankruptcy action or liquidation action or
reorganization action or insolvency action or an assignment of or by Tenant for the benefit of
creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant, shall, at
Landlord’s option, constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar action
elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in writing
of its election within thirty (30) days after an order for relief in a liquidation action or within
thirty (30) days after the commencement of any action.

     Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate assurance
of future performance, as used herein, includes, but shall not be limited to: (i) assurance of
source and payment of rent, and other consideration due under this Lease; (ii) assurance that the
assumption or assignment of this Lease will not breach substantially any provision, such as radius,
location, use, or exclusivity provision, in any agreement relating to the above described Premises.

     Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the benefit of creditors or
other similar act. Nothing contained in this Lease shall be construed as giving or granting or
creating an equity in the demised Premises to Tenant. In no event shall the leasehold estate under
this Lease, or any interest therein, be assigned by voluntary or involuntary bankruptcy proceeding
without the prior written consent of Landlord. In no event shall this Lease or any

11

 

rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings.

     The failure to perform or honor any covenant, condition or representation made under this
Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of written notice from
Landlord within which to cure any other default under this Lease. Upon an uncured default of this
Lease by Tenant, Landlord shall have the following rights and remedies in addition to any other
rights and remedies available to Landlord at law or in equity.

               (a) The rights and remedies provided for by California Civil Code Section 1951.2 including but
not limited to, recovery of 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 rental loss for the same
period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b) of
said Section 1951.2.

               (b) The rights and remedies provided by California Civil Code which allows Landlord to
continue the Lease in effect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as Landlord does not terminate
Tenant’s right to possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord’s initiative to protect its interest under this
Lease shall not constitute a termination of Tenant’s right to possession.

               (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable
law.

               (d) The right and power, after compliance with all statutory requirements and in any event on
not less than three (3) business days prior written notice to enter the Premises and remove
therefrom all persons and property, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord, may from time to time sublet the
Premises or any part thereof for such term or terms (which may extend beyond the term of this
Lease) and at such rent and such other terms as Landlord in its reasonable sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises. Upon each subletting,
(i) Tenant shall be immediately liable to pay Landlord, in addition to indebtedness other than rent
due hereunder, the reasonable cost of such subletting, including , but not limited to, reasonable
attorneys’ fees, and any real estate commissions actually paid, and the cost of such reasonable
alterations and repairs incurred by Landlord and the amount, if any, by which the rent hereunder
for the period of such subletting (to the extent such period does not exceed the term hereof)
exceeds the amount to be paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment of indebtedness
other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such
subletting and of such alterations and repairs; third to payment of rent due and unpaid hereunder;
and the residue, if any, shall be held by Landlord and applied in payment of future rent as the
same becomes due hereunder. If

12

 

Tenant has been credited with any rent to be received by such subletting under option (i) and
such rent shall not be promptly paid to Landlord by the subtenant(s), or if such rentals received
from such subletting under option (ii) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall
be calculated and paid monthly. No taking possession of the Premises by Landlord shall be
construed as an election on its part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such subletting without termination, Landlord
may at any time hereafter elect to terminate this Lease for such previous breach.

               (e) The right to have a receiver appointed for Tenant upon application by Landlord, to take
possession of the Premises and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord pursuant to subparagraph d above. See Paragraph 60.

     20. ABANDONMENT. Tenant shall not vacate or abandon the Premises at any time during the term
of this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be dispossessed
by the process of law, or otherwise, any personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord. See Paragraph 61

     21. DESTRUCTION. In the event the Premises are destroyed in whole or in part from any cause,
except for routine maintenance and repairs and incidental damage and destruction caused from
vandalism and accidents for which Tenant is responsible under Paragraph 7. Landlord may, at its
option:

               (a) Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b) Terminate this Lease.

     If Landlord does not give Tenant notice in writing within thirty (30) days from the
destruction of the Premises of its election to either rebuild and restore them or to terminate this
Lease, Landlord shall be deemed to have elected to rebuild or restore them, in which event Landlord
agrees, at its expense, promptly to rebuild or restore the Premises to their condition prior to the
damage or destruction. Tenant shall be entitled to a reduction in rent while such repair is being
made in the proportion that the area of the Premises rendered untenantable by such damage bears to
the total area of the Premises. If Landlord does not complete the rebuilding or restoration within
one hundred eighty (180) days following the date of destruction (such period of time to be extended
for delays caused by the fault or neglect of Tenant or because of Acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargos, rainy or stormy weather, inability to
obtain materials, supplies or fuels, acts of contractors or subcontractors, or delay of the
contractors or subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving fifteen (15) days
prior written notice to Landlord. Notwithstanding anything herein to the contrary, Landlord’s
obligation to rebuild or restore shall be limited to the building and interior improvements
constructed by Landlord as they existed as of the commencement date of the Lease and shall not
include restoration of Tenant’s trade fixtures, equipment, merchandise,

13

 

or any improvements, alterations or additions made by Tenant to the Premises, which Tenant
shall forthwith replace or fully repair at Tenant’s sole cost and expense provided this Lease is
not cancelled according to the provisions above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain
in full force and effect. Tenant hereby expressly waives the provisions of Section 1932,
Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

     In the event that the building in which the Premises are situated is damaged or destroyed to
the extent of not less than 331/2% of the replacement cost thereof, Landlord may elect to terminate
this Lease, whether the Premises be injured or not. In the event the destruction of the Premises
is caused by Tenant, Tenant shall pay the deductible portion of Landlord’s insurance proceeds. See
Paragraph 62

     22. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this Lease
shall terminate as to any portion of the Premises so taken or conveyed on the date when title vests
in the condemnor and Landlord shall be entitled to any and all payment, income, rent, award, or any
interest therein whatsoever which may be paid or made in connection with such taking or conveyance,
and Tenant shall have no claim against Landlord or otherwise for the value of any unexpired term of
this Lease. Notwithstanding the foregoing paragraph, any compensation specifically awarded Tenant
for loss of business, Tenant’s personal property, moving cost or loss of goodwill, shall be and
remain the property of Tenant.

     If any action or proceeding is commenced for such taking of the Premises or any part thereof,
or if Landlord is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall
have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60)
days of the date of receipt of said written advice, or commencement of said action or proceeding,
or taking conveyance, which termination shall take place as of the first to occur of the last day
of the calendar month next following the month in which such notice is given or the date on which
title to the Premises shall vest in the condemnor.

     In the event of such a partial taking or conveyance of the Premises, if the portion of the
Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its
business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the
date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the calendar month next
following the month in which such notice is given, upon payment by Tenant of the rent from the date
of such taking or conveyance to the date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate this Lease as provided herein, this Lease shall
continue in full force and effect as to the part of the Premises not so taken or conveyed, and the
rent herein shall be apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking. See Paragraph 63

14

 

     23. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance of the Premises or
any interest therein, by any owner of the reversion then constituting Landlord, the transferor
shall thereby be released from any further liability upon any of the terms, covenants or conditions
(express or implied) herein contained in favor of Tenant, and in such event, insofar as such
transfer is concerned, Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. See Paragraph 64

     24. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of Landlord in the land
and buildings in which the leased Premises are located (whether such interest of Landlord is a fee
title interest or a leasehold interest is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale. Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved and upon all the other
terms, conditions and covenants herein contained.

     25. HOLDING OVER. Any holding over by Tenant after expiration or other termination of the
term of this Lease with the written consent of Landlord delivered to Tenant shall not constitute a
renewal or extension of the Lease or give Tenant any rights in or to the leased Premises except as
expressly provided in this Lease. Any holding over after the expiration or other termination of
the term of this Lease, with the consent of Landlord, shall be construed to be a tenancy from month
to month, on the same terms and conditions herein specified insofar as applicable except that the
monthly Basic Rent shall be increased to an amount equal to one hundred twenty-five (125%) percent
of the monthly Basic Rent required during the last month of the Lease term.

     26. CERTIFICATE OF ESTOPPEL. Either party shall at any time upon not less than ten (10) days
prior written notice from the other party execute, acknowledge and deliver to the requesting party
a statement in writing (i) 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 (ii) acknowledging that there are not, to the best of such party’s knowledge,
any uncured defaults on the part of the other party hereunder, or specifying such defaults, if any,
are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises. Tenant’s failure to deliver such statement within such time shall be
conclusive upon the party receiving such request that this Lease is in full force and effect,
without modification except as may be represented by Landlord; that there are no uncured defaults
in the requesting party’s performance, and that not more than one month’s rent has been paid in
advance.

     27. CONSTRUCTION CHANGES. It is understood that the description of the Premises and the
location of ductwork, plumbing and other facilities therein are subject to such minor changes as
Landlord or Landlord’s architect determines to be desirable in the course of

15

 

construction of the Premises, and no such changes shall affect this Lease or entitle Tenant to
any reduction of rent hereunder or result in any liability of Landlord to Tenant. Landlord does
not guarantee the accuracy of any drawings supplied to Tenant and verification of the accuracy of
such drawings rests with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of this Lease to be
performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s sole cost and
expense and without any reduction in rent. If Tenant shall fail to pay any sum of money, or other
rent required to be paid by a hereunder or shall fail to perform any other term or covenant
hereunder on its part to be performed, and such failure shall continue for five (5) days after
written notice thereof by Landlord. Landlord, without waiving or releasing Tenant from any
obligation of Tenant hereunder, may, but shall not be obliged to, make any such payment or perform
any such other term or covenant on Tenant’s part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest thereon at the rate of
the prime rate of interest per annum as quoted by the Bank of America from the date of such payment
on performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord
on demand by Landlord, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of
failure by Tenant in the payment of rent hereunder.

     29. ATTORNEYS’ FEES.

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease or because of the breach of any
provision of this Lease, or for any other relief against the other party hereunder, then all costs
and expenses, including reasonable attorneys’ fees, incurred by the prevailing party therein shall
be paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be enforceable whether or not the
action is prosecuted to judgment.

          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorneys’ fee.

     30. WAIVER. The waiver by either party of the other party’s failure to perform or observe any
term, covenant or condition herein contained to be performed or observed by such waiving party
shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent failure
of the party failing to perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the parties hereto during
the term hereof shall be deemed a waiver of, or in any way affect, the right of either party to
insist upon performance and observance by the other party in strict accordance with the terms
hereof.

     31. NOTICES. All notices, demands, requests, advices or designations which may be or are
required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advices or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises of it

16

 

sent by United Stated certified or registered mail, postage prepaid, addressed to Tenant at
the Premises. All notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid, addressed to Landlord at
its offices at Peery/Arrillaga, 2560 Mission College Boulevard, Suite 101, Santa Clara, CA 95054.
Each notice, request, demand, advice or designation referred to in this paragraph shall be deemed
received on the date of the personal service or mailing thereof in the manner herein provided, as
the case may be.

     32. EXAMINATION OF LEASE. Submission of this instrument for examination or signature by
Tenant does not constitute a reservation of or option for a lease, and this instrument is not
effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event earlier than (30) days
after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations; provided, however,
that if the nature of Landlord’s obligations is such more than thirty (30) days are required for
performance, then Landlord shall not be in default if Landlord commences performance within such
thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY. If Tenant is a corporation (or a partnership), each individual
executing this Lease on behalf of said corporation (or partnership) represents and warrants that he
is duly authorized to execute and deliver this Lease on behalf of said corporation (or partnership)
in accordance with the by-laws of said corporation (or partnership in accordance with the
partnership agreement) and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty (30) days after
execution of this Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this Lease.

35. INTENTIONALLY LEFT BLANK

     36. LIMITATION OF LIABILITY. In consideration of the benefits accruing hereunder, Tenant and
all successors and assigns covenant and agree that, in the event of any actual or alleged failure,
breach or default hereunder by Landlord:

               (a) the sole and exclusive remedy shall be against Landlord and Landlord’s assets;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction of the partnership);

17

 

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process;

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

               (g) no writ of execution will ever be levied against the assets of any partner of Landlord;

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS. No sign, placard, picture, advertisement, name or notice shall be inscribed,
displayed or printed or affixed on or to any part of the outside of the Premises or any exterior
windows of the Premises without the written consent of Landlord first had and obtained and Landlord
shall have the right to remove any such sign, placard, picture, advertisement, name or notice
without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on or about the Premises, upon expiration or other sooner termination of this
Lease, Tenant at Tenant’s sole cost and expense shall both remove such sign and repair all damage
in such a manner as to restore all aspects of the appearance of the Premises to the condition prior
to the placement of said sign.

     All approved signs or lettering on outside doors shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person reasonably approved of by Landlord.

     Tenant shall not place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.

     38. MISCELLANEOUS AND GENERAL PROVISIONS.

          A. Use of Building Name. Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

          B. Choice of Law: Severability. This Lease shall in all respects be governed by and construed
in accordance with the laws of the State of California. If any provision of this Lease shall be
invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall
be and remain in full force and effect.

          C. Definition of Terms. The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and

18

 

the successors and assigns of Landlord. The term “Tenant” or any pronoun used in place
thereof includes the plural as well as the singular and individuals, firms, associations,
partnerships and corporations, and their and each of their respective heirs, executors,
administrators, successors and permitted assigns, according to the context hereof, and the
provisions of this Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns.

     The term “person” includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations. Words used in any gender include other genders. If
there be more than one Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.

          D. Time of Essence. Time is of the essence of this Lease and of each and all of its
provisions.

          E. Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim deed or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

          F. Incorporation of Prior Agreements: Amendments. This agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.

          G. Recording. Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit D.

          H. Amendments for Financing. Tenant further agrees to execute any amendments reasonably
required by a lender to enable Landlord to obtain financing, so long as Tenant’s rights hereunder
are not materially and adversely affected and there is no change in the Basic Rent, Options to
Renew, Lease Term or Construction obligations of Landlord.

          I. Additional Paragraphs. Paragraphs 39 through 65 are added hereto and are included as a
part of this Lease

          J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          K. Diminution of Light, Air or View. Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect this Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant.

19

 

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

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA	 	QUANTUM CORPORATION,	 	 
	SEPARATE PROPERTY TRUST	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ John Arrillaga
	 	By
	 	  /s/ Joseph C. Shepela	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title
	 	  VP Human Resources	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY	 	 	 	 	 	 
	SEPARATE PROPERTY TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ Richard Peery	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 

20

 

     Paragraphs 39 through 65 to Lease Agreement Dated October 31, 1989, By and Between JOHN
ARRILLAGA AND RICHARD T. PEERY SEPARATE PROPERTY TRUSTS, as Landlord, and QUANTUM CORPORATION, a
Delaware corporation, as Tenant for 176,516 ± Square Feet of Space Located at the corner of Bellew
and McCarthy Boulevard, Milpitas, California.

     39. BASIC RENT: In accordance with Paragraph 4A, subject to the provisions of
Paragraph 40 and 41, Basic Rent shall be payable as follows during the indicated months of the term
of the Lease based upon the gross leasable area within the building that is part of the Premises:

	 	 	 	 	 
	 Period	 	Monthly Basic Rent	 
	Months 1-17
	 	 	 	 
	(plus the partial calendar month, if any,
	 	 	 	 
	following the Commencement Date)
	 	$1.00/sf
	 
	 	 	 	 
	Months 18-29
	 	$1.05/sf
	 
	 	 	 	 
	Months 30-41
	 	$1.10/sf
	 
	 	 	 	 
	Months 42-53
	 	$1.15/sf
	 
	 	 	 	 
	Months 54-65
	 	$1.20/sf
	 
	 	 	 	 
	Months 66-77
	 	$1.25/sf
	 
	 	 	 	 
	Months 78-89
	 	$1.30/sf
	 
	 	 	 	 
	Months 90-101
	 	$1.35/sf
	 
	 	 	 	 
	Months 102-113
	 	$1.40/sf
	 
	 	 	 	 
	Months 114-125
	 	$1.45/sf
	 
	 	 	 	 
	Months 126-137
	 	$1.50/sf
	 
	 	 	 	 
	Months 138-149
	 	$1.55/sf
	 
	 	 	 	 
	Months 150-161
	 	$1.60/sf
	 
	 	 	 	 
	Months 162-173
	 	$1.65/sf
	 
	 	 	 	 
	Months 174-185
	 	$1.70/sf

     Example of calculation for Basic Rent per month for the period commencing with the
first through the seventeenth month of said Lease:

	 	 	 	 	 
	Square footage of Building
	 	 	176,516	 
	Per square foot Basic Monthly Rent:
	 	 	x$1.00	 
	 
	 	 	 
	 
	 	 	 	 
	 
	 	[Illegible]

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     40. BASIC RENT REDUCTION DURING PHASE IN PERIOD: For the period commencing on the
Commencement Date through May 31, 1991, Landlord acknowledges that Tenant may occupy the building
on a phased-in basis. In the event Tenant does not occupy the entire building from the
Commencement Date of this Lease, it is agreed that Tenant’s monthly Basic Rent will be reduced by
$1.00 per square foot on the square footage not occupied. This reduction in Basic Rent is only
allowed from the Commencement Date through May 31, 1991 (but not under any circumstances after May
31, 1991). In no event whatsoever shall Tenant be entitled to such reduction in rent and this
Paragraph 40 shall not be considered in effect and binding on Landlord after May 31, 1991
regardless of the Commencement Date of this Lease and regardless of the reason for any delays in
the Commencement date of this Lease. In the event Tenant occupies the Premises on a phased in
basis in accordance with the foregoing, Landlord and Tenant agree to execute an amendment to this
Lease reflecting the number of square feet so occupied and adjusting the Basic Rent accordingly.
It is further agreed that during the phase-in period Tenant will be responsible for paying all
Additional Rent expense as outlined in Paragraph 4D on the entire building from the Commencement
Date.

     41. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as
defined herein) and shall continue for a period of fifteen (15) years and five (5) months, plus the
partial calendar month, if any, in which the Commencement Date occurs, subject to (i) earlier
termination in accordance with the provisions of this Lease, and (ii) extension pursuant to the
options to renew granted by Paragraphs 42 and 43. By way of example only, if the Commencement Date
occurs on December 15, 1990, the term of the Lease shall continue until May 30, 2006 (i.e., a
period of 15 years and 5 calendar months, along with the partial calendar month following December
15, 1990 until December 31, 1990).

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean
the later to occur of the following: (i) the date upon which the “Improvements” are
“Substantially Completed”; or (ii) December 15, 1990; provided, however, that if prior to the
later of such dates Tenant’s operating personnel enter into occupancy of the Premises and commence
the operation of Tenant’s business within the Premises, the Commencement Date shall be the date
such personnel of Tenant so enter into occupancy of the Premises. The term “Substantially
Completed” and/or “Substantial Completion” shall mean the date when all of the following have
occurred with respect to the Improvements in question: (i) the construction of the Improvements
in question has been substantially completed in accordance with the approved plans therefor except
for punch list items which do not prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; (ii) Landlord has executed a certificate or statement representing that the
Improvements in question have been substantially completed in accordance with the plans and
specifications therefor except for punch list items which do not prevent Tenant from reasonably
using the Premises to conduct Tenant’s business; and (iii) the Building Department of the City of
Milpitas has completed its final inspection of such Improvements and has “signed off” the building
inspection card approving such work as complete except for punch list items which do not prevent
Tenant from reasonably using the Premises to conduct Tenant’s business. Notwithstanding the
foregoing, Substantial Completion

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of the Interior Improvements shall not be deemed to have occurred until Landlord has obtained
final or [Illegible] that do not prevent Tenant from occupying the improvements.

          C. Lease Terms Co-extensive: It is acknowledged that (i) concurrently with the
execution of this Lease, Landlord and Tenant are also executing a lease dated October 31, 1989
affecting adjacent property upon which is to be constructed a building for Tenant’s use consisting
of approximately 155,734 square feet (the “Companion Lease”), and (ii) it is the intention of the
parties that the term of this Lease be co-extensive with the term of the Companion Lease, such that
the terms of both leases expire on the same date. To that end, in the event that following the
date upon which the Commencement Date of this Lease and the comparable “Commencement Date” of the
Companion Lease become established as a date certain following completion of improvements and
satisfaction of any other conditions related to determining such dates, and if such dates are not
the same, then whichever date occurs later shall be the expiration date of the lease term for both
leases (subject to the right of Tenant to extend either lease pursuant to the options to extend
granted in the two leases). It is acknowledged that the implementation of this paragraph may
result in an extension of the term of this Lease, in which event Tenant shall continue to pay rent
at the rate applicable for the period immediately prior to the adjusted lease term expiration date.
As soon as the parties are able to implement the provisions of this paragraph because the
Commencement Date of this Lease and “Commencement Date” of the Companion Lease have been determined
following completion of improvements and satisfaction of other appropriate conditions, the parties
shall execute amendments to this Lease and the Companion Lease establishing the applicable
Commencement Date, the expiration date of the term of the leases in accordance with the foregoing
provisions of this Paragraph 41C, the actual rent based upon the measurements of the completed
building covered by such lease as certified prior to the Commencement Date by an architect or
general contractor reasonably approved by the parties, and the actual date for each rent adjustment
provided for in each lease, based upon the actual Commencement Date.

     42. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions:

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at least one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 42 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

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	 	 	Monthly
	Period	 	Basic Rent
	Months 1-12
	 	$1.75/sf
	Months 13-24
	 	$1.80/sf
	Months 25-36
	 	$1.85/sf
	Months 37-48
	 	$1.90/sf
	Months 49-60
	 	$1.95/sf

          C. Notwithstanding anything concerned herein, Tenant may not exercise the option to renew
granted by this Paragraph 42 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 42
notwithstanding such non-curable default.

     43. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 42, Landlord hereby grants to Tenant an
option to extend the term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 42, in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this Paragraph 43A and subject
to the rental as set forth below. In the event that Tenant fails to timely exercise Tenant’s
option as set forth herein in writing, Tenant shall have no further option to extend this Lease,
and this Lease shall continue in full force and effect for the full remaining term hereof, absent
this Paragraph 43.

          B. The monthly rental for the option period shall be as follows in the event the option is
exercised:

	 	 	 	 	 
	 	 	Monthly
	Period	 	Basic Rent
	Months 1-12
	 	$2.00/sf
	Months 13-24
	 	$2.05/sf
	Months 25-36
	 	$2.10/sf
	Months 37-48
	 	$2.15/sf
	Months 49-60
	 	$2.20/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 43 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this

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Lease; provided, however, that if such default of Tenant is not for money due under this Lease
and cannot be cured, and if Landlord does not elect to terminate this Lease as a result of such
non-curable default by Tenant, Tenant may exercise the option to extend granted by this Paragraph
43 notwithstanding such non-curable default.

     44. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide for
construction contingencies and reserve funds. Interest will be earned on such funds created for
contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be [Illegible] additional rent if, and at the time of any
such credit of surpluses, an amount equal to all such surpluses so credited.

     45. HAZARDOUS MATERIALS: The parties agree as follows with respect to the existence
or use of hazardous material on the Premises:

          A. Tenant shall have no obligation to “clean up”, to comply with any law regarding, or to
reimburse, release, indemnify, or defend Landlord with respect to any hazardous materials or wastes
which Tenant or other parties on the Premises did not store, dispose, or transport in, use, or
cause to be on the Premises in violation of applicable law during the term of this Lease. Any
handling, transportation, storage, treatment, disposal or use of hazardous materials by Tenant or
other parties in or about the Premises during the term of this Lease shall strictly comply with all
applicable laws and regulations. Tenant will be 100 percent liable and responsible for any and all
“clean up” of said toxic waste and/or hazardous materials contamination which Tenant, its agents,
or future subtenants, if any, does store, dispose, or transport in, use or cause to be on the
Premises in violation of applicable law or governing agency(s) (or which originate on the Premises
during the term of this Lease from any manner whatsoever, including but not limited to, dumping by
others), and will indemnify Landlord and hold Landlord harmless from any liabilities, demands,
costs, expenses and damages, including attorney fees incurred as a result of any claims resulting
from such contamination, or from any claims for personal injury or property damage or diminution in
the value of the Premises caused by the use, storage, disposal or transportation of hazardous
materials on the Premises by Tenant or other parties during the term of this Lease. It is agreed
that the Tenant’s responsibilities related to toxic waste and hazardous materials will survive the
termination date of the Lease. Tenant agrees to complete compliance with governmental regulations
regarding use or removal or remediation of Hazardous Materials used, stored, disposed, transported
or caused to be on the Premises by Tenant or its agents or subtenants, or which originate on the
Premises during the term of this Lease, and prior to the termination of said Lease Tenant agrees to
follow the proper closure procedures and will obtain a clearance from the local fire department
and/or the appropriate city agency. Tenant also agrees to install such toxic waste and/or
hazardous materials monitoring devices as Landlord reasonably deems necessary to monitor any use of
hazardous materials by Tenant, its agents or subtenants, originating from the Premises during the
Lease term, if recommended by a qualified environmental consulting firm.

-25-

 

          B. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this Lease, without any
inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

               (1) The soil and ground water on or under the Premises does not contain hazardous materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such hazardous materials.

               (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the
[Illegible]

               (3) any pending investigation by any governmental agency concerning the Premises relating to
hazardous materials.

          C. Landlord and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority concerning hazardous
materials which relates to the Premises, and (ii) any contamination of the Premises by hazardous
materials which constitutes a violation of any law. Attached as Exhibit “C” hereto
is a list of hazardous materials that Tenant intends to use at the Premises. If during the Lease
term Tenant proposes to use other hazardous materials at the Premises, Tenant shall inform Landlord
of such use, identifying the hazardous materials and the manner of their use, storage and disposal,
and shall agree (i) to use, store and dispose of such materials strictly in compliance with all
laws and (ii) that the indemnity set forth in paragraph 45A shall be applicable to Tenant’s use of
such material.

          D. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of hazardous material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid for by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
hazardous materials laws, or Tenant or parties on the Premises during the term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to hazardous materials
laws, or that Tenant has liability to Landlord pursuant to paragraph 45A, then Tenant shall pay for
100% of the cost of the test and all related expense. Prior to the expiration of the Lease term,
Tenant shall remove any testing wells it has installed at the Premises, and return the Premises to
the condition existing prior to the installation of such wells, unless Landlord requests in writing
that Tenant leave all or some of the testing wells in which instance the wells requested to be left
shall not be removed.

          E. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
hazardous materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such materials at the Premises. The
Commencement Date shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.

-26-

 

          F. The obligations of Landlord and Tenant under this Paragraph 45 shall survive the expiration
or earlier termination of the term of this Lease. The rights and obligations of Landlord and
Tenant with respect to issues relating to hazardous materials are exclusively established by this
Paragraph 45.

     46. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall not be
unreasonably withheld or delayed.

     47. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can commence.
Therefore, it is agreed that in the event Landlord cannot obtain all the necessary building permits
for the building shell by June 1, 1990, then either Landlord or Tenant can terminate this Lease by
written notice to the other party given within thirty (30) days thereafter, without any liability
to the other party of any type whatsoever, and that this Lease Agreement will be null and void
[Illegible] to use its best efforts to obtain the required permits by June 1, 1990.

     48. CROSS DEFAULT: As set forth in Paragraph 41C, Landlord and Tenant have entered
into another lease dated October 31, 1989 referred to herein as the “Companion Lease” affecting
property contiguous to the Premises leased hereunder. As a material part of the consideration for
the execution of this Lease by Landlord, it is agreed between Landlord and Tenant that a default
under this Lease, or a default under said Companion Lease dated October 31, 1989 may, at the option
of Landlord, be considered a default under both leases, in which event Landlord shall be entitled
(but in no event required) to apply all rights and remedies of Landlord under the terms of one
Lease to both Leases including, but not limited to, the right to terminate one or both of said
leases by reason of a default under said Companion Lease dated October 31, 1989 or hereunder.

     49. SUBDIVISION: With respect to the development of the Premises:

          A. The parties acknowledge that as of the date this Lease is signed by the last party (the
“Effective Date”) the Premises is not constituted as a separate legal parcel, but is part of a
larger parcel consisting of approximately 37.096 acres (“Larger Parcel”), all of which is shown by
the site plan attached to the lease as Exhibit “A”. Landlord agrees to use reasonable
efforts to cause the Premises to be constituted as a separate legal parcel containing approximately
11.848 acres in the approximate area and configuration shown and outlined within the area marked in
red on Exhibit “A”, and to use reasonable efforts to cause lot 1, as shown on Exhibit
“A” to the Companion Lease and lots 3 through 5 as shown on Exhibit “A” to the Option
Agreement (the “Option”) between Landlord and Tenant of even date herewith to be subdivided by
means of the recordation of a subdivision map by July 1, 1990. In causing such property to be
subdivided, Landlord and Tenant agree to consent to reasonable lot line modifications as required
by the City of Milpitas; provided, however, that the configuration of the Premises shall be
established in such manner that does not result in a material reduction in the Improvements or in
parking, access, or landscape amenities which are shown on the site plan attached to this Lease as
Exhibit “A”. Tenant agrees to reimburse Landlord for actual expenses paid by Landlord in
the

-27-

 

preparation, processing and recordation of such subdivision map and to meet other requirements
necessary to make said lots 1-5 separate lots; provided, however, Tenant’s total reimbursement
obligation pursuant hereto, the Companion Lease and the Option shall not exceed Twenty Five
Thousand Dollars ($25,000). At such time is Landlord causes any such subdivision to be completed,
Landlord and Tenant shall execute an amendment to this Lease which shall set forth the description
of the Premises resulting from the subdivision.

          B. Landlord and Tenant agree that the Premises and the Larger Parcel during (and limited to)
the term of this Lease shall be developed and used only in accordance with a master plan, developed
by Landlord. The parties have mutually agreed to a Master Plan for the general development of the
entire 37.096 ± acre site which is attached hereto as Exhibit “A” and entitled “Master Site
Plan”. Said Master Site Plan sets forth the buildings and land to be leased under this Lease and
the Companion Lease (Building 1 and 2 on Lots 1 and 2), and the buildings and land proposed to be
developed on the remainder of the property (Building 3, 4, and 5 to be constructed on Lots 3, 4,
and 5 respectively) as well as the general location of the parking and landscaping pertaining
thereto. The parties agree that the Master Site Plan may be modified provided that (i) a perimeter
driveway is developed in front of [Illegible] generally runs near [Illegible] recreation area at
the rear of Lot 4 (as shown on the Site Plan) is developed when a building is constructed on Lot 4,
(iii) all buildings will be similar and generally architecturally compatible, and (iv) a landscape
area is developed along the frontage of all streets between the street and parking area closest to
the street. The parties agree that (i) Landlord may change the master plan, shape and sizes of the
buildings, parking and landscaping as long as the general development concept set forth above is
generally followed by Landlord, and (ii) any successor or assign of Landlord or Tenant shall be
required to consent and agree to develop the Premises and the Larger Parcel in accordance with the
foregoing, and shall be deemed to have assumed the obligation to so develop such property by
acceptance of a deed, assignment or other means of transfer of Landlord’s or Tenant’s interest in
such property or any portion thereof, as the case may be. Further, the memorandum of lease to be
recorded by Landlord and Tenant pursuant to paragraph 38G shall contain the following statement:

“The Lease provides that from and after the commencement date of the Lease and
continuing for a period of fifteen years the Premises and the larger 37.096 acre
parcel in which the Premises were originally included, shall be developed by the
parties to the Lease or their successors or assigns, as more particularly set forth
in the Lease, so that (i) a perimeter driveway is developed in front of each
building which generally runs near and parallel with the street surrounding the 37 ±
acre site, (ii) a landscape area is developed along the frontage of all streets
between the street and parking area closest to the street, (iii) a landscape and
recreation area at the rear of Lot 4 (as shown on the Site Plan identified in the
Lease) is developed when a building is constructed on Lot 4, and (iv) all buildings
will be similar and generally architecturally compatible, it being agreed that
Landlord may change the shape and sizes of the buildings, parking and landscaping as
long as the general development concept set forth above and in the Lease is
generally followed by Landlord. Tenant understands that the lots shown on the
Master Site Plan described in the Lease are for lease purposes only and that the
lots have not been legally subdivided and do not constitute separate legal lots, but
Landlord agrees to use reasonable efforts to cause Lots 1-5 to be subdivided in
accordance

-28-

 

with the approved Master Plan by July 1, 1990. If a Public Agency requires
modifications to the lot lines as shown on the Master Plan, the parties agree to
reasonable lot line modifications. Tenant agrees to reimburse Landlord for actual
expenses paid by Landlord in the processing and recordation of such subdivision map
and to meet all other requirements necessary to make said Lots 1-5 separate lots;
provided, however, Tenant’s total reimbursement obligation (pursuant to all
agreements between Landlord and Tenant) shall in no event exceed Twenty-Five
Thousand Dollars ($25,000.00).”

     50. LIMITATION ON IMPOSITION OF LATE CHARGE: Notwithstanding anything contained in
Paragraph 4C, if Tenant is delinquent in the payment of Basic Rent or Additional Rent and is
subject to a late charge, Landlord agrees to waive the late charge if the Basic Rent or Additional
Rent due is paid within five days of Landlord’s written notice to Tenant of the delinquent amount
owed and provided Tenant has not been delinquent in its payment of Basic Rent or Additional Rent
owed under said Lease during the twelve (12) month period preceding the rent delinquency in
question.

     51. SECURITY DEPOSIT: The following provisions shall modify paragraph 4F:

          A. [Illegible] within thirty (30) days after the expiration or earlier termination of the
Lease term and after Tenant has vacated the Premises, Landlord shall return to Tenant the entire
Security Deposit except for amounts that Landlord has deducted therefrom that are needed by
Landlord to cure defaults of Tenant under the Lease or compensate Landlord for damages for which
Tenant is liable pursuant to this Lease. The use or disposition of the Security Deposit shall be
subject to the provisions of California Civil Code Section 1950.7.

          B. Tenant shall have the option of satisfying its obligation with respect to an amount equal
to one-half (1/2) of the Security Deposit by providing to Landlord, at Tenant’s sole cost, a letter
of credit which (i) is drawn upon an institutional lender reasonably acceptable to Landlord, (ii)
is in the amount of one-half (1/2) of the Security Deposit, (iii) is for a term of at least twelve
(12) months, (iv) with respect to any letter of credit in effect within the six month period
immediately prior to the expiration of the Lease term, shall provide that the term of such letter
of credit shall extend at least thirty (30) days past the Lease expiration date, (v) may be drawn
upon by Landlord upon submission of a declaration of Landlord that Tenant is in default (as defined
in Paragraph 19 and as modified by Paragraph 60). Landlord shall not be obligated to furnish proof
of default to such institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit, (vi) shall provide that if the
letter of credit is not renewed, replaced or extended within twenty (20) days of its expiration
date the issuer of the credit shall automatically make payment of the amount of the letter of
credit directly to Landlord after the date which is twenty (20) days before the expiration date,
and no later than the expiration date, without Landlord being required to make demand upon the
letter of credit, and (vii) is otherwise in form and content reasonably satisfactory to Landlord.
If Tenant provides Landlord with a letter of credit meeting the foregoing

-29-

 

requirements, one-half (1/2) of the cash Security Deposit (i.e., $238,296.60 of the
$476,593.20 Deposit) shall be returned to Tenant by Landlord inasmuch as the cash deposit remaining
and the Letter of Credit equal the total Security Deposit required in Paragraph 4F. If Tenant
defaults with respect to any provisions of this Lease, including but not limited to provisions
relating to the payment of rent, Landlord may (but shall not be required to) draw down on the
letter of credit for payment of any sum which Landlord may spend or become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant’s default. Landlord and Tenant acknowledge that such letter of credit
will be treated as if it were a cash security deposit, and such letter of credit may be drawn down
upon by Landlord upon demand and presentation of evidence of the identity of Landlord to the
issuer, in the event that Tenant defaults with respect to any provision of this Lease and such
default is not cured within any applicable cure period. Notwithstanding anything to the contrary
in this Lease, Landlord shall not be obligated to furnish proof of default to such institutional
lender and Landlord is only required to give the institutional lender written notification that
Tenant is in default and upon receiving such written notification from Landlord the institutional
lender shall be obligated to immediately deliver cash to Landlord equal to the amount Landlord may
spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord
[Illegible] acknowledges that it is not entitled to draw down such letter of credit unless Landlord
would have been entitled to draw upon the cash security deposit pursuant to the terms of Paragraph
4.F of the Lease. Concurrently with the delivery of the required information to the issuer,
Landlord shall deliver to Tenant written evidence of the default upon which the draw down was
based, together with evidence that Landlord has provided to Tenant the written notice of such
default which was required under the applicable provision of the Lease, and evidence of the failure
of Tenant to cure such default within the applicable grace period following receipt of such notice
of default. Any proceeds received by Landlord by drawing upon the letter of credit shall be
applied in accordance with the provisions governing the Security Deposit imposed by Paragraph 4F
and this Paragraph 51. If Landlord draws upon the letter of credit, thereafter Tenant shall once
again shall have the right to post a letter of credit in place of one-half (1/2) of a cash Security
Deposit so long as Tenant is not then in default. In any event Tenant will be obligated to
replenish the amount drawn to restore the Security Deposit to its original amount as provided for
in paragraph 4F. If any portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from Landlord, restore and
replace the value of such security by either (i) depositing cash with Landlord in the amount equal
to the sum drawn down under the letter of credit, or (ii) increasing the letter of credit to its
value immediately prior to such application. Tenant’s failure to replace the value of the security
as provided in the preceding sentence shall be a material breach of its obligation under this
Lease.

     52. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 52 shall modify
Paragraphs 5 and 6:

          A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include Tenant’s trade
fixtures so long as such trade fixtures are not installed in such a manner that they have become an
integral part of the building.

          B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval if the total cost of such Alterations exceeds $20,000

-30-

 

per the scope of any single remodeling job to the Premises, or if such Alteration is
structural in nature. Any other non-structural Alteration of less than $20,000 for the total cost
of the remodeling job may be undertaken by Tenant without Landlord’s prior written approval but
with the understanding that Tenant shall be obligated to restore the Premises as set forth in
Paragraph 5 at the termination of this Lease, except as otherwise provided in Paragraph 52.D.
Notwithstanding the foregoing, Tenant shall have the right to reconfigure modular freestanding
walls and partitions without Landlord’s prior’ consent, which have been installed by Tenant and
paid for by Tenant.

          C. At all times during the Lease Term (i) Tenant shall maintain and keep up dated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

          D. Tenant shall have the right to remove at any time during the Lease term or prior to the
expiration thereof any (i) process equipment such as clean hoods, thermal cycling chambers, freon
piping, high temperature furnaces, air handlers and special air-conditioning, (ii) process systems
such as compressed air or processed exhaust systems and (iii) the clean room modules and all
related process equipment, which are paid for 100% by Tenant (excluding building [Illegible] part
of the building not related to Tenant’s clean room modules or other special purpose process
equipment or systems), which systems, equipment and modules the parties agree for the purposes of
this Lease shall be deemed to be trade fixtures, so long as Tenant repairs all damage caused by the
installation and/or removal thereof, returns the Premises prior to the termination of the Lease to
the condition existing prior to the installation of such item, and repairs and restores any
so-called “doughnuts” or gaps in the roof and/or floor tiles and/or ceiling and lighting resulting
from such removal. At the time Tenant requests the consent of Landlord to approve the installation
of an Alteration requiring the consent of Landlord, Tenant shall seek from Landlord a written
statement of whether or not Landlord will require Tenant to remove such Alteration and restore all
or part of the Premises as required by Landlord in accordance with this paragraph and Paragraph 5
at the expiration or earlier termination of the term of the Lease. If Tenant does not obtain from
Landlord a statement in writing that Landlord will not require such Alteration to be removed, then
at the expiration or sooner termination of the term of the Lease, it is agreed that Tenant may be
required to remove all or part of such Alterations, and return the Premises to the condition
existing prior to the installation of such Alterations as provided for in Paragraph 5 above. In
addition, if Tenant has installed Alterations without Landlord’s consent, if Landlord so requires,
Tenant shall also remove all or part of such Alterations so installed without Landlord’s consent as
Landlord may designate and return the Premises to the condition existing prior to the installation
of such Alteration. Alterations for which Landlord has given its written consent to Tenant that
such Alteration need not be removed, shall not be removed by Tenant at the expiration or earlier
termination of the term of the Lease.

          E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such fixtures and repairs and restores any so
called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-floor and

-31-

 

appropriate floor covering for said area) and/or floor tiles and/or ceiling tiles and lighting
resulting from such removal.

     53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions
of this Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 42 and 43, or during either of the five (5) year extension
periods permitted by Paragraphs 42 and 43, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural improvements required by
laws enacted or legal requirements imposed by governmental agency(s) after the Commencement Date,
and the cost for each required work or improvement exceeds $100,000, then if such legal requirement
is not imposed because of Tenant’s specific use of the Premises and is not “triggered” by Tenant’s
Alterations or Tenant’s application for a building permit or any other governmental approval (in
which instance Tenant shall be responsible for 100% of the cost of such improvements), Landlord
shall be responsible for paying the cost of such improvement and constructing such improvement,
subject to a cash contribution from Tenant of a portion of the cost thereof as provided for and
calculated in Paragraph 53B.

          B. [Illegible] improvement pursuant [Illegible] such improvement, Tenant shall make the
following contribution in cash to Landlord for the cost thereof prior to the commencement of the
work by Landlord. It is agreed that Tenant shall pay to Landlord 100% of the cost of the first
$100,000.00 worth of each improvement. After the first $100,000.00, all costs above $100,000.00
shall be divided by 15 and multiplied by the time period remaining in the last five years of the
Lease term from the date work on such improvement commences.

     For example, if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be responsible for
reimbursing Landlord in cash $130,000 computed as follows:

	 	 	 	 	 	 	 	 	 
	Total Cost of Work
	 	 	 	 	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	 	 	 	 	-100.000.00	 
	 
	 	 	 	 	 	 	 
	Total Amount To Be Amortized
	 	 	 	 	 	 	300,000.00	 
	 
	 	 	 	 	 	 	 	 
	$300,000.00/15 = $20,000/yr. x 1.5 yrs
	 	 	=	 	 	$	30,000.00	 
	 
	 	 	 	 	 	 	 	 
	Tenant responsible for $100,000 + 30,000
	 	 	=	 	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 53B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 42 or 43, upon the exercise of
any such option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total amount
of said improvement less the amount

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previously paid for by Tenant. Using the example in Paragraph 53B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 — $130,000.00 = $270,000.00).

     54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of hazardous materials on the Premises unless directly
related to Tenant’s activities, which subject is exclusively governed by Paragraph 45.

          B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond. If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on Tenant’s part to pay
such Real Property Taxes being so contested shall not constitute a default so long as Tenant
complies with the provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord. In that case Landlord shall join
in the proceedings or contest or permit it to be brought in Landlord’s name as long as Landlord is
not required to bear any cost. Tenant, on final determination of the proceeding or contest, shall
[Illegible] decision or judgment rendered, together with all costs, charges, interest, and
penalties incidental to the decision or judgment. If Tenant does not pay the Real Property Taxes
when due pursuant to the Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant shall furnish to Landlord a
surety bond in form reasonably satisfactory to Landlord issued by an insurance company qualified to
do business in California. The amount of the bond shall equal 125% of the total amount of Real
Property Taxes in dispute and any such bond shall be assignable to any lender or purchaser of the
Premises. The bond shall hold Landlord and the Premises harmless from any damage arising out of
the proceeding or contest and shall insure the payment of any judgment that may be rendered.

     55. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

          A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga and Richard T. Peery Separate
Property Trusts or an affiliated entity; (ii) the insurance to be carried by Tenant to satisfy this
requirement strictly complies with all of the provisions of Paragraph 12; (iii) such insurance
shall name Landlord as the insured and provide that it is to be payable to Landlord in the same
manner as if such insurance had been carried by Landlord pursuant to Paragraph 12 (subject to the
rights of any lender holding a mortgage or deed of trust

-33-

 

encumbering the Premises); (iv) each lender holding a mortgage or deed or trust encumbering
the Premises shall have given its written consent to Tenant carrying such insurance and such
insurance shall comply with the requirements of any such lender; (v) Tenant must notify Landlord,
by certified mail, no later than one hundred eighty (180) days prior to the expiration date of
Landlord’s insurance policy (which expiration date is currently 3/13/xx of a given year and is
subject to change), that Tenant will directly obtain the required insurance coverage for the
insurance year commencing 3/14/XX through 3/13/XX and each insurance year through the termination
date of this Lease, or until Tenant is no longer able to comply with all of the provisions of this
paragraph 55; (vi) the annual premium must be paid in full at the commencement of the policy; (vii)
the insurance policy must be issued for a one-year period following the expiration date of
Landlord’s insurance policy (i.e., from 3/14/XX to 3/13/XX); (viii) any and all deductibles
required under the policy will be paid entirely by Tenant; (ix) the terms of the coverage must be
broad form and cover all items to be covered as set forth in Paragraph 12 of this Lease; (x) the
Building and Premises must be insured for their full replacement cost; (xi) the insurance policy
containing the required coverage in accordance with the provisions of this paragraph must be sent
to Landlord for retention within thirty (30) days prior to the expiration date of Landlord’s
insurance policy, and may not be terminated or altered without thirty (30) days written notice to
Landlord by the company providing such insurance (it is agreed that if the insurance policy is
cancelled or altered, Landlord will have the right to obtain the property insurance coverage on
said building, and Landlord will bill the Tenant for the related insurance premium); and (xii) at
all times while Tenant is so carrying such insurance, Tenant is Quantum Corporation or a successor
entity and the then net worth of such corporation is substantially the same as the net worth of
Quantum Corporation as of the date of this Lease is executed by Landlord and Tenant. Tenant shall
provide such evidence as is required by Landlord and any lender to establish that the insurance
that Tenant carries pursuant to this Paragraph 55 has been obtained and meets the requirement of
this [Illegible] Such insurance [Illegible] is reasonably acceptable[Illegible] which must be
rated “A plus” or better by Best’s Insurance Service (or an equivalent rating from another rating
agency should Best’s no longer provide such service). A copy of any such policy shall be delivered
to Landlord. If Tenant elects to insure and such insurance provided by Tenant does not satisfy the
requirements of paragraph 12, in the event of a subsequent casualty, Tenant shall be responsible
for and shall pay for that portion of the restoration cost, in excess of the insurance proceeds
actually available, that would have been covered by insurance satisfying the requirements of
paragraph 12.

          B. Tenant shall not obligated to contribute to the cost of earthquake insurance more than an
amount equal to six (6) times the then annual cost of fire and “all risk” insurance per year. For
example, if the 1993 annual premium for fire and “all risk” insurance is $9,000, then Tenant’s
share of the cost of any premium for earthquake insurance for the following year (1994) shall be
limited to $54,000 ($9,000 x 6). Tenant shall have the right to require earthquake insurance
providing it is available if Tenant agrees to pay full cost thereof.

     56. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i)

-34-

 

to withhold its consent to such assignment or sublease, as permitted pursuant to Paragraph 16,
or (ii) to permit Tenant to so assign the Lease or sublease such part of the Premises, in which
event Tenant may do so, but without being released of its liability for the performance of all of
its obligations under the Lease, and the following shall apply (except the following shall not
apply to a “Permitted Transfer” described in Paragraph 57):

               (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all consideration received by
Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant under this
Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing commissions paid
to third parties not affiliated with Tenant in order to obtain the assignment or sublease in
question.

               (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the rental provided for in this Lease fifty percent (50%) of the positive difference,
if any, between (i) all rent and other consideration paid by the subtenant to Tenant, less (ii) all
rent paid by Tenant to Landlord pursuant to this Lease which is allocable to the area so sublet and
all Permitted Transfer Costs related to such sublease. After Tenant has recovered all Permitted
Transfer Costs Tenant shall pay to Landlord the amount specified in the preceding sentence on the
same basis, whether periodic or in lump sum, that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by Tenant.

               (3) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall
[Illegible] an itemized statement [Illegible] certified by Tenant as true and correct. Landlord
shall have the right to inspect Tenant’s books and records relating to the payments due pursuant to
this subparagraph. Upon request therefor, Tenant shall deliver to Landlord copies of all bills,
invoices or other documents upon which its calculations are based.

               (4) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received, by Tenant as a result of the assignment or sublease, if such sums are
paid for Tenant’s interest in this Lease or in the Premises.

     57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 16, so long as Tenant otherwise complies with the provisions of Paragraph 16 and the
Permitted Transfer does not release Tenant from its obligations hereunder, Tenant may enter into
any of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent,
and the provisions of Paragraph 56A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of rent and full performance of the lease;

-35-

 

          B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
95% of all assets of Tenant are permanently transferred to such assignee. In the event there is
not a permanent transfer of 95% or more of the assets and liabilities from Tenant to a third party,
and Tenant continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;

          C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets of Tenant are permanently transferred to
such assignee (in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of the Lease).

     58. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or
deed of trust enters into a written subordination, non-disturbance and attornment agreement in
which the Lender agrees that notwithstanding any subordination of this Lease to such Lender’s
mortgage or deed of trust, (i) such Lender shall recognize all of Tenant’s rights under this Lease,
and (ii) in the event of a foreclosure this Lease shall not be terminated so long as Tenant is not
in material default of its obligations under this Lease, but shall continue in effect and Tenant
and such Lender (or any party acquiring the Premises through such foreclosure) shall each be bound
to perform the respective obligations of Tenant and Landlord with respect to the Premises arising
after such foreclosure.

     59. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (i)
except in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior
to entering [Illegible] shall only enter the Premises when accompanied by Tenant or its agent (so
long as Tenant makes itself reasonably available for this purpose), and (ii) Landlord may install
“for lease” signs relating to the Premises only during the last 150 days of the Lease term.
Landlord agrees to use its reasonable, good faith efforts such that any entry by Landlord, and
Landlord’s agents, employees, contractors and invitees shall be performed in a manner with as
minimal interference as possible with Tenant’s business at the Premises. Subject to the foregoing,
Tenant agrees to cooperate with Landlord and Landlord’s agents, employees and contractors so that
responsibilities of Landlord under the Lease can be fulfilled in a reasonable manner during normal
business hours so that no extraordinary costs are incurred by Landlord.

     60. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30) days is
required to cure such non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

     61. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is

-36-

 

performing all of its other obligations under the Lease including the obligation to pay Basic
Rent and Additional Rent, (ii) Tenant provides on-site security during normal business hours for
those parts of the Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord with respect to the
Premises, and (iv) the utilities and heating and ventilation system are operated to the extent
necessary to prevent damage to the Premises or its systems.

     62. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Except as provided in Paragraph 62B, Landlord may not terminate the Lease if the Premises
are damaged by a peril that is covered by the insurance carried by Landlord pursuant to Paragraph
12, but instead shall restore the Premises in the manner described by Paragraph 21.

          B. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of the
following conditions is satisfied: (i) the cost to repair or the damage exceeds thirty-three
percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs at a time
when there is less than five (5) years remaining in the term of the Lease. Notwithstanding the
foregoing, if such damage occurs at a time when there is less than five (5) years remaining in the
term of the Lease and Landlord notifies Tenant of Landlord’s election to terminate the Lease
pursuant to the provisions of this Paragraph 62B, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 42 or 43 such that the remaining term of the Lease
(including the option period) will be more than five (5) years following the date of such damage,
this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise of an
option to extend granted to Tenant by either Paragraph 42 or 43. In such event, this Lease shall
not terminate, [Illegible] shall be so extended [Illegible]

          C. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the 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
only by delivery to Landlord of a written notice of election to terminate within seven (7) days
after Tenant receives from Landlord the estimate of the time needed to complete such restoration:

               (1) The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage; or

               (2) The Premises are damaged by any peril within twelve (12) months of the last day of the
Lease term and provided Tenant has not exercised an option to renew pursuant to the provisions of
Paragraph 42 or 43, and, in the reasonable opinion of Landlord’s architect or construction
consultant, the restoration of the Leased Premises cannot be substantially completed within sixty
(60) days after the date of such damage.

-37-

 

     63. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than 1/3 of the building is taken by condemnation
or if a taking by condemnation is only threatened.

     64. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the Security Deposit
to its successor in interest (transferee) in accordance with the provisions of California Civil
Code Section 1950.7, as amended or recodified.

     65. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably required by any
supplier, lessor, or lender in connection with the installation in the Premises of the Tenant’s
personal property or trade fixtures providing Landlord approves the form of any such waiver and
Landlord’s rights under this Lease are not materially and adversely affected.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION,	 	JOHN ARRILLAGA SEPARATE	 	 
	a Delaware corporation	 	PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Joseph Shepala
	 	By
	 	/s/ John Arrillaga	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	VP Human Resources	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	RICHARD T. PEERY SEPARATE	 	 
	 	 	 	 	PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ Richard Peery	 	 
	 

	 	 	 	 	 	 	 	 

-38-

 

AMENDMENT NO. 1

     THIS AMENDMENT NO. 1 is made and entered into this 24th day of April, 1990, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE
PROPERTY TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated
7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, as LANDLORD, and QUANTUM
CORPORATION, a Delaware corporation, as TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989, Landlord leased to Tenant all of that
certain 176,516 ± square foot building located at Bellew Drive and Magnolia Drive, Milpitas,
California, the details of which are more particularly set forth in said October 31, 1989 Lease
Agreement, and

     B. WHEREAS, it is now the desire of the parties hereto to amend said Lease to reflect the:
delay of the Commencement Date of the Lease from December 15, 1990 to April 1, 1991 and to amend
the Basic Rent schedule accordingly; deletion of the Phase In Right of said Lease; and commencement
of payment of Additional Rent as of December 15, 1990; as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. LEASE TERM AND COMMENCEMENT DATE: Paragraph 41.B. of the Lease is amended by
changing the reference to the December 15, 1990 Commencement Date to April 1, 1991. Subject
paragraph will be amended to read as follows:

     “B. Commencement Date Defined: As used herein, the term “Commencement Date” shall
mean the later to occur of the following: (i) the date upon which the “Improvements” are
“Substantially Completed”; or (ii) April 1, 1991; provided, however, that if prior to the later of
such dates Tenant’s operating personnel enter into occupancy of the Premises and commence the
operation of Tenant’s business within the Premises, the Commencement Date shall be the date such
personnel of Tenant so enter into occupancy of the Premises. The term “Substantially Completed”
and/or “Substantial Completion” shall mean the date when all of the following have occurred with
respect to the Improvements in question: (i) the construction of the Improvements in question has
been substantially completed in accordance with the approved plans therefore except for punch list
items which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business;
(ii) Landlord has executed a certificate or statement representing that the Improvements in
question have been substantially completed in accordance with the plans and specifications
therefore except for punch list items which do not prevent Tenant from reasonably using the
Premises to conduct Tenant’s business; and (iii) the Building Department of the City of Milpitas
has completed its final inspection of such Improvements and has “signed off” the building
inspection card approving such work as complete except for punch list items

 1

 

which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business.
Notwithstanding the foregoing, Substantial Completion of the Interior Improvements shall not be
deemed to have occurred until Landlord has obtained final or conditional approval from the Fire
Department of the City of Milpitas that the Improvements have been completed in accordance with
such department’s requirements (subject only to conditions that do not prevent Tenant from
occupying the Improvements).”

     2. DELETION OF “BASIC RENT REDUCTION DURING PHASE IN PERIOD”: As a material
inducement to Landlord to postpone the commencement of the Lease Agreement, Paragraph 40 shall be
deleted in its entirety, and Tenant will be responsible for paying Basic Rent to Landlord, from the
Commencement Date of said Lease, on the entire 155,734 ± square foot building.

     3. COMMENCEMENT OF PAYMENT OF ADDITIONAL RENT: Notwithstanding the commencement date
of this Lease as stated above, Tenant shall be responsible for paying one hundred percent (100%) of
the Additional Rent Expenses as. outlined in Paragraph 4.D. of said Lease Agreement for the entire
155,734 ± square foot Lease Premises commencing December 15, 1990.

     4. BASIC RENT SCHEDULE: Furthermore, as Landlord is accommodating Tenant in deferring
the Commencement Date of said Lease from December 15, 1990 to April 1, 1991, the parties have
agreed that the Basic Rent increases will be calculated from December 15, 1990 and that Paragraph
39 “Basic Rent” of said Lease Agreement shall be amended as follows:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-13

	 	$1.00/sf
	 
	 	 
	Months 14-25

	 	$1.05/sf
	 
	 	 
	Months 26-37

	 	$1.10/sf
	 
	 	 
	Months 38-49

	 	$1.15/sf
	 
	 	 
	Months 50-61

	 	$1.20/sf
	 
	 	 
	Months 62-73

	 	$1.25/sf
	 
	 	 
	Months 74-85

	 	$1.30/sf
	 
	 	 
	Months 86-97

	 	$1.35/sf
	 
	 	 
	Months 98-109

	 	$1.40/sf
	 
	 	 
	Months 110-121

	 	$1.45/sf
	 
	 	 

 2

 

	 	 	 
	Period	 	Monthly Basic Rent
	Months 122-133

	 	$1.50/sf
	 
	 	 
	Months 134-145

	 	$1.55/sf
	 
	 	 
	Months 146-157

	 	$1.60/sf
	 
	 	 
	Months 158-169

	 	$1.65/sf
	 
	 	 
	Months 170-185

	 	$1.70/sf

     5. LANDLORD’S RIGHT TO TERMINATE: Paragraph 47 of the Lease is amended by deleting
the references to June 1, 1990 and adding in lieu thereof references to August 1, 1990. Subject
paragraph will be amended to read as follows:

     “It is understood that the Premises to be leased by Tenant are to be constructed by Landlord,
and that Landlord is required to obtain the necessary building permits for the building shell
before construction of said Premises can commence. Therefore, it is agreed that in the event
Landlord cannot obtain all the necessary building permits for the building shell by August 1, 1990,
then either Landlord or Tenant can terminate this Lease by written notice to the other party given
within thirty (30) days thereafter, without any liability to the other party of any type
whatsoever, and that this Lease Agreement will be null and void as of the date of receipt of such
notice. Landlord agrees to use its best efforts to obtain the required permits by August 1, 1990.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year first hereinabove set forth.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE	 	QUANTUM CORPORATION	 	 
	PROPERTY TRUST	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ John Arrillaga
	 	By
	 	  /s/ Joseph Shepala	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	  John Arrillaga, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	Title:	 	  VP Human Resources	 	 
	 

	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	  /s/ Richard Peery
	 	Dated:
	 	  6/12/90	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	  Richard T. Peery, Trustee	 	 	 	 	 	 

 3

 

AMENDMENT NO. 2

TO LEASE

     THIS AMENDMENT NO. 2 is made and entered into this 8th day of June, 1992, by and between JOHN
ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY
TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77
(RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, collectively as LANDLORD, and QUANTUM
CORPORATION, a Delaware corporation, as TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to Tenant all of that
certain 155,734 ± square foot building located at 500 McCarthy Blvd., Milpitas, California, the
details of which are more particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24, 1990 which amended said
Lease to delay the Commencement Date to April 1, 1991 and amend the Basic Rent schedule, and

     C. WHEREAS, said Lease was amended by the Commencement Letter dated May 3, 1991 which amended
the Lease to commence April 7, 1991, and,

     D. WHEREAS, it is now the desire of the parties hereto to amend the Lease by replacing Exhibit
A and amending the description of the Premises to said Lease Agreement as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. REPLACEMENT OF EXHIBIT A: Pursuant to Lot Line/Parcel Adjustment dated April 1,
1992, it is hereby agreed between the parties that Exhibit A to Lease Agreement dated October 31,
1989 shall be considered null and void and shall be replaced with Exhibit A to this Amendment No.
2.

     2. DELETION OF DESCRIPTION QF THE PREMISES ON PAGE 1 OF LEASE AGREEMENT DATED OCTOBER 31,
1989: It is agreed between the parties that the Premises as described on Page 1 of said Lease
Agreement shall be deleted and considered null and void; therefore, said description is deleted in
its entirety and replaced by the following:

“All of that land containing approximately 11.589 ± acres and that certain 176,516 ±
square foot two story building (“Building 2”) and parking appurtenant thereto, to be
constructed and landscaping to be installed by Landlord as shown within the area
outlined in red (“Lot 2”) on Exhibit A to be located at 500

1

 

McCarthy Blvd., Milpitas, California. Said Premises (‘‘Lot 2”) is more particularly
shown within the area outlined in red on Exhibit A attached hereto and incorporated
herein by this reference. The entire parcel containing approximately 37.096 ± acres,
of which the Premises is a part, is shown within the area outlined in green on
Exhibit A attached hereto and incorporated herein by this reference. The interior
of the Leased Premises shall be improved in the configuration as shown in red on
Exhibit B to be attached hereto and incorporated herein by this reference. The
building shell shall be constructed in accordance with the shell and site
improvement specification set forth on Exhibit A, and the general building elevation
set forth on Exhibit A.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the
day and year first hereinabove set forth.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE	 	 	 	QUANTUM CORPORATION	 	 
	PROPERTY TRUST	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Joseph Shepala
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	John Arrillaga, Trustee	 	 	 	Print or Type Name: Joseph Shepala	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	Title:	 	Vice President, Human Resources	 	 
	PROPERTY

	 	TRUST
	 	 	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard Peery
	 	 	 	Dated:
	 	 6/9/92	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 

2

 

Quantum 2

AMENDMENT NO. 3

TO LEASE

     THIS AMENDMENT NO. 3 is made and entered into this 16th day of April, 1997, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware corporation, as
TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to Tenant all of that
certain 176,516 ± square foot building located at 500 McCarthy Blvd., Milpitas, California, the
details of which are more particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Letter Agreement dated October 31, 1989 which provided
for a Basic Rent Credit for the period commencing with the Lease Commencement Date and ending on
May 31, 1991, and

     C. WHEREAS, said Lease was amended by Letter Agreement dated April 24, 1990 which canceled the
reduction in Basic Rent Credit Letter dated October 31, 1989, and

     D. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24, 1990 which which delayed
the Lease Commencement Date from December 15, 1990 to April 1, 1991, and,

     E. WHEREAS, said Lease was amended by the Commencement Letter dated March 7, 1991 which
changed the Commencement Date of the Lease from April 1, 1991 to April 7, 1991, and established the
Termination Date of September 30, 2006, and,

     E. WHEREAS, said Lease was amended by Amendment No. 2 dated June 8, 1992 which replaced Lease
Exhibit A and amended the description of the Premises, and

     F. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) extending the
Term for five years, changing the Termination Date from September 30, 2006 to September 30, 2011,
(ii) amending the Basic Rent schedule and Aggregate Rent accordingly, (iii) adding a third Five
Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms Co-extensive”) and 48 (“Cross
Default”) and 53 (“Structural Capital Costs Regulated by Governmental Agencies After the
Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”),
(v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or replacing certain
provisions of the Lease commencing as of the commencement of the Third Extended Term of said Lease
as hereinafter set forth.

1

 

Quantum 2

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: It is agreed between the parties that Tenant has exercised its
First Five-Year Option to Extend the lease term of that certain lease agreement dated March 23,
1994 for premises located at 1101 Sumac Drive, Milpitas, California (the “Building 5 Lease”), as
detailed in Paragraph 41 of said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides
that in the event the term of said Building 5 Lease is extended for any reason whatsoever, the
terms of the Existing Leases (i.e. two of said leases dated October 31, 1989 are for Premises
located at 1140 Technology Drive and 500 McCarthy Blvd., Milpitas, California (the “1989 Leases”);
one of said leases dated September 17, 1990 is for Premises located at 1000 Sumac Drive, Milpitas,
California, and one of said leases dated April 10, 1992 is for Premises located at 900 Sumac Drive,
Milpitas, California) shall also be extended so that all five Leases expire on the same date;
therefore, it is agreed between the parties that by exercising its Option to Extend the Building 5
Lease, Tenant has in effect exercised its Option to Extend under Lease Paragraph 42 (“First
Five-Year Option to Extend”), and that pursuant to said Lease Paragraph 42, the Term of this Lease
Agreement shall be extended for an additional five (5) year period, and the Lease Termination Date
shall be changed from September 30, 2006 to September 30, 2011.

     2. BASIC RFNTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic Rental for the
First Extended Term of Lease shall be as follows:

     On October 1, 2006, the sum of THREE HUNDRED EIGHT THOUSAND NINE HUNDRED THREE AND NO/100
DOLLARS ($308,903.00) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2007.

     On October 1, 2007, the sum of THREE HUNDRED SEVENTEEN THOUSAND SEVEN HUNDRED TWENTY EIGHT AND
80/100 DOLLARS ($317,728.80) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2008.

     On October 1, 2008, the sum of THREE HUNDRED TWENTY SIX THOUSAND FIVE HUNDRED FIFTY FOUR AND
60/100 DOLLARS ($326,554.60) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2009.

     On October 1, 2009, the sum of THREE HUNDRED THIRTY FIVE THOUSAND THREE HUNDRED EIGHTY AND
40/100 DOLLARS ($335,380.40) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2010.

     On October 1, 2010, the sum of THREE HUNDRED FORTY FOUR THOUSAND TWO HUNDRED SIX AND 20/100
DOLLARS ($344,206.20) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2011.

2

 

Quantum 2

     The Aggregate Basic Rent for the Lease shall be increased by $19,593,276.00 or from
$44,409,491.18 to $64,002,767.18.

     3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period pursuant to Lease Paragraph 43 (“Second Five Year Option To
Extend”), Landlord hereby grants to Tenant a third option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term as extended pursuant
to Lease Paragraph 43 (“Second Five Year Option To Extend”), in which event the Lease shall be
considered extended for an additional five (5) year period upon the same terms and conditions as
this Lease, absent this Paragraph 3 and subject to the Rental as set forth below. In the event
that Tenant fails to timely exercise Tenant’s option as set forth herein in writing, Tenant shall
have no further option to extend this Lease or the Other Leases, and this Lease shall continue in
full force and effect for the full remaining term hereof, absent this Paragraph 3.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.25/sf
	Months 13-24

	 	$2.30/sf
	Months 25-36

	 	$2.35/sf
	Months 37-48

	 	$2.40/sf
	Months 49-60

	 	$2.45/sf

     C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 3 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 3 notwithstanding such non-curable default.

     4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C (“Lease Terms Co-extensive”) is
hereby deleted in its entirety and replaced with the following:

“40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i) Landlord
and Tenant have previously executed four separate leases in addition to this Lease:
one of said leases dated October 31, 1989 is for Premises located at 1140 Technology
Drive, Milpitas, California (the “Building One Lease”); one of said leases dated
September 17, 1990 is for Premises located at 1000 Sumac

3

 

Quantum 2

Drive, Milpitas, California (the “Building Four Lease”); one of said leases dated April 10, 1992 is for Premises
located at 900 Sumac Drive, Milpitas, California (the “Building 3 Lease”); and one
of said leases dated March 23, 1994 is for
premises located at 1101 Sumac Drive, Milpitas, California (the “Building 5
Lease”) (hereinafter collectively referred to as the “Other Leases”); and (ii) it is
the intention of the parties that the term of this Lease be co-extensive with the
term of the Other Leases, such that the terms of all five leases (“the Leases”)
expire on the same date. The provisions of this Paragraph 40C also requires the
terms of all the Leases to be extended accordingly if Tenant exercises its Option to
Extend under any of the Leases. The monthly Basic Rent during the extended term
under each of the Leases shall be increased by $.05 per square foot on the
commencement date of the extended term and thereafter on each and every anniversary
of the respective lease’s commencement date of the extended term.”

     5. CROSS DEFAULT: Lease Paragraph 48 (“Cross Default”) is hereby deleted in its
entirety and replaced with the following:

“48. CROSS DEFAULT: It is agreed between Landlord and Tenant that a
default under this Lease, or a default under any of the Other Leases may, at the
option of Landlord, be considered a default under all Leases, in which event
Landlord shall be entitled (but in no event required) to apply all rights and
remedies of Landlord under the terms of one lease to all the Leases including, but
not limited to, the right to terminate any or all of the aforementioned Other Leases
or this Lease by reason of a default under the Leases or hereunder.

Notwithstanding the above, Landlord shall have the option of considering a
default under this Lease or a default under any of the Other Leases to be a default
under all such leases, only with respect to such leases under which Landlord is also
the ‘Landlord’ at the time such default occurs. By way of example, if at the time a
default of Tenant occurs under this Lease, Landlord has sold the premises described
in any of the Other Leases and is no longer the ‘Landlord’ thereunder, then a
default under this Lease shall not constitute a default under any of such
Other Leases so sold by Landlord (unless the premises leased under this Lease and
the Other Leases are sold to the same entity), and a default by Tenant under any of
such Other Leases so sold by Landlord shall not constitute a default under
this Lease or any other of the Other Leases then remaining between Landlord and
Tenant. However, if the Landlord under this Lease and the Other Leases is one in
the same at the time of said default, said cross default provisions shall apply.”

     6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: Lease
Paragraph 53 (“Structural Capital Costs Regulated by Governmental Agencies after the Commencement
of this Lease Not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) is hereby
deleted and replaced with the following:

4

 

Quantum 2

“53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR
REMODELING OF THE PREMISES: The provisions of this Paragraph 53 shall modify
Paragraphs 7 and 14:

          A. If (i) during the last five (5) years of the First Extended Term of the Lease if said Lease
has not been extended as provided for in Lease Paragraph 43 (“Second Five Year Option To Extend”)
or in Paragraph 3 (“Third Five Year Option to Extend”) or Paragraph 4 (“Lease Terms Co-Extensive”)
above, or (ii) during either of the five (5) year extension periods permitted by Lease Paragraph 43
or Paragraph 3, or Paragraph 4 above, it becomes necessary (due to any governmental requirement for
continued occupancy of the Premises) to make structural improvements required by laws enacted or
legal requirements imposed by governmental agency(s) after the Commencement Date, and the cost for
each required work or improvements exceeds $100,000, then if such legal requirement is not imposed
because of Tenant’s specific use of the Premises and is not “triggered” by Tenant’s Alterations or
Tenant’s application for a building permit or any other governmental approval (collectively
“Tenant’s Actions”) in which instance Tenant shall be responsible for 100% of the cost of such
improvements, Landlord shall be responsible for paying the cost of such improvement and
constructing such improvement, subject to a cash contribution from Tenant of a portion of the cost
thereof as provided for and calculated in Paragraph 53B.

          B. When Landlord makes an improvement pursuant to Paragraph 53A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost thereof prior to the commencement of the work by Landlord. It is
agreed that Tenant shall pay to Landlord 100% of the cost of the first $100,000.00 worth of each
improvement. After the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease Term from the date work
on such improvement commences.

     For example, if the improvement is not required as a result of Tenant’s Actions and if the
cost of such improvement was $400,000 and there was one year and six months remaining in the Lease
term when the work commenced, then Tenant would be responsible for reimbursing Landlord in cash
$130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work

	 	$	400,000.00	 
	Tenant Responsible for
	 	 	 	 
	1st $100,000

	 	 	-100.000.00	 
	 

	 	 	 	 
	Total Amount To Be Amortized

	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =

	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + $30,000.00 =

	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 53B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to

5

 

Quantum 2

Lease Paragraph 43 or Paragraph 3 above, upon the exercise of any such option by Tenant, Tenant shall pay to Landlord an additional sum
equal to the total amount of said improvement less the amount previously paid for by Tenant. Using
the example in Paragraph 53B above, Tenant would owe Landlord the additional amount of $270,000.00 ($400,000.00 — $130,000.00 =
$270,000.00).”

     7. PROPERTY INSURANCE: Lease Paragraph 12 (“Property Insurance”) is hereby amended to
include the following: “Tenant acknowledges that as part of the cost of insurance policies for the
Premises, Tenant is responsible for the payment of insurance deductibles on insurance claims as
they relate to the Premises subject to the limitations provided in Lease Paragraph 55 (“Property
Insurance”) which limitations are applicable only during the initial Lease Term and the First Lease
Extension Period and the Second Lease Extension Period. Said limitation provided for in Lease
Paragraph 55 are null and void at the commencement of the Third Lease Extended Term”.

     8. THIRD OPTION PERIOD — LEASE PROVISION CHANGES: In the event Tenant exercises its
Third Option to Extend as provided for in Paragraph 3 above, the following amendments (contained
within Paragraphs 9 through 19) are herein made to the Lease to be effective upon the commencement
of the third option period (“Third Option Period”), or during any period following the expiration
of the Lease Term or expiration of the Lease when Tenant is in possession of the Premises.

     9. LATE CHARGE: Effective as of the first day of the Third Option Period, the Late
Charge referenced in Lease Paragraph 4.D (“Late Charge”) shall be changed from five percent (5%) to
ten percent (10%), and Lease Paragraph 50 (“Limitation on Late Charge”) shall be deleted in its
entirety and of no further force or effect.

     10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the Lease, effective
as of the first day of the Third Option Period, and on the first day of each month thereafter,
Tenant shall pay to Landlord, in addition to the Basic Rent and Additional Rent, a fixed monthly
management fee (“Management Fee”) equal to one percent (1 %) of the Basic Rent due for each month
during the Lease Term.

     11. HAZARDOUS MATERIALS: Effective as of the first day of the Third Option Period,
Lease Paragraph 45 (“Hazardous Materials”) shall be deleted in its entirety and replaced with the
following:

“45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of “Hazardous Materials” (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A to the Lease (hereinafter collectively referred to as the
“Property”):

     A. As used herein, the term “Hazardous Materials” shall mean any material,
waste, chemical, mixture or byproduct which is or hereafter is defined, listed or
designated under Environmental Laws (defined below) as a pollutant, or

6

 

Quantum 2

as a contaminant, or as a toxic or hazardous substance, waste or material, or any other
unwholesome, hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or restricted
by any Environmental Law (including, without limitation, petroleum hydrocarbons
or any distillates or derivatives or fractions thereof, polychlorinated biphenyls,
or asbestos). As used herein, the term “Environmental Laws” shall mean any
applicable Federal, State of California or local government law (including common
law), statute, regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or order of any
executive or judicial authority at any level of Federal, State of California or
local government (whether now existing or subsequently adopted or promulgated)
relating to pollution or the protection of the environment, ecology, natural
resources, or public health and safety.

B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s
Hazardous Materials Activities (defined below). Landlord acknowledges that Tenant
shall use, in compliance with applicable Environmental Laws, customary household and
office supplies (Tenant shall first provide Landlord with a list of said materials
use), such as mild cleaners, lubricants and copier toner. Any and all of Tenant’s
Hazardous Materials Activities shall be conducted in conformity with this Paragraph
45, Paragraph 14 of this Lease, and in compliance with all Environmental Laws and
regulations. As used herein, the term “Tenant’s Hazardous Materials Activities”
shall mean any and all use, handling, generation, storage, disposal, treatment,
transportation, release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with Tenant’s use of the
Property, or by Tenant or by any of Tenant’s agents, employees, contractors,
vendors, invitees, visitors or its future subtenants or assignees or other third
parties (including “dumping” by others) (or which Hazardous Materials originate on
the surface of the Premises any time on or after the Commencement Date of this
Lease, but excluding Hazardous Materials on the Premises prior to the Lease
Commencement Date because of the storage, use, disposal, or transportation of such
materials or waste by any of Landlord’s contractors or otherwise arising out of
construction work performed by or under the direction of Landlord on the Premises
and Landlord shall be responsible for all required actions with respect to such
materials or wastes). Tenant agrees to provide Landlord with prompt written notice
of any spill or release of Hazardous Materials at the Property during the term of
the Lease of which Tenant becomes aware, and further agrees to provide Landlord with
prompt written notice of any violation of Environmental Laws in connection with
Tenant’s Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s
Hazardous Materials Activities involve Hazardous Materials other than normal use of
customary household and office supplies, Tenant also agrees at Tenant’s expense: (i)
to install such Hazardous Materials monitoring, storage and containment devices as
may be required by Environmental Laws, regulations and/or governing agencies; (ii)
to provide Landlord with a written inventory of such Hazardous Materials, including
an update of same each year upon the anniversary date of the Commencement Date of
the Lease (“Anniversary Date”);

7

 

Quantum 2

and (iii) on each Anniversary Date to provide to Landlord copies of all documentation
and records, required by applicable Environmental Laws to be prepared and submitted to governmental authorities,
relating to use at the Property of Hazardous Materials or
to Tenant’s Hazardous Materials Activities, if any. If upon completion of
Landlord’s review of said documentation and records, Landlord reasonably questions
if Tenant is in compliance with all applicable Environmental Laws with respect to
Tenant’s Hazardous Materials Activities, Tenant agrees within thirty (30) days
following receipt of written notice from Landlord, to retain a qualified
environmental consultant, acceptable to Landlord, to evaluate whether Tenant is in
compliance with all applicable Environmental Laws with respect to Tenant’s Hazardous
Materials Activities. Tenant, at its expense, shall submit to Landlord a report
from such environmental consultant which discusses the environmental consultant’s
findings within two (2) months of each Anniversary Date. Tenant, at its expense,
shall promptly undertake and complete any and all steps necessary, and in full
compliance with applicable Environmental Laws, to fully correct any and all problems
or deficiencies identified by the environmental consultant, and promptly provide
Landlord with documentation of all such corrections.

C. Prior to termination or expiration of the Lease, Tenant, at its expense,
shall (i) properly remove from the Property all Hazardous Materials which come to be
located at the Property in connection with Tenant’s Hazardous Materials Activities,
and (ii) fully comply with and complete all facility closure requirements of
applicable Environmental Laws regarding Tenant’s Hazardous Materials Activities,
including but not limited to (x) properly restoring and repairing the Property to
the extent damaged by such closure activities, and (y) obtaining from the local Fire
Department or other appropriate governmental authority with any legal or regulatory
jurisdiction a written concurrence that closure has been completed in compliance
with applicable Environmental Laws. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any such closure activities.

D. If Landlord, upon consultation with Tenant, reasonably concludes that the
Property has become contaminated as a result of Tenant’s Hazardous Materials
Activities, Landlord in addition to any other rights it may have under this Lease or
under Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the nature
and extent of such contamination except to the extent that such activities may be
inconsistent with Tenant’s compliance with Environmental Laws. Tenant shall
promptly reimburse Landlord for the costs of such an investigation, including but
not limited to reasonable attorneys’ fees Landlord incurs with respect to such
investigation to the extent, and only to the extent, that it that discloses
Hazardous Materials contamination for which Tenant is liable under this Lease.
Except as may be required of Tenant by applicable Environmental Laws, Tenant shall
not perform any sampling, testing, or drilling

8

 

Quantum 2

to
identify the presence of any Hazardous Materials at the Property, without Landlord’s prior written consent which
shall not be unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or submitted in connection with any
sampling, testing or drilling performed pursuant to the preceding sentence.

E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord,
whose consent shall not unreasonably be withheld) and hold harmless Landlord, its
employees, assigns, successors, successors-in-interest, agents and representatives
from and against any and all claims (including but not limited to third party claims
from a private party or a government authority), liabilities, obligations, losses,
causes of action, demands, governmental proceedings or directives, fines, penalties,
expenses, costs (including but not limited to reasonable attorneys’, consultants’
and other experts’ fees and costs), and damages, which arise from or relate to: (i)
Tenant’s Hazardous Materials Activities; (ii) any Hazardous Materials contamination
caused by Tenant prior to the Commencement Date of the Lease; or (iii) the breach of
any obligation of Tenant under this Paragraph 45 (collectively, “Tenant’s
Environmental Indemnification”). Tenant’s Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair market
value of the Property. Tenant’s Environmental Indemnification shall further include
but is not limited to the obligation to diligently and properly implement to
completion, at Tenant’s expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other environmental
response action as may be required by applicable Environmental Laws, regulations or
governing agencies (collectively, “Response Actions”). Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and reports
prepared, received or submitted in connection with any Response Actions.

F. Landlord hereby makes the following representations to Tenant, each of which
is made only to the best of Landlord’s knowledge as of the date Landlord executes
this Lease, without any inquiry or investigation having been made or required by
Landlord regarding this subject, nor does Landlord have any obligation to
investigate or make inquiry regarding the subject:

          (1) The soil and ground water on or under the Premises does not contain
Hazardous Materials in amounts which violate any laws to the extent that any
governmental entity could require either Landlord or Tenant to take any remedial
action with respect to such Hazardous Materials.

          (2) During the time that Landlord has owned the Premises, Landlord has received
no notice of (i) any violation, or alleged violation, of any law that has not been
corrected to the satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or (iii) any pending
investigation by any governmental agency concerning the Premises relating to
Hazardous Materials.

9

 

Quantum 2

G. Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Premises, and (ii) any contamination of the Premises by Hazardous Materials which
constitutes a violation of any law. Attached as Exhibit “C” to the Lease is
a list of Hazardous Materials-that Tenant intends to use at the Premises. If during
the Lease Term Tenant proposes to use other Hazardous Materials at the Premises,
Tenant shall inform Landlord of such use, identifying the Hazardous Materials and
the manner of their use, storage and disposal, and shall agree (i) to use, store and
dispose of such Hazardous Materials strictly in compliance with all laws,
regulations and governing agencies and (ii) that the indemnity set forth in
Paragraph 45 shall be applicable to Tenant’s use of such Hazardous Material.

H. Landlord or Tenant may, at any time, cause testing wells to be installed on
the Premises, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for such
purposes. Testing wells installed by Tenant shall be paid for by Tenant. If tests
conducted by Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to Hazardous
Materials laws, or that Tenant has liability to Landlord pursuant to Paragraph 45A,
then Tenant shall pay for 100 percent of the cost of the test and all related
expense. Prior to the expiration of the Lease Term, Tenant shall remove any testing
wells it has installed at the Premises, and return the Premises to the condition
existing prior to the installation of such wells, unless Landlord requests in
writing that Tenant leave all or some of the testing wells in which instance the
wells requested to be left shall not be removed.

I. If any tests performed by Tenant or Landlord prior to the Commencement Date
disclose Hazardous Materials at the Premises, Landlord at its expense will promptly
take all reasonable action required by law with respect to the existence of such
Hazardous Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is prohibited
by law.

J. The obligations of Landlord and Tenant under this Paragraph 45 shall survive
the expiration or earlier termination of the Term of this Lease. The rights and
obligations of Landlord and Tenant with respect to issues relating to Hazardous
Materials are exclusively established by this Paragraph 45.”

     12. SECURITY DEPOSIT: Effective as of the first day of the Third Option Period, Lease
Paragraph 51 (“Security Deposit”) shall be deleted in its entirety and replaced with the following:

“51. SECURITY DEPOSIT: The following provisions shall modify Lease
Paragraph 4F:

10

 

Quantum 2

A. Within thirty (30) days after the expiration or earlier termination of the
Lease term and after Tenant has vacated the Premises, Landlord shall return to
Tenant the entire Security Deposit except for amounts that Landlord has deducted
therefrom that are needed by Landlord to cure defaults of Tenant under the Lease or
compensate Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the provisions of
California Civil Code Section 1950.7.

B. During the first thirty (30) days following Tenant’s exercise of its Third
Option to Extend, and only during said thirty day period, Tenant shall have the
one-time option of satisfying its obligation with respect to an amount equal to
one-half (1/2) ($238,296.60) of the $476,593.20 Security Deposit required under
Lease Paragraph 4F by providing to Landlord, at Tenant’s sole cost, a letter of
credit which: (i) is drawn upon an institutional lender reasonably acceptable and
accessible to Landlord in form and content reasonably satisfactory to Landlord; (ii)
is in the amount of one-half (1/2) of the Security Deposit; (iii) is for a term of
at lease twelve (12) months; (iv) with respect to any letter of credit in effect
within the six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at least forty
five (45) days past the Lease expiration date (including any extensions thereof);
and (v) may be drawn upon by Landlord upon submission of a declaration of Landlord
that Tenant is in default (as defined in Paragraph 19 and as modified by Paragraph
60). Landlord shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the institutional
lender written notification that Tenant is in default and upon receiving such
written notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit required under Lease Paragraph 4F. Said letter of
credit shall provide that if the letter of credit is not renewed, replaced or
extended within twenty (20) days prior to its expiration date the issuer of the
credit shall automatically issue a cashiers check payable to Landlord in the amount
of the letter of credit after the date which is twenty (20) days before the
expiration date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides Landlord with
a letter of credit, within thirty (30) days of the execution of this Lease, meeting
the foregoing requirements, one-half (1/2) of the cash Security Deposit (i.e.
$238,296.60 of the $476,593.20 Security Deposit) shall be returned to Tenant by
Landlord inasmuch as the cash deposit remaining and the Letter of Credit equal the
total Security Deposit required in Lease Paragraph 4F. If Tenant defaults with
respect to any provisions of this Lease, including but not limited to provisions
relating to the payment of Rent, Landlord may (but shall not be required to) draw
down on the letter of credit for payment of any sum which Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of

11

 

Quantum 2

credit will be treated as if it were a cash security deposit, and such letter
of credit may be drawn down upon by Landlord upon demand and presentation of
evidence of the identity of Landlord to the issuer, in the event that Tenant
defaults with respect to any provision of this Lease and such default is not cured
within any applicable cure period. Notwithstanding anything to the contrary in this
Lease, Landlord shall not be obligated to furnish proof of default to such
institutional lender and Landlord is only required to give the institutional lender
written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit. Landlord acknowledges that it is not entitled to
draw down such letter of credit unless Landlord would have been entitled to draw
upon the cash security deposit pursuant to the terms of Paragraph 4F of the Lease.
Concurrently with the delivery of the required information to the issuer, Landlord
shall deliver to Tenant written evidence of the default upon which the draw down was
based, together with evidence that Landlord has provided to Tenant the written
notice of such default which was required under the applicable provision of the
Lease, and evidence of the failure of Tenant to cure such default within the
applicable grace period following receipt of such notice of default. Any proceeds
received by Landlord by drawing upon the letter of credit shall be applied in
accordance with the provisions governing the Security Deposit imposed by Lease
Paragraph 4F and this Paragraph 51. If Landlord draws upon the letter of credit,
thereafter Tenant shall once again have the right to post a letter of credit in
place of one-half (1/2) of a cash Security Deposit so long as Tenant is not then in
default. In any event Tenant will be obligated to replenish the amount drawn to
restore the Security Deposit to its original amount as provided for in Paragraph 4F.
If any portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i) depositing
cash with Landlord in the amount equal to the sum drawn down under the letter of
credit, or (ii) increasing the letter of credit to its value immediately prior to
such application. Tenant’s failure to replace the value of the security as provided
in the preceding sentence shall be a material breach of its obligation under this
Lease.”

     13. REAL ESTATE TAXES: Effective as of the first day of the Third Option Period,
Lease Paragraph 54 (“Real Estate Taxes”) shall be deleted in its entirety and replaced with the
following:

“54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

A. The term “Real Property Taxes” shall not include charges, levies or fees
directly related to the use, storage, disposal or release of Hazardous Materials on
the Premises unless directly related to Tenant’s Activities at this site or on other
sites leased and/or owned by Tenant; however, Tenant shall be

12

 

Quantum 2

responsible for general or special tax and/or assessments (related to Hazardous Materials
and/or toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on the Property
(by third parties not related to Tenant) prior to the Lease Commencement Date.
Subject to the terms and conditions stated herein, Tenant shall be responsible for
paying one hundred percent (100%) of said taxes and/or assessments allocated to the
Property.

B. If any assessments for public improvements are levied against the Premises,
Landlord may elect either to pay the assessment in full or to allow the assessment
to go to bond. If Landlord pays the assessment in full, Tenant shall pay to
Landlord or any assignee or purchaser of the Premises each time payment of Real
Property Taxes is made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to bond.

C. Tenant at its cost shall have the right, at any time, to seek a reduction in
the assessed valuation of the Premises or to contest any Real Property Taxes that
are to be paid by Tenant. If Tenant seeks a reduction or contests such Real
Property Taxes, the failure on Tenant’s part to pay such Real Property Taxes being
so contested shall not constitute a default so long as Tenant complies with the
provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Landlord. In that
case Landlord shall join in the proceedings or contest or permit it to be brought in
Landlord’s name as long as Landlord is not required to bear any cost. Tenant, on
final determination of the proceeding or contest, shall immediately pay or discharge
its share of any Real Property Taxes determined by any decision or judgment
rendered, together with all costs, charges, interest, and penalties incidental to
the decision or judgment. If Tenant does not pay the Real Property Taxes when due
pursuant to the Lease and Tenant seeks a reduction or contests them as provided in
this paragraph, before the commencement of the proceeding or contest Tenant shall
furnish to Landlord a surety bond in form reasonably satisfactory to Landlord issued
by an insurance company qualified to do business in California. The amount of the
bond shall equal 125% of the total amount of Real Property Taxes in dispute and any
such bond shall be assignable to any lender or purchaser of the Premises. The bond
shall hold Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that may be
rendered.”

     14. PROPERTY INSURANCE: Effective as of the first day of the Third Option Period,
section B of Lease Paragraph 55 (“Property Insurance”) shall be deleted in its entirety and be of
no further force or effect.

     15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the Third Option
Period, Lease Paragraph 56 (“Assignment and Subletting”) shall be deleted in its entirety and
replaced with the following:

13

 

Quantum 2

          “56. ASSIGNMENT AND SUBLETTING: The following modifications are made
to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then
Landlord, by giving Tenant written notice of its election within fifteen (15) days
after Tenant’s notice of intent to assign or sublease has been given to Landlord,
shall have the right to elect (i) to withhold its consent to such assignment or
sublease, as permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its
obligations under the Lease, and the following shall apply (except the following
shall not apply to a “Permitted Transfer” described in Paragraph 57):

          (1) If Tenant assigns its interest in this Lease, then in addition to the
rental provided for in this Lease, Tenant shall pay to Landlord fifty percent (50%)
of all Rent and other consideration received by Tenant over and above (i) the
assignee’s agreement to assume the obligations of Tenant under this Lease and (ii)
all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing
commissions paid to third parties not affiliated with Tenant in order to obtain the
assignment or sublease in question.

          (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to
Landlord in addition to the Rent provided for in this Lease fifty percent (50%) of
the positive difference, if any, between (i) all rent and other consideration paid
or provided to Tenant by the subtenant, less (ii) all Rent paid by Tenant to
Landlord pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the
preceding sentence on the same basis, whether periodic or in lump sum, that such
rent and other consideration is paid to Tenant by its subtenant, within seven (7)
days after it is received by Tenant.

          (3) Tenant’s obligations under this subparagraph shall survive any assignment
or sublease. At the time Tenant makes any payment to Landlord required by this
subparagraph, Tenant shall deliver an itemized statement of the method by which the
amount to which Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant’s books and records
relating to the payments due pursuant to this subparagraph. Upon request therefor,
Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

          (4) As used herein, the term “consideration” shall mean any consideration of
any kind received, or to be received (including, but not limited to, services
rendered and/or value received) by Tenant as a result of the

14

 

Quantum 2

     assignment or sublease, if such sums are paid or provided to Tenant for
Tenant’s interest in this Lease or in the Premises.

     (5) This Paragraph 56.A does not apply to a “Permitted Transfer”, as provided
in Paragraph 57 hereof. The parties agree that if any of the following transactions
occur and do not qualify as “Permitted Transfers”, Tenant must obtain Landlord’s
consent to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as “Permitted Transfers”, then the
provisions of this Paragraph 56.A shall not apply to the following transactions: (i)
a merger, consolidation or other reorganization in which Tenant is not the surviving
corporation so long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a corporation
which purchases or otherwise acquires 95% or more of the assets of Tenant so long as
95% of all assets and liabilities of Tenant are permanently transferred to such
assignee and Tenant remains liable and responsible under the Lease to the extent
Tenant continues in existence following such transaction.”

     16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day of the Third
Option Period, Lease Paragraph 57 (“Permitted Assignments and Subleases”) shall be deleted in its
entirety and replaced with the following:

“57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything
contained in Paragraph 16, so long as Tenant otherwise complies with the provisions
of Paragraph 16 and the Permitted Transfer does not release Tenant from its
obligations hereunder, Tenant may enter into any of the following transfers (a
“Permitted Transfer”) without Landlord’s prior written consent, and the provisions
of Paragraph 56A shall not apply to any such Permitted Transfer:

A. Tenant may sublease all or part of the Premises or assign its interest in
this Lease to any corporation which controls, is controlled by, or is under common
control with Tenant by means of an ownership interest of more than fifty percent
(50%) providing Tenant remains liable for the payment of Rent and full performance
of the Lease;

B. Tenant may assign its interest in the Lease to a corporation which results
from a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as (i) 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which Tenant is to be
merged has a net worth equal to or greater than the net worth of Tenant at the time
of Lease execution or at the time of such assignment, merger, consolidation or
reorganization (whichever is greater), or if it does not, Landlord is
provided a guaranty of the Lease (in a form reasonably acceptable to Landlord) from
a corporation (a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a current net

15

 

Quantum 2

worth equal to or greater than the net worth of Tenant at the time of Lease
execution or at the time of such assignment, merger, consolidation or reorganization
(whichever is greater). In the event there is not a permanent transfer of 95% or
more of the assets and liabilities from Tenant to a third party, and Tenant
continues to exist as a separate entity, both companies shall be jointly and
severally liable for the full terms and conditions of the Lease;

     C. Tenant may assign this Lease to a corporation which purchases or otherwise
acquires 95% or more of the assets of Tenant so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee (in the event
there is not a permanent transfer of 95% or more of the assets and liabilities from
Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of
the Lease), and provided that immediately prior to such assignment said corporation,
has a net worth equal to or greater than the net worth of Tenant (a) at the time of
Lease execution or (b) at the time of such assignment (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form
reasonably acceptable to Landlord) from a corporation (a) that is the parent of, or
is otherwise affiliated with, said corporation and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, (whichever is greater).”

     17. DESTRUCTION: Effective as of the first day of the Third Option Period, Lease
Paragraph 62 (“Destruction”) shall be deleted in its entirety and replaced with the following:

“62. DESTRUCTION: Paragraph 21 is modified by the following:

     A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may
terminate this Lease in the event of an uninsured event or if insurance proceeds,
net of the deductible, are insufficient to cover one hundred percent of the
rebuilding costs; provided, however, Tenant shall have the right to elect, in its
discretion, to contribute such excess funds to permit Landlord to repair the
Premises.

     B. Except as provided in Paragraph 62C, Landlord may not terminate the Lease if
the Premises are damaged by a peril whereby the cost to replace and/or repair is one
hundred percent (100%) covered by the insurance carried by Landlord pursuant to
Paragraph 12, but instead shall restore the Premises in the manner described by
Paragraph 21.

     C. If the Premises are damaged by a peril covered by the insurance carried by
Landlord pursuant to Paragraph 12, Landlord shall have the option to terminate the
Lease if each of the following conditions is satisfied: (i) the cost to repair or
the damage exceeds thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than five (5)
years remaining in the term of the Lease.

16

 

Quantum 2

     D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12,
and said insurance would have been available to cover any damage or destruction to
the Premises, Landlord shall be required to rebuild, at its cost, net of the
deductible which would have been required under said insurance policy (which
deductible Tenant is required to pay).

     E. If the Premises are damaged by any peril, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the 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 only by
delivery to Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time needed to complete
such restoration:

                    (1) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) and, in the
reasonable opinion of Landlord’s architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within 180 days
after the date of such damage (subject to force majeure conditions); or

                    (2) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) within
twelve (12) months of the last day of the Lease term, and, in the reasonable opinion
of Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within sixty (60) days after the date of
such damage and Tenant has not exercised its Option to Extend said Term (or Extended
Term as the case may be).”

     18. LIABILITY INSURANCE: Effective as of the first day of the Third Option Period,
the first sentence of Lease Paragraph 10 (“Liability Insurance”) shall be deleted and replaced with
the following: “Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease
a policy of commercial general liability insurance with combined single limit coverage of not less
than Two Million Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped areas.”

     19. LIMITATION OF LIABILITY: Effective as of the first day of the Third Option
Period, Lease Paragraph 36 (“Limitation of Liability”) shall be deleted in its entirety and
replaced with the following:

     “36. LIMITATION OF LIABILITY. In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and agree that,
in the event of any actual or alleged failure, breach or default hereunder by
Landlord:

17

 

Quantum 2

(i) the sole and exclusive remedy shall be against Landlord’s interest in the Premises
leased herein;

(ii) no partner of Landlord shall be sued or named as a party in any suit or action (except
as may be necessary to secure jurisdiction of the partnership);

(iii) no service of process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction of the partnership);

(iv) no partner of Landlord shall be required to answer or otherwise plead to any service
of process;

(v) no judgment will be taken against any partner of Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

(vii) no writ of execution will ever be levied against the assets of any partner of
Landlord;

(viii) these covenants and agreements are enforceable both by Landlord and also by any
partner of Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease or
imposed by statute or at common law.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 3 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:

	 	 	 	TENANT:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST  	 	QUANTUM CORPORATION  
	 	 	 	 	 	 	a Delaware corporation
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Andrew Kryder	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	John Arrillaga, Tustee	 	 	 	 	 	 
	 	 	 	 	 	 	Andrew Kryder
	 

	 	 
	 	 	 	 
	Date:	 	6/30/97	 	 	 	Print or Type Name
	 

	 	 	 	 	 	 	 	 	 	 
	 
	RICHARD T. PEERY SEPARATE	 	Title:	 	Finance & Corporate General Counsel	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 
	By	 	/s/ Richard Peery	 	 	 	Date: 	 	June 25, 1997
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 
	Date:	 	6/26/97	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

18

 

Quantum 2

AMENDMENT NO.4

TO LEASE

     THIS AMENDMENT NO. 4 is made and entered into this 22nd day of March, 2001, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and MAXTOR
CORPORATION, a Delaware corporation, as
“ASSIGNEE” or “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased to QUANTUM CORPORATION,
a Delaware corporation (the “ASSIGNOR” or “QUANTUM”) all of that certain 176,516 ± square foot
building located at 500 McCarthy Blvd., Milpitas, California, the details of which are more
particularly set forth in said October 31, 1989 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Letter Agreement dated October 31, 1989 which provided
for a Basic Rent Credit for the period commencing with the Lease Commencement Date and ending on
May 31, 1991, and

     C. WHEREAS, said Lease was amended by Letter Agreement dated April 24, 1990 which canceled the
reduction in Basic Rent Credit Letter dated October 31, 1989, and

     D. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24, 1990 which delayed the
Lease Commencement Date from December 15, 1990 to April 1, 1991, and,

     E. WHEREAS, said Lease was amended by the Commencement Letter dated March 7, 1991 which
changed the Commencement Date of the Lease from April 1, 1991 to April 7, 1991, and established the
Termination Date of September 30, 2006, and,

     F. WHEREAS, said Lease was amended by Amendment No. 2 dated June 8, 1992 which replaced Lease
Exhibit A and amended the description of the Premises, and

     G. WHEREAS, said Lease was amended by Amendment No. 3 dated April 16, 1997, which amended the
Lease by (i) extending the Term for five years, changing the Termination Date from September 30,
2006 to September 30, 2011, (ii) amending the Basic Rent schedule and Aggregate Rent accordingly,
(iii) adding a third Five Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms
Co-extensive”) and 48 (“Cross Default”) and 53 (“Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling
of the Premises”), (v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or
replacing certain provisions of the Lease commencing as of the commencement of the Third Extended
Term of said Lease, and

1

 

Quantum 2

H. WHEREAS, the Lease, together with those certain Amendments described above in Recitals B
through G shall herein after collectively be referred to as “the Lease Agreement”, and

     I. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraph 43
(“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 3 dated April 16, 1997
(“Third Five Year Option to Extend”) as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary
contained in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to
Landlord, Landlord hereby acknowledges that the following transactions have occurred:

     A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

     B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement”), wherein they agreed that:

          (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

          (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock, such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

          (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

     C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be assigned by Quantum to Insula
and Insula will assume and agree to be liable for all of the obligations of Quantum, as Tenant,
under the Lease.

2

 

Quantum 2

     D. Because the actual physical separation of the Quantum HDD business from the Quantum DSS
business cannot be completed prior to the closing of the foregoing transactions described above,
Insula has agreed to provide to Quantum with a limited license for the use of the premises subject
to the Leases, identified as “License Back” Leases in attached Exhibit A for a period of
time not exceeding the number of months specified in attached Exhibit A.

As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated October 31, 1989, as amended.

Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as expressly
set forth below, Landlord’s Consent shall in no way void or alter any of the terms of the Lease
Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or diminish in any
way Tenant’s obligations to Landlord.

Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor, and
Landlord shall not be bound by any agreement other than the terms of the Lease Agreement between
Landlord and Tenant. Landlord does not make any warranties or representations as to the condition
of the Leased Premises or the terms of the Lease Agreement between Landlord and Quantum.
Landlord’s consent to the assignment shall in no way obligate Landlord to any further consents or
agreements between Quantum and/or Assignee. So long as Quantum continues to exist as a Delaware
corporation, it is agreed that both Quantum and Maxtor will be jointly and severally liable for all
the terms and conditions of the Lease and all Amendments thereto; provided, however, that so long
as Quantum remains liable for said Lease, no material amendment to the Lease Agreement after the
date hereof shall be binding upon Quantum without the prior written
consent of Quantum, which consent shall not be unreasonably
withheld, and Quantum’s approval shall not be required on
transactions related to Landlord’s Waivers, Landlord’s Consents to Sublease and/or Landlord’s
Consents to Alterations. The foregoing, however, shall not prevent Tenant and Landlord from
entering into any such modification or amendment between themselves.

It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     1. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 43 (“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 3 dated
April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall
be replaced with the following:

          A. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“Second
Extended Term”) upon the following terms and conditions:

               1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease

3

 

Quantum 2

Term pursuant to Paragraph A hereof (not later than April 3, 2011), in which event the Term of
the Lease shall be considered extended for an additional five (5) years, subject to the Basic Rent
set forth below and with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii)
management fee and the terms and conditions subject to amendment by Landlord (Landlord, in its sole
and absolute discretion, may, but is not required to, incorporate its then current Lease provisions
that are standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise
of its Option to Extend); and (iii) this Paragraph 2.A thereafter deleted. In the event that
Tenant fails to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have
no further Option to Extend this Lease, and the Lease shall continue in full force and effect for
the full remaining term hereof, absent this Paragraph 2.

               2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.A.1(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year
of the current Term) required for the Extended Term of the Lease to make the Basic Rent for the
Premises comparable to the then current market triple net basic rent for comparable properties
either (i) then owned in whole or in part by the above mentioned Landlord or by members of its
immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as
stated herein, other third party properties in the vicinity of the Premises. Tenant shall have
five (5) days after receipt from the Landlord of said new terms and conditions and Basic Rent in
which to accept said new terms and conditions and Basic Rent and enter into written documentation
confirming same. In the event Tenant fails to execute said written documentation confirming said
new terms and conditions and Basic Rent for the Second Extended Term of Lease within said five (5)
day period, Tenant shall have no further Option to Extend this Lease, and this Lease shall continue
in full force and effect for the full remaining term hereof absent of this Paragraph 2, with
Landlord having no further responsibility or obligation to Tenant with respect to Tenant’s Option
to Extend.

               3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

               4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

               5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant

4

 

Quantum 2

does not completely cure said default within five days for a monetary default and thirty days
for a non-monetary default (or such longer time as permitted by cure in the Lease Agreement). In
the event said Option to Extend is forfeited as stated herein, Tenant shall have no further Option
to Extend this Lease.

     B. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

          1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than April 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Third Extended Term”) subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee
and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In the event that Tenant fails
to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further
Option to Extend this Lease, and the Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 2.B.

          2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.l(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

          3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at

5

 

Quantum 2

its sole and absolute discretion, cancel Tenant’s Option to Extend, and this Lease will
continue in full force and effect for the full remaining Term hereof, absent of this Paragraph 2.B.

          4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

          5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for anon-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said October 31, 1989
Lease Agreement, as heretofore amended, shall remain in full force and effect.

6

 

Quantum 2

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 4 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:
JOHN ARRILLAGA
SURVIVOR’S TRUST	 	 	 	ASSIGNEE/MAXTOR:

MAXTOR CORPORATION

a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga, by Richard

	 	 	 	By
	 	/s/ Glenn Stevens	 	 
	 

	 	Peery, his attorney-in-fact
	 	 	 	 	 	 

	 	 
	 

	 	John Arrillaga, Trustee
	 	 	 	 Glenn H. Stevens 	 	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 	 	 	Print or Type Name
	Date:
	 	3/30/01	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	RICHARD T. PEERY SEPARATE	 	 	 	Title:	 	V.P., General Counsel &
Secretary	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard Peery
	 	 	 	Date:
	 	4/1/01	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:	 	3/30/01	 	 	 	ASSIGNOR/QUANTUM:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUANTUM CORPORATION

a Delaware corporation	 	 
	 
	 

	 	 	 	 	 	By
	 	/s/ Norm Claus	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 

	 	 
	 	 	 	 
	 	 	 	 	 	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	V.P. Real Estate	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	Date:	 	3/30/01	 	 
	 

	 	 	 	 	 	 	 	 	 	 

7

 

LEASE AGREEMENT

     THIS LEASE, made this 10th day of April, 1992 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY TRUST) as amended, and
RICHARD T. PEERY Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE
PROPERTY TRUST) as amended, hereinafter called Landlord and QUANTUM CORPORATION, a Delaware
corporation, hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit “A”, attached hereto and incorporated herein
by this reference thereto more particularly described as follows:

All of that land containing approximately 3.752± acres and that
certain 60.128 ± square foot two-story building (“Building 3”) and parking
appurtenant thereto, to be constructed and landscaping to be installed by
Landlord as shown within the area outlined in Red (“Lot 3”) on Exhibit A to
be located at 900 Sumac Drive, Milpitas, California 95035. Said Premises is
more particularly shown within the area outlined in Red on Exhibit A
attached hereto and incorporated herein by this reference. The interior of
the leased Premises shall be improved in the configuration as shown in Red
on Exhibit B to be attached hereto and incorporated herein by this
reference. The building shell shall be constructed in accordance with the
shell and site improvement specifications set forth on Exhibit A, and the
general building elevation set forth on Exhibit A.

SEE PARAGRAPH 49.

          The word “Premises” as used throughout this lease is hereby defined to include the
nonexclusive use of sidewalks and driveways in front of or adjacent to the Premises, and the
nonexclusive use of the area directly underneath or over such sidewalks and driveways. The gross
leasable area of the building shall be measured from outside of exterior walls to outside of
exterior walls, and shall include any atriums, covered entrances or egresses and covered loading
areas.

          Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE Tenant shall use the Premises only in conformance with applicable governmental laws,
regulations, rules and ordinances for the purpose of office, sales and R&D, and related uses
necessary for the use of Tenant or any approved assignee or subtenant to conduct its business
providing any and all uses of the Premises shall be subject to and in conformance with all
governmental laws and ordinances, and for no other purpose without

1

 

Landlord’s prior written consent, Tenant shall not do or permit to be done in or about the
Premises nor bring or keep or permit to be brought or kept in or about the Premises anything which
is prohibited by or will in any way increase the existing rate of (or otherwise affect) fire or any
insurance covering the Premises or any part thereof, or any of its contents without the prior
written consent of Landlord, and provided Tenant bears any cost related to such increased rate, or
will cause a cancellation of any insurance covering the Premises or any part thereof, or any of its
contents. Tenant shall not do or permit to be done anything in, on or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or occupants of the Premises
or neighboring premises or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. No sale by auction shall be permitted on the Premises.
Tenant shall not place any loads upon the floors, walls, or ceiling which endanger the structure,
or place any harmful fluids or other materials in the drainage system of the building, or overload
existing electrical or other mechanical systems. No waste materials or refuse shall be dumped upon
or permitted to remain upon any part of the Premises or outside of the building in which the
Premises are a part, except in trash containers placed inside exterior enclosures designated by
Landlord for that purpose or inside of the building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the Premises. Tenant
shall not place anything or allow anything to be placed near the glass of any window, door
partition or wall which may appear unsightly from outside the Premises. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any loss, expense, damage, reasonable attorneys’ fees, or liability arising out of
failure of Tenant to comply with any applicable law that governs Tenant use of the Premises.
Tenant shall comply with any covenant, condition, or restriction (“CC&R’s”) affecting the Premises.
The provisions of this paragraph are for the benefit of Landlord only and shall not be construed
to be for the benefit of any tenant or occupant of the Premises.

     2. TERM AND COMMENCEMENT DATE OF LEASE See Paragraphs 41, 42, & 43 of this Lease.

     3. POSSESSION If Landlord, for any reason whatsoever other than Landlord’s default cannot
deliver possession of said premises to Tenant at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant shall be affected
thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of the Lease, and all
other dates affected thereby shall be revised to conform to the date of Landlord’s delivery of
possession, as specified in Paragraph 28, above; provided, however, it is agreed that in no event
shall the Lease commence sooner that April 1, 1993 unless the parties agree in writing to an
earlier date for the Lease to commence. The above is, however, subject to the provision that the
period of delay of delivery of the Premises shall not exceed 180 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities, governmental bodies,
weather, unavailable materials, and delays beyond Landlord’s

2

 

control shall be excluded in calculating such period) in which instance Tenant, at its option,
may, by written notice to Landlord, terminate this Lease. SEE PARAGRAPH 47.

     4. RENT

          A. Basic Rent Tenant agrees to pay to Landlord at such place as Landlord may designate without
deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for the
leased Premises the total sum of the amount to be calculated pursuant to Paragraph 39 in lawful
money of the United States of America, payable as follows:

SEE PARAGRAPHS 39 THROUGH 43.

          B. Time for Payment Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences on a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day of said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge Notwithstanding any other provision of this Lease, if Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal five percent (5%) of each rental payment so in
default. See Paragraph 50.

          D. Additional Rent Beginning with the commencement date of the term of this Lease, Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following:

               (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.

3

 

     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days after presentation of invoice from Landlord or Landlord’s agent setting forth such
Additional Rent and/or (ii) at the option of Landlord, Tenant shall pay to Landlord monthly, in
advance, Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s approximate
average monthly expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord’s actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, upon demand, any amount of actual expenses
expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant (providing
Tenant is not in default in the performance of any of the terms, covenants and conditions of this
Lease in which case such amount shall be held by Landlord as a credit for Tenant’s account until
such default has been cured) any amount of estimated payments made by Tenant in excess of
Landlord’s actual expenditures for said Additional Rent items.

     The respective obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          E. Place of Payment of Rent and Additional Rent All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Peery/Arrillaga, File 1504, P.O. Box 60000, San Francisco, CA 94160 or to such other person or to
such other place as Landlord may from time to time designate in writing.

          F. Security Deposit Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
with Landlord the sum of ONE HUNDRED SIXTY SIX THOUSAND FIVE HUNDRED FIFTY FOUR AND 56/00 Dollars
($166,554.56). Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the payment of rent and any
of the monetary sums due herewith, Landlord may (but shall not be required to) use, apply or retain
all or any part of this Security Deposit for the payment of any other amount which Landlord may
spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant’s default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its original amount. Tenant’s
failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds and Tenant shall not be entitled to interest
on such Deposit. If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) at the expiration of the
Lease term and after Tenant has vacated the Premises. In the event of termination of Landlord’s
interest in this Lease, Landlord shall transfer said Deposit to Landlord’s successor in interest
whereupon Tenant agrees

4

 

to release Landlord from liability for the return of such Deposit or the accounting therefor.
SEE PARAGRAPH 51

     5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the Premises as
being in good and sanitary order, condition and repair and accepts the building and improvements
included in the Premises in their present condition and without representation or warranty by
Landlord as to the condition of such building or as to the use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord and
Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed; all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed; the air conditioning and heating systems serviced by a
reputable and licensed service firm and in good operating condition and repair; the plumbing and
electrical systems and lighting in good order and repair, including replacement of any burned out
or broken light bulbs or ballasts; the lawn and shrubs in good condition including the replacement
of any dead or damaged plantings; the sidewalk, driveways and parking areas in good order,
condition and repair; together with all alterations, additions, and improvements which may have
been made in, to, or on the Premises (except moveable trade fixtures installed at the expense of
Tenant) except that Tenant shall ascertain from Landlord within ninety (90) days before the end of
the term of this Lease whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part or parts thereof
before the end of this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of
the term or sooner termination of this Lease, shall remove all of Tenant’s personal property and
trade fixtures from the Premises, and all property not so removed on or before the end of the term
or sooner termination of this Lease shall be deemed abandoned by Tenant and title to same shall
thereupon pass to Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost,
and repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not
surrendered at the end of the term or sooner termination of this Lease, Tenant shall indemnify
Landlord against loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the term hereof or as a
consent of Landlord to any holding over by Tenant. The voluntary or other surrender of this Lease
or the Premises by Tenant or a mutual cancellation of this Lease shall not work as a merger and, at
the option of Landlord, shall either terminate all or any existing subleases or subtenancies or
operate as an assignment to Landlord of all or any such subleases or subtenancies. SEE PARAGRAPH
52.

     6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any alteration or
addition to the Premises, or any part thereof, without the written consent of Landlord first had
and obtained by Tenant (such consent not to be unreasonably withheld), but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture and trade fixtures,
shall at once become a part of the Premises and belong to Landlord.

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Landlord reserves the right to approve all contractors and mechanics proposed by Tenant to
make such alterations and additions. Tenant shall retain title to all moveable furniture and trade
fixtures placed in the Premises. All heating, lighting, electrical, airconditioning, partitioning,
drapery, carpeting, and floor installations made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures. Tenant agrees that it
will not proceed to make such alteration or additions, without having obtained consent from
Landlord to do so, and until five (5) days from the receipt of such consent, in order that Landlord
may post appropriate notices to avoid any liability to contractors or material suppliers for
payment for Tenant’s improvements. Tenant will at all times permit such notices to be posted and
to remain posted until the completion of work. Tenant shall, if required by Landlord, secure at
Tenant’s own cost and expense, a completion and lien indemnity bond, satisfactory to Landlord, for
such work. Tenant further covenants and agrees that any mechanic’s lien filed against the Premises
for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond or otherwise, within ten (10) days after Tenant receives notice of
the filing thereof, at the cost and expense of Tenant. Any exceptions to the foregoing must be
made in writing and executed by both Landlord and Tenant. SEE PARAGRAPH 52.

     7. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and maintain the
Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good and sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and airconditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of the building,
store fronts, roofs, downspouts, all interior improvements within the premises including but not
limited to wall coverings, window coverings, carpet floor coverings partitioning, ceilings, doors
(both interior and exterior), including closing mechanisms, latches locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to landscaping,
sidewalks, driveways, parking lots including striping and sealing, sprinkler systems, lighting,
ponds, fountains, waterways, and drains. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by such rolling chairs
if such wear and tear exceeds that caused by normal foot traffic in surrounding areas. Areas of
excessive wear shall be replaced at Tenant’s sole expense upon Lease termination. Tenant hereby
waives all rights under, and benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of
the California Civil Code and under any similar law, statute or ordinance now or hereafter in
effect. In the event any of the above maintenance responsibilities apply to any other tenant(s) of
Landlord where there is common usage with other tenant(s), such maintenance responsibilities and
charges shall be allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord. SEE PARAGRAPH 53.

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     8. UTILITIES Tenant shall pay promptly, as the same become due, all charges for water, gas,
electricity, telephone, telex and other electronic communication service, sewer service, waste
pick-up and any other utilities, materials or services furnished directly to or used by Tenant on
or about the Premises during the term of this Lease, including, without limitation, any temporary
or permanent utility surcharge or other exactions whether or not hereinafter imposed. In the event
the above charges apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such charges shall be allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES

          A. Notwithstanding the following and pursuant to the terms of the Option Agreement dated
October 31, 1989 related to this Lease Tenant is responsible for paying all real estate taxes and
assessments assessed against the Premises leased hereunder from the date Tenant exercised its
option on said Premises which date was April 6, 1992. As Additional Rent and in accordance with
Paragraph 4D of this Lease, Tenant shall pay to Landlord, or if Landlord so directs, directly to
the Tax Collector, all Real Property Taxes relating to the Premises. In the event the Premises
leased hereunder consist of only a portion of the entire tax parcel, Tenant shall pay to Landlord
Tenant’s proportionate share of such real estate taxes allocated to the leased Premises by square
footage or other reasonable basis as calculated and determined by Landlord. If the tax billing
pertains 100% to the leased Premises, and Landlord chooses to have Tenant pay said real estate
taxes directly to the Tax Collector, then in such event it shall be the responsibility of Tenant to
obtain the tax and assessment bills and pay, prior to delinquency, the applicable real property
taxes and assessments pertaining to the leased Premises, and failure to receive a bill for taxes
and/or assessments shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term “Real Property Taxes”, as used
herein, shall mean (i) all taxes, assessments, levies and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all installments of principal
and interest required to pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership of the Premises) now or
hereafter imposed by any governmental or quasi-governmental authority or special district having
the direct or indirect power to tax or levy assessments, which are levied or assessed against, or
with respect to the value, occupancy or use of, all or any portion of the Premises (as now
constructed or as may at any time hereafter be constructed, altered, or otherwise changed) or
Landlord’s interest therein; any improvements located within the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or personal, that are an
integral part of and located in the Premises; or parking areas, public utilities, or energy within
the Premises; (ii) all charges, levies or fees imposed by reason of environmental regulation or
other governmental control of the Premises: and (iii) all costs and fees (including reasonable
attorneys fees) incurred by Landlord in reasonably contesting any Real Property Tax and in
negotiating with public authorities as to any Real

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Property Tax. If at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied, assessed or imposed
(whether by reason of a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Premises or Landlord’s interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Premises, on Landlord’s business of leasing the Premises, or
computed in any manner with respect to the operation of the Premises, then any such tax or charge,
however designated, shall be included within the meaning of the term “Real Property Taxes” for
purposes of this Lease. If any Real Property Tax is based upon property or rents unrelated to the
Premises, then only that part of such Real Property Tax that is fairly allocable to the Premises
shall be included within the meaning of the term “Real Property Taxes”. Notwithstanding the
foregoing, the term “Real Property Taxes” shall not include estate, inheritance, gift or franchise
taxes of Landlord or the federal or state net income tax imposed on Landlord’s income from all
sources. SEE PARAGRAPH 54.

          B. Taxes on Tenant’s Property Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any Such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion therein of a value placed on such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant, Tenant shall upon demand, as the case may be, repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from such increase in
the assessment; provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction
to recover the amount of such taxes so paid under protest, and any amount so recovered shall belong
to Tenant.

     10. LIABILITY INSURANCE Tenant, at Tenant’s expense, agrees to keep in force during the term
of this Lease a policy of comprehensive general liability insurance for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped areas, in the
amount of $2,000,000 combined single limit. Such insurance shall be primary and noncontributory as
respects any insurance carried by Landlord. The policy or policies effecting such insurance shall
name Landlord as additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or invitees or otherwise
by any conduct or transactions of any of said persons in or about or concerning the Premises,
including any failure of Tenant to observe or perform any of its obligations hereunder; shall be
issued by an insurance company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon thirty (30) days’
prior written notice to Landlord. A copy of said policy shall be delivered to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord’s Lender, insurance advisor,
or counsel, the amount of insurance described in this Paragraph 10 is not adequate, Tenant agrees
to increase said coverage to such reasonable amount as Landlord’s Lender, insurance advisor, or
counsel shall deem adequate.

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     11. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE Tenant shall
maintain a policy or policies of fire and property damage insurance in “all risk” form with a
sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement of such items so
insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as Additional Rent and
in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord Tenant’s proportionate
share (allocated to the leased Premises by square footage or other equitable basis as calculated
and determined by Landlord) of the cost of, policy or policies of insurance covering loss or damage
to the Premises (excluding routine maintenance and repairs and incidental damage or destruction
caused by accidents or vandalism for which Tenant is responsible under Paragraph 7) in the amount
of the full replacement value thereof, providing protection against those perils included within
the classification of “all risks” insurance and flood and/or earthquake insurance, if available,
plus a policy of rental income insurance in the amount of one hundred (100%) percent of twelve (12)
months Basic Rent, plus sums paid as Additional Rent. If such insurance cost is increased due to
Tenant’s use of the Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance procured by
Landlord for the Premises.

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty; provided, however, that if the insurance policy of either
releasing party prohibits such waiver, then this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof. SEE PARAGRAPH 55.

     13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby waives all claims
against Landlord for any injury to or death of any person or damage to or destruction of property
in or about the Premises by or from any cause whatsoever, including, without limitation, gas, fire,
oil, electricity or leakage of any character from the roof, walls, basement or other portion of the
Premises but excluding, however, the negligence of Landlord, its agents, servants, employees,
invitees, or contractors of which negligence Landlord has knowledge and reasonable time to correct.
Except as to injury to persons or damage to property the principal cause of which is the
negligence of Landlord, and subject to the last two sentences of Paragraph 12, Tenant shall hold
Landlord harmless from and defend Landlord against any and all expenses, including reasonable
attorneys’ fees in connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or any part thereof,
from any cause whatsoever.

     14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now or

9

 

hereafter in effect; with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted; and with any direction or occupancy certificate issued pursuant
to law by any public officer; provided, however, that no such failure shall be deemed a breach of
the provisions if Tenant, immediately upon notification, commences to remedy or rectify said
failure. The judgment of any court of competent jurisdiction or the admission of Tenant in any
action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
such law, statute, ordinance or governmental rule, regulation, requirement, direction or provision,
shall be conclusive of that fact as between Landlord and Tenant. Tenant shall, at its sole cost
and expense, comply with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability insurance covering
the Premises. SEE PARAGRAPHS 45 AND 53.

     15. LIENS Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection therewith, shall
be payable to Landlord by Tenant on demand with interest at the prime rate of interest as quoted by
the Bank of America.

     16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or hypothecate the leasehold
estate under this Lease, or any interest therein, and shall not sublet the Premises, or any part
thereof, or any right or privilege appurtenant thereto, or suffer any other person or entity to
occupy or use the Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the premises, with the prior written
consent of Landlord, no assignee, transferee or subtenant shall assign or transfer this Lease,
either in whole or in part, or sublet the whole or any part of the Premises, without also having
obtained the prior written consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not release Tenant from any
of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar or
dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other person.
Any such assignment, transfer, hypothecation, subletting, occupation or use without such consent
shall be void and shall constitute a breach of this Lease by Tenant and shall, at the option of
Landlord exercised by written notice to Tenant, terminate this Lease. The leasehold estate under
this Lease shall not, nor shall any interest therein, be assignable for any purpose by operation of
law without the written consent of Landlord. As a condition to its consent, Landlord may require
Tenant to pay all reasonable expenses in connection with the assignment, and Landlord may require
Tenant’s assignee or transferee (or other assignees or transferees) to assume in writing all of the
obligations under this Lease and for Tenant to remain liable to Landlord under the Lease. SEE
PARAGRAPHS 56 AND 57.

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     17. SUBORDINATION AND MORTGAGES In the event Landlord’s title or leasehold interest is now or
hereafter encumbered by a deed of trust, upon the interest of Landlord in the land and buildings in
which the demised Premises are located, to secure a loan from a lender (hereinafter referred to as
“Lender”) to Landlord, Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of trust, or, if so
requested, agreeing that the lien of Lender’s deed of trust shall be or remain subject and
subordinate to the rights of Tenant under this Lease. Notwithstanding any such subordination,
Tenant’s possession under this Lease shall not be disturbed if Tenant is not in default and so long
as Tenant shall pay all rent and observe and perform all of the provisions set forth in this Lease.
SEE PARAGRAPH 58.

     18. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have, the right to
enter the Premises to inspect them; to perform any services to be provided by Landlord hereunder;
to make repairs or provide any services to a contiguous tenant(s); to submit the Premises to
prospective purchasers, mortgagers or tenants; to post notices of nonresponsibility; and to alter,
improve or repair the Premises or other parts of the building, all without abatement of rent, and
may erect scaffolding and other necessary structures in or through the Premises where reasonably
required by the character of the work to be performed; provided, however that the business of
Tenant shall be interfered with to the least extent that is reasonably practical. Any entry to the
Premises by Landlord for the purposes provided for herein shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or constructive, of Tenant from the Premises or any portion thereof. SEE
PARAGRAPH 59.

     19. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or liquidation action or
reorganization action or insolvency action or an assignment of or by Tenant for the benefit of
creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant, shall, at
Landlord’s option, constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar action
elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in writing
of its election within thirty (30) days after an order for relief in a liquidation action or within
thirty (30) days after the commencement of any action.

          Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate assurance
of future performance, as used herein, includes, but shall not be limited to: (i) assurance of
source and payment of rent, and other consideration due under this Lease; (ii) assurance that the
assumption or assignment of this Lease will not breach substantially any provision, such as radius,
location, use, or exclusivity provision, in any agreement relating to the above described Premises.

          Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the benefit of

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creditors or other similar act. Nothing contained in this Lease shall be construed as giving
or granting or creating an equity in the demised Premises to Tenant. In no event shall the
leasehold estate under this Lease, or any interest therein, be assigned by voluntary or involuntary
bankruptcy proceeding without the prior written consent of Landlord. In no event shall this Lease
or any rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings.

          The failure to perform or honor any covenant, condition or representation made under this
Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of written notice from
Landlord within which to cure any other default under this Lease. Upon an uncured default of this
Lease by Tenant, Landlord shall have the following rights and remedies in addition to any other
rights or remedies available to Landlord at law or in equity:

               (a) The rights and remedies provided for by California Civil Code Section 1951.2, including
but not limited to, recovery of 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 rental loss for the
same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b)
of said Section 1951.2.

               (b) The rights and remedies provided by California Civil Code Section which allows Landlord to
continue the Lease in affect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as Landlord does not terminate
Tenant’s right to possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord’s initiative to protect its interest under this
Lease shall not constitute a termination of Tenant’s right to possession.

               (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable
law.

               (d) The right and power, after compliance with all statutory requirements and in any event on
not less than three (3) business days prior written notice, to enter the Premises and remove
therefrom all persons and property, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord, may from time to time sublet the
Premises or any part thereof for such term or terms (which may extend beyond the term of this
Lease) and at such rent and such other terms as Landlord in its reasonable sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises. Upon each subletting,
(i) Tenant shall be immediately liable to pay Landlord, in addition to indebtedness other than rent
due hereunder, the reasonable cost of such subletting, including, but not limited to, reasonable
attorneys’ fees, and any real estate commissions actually paid, and the cost of such reasonable
alterations and repairs incurred by Landlord and the amount, if any, by which the rent hereunder
for the period of such subletting (to the extent such period does not exceed the term hereof)
exceeds the amount to be paid as rent for the Premises

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for such period or (ii) at the option of Landlord, rents received from such subletting shall
be applied first to payment of indebtedness other than rent due hereunder from Tenant to Landlord;
second, to the payment of any costs of such subletting and of such alterations and repairs; third
to payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same becomes due hereunder. If Tenant has been credited
with any rent to be received by such subletting under option (i) and such rent shall not be
promptly paid to Landlord by the subtenant(s), or if such rentals received from such subletting
under option (ii) during any month be less than that to be paid during that month by Tenant
hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated
and paid monthly. No taking possession of the Premises by Landlord shall be construed as an
election on its part to terminate this Lease unless a written notice of such intention be given to
Tenant. Notwithstanding any such subletting without termination, Landlord may at any time hereafter
elect to terminate this Lease for such previous breach.

               (e) The right to have a receiver appointed for Tenant upon application by Landlord, to take
possession of the Premises and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord pursuant to subparagraph d above. SEE PARAGRAPH 60.

     20. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time during the term of
this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be dispossessed by
the process of law, or otherwise, any personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord. SEE PARAGRAPH 61.

     21. DESTRUCTION In the event the Premises are destroyed in whole or in part from any cause,
except for routine maintenance and repairs and incidental damage and destruction caused from
vandalism and accidents for which Tenant is responsible under Paragraph 7, Landlord may, at its
option:

               (a) Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b) Terminate this Lease.

          If Landlord does not give Tenant notice in writing within thirty (30) days from the
destruction of the Premises of its election to either rebuild and restore them, or to terminate
this Lease, Landlord shall be deemed to have elected to rebuild or restore them, in which event
Landlord agrees, at its expense, promptly to rebuild or restore the Premises to their condition
prior to the damage or destruction. Tenant shall be entitled to a reduction in rent while such
repair is being made in the proportion that the area of the Premises rendered untenantable by such
damage bears to the total area of the Premises. If Landlord does not complete the rebuilding or
restoration within one hundred eighty (180) days following the date of destruction (such period of
time to be extended for delays caused by the fault or neglect of Tenant or because of Acts of God,
acts of public agencies, labor disputes, strikes, fires, freight embargos, rainy or stormy weather,
inability to obtain materials, supplies or fuels, acts of contractors or subcontractors, or delay
of the contractors or subcontractors due to such causes or other

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contingencies beyond the control of Landlord), then Tenant shall have the right to terminate
this Lease by giving fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord’s obligation to rebuild or restore shall be limited to the
building and interior improvements constructed by Landlord as they existed as of the commencement
date of the Lease and shall not include restoration of Tenant’s trade fixtures, equipment
merchandise, or any improvements, alterations or additions made by Tenant to the Premises which
Tenant shall forthwith replace or fully repair at Tenant’s sole cost and expense provided this
Lease is not cancelled according to the provisions above.

          Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain
in full force and effect. Tenant hereby expressly waives the provisions of Section 1932,
Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

          In the event that the building in which the Premises are situated is damaged or destroyed to
the extent of not less than 331/3% of the replacement cost thereof, Landlord may elect to terminate
this Lease, whether the Premises be injured or not. In the event the destruction of the Premises
is caused by Tenant, Tenant shall pay the deductible portion of Landlord’s insurance proceeds. SEE
PARAGRAPH 62.

     22. EMINENT DOMAIN If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this Lease
shall terminate as to any portion of the Premises so taken or conveyed on the date when title vests
in the condemnor and Landlord shall be entitled to any and all payment, income, rent, award, or any
interest therein whatsoever which may be paid or made in connection with such taking or conveyance,
and Tenant shall have no claim against Landlord or otherwise for the value of any unexpired term of
this Lease. Notwithstanding the foregoing paragraph, any compensation specifically awarded Tenant
for loss of business, Tenant’s personal property, moving cost or loss of goodwill shall be and
remain the property of Tenant.

          If any action or proceeding is commenced for such taking of the Premises or any part thereof,
or if Landlord is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall
have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60)
days of the date of receipt of said written advice, or commencement of said action or proceeding,
or taking conveyance, which termination shall take place as of the first to occur of the last day
of the calendar month next following the month in which such notice is given or the date on which
title to the Premises shall vest in the condemnor.

          In the event of such a partial taking or conveyance of the Premises, if the portion of the
Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its
business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the
date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the calendar month next
following the month in which such notice is given, upon payment by Tenant of the rent from the date
of such taking or conveyance to the date of termination.

14

 

          If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate this Lease as provided herein, this Lease shall
continue in full force and effect as to the part of the Premises not so taken or conveyed, and the
rent herein shall be apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking. SEE PARAGRAPH 63.

     23. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the Premises or any
interest therein, by any owner of the reversion then constituting Landlord, the transferor shall
thereby be released from any further liability upon any of the terms, covenants or conditions
(express or implied) herein contained in favor of Tenant, and in such event, insofar as such
transfer is concerned, Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. SEE PARAGRAPH 64.

     24. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in the land and
buildings in which the leased Premises are located (whether such interest of Landlord is a fee
title interest or a leasehold interest) is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale, Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved and upon all the other
terms, conditions and covenants herein contained.

     25. HOLDING OVER Any holding over by Tenant after expiration or other termination of the term
of this Lease with the written consent of Landlord delivered to Tenant shall not constitute a
renewal or extension of the Lease or give Tenant any rights in or to the leased Premises except as
expressly provided in this Lease. Any holding over after the expiration or other termination of
the term of this Lease, with the consent of Landlord, shall be construed to be a tenancy from month
to month, on the same terms and conditions herein specified insofar as applicable except that the
monthly Basic Rent shall be increased to an amount equal to one hundred twenty five (125%) percent
of the monthly Basic Rent required during the last month of the Lease term.

     26. CERTIFICATE OF ESTOPPEL Either party shall at any time upon not less than ten (10) days
prior written notice from the other party execute, acknowledge and deliver to the requesting party
a statement in writing (i) 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 (ii) acknowledging that there are not, to the best of such party’s knowledge,
any uncured defaults on the part of the other party hereunder, or specifying such defaults, if any,
are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises. A party’s failure to deliver such

15

 

statement within such time shall be conclusive upon the party receiving such request that this
Lease is in full force and effect, without modification except as may be represented by Landlord
that there are no uncured defaults in the requesting party’s performance, and that not more than
one month’s rent has been paid in advance.

     27. CONSTRUCTION CHANGES It is understood that the description of the Premises and the
location of ductwork, plumbing and other facilities therein are subject to such minor changes as
Landlord or Landlord’s architect determines to be desirable in the course of construction of the
Premises, and no such changes shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of such drawings rests
with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this Lease to be
performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s sole cost and
expense and without any reduction of rent. If Tenant shall fail to pay any sum of money, or other
rent, required to be paid by it hereunder or shall fail to perform any other term or covenant
hereunder on its part to be performed, and such failure shall continue for five (5) days after
written notice thereof by Landlord. Landlord, without waiving or releasing Tenant from any
obligation of Tenant hereunder, may, but shall not be obliged to, make any such payment or perform
any such other term or covenant on Tenant’s part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest thereon at the rate of
the prime rate of interest per annum as quoted by the Bank of America from the date of such payment
on performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord
on demand by Landlord and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of
failure by Tenant in the payment of rent hereunder.

     29. ATTORNEYS’ FEES

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the breach of any
provision of this Lease, or for any other relief against the other party hereunder, then all costs
and expenses, including reasonable attorney’s fees, incurred by the prevailing party therein shall
be paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be enforceable whether or not the
action is prosecuted to judgment.

          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

     30. WAIVER The waiver by either party of the other party’s failure to perform or observe any
term, covenant or condition herein contained to be performed or observed by such waiving party
shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent failure
of the party failing to perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between

16

 

the parties hereto during the term hereof shall be deemed a waiver of, or in any way affect,
the right of either party to insist upon performance and observance by the other party in strict
accordance with the terms hereof.

     31. NOTICES All notices, demands, requests, advices or designations which may be or are
required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advices or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises of if sent by
United Stated certified or registered mail, postage prepaid, addressed to Tenant at the Premises.
All notices, demands, requests, advices or designations by Tenant to Landlord shall be sent by
United States certified or registered mail, postage prepaid, addressed to Landlord at its offices
at Peery/Arrillaga, 2560 Mission College Blvd., Suite 101, Santa Clara, CA 95054. Each notice,
request, demand, advice or designation referred to in this paragraph shall be deemed received on
the date of the personal service or mailing thereof in the manner herein provided, as the case may
be.

     32. EXAMINATION OF LEASE Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for a lease, and this instrument is not effective as
a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event earlier than (30) days
after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations; provided, however,
that if the nature of Landlord’s obligations is such that more than thirty (30) days are required
for performance, then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY If Tenant is a corporation (or a partnership), each individual
executing this Lease on behalf of said corporation (or partnership) represents and warrants that he
is duly authorized to execute and deliver this Lease on behalf of said corporation (or partnership)
in accordance with the by-laws of said corporation (or partnership in accordance with the
partnership agreement) and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty (30) days after
execution of this Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this Lease.

     35. INTENTIONALLY LEFT BLANK

     36. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder, Tenant and
all successors and assigns covenant and agree that, in the event of any actual or alleged failure,
breach or default hereunder by Landlord:

17

 

               (a) the sole and exclusive remedy shall be against Landlord and Landlord’s assets;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as maybe
necessary to secure jurisdiction of the partnership);

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process;

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

               (g) no writ of execution will ever be levied against the assets of any partner of Landlord;

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS No sign, placard, picture, advertisement, name or notice shall be inscribed,
displayed or printed or affixed on or to any part of the outside of the Premises or any exterior
windows of the Premises without the written consent of Landlord first had and obtained and Landlord
shall have the right to remove any such sign, placard, picture, advertisement, name or notice
without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on or about the Premises, upon expiration or other sooner termination of this
Lease, Tenant at Tenant’s sole cost and expense shall both remove such sign and repair all damage
in such a manner as to restore all aspects of the appearance of the Premises to the condition prior
to the placement of said sign.

          All approved signs or lettering on outside doors shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person reasonably approved of by Landlord.

          Tenant shall not place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.

     38. MISCELLANEOUS AND GENERAL PROVISIONS

          A. Use of Building Name. Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

18

 

     B. Choice of Law; Severability. This Lease shall in all respects be governed by and construed
in accordance with the laws of the State of California. If any provision of this Lease shall be
invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall
be and remain in full force and effect.

     C. Definition of Terms. The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as
well as the singular and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof, and the provisions of this Lease shall inure to the benefit of and
bind such heirs, executors, administrators, successors and permitted assigns.

     The term “person” includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations. Words used in any gender include other genders. If
there be more than one Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.

     D. Time of Essence. Time is of the essence of this Lease and of each and all of its
provisions.

     E. Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim deed or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

     F. Incorporation of Prior Agreements; Amendments. This agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.

     G. Recording. Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit D.

     H. Amendments for Financing. Tenant further agrees to execute any amendments reasonably
required by a lender to enable Landlord to obtain financing, so long as Tenant’s rights hereunder
are not materially and adversely affected and there is no change in the Basic Rent Options to
Renew, Lease Term or Construction obligations of Landlord.

     I. Additional Paragraphs. Paragraphs 39 through 65 are added hereto and are included as a
part of this Lease.

19

 

          J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          K. Diminution of Light, Air or View. Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect this Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant.

20

 

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

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA	 	 	 	QUANTUM CORPORATION,	 	 
	SEPARATE PROPERTY TRUST	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Joseph C. Shepela	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title
	 	Vice President Human Resources	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY	 	 	 	 	 	 	 	 
	SEPARATE PROPERTY TRUST	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard Peery	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 

21

 

     Paragraphs 39 through 65 to Lease Agreement dated April 10, 1992. By and Between JOHN
ARRILLAGA AND RICHARD T. PEERY SEPARATE PROPERTY TRUSTS, as Landlord, and QUANTUM CORPORATION, a
Delaware corporation, as Tenant for 60,128 ± Square Feet of Space Located at 900 Sumac Drive,
Milpitas, California.

     39. BASIC RENT: In accordance with Paragraph 4A, subject to the provisions of
Paragraphs 39 and 40, Basic Rent shall be payable as follows during the indicated months of the
term of the Lease based upon the gross leasable area within the building that is part of the
Premises:

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12
(plus the partial calendar
month, if any, following
the Commencement Date)
	 	$1.16/sf
	 
	 	 	 	 
	Months 13-24
	 	$1.21/sf
	 
	 	 	 	 
	Months 25-36
	 	$1.26/sf
	 
	 	 	 	 
	Months 37-48
	 	$1.31/sf
	 
	 	 	 	 
	Months 49-60
	 	$1.36/sf
	 
	 	 	 	 
	Months 61-72
	 	$1.41/sf
	 
	 	 	 	 
	Months 73-84
	 	$1.46/sf
	 
	 	 	 	 
	Months 85-96
	 	$1.51/sf
	 
	 	 	 	 
	Months 97-108
	 	$1.56/sf
	 
	 	 	 	 
	Months 109-120
	 	$1.61/sf
	 
	 	 	 	 
	Months 121-132
	 	$1.66/sf
	 
	 	 	 	 
	Months 133-144
	 	$1.71/sf
	 
	 	 	 	 
	Months 145-156
	 	$1.76/sf
	 
	 	 	 	 
	Months 157-163
	 	$1.81/sf

     Example of calculation of Basic Rent per month for the period commencing with the
first through the twelfth months of said Lease:

	 	 	 	 	 
	Square footage of Building
	 	 	60,128	 
	Per square foot Basic Monthly Rent
	 	 	x $1.16	 
	 
	 	 	 
	Basic Rent per Month
	 	$	69,748.48	 
	 
	 	 	 

In the event this Lease commences on June 1, 1993 or thereafter, the Basic Rent schedule shown
above may be amended in accordance with Article I.F.2.(b)(1) entitled “Basic Monthly Rental” of
Option Agreement dated October 31, 1989 between the parties.

22

 

     40. BASIC RENT REDUCTION IN THE EVENT TENANT DEFERS ITS OCCUPANCY OF THE LEASED
PREMISES: It is agreed between the parties that the Lease term will commence on the
Commencement Date as defined in Paragraph 41.B., however, Landlord has agreed that Tenant may, by
providing Landlord 30 days prior written notice, defer its occupancy of the Leased Premises from
the Lease Commencement Date (projected to be April 1, 1993) through July 31, 1993 (hereinafter
referred to as the “Deferral Period”). Provided Tenant notifies Landlord of its election to defer
its occupancy, as provided above, and further provided Tenant does not occupy any portion of the
Leased Premises, the Monthly Basic Rent will be reduced to FORTY THOUSAND AND NO/100 DOLLARS
($40,000.00) per month during the Deferral Period and the Lease will be amended to reflect said
adjustment to the Basic Rent Schedule. In the event Tenant occupies any part of the Leased
Premises during the Deferral Period, the Lease will be further amended and Tenant will pay, from
the date of occupancy of any part of the Leased Premises, Basic Rent per the Schedule outlined in
Paragraph 39 “Basic Rent.” For example, if the Lease Commencement Date is April 1, 1993 and Tenant
notifies Landlord by March 1, 1993 of its intent to defer occupancy until July 1, 1993, and Tenant
occupies part or all of the Leased Premises on June 1, 1993, the Basic Rent for the Deferral Period
shall be payable as follows: April 1 through 30th....$40,000.00; May 1 through 31st....$40,000.00;
June 1 through 30th....$69,748.48; July I through 31st....$69,748.48. In the event the Lease term
commences on a date other than the first day of the month, or Tenant occupies the Leased Premises
during the Deferral Period on a date other than the first day of the month, the Basic Rent shall be
pro rated on a daily basis for such partial month at the Basic Rent rate scheduled for the
Commencement Date as shown in Paragraph 39 above, and/or the reduced Basic Rent as provided for in
this Paragraph 40. For example, if the Lease Commencement Date is April 1, 1993 and Tenant
occupies part or all of the Leased Premises on April 15, 1993, Tenant’s Basic Rent due for the
period April 1, 1993 through April 30, 1993 shall be $55,100.59, calculated as follows:

	 	 	 
	$40,000.00/mo x 12

	 	= $480,000.00/year
	 
	 	 
	$480,000.00 divided by 365

	 	= $1,315.07/day
	 
	 	 
	$ 1,315.07 x 14 days

	 	= $18,410.98 due for the period 4/1/93 — 4/14/93
	 
	 	 
	$ 69,748.48/mo x 12

	 	= $836,981.76/year
	 
	 	 
	$836,981.76 divided by 365

	 	= $2,293.10/day
	 
	 	 
	$ 2,293.10 x 16 days

	 	= $36,689.61 due for the period 4/15/93 — 4/30/93

	 	 	 
	$18,410.98
	 	due for the period 4/01/93 - 4/14/93
	$36,689.61
	 	due for the period 4/15/93 - 4/30/93
	 
	 	 
	$55,100.59
	 	due for the period 4/01/93 - 4/30/93
	 
	 	 

This reduction in Basic Rent is only allowed from the Commencement Date through July 31, 1993 (but
under no circumstances after July 31, 1993). In no event whatsoever shall Tenant be

23

 

entitled to such reduction in Basic Rent after July 31, 1993 regardless of the Commencement Date of this Lease
and regardless of the reason for any delays in the Commencement Date of this Lease. Subject to the
above, commencing August 1, 1993, Tenant shall pay monthly Basic Rent in accordance with the Basic
Rent schedule shown in Paragraph 39 “Basic Rent” above (i.e. Months 1-12 $1.16 PSF, Months 13-24
$1.21 PSF,...). For purposes of this Paragraph 40, Tenant shall be deemed to occupy the Leased
Premises on the date any of Tenant’s personnel occupy any part of the Premises, provided however,
entry into the Premises by Tenant to install Tenant’s trade fixtures and furniture won’t be
considered occupancy by Tenant to the Premises.

It is further agreed that during the Deferral Period Tenant will be responsible, from the
Commencement Date of the Lease, for paying all Additional Rent expenses as outlined in Paragraph
4D.

     41. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as
defined herein) which is projected to be April 1, 1993, and shall continue for a period of thirteen
years and six months plus the partial calendar month, if any, in which the Commencement Date
occurs, subject to (i) earlier termination in accordance with the provisions of this Lease, and
(ii) extension pursuant to the options to renew granted by Paragraphs 42 and 43; provided, however,
that in the event the Lease term commences on a date other than April 1, 1993, the Lease term shall
be amended to reflect a term equal to the period which commences on the Act Commencement Date and
ends on September 30, 2006 (the termination date) (i.e., In the event the Lease term commences June
1, 1993, the term of this Lease shall be amended to reflect a thirteen year four month term. In
the event the Lease term commences February 1, 1993, the Lease term shall be for thirteen years
eight months).

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean
the later to occur of the following: (i) the date upon which the “Improvements” are “Substantially
Completed”; or (ii) April 1, 1993; provided, however, that if prior to the later of such dates
Tenant’s operating personnel enter into occupancy of the Premises and commence the operation of
Tenant’s business within the Premises, the Commencement Date shall be the date such personnel of
Tenant so enter into occupancy of the Premises. The term “Substantially Completed” and/or
“Substantial Completion” shall mean the date when all of the following have occurred with respect
to the Improvements in question: (i) the construction of the Improvements in question has been
substantially completed in accordance with the approved plans therefor except for punch list items
which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business; (ii)
Landlord has executed a certificate or statement representing that the Improvements in question
have been substantially completed in accordance with the plans and specifications therefor except
for the punch list items which do not prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; and (iii) the Building Department of the City of Milpitas has completed its
final inspection of such Improvements and has “signed off” the building inspection card approving
such work as complete except for punch list items which do not prevent Tenant from reasonably using
the Premises to conduct Tenant’s
business. Notwithstanding the foregoing, Substantial Completion of the Interior Improvements
shall not be deemed to have occurred until Landlord has obtained final or conditional approval

24

 

from the Fire Department of the City of Milpitas that the Improvements have been completed in accordance
with such department’s requirements (subject only to conditions that do not prevent Tenant from
occupying the Improvements).

          C. Lease Terms Co-extensive: It is acknowledged that (i) Landlord and Tenant have
previously executed three separate leases. Two of said leases dated October 31, 1989 (hereinafter
referred to as the 1989 Leases) are for Premises located at 1130 Bellew Drive and 490 McCarthy
Blvd., Milpitas, California and one of said leases dated September 17, 1990 (hereinafter referred
to as the “1990 Lease”) is for Premises located at 1000 Sumac Drive, Milpitas, California, and (ii)
it is the intention of the parties that the term of this Lease be co-extensive with the term of the
1989 Leases and the 1990 Lease, such that the terms of all four leases expire on the same date. To
that end, following the date upon which the Commencement Date of this Lease becomes established as
a date certain following completion of improvements and satisfaction of any other conditions
related to determining such date, the term of this Lease may be reduced or extended to coincide
with the term of the 1989 Leases and the 1990 Lease, however, in no event will the term of this
Lease be for a period of less than ten (10) years. As soon as the parties are able to implement
the provisions of this paragraph because the Commencement Date of this Lease has been determined
following completion of improvements and satisfaction of other appropriate conditions, the parties
shall execute an amendment to this Lease establishing the applicable Commencement Date in
accordance with the foregoing provisions of this Paragraph 41C, the actual rent based upon the
measurements of the completed building covered by this Lease as certified prior to the Commencement
Date by an architect or general contractor reasonably approved by the parties, and the actual date
for each rent adjustment provided for in this Lease, based upon the actual Lease Commencement Date.

     42. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions:

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at lease one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 42 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$1.86/sf
	Months 13-24

	 	$1.91/sf
	Months 25-36

	 	$1.96/sf
	Months 37-48

	 	$2.01/sf
	Months 49-60

	 	$2.06/sf

25

 

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to renew
granted by this Paragraph 42 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 42
notwithstanding such non-curable default.

     43. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 42, Landlord hereby grants to Tenant an
option to extend the term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 42, in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this Paragraph 43A and subject
to the rental as set forth below. In the event that Tenant fails to timely exercise Tenant’s
option as set forth herein in writing, Tenant shall have no further option to extend this Lease,
and this Lease shall continue in full force and effect for the full remaining term hereof, absent
this Paragraph 43.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.11/sf
	Months 13-24

	 	$2.16/sf
	Months 25-36

	 	$2.21/sf
	Months 37-48

	 	$2.26/sf
	Months 49-60

	 	$2.31/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 43 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 43
notwithstanding such non-curable default.

     44. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide
for construction contingencies and reserve funds. Interest will be earned on such funds created

26

 

for contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be credited on assessments otherwise due against the
demised premises, Tenant shall pay to Landlord, as additional rent if, and at the time of any such
credit of surpluses, an amount equal to all such surpluses so credited.

     45. HAZARDOUS MATERIALS: The parties agree as follows with respect to the existence
or the use of hazardous material on the Premises:

          A. Tenant shall have no obligations to “clean up”, to comply with any law regarding, or to
reimburse, release, indemnify, or defend Landlord with respect to any hazardous materials or wastes
which Tenant or other parties on the Premises did not store, dispose, or transport in, use, or
cause to be on the Premises in violation of applicable law during the term of this Lease. Any
handling, transportation, storage, treatment, disposal or use of hazardous materials by Tenant or
other parties in or about the Premises during the term of this Lease shall strictly comply with all
applicable laws and regulations. Tenant will be 100 percent liable and responsible for any and all
“clean up” of said toxic waste and/or hazardous materials contamination which Tenant, its agents,
or future subtenants, if any, does store, dispose, or transport in, use or cause to be on the
Premises in violation of applicable law or governing agency(s) or which originate on Premises,
during the term of this Lease from any manner whatsoever, including but not limited to, dumping by
others, (or which originate on the surface of the Premises any time after October 28, 1989, the
date the Option Agreement dated October 31, 1989 related to said Lease was executed by all parties,
and before the Commencement Date of this Lease, but excluding Hazardous Materials on the Premises
prior to the Lease Commencement Date because of the storage, use, disposal, or transportation of
such materials or waste by any of Landlord’s contractors or otherwise arising out of construction
work performed by or under the direction of Landlord on the Premises and Landlord shall be
responsible for all required actions with respect to such materials or wastes), and will indemnify
Landlord and hold Landlord harmless from any liabilities, demands, costs, expenses and damages,
including attorney fees incurred as a result of any claims resulting from such contamination, or
from any claims for personal injury or property damage or diminution in the value of the Premises
caused by the use, storage, disposal or transportation of hazardous materials on the Premises by
Tenant or other parties during the term of this Lease. It is agreed that the Tenant’s
responsibilities related to toxic waste and hazardous materials will survive the termination date
of the Lease. Tenant agrees to complete compliance with governmental regulations regarding use or
removal or remediation of Hazardous Materials used, stored, disposed, transported or caused to be
on the Premises by Tenant or its agents or subtenants, or which originate on the Premises during
the term of this Lease, and prior to the termination of said Lease Tenant agrees to follow the
proper closure procedures and will obtain a clearance from the local fire department and/or the
appropriate city agency. Tenant also agrees to install such toxic waste and/or hazardous materials
monitoring devices as Landlord reasonably deems necessary to monitor any use of hazardous materials
by Tenant, its agents or subtenants, originating from the Premises during the Lease term, if
recommended by a qualified environmental consulting firm.

          B. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this

27

 

Lease, without any inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

               (1) The soil and ground water on or under the Premises does not contain hazardous materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such hazardous materials.

               (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the presence of hazardous
material on the Premises, or (iii) any pending investigation by any governmental agency concerning
the Premises relating to hazardous materials.

          C. Landlord and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority concerning hazardous
materials which relates to the Premises, and (ii) any contamination of the Premises by hazardous
materials which constitutes a violation of any law. If during the Lease term Tenant proposes to
use other hazardous materials at the Premises, Tenant shall inform Landlord of such use,
identifying the hazardous materials and the manner of their use, storage and disposal, and shall
agree (i) to use, store and dispose of such materials strictly in compliance with all laws and (ii)
that the indemnity set forth in Paragraph 45A shall be applicable to Tenant’s use of such material.

          D. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of hazardous material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid for by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
hazardous materials laws, or Tenant or parties on the Premises during the term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to hazardous materials
laws, or that Tenant has liability to Landlord pursuant to Paragraph 45A, then Tenant shall pay for
l00 percent of the cost of the test and all related expense. Prior to the expiration of the Lease
term, Tenant shall remove any testing wells it has installed at the Premises, and return the
Premises to the condition existing prior to the installation of such wells, unless Landlord
requests in writing that Tenant leave all or some of the testing wells in which instance the wells
requested to be left shall not be removed.

          E. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
hazardous materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such materials at the Premises. The
Commencement Date shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.

          F. The obligations of Landlord and Tenant under this Paragraph 45 shall survive the expiration
or earlier termination of the term of this Lease. The rights and obligations

28

 

of Landlord and Tenant with respect to issues relating to hazardous materials are exclusively established by this
Paragraph 45.

     46. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall not be
unreasonably withheld or delayed.

     47. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can commence.
Therefore, it is agreed that in the event Landlord cannot obtain all the necessary building permits
for the building shell by September 1, 1992, then either Landlord or Tenant can terminate this
Lease by written notice to the other party given within thirty (30) days thereafter, without any
liability to the other party of any type whatsoever, and that this Lease Agreement shall be null
and void as of the date of receipt of such notice. Landlord agrees to use its best efforts to
obtain the required permits by September 1, 1992.

     48. CROSS DEFAULT: As set forth in Paragraph 41C, Landlord and Tenant have entered
into other leases dated October 31, 1989 referred to herein as the “1989 Leases” and Lease
Agreement dated September 17, 1990 referred to herein as the “1990 Lease”. As a material part of
the consideration for the execution of this Lease by Landlord, it is agreed between Landlord and
Tenant that a default under this Lease, or a default under said 1989 and 1990 Leases may, at the
option of Landlord, be considered a default under all leases, in which event Landlord shall be
entitled (but in no event required) to apply all rights and remedies of Landlord under the terms of
one lease to all Leases including, but not limited to, the right to terminate one, two, three or
all of said leases by reason of a default under said 1989 and 1990 Leases or hereunder.

     49. SUBDIVISION: With respect to the development of the Premises:

     Landlord and Tenant agree that the Premises and all of Parcels 1, 2, 4, and 5 shown on that
certain parcel map, recorded on July 23, 1990 in Book 616 of Maps, Page 20 (the “Larger Parcel”)
during (and limited to) the term of this Lease shall be developed and used only in accordance with
a master plan, developed by Landlord. The parties have mutually agreed to a Master Plan for the
general development of the Premises and the Larger Parcel which is attached hereto as Exhibit “Al”
and entitled “Master Site Plan”. Said Master Site Plan sets forth the buildings and land to be
leased under this Lease (Building 3 on Lot 3), the 1989 Leases (Buildings 1 and 2 on Lots 1 and 2,
respectively) and the 1990 Lease (Building 4 on Lot 4), and the building and land proposed to be
developed on the remainder of the property (Building 5 to be constructed on Lot 5) as well as the
general location of the parking and landscaping pertaining thereto. The parties agree that the
Master Site Plan may be modified provided that (i) a perimeter driveway is developed in front of
each building which generally runs near and parallel with the street surrounding the 37 ± acre site,
(ii) all buildings will be similar and generally architecturally compatible, (iii) a landscape area
is developed along the frontage of all streets between the street and parking area closest to the
street and (iv) a landscape and recreation area
at the rear of Lot 4 (as shown on the Site Plan) is developed when a building is constructed
on Lot 4. The parties agree that (i) Landlord may change the Master Plan, shape and sizes of the

29

 

buildings, parking and landscaping as long as the general development concept set forth above is
generally followed by Landlord, and (ii) any successor or assign of Landlord or Tenant shall be
required to consent and agree to develop the Premises and the Larger Parcel in accordance with the
foregoing, and shall be deemed to have assumed the obligation to so develop such property by
acceptance of a deed, assignment or other means of transfer of Landlord’s or Tenant’s interest in
such property or any portion thereof, as the case may be. Further, the memorandum of lease to be
recorded by Landlord and Tenant pursuant to Paragraph 38G shall contain the following statement:

“The Lease provides that from and after the commencement date of the 1989
Leases (as defined in the Lease) and continuing for a period of fifteen (15)
years, or the date of termination of the Lease, whichever first occurs, the
Premises and the larger 37.096 acre parcel in which the Premises were
originally included, and which is described on the attached Exhibit
“A”, incorporated herein by this reference, shall be developed by
Landlord and Tenant or their successors or assigns, as more particularly set
forth in the Lease, so that (i) a perimeter driveway is developed in front
of each building which generally runs near and parallel with the street
surrounding the 37 ± acre site, (ii) a landscape area is developed along the
frontage of all streets between the street and parking area closest to the
street, (iii) a landscape and recreation area at the rear of Lot 4 (as shown
on the Site Plan identified in the Lease) is developed when a building is
constructed on Lot 4, and (iv) all buildings will be similar and generally
architecturally compatible, it being agreed that Landlord may change the
shape and sizes of the buildings, parking and landscaping as long as the
general development concept set forth above and in the Lease is generally
followed by Landlord. If a Public Agency requires modifications to the lot
lines as shown on the Master Plan, the parties agree to reasonable lot line
modifications.”

     50. LIMITATION ON IMPOSITION OF LATE CHARGE: Notwithstanding anything contained in
Paragraph 4C, if Tenant is delinquent in the payment of Basic Rent or Additional Rent and is
subject to a late charge, Landlord agrees to waive the late charge if the Basic Rent or Additional
Rent due is paid within five days of Landlord’s written notice to Tenant of the delinquent amount
owed and provided Tenant has not been delinquent in its payment of Basic Rent or Additional Rent
owed under said Lease during the twelve (12) month period preceding the rent delinquency in
question.

     51. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4F:

          A. Within thirty (30) days after the expiration or earlier termination of the Lease term and
after Tenant has vacated the Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed by Landlord to cure
defaults of Tenant under the Lease or compensate Landlord for damages for
which Tenant is liable pursuant to this Lease. The use or disposition of the Security Deposit
shall be subject to the provisions of California Civil Code Section 1950.7.

30

 

          B. Tenant shall have the option of satisfying its obligation with respect to an amount equal
to one-half (1/2) of the Security Deposit by providing to Landlord, at Tenant’s sole cost, a letter
of credit which (i) is drawn upon an institutional lender reasonably acceptable to Landlord, (ii)
is in the amount of one-half (1/2) of the Security Deposit, (iii) is for a term of at lease twelve
(12) months, (iv) with respect to any letter of credit in effect within the six month period
immediately prior to the expiration of the Lease term, shall provide that the term of such letter
of credit shall extend at least thirty (30) days past the Lease expiration date, (v) may be drawn
upon by Landlord upon submission of a declaration of Landlord that Tenant is in default (as defined
in Paragraph 19 and as modified by Paragraph 60). Landlord shall not be obligated to furnish proof
of default to such institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit, (vi) shall provide that if the
letter of credit is not renewed, replaced or extended within twenty (20) days of its expiration
date the issuer of the credit shall automatically make payment of the amount of the letter of
credit directly to Landlord after the date which is twenty (20) days before the expiration date,
and no later than the expiration date, without Landlord being required to make demand upon the
letter of credit, and (vii) is otherwise in form and content reasonably satisfactory to Landlord.
If Tenant provides Landlord with a letter of credit meeting the foregoing requirements, one-half
(1/2) of the cash Security Deposit (i.e., $83,277.28 of the $166,554.56 Deposit) shall be
returned to Tenant by Landlord inasmuch as the cash deposit remaining and the Letter of Credit
equal the total Security Deposit required in Paragraph 4F. If Tenant defaults with respect to any
provisions of this Lease, including but not limited to provisions relating to the payment of rent,
Landlord may (but shall not be required to) draw down on the letter of credit for payment of any
sum which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if it were a cash
security deposit, and such letter of credit may be drawn down upon by Landlord upon demand and
presentation of evidence of the identity of Landlord to the issuer, in the event that Tenant
defaults with respect to any provision of this Lease and such default is not cured within any
applicable cure period. Notwithstanding anything to the contrary in this Lease, Landlord shall not
be obligated to furnish proof of default to such institutional lender and Landlord is only required
to give the institutional lender written notification that Tenant is in default and upon receiving
such written notification from Landlord the institutional lender shall be obligated to immediately
deliver cash to Landlord equal to the amount Landlord may spend or become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant’s default up to 1/2 of the total Security Deposit. Landlord
acknowledges that it is not entitled to draw down such letter of credit unless Landlord would have
been
 entitled to draw upon the cash security deposit pursuant to the terms of Paragraph 4F of the
Lease. Concurrently with the delivery of the required information to the issuer, Landlord shall
deliver to Tenant written evidence of the default upon which the draw down was based, together with
evidence that Landlord has provided to Tenant
the written notice of such default which was required under the applicable provision of the
Lease, and evidence of the failure of Tenant to cure such default within the applicable grace

31

 

period following receipt of such notice of default. Any proceeds received by Landlord by drawing
upon the letter of credit shall be applied in accordance with the provisions governing the Security
Deposit imposed by Paragraph 4F and this Paragraph 51. If Landlord draws upon the letter of
credit, thereafter Tenant shall once again shall have the right to post a letter of credit in place
of one-half (1/2) of a cash Security Deposit so long as Tenant is not then in default. In any
event Tenant will be obligated to replenish the amount drawn to restore the Security Deposit to its
original amount as provided for in Paragraph 4F. If any portion of the letter of credit is used or
applied pursuant hereto, Tenant shall, within ten (10) days after receipt of a written demand
therefor from Landlord, restore and replace the value of such security by either (i) depositing
cash with Landlord in the amount equal to the sum drawn down under the letter of credit, or (ii)
increasing the letter of credit to its value immediately prior to such application. Tenant’s
failure to replace the value of the security as provided in the preceding sentence shall be a
material breach of its obligation under this Lease.

     52. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 52 shall modify
Paragraphs 5 and 6:

          A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include Tenant’s trade
fixtures so long as such trade fixtures are not installed in such a manner that they have become an
integral part of the building.

          B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval if the total cost of such Alterations exceeds $20,000 per the
scope of any single remodeling job to the Premises, or if such Alteration is structural in nature.
Any other non-structural Alteration of less than $20,000 for the total cost of the remodeling job
may be undertaken by Tenant without Landlord’s prior written approval but with the understanding
that Tenant shall be obligated to restore the Premises as set forth in Paragraph 5 at the
termination of this Lease, except as otherwise provided in Paragraph 52.D.

Notwithstanding the foregoing, Tenant shall have the right to reconfigure modular freestanding
walls and partitions without Landlord’s prior consent, which have been installed by Tenant and paid
for by Tenant.

          C. At all times during the Lease Term (i) Tenant shall maintain and keep updated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

          D. Tenant shall have the right to remove at any time during the Lease term or prior to the
expiration thereof any (i) process equipment such as clean hoods, thermal cycling chambers, freon
piping, high temperature furnaces, air handlers and special air-conditioning, and (ii) process
systems such as compressed air or processed exhaust systems and (iii) the clean room modules and
all related process equipment which are paid for 100% by Tenant (excluding building standard HVAC,
electrical, plumbing and other building standard systems which are an
integral part of the building not related to Tenant’s clean room modules or other special
purpose process equipment or systems), which systems, equipment and modules the parties agree for
the

32

 

purposes of this Lease shall be deemed to be trade fixtures, so long as Tenant repairs all
damage caused by the installation and/or removal thereof, returns the Premises prior to the
termination of the Lease to the condition existing prior to the installation of such item, and
repairs and restores any so-called “doughnuts” or gaps in the roof and/or floor tiles and/or
ceiling and lighting resulting from such removal. At the time Tenant requests the consent of
Landlord to approve the installation of an Alteration requiring the consent of Landlord, Tenant
shall seek from Landlord a written statement of whether or not Landlord will require Tenant to
remove such Alteration and restore all or part of the Premises as required by Landlord in
accordance with this paragraph and Paragraph 5 at the expiration or earlier termination of the term
of the Lease. If Tenant does not obtain-from Landlord a statement in writing that Landlord will
not require such Alteration to be removed, then at the expiration or sooner termination of the term
of the Lease, it is agreed that Tenant may be required to remove all or part of such Alterations,
and return the Premises to the condition existing prior to the installation of such Alterations as
provided for in Paragraph 5 above. In addition, if Tenant has installed Alterations without
Landlord’s consent, if Landlord so requires, Tenant shall also remove all or part of such
Alterations so installed without Landlord’s consent as Landlord may designate and return the
Premises to the condition existing prior to the installation of such Alteration. Alterations for
which Landlord has given its written consent to Tenant that such Alteration need not be removed,
shall not be removed by Tenant at the expiration or earlier termination of the term of the Lease.

          E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such fixtures and repairs and restores any so
called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-floor and
appropriate floor covering for said area) and/or floor tiles and/or ceiling tiles and lighting
resulting from such removal.

     53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions
of this Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 42 and 43, or during either of the five (5) year extension
periods permitted by Paragraphs 42 and 43, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural improvements required by
laws enacted or legal requirements imposed by governmental agency(s) after the Commencement Date,
and the cost for each required work or improvements exceeds $100,000, then if such legal
requirement is not imposed because of Tenant’s specific use of the Premises and is not “triggered”
by Tenant’s Alterations or Tenant’s application for a building permit or any other governmental
approval (in which instance Tenant shall be responsible for 100% of the cost of such improvements),
Landlord shall be responsible for paying the cost of such improvement and constructing such
improvement, subject to a cash
contribution from Tenant of a portion of the cost thereof as provided for and calculated in
Paragraph 53B.

33

 

          B. When Landlord makes an improvement pursuant to Paragraph 53A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost thereof prior to the commencement of the work by Landlord. It is
agreed that Tenant shall pay to Landlord 100% of the cost of the first $100,000.00 worth of each
improvement. After the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease term from the date work
on such improvement commences.

     For example, if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be responsible for
reimbursing Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for 1st $100,000
	 	 	-100,000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 

	 	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 53B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 42, or 43, upon the exercise of
any such option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total amount
of said improvement less the amount previously paid for by Tenant. Using the example in Paragraph
53B above, Tenant would owe Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00).

     54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of hazardous materials on the Premises unless directly
related to Tenant’s activities, which subject is exclusively governed by Paragraph 45.

          B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond. If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on
Tenant’s part to pay such Real Property Taxes being so contested shall not constitute a
default so long as Tenant complies with the provisions of this Paragraph. Landlord shall not be
required to

34

 

join in any proceeding or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest be brought by or in the name of Landlord. In that case
Landlord shall join in the proceedings or contest or permit it to be brought in Landlord’s name as
long as Landlord is not required to bear any cost. Tenant, on final determination of the
proceeding or contest, shall immediately pay or discharge its share of any Real Property Taxes
determined by any decision or judgment rendered, together with all costs, charges, interest, and
penalties incidental to the decision or judgment. If Tenant does not pay the Real Property Taxes
when due pursuant to the Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant shall furnish to Landlord a
surety bond in form reasonably satisfactory to Landlord issued by an insurance company qualified to
do business in California. The amount of the bond shall equal 125% of the total amount of Real
Property Taxes in dispute and any such bond shall be assignable to any lender or purchaser of the
Premises. The bond shall hold Landlord and the Premises harmless from any damage arising out of
the proceeding or contest and shall insure the payment of any judgment that may be rendered.

     55. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

          A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga and Richard T. Peery Separate
Property Trusts or an affiliated entity; (ii) the insurance to be carried by Tenant to satisfy this
requirement strictly complies with all of the provisions of Paragraph 12; (iii) such insurance
shall name Landlord as the insured and provide that it is to be payable to Landlord in the same
manner as if such insurance had been carried by Landlord pursuant to Paragraph 12 (subject to the
rights of any lender holding a mortgage or deed of trust encumbering the Premises); (iv) each
lender holding a mortgage or deed of trust encumbering the Premises shall have given its written
consent to Tenant carrying such insurance and such insurance shall comply with the requirements of
any such lender; (v) Tenant must notify Landlord, by certified mail, no later than one hundred
eighty (180) days prior to the expiration date of Landlord’s insurance policy (which expiration
date is currently 3/13/xx of a given year and is subject to change), that Tenant will directly
obtain the required insurance coverage for the insurance year commencing 3/14/XX through 3/13/XX
and each insurance year through the termination date of this Lease, or until Tenant is no longer
able to comply with all of the provisions of this Paragraph 55; (vi) the annual premium must be
paid in full at the commencement of the policy; (vii) the insurance policy must be issued for a
one-year period following the expiration date of Landlord’s insurance policy from 3/14/XX to
3/13/XX; (viii) any and all deductibles required under the policy will be paid entirely by Tenant;
(ix) the terms of the coverage must be broad form and cover all items to be covered as set forth in
Paragraph 12 of this Lease; (x) the Building and Premises must be insured for their full
replacement cost; (xi) the insurance policy containing the required coverage in accordance with the
provisions of this paragraph must be sent to Landlord for retention within thirty (30) days prior
to the expiration date of Landlord’s insurance policy, and may not be terminated or altered without
thirty (30) days written notice to Landlord by the company providing such insurance (it is agreed
that if the insurance policy is cancelled or altered, Landlord will have the right to obtain the
property
insurance coverage on said building, and Landlord will bill the Tenant for the related
insurance premium); and (xii) at all times while Tenant is so carrying such insurance, Tenant is
Quantum

35

 

Corporation or a successor entity and the then net worth of such corporation is
substantially the same as the net worth of Quantum corporation as of the date of this Lease is
executed by Landlord and Tenant. Tenant shall provide such evidence as is required by Landlord and
any lender to establish that the insurance that Tenant carries pursuant to this Paragraph 55 has
been obtained and meets the requirement of this Paragraph 55. Such insurance carried by Tenant
shall be in form and provided by an insurance company that is reasonably acceptable to Landlord,
which must be rated “A plus” or better by Best’s Insurance Service (or an equivalent rating from
another rating agency should Best’s no longer provide such service). A copy of any such policy
shall be delivered to Landlord. If Tenant elects to insure and such insurance provided by Tenant
does not satisfy the requirements of Paragraph 12, in the event of a subsequent casualty, Tenant
shall be responsible for and shall pay for that portion of the restoration cost, in excess of the
insurance proceeds actually available, that would have been covered by insurance satisfying the
requirements of Paragraph 12.

          B. Tenant shall not be obligated to contribute to the cost of earthquake insurance more than
an amount equal to six (6) times the then annual cost of fire and “all risk” insurance per year.
For example, if the 1993 annual premium for fire and “all risk” insurance is $9,000, then Tenant’s
share of the cost of any premium for earthquake insurance for the following year (1994) shall be
limited to $54,000 ($9,000 x 6). Tenant shall have the right to require earthquake insurance
providing it is available if Tenant agrees to pay full cost thereof.

     56. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i) to withhold its
consent to such assignment or sublease, as permitted pursuant to Paragraph 16, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its obligations under
the Lease, and the following shall apply (except the following shall not apply to a “Permitted
Transfer” described in Paragraph 57):

               (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all consideration received by
Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant under this
Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing commissions paid
to third parties not affiliated with Tenant in order to obtain the assignment or sublease in
question.

               (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the rental provided for in this Lease fifty percent (50%) of the positive difference,
if any, between (i) all rent and other consideration paid by the subtenant to Tenant, less (ii) all
rent paid by Tenant to Landlord pursuant to this Lease which is allocable
to the area so sublet and all Permitted Transfer Costs related to such sublease. After Tenant
has recovered all Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the

36

 

preceding sentence on the same basis, whether periodic or in lump sum, that such rent and other
consideration is paid to Tenant by its subtenant, within seven (7) days after it is received by
Tenant.

               (3) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the right to inspect
Tenant’s books and records relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

               (4) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received, by Tenant as a result of the assignment or sublease, if such sums are
paid for Tenant’s interest in this Lease or in the Premises.

     57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 16, so long as Tenant otherwise complies with the provisions of Paragraph 16 and the
Permitted Transfer does not release Tenant from its obligations hereunder, Tenant may enter into
any of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent,
and the provisions of Paragraph 56A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of rent and full performance of the lease;

          B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
95% of all assets of Tenant are permanently transferred to such assignee. In the event there is
not a permanent transfer of 95% or more of the assets and liabilities from Tenant to a third party,
and Tenant continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;

          C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets of Tenant are permanently transferred to
such assignee (in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of the Lease).

     58. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or
deed of trust enters into a written subordination, non-disturbance and
attornment agreement in which the Lender agrees that notwithstanding any subordination of this
Lease to such Lender’s mortgage or deed of trust, (i) such Lender shall recognize all of Tenant’s

37

 

rights under this Lease, and (ii) in the event of a foreclosure this Lease shall not be terminated
so long as Tenant is not in material default of its obligations under this Lease, but shall
continue in effect and Tenant and such Lender (or any party acquiring the Premises through such
foreclosure) shall each be bound to perform the respective obligations of Tenant and Landlord with
respect to the Premises arising after such foreclosure.

     59. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (i)
except in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior
to entering the Premises, agrees to comply with any reasonably safety and/or security regulations
imposed by Tenant with respect to such entry, and shall only enter the Premises when accompanied by
Tenant or its agent (so long as Tenant makes itself reasonably available for this purpose), and
(ii) Landlord may install “for lease” signs relating to the Premises only during the last 150 days
of the Lease term. Landlord agrees to use its reasonable, good faith efforts such that any entry
by Landlord, and Landlord’s agents, employees, contractors and invitees shall be performed in a
manner with as minimal interference as possible with Tenant’s business at the Premises. Subject to
the foregoing, Tenant agrees to cooperate with Landlord and Landlord’s agents, employees and
contractors so that responsibilities of Landlord under the Lease can be fulfilled in a reasonable
manner during normal business hours so that no extraordinary costs are incurred by Landlord.

     60. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30) days is
required to cure such non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

     61. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is
performing all of its other obligations under the Lease including the obligation to pay Basic Rent
and Additional Rent (ii) Tenant provides on-site security during normal business hours for those
parts of the Premises left vacant, (iii) such vacancy does not materially and adversely affect the
validity or coverage of any policy of insurance carried by Landlord with respect to the Premises,
and (iv) the utilities and heating and ventilation system are operated to the extent necessary to
prevent damage to the Premises or its systems.

     62. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Except as provided in Paragraph 62B, Landlord may not terminate the Lease if the Premises
are damaged by a peril that is covered by the insurance carried by Landlord pursuant to Paragraph
12, but instead shall restore the Premises in the manner described by Paragraph 21.

          B. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each
of the following conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs
at a time

38

 

when there is less than five (5) years remaining in the term of the Lease.
Notwithstanding the foregoing, if such damage occurs at a time when there is less than five (5)
years remaining in the term of the Lease and Landlord notifies Tenant of Landlord’s election to
terminate the Lease pursuant to the provisions of this Paragraph 62B, if Tenant has the right to
extend the term of this Lease pursuant to either Paragraph 42 or 43 such that the remaining term of
the Lease (including the option period) will be more than five (5) years following the date of such
damage, this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise
of an option to extend granted to Tenant by either Paragraph 42 or 43. In such event, this Lease
shall not terminate, the term shall be so extended, and Landlord shall restore the Premises in the
manner provided in Paragraph 21.

          C. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the 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
only by delivery to Landlord of a written notice of election to terminate within seven (7) days
after Tenant receives from Landlord the estimate of the time needed to complete such restoration:

               (1) The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage; or

               (2) The Premises are damaged by any peril within twelve (12) months of the last day of the
Lease term and provided Tenant has not exercised an option to renew pursuant to the provisions of
Paragraph 42 or 43, and, in the reasonable opinion of Landlord’s architect or construction
consultant, the restoration of the Leased Premises cannot be substantially completed within sixty
(60) days after the date of such damage.

     63. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than 1/3 of the building is taken by condemnation
or if a taking by condemnation is only threatened.

     64. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the Security Deposit
to its successor in interest (transferee) in accordance with the provisions of California Civil
Code Section 1950.7, as amended or recodified.

     65. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably required
by any supplier, lessor, or lender in connection with the installation in the Premises of the

39

 

Tenant’s personal property or trade fixtures providing Landlord approves the form of any such
waiver and Landlord’s rights under this Lease are not materially and adversely affected.

	 	 	 	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION,

a Delaware corporation	 	 	 	JOHN ARRILLAGA

SEPARATE PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Joseph C. Shepela
 

	 	 
	 	By
	 	/s/ John Arrillaga
 

	 	 
	 

	 	 	 	 	 	 	 	John Arrillaga, Trustee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title Vice President Human Resources	 	 	 	RICHARD T. PEERY
SEPARATE PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	/s/ Richard Peery	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Richard T. Peery, Trustee	 	 

40

 

AMENDMENT NO. 1

TO LEASE

     THIS AMENDMENT NO. 1 is made and entered into this 16th day of April, 1997, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware corporation, as
TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated April 10, 1992 Landlord leased to Tenant all of that
certain 60,128 ± square foot building located at 900 Sumac Drive, Milpitas, California, the details
of which are more particularly set forth in said April 10, 1992 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated April 2, 1993 which
established the February 26, 1993 Lease Commencement Date, and established the Termination Date of
September 30, 2006, and,

     C. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) extending the
Term for five years, changing the Termination Date from September 30, 2006 to September 30, 2011,
(ii) amending the Basic Rent schedule and Aggregate Rent accordingly, (iii) adding a third Five
Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms Co-extensive”) and 48 (“Cross
Default”) and 53 (“Structural Capital Costs Regulated by Governmental Agencies After the
Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”),
(v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or replacing certain
provisions of the Lease commencing as of the commencement of the Third Extended Term of said Lease
as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: It is agreed between the parties that Tenant has exercised its
First Five-Year Option to Extend the lease term of that certain lease agreement dated March 23,
1994 for premises located at 1101 Sumac Drive, Milpitas, California (the “Building 5 Lease”), as
detailed in Paragraph 41 of said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides
that in the event the term of said Building 5 Lease is extended for any reason whatsoever, the
terms of the Existing Leases (i.e. two of said leases dated October 31, 1989 are for Premises
located at 1140 Technology Drive and 500 McCarthy Blvd., Milpitas, California (the “1989 Leases”);
one of said leases dated September 17, 1990 is for Premises located at 1000 Sumac Drive, Milpitas,
California, and one of said leases dated April 10, 1992 is for Premises located at 900 Sumac Drive,
Milpitas, California) shall also be extended so that all five Leases expire on the same date;
therefore, it is agreed between the parties that by exercising its Option

1

 

to Extend the Building 5 Lease, Tenant has in effect exercised its Option to Extend under
Lease Paragraph 42 (“First Five-Year Option to Extend”), and that pursuant to said Lease Paragraph
42, the Term of this Lease Agreement shall be extended for an additional five (5) year period, and
the Lease Termination Date shall be changed from September 30, 2006 to September 30, 2011.

     2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic Rental for the
First Extended Term of Lease shall be as follows:

     On October 1, 2006, the sum of ONE HUNDRED ELEVEN THOUSAND EIGHT HUNDRED THIRTY EIGHT AND
08/100 DOLLARS ($111,838.08) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2007.

     On October 1, 2007, the sum of ONE HUNDRED FOURTEEN THOUSAND EIGHT HUNDRED FORTY FOUR AND
48/100 DOLLARS ($114,844.48) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2008.

     On October 1, 2008, the sum of ONE HUNDRED SEVENTEEN THOUSAND EIGHT HUNDRED FIFTY AND 88/100
DOLLARS ($117,850.88) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2009.

     On October 1, 2009, the sum of ONE HUNDRED TWENTY THOUSAND EIGHT HUNDRED FIFTY SEVEN AND
28/100 DOLLARS ($120,857.28) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2010.

     On October 1, 2010, the sum of ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED SIXTY THREE AND
68/100 DOLLARS ($123,863.68) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2011.

     The Aggregate Basic Rent for the Lease shall be increased by $7,071,052.80 or from
$14,463,454.34 to $21,534,507.14.

     3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period pursuant to Lease Paragraph 43 (“Second Five Year Option To
Extend”), Landlord hereby grants to Tenant a third option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term as extended pursuant
to Lease Paragraph 43 (“Second Five Year Option To Extend”), in which event the Lease shall be
considered extended for an additional five (5) year period upon the same terms and conditions as
this Lease, absent this Paragraph 3 and subject to the Rental as set forth below. In the event
that Tenant fails to timely exercise Tenant’s option as set forth herein in writing, Tenant shall
have no further option to extend this Lease or the Other Leases, and this Lease shall continue in
full force and effect for the full remaining term hereof, absent this Paragraph 3.

2

 

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12
	 	$2.36/sf
	Months 13-24
	 	$2.41/sf
	Months 25-36
	 	$2.46/sf
	Months 37-48
	 	$2.51/sf
	Months 49-60
	 	$2.56/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 3 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 3 notwithstanding such non-curable default.

     4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C (“Lease Terms Co-extensive”) is
hereby deleted in its entirety and replaced with the following:

          “40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i) Landlord
and Tenant have previously executed four separate leases in addition to this Lease:
one of said leases dated October 31, 1989 is for Premises located at 1140 Technology
Drive, Milpitas, California (the “Building One Lease”); one of said leases dated
October 31, 1989 is for Premises located at 500 McCarthy Blvd., Milpitas, California
(the “Building Two Lease”); one of said leases dated September 17, 1990 is for
Premises located at 1000 Sumac Drive, Milpitas, California (the “Building Four
Lease”); and one of said leases dated March 23, 1994 is for premises located at 1101
Sumac Drive, Milpitas, California (the “Building 5 Lease”) (hereinafter collectively
referred to as the “Other Leases”); and (ii) it is the intention of the parties that
the term of this Lease be co-extensive with the term of the Other Leases, such that
the terms of all five leases (“the Leases”) expire on the same date. The provisions
of this Paragraph 40C also requires the terms of all the Leases to be extended
accordingly if Tenant exercises its Option to Extend under any of the Leases. The
monthly Basic Rent during the extended term under each of the Leases shall he
increased by $.05 per square foot on the commencement date of the extended term and
thereafter on each and every anniversary of the respective lease’s commencement date
of the extended term.”

     5. CROSS DEFAULT: Lease Paragraph 48 (“Cross Default”) is hereby deleted in its
entirety and replaced with the following:

3

 

          “48. CROSS DEFAULT: It is agreed between Landlord and Tenant that a
default under this Lease, or a default under any of the Other Leases may, at the
option of Landlord, be considered a default under all Leases, in which event
Landlord shall be entitled (but in no event required) to apply all rights and
remedies of Landlord under the terms of one lease to all the Leases including, but
not limited to, the right to terminate any or all of the aforementioned Other Leases
or this Lease by reason of a default under the Leases or hereunder.

          Notwithstanding the above, Landlord shall have the option of considering a
default under this Lease or a default under any of the Other Leases to be a default
under all such leases, only with respect to such leases under which Landlord is also
the ‘Landlord’ at the time such default occurs. By way of example, if at the time a
default of Tenant occurs under this Lease, Landlord has sold the premises described
in any of the Other Leases and is no longer the `Landlord’ thereunder, then a
default under this Lease shall not constitute a default under any of such
Other Leases so sold by Landlord (unless the premises leased under this Lease and
the Other Leases are sold to the same entity), and a default by Tenant under any of
such Other Leases so sold by Landlord shall not constitute a default under
this Lease or any other of the Other Leases then remaining between Landlord and
Tenant. However, if the Landlord under this Lease and the Other Leases is one in
the same at the time of said default, said cross default provisions shall apply.”

     6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF THIS
LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: Lease Paragraph 53
(“Structural Capital Costs Regulated by Governmental Agencies after the Commencement of this Lease
Not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) is hereby deleted and
replaced with the following:

          “53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF
THE PREMISES: The provisions of this Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If (i) during the last five (5) years of the First Extended Term of the
Lease if said Lease has not been extended as provided for in Lease Paragraph 43
(“Second Five Year Option To Extend”) or in Paragraph 3 (“Third Five Year Option to
Extend”) or Paragraph 4 (“Lease Terms Co-Extensive”) above, or (ii) during either of
the five (5) year extension periods permitted by Lease Paragraph 43 or Paragraph 3,
or Paragraph 4 above, it becomes necessary (due to any governmental requirement for
continued occupancy of the Premises) to make structural improvements required by
laws enacted or legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements exceeds
$100,000, then if such legal requirement is not imposed because of Tenant’s specific
use of the Premises and is not

4

 

“triggered” by Tenant’s Alterations or Tenant’s application for a building
permit or any other governmental approval (collectively “Tenant’s Actions”) in which
instance Tenant shall be responsible for 100% of the cost of such improvements,
Landlord shall be responsible for paying the cost of such improvement and
constructing such improvement, subject to a cash contribution from Tenant of a
portion of the cost thereof as provided for and calculated in Paragraph 53B.

          B. When Landlord makes an improvement pursuant to Paragraph 53A, and as a
condition to Landlord’s obligation to construct such improvement, Tenant shall make
the following contribution in cash to Landlord for the cost thereof prior to the
commencement of the work by Landlord. It is agreed that Tenant shall pay to
Landlord 100% of the cost of the first $100,000.00 worth of each improvement. After
the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease Term
from the date work on such improvement commences.

          For example, if the improvement is not required as a result of Tenant’s Actions
and if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be
responsible for reimbursing Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	-100,000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	$300,000.00/15 =
$20,000.00/yr. x 1.5 yrs  =
	 	$	30,000.00	 
	Tenant
responsible for $100,000 + $30,000.00  =
	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord
for the cost thereof pursuant to Paragraph 53B, and the term of this Lease is
subsequently extended pursuant to the exercise by Tenant of an option to renew
pursuant to Lease Paragraph 43 or Paragraph 3 above, upon the exercise of any such
option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by Tenant. Using the
example in Paragraph 53B above, Tenant would owe Landlord the additional amount of
$270,000.00 ($400,000.00 — $130,000.00 = $270,000.00).”

     7. PROPERTY INSURANCE: Lease Paragraph 12 (“Property Insurance”) is hereby amended to
include the following: “Tenant acknowledges that as part of the cost of insurance policies for the
Premises, Tenant is responsible for the payment of insurance deductibles on insurance claims as
they relate to the Premises subject to the limitations provided in Lease Paragraph 55 (“Property
Insurance”) which limitations are applicable only during the initial Lease Term and the First Lease
Extension Period and the Second Lease Extension Period.

5

 

Said limitation provided for in Lease Paragraph 55 are null and void at the commencement of
the Third Lease Extended Term”.

     8. THIRD OPTION PERIOD — LEASE PROVISION CHANGES: In the event Tenant exercises its
Third Option to Extend as provided for in Paragraph 3 above, the following amendments (contained
within Paragraphs 9 through 19) are herein made to the Lease to be effective upon the commencement
of the third option period (“Third Option Period”), or during any period following the expiration
of the Lease Term or expiration of the Lease when Tenant is in possession of the Premises.

     9. LATE CHARGE: Effective as of the first day of the Third Option Period, the Late
Charge referenced in Lease Paragraph 4.D (“Late Charge”) shall be changed from five percent (5%) to
ten percent (10%), and Lease Paragraph 50 (“Limitation on Late Charge”) shall be deleted in its
entirety and of no further force or effect.

     10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the Lease, effective
as of the first day of the Third Option Period, and on the first day of each month thereafter,
Tenant shall pay to Landlord, in addition to the Basic Rent and Additional Rent, a fixed monthly
management fee (“Management Fee”) equal to one percent (1%) of the Basic Rent due for each month
during the Lease Term.

     11. HAZARDOUS MATERIALS: Effective as of the first day of the Third Option Period,
Lease Paragraph 45 (“Hazardous Materials”) shall be deleted in its entirety and replaced with the
following:

          “45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of “Hazardous Materials” (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A to the Lease (hereinafter collectively referred to as the
“Property”):

          A. As used herein, the term “Hazardous Materials” shall mean any material,
waste, chemical, mixture or byproduct which is or hereafter is defined, listed or
designated under Environmental Laws (defined below) as a pollutant, or as a
contaminant, or as a toxic or hazardous substance, waste or material, or any other
unwholesome, hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or restricted by any
Environmental Law (including, without limitation, petroleum hydrocarbons or any
distillates or derivatives or fractions thereof, polychlorinated biphenyls, or
asbestos). As used herein, the term “Environmental Laws” shall mean any applicable
Federal, State of California or local government law (including common law),
statute, regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or order of any
executive or judicial authority at any level of Federal, State of California or
local government (whether now existing or subsequently

6

 

adopted or promulgated) relating to pollution or the protection of the
environment, ecology, natural resources, or public health and safety.

          B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s
Hazardous Materials Activities (defined below). Landlord acknowledges that Tenant
shall use, in compliance with applicable Environmental Laws, customary household and
office supplies (Tenant shall first provide Landlord with a list of said materials
use), such as mild cleaners, lubricants and copier toner. Any and all of Tenant’s
Hazardous Materials Activities shall be conducted in conformity with this Paragraph
45, Paragraph 14 of this Lease, and in compliance with all Environmental Laws and
regulations. As used herein, the term “Tenant’s Hazardous Materials Activities”
shall mean any and all use, handling, generation, storage, disposal, treatment,
transportation, release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with Tenant’s use of the
Property, or by Tenant or by any of Tenant’s agents, employees, contractors,
vendors, invitees, visitors or its future subtenants or assignees or other third
parties (including “dumping” by others) (or which Hazardous Materials originate on
the surface of the Premises any time on or after the Commencement Date of this
Lease, but excluding Hazardous Materials on the Premises prior to the Lease
Commencement Date because of the storage, use, disposal, or transportation of such
materials or waste by any of Landlord’s contractors or otherwise arising out of
construction work performed-by or under the direction of Landlord on the Premises
and Landlord shall responsible for ‘ all required actions with respect to such
materials or wastes). Tenant agrees to provide Landlord with prompt written notice
of any spill or release of Hazardous Materials at the Property during the term of
the Lease of which Tenant becomes aware, and further agrees to provide Landlord with
prompt written notice of any violation of Environmental Laws in connection with
Tenant’s Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s
Hazardous Materials Activities involve Hazardous Materials other than normal use of
customary household and office supplies, Tenant also agrees at Tenant’s expense: (i)
to install such Hazardous Materials monitoring, storage and containment devices as
may be required by Environmental Laws, regulations and/or governing agencies; (ii)
to provide Landlord with a written inventory of such Hazardous Materials, including
an update of same each year upon the anniversary date of the Commencement Date of
the Lease (“Anniversary Date”); and (iii) on each Anniversary Date to provide to
Landlord copies of all documentation and records, required by applicable
Environmental Laws to be prepared and submitted to governmental authorities,
relating to use at the Property of Hazardous Materials or to Tenant’s Hazardous
Materials Activities, if any. If upon completion of Landlord’s review of said
documentation and records, Landlord reasonably questions if Tenant is in
compliance-with all applicable Environmental Laws with respect to Tenant’s Hazardous
Materials Activities, Tenant agrees within thirty (30) days following receipt of
written notice from Landlord, to retain a qualified environmental consultant,
acceptable to Landlord, to evaluate whether Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant’s Hazardous Materials
Activities. Tenant, at its

7

 

expense, shall submit to Landlord a report from such environmental consultant
which discusses the environmental consultant’s findings within two (2) months of
each Anniversary Date. Tenant, at its expense, shall promptly undertake and
complete any and all steps necessary, and in full compliance with applicable
Environmental Laws, to fully correct any and all problems or deficiencies identified
by the environmental consultant, and promptly provide Landlord with documentation of
all such corrections.

          C. Prior to termination or expiration of the Lease, Tenant, at its expense,
shall (i) properly remove from the Property all Hazardous Materials which come to be
located at the Property in connection with Tenant’s Hazardous Materials Activities,
and (ii) fully comply with and complete all facility closure requirements of
applicable Environmental Laws regarding Tenant’s Hazardous Materials Activities,
including but not limited to (x) properly restoring and repairing the Property to
the extent damaged by such closure activities, and (y) obtaining from the local Fire
Department or other appropriate governmental authority with any legal or regulatory
jurisdiction a written concurrence that closure has been completed in compliance
with applicable Environmental Laws. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any such closure activities.

          D. If Landlord, upon consultation with Tenant, reasonably concludes that the
Property has become contaminated as a result of Tenant’s Hazardous Materials
Activities, Landlord in addition to any other rights it may have under this Lease or
under Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the nature
and extent of such contamination except to the extent that such activities may be
inconsistent with Tenant’s compliance with Environmental Laws. Tenant shall
promptly reimburse Landlord for the costs of such an investigation, including but
not limited to reasonable attorneys’ fees Landlord incurs with respect to such
investigation to the extent, and only to the extent, that it that discloses
Hazardous Materials contamination for which Tenant is liable under this Lease.
Except as may be required of Tenant by applicable Environmental Laws, Tenant shall
not perform any sampling, testing, or drilling to identify the presence of any
Hazardous Materials at the Property, without Landlord’s prior written consent which
shall not be unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any sampling, testing or drilling, performed pursuant
to the preceding sentence.

          E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord,
whose consent shall not unreasonably be withheld) and hold harmless Landlord, its
employees, assigns, successors, successors-in-interest, agents and representatives
from and against any and ail claims (including but not limited to third party claims
from a private party or a government authority), liabilities,

8

 

obligations, losses, causes of action, demands, governmental proceedings or
directives, fines, penalties, expenses, costs (including but not limited to
reasonable attorneys’, consultants’ and other experts’ fees and costs), and damages,
which arise from or relate to: (i) Tenant’s Hazardous Materials Activities; (ii) any
Hazardous Materials contamination caused by Tenant prior to the Commencement Date of
the Lease; or (iii) the breach of any obligation of Tenant under this Paragraph 45
(collectively, “Tenant’s Environmental Indemnification”). Tenant’s Environmental
Indemnification shall include but is not limited to the obligation to promptly and
fully reimburse Landlord for losses in or reductions to rental income, and
diminution in fair market value of the Property. Tenant’s Environmental
Indemnification shall further include but is not limited to the obligation to
diligently and properly implement to completion, at Tenant’s expense, any and all
environmental investigation, removal, remediation, monitoring, reporting, closure
activities, or other environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively, “Response
Actions”). Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted in connection
with any Response Actions.

          F. Landlord hereby makes the following representations to Tenant, each of which
is made only to the best of Landlord’s knowledge as of the date Landlord executes
this Lease, without any inquiry or investigation having been made or required by
Landlord regarding this subject, nor does Landlord have any obligation to
investigate or make inquiry regarding the subject:

               1) The soil and ground water on or under the Premises does not contain
Hazardous Materials in amounts which violate any laws to the extent that any
governmental entity could require either Landlord or Tenant to take any remedial
action with respect to such Hazardous Materials.

               2) During the time that Landlord has owned the Premises, Landlord has received
no notice of (i) any violation, or alleged violation, of any law that has not been
corrected to the satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or (iii) any pending
investigation by any governmental agency concerning the Premises relating to
Hazardous Materials.\

          G. Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any governmental
authority concerning Hazardous Materials which relates to the Premises, and (ii) any
contamination of the Premises by Hazardous Materials which constitutes a violation
of any law. Attached as Exhibit “C” to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the Lease Term
Tenant proposes to use other Hazardous Materials at the Premises, Tenant shall
inform Landlord of such use, identifying the Hazardous Materials and the manner of
their use, storage and disposal, and shall agree (i) to use, store and dispose of
such Hazardous Materials strictly in compliance with all

9

 

laws, regulations and governing agencies and (ii) that the indemnity set forth
in Paragraph 45 shall be applicable to Tenant’s use of such Hazardous Material.

          H. Landlord or Tenant may, at any time, cause testing wells to be installed on
the Premises, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for such
purposes. Testing wells installed by Tenant shall be paid for by Tenant. If tests
conducted by Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to Hazards
Materials laws, or that Tenant has liability to Landlord pursuant to Paragraph 45A,
then Tenant shall pay for 100 percent of the cost of the test and all related
expense. Prior to the expiration of the Lease Term, Tenant shall remove any testing
wells it has installed at the Premises, and return the Premises to the condition
existing prior to the installation of such wells, unless Landlord requests in
writing that Tenant leave all or some of the testing wells in which instance the
wells requested to be left shall not be removed.

          I. If any tests performed by Tenant or Landlord prior to the Commencement Date
disclose Hazardous Materials at the Premises, Landlord at its expense will promptly
take all reasonable action required by law with respect to the existence of such
Hazardous Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is prohibited
by law.

          J. The obligations of Landlord and Tenant under this Paragraph 45 shall survive
the expiration or earlier termination of the Term of this Lease. The rights and
obligations of Landlord and Tenant with respect to issues relating to Hazardous
Materials are exclusively established by this Paragraph 45.”

     12. SECURITY DEPOSIT: Effective as of the first day of the Third Option Period, Lease
Paragraph 51 (“Security Deposit”) shall be deleted in its entirety and replaced with the following:

          “51. SECURITY DEPOSIT: The following provisions shall modify Lease
Paragraph 4F:

          A. Within thirty (30) days after the expiration or earlier termination of the
Lease term and after Tenant has vacated the Premises, Landlord shall return to
Tenant the entire Security Deposit except for amounts that Landlord has deducted
therefrom that are needed by Landlord to cure defaults of Tenant under the Lease or
compensate Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the provisions of
California Civil Code Section 1950.7.

10

 

          B. During the first thirty (30) days following Tenant’s exercise of its Third
Option to Extend, and only during said thirty day period, Tenant shall have the
one-time option of satisfying its obligation with respect to an amount equal to
one-half (1/2) ($83,277.28) of the $166,554.56 Security Deposit required under Lease
Paragraph 4F by providing to Landlord, at Tenant’s sole cost, a letter of credit
which: (i) is drawn upon an institutional lender reasonably acceptable and
accessible to Landlord in form and content reasonably satisfactory to Landlord; (ii)
is in the amount of one-half (1/2) of the Security Deposit; (iii) is for a term of
at lease twelve (12) months; (iv) with respect to any letter of credit in effect
within the six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at least forty
five (45) days past the Lease expiration date (including any extensions thereof);
and (v) may be drawn upon by Landlord upon submission of a declaration of Landlord
that Tenant is in default (as defined in Paragraph 19 and as modified by Paragraph
60). Landlord shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the institutional
lender written notification that Tenant is in default and upon receiving such
written notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit required under Lease Paragraph 4F. Said letter of
credit shall provide that if the letter of credit is not renewed, replaced or
extended within twenty (20) days prior to its expiration date the issuer of the
credit shall automatically issue a cashiers check payable to Landlord in the amount
of the letter of credit after the date which is twenty (20) days before the
expiration date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides Landlord with
a letter of credit, within thirty (30) days of the execution of this Lease, meeting
the foregoing requirements, one-half (1/2) of the cash Security Deposit (i.e.,
$83,277.28 of the $166, 554.56 Security Deposit) shall be returned to Tenant by
Landlord inasmuch as the cash deposit remaining and the Letter of Credit equal the
total Security Deposit required in Lease Paragraph 4F. If Tenant defaults with
respect to any provisions of this Lease, including but not limited to provisions
relating to the payment of Rent, Landlord may (but shall not be required to) draw
down on the letter of credit for payment of any sum which Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if it
were a cash security deposit, and such letter of credit may be drawn down upon by
Landlord upon demand and presentation of evidence of the identity of Landlord to the
issuer, in the event that Tenant defaults with respect to any provision of this
Lease and such default is not cured within any applicable cure period.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be
obligated to furnish proof of default to such institutional lender and Landlord is
only required to give the institutional lender written

11

 

notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit. Landlord acknowledges that it is not entitled to
draw down such letter of credit unless Landlord would have been entitled to draw
upon the cash security deposit pursuant to the terms of Paragraph 4F of the Lease.
Concurrently with the delivery of the required information to the issuer, Landlord
shall deliver to Tenant written evidence of the default upon which the draw down was
based, together with evidence that Landlord has provided to Tenant the written
notice of such default which was required under the applicable provision of the
Lease, and evidence of the failure of Tenant to cure such default within the
applicable grace period following receipt of such notice of default. Any proceeds
received by Landlord by drawing upon the letter of credit shall be applied in
accordance with the provisions governing the Security Deposit imposed by Lease
Paragraph 4F and this Paragraph 51. If Landlord draws upon the letter of credit,
thereafter Tenant shall once again have the right to post a letter of credit in
place of one-half (1/2) of a cash Security Deposit so long as Tenant is not then in
default. In any event Tenant will be obligated to replenish the amount drawn to
restore the Security Deposit to its original amount as provided for in Paragraph 4F.
If any portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i) depositing
cash with Landlord in the amount equal to the sum drawn down under the letter of
credit, or (ii) increasing the letter of credit to its value immediately prior to
such application. Tenant’s failure to replace the value of the security as provided
in the preceding sentence shall be a material breach of its obligation under this
Lease.”

     13. REAL ESTATE TAXES: Effective as of the first day of the Third Option Period,
Lease Paragraph 54 (“Real Estate Taxes”) shall be deleted in its entirety and replaced with the
following:

          “54. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees
directly related to the use, storage, disposal or release of Hazardous Materials on
the Premises unless directly related to Tenant’s Activities at this site or on other
sites leased and/or owned by Tenant; however, Tenant shall be responsible for
general or special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or assessment is
not imposed due to on-site originated contamination on the Property (by third
parties not related to Tenant) prior to the Lease Commencement Date. Subject to the
terms and conditions stated herein, Tenant shall be responsible for paying one
hundred percent (100%) of said taxes and/or assessments allocated to the Property.

12

 

          B. If any assessments for public improvements are levied against the Premises,
Landlord may elect either to pay the assessment in full or to allow the assessment
to go to bond. If Landlord pays the assessment in full, Tenant shall pay to
Landlord or any assignee or purchaser of the Premises each time payment of Real
Property Taxes is made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in
the assessed valuation of the Premises or to contest any Real Property Taxes that
are to be paid by Tenant. If Tenant seeks a reduction or contests such Real
Property Taxes, the failure on Tenant’s part to pay such Real Property Taxes being
so contested shall not constitute a default so long as Tenant complies with the
provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Landlord. In that
case Landlord shall join in the proceedings or contest or permit it to be brought in
Landlord’s name as long as Landlord is not required to bear any cost. Tenant, on
final determination of the proceeding or contest, shall immediately pay or discharge
its share of any Real Property Taxes determined by any decision or judgment
rendered, together with all costs, charges, interest, and penalties incidental to
the decision or judgment. If Tenant does not pay the Real Property Taxes when due
pursuant to the Lease and Tenant seeks a reduction or contests them as provided in
this paragraph, before the commencement of the proceeding or contest Tenant shall
furnish to Landlord a surety bond in form reasonably satisfactory to Landlord issued
by an insurance company qualified to do business in California. The amount of the
bond shall equal 125% of the total amount of Real Property Taxes in dispute and any
such bond shall be assignable to any lender or purchaser of the Premises. The bond
shall hold Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that may be
rendered.”

     14. PROPERTY INSURANCE: Effective as of the first day of the Third Option Period,
section B of Lease Paragraph 55 (“Property Insurance”) shall be deleted in its entirety and be of
no further force or effect.

     15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the Third Option
Period, Lease Paragraph 56 (“Assignment and Subletting”) shall be deleted in its entirety and
replaced with the following:

          “56. ASSIGNMENT AND SUBLETTING: The following modifications are made
to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then
Landlord, by giving Tenant written notice of its election within fifteen (15) days
after Tenant’s notice of intent to assign or sublease has been given to Landlord,
shall have the right to elect (i) to withhold its consent to such

13

 

assignment or sublease, as permitted pursuant to Paragraph 16, or (ii) to
permit Tenant to so assign the Lease or sublease such part of the Premises, in which
event Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the following shall apply
(except the following shall not apply to a “Permitted Transfer” described in
Paragraph 57):

               1) If Tenant assigns its interest in this Lease, then in addition to the rental
provided for in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all
Rent and other consideration received by Tenant over and above (i) the assignee’s
agreement to assume the obligations of Tenant under this Lease and (ii) all
“Permitted Transfer Costs” (as defined herein) related to such assignment. As used
herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing
commissions paid to third parties not affiliated with Tenant in order to obtain the
assignment or sublease in question.

               2) If Tenant sublets all or part of the Premises, then Tenant shall pay to
Landlord in addition to the Rent provided for in this Lease fifty percent (50%) of
the positive difference, if any, between (i) all rent and other consideration paid
or provided to Tenant by the subtenant, less (ii) all Rent paid by Tenant to
Landlord pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the
preceding sentence on the same basis, whether periodic or in lump sum, that such
rent and other consideration is paid to Tenant by its subtenant, within seven (7)
days after it is received by Tenant.

               3) Tenant’s obligations under this subparagraph shall survive any assignment or
sublease. At the time Tenant makes any payment to Landlord required by this
subparagraph, Tenant shall deliver an itemized statement of the method by which the
amount to which Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant’s books and records
relating to the payments due pursuant to this subparagraph. Upon request therefor,
Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

               4) As used herein, the term “consideration” shall mean any consideration of any
kind received, or to be received (including, but not limited to, services rendered
and/or value received) by Tenant as a result of the assignment or sublease, if such
sums are paid or provided to Tenant for Tenant’s interest in this Lease or in the
Premises.

               5) This Paragraph 56.A does not apply to a “Permitted Transfer”, as provided in
Paragraph 57 hereof. The parties agree that if any of the following transactions
occur and do not qualify as “Permitted Transfers”, Tenant must obtain Landlord’s
consent to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as “Permitted

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Transfers”, then the provisions of this Paragraph 56.A shall not apply to the
following transactions: (i) a merger, consolidation or other reorganization in which
Tenant is not the surviving corporation so long as 95% of all assets and liabilities
of Tenant are permanently transferred to such assignee; and (ii) an assignment of
this Lease to a corporation which purchases or otherwise acquires 95% or more of the
assets of Tenant so long as 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee and Tenant remains liable and responsible
under the Lease to the extent Tenant continues in existence following such
transaction.”

     16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day of the Third
Option Period, Lease Paragraph 57 (“Permitted Assignments and Subleases”) shall be deleted in its
entirety and replaced with the following:

          “57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything
contained in Paragraph 16, so long as Tenant otherwise complies with the provisions
of Paragraph 16 and the Permitted Transfer does not release Tenant from its
obligations hereunder, Tenant may enter into any of the following transfers (a
“Permitted Transfer”) without Landlord’s prior written consent, and the provisions
of Paragraph 56A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in
this Lease to any corporation which controls, is controlled by, or is under common
control with Tenant by means of an ownership interest of more than fifty percent
(50%) providing Tenant remains liable for the payment of Rent and full performance
of the Lease;

          B. Tenant may assign its interest in the Lease to a corporation which results
from a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as (i) 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which Tenant is to be
merged has a net worth equal to or greater than the net worth of Tenant at the time
of Lease execution or at the time of such assignment, merger, consolidation or
reorganization (whichever is greater), or if it does not, Landlord is
provided a guaranty of the Lease (in a form reasonably acceptable to Landlord) from
a corporation (a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, merger, consolidation or reorganization (whichever
is greater). In the event there is not a permanent transfer of 95% or more of the
assets and liabilities from Tenant to a third party, and Tenant continues to exist
as a separate entity, both companies shall be jointly and severally liable for the
full terms and conditions of the Lease;

15

 

          C. Tenant may assign this Lease to a corporation which purchases or otherwise
acquires 95% or more of the assets of Tenant so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee (in the event
there is not a permanent transfer of 95% or more of the assets and liabilities from
Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of
the Lease), and provided that immediately prior to such assignment said corporation,
has a net worth equal to or greater than the net worth of Tenant (a) at the time of
Lease execution or (b) at the time of such assignment (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form
reasonably acceptable to Landlord) from a corporation (a) that is the parent of, or
is otherwise affiliated with, said corporation and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, (whichever is greater).”

     17. DESTRUCTION: Effective as of the first day of the Third Option Period, Lease
Paragraph 62 (“Destruction”) shall be deleted in its entirety and replaced with the following:

          “62. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may
terminate this Lease in the event of an uninsured event or if insurance proceeds,
net of the deductible, are insufficient to cover one hundred percent of the
rebuilding costs; provided, however, Tenant shall have the right to elect, in its
discretion, to contribute such excess funds to permit Landlord to repair the
Premises.

          B. Except as provided in Paragraph 62C, Landlord may not terminate the Lease if
the Premises are damaged by a peril whereby the cost to replace and/or repair is one
hundred percent (100%) covered by the insurance carried by Landlord pursuant to
Paragraph 12, but instead shall restore the Premises in the manner described by
Paragraph 21.

          C. If the Premises are damaged by a peril covered by the insurance carried by
Landlord pursuant to Paragraph 12, Landlord shall have the option to terminate the
Lease if each of the following conditions is satisfied: (i) the cost to repair or
the damage exceeds thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than five (5)
years remaining in the term of the Lease.

          D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12,
and said insurance would have been available to cover any damage or destruction to
the Premises, Landlord shall be required to rebuild, at its cost, net of the
deductible which would have been required under said insurance policy (which
deductible Tenant is required to pay).

16

 

          E. If the Premises are damaged by any peril, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the 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 only by
delivery to Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time needed to complete
such restoration:

               1) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) and, in the
reasonable opinion of Landlord’s architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within 180 days
after the date of such damage (subject to force majeure conditions); or

               2) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) within
twelve (12) months of the last day of the Lease term, and, in the reasonable opinion
of Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within sixty (60) days after the date of
such damage and Tenant has not exercised its Option to Extend said Term (or Extended
Term as the case may be).”

     18. LIABILITY INSURANCE: Effective as of the first day of the Third Option Period,
the first sentence of Lease Paragraph 10 (“Liability Insurance”) shall be deleted and replaced with
the following: “Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease
a policy of commercial general liability insurance with combined single limit coverage of not less
than Two Million Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped areas.”

     19. LIMITATION OF LIABILITY: Effective as of the first day of the Third Option
Period, Lease Paragraph 36 (“Limitation of Liability”) shall be deleted in its entirety and
replaced with the following:

          “36. LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:

(i) the sole and exclusive remedy shall be against Landlord’s interest in the
Premises leased herein;

(ii) no partner of Landlord shall be sued or named as a party in any suit or action
(except as may be necessary to secure jurisdiction of the partnership);

17

 

(iii) no service of process shall be made against any partner of Landlord (except as
may be necessary to secure jurisdiction of the partnership);

(iv) no partner of Landlord shall be required to answer or otherwise plead to any
service of process;

(v) no judgment will be taken against any partner of Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set aside
at any time without hearing;

(vii) no writ of execution will ever be levied against the assets of any partner of
Landlord;

(vii) these covenants and agreements are enforceable both by Landlord and also by
any partner of Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said April 10, 1992
Lease Agreement shall remain in full force and effect.

(This Space Left Blank Intentionally)

18

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST	 	 	 	QUANTUM CORPORATION
	 	 	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By	 	     /s/ John Arrillaga	 	 	 	By	 	     /s/ Andrew Kryder 
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	Andrew Kryder
	 
	 	 	 	 	 	 	 
	Date:	 	6/30/97	 	 	 	Andrew
Kryder
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print or Type Name
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY	 	 	 	Title: 	Finance & Corporate General Council 
	SEPARATE PROPERTY TRUST	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By	 	     /s/ Richard Peery	 	 	 	Date:	June 25, 1997
	 

	 	 
	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:	 	6/26/97	 	 	 	 	 	 

19

 

AMENDMENT NO. 2

TO LEASE

     THIS AMENDMENT NO. 2 is made and entered into this 22nd day of March, 2001, by and
between JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA
SURVIVOR’S TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended,
and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY
SEPARATE PROPERTY TRUST) as amended, collectively as LANDLORD, and MAXTOR CORPORATION, a Delaware
corporation, as “ASSIGNEE” OR “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated April 10, 1992 Landlord leased to QUANTUM CORPORATION, a
Delaware corporation (the “ASSIGNOR” or “QUANTUM”) all of that certain 60,128+ square foot
building located at 900 Sumac Drive, Milpitas, California (the “Premises”), the details of which
are more particularly set forth in said April 10, 1992 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated April 2, 1993 which
established the February 26, 1993 Lease Commencement Date, and established the Termination Date of
September 30, 2006, and,

     C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 16, 1997, which amended the
Lease by (i) extending the Term for five years, changing the Termination Date from September 30,
2006 to September 30, 2011, (ii) amending the Basic Rent schedule and Aggregate Rent accordingly,
(iii) adding a third Five Year Option to Extend, (iv) replacing Paragraphs 41C (“Lease Terms
Co-extensive”) and 48 (“Cross Default”) and 53 (“Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling
of the Premises”), (v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or
replacing certain provisions of the Lease commencing as of the commencement of the Third Extended
Term of said Lease , and

     D. WHEREAS, the Lease, together with those certain Amendments described above in Recitals B
and C shall hereinafter collectively be referred to as “the Lease Agreement”, and

     E. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraph 43
(“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 1 dated April 16, 1997
(“Third Five Year Option to Extend”) as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

1

 

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary contained
in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to Landlord,
Landlord hereby acknowledges that the following transactions have occurred:

          A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

          B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement”), wherein they agreed that:

               (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

               (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock, such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

               (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

          C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be assigned by Quantum to Insula
and Insula will assume and agree to be liable for all of the obligations of Quantum, as Tenant,
under the Lease.

As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated April 10, 1992, as amended.

Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as expressly
set forth below, Landlord’s Consent shall in no way void or alter any of the terms of the Lease
Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or diminish in any
way Tenant’s obligations to Landlord.

Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor, and
Landlord shall not be bound by any agreement other than the terms of the Lease Agreement between
Landlord and Tenant. Landlord does not make any warranties or representations as to the condition
of the Leased Premises or the terms of the Lease Agreement between Landlord and Quantum.
Landlord’s consent to the assignment shall in no way obligate Landlord to any further

2

 

consents or agreements between Quantum and/or Assignee. So long as Quantum continues to exist as a
Delaware corporation, it is agreed that both Quantum and Maxtor will be jointly and severally
liable for all the terms and conditions of the Lease and all Amendments thereto; provided, however,
that so long as Quantum remains liable for said Lease, no material amendment to the Lease Agreement
after the date hereof shall be binding upon Quantum without the prior written consent of Quantum,
which consent shall not be unreasonably withheld, and Quantum’s approval shall not be required on
transactions related to Landlord’s Waivers, Landlord’s Consents to Sublease and/or Landlord’s
Consents to Alterations. The foregoing, however, shall not prevent Tenant and Landlord from
entering into any such modification or amendment between themselves.

It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     1. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 43 (“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 1 dated
April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall
be replaced with the following:

     2. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“Second
Extended Term”) upon the following terms and conditions:

                    (1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term pursuant to Paragraph
A hereof (not later than April 3, 2011), in which event the Term of the Lease shall be considered
extended for an additional five (5) years, subject to the Basic Rent set forth below and with: (i)
the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and the terms
and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion,
may, but is not required to, incorporate its then current Lease provisions that are standard in
Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its Option to
Extend); and (iii) this Paragraph 2.A thereafter deleted. In the event that Tenant fails to timely
exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further Option to
Extend this Lease, and the Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 2.

                    (2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.A.1(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year
of the current Term) required for the Extended Term of the Lease to make the Basic Rent for the
Premises comparable to the then current market triple net basic rent for comparable properties
either (i) then owned in whole or in part by the above mentioned Landlord or by members of its
immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as
stated herein, other third party properties in the vicinity of the Premises. Tenant shall have
five (5) days after receipt from the Landlord of said new terms and conditions and Basic Rent in
which to accept said new terms and conditions and Basic Rent and enter into written documentation
confirming same. In the event Tenant fails to execute

3

 

said written documentation confirming said new terms and conditions and Basic Rent for the
Second Extended Term of Lease within said five (5) day period, Tenant shall have no further Option
to Extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof absent of this Paragraph 2, with Landlord having no further responsibility or
obligation to Tenant with respect to Tenant’s Option to Extend.

                    (3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

                    (4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

                    (5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

     3. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

                    (1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than April 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Third Extended Term”) subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee
and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In the event that Tenant fails
to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further
Option to Extend this Lease, and the Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 2.B.

4

 

                    (2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.1(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

                    (3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at its sole and
absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force
and effect for the full remaining Term hereof, absent of this Paragraph 2.B.

                    (4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 57 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

                    (5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

               EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said April 10, 1992
Lease Agreement shall remain in full force and effect.

5

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	ASSIGNEE/MAXTOR
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST	 	 	 	MAXTOR CORPORATION
	 	 	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By:	 	/s/ Richard Peery, his Attorney in Fact	 	 	 	By:	 	/s/ Glenn H. Stevens

	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	     

	 

	 	John Arrillaga, Trustee	 	 	 	Glenn
H. Stevens

	 

	 	 
	 		 	 
	 
	 	 	 	 	 	Print or Type Name
	Date:	 	3/30/01	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	Title:	 	 V.P., General Counsel & Secretary
	 

	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	/s/ Richard Peery	 	 	 	Date: 	 	4/1/01
	 

	 	 
	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:	 	3/30/01	 	 	 	ASSIGNOR/QUANTUM
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUANTUM CORPORATION
	 	 	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	/s/ Signature Illegible
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print or Type Name
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Title:	 	VP Real Estate
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date:	 	3/30/01
	 

	 	 	 	 	 	 	 	 

6

 

	 	 	 
	 

	 	LEASE 3
	 

	 	Building 4
	 

	 	Lot 4

LEASE AGREEMENT

     THIS LEASE, made this 17th day of September, 1990 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY TRUST) as amended, and
RICHARD T. PEERY, Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE
PROPERTY TRUST) as amended, hereinafter called Landlord, and QUANTUM CORPORATION, a Delaware
corporation, hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit “A”, attached hereto and incorporated herein
by this reference thereto more particularly described as follows:

All of that land containing approximately 6,749 ± acres and that
certain 101,253+ square foot two-story building (“Building
4”) and parking appurtenant thereto, to be constructed and
landscaping to be installed by Landlord as shown within the area
outlined in Red (“Lot 4”) on Exhibit A to be located at 1000 Sumac
Drive, Milpitas, California 95035. Said Premises is more
particularly shown within the area outlined in Red on Exhibit A
attached hereto and incorporated herein by this reference and Lot 4
is more particularly described as Parcel 4 as shown on that certain
parcel map recorded in the Official Records of Santa Clara County in
Book 616 of Maps, Page 20 on July 23, 1990. The interior of the
leased Premises shall be improved in the configuration as shown in
Red on Exhibit B to be attached hereto and incorporated herein by
this reference. The building shell shall be constructed in
accordance with the shell and site improvement specifications set
forth on Exhibit A, and the general building elevation net forth on
Exhibit A.

SEE PARAGRAPH 48.

     The word “Premises” as used throughout this lease is hereby defined to include the
nonexclusive use of sidewalks and driveways in front of or adjacent the Premises, and the
nonexclusive use of the area directly underneath or over such sidewalks and driveways. The gross
leasable area of the building shall be measured from outside of exterior walls to outside of
exterior walls, and shall include any atriums, covered entrances or egresses and covered loading
areas.

1

 

     Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE: Tenant shall use the Premises only in conformance with applicable governmental
laws, regulations, rules and ordinances for the purpose of office, sales, R&D, light manufacturing
and related uses necessary for the use of Tenant or any approved assignee or subtenant to conduct
its business providing any and all uses of the Premises shall be subject to and in conformance with
all governmental laws and ordinances and for no other purpose without Landlord’s prior written
consent, Tenant shall not do or permit to be done in or about the Premises nor bring or keep or
permit to be brought or kept in or about the Premises anything which is prohibited by or will in
any way increase the existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents without the prior written consent of Landlord,
and provided Tenant bears any cost related to such increased rate, or will cause a cancellation of
any insurance covering the Premises or any part thereof, or any of its contents. Tenant shall not
do or permit to be done anything in, on or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Premises or neighboring premises or
injure or annoy them, or use or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. No sale by auction shall be permitted on the Premises. Tenant shall not place any
loads upon the floors, walls, or ceiling which endanger the structure, or place any harmful fluids
or other material in the drainage system of the building, or overload existing electrical or other
mechanical systems. No waste materials or refuse shall be dumped upon or permitted to remain upon
any part of the Premises or outside of the building in which the Premises are a part, except in
trash containers placed inside exterior enclosures designated by Landlord for that purpose or
inside of the building proper where designated by Landlord. No materials, supplies, equipment,
finished products or semi-finished products, raw materials or articles of any nature shall be
stored upon or permitted to remain outside the Premises. Tenant shall not place anything or allow
anything to be placed near the glass of any window, door partition or wall which may appear
unsightly from outside the Premises. No loudspeaker or other device, system or apparatus which can
be heard outside the Premises shall be used in or at the Premises without the prior written consent
of Landlord. Tenant shall not commit or suffer to be committed any waste in or upon the Premises.
Tenant shall indemnify, defend and hold Landlord harmless against any loss, expense, damage,
reasonable attorneys’ fees, or liability arising out of failure of Tenant to comply with any
applicable law that governs Tenant use of the Premises. Tenant shall comply with any covenant,
condition, or restriction (“CC&R’s”) affecting the Premises. The provisions of this paragraph are
for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or
occupant of the Premises.

     2. TERM: and Commencement Date of Lease: See Paragraph 40, 41 and 42 of this Lease.

     3. POSSESSION: If Landlord, for any reason whatsoever, other than Landlord’s default,
cannot deliver possession of said premises to Tenant at the commencement of the said term, as
hereinbefore specified, this Lease shall not be void or voidable; no obligation of Tenant

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shall be affected thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any
loss or damage resulting therefrom; but in that event the commencement and termination dates of the
Lease and all other dates affected thereby shall be revised to conform to the date of Landlord’s
delivery of possession, as specified in Paragraph 2B, above; provided, however, it is agreed that
in no event shall the Lease commence sooner than December 20, 1991 unless the parties agree in
writing to an earlier date for the Lease to commence. The above is, however, subject to the
provision that the period of delay of delivery of the Premises shall not exceed 180 days from the
commencement date herein (except those delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond Landlord’s control shall be
excluded in calculating such period) in which instance Tenant, at its option, may, by written
notice to Landlord, terminate this Lease.

SEE PARAGRAPH 46

     4. RENT:

          A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may designate
without deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for
the leased Premises the total sum of the amount to be calculated pursuant to Paragraph 39 Dollars
($) in lawful money of the United States of America, payable as follows:

SEE PARAGRAPHS 39 THROUGH 42.

          B. Time for Payment. Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences on a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day of said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge. Notwithstanding any other provision of this Lease, it Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal five percent (5%) of each rental payment so in
default. See Paragraph 49.

          D. Additional Rent. Beginning with the commencement date of the term of this Lease, Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following:

               (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

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               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.

     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days after presentation of invoice from Landlord or Landlord’s agent setting forth such
Additional Rent and/or (ii) at the option of Landlord, Tenant shall pay to Landlord monthly, in
advance, Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s approximate
average monthly expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord’s actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, upon demand, any amount of actual expenses
expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant (providing
Tenant is not in default in the performance of any of the terms, covenants and conditions of this
Lease in which case such amount shall be held by Landlord as a credit for Tenant’s account until
such default has been cured) any amount of estimated payments made by Tenant in excess of
Landlord’s actual expenditures for said Additional Rent items.

     The respective obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          E. Place of Payment of Rent and Additional Rent. All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Peery/Arrillaga, File 1504, P.O. Box 60000, Sand Francisco, CA 4160 or to such other person or to
such other place as Landlord may from time to time designate in writing.

          F. Security Deposit. Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
with Landlord the sum of TWO HUNDRED EIGHTY NINE THOUSAND FIVE HUNDRED EIGHTY THREE AND 58/100
Dollars ($289, 583.58) Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the payment of rent and any
of the monetary sums due herewith. Landlord may (but shall not be required to) use, apply or
retain all or any part of this Security Deposit for the payment of any other amount which Landlord
may spend by reason of Tenant’s

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default or to compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant’s default. If any portion of said Deposit is so used or applied. Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord in the amount
sufficient to restore the Security Deposit to its original amount. Tenant’s failure to do so shall
be a material breach of this Lease. Landlord shall not be required to keep this Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on such Deposit. If
Tenant fully and faithfully performs every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or at Landlord’s option, to
the last assignee of Tenant’s interest hereunder) at the expiration of the Lease term and after
Tenant has vacated the Premises. In the event of termination of Landlord’s interest in this Lease,
Landlord shall transfer said Deposit to Landlord’s successor in interest whereupon Tenant agrees to
release Landlord from liability for the return of such Deposit or the accounting therefore. SEE
PARAGRAPH 50.

     5. ACCEPTANCE AND SURRENDER OF PREMISES: By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts the building and
improvements included in the Premises in their present condition and without representation or
warranty by Landlord as to the condition of such building or as to the use or occupancy which may
be made thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed: all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed; the air conditioning and heating systems serviced by a
reputable and licensed service firm and in good operating condition and repair; the plumbing and
electrical systems and lighting in good order and repair, including replacement of any burned out
or broken light bulbs or ballasts; the lawn and shrubs in good condition including the replacement
of any dead or damaged plantings; the sidewalk, driveways and parking areas in good order,
condition and repair; together with all alterations, additions, and improvements which may have
been made in, to, or on the Premises (except moveable trade fixtures installed at the expense of
Tenant) except that Tenant shall ascertain from Landlord within ninety (90) days before the end of
the term of this Lease whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part or parts thereof
before the end of this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of
the term or sooner termination of this Lease, shall remove all of Tenant’s personal property and
trade fixtures from the Premises, and all property not so removed on or before the end of the term
or sooner termination of this Lease shall be deemed abandoned by Tenant and title to same shall
thereupon pass to Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost,
and repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not
surrendered at the end of the term or sooner termination of this Lease, Tenant shall indemnify
Landlord against loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the term hereof or

5

 

as a consent of Landlord to any holding over by Tenant. The voluntary or other surrender of this
Lease or the Premises by Tenant or a mutual cancellation of this Lease shall not work as a merger
and, at the option of Landlord, shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such subleases or sub tenancies.
SEE PARAGRAPH 51.

     6. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written consent of
Landlord first had and obtained by Tenant (such consent not to be unreasonably withheld), but at
the cost of Tenant, and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to Landlord. Landlord
reserves the right to approve all contractors and mechanics proposed by Tenant to make such
alterations and additions. Tenant shall retain title to all moveable furniture and trade fixtures
placed in the Premises. All heating, lighting, electrical, air conditioning, partitioning,
drapery, carpeting, and floor installations made by Tenant, together with alt property that has
become an integral part of the Premises, shall not be deemed trade fixtures. Tenant agrees that it
will not proceed to make such alteration or additions, without having obtained consent from
Landlord to do so, and until five (5) days from the receipt of such consent, in order that Landlord
may post appropriate notices to avoid any liability to contractors or material suppliers for
payment for Tenant’s improvements. Tenant will at all times permit such notices to be posted and
to remain posted until the completion of work. Tenant shall, if required by Landlord, secure at
Tenant’s own cost and expense, a completion and lien indemnity bond, satisfactory to Landlord, for
such work. Tenant further covenants and agrees that any mechanic’s lien filed against the Premises
for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond or otherwise, within ten (10) days after Tenant receives notice of
the filing thereof, at the cost and expense of Tenant. Any exceptions to the foregoing must be
made in writing and executed by both Landlord and Tenant. SEE PARAGRAPH 51.

     7. TENANT MAINTENANCE: Tenant shall, at its sole cost and expense, keep and maintain
the Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good and sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and air conditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of the building,
store fronts, roofs, downspouts, all interior improvements within the premises including but not
limited to wall coverings, window coverings, carpet, floor coverings, partitioning, ceilings, doors
(both interior and exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to landscaping,
sidewalks, driveways, parking lots including striping and sealing, sprinkler systems, lighting,
ponds, fountains, waterways, and drains. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet

6

 

caused by such rolling chairs if such wear and tear exceeds that caused by normal foot traffic
in surrounding areas. Areas of excessive wear shall be replaced at Tenant’s sole expense upon
Lease termination. Tenant hereby waives all rights under, and benefits of, Subsection 1 of Section
1932 and Section 1941 and 1942 of the California Civil Code and under any similar law, statute or
ordinance now or hereafter in effect. In the event any of the above maintenance responsibilities
apply to any other tenant(s) of Landlord where there is common usage with other tenant(s), such
maintenance responsibilities and charges shall be allocated to the leased Premises by square
footage or other equitable basis as calculated and determined by Landlord. SEE PARAGRAPH 52.

     8. UTILITIES: Tenant shall pay promptly, as the same become due all charges for water,
gas, electricity, telephone, telex and other electronic communication service, sewer service, waste
pick-up and any other utilities, materials or services furnished directly to or used by Tenant on
or about the Premises during the term of this Lease, including, without limitation, any temporary
or permanent utility surcharge or other exactions whether or not hereinafter imposed. In the event
the above charges apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such charges shall be allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES:

          A. Notwithstanding the following and pursuant to the terms of the Option Agreement dated
October 31, 1989 related to this Lease Tenant is responsible for paying all real estate taxes and
assessments assessed against the Premises leased hereunder from the date Tenant exercised its
option on said Premises which date was August 27, 1990. As Additional Rent and in accordance with
Paragraph 4D of this Lease, Tenant shall pay to Landlord, or if Landlord so directs, directly to
the Tax Collector, all Real Property Taxes relating to the Premises. In the event the Premises
leased hereunder consist of only a portion of the entire tax parcel. Tenant shall pay to Landlord
Tenant’s proportionate share of such real estate taxes allocated to the leased Premises by square
footage or other reasonable basis as calculated and determined by Landlord. It the tax billing
pertains 100% to the leased Premises, and Landlord chooses to have Tenant pay said real estate
taxes directly to the Tax Collector, than in such event it shall be the responsibility of Tenant to
obtain the tax and assessment bills and pay, prior to delinquency, the applicable real property
taxes and assessments pertaining to the leased Premises, and failure to receive a bill for taxes
and or assessments shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term “Real Property Taxes” as used
herein, shall mean (i) all taxes, assessments, levies and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all installments of principal
and interest required to pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership of the Premises) now or
hereafter imposed by any

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governmental or quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed against, or with respect to the
value, occupancy or use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord’s interest therein; any
improvements located within the Premises (regardless of ownership); the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part of and located in the
Premises; or parking areas, public utilities, or energy within the premises (ii) all charges,
levies or fees imposed by reason of environmental regulation or other governmental control of the
Premises: and (iii) costs and fees (including reasonable attorneys’ fees) incurred by Landlord in
reasonably contesting any Real Property Tax and in negotiating with public authorities as to any
Real Property Tax. If at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied, assessed or imposed
(whether by reason of a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Premises or Landlord’s interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Premises, on Landlord’s business of leasing the Premises, or
computed in any manner with respect to the operation of the Premises. Then any such tax or charge,
however designated, shall be included within the meaning of the term “Real Property Taxes” for
purposes of this Lease. If any Real Property Tax is based upon property or rents unrelated to the
Premises, than only that part of such Real Property Tax that is fairly allocable to the Premises
shall be included within the meaning of the term “Real Property Taxes”. Notwithstanding the
foregoing, the term “Real Property Taxes” shall not include estate, inheritance, gift or franchise
taxes of Landlord or the federal or state net income tax imposed on Landlord’s income from all
sources. SEE PARAGRAPH 53.

          B. Taxes on Tenant’s Property Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant, Tenant shall upon demand, as the case may be, repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from such increase in
the assessment; provided that in any such event Tenant shall have the right, in the name of
Landlord and with landlord’s full cooperation, to bring suit in any court of competent jurisdiction
to recover the amount of such taxes so paid under protest, and any amount so recovered shall belong
to Tenant.

     10. LIABILITY INSURANCE: Tenant, at Tenant’s expense, agrees to keep in force during
the term of this Lease a policy of comprehensive general liability insurance for bodily injury and
property damage occurring in, on or about the Premises, including parking and landscaped areas, in
the amount of $2,000,000 combined single limit. Such insurance shall be primary and
noncontributory as respects any insurance carried by Landlord. The policy or policies effecting
such insurance shall name Landlord as additional insureds, and shall insure any liability of
Landlord, contingent or otherwise, as respects acts or omissions of Tenant, its agents,

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employees or invitees or otherwise by any conduct or transactions of any of said persons in or
about or concerning the Premises, including any failure of Tenant to observe or perform any of its
obligations hereunder; shall be issued by an insurance company admitted to transact business in the
State of California; and shall provide that the insurance effected thereby shall not be canceled,
except upon thirty (30) days’ prior written notice to Landlord. A copy of said policy shall be
delivered to Landlord. If, during the term of this Lease, in the considered opinion of Landlord’s
Lender, insurance advisor, or counsel, the amount of insurance described in this Paragraph 10 is
not adequate, Tenant agrees to increase said coverage to such reasonable amount as Landlord’s
Lender, insurance advisor, or counsel shall deem adequate.

     11. TENANTS PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE: Tenant
shall maintain a policy or policies of fire and property damage insurance in “all risk” form with a
sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement of such items so
insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE: Landlord shall purchase and keep in force, and as Additional
Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord Tenant’s
proportionate share (allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord) of the cost of, policy or policies of insurance covering
loss or damage to the Premises (excluding routine maintenance and repairs and incidental damage or
destruction caused by accidents or vandalism for which Tenant is responsible under Paragraph 7) in
the amount of the full replacement value thereof, providing protection against those perils
included within the classification of “all risks” insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one hundred (100%) percent
of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If such insurance cost is
increased due to Tenant’s use of the Premises, Tenant agrees to pay to Landlord the full cost of
such increase. Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty: provided, however, that it the insurance policy of either
releasing party prohibits such waiver, then this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof. SEE PARAGRAPH 54.

     13. INDEMNIFICATION: Landlord shall not be liable to Tenant and Tenant hereby waives
all claims against Landlord for any injury to or death of any person or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, including, without limitation,
gas, fire, oil, electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises but excluding, however, the negligence of Landlord,

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its agents, servants, employees, invitees, or contractors of which negligence landlord has
knowledge and reasonable time to correct. Except as to injury to persons or damage to property the
principal cause of which is the negligence of Landlord and subject to the last two sentences of
Paragraph 12. Tenant shall hold Landlord harmless from and defend Landlord against any and all
expenses, including reasonable attorneys’ fees, in connection therewith, arising out of any injury
to or death of any person or damage to or destruction of property occurring in, on or about the
Premises, or any part thereof, from any use whatsoever.

     14. COMPLIANCE: Tenant, at its sole cost and expense, shall promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements now or hereafter in
effect; with the requirements of any board of fire underwriters or other similar body now or
hereafter constituted; and with any direction or occupancy certificate issued pursuant to law by
any public officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or rectify said failure.
The judgment of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its sole cost and
expense, comply with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability insurance covering
the Premises. SEE PARAGRAPHS 44 AND 52.

     15. LIENS: Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection therewith, shall
be payable to Landlord by Tenant on demand with interest at the prime rate of interest as quoted by
the Bank of America.

     16. ASSIGNMENT AND SUBLETTING: Tenant shall not assign, transfer, or hypothecate the
leasehold estate under this Lease, or any interest therein, and shall not sublet the Premises, or
any part thereof, or any right or privilege appurtenant thereto, or suffer any other person or
entity to occupy or use the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld. In the event Tenant
is allowed to assign, transfer or sublet the whole or any part of the Premises, with the prior
written consent of Landlord, no assignee, transferee or subtenant shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any part of the Premises without also
having obtained the prior written consent of Landlord. A consent of Landlord to one assignment,
transfer, hypothecation, subletting, occupation or use by any other person shall not release Tenant
from any of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar
or dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other
person. Any such assignment, transfer, hypothecation, subletting, occupation or

10

 

use without such consent shall be void and shall constitute a breach of this lease by Tenant
and shall, at the option of Landlord exercised by written notice to Tenant, terminate this Lease.
The leasehold estate wider this Lease shall not, nor shall any interest therein, be assignable for
any purpose by operation of law without the written consent of landlord. As a condition to its
consent, Landlord may require Tenant to pay all reasonable expenses in connection with the
assignment, and Landlord may require Tenant’s assignee or transferee (or other assignees or
transferees) to assume in writing all of the obligations under this Lease and for Tenant to remain
liable to Landlord under the Lease. SEE PARAGRAPHS 55 AND 56.

     17. SUBORDINATION AND MORTGAGES: In the event Landlord’s title or leasehold interest
is now or hereafter encumbered by a deed of trust, upon the interest of Landlord in the land and
buildings in which the demised Premises are located, to secure a loan from a lender (hereinafter
referred to as “Lender”) to Landlord, Tenant shall, at the request of Landlord or Lender, execute
in writing an agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender’s deed of trust shall be or remain
subject and subordinate to the rights of Tenant under this Lease. Notwithstanding any such
subordination, Tenant’s possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of the provisions set
forth in this Lease. SEE PARAGRAPH 57

     18. ENTRY BY LANDLORD: Landlord reserves, and shall at all reasonable times have, the
right to enter the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s); to submit the
Premises to prospective purchasers, mortgagers or tenants; to post notices of nonresponsibility;
and to alter, improve or repair the Premises or other parts of the building, all without abatement
of rent, and may erect scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided, however that the
business of Tenant shall be interfered with to the least extent that is reasonably practical. Any
entry to the Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. SEE PARAGRAPH 59.

     19. BANKRUPTCY AND DEFAULT: The commencement of a bankruptcy action or liquidation
action or reorganization action or insolvency action or an assignment of or by Tenant for the
benefit of creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant,
shall, at Landlord’s option, constitute a breach of this Lease by Tenant. If the trustee or
receiver appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar
action elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in
writing of its election within thirty (30) days after an order for relief in a liquidation action
or within thirty (30) days after the commencement of any action.

     Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate

11

 

assurance of future performance, as used herein, includes, but shall not be limited to: (i)
assurance of source and payment of rent, and other consideration due under this Lease; (ii)
assurance that the assumption or assignment of this Lease will not breach substantially any
provision; such as radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.

     Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the benefit of creditors or
other similar act. Nothing contained in this Lease shall be construed as giving or granting or
creating an equity in the demised Premises to Tenant. In no event shall the leasehold estate under
this Lease, or any interest therein, be assigned by voluntary or involuntary bankruptcy proceeding
without the prior written consent of Landlord. In no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or reorganization
proceedings.

     The failure to perform or honor any covenant, condition or representation made under this
Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of [Illegible] days from the date of
written notice from Landlord within which to cure any default in the payment of rental or
adjustment thereto. Tenant shall have a period of [Illegible] days from the date of written
notice from Landlord within which to cure any other default under this Lease. Upon an uncured
default of this Lease by Tenant, Landlord shall have the following rights and remedies in addition
to any other rights or remedies available to Landlord at law or in equity:

               (a) The rights and remedies provided for by California Civil Code Section 1951.2, including
but not limited to, recovery of 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 rental loss for the
same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b)
of said Section 1951.2.

               (b) The rights and remedies provided by California Civil Code Section which allows Landlord to
continue the Lease in effect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as Landlord does not terminate
Tenant’s right to possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord’s initiative to protect its interest under this
Lease shall not constitute a termination of Tenant’s right to possession.

               (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable
law.

               (d) The right and power, after compliance with all statutory requirements and in any event on
not less than three (3) business days prior written notice, to enter the Premises and remove
therefrom all persons and property, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord,

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may from time to time sublet the
Premises or any part thereof for such term or terms (which may
extend beyond the term of this Lease) and at such rent and such other terms as Landlord in its
reasonable sole discretion may deem advisable, with the right to make alterations and repairs to
the Premises. Upon each subletting, (i) Tenant shall be immediately liable to pay Landlord, in
addition to indebtedness other than rent due hereunder, the reasonable cost of such subletting,
including, but not limited to, reasonable attorneys’ fees, and any real estate commissions actually
paid, and the cost of such reasonable alterations and repairs incurred by landlord and the amount,
if any, by which the rent hereunder for the period of such subletting (to the extent such period
does not exceed the term hereof) exceeds the amount to be paid as rent for the Premises for such
period or (ii) at the option of Landlord, rents received from such subletting shall be applied
first to payment of indebtedness other than rent due hereunder from Tenant to Landlord; second, to
the payment of any costs of such subletting and of such alterations and repairs; third to payment
of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future rent as the same becomes due hereunder. If Tenant has been credited with any
rent to be received by such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such subletting under option (ii)
during any month be less than that to be paid during that month by tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No
taking possession of the Premises by Landlord shall be construed as an election on its part to
terminate this Lease unless a written notice of such intention be given to Tenant. Notwithstanding
any such subletting without termination. Landlord may at any time hereafter elect to terminate
this Lease for such previous breach.

               (e) The right to have a receiver appointed for Tenant upon application by Landlord, to take
possession of the Premises and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord pursuant to subparagraph d above. SEE PARAGRAPH 59.

     20. ABANDONMENT: Tenant shall not vacate or abandon the Premises at any time during
the term of this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be
dispossessed by the process of law, or otherwise, any personal property belonging to Tenant and
left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such
property as may be mortgaged to Landlord. SEE PARAGRAPH 60.

     21. DESTRUCTION: In the event the Premises are destroyed in whole or in part from any
cause, except for routine maintenance and repairs and incidental damage and destruction caused from
vandalism and accidents for which Tenant is responsible under Paragraph 7. Landlord may at its
option:

               (a) Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b) Terminate this Lease.

     If Landlord does not give Tenant notice in writing within thirty (30) days from the
destruction of the Premises of its election to either rebuild and restore them, or to terminate
this Lease. Landlord shall be deemed to have elected to rebuild or restore them, in which event

13

 

Landlord agrees, at its expense, promptly to rebuild or restore the Premises to their condition
prior to the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises rendered untenantable by
such damage bears to the total area of the Premises. If Landlord does not complete the rebuilding
or restoration within one hundred eighty (180) days following the date of destruction (such period
of time to be extended for delays caused by the fault or neglect of Tenant or because of Acts of
God, acts of public agencies, labor disputes, strikes, fires, freight embargos, rainy or stormy
weather, inability to obtain materials, supplies or fuels, acts of contractors or subcontractors,
or delay of the contractors or subcontractors due to such causes of other contingencies beyond the
control of Landlord), then Tenant shall have the right to terminate this Lease by giving fifteen
(15) days prior written notice to Landlord. Notwithstanding anything herein to the contrary,
Landlord’s obligation to rebuild or restore shall be limited to the building and interior
improvements constructed by Landlord as they existed as of the commencement date of the Lease and
shall not include restoration of Tenant’s trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which Tenant shall forthwith
replace or fully repair at Tenant’s sole cost and expense provided this Lease is not cancelled
according to the provisions above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain
in full force and effect. Tenant hereby expressly waives the provisions of Section 1932,
Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

     In the event that the building in which the Premises are situated is damaged or destroyed to
the extent of not less than 33 1/3% of the replacement cost thereof, Landlord may elect to
terminate this Lease, whether the Premises be injured or not. In the event the destruction of the
Premises is caused by Tenant, Tenant shall pay the deductible portion of Landlord’s insurance
proceeds. SEE PARAGRAPH 61.

     22. EMINENT DOMAIN: If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this Lease
shall terminate as to any portion of the Premises so taken or conveyed on the date when title vests
in the condemnor, and Landlord shall be entitled to any and all payment, income, rent, award, or
any interest therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the value of any
unexpired term of this Lease. Notwithstanding the foregoing paragraph, any compensation
specifically awarded Tenant for loss of business, Tenant’s personal property, moving cost or loss
of goodwill, shall be and remain the property of Tenant.

     If any action or proceeding is commenced for such taking of the Premises or any part thereof,
or if Landlord is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall
have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60)
days of the date of receipt of said written advice, or commencement of said action or proceeding,
or taking conveyance, which termination shall take place as of the first to occur of the last day
of the calendar month next following the month in which such notice is given or the date on which
title to the Premises shall vest in the condemnor.

14

 

     In the event of such a partial taking or conveyance of the Premises, if the portion of the
Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its
business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the
date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the calendar month next
following the month in which such notice is given, upon payment by Tenant of the rent from the date
of such taking or conveyance to the date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate this Lease as provided herein, this Lease shall
continue in full force and effect as to the part of the Premises not so taken or conveyed, and the
rent herein shall be apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking. SEE PARAGRAPH 62.

     23. SALE OR CONVEYANCE BY LANDLORD: In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then constituting Landlord, the
transferor shall thereby be released from any further liability upon any of the terms, covenants or
conditions (express or implied) herein contained in favor of Tenant, and in such event, insofar as
such transfer is concerned, Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shaft not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. SEE PARAGRAPH 63.

     24. ATTORNMENT TO LENDER OR THIRD PARTY: In the event the interest of Landlord in the
land and buildings in which the leased Premises are located (whether such interest of Landlord is a
fee title interest or a leasehold interest) is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale, Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust secunng the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved and upon all the other
terms, conditions and covenants herein contained.

     25. HOLDING OVER: Any holding over by Tenant after expiration or other termination of
the term of this Lease with the written consent of Landlord delivered to Tenant shall not
constitute a renewal or extension of the Lease or give Tenant any rights in or to the leased
Premises except as expressly provided in this Lease. Any holding over after the expiration or
other termination of the term of this Lease, with the consent of Landlord, shall be construed to be
a tenancy from month to month, on the same terms and conditions herein specified insofar as
applicable except that the monthly Basic Rent shall be increased to an amount equal to one hundred
twenty five (125%) percent of the monthly Basic Rent required during the last month of the Lease
term.

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     26. CERTIFICATE OF ESTOPPEL: Either party shall at any time upon not less than ten
(10) days prior written notice from the other party execute, acknowledge and deliver to the
requesting party a statement in writing (i) 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 (ii) acknowledging that there are not, to the best of such
party’s knowledge, any uncured defaults on the part of the other party hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises. A party’s failure to deliver such statement
within such time shall be conclusive upon the party receiving such request that this Lease is in
full force and effect, without modification except as may be represented by Landlord that there are
no uncured defaults in the requesting party’s performance, and that not more than one month’s rent
has been paid in advance.

     27. CONSTRUCTION CHANGES: It is understood that the description of the Premises and
the location of ductwork, plumbing and other facilities therein are subject to such minor changes
as Landlord or Landlord’s architect determines to be desirable in the course of construction of the
Premises, and no such changes shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of such drawings rests
with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM: All terms, covenants and conditions of this Lease to
be performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s sole cost
and expense and without any reduction of rent. If Tenant shall fail to pay any sum of money, or
other rent, required to be paid by it hereunder or shall fail to perform any other term or covenant
hereunder on its part to be performed, and such failure shall continue for five (5) days after
written notice thereof by Landlord, Landlord without waiving or releasing Tenant from any
obligation of Tenant hereunder, may, but shall not be obliged to, make any such payment or perform
any such other term or covenant on Tenant’s part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest thereon at the rate of
the prime rate of interest per annum as quoted by the Bank of America from the date of such payment
on performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord
on demand by Landlord, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of
failure by Tenant in the payment of rent hereunder.

     29. ATTORNEYS’ FEES:

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this, or because of the breach of any provision of
this Lease, or for any other relief against the other party hereunder, then all costs and expenses,
including reasonable attorneys fees incurred by the prevailing party therein shall be paid by the
other party, which obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not the action is
prosecuted to judgment.

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          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

     30. WAIVER: The waiver by either party of the other party’s failure to perform or
observe any term, covenant or condition herein contained to be performed or observed by such
waiving party shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent failure of the party failing to perform or observe the same or any other such term,
covenant or condition therein contained and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in anyway affect, the right
of either party to insist upon performance and observance by the other party in strict accordance
with the terms hereof.

     31. NOTICES: All notices, demands, requests, advices or designations which may be or
are required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advises or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises of it sent by
United Stated certified or registered mail, postage prepaid, addressed to Tenant at the Premises.
All notices, demands, requests, advises or designations by Tenant to Landlord shall be sent by
United States certified or registered mail, postage prepaid, addressed to Landlord at its offices
at Peery/Arrillage, 2560 Mission College Blvd., Suite 101, Santa Clara, CA 95054. Each notice,
request, demand, advice or designation referred to in this paragraph shall be deemed received on
the date of the personal service or mailing thereof in the manner herein provided, as the case may
be.

     32. EXAMINATION OF LEASE: Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or option for a lease and this instrument is not
effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no event earlier than
(30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or
deed of trust covering the Premises whose name and address shall have heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such obligations; provided,
however, that it the nature of Landlord’s obligations is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY: If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership) represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation
(or partnership) in accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement) and that this Lease is binding upon said corporation (a
partnership) in accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty

17

 

(30) days after execution of this Lease, deliver to Landlord a certified copy of the
resolution of the Board of Directors of said corporation authorizing or ratifying the execution of
this Lease.

     35. INTENTIONALLY LEFT BLANK

     36. LIMITATION OF LIABILITY: In consideration of the benefits accruing hereunder.
Tenant and all successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:

               (a) the sole and exclusive remedy shall be against Landlord and Landlord’s assets;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as maybe
necessary to secure jurisdiction of the partnership);

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process:

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord maybe vacated and set aside at any time
without hearing;

               (g) no writ of execution will ever by levied against the assets of any partner of Landlord:

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS: No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of the Premises or any
exterior windows of the Premises without the written consent of Landlord first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or
in any way place a sign in, on, or about the Premises, upon expiration or other sooner termination
of this Lease. Tenant at Tenant’s sole cost and expense shall both remove such sign and repair all
damage in such a manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.

     All approved signs or lettering on outside doors shall be printed. painted, affixed or
inscribed at the expense of Tenant by a person reasonably approved of by Landlord. Tenant

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shall not place anything or allow anything to be placed near the glass of any window, door
partition or wall which may appear unsightly from outside the Premises.

     38. MISCELLANEOUS AND GENERAL PROVISIONS:

          A. Use of Building Name. Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

          B. Choice of Law; Severability. This Lease shall in all respects be governed by and construed
in accordance with the laws of the State of California. If any provision of this Lease shall be
invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall
be and remain in full force and effect.

          C. Definition of Terms. The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as
well as the singular and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof, and the provisions of this Lease shall inure to the benefit of and
bind such heirs, executors, administrators, successors and permitted assigns. The term “person”
includes the plural as well as the singular and individuals, firms, associations, partnerships and
corporations. Words used in any gender include other genders. If there be more than one Tenant
the obligations of Tenant hereunder are joint and several. The paragraph headings of this Lease
are for convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.

          D. Time of Essence. Time is of the essence of this Lease and of each and all of its
provisions.

          E. Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim deed or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

          F. Incorporation of Prior Agreements; Amendments. This agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.

          G. Recording. Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit D.

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          H. Amendments for Financing. Tenant further agrees to execute any amendments reasonably
required by a lender to enable Landlord to obtain financing, so long as Tenant’s rights hereunder
are not materially and adversely affected and there is no change in the Basic Options to Renew,
Lease Term or Construction obligations of Landlord.

          I. Additional Paragraphs. Paragraphs 39 through 64 are added hereto and are included as a
part of this lease.

          J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          K. Diminution of Light, Air or View. Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect his Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant.

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

	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:
	JOHN ARRILLAGA SEPARATE PROPERTY TRUST	 	QUANTUM CORPORATION,
	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	By
	 	/s/ Joseph Shepela
	 

	 	 
	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Title
	 	VP Human Resources
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 	 	 
	 
	 	 	 	 	 	 
	By

	 	/s/ Richard Peery	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 

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Paragraphs 39 through 64 to Lease Agreement dated September 17, 1990. By and Between JOHN
ARRILLAGA AND RICHARD T. PEERY SEPARATE PROPERTY TRUSTS, as Landlord, and QUANTUM CORPORATION, a
Delaware corporation, as Tenant for 101,253 ± Square Feet of Space Located at 1000 Sumac Drive,
Milpitas, California.

     39. BASIC RENT: In accordance with Paragraph 4A, subject to the provisions of
Paragraph 40, Basic Rent shall be payable as follows during the indicated months of the term of the
Lease based upon the gross leasable area within the building that is part of the Premises:

	 	 	 	 	 
	Period	 	Monthly Basic Rent	 
	Months 1-12 (plus the partial calendar month, if any, following the
Commencement Date)
	 	$1.08/sf
	 
	 	 	 	 
	Months 13-24
	 	$1.13/sf
	 
	 	 	 	 
	Months 25-36
	 	$1.18/sf
	 
	 	 	 	 
	Months 37-48
	 	$1.23/sf
	 
	 	 	 	 
	Months 49-60
	 	$1.28/sf
	 
	 	 	 	 
	Months 61-72
	 	$1.33/sf
	 
	 	 	 	 
	Months 73-84
	 	$1.38/sf
	 
	 	 	 	 
	Months 85-96
	 	$1.43/sf
	 
	 	 	 	 
	Months 97-108
	 	$1.48/sf
	 
	 	 	 	 
	Months 109-120
	 	$1.53/sf
	 
	 	 	 	 
	Months 121-132
	 	$1.58/sf
	 
	 	 	 	 
	Months 133-144
	 	$1.63/sf
	 
	 	 	 	 
	Months 145-156
	 	$1.68/sf
	 
	 	 	 	 
	Months 157-168
	 	$1.73/sf
	 
	 	 	 	 
	Months 169-176
	 	$1.78/sf

     Example of calculation of Basic Rent per month for the period commencing with the
first through the twelfth months of said Lease:

	 	 	 	 	 
	Square footage of Building
	 	 	101,253	 
	Per square foot Basic Monthly Rent
	 	 	x$1.08	 
	 
	 	 	 
	Basic Rent per Month
	 	$	109,353.24	 
	 
	 	 	 

     40. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

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          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as
defined herein) and shall continue for a period of fourteen years and eight months, plus the
partial calendar month, if any, in which the Commencement Date occurs, subject to (i) earlier
termination in accordance with the provisions of this Lease, and (ii) extension pursuant to the
options to renew granted by Paragraphs 41 and 42. By way of example only, if the Commencement Date
occurs on December 20, 1991, the term of the Lease shall
continue until August 31, 2006 (i.e., a period of 14 years and 8 calendar months, plus the
partial calendar month following December 20, 1991 until December 31, 1991).

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean
the later to occur of the following: (i) the date upon which the “Improvements” are “Substantially
Completed”; or (ii) December 20, 1991; provided, however, that if prior to the later of such dates
Tenant’s operating personnel enter into occupancy of the Premises and commence the operation of
Tenant’s business within the Premises, the Commencement Date shall be the date such personnel of
Tenant so enter into occupancy of the Premises. The term “Substantially Completed” and/or
“Substantial Completion” shall mean the date when all of the following have occurred with respect
to the Improvements in question: (i) the construction of the Improvements in question has been
substantially completed in accordance with the approved plans therefor except for punch list items
which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business; (ii)
Landlord has executed a certificate or statement representing that the Improvements in question
have been substantially completed in accordance with the plans and specifications therefor except
for the punch list items which do not prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; and (iii) the Building Department of the City of Milpitas has completed its
final inspection of such Improvements and has “signed off” the building inspection card approving
such work as complete except for punch list items which do not prevent Tenant from reasonably using
the Premises to conduct Tenant’s business. Notwithstanding the foregoing, Substantial Completion
of the Interior Improvements shall not be deemed to have occurred until Landlord has obtained final
or conditional approval from the Fire Department of the City of Milpitas that the Improvements have
been completed in accordance with such department’s requirements (subject only to conditions that
do not prevent Tenant from occupying the Improvements).

          C. Lease Terms Co-extensive: It is acknowledged that (i) Landlord and Tenant have
previously executed two separate leases dated October 31, 1989 (hereinafter referred to as the 1989
Leases) for Premises located at 1130 Bellew Drive and 490 McCarthy Blvd., Milpitas, California,
affecting property upon which two separate buildings are being constructed for Tenant’s use. The
parties to said 1989 Leases have agreed that the 1989 Leases will commence on the later of April 1,
1991 or the date the “Improvements” are “Substantially Completed” (as that term is defined in
Amendment No. 1 dated April 29, 1990 to the 1989 Leases between Landlord and Tenant), and (ii) it
is the intention of the parties that the term of this Lease be co-extensive with the term of the
1989 Leases, such that the terms of all three leases expire on the same date. To that end, in the
event that following the date upon which the Commencement Date of this Lease and the commencement
dates for the 1989 Leases become established as dates certain following completion of improvements
and satisfaction of any other conditions related to determining such dates, the term of this Lease
may be reduced or extended to coincide with the term of the 1989 Leases, however, in no event will
the term of this Lease be for a period of less than ten (10) years. It is acknowledged that the
implementation of this

22

 

paragraph may result in an extension of the term of this Lease, in which
event Tenant shall continue to pay rent at the rate applicable for the period immediately prior to
the adjusted lease term expiration date. As soon as the parties are able to implement the
provisions of this paragraph because the Commencement Date of this Lease and the commencement dates
of the 1989 Leases have been determined following completion of improvements and satisfaction of
other appropriate conditions, the parties shall execute an amendment to this Lease establishing
the applicable Commencement Date and the expiration date of the term of this Lease in
accordance with the foregoing provisions of this Paragraph 40C, the actual rent based upon the
measurements of the completed building covered by this Lease as certified prior to the Commencement
Date by an architect or general contractor reasonably approved by the parties, and the actual date
for each rent adjustment provided for in this Lease, based upon the actual Lease Commencement Date.

     41. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions)

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at lease one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 41 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 41.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12
	 	$1.83/sf
	Months 13-24
	 	$1.88/sf
	Months 25-36
	 	$1.93/sf
	Months 37-48
	 	$1.98/s£
	Months 49-60
	 	$2.03/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to renew
granted by this Paragraph 41 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 41
notwithstanding such non-curable default.

     42. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 41, Landlord

23

 

hereby grants to Tenant an
option to extend the term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 41, in which event the Lease shall be considered extended for
an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 42A and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 	 	 	 	 	 	 
	Period	 	 	 	 	 	Monthly Basic Rent	 
	Months 1-12
	 	 	 	 	 	$2.08/sf
	Months 13-24
	 	 	 	 	 	$2.13/sf
	Months 25-36
	 	 	 	 	 	$2.18/sf
	Months 37-48
	 	 	 	 	 	$2.23/sf
	Months 49-60
	 	 	 	 	 	$2.28/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 42 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided; however, that if such default of Tenant is not for money due under this Lease/ and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 42
notwithstanding such non-curable default.

     43. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide for
construction contingencies and reserve funds. Interest will be earned on such funds created for
contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be credited on assessments otherwise due against the
demised premises, Tenant shall pay to Landlord, as additional rent if, and at the time of any such
credit of surpluses, an amount equal to all such surpluses so credited.

     44. HAZARDOUS MATERIALS: The parties agree as follows with respect to the existence
or the use of hazardous material on the Premises:

          A. Tenant shall have no obligations to “clean up”, to comply with any law regarding, or to
reimburse, release, indemnify, or defend Landlord with respect to any hazardous

24

 

materials or wastes
which Tenant or other parties on the Premises did not store, dispose, or transport in, use, or
cause to be on the Premises in violation of applicable law during the term of this Lease. Any
handling, transportation, storage, treatment, disposal or use of hazardous materials by Tenant or
other parties in or about the Premises during the term of this Lease shall strictly comply with all
applicable laws and regulations. Tenant will be 100 percent liable and responsible for any and all
“clean up” of said toxic waste and/or hazardous materials
contamination which Tenant, its agents, or future subtenants, if any, does store, dispose, or
transport in, use or cause to be on the Premises in violation of applicable law or governing
agency(s) or which originate on Premises, during the term of this Lease from any manner whatsoever,
including but not limited to, dumping by others, (or which originate on the surface of the Premises
any time after October 28, 1989, the date the Option Agreement dated October 31, 1989 related to
said Lease was executed by all parties, and before the Commencement Date of this Lease, but
excluding Hazardous Materials on the Premises prior to the Lease Commencement Date because of the
storage, use, disposal, or transportation of such materials or waste by any of Landlord’s
contractors or otherwise arising out of construction work performed by or under the direction of
Landlord on the Premises and Landlord shall be responsible for all required actions with respect to
such materials or wastes), and will indemnify Landlord and hold Landlord harmless from any
liabilities, demands, costs, expenses and damages, including attorney fees incurred as a result of
any claims resulting from such contamination, or from any claims for personal injury or property
damage or diminution in the value of the Premises caused by the use, storage, disposal or
transportation of hazardous materials on the Premises by Tenant or other parties during the term of
this Lease. It is agreed that the Tenant’s responsibilities related to toxic waste and hazardous
materials will survive the termination date of the Lease. Tenant agrees to complete compliance
with governmental regulations regarding use or removal or remediation of Hazardous Materials used,
stored, disposed, transported or caused to be on the Premises by Tenant or its agents or
subtenants, or which originate on the Premises during the term of this Lease, and prior to the
termination of said Lease Tenant agrees to follow the proper closure procedures and will obtain a
clearance from the local fire department and/or the appropriate city agency. Tenant also agrees to
install such toxic waste and/or hazardous materials monitoring devices as Landlord reasonably deems
necessary to monitor any use of hazardous materials by Tenant, its agents or subtenants,
originating from the Premises during the Lease term, if recommended by a qualified environmental
consulting firm.

          B. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this Lease, without any
inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

                    (1) The soil and ground water on or under the Premises does not contain hazardous materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such hazardous materials.

                    (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to

25

 

the presence of hazardous
material on the Premises, or (iii) any pending investigation by any governmental agency concerning
the Premises relating to hazardous materials.

          C. Landlord and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority concerning hazardous
materials which relates to the Premises, and (ii) any contamination of the
Premises by hazardous materials which constitutes a violation of any law. Attached as
Exhibit “C” hereto is a list of hazardous materials that Tenant intends to use at the
Premises. If during the Lease term Tenant proposes to use other hazardous materials at the
Premises, Tenant shall inform Landlord of such use, identifying the hazardous materials and the
manner of their use, storage and disposal, and shall agree (i) to use, store and dispose of such
materials strictly in compliance with all laws and (ii) that the indemnity set forth in Paragraph
44A shall be applicable to Tenant’s use of such material.

          D. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of hazardous material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid for by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
hazardous materials laws, or Tenant or parties on the Premises during the term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to hazardous materials
laws, or that Tenant has liability to Landlord pursuant to Paragraph 44A, then Tenant shall pay for
100 percent of the cost of the test and all related expense. Prior to the expiration of the Lease
term, Tenant shall remove any testing wells it has installed at the Premises, and return the
Premises to the condition existing prior to the installation of such wells, unless Landlord
requests in writing that Tenant leave all or some of the testing wells in which instance the wells
requested to be left shall not be removed.

          E. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
hazardous materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such materials at the Premises. The
Commencement Date shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.

          F. The obligations of Landlord and Tenant under this Paragraph 44 shall survive the expiration
or earlier termination of the term of this Lease. The rights and obligations of Landlord and
Tenant with respect to issues relating to hazardous materials are exclusively established by this
Paragraph 44.

     45. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action maybe taken, such approval or consent shall not be unreasonably
withheld or delayed.

     46. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can commence.
Therefore, it is agreed that in the event Landlord cannot obtain all the necessary building permits
for the building shell by April 1, 1991, then either Landlord or Tenant can

26

 

terminate this Lease by
written notice to the other party given within thirty (30) days thereafter, without any liability
to the other party of any type whatsoever, and that this Lease Agreement shall be null and void as
of the date of receipt of such notice. Landlord agrees to use its best efforts to obtain the
required permits by April 1, 1991.

     47. CROSS DEFAULT: As set forth in Paragraph 40C, Landlord and Tenant have entered
into other leases dated October 31, 1989 referred to herein as the “1989 Leases”. As a material
part of the consideration for the execution of this Lease by Landlord, it is agreed between
Landlord and Tenant that a default under this Lease, or a default under said 1989 Leases may, at
the option of Landlord, be considered a default under all leases, in which event Landlord shall be
entitled (but in no event required) to apply all rights and remedies of Landlord under the terms of
one lease to all Leases including, but not limited to, the right to terminate one, two or all of
said leases by reason of a default under said 1989 Leases or hereunder.

     48. SUBDIVISION: With respect to the development of the Premises:

     Landlord and Tenant agree that the Premises and all of Parcels 1, 2, 3 and 5 shown on that
certain parcel map, recorded on July 23, 1990 in Book 616 of Maps, Page 20 (the “Larger Parcel”)
during (and limited to) the term of this Lease shall be developed and used only in accordance with
a master plan, developed by Landlord. The parties have mutually agreed to a Master Plan for the
general development of the Premises and the Larger Parcel which is attached hereto as Exhibit “Al”
and entitled “Master Site Plan”. Said Master Site Plan sets forth the buildings and land to be
leased under this Lease (Building 4 on Lot 4) and the 1989 Leases (Buildings 1 and 2 on Lots 1 and
2), and the buildings and land proposed to be developed on the remainder of the property (Buildings
3 and 5 to be constructed on Lots 3 and 5 respectively) as well as the general location of the
parking and landscaping pertaining thereto. The parties agree that the Master Site Plan may be
modified provided that (i) a perimeter driveway is developed in front of each building which
generally runs near and parallel with the street surrounding the 37+ acre site, (ii) a landscape
and recreation area at the rear of lot 4 (as shown on the Site Plan) is developed when a building
is constructed on lot 4, (iii) all buildings will be similar and generally architecturally
compatible, and (iv) a landscape area is developed along the frontage of all streets between the
street and parking area closest to the street. The parties agree that (i) Landlord may change the
Master Plan, shape and sizes of the buildings, parking and landscaping as long as the general
development concept set forth above is generally followed by Landlord, and (ii) any successor or
assign of Landlord or Tenant shall be required to consent and agree to develop the Premises and the
Larger Parcel in accordance with the foregoing, and shall be deemed to have assumed the obligation
to so develop such property by acceptance of a deed, assignment or other means of transfer of
Landlord’s or Tenant’s interest in such property or any portion thereof, as the case may be.
Further, the memorandum of lease to be recorded by Landlord and Tenant pursuant to Paragraph 38G
shall contain the following statement:

“The Lease provides that from and after the commencement date of the
1989 Leases (as defined in the Lease) and continuing for a period of
fifteen (15) years, or the date of termination of the Lease,
whichever first occurs, the Premises and the larger 37.096 acre
parcel in which the Premises were originally included, and which is
described on the attached Exhibit “A”, incorporated herein
by

27

 

this reference, shall be developed by—Landlord and Tenant or
their successors or assigns, as more particularly set forth in the
Lease, so that (i) a perimeter driveway is developed in front of
each building which generally runs near and parallel with the street
surrounding the 37 ± acre site. (ii) a landscape areas is developed
along the
frontage of all streets between the street and parking area closest
to the street. (iii) a landscape and recreation area at the rear of
Lot 4 (as shown on the Site Plan identified in the Lease) is
developed when a building is constructed on Lot 4, and (iv) all
buildings will be similar and generally architecturally compatible,
it being agreed that Landlord may change the shape and sizes of the
buildings, parking, and landscaping as long as the general
development concept set forth above and in the Lease is generally
followed by Landlord. If a Public Agency requires modifications to
the lot lines as shown on the Master Plan, the parties agree to
reasonable lot line modifications.”

49. LIMITATION ON IMPOSITION OF LATE CHARGE: Notwithstanding anything contained in
Paragraph 4C, if Tenant is delinquent in the payment of Basic Rent or Additional Rent and is
subject to a late charge, Landlord agrees to waive the late charge if the Basic Rent or Additional
Rent due is paid within five days of Landlord’s written notice to Tenant of the delinquent amount
owed and provided Tenant has not been delinquent in its payment of Basic Rent or Additional Rent
owed under said Lease during the twelve (12) month period preceding the rent delinquency in
question.

50. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4F:

     A. Within thirty (30) days after the expiration or earlier termination of the Lease term and
after Tenant has vacated the Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed by Landlord to cure
defaults of Tenant under the Lease or compensate Landlord for damages for which Tenant is liable
pursuant to this Lease. The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.

     B. Tenant shall have the option of satisfying its obligation with respect to an amount equal
to one-half (1/2) of the Security Deposit by providing to Landlord, at Tenant’s sole cost, a letter
of credit which (i) is drawn upon an institutional lender reasonably acceptable to Landlord, (ii)
is in the amount of one-half (1/2) of the Security Deposit, (iii) is for a term of at lease twelve
(12) months, (iv) with respect to any letter of credit in effect within the six month period
immediately prior to the expiration of the Lease term, shall provide that the term of such letter
of credit shall extend at least thirty (30) days past the Lease expiration date, (v) may be drawn
upon by Landlord upon submission of a declaration of Landlord that Tenant is in default (as defined
in Paragraph 19 and as modified by Paragraph 59). Landlord shall not be obligated to furnish proof
of default to such institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of

28

 

Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit, (vi) shall provide that if the
letter of credit is not renewed, replaced or extended within twenty (20) days of its expiration
date the issuer of the credit shall automatically make payment of the amount of the letter of
credit directly to Landlord after the date which is twenty (20) days before the expiration date,
and no
later than the expiration date, without Landlord being required to make demand upon the letter
of credit, and (vii) is otherwise in form and content reasonably satisfactory to landlord. If
Tenant provides Landlord with a letter of credit meeting the foregoing requirements, one-half (1/2)
of the cash Security Deposit (i.e., $136,691.55 of the $273,383.10 Deposit) shall be
returned to Tenant by Landlord inasmuch as the cash deposit remaining and the Letter of Credit
equal the total Security Deposit required in Paragraph 4F. If Tenant defaults with respect to any
provisions of this Lease, including but not limited to provisions relating to the payment of rent,
Landlord may (but shall not be required to) draw down on the letter of credit for payment of any
sum which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if it were a cash
security deposit, and such letter of credit may be drawn down upon by Landlord upon demand and
presentation of evidence of the identity of Landlord to the issuer, in the event that Tenant
defaults with respect to any provision of this Lease and such default is not cured within any
applicable cure period. Notwithstanding anything to the contrary in this Lease, Landlord shall not
be obligated to furnish proof of default to such institutional lender and Landlord is only required
to give the institutional lender written notification that Tenant is in default and upon receiving
such written notification from Landlord the institutional lender shall be obligated to immediately
deliver cash to Landlord equal to the amount Landlord may spend or become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant’s default up to 1/2 of the total Security Deposit. Landlord
acknowledges that it is not entitled to draw down such letter of credit unless Landlord would have
been entitled to draw upon the cash security deposit pursuant to the terms of Paragraph 4F of the
Lease. Concurrently with the delivery of the required information to the issuer, Landlord shall
deliver to Tenant written evidence of the default upon which the draw down was based, together with
evidence that Landlord has provided to Tenant the written notice of such default which was required
under the applicable provision of the Lease, and evidence of the failure of Tenant to cure such
default within the applicable grace period following receipt of such notice of default. Any
proceeds received by Landlord by drawing upon the letter of credit shall be applied in accordance
with the provisions governing the Security Deposit imposed by Paragraph 4F and this Paragraph 50.
If Landlord draws upon the letter of credit, thereafter Tenant shall once again shall have the
right to post a letter of credit in place of one-half (1/2) of a cash Security Deposit so long as
Tenant is not then in default. In any event Tenant will be obligated to replenish the amount drawn
to restore the Security Deposit to its original amount as provided for in Paragraph 4F. If any
portion of the letter of credit is used or applied pursuant hereto, Tenant shall, within ten (10)
days after receipt of a written demand therefor from Landlord, restore and replace the value of
such security by either (i) depositing cash with Landlord in the amount equal to the sum drawn down
under the letter of credit, or (ii) increasing the letter of credit to its value immediately prior
to such application. Tenant’s failure to replace the value of the security as provided in the
preceding sentence shall be a material breach of its obligation under this Lease.

29

 

51. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 51 shall modify
Paragraphs 5 and 6:

     A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include
Tenant’s trade fixtures so long as such trade fixtures are not installed in such a manner that
they have become an integral part of the building.

     B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval if the total cost of such Alterations exceeds $20,000 per the
scope of any single remodeling job to the Premises, or if such Alteration is structural in nature.
Any other non-structural Alteration of less than $20,000 for the total cost of the remodeling job
may be undertaken by Tenant without Landlord’s prior written approval but with the understanding
that Tenant shall be obligated to restore the Premises as set forth in Paragraph 5 at the
termination of this Lease, except as otherwise provided in Paragraph 51.D.

Notwithstanding the foregoing, Tenant shall have the right to reconfigure modular freestanding
walls and partitions without Landlord’s prior consent, which have been installed by Tenant and paid
for by Tenant.

     C. At all times during the Lease Term (i) Tenant shall maintain and keep up dated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

     D. Tenant shall have the right to remove at any time during the Lease term or prior to the
expiration thereof any (i) process equipment such as clean hoods, thermal cycling chambers, freon
piping, high temperature furnaces, air handlers and special air-conditioning, and (ii) process
systems such as compressed air or processed exhaust systems and (iii) the clean room modules and
all related process equipment which are paid for 100% by Tenant (excluding building standard HVAC,
electrical, plumbing and other building standard systems which are an integral part of the building
not related to Tenant’s clean room modules or other special purpose process equipment or systems),
which systems, equipment and modules the parties agree for the purposes of this Lease shall be
deemed to be trade fixtures, so long as Tenant repairs all damage caused by the installation and/or
removal thereof, returns the Premises prior to the termination of the Lease to the condition
existing prior to the installation of such item, and repairs and restores any so-called “doughnuts”
or gaps in the roof and/or floor tiles and/or ceiling and lighting resulting from such removal. At
the time Tenant requests the consent of Landlord to approve the installation of an Alteration
requiring the consent of Landlord, Tenant shall seek from Landlord a written statement of whether
or not Landlord will require Tenant to remove such Alteration and restore all or part of the
Premises as required by Landlord in accordance with this paragraph and Paragraph 5 at the
expiration or earlier termination of the term of the Lease. If Tenant does not obtain-from
Landlord a statement in writing that Landlord will not require such Alteration to be removed, then
at the expiration or sooner termination of the term of the Lease, it is agreed that Tenant may be
required to remove all or part of such Alterations, and return the Premises to the condition
existing prior to the installation of such Alterations as provided for in Paragraph 5 above. In
addition, if Tenant has installed Alterations without Landlord’s consent, if Landlord so

30

 

requires,
Tenant shall also remove all or part of such Alterations so installed without Landlord’s consent as
Landlord may designate and return the Premises to the condition existing prior to the installation
of such Alteration. Alterations for which Landlord has given its written consent to Tenant that
such Alteration need not be removed, shall not be removed by Tenant at the expiration or earlier
termination of the term of the Lease.

     E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such fixtures and repairs and restores any so
called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-floor and
appropriate floor covering for said area) and/or floor tiles and/or ceiling tiles and lighting
resulting from such removal.

52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF THIS
LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions of
this Paragraph 52 shall modify Paragraphs 7 and 14:

     A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 41 and 42, or during either of the five (5) year extension
periods permitted by Paragraphs 41 and 42, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural improvements required by
laws enacted or legal requirements imposed by governmental agency(s) after the Commencement Date,
and the cost for each required work or improvements exceeds $100,000, then if such legal
requirement is not imposed because of Tenant’s specific use of the Premises and is not “triggered”
by Tenant’s Alterations or Tenant’s application for a building permit or any other governmental
approval (in which instance Tenant shall be responsible for 100% of the cost of such improvements),
Landlord shall be responsible for paying the cost of such improvement and constructing such
improvement, subject to a cash contribution from Tenant of a portion of the cost thereof as
provided for and calculated in Paragraph 52B.

     B. When Landlord makes an improvement pursuant to Paragraph 52A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost thereof prior to the commencement of the work by Landlord. It is
agreed that Tenant shall pay to Landlord 100% of the cost of the first $100,000.00 worth of each
improvement. After the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease term from the date work
on such improvement commences.

     For example, if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be responsible for
reimbursing Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for 1st $100,000
	 	 	-100,000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

31

 

     C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 52B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 41, or
42, upon the exercise of any such option by Tenant, Tenant shall pay to Landlord an additional
sum equal to the total amount of said improvement less the amount previously paid for by Tenant.
Using the example in Paragraph 52B above, Tenant would owe Landlord the additional amount of
$270,000.00 ($400,000.00 — $130,000.00 = $270,000.00).

53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

     A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of hazardous materials on the Premises unless directly
related to Tenant’s activities, which subject is exclusively governed by Paragraph 45.

     B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond. If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

     C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on Tenant’s part to pay
such Real Property Taxes being so contested shall not constitute a default so long as Tenant
complies with the provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord. In that case Landlord shall join
in the proceedings or contest or permit it to be brought in Landlord’s name as long as Landlord is
not required to bear any cost. Tenant, on final determination of the proceeding or contest, shall
immediately pay or discharge its share of any Real Property Taxes determined by any decision or
judgment rendered, together with all costs, charges, interest, and penalties incidental to the
decision or judgment. If Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this paragraph, before the
commencement of the proceeding or contest Tenant shall furnish to Landlord a surety bond in form
reasonably satisfactory to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total amount of Real Property Taxes in
dispute and any such bond shall be assignable to any lender or purchaser of the Premises. The bond
shall hold Landlord and the Premises harmless from any damage arising out of the proceeding or
contest and shall insure the payment of any judgment that may be rendered.

32

 

54. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

     A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga and Richard T. Peery Separate
Property Trusts or an affiliated entity; (ii) the insurance to be carried by Tenant to satisfy this
requirement strictly complies with all of the provisions of Paragraph 12; (iii) such insurance
shall name Landlord as the insured and provide that it is to be payable to Landlord in the same
manner as if such insurance had been carried by Landlord pursuant to Paragraph 12
(subject to the rights of any lender holding a mortgage or deed of trust encumbering the
Premises); (iv) each lender holding a mortgage or deed of trust encumbering the Premises shall have
given its written consent to Tenant carrying such insurance and such insurance shall comply with
the requirements of any such lender; (v) Tenant must notify Landlord, by certified mail, no later
than one hundred eighty (180) days prior to the expiration date of Landlord’s insurance policy
(which expiration date is currently 3/13/xx of a given year and is subject to change), that Tenant
will directly obtain the required insurance coverage for the insurance year commencing 3/14/XX
through 3/13/XX and each insurance year through the termination date of this Lease, or until Tenant
is no longer able to comply with all of the provisions of this Paragraph 54; (vi) the annual
premium must be paid in full at the commencement of the policy; (vii) the insurance policy must be
issued for a one-year period following the expiration date of Landlord’s insurance policy
(i.e., from 3/14/XX to 3/13/XX; (viii) any and all deductibles required under the policy
will be paid entirely by Tenant; (ix) the terms of the coverage must be broad form and cover all
items to be covered as set forth in Paragraph 12 of this Lease; (x) the Building and Premises must
be insured for their full replacement cost; (xi) the insurance policy containing the required
coverage in accordance with the provisions of this paragraph must be sent to Landlord for retention
within thirty (30) days prior to the expiration date of Landlord’s insurance policy, and may not be
terminated or altered without thirty (30) days written notice to Landlord by the company providing
such insurance (it is agreed that if the insurance policy is cancelled or altered, Landlord will
have the right to obtain the property insurance coverage on said building, and Landlord will bill
the Tenant for the related insurance premium); and (xii) at all times while Tenant is so carrying
such insurance, Tenant is Quantum Corporation or a successor entity and the then net worth of such
corporation is substantially the same as the net worth of Quantum corporation as of the date of
this Lease is executed by Landlord and Tenant. Tenant shall provide such evidence as is required
by Landlord and any lender to establish that the insurance that Tenant carries pursuant to this
Paragraph 54 has been obtained and meets the requirement of this Paragraph 54. Such insurance
carried by Tenant shall be in form and provided by an insurance company that is reasonably
acceptable to Landlord, which must be rated “A plus” or better by Best’s Insurance Service (or an
equivalent rating from another rating agency should Best’s no longer provide such service). A copy
of any such policy shall be delivered to Landlord. If Tenant elects to insure and such insurance
provided by Tenant does not satisfy the requirements of Paragraph 12, in the event of a subsequent
casualty, Tenant shall be responsible for and shall pay for that portion of the restoration cost,
in excess of the insurance proceeds actually available, that would have been covered by insurance
satisfying the requirements of Paragraph 12.

     B. Tenant shall not be obligated to contribute to the cost of earthquake insurance more than
an amount equal to six (6) times the then annual cost of fire and “all risk” insurance

33

 

per year.
For example, if the 1993 annual premium for fire and “all risk” insurance is $9,000, then Tenant’s
share of the cost of any premium for earthquake insurance for the following year (1994) shall be
limited to $54,000 ($9,000 x 6). Tenant shall have the right to require earthquake insurance
providing it is available if Tenant agrees to pay full cost thereof.

55. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

     A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i) to withhold its
consent to such assignment or sublease, as permitted pursuant to Paragraph 16, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its obligations under
the Lease, and the following shall apply (except the following shall not apply to a “Permitted
Transfer” described in Paragraph 56):

          (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all consideration received by
Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant under this
Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing commissions paid
to third parties not affiliated with Tenant in order to obtain the assignment or sublease in
question.

               (b) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the rental provided for in this Lease fifty percent (50%) of the positive difference,
if any, between (i) all rent and other consideration paid by the subtenant to Tenant, less (ii) all
rent paid by Tenant to Landlord pursuant to this Lease which is allocable to the area so sublet and
all Permitted Transfer Costs related to such sublease. After Tenant has recovered all Permitted
Transfer Costs Tenant shall pay to Landlord the amount specified in the preceding sentence on the
same basis, whether periodic or in lump sum, that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by Tenant.

          (1) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the right to inspect
Tenant’s books and records relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

          (2) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received, by Tenant as a result of the assignment or sublease, if such sums are
paid for Tenant’s interest in this Lease or in the Premises.

34

 

56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in Paragraph
16, so long as Tenant otherwise complies with the provisions of Paragraph 16 and the Permitted
Transfer does not release Tenant from its obligations hereunder, Tenant may enter into any of the
following transfers (a “Permitted Transfer”) without Landlord’s prior written consent, and the
provisions of Paragraph 56A shall not apply to any such Permitted Transfer:

     A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of rent and full performance of the lease;

     B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
95% of all assets of Tenant are permanently transferred to such assignee. In the event there is
not a permanent transfer of 95% or more of the assets and liabilities from Tenant to a third party,
and Tenant continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;

     C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets of Tenant are permanently transferred to
such assignee (in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of the Lease).

57. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease shall
not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or deed
of trust enters into a written subordination, non-disturbance and attornment agreement in which the
Lender agrees that notwithstanding any subordination of this Lease to such Lender’s mortgage or
deed of trust, (i) such Lender shall recognize all of Tenant’s rights under this Lease, and (ii) in
the event of a foreclosure this Lease shall not be terminated so long as Tenant is not in material
default of its obligations under this Lease, but shall continue in effect and Tenant and such
Lender (or any party acquiring the Premises through such foreclosure) shall each be bound to
perform the respective obligations of Tenant and Landlord with respect to the Premises arising
after such foreclosure.

58. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (i) except
in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior to
entering the Premises, agrees to comply with any reasonably safety and/or security regulations
imposed by Tenant with respect to such entry, and shall only enter the Premises when accompanied by
Tenant or its agent (so long as Tenant makes itself reasonably available for this purpose), and
(ii) Landlord may install “for lease” signs relating to the Premises only during the last 150 days
of the Lease term. Landlord agrees to use its reasonable, good faith efforts such that any entry
by Landlord, and Landlord’s agents, employees, contractors and invitees shall be performed in a
manner with as minimal interference as possible with Tenant’s business at the Premises. Subject to
the foregoing, Tenant agrees to cooperate with Landlord and Landlord’s

35

 

agents, employees and
contractors so that responsibilities of Landlord under the Lease can be fulfilled in a reasonable
manner during normal business hours so that no extraordinary costs are incurred by Landlord.

59. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30)
days is required to cure such non-monetary default, and (ii) Tenant commences cure of such default
as soon as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

60. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in default
under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is performing
all of its other obligations under the Lease including the obligation to pay Basic Rent and
Additional Rent (ii) Tenant provides on-site security during normal business hours for those parts
of the Premises left vacant, (iii) such vacancy does not materially and adversely affect the
validity or coverage of any policy of insurance carried by Landlord with respect to the Premises,
and (iv) the utilities and heating and ventilation system are operated to the extent necessary to
prevent damage to the Premises or its systems.

61. DESTRUCTION: Paragraph 21 is modified by the following:

     A. Except as provided in Paragraph 61B, Landlord may not terminate the Lease if the Premises
are damaged by a peril that is covered by the insurance carried by Landlord pursuant to Paragraph
12, but instead shall restore the Premises in the manner described by Paragraph 21.

     B. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of the
following conditions is satisfied: (i) the cost to repair or the damage exceeds thirty-three
percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs at a time
when there is less than five (5) years remaining in the term of the Lease. Notwithstanding the
foregoing, if such damage occurs at a time when there is less than five (5) years remaining in the
term of the Lease and Landlord notifies Tenant of Landlord’s election to terminate the Lease
pursuant to the provisions of this Paragraph 61B, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 41 or 42 such that the remaining term of the Lease
(including the option period) will be more than five (5) years following the date of such damage,
this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise of an
option to extend granted to Tenant by either Paragraph 41 or 42. In such event, this Lease shall
not terminate, the term shall be so extended, and Landlord shall restore the Premises in the manner
provided in Paragraph 21.

     C. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the 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
only by delivery to Landlord of a written notice of election to terminate within

36

 

seven (7) days
after Tenant receives from Landlord the estimate of the time needed to complete such restoration:

          (1) The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage; or

          (2) The Premises are damaged by any peril within twelve (12) months of the last day of the
Lease term and provided Tenant has not exercised an option to renew pursuant to the provisions of
Paragraph 41 or 42, and, in the reasonable opinion of Landlord’s architect or construction
consultant, the restoration of the Leased Premises cannot be substantially completed within sixty
(60) days after the date of such damage.

62. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than 1/3 of the building is taken by condemnation
or if a taking by condemnation is only threatened.

63. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the Security Deposit
to its successor in interest (transferee) in accordance with the provisions of California Civil
Code Section 1950.7, as amended or recodified.

64. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from Tenant,
shall execute and deliver such lien waiver documents that are reasonably required by any supplier,
lessor, or lender in connection with the installation in the Premises of the Tenant’s personal
property or trade fixtures providing Landlord approves the form of any such waiver and Landlord’s
rights under this Lease are not materially and adversely affected.

	 	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION,	 	JOHN ARRILLAGA	 	 
	a Delaware corporation	 	SEPARATE PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Joseph C. Shepela
	 	By
	 	/s/ John Arrillaga	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	John Arrillaga, Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	Title Vice President Human Resources	 	RICHARD T. PEERY	 	 
	 	 	 	 	SEPARATE PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ Richard Peery	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Richard T. Peery, Trustee	 	 

37

 

AMENDMENT NO. 1

TO LEASE

     THIS AMENDMENT NO. l is made and entered into this 16th day of April, 1997, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware corporation, as
TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated September 17, 1990 Landlord leased to Tenant all of that
certain 101,253 ± square foot building located at 1000 Sumac Drive, Milpitas, California, the
details of which are more particularly set forth in said September 17, 1990 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated December 6, 1991 which
established the December 6, 1991 Lease Commencement Date, and established the Termination Date of
September 30, 2006, and,

     C. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) extending the
Term for five years, changing the Termination Date from September 30, 2006 to September 30, 2011,
(ii) amending the Basic Rent schedule and Aggregate Rent accordingly, (iii) adding a third Five
Year Option to Extend, (iv) replacing Paragraphs 40C (“Lease Terms Co-extensive”) and 47 (“Cross
Default”) and 52 (“Structural Capital Costs Regulated by Governmental Agencies After the
Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”),
(v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or replacing certain
provisions of the Lease commencing as of the commencement of the Third Extended Term of said Lease
as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: It is agreed between the parties that Tenant has exercised its
First Five-Year Option to Extend the lease term of that certain lease agreement dated March 23,
1994 for premises located at 1101 Sumac Drive, Milpitas, California (the “Building 5 Lease”), as
detailed in Paragraph 41 of said Building 5 Lease. Paragraph 40C of said Building 5 Lease
provides that in the event the term of said Building 5 Lease is extended for any reason
whatsoever, the terms of the Existing Leases (i.e. two of said leases dated October 31, 1989 are
for Premises located at 1140 Technology Drive and 500 McCarthy Blvd., Milpitas, California (the
“1989 Leases”); one of said leases dated September 17, 1990 is for Premises located at 1000 Sumac
Drive, Milpitas, California, and one of said leases dated April 10, 1992 is for Premises located at
900 Sumac Drive, Milpitas, California) shall also be extended so that all five Leases

1

 

expire on the
same date; therefore, it is agreed between the parties that by exercising its Option to Extend the
Building 5 Lease, Tenant has in effect exercised its Option to Extend under Lease Paragraph 41
(“First Five-Year Option to Extend”), and that pursuant to said Lease Paragraph 41, the Term of
this Lease Agreement shall be extended for an additional five (5) year period, and the Lease
Termination Date shall be changed from September 30, 2006 to September 30, 2011.

     2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic Rental for the
First Extended Term of Lease shall be as follows:

     On October 1, 2006, the sum of ONE HUNDRED EIGHTY FIVE THOUSAND TWO HUNDRED NINETY TWO AND
99/100 DOLLARS ($185,292.99) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2007.

     On October 1, 2007, the sum of ONE HUNDRED NINETY THOUSAND THREE HUNDRED FIFTY FIVE AND 64/100
DOLLARS ($190,355.64) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2008.

     On October 1, 2008, the sum of ONE HUNDRED NINETY FIVE THOUSAND FOUR HUNDRED EIGHTEEN AND
29/100 DOLLARS ($195,418.29) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2009.

     On October 1, 2009, the sum of TWO HUNDRED THOUSAND FOUR HUNDRED EIGHTY AND 94/100 DOLLARS
($200,480.94) shall be due, and a like sum due on the first day of each month thereafter through
and including September I, 2010.

     On October 1, 2010, the sum of TWO HUNDRED FIVE THOUSAND FIVE HUNDRED FORTY THREE AND 59/100
DOLLARS ($205,543.59) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2011.

     The Aggregate Basic Rent for the Lease shall be increased by $11,725,097.40 or from
$25,686,182.83 to $37,411,280.23.

     3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period pursuant to Lease Paragraph 42 (“Second Five Year Option To
Extend”), Landlord hereby grants to Tenant a third option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term as extended pursuant
to Lease Paragraph 42 (“Second Five Year Option To Extend”), in which event the Lease shall be
considered extended for an additional five (5) year period upon the same
terms and conditions as this Lease, absent this Paragraph 3 and subject to the Rental as set
forth below. In the event that Tenant fails to timely exercise Tenant’s option as set forth herein
in writing, Tenant shall have no further option to extend this Lease or the Other Leases, and this
Lease shall continue in full force and effect for the full remaining term hereof, absent this
Paragraph 3.

2

 

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12
	 	$2.33/sf
	Months 13-24
	 	$2.38/sf
	Months 25-36
	 	$2.43/sf
	Months 37-48
	 	$2.48/sf
	Months 49-60
	 	$2.53/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 3 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 3 notwithstanding such non-curable default.

     4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C (“Lease Terms Co-extensive”) is
hereby deleted in its entirety and replaced with the following:

“40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i) Landlord and
Tenant have previously executed four separate leases in addition to this Lease: one
of said leases dated October 31, 1989 is for Premises located at 1140 Technology
Drive, Milpitas, California (the “Building One Lease”); one of said leases dated
October 31, 1989 is for Premises located at 500 McCarthy Blvd., Milpitas, California
(the “Building Two Lease”); one of said leases dated April 10, 1992 is for Premises
located at 900 Sumac Drive, Milpitas, California (the “Building 3 Lease”); and one
of said leases dated March 23, 1994 is for premises located at 1101 Sumac Drive,
Milpitas, California (the “Building 5 Lease”) (hereinafter collectively referred to
as the “Other Leases”); and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Other Leases, such that the terms of
all five leases (“the Leases”) expire on the same date. The provisions of this
Paragraph 40C also requires the terms of all the Leases to be extended accordingly
if Tenant exercises its Option to Extend under any of the Leases. The monthly Basic
Rent during the extended term under each of the Leases shall be increased by $.05
per square foot on the commencement
date of the extended term and thereafter on each and every anniversary of the
respective lease’s commencement date of the extended term.”

     5. CROSS DEFAULT: Lease Paragraph 47 (“Cross Default”) is hereby deleted in its
entirety and replaced with the following:

3

 

     “47. CROSS DEFAULT: It is agreed between Landlord and Tenant that a
default under this Lease, or a default under any of the Other Leases may, at the
option of Landlord, be considered a default under all Leases, in which event
Landlord shall be entitled (but in no event required) to apply all rights and
remedies of Landlord under the terms of one lease to all the Leases including, but
not limited to, the right to terminate any or all of the aforementioned Other Leases
or this Lease by reason of a default under the Leases or hereunder.

     Notwithstanding the above, Landlord shall have the option of considering a
default under this Lease or a default under any of the Other Leases to be a default
under all such leases, only with respect to such leases under which Landlord is also
the ‘Landlord’ at the time such default occurs. By way of example, if at the time a
default of Tenant occurs under this Lease, Landlord has sold the premises described
in any of the Other Leases and is no longer the ‘Landlord’ thereunder, then a
default under this Lease shall not constitute a default under any of such Other
Leases so sold by Landlord (unless the premises leased under this Lease and the
Other Leases are sold to the same entity), and a default by Tenant under any of such
Other Leases so sold by Landlord shall not constitute a default under this Lease or
any other of the Other Leases then remaining between Landlord and Tenant. However,
if the Landlord under this Lease and the Other Leases is one in the same at the time
of said default, said cross default provisions shall apply.”

     6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: Lease
Paragraph 52 (“Structural Capital Costs Regulated by Governmental Agencies after the Commencement
of this Lease Not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) is hereby
deleted and replaced with the following:

     “52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL. AGENCIES AFTER
THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING
OF THE PREMISES: The provisions of this Paragraph 52 shall modify Paragraphs 7
and 14:

     A. If (i) during the last five (5) years of the First Extended Term of the
Lease if said Lease has not been extended as provided for in Lease Paragraph 42
“Second Five Year Option To Extend”) or in Paragraph 3 (“Third Five Year Option to
Extend”) or Paragraph 4 (“Lease Terms Co-Extensive”) above, or (ii) during either of
the five (5) year extension periods permitted by Lease Paragraph
42 or Paragraph 3, or Paragraph 4 above, it becomes necessary (due to any
governmental requirement for continued occupancy of the Premises) to make structural
improvements required by laws enacted or legal requirements imposed by governmental
agency(s) after the Commencement Date, and the cost for each required work or
improvements exceeds $100,000, then if such legal requirement is not imposed because
of Tenant’s specific use of the Premises and is not

4

 

“triggered” by Tenant’s
Alterations or Tenant’s application for a building permit or any other governmental
approval (collectively “Tenant’s Actions”) in which instance Tenant shall be
responsible for 100% of the cost of such improvements, Landlord shall be responsible
for paying the cost of such improvement and constructing such improvement, subject
to a cash contribution from Tenant of a portion of the cost thereof as provided for
and calculated in Paragraph 52B.

     B. When Landlord makes an improvement pursuant to Paragraph 52A, and as a
condition to Landlord’s obligation to construct such improvement, Tenant shall make
the following contribution in cash to Landlord for the cost thereof prior to the
commencement of the work by Landlord. It is agreed that Tenant shall pay to
Landlord 100% of the cost of the first $100,000.00 worth of each improvement. After
the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease Term
from the date work on such improvement commences.

     For example, if the improvement is not required as a result of Tenant’s Actions
and if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be
responsible for reimbursing Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for1st $100,000
	 	 	-100.000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

     C. If Landlord has made improvements, for which Tenant has reimbursed Landlord
for the cost thereof pursuant to Paragraph 52B, and the term of this Lease is
subsequently extended pursuant to the exercise by Tenant of an option to renew
pursuant to Lease Paragraph 42 or Paragraph 3 above, upon the exercise of any such
option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by Tenant. Using the
example in Paragraph 52B above, Tenant would owe Landlord the additional amount of
$270,000.00 ($400,000.00 — $130,000.00 = $270,000.00).”

     7. PROPERTY INSURANCE: Lease Paragraph 12 (“Property Insurance”) is hereby amended to
include the following: “Tenant acknowledges that as part of the cost of insurance policies for the
Premises, Tenant is responsible for the payment of insurance deductibles on insurance claims as
they relate to the Premises subject to the limitations provided in Lease Paragraph 54 (“Property
Insurance”) which limitations are applicable only during the initial Lease Term and the First Lease
Extension Period and the Second Lease Extension Period.

5

 

Said limitation provided for in Lease
Paragraph 54 are null and void at the commencement of the Third Lease Extended Term”.

     8. THIRD OPTION PERIOD — LEASE PROVISION CHANGES: In the event Tenant exercises its
Third Option to Extend as provided for in Paragraph 3 above, the following amendments (contained
within Paragraphs 9 through 19) are herein made to the Lease to be effective upon the commencement
of the third option period (“Third Option Period”), or during any period following the expiration
of the Lease Term or expiration of the Lease when Tenant is in possession of the Premises.

     9. LATE CHARGE: Effective as of the first day of the Third Option Period, the Late
Charge referenced in Lease Paragraph 4.D (“Late Charge”) shall be changed from five percent (5%) to
ten percent (10%), and Lease Paragraph 49 (“Limitation on Late Charge”) shall be deleted in its
entirety and of no further force or effect.

     10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the Lease, effective
as of the first day of the Third Option Period, and on the first day of each month thereafter,
Tenant shall pay to Landlord, in addition to the Basic Rent and Additional Rent, a fixed monthly
management fee (“Management Fee”) equal to one percent (1%) of the Basic Rent due for each month
during the Lease Term.

     11. HAZARDOUS MATERIALS: Effective as of the first day of the Third Option Period,
Lease Paragraph 44 (“Hazardous Materials”) shall be deleted in its entirety and replaced with the
following:

     “44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of “Hazardous Materials” (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A to the Lease (hereinafter collectively referred to as the
“Property”):

     A. As used herein, the term “Hazardous Materials” shall mean any material,
waste, chemical, mixture or byproduct which is or hereafter is defined, listed or
designated under Environmental Laws (defined below) as a pollutant, or as a
contaminant, or as a toxic or hazardous substance, waste or material, or any other
unwholesome, hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or restricted by any
Environmental Law (including, without limitation, petroleum hydrocarbons or any
distillates or derivatives or fractions thereof, polychlorinated biphenyls, or
asbestos). As used herein, the term “Environmental Laws” shall
mean any applicable Federal, State of California or local government law
(including common law), statute, regulation, rule, ordinance, permit, license,
order, requirement, agreement, or approval, or any determination, judgment,
directive, or order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or subsequently

6

 

adopted or promulgated) relating to pollution or the protection of the environment,
ecology, natural resources, or public health and safety.

     B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s
Hazardous Materials Activities (defined below). Landlord acknowledges that Tenant
shall use, in compliance with applicable Environmental Laws, customary household and
office supplies (Tenant shall first provide Landlord with a list of said materials
use), such as mild cleaners, lubricants and copier toner. Any and all of Tenant’s
Hazardous Materials Activities shall be conducted in conformity with this Paragraph
44, Paragraph 14 of this Lease, and in compliance with all Environmental Laws and
regulations. As used herein, the term “Tenant’s Hazardous Materials Activities”
shall mean any and all use, handling, generation, storage, disposal, treatment,
transportation, release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with Tenant’s use of the
Property, or by Tenant or by any of Tenant’s agents, employees, contractors,
vendors, invitees, visitors or its future subtenants or assignees or other third
parties (including “dumping” by others) (or which Hazardous Materials originate on
the surface of the Premises any time on or after the Commencement Date of this
Lease, but excluding Hazardous Materials on the Premises prior to the Lease
Commencement Date because of the storage, use, disposal, or transportation of such
materials or waste by any of Landlord’s contractors or otherwise arising out of
construction work performed by or under the direction of Landlord on the Premises
and Landlord shall be responsible for all required actions with respect to such
materials or wastes). Tenant agrees to provide Landlord with prompt written notice
of any spill or release of Hazardous Materials at the Property during the term of
the Lease of which Tenant becomes aware, and further agrees to provide Landlord with
prompt written notice of any violation of Environmental Laws in connection with
Tenant’s Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s
Hazardous Materials Activities involve Hazardous Materials other than normal use of
customary household and office supplies, Tenant also agrees at Tenant’s expense:
(i) to install such Hazardous Materials monitoring, storage and containment devices
as may be required by Environmental Laws, regulations and/or governing agencies;
(ii) to provide Landlord with a written inventory of such Hazardous Materials,
including an update of same each year upon the anniversary date of the Commencement
Date of the Lease (“Anniversary Date”); and (iii) on each Anniversary Date to
provide to Landlord copies of all documentation and records, required by applicable
Environmental Laws to be prepared and submitted to governmental authorities,
relating to use at the Property of Hazardous Materials or to Tenant’s Hazardous
Materials Activities, if any. If upon completion of Landlord’s review of said
documentation and records, Landlord reasonably questions if Tenant is in compliance
with all applicable Environmental Laws with
respect to Tenant’s Hazardous Materials Activities, Tenant agrees within thirty
(30) days following receipt of written notice from Landlord, to retain a qualified
environmental consultant, acceptable to Landlord, to evaluate whether Tenant is in
compliance with all applicable Environmental Laws with respect to Tenant’s Hazardous
Materials Activities. Tenant, at its expense, shall submit to Landlord a

7

 

report
from such environmental consultant which discusses the environmental consultant’s
findings within two (2) months of each Anniversary Date. Tenant, at its expense,
shall promptly undertake and complete any and all steps necessary, and in full
compliance with applicable Environmental Laws, to fully correct any and all problems
or deficiencies identified by the environmental consultant, and promptly provide
Landlord with documentation of all such corrections.

     C. Prior to termination or expiration of the Lease, Tenant, at its expense,
shall (i) properly remove from the Property all Hazardous Materials which come to be
located at the Property in connection with Tenant’s Hazardous Materials Activities,
and (ii) fully comply with and complete all facility closure requirements of
applicable Environmental Laws regarding Tenant’s Hazardous Materials Activities,
including but not limited to (x) properly restoring and repairing the Property to
the extent damaged by such closure activities, and (y) obtaining from the local Fire
Department or other appropriate governmental authority with any legal or regulatory
jurisdiction a written concurrence that closure has been completed in compliance
with applicable Environmental Laws. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any such closure activities.

     D. If Landlord, upon consultation with Tenant, reasonably concludes that the
Property has become contaminated as a result of Tenant’s Hazardous Materials
Activities, Landlord in addition to any other rights it may have under this Lease or
under Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the nature
and extent of such contamination except to the extent that such activities may be
inconsistent with Tenant’s compliance with Environmental Laws. Tenant shall
promptly reimburse Landlord for the costs of such an investigation, including but
not limited to reasonable attorneys’ fees Landlord incurs with respect to such
investigation to the extent, and only to the extent, that it that discloses
Hazardous Materials contamination for which Tenant is liable under this Lease.
Except as may be required of Tenant by applicable Environmental Laws, Tenant shall
not perform any sampling, testing, or drilling to identify the presence of any
Hazardous Materials at the Property, without Landlord’s prior written consent which
shall not be unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports’ prepared, received or
submitted in connection with any sampling, testing or drilling performed pursuant to
the preceding sentence.

     E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord,
whose consent shall not unreasonably be withheld) and hold harmless Landlord, its
employees, assigns, successors, successors-in-interest, agents and representatives
from and against any and all claims (including but not limited to third party claims
from a private party or a government authority), liabilities, obligations, losses,
causes of action, demands, governmental proceedings or

8

 

directives, fines, penalties,
expenses, costs (including but not limited to reasonable attorneys’, consultants’
and other experts’ fees and costs), and damages, which arise from or relate to: (i)
Tenant’s Hazardous Materials Activities; (ii) any Hazardous Materials contamination
caused by Tenant prior to the Commencement Date of the Lease; or (iii) the breach of
any obligation of Tenant under this Paragraph 44 (collectively, “Tenant’s
Environmental Indemnification”). Tenant’s Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair market
value of the Property. Tenant’s Environmental Indemnification shall further include
but is not limited to the obligation to diligently and properly implement to
completion, at Tenant’s expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other environmental
response action as may be required by applicable Environmental Laws, regulations or
governing agencies (collectively, “Response Actions”). Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and reports
prepared, received or submitted in connection with any Response Actions.

     F. Landlord hereby makes the following representations to Tenant, each of
which is made only to the best of Landlord’s knowledge as of the date Landlord
executes this Lease, without any inquiry or investigation having been made or
required by Landlord regarding this subject, nor does Landlord have any obligation
to investigate or make inquiry regarding the subject:

          (1) The soil and ground water on or under the Premises does not contain
Hazardous Materials in amounts which violate any laws to the extent that any
governmental entity could require either Landlord or Tenant to take any remedial
action with respect to such Hazardous Materials.

          (2) During the time that Landlord has owned the Premises, Landlord has received
no notice of (i) any violation, or alleged violation, of any law that has not been
corrected to the satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or (iii) any pending
investigation by any governmental agency concerning the Premises relating to
Hazardous Materials.

     G. Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any governmental
authority concerning Hazardous Materials which relates to the Premises, and (ii) any
contamination of the Premises by Hazardous Materials which constitutes a violation
of any law. Attached as Exhibit “C” to the Lease is
a list of Hazardous Materials that Tenant intends to use at the Premises. If
during the Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the Hazardous
Materials and the manner of their use, storage and disposal, and shall agree (i) to
use, store and dispose of such Hazardous Materials strictly in compliance with all

9

 

laws, regulations and governing agencies and (ii) that the indemnity set forth in
Paragraph 44 shall be applicable to Tenant’s use of such Hazardous Material.

     H. Landlord or Tenant may, at any time, cause testing wells to be installed on
the Premises, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for such
purposes. Testing wells installed by Tenant shall be paid for by Tenant. If tests
conducted by Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to Hazardous
Materials laws, or that Tenant has liability to Landlord pursuant to Paragraph 44A,
then Tenant shall pay for 100 percent of the cost of the test and all related
expense. Prior to the expiration of the Lease Term, Tenant shall remove any testing
wells it has installed at the Premises, and return the Premises to the condition
existing prior to the installation of such wells, unless Landlord requests in
writing that Tenant leave all or some of the testing wells in which instance the
wells requested to be left shall not be removed.

     I. If any tests performed by Tenant or Landlord prior to the Commencement Date
disclose Hazardous Materials at the Premises, Landlord at its expense will promptly
take all reasonable action required by law with respect to the existence of such
Hazardous Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is prohibited
by law.

     J. The obligations of Landlord and Tenant under this Paragraph 44 shall
survive the expiration or earlier termination of the Term of this Lease. The rights
and obligations of Landlord and Tenant with respect to issues relating to Hazardous
Materials are exclusively established by this Paragraph 44.”

     12. SECURITY DEPOSIT: Effective as of the first day of the Third Option Period, Lease
Paragraph 50 (“Security Deposit”) shall be deleted in its entirety and replaced with the following:

     “50. SECURITY DEPOSIT: The following provisions shall modify Lease
Paragraph 4F:

     A. Within thirty (30) days after the expiration or earlier termination of the
Lease term and after Tenant has vacated the Premises, Landlord shall return to
Tenant the entire Security Deposit except for amounts that Landlord has deducted
therefrom that are needed by Landlord to cure defaults of Tenant under the Lease
or compensate Landlord for damages for which Tenant is liable pursuant to this
Lease. The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.

10

 

     B. During the first thirty (30) days following Tenant’s exercise of its Third
Option to Extend, and only during said thirty day period, Tenant shall have the
one-time option of satisfying its obligation with respect to an amount equal to
one-half (1/2) ($136,691.55) of the $273,383.10 Security Deposit required under
Lease Paragraph 4F by providing to Landlord, at Tenant’s sole cost, a letter of
credit which: (i) is drawn upon an institutional lender reasonably acceptable and
accessible to Landlord in form and content reasonably satisfactory to Landlord; (ii)
is in the amount of one-half (1/2) of the Security Deposit; (iii) is for a term of
at lease twelve (12) months; (iv) with respect to any letter of credit in effect
within the six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at least forty
five (45) days past the Lease expiration date (including any extensions thereof);
and (v) may be drawn upon by Landlord upon submission of a declaration of Landlord
that Tenant is in default (as defined in Paragraph 19 and as modified by Paragraph
59). Landlord shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the institutional
lender written
notification that Tenant is in default and upon receiving such
written notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit required under Lease Paragraph 4F. Said letter of
credit shall provide that if the letter of credit is not renewed, replaced or
extended within twenty (20) days prior to its expiration date the issuer of the
credit shall automatically issue a cashiers check payable to Landlord in the amount
of the letter of credit after the date which is twenty (20) days before the
expiration date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides Landlord with
a letter of credit, within thirty (30) day of the execution of this Lease, meeting
the foregoing requirements, one-half (1/2) of the cash Security
Deposit (i.e. $136.691.55 of the $273.383.10 Security Deposit) shall be returned to Tenant by
Landlord inasmuch as the cash deposit remaining and the Letter of Credit equal the
total Security Deposit required in Lease Paragraph 4F. If Tenant defaults with
respect to any provisions of this Lease, including but not limited to provisions
relating to the payment of Rent, Landlord may (but shall not be required to) draw
down on the letter of credit for payment of any sum which Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if it
were a cash security deposit, and such letter of credit may be drawn down upon by
Landlord upon demand and presentation of evidence of the identity of Landlord to the
issuer, in the event that Tenant defaults with respect to any provision of this
Lease and such default is not cured within any
applicable cure period. Notwithstanding anything to the contrary in this
Lease, Landlord shall not be obligated to furnish proof of default to such
institutional lender and Landlord is only required to give the institutional lender
written

11

 

notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to
immediately deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer by reason of Tenant’s default up to
1/2 of the total Security Deposit. Landlord acknowledges that it is not entitled to
draw down such letter of credit unless Landlord would have been entitled to draw
upon the cash security deposit pursuant to the terms of Paragraph 4F of the Lease.
Concurrently with the delivery of the required information to the issuer, Landlord
shall deliver to Tenant written evidence of the default upon which the draw down was
based, together with evidence that Landlord has provided to Tenant the written
notice of such default which was required under the applicable provision of the
Lease, and evidence of the failure of Tenant to cure such default within the
applicable grace period following receipt of such notice of default. Any proceeds
received by Landlord by drawing upon the letter of credit shall be applied in
accordance with the provisions governing the Security Deposit imposed by Lease
Paragraph 4F and this Paragraph 50. If Landlord draws upon the letter of credit,
thereafter Tenant shall once again have the right to post a letter of credit in
place of one-half (1/2) of a cash Security Deposit so long as Tenant is not then in
default. In any event Tenant will be obligated to replenish the amount drawn to
restore the Security Deposit to its original amount as provided for in Paragraph 4F.
If any portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i) depositing
cash with Landlord in the amount equal to the sum drawn down under the letter of
credit, or (ii) increasing the letter of credit to its value immediately prior to
such application. Tenant’s failure to replace the value of the security as provided
in the preceding sentence shall be a material breach of its obligation under this
Lease.”

     13. REAL ESTATE TAXES: Effective as of the first day of the Third Option Period,
Lease Paragraph 53 (“Real Estate Taxes”) shall be deleted in its entirety and replaced with the
following:

     “53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

     A. The term “Real Property Taxes” shall not include charges, levies or fees
directly related to the use, storage, disposal or release of Hazardous Materials on
the Premises unless directly related to Tenant’s Activities at this site or on other
sites leased and/or owned by Tenant; however, Tenant shall be responsible for
general or special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or assessment is
not imposed due to on-site originated contamination on the Property (by third
parties not related to Tenant) prior to the Lease Commencement Date.
Subject to the terms and conditions stated herein, Tenant shall be responsible
for paying one hundred percent (100%) of said taxes and/or assessments allocated to
the Property.

12

 

     B. If any assessments for public improvements are levied against the Premises,
Landlord may elect either to pay the assessment in full or to allow the assessment
to go to bond. If Landlord pays the assessment in full, Tenant shall pay to
Landlord or any assignee or purchaser of the Premises each time payment of Real
Property Taxes is made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to bond.

     C. Tenant at its cost shall have the right, at any time, to seek a reduction
in the assessed valuation of the Premises or to contest any Real Property Taxes that
are to be paid by Tenant. If Tenant seeks a reduction or contests such Real
Property Taxes, the failure on Tenant’s part to pay such Real Property Taxes being
so contested shall not constitute a default so long as Tenant complies with the
provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Landlord. In that
case Landlord shall join in the proceedings or contest or permit it to be brought in
Landlord’s name as long as Landlord is not required to bear any cost. Tenant, on
final determination of the proceeding or contest, shall immediately pay or discharge
its share of any Real Property Taxes determined by any decision or judgment
rendered, together with all costs, charges, interest, and penalties incidental to
the decision or judgment. If Tenant does not pay the Real Property Taxes when due
pursuant to the Lease and Tenant seeks a reduction or contests them as provided in
this paragraph, before the commencement of the proceeding or contest Tenant shall
furnish to Landlord a surety bond in form reasonably satisfactory to Landlord issued
by an insurance company qualified to do business in California. The amount of the
bond shall equal 125% of the total amount of Real Property Taxes in dispute and any
such bond shall be assignable to any lender or purchaser of the Premises. The bond
shall hold Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that may be
rendered.”

     14. PROPERTY INSURANCE: Effective as of the first day of the Third Option Period,
section B of Lease Paragraph 54 (“Property Insurance”) shall be deleted in its entirety and be of
no further force or effect.

     15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the Third Option
Period, Lease Paragraph 55 (“Assignment and Subletting”) shall be deleted in its entirety and
replaced with the following:

     “55. ASSIGNMENT AND SUBLETTING: The following modifications are made
to Paragraph 16:

     A. In the event that Tenant seeks to make any assignment or sublease, then
Landlord, by giving Tenant written notice of its election within fifteen (15) days
after Tenant’s notice of intent to assign or sublease has been given to Landlord,
shall have the right to elect (i) to withhold its consent to such

13

 

assignment or
sublease, as permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its
obligations under the Lease, and the following shall apply (except the following
shall not apply to a “Permitted Transfer” described in Paragraph 56):

          (1) If Tenant assigns its interest in this Lease, then in addition to the
rental provided for in this Lease, Tenant shall pay to Landlord fifty percent (50%)
of all Rent and other consideration received by Tenant over and above (i) the
assignee’s agreement to assume the obligations of Tenant under this Lease and (ii)
all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing
commissions paid to third parties not affiliated with Tenant in order to obtain the
assignment or sublease in question.

          (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to
Landlord in addition to the Rent provided for in this Lease fifty percent (50%) of
the positive difference, if any, between (i) all rent and other consideration paid
or provided to Tenant by the subtenant, less (ii) all Rent paid by Tenant to
Landlord pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the
preceding sentence on the same basis, whether periodic or in lump sum, that such
rent and other consideration is paid to Tenant by its subtenant, within seven (7)
days after it is received by Tenant.

          (3) Tenant’s obligations under this subparagraph shall survive any assignment
or sublease. At the time Tenant makes any payment to Landlord required by this
subparagraph, Tenant shall deliver an itemized statement of the method by which the
amount to which Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant’s books and records
relating to the payments due pursuant to this subparagraph. Upon request therefor,
Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

          (4) As used herein, the term “consideration” shall mean any consideration of
any kind received, or to be received (including, but not limited to, services
rendered and/or value received) by Tenant as a result of the assignment or sublease,
if such sums are paid or provided to Tenant for Tenant’s interest in this Lease or
in the Premises.

          (5) This Paragraph 55.A does not apply to a “Permitted Transfer”, as provided
in Paragraph 56 hereof. The parties agree that if any of the following transactions
occur and do not qualify as “Permitted

14

 

Transfers”, Tenant must obtain Landlord’s
consent to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as “Permitted Transfers”, then the
provisions of this Paragraph 55.A shall not apply to the following transactions:
(i) a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the assets of
Tenant so long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee and Tenant remains liable and responsible under the
Lease to the extent Tenant continues in existence following such transaction.”

     16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day of the Third
Option Period, Lease Paragraph 56 (“Permitted Assignments and Subleases”) shall be deleted in its
entirety and replaced with the following:

     “56. PERMITTED ASSIGNMENTS AND SUBLEASES:  Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise complies with the
provisions of Paragraph 16 and the Permitted Transfer does not release Tenant from
its obligations hereunder, Tenant may enter into any of the following transfers (a
“Permitted Transfer”) without Landlord’s prior written consent, and the provisions
of Paragraph 55A shall not apply to any such Permitted Transfer:

     A. Tenant may sublease all or part of the Premises or assign its interest in
this Lease to any corporation which controls, is controlled by, or is under common
control with Tenant by means of an ownership interest of more than fifty percent
(50%) providing Tenant remains liable for the payment of Rent and full performance
of the Lease;

     B. Tenant may assign its interact in the Lease to a corporation which results
from a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as (i) 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which Tenant is to be
merged has a net worth equal to or greater than the net worth of Tenant at the time
of Lease execution or at the time of such assignment, merger, consolidation or
reorganization (whichever is greater), or if it does not, Landlord is
provided a guaranty of the Lease (in a form reasonably acceptable to Landlord) from
a corporation (a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, merger, consolidation or reorganization (whichever
is greater). In the event there is not a permanent
transfer of 95% or more of the assets and liabilities from Tenant to a third
party, and Tenant continues to exist as a separate entity, both companies shall be
jointly and severally liable for the full terms and conditions of the Lease;

15

 

     C. Tenant may assign this Lease to a corporation which purchases or otherwise
acquires 95% or more of the assets of Tenant so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee (in the event
there is not a permanent transfer of 95% or more of the assets and liabilities from
Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of
the Lease), and provided that immediately prior to such assignment said corporation,
has a net worth equal to or greater than the net worth of Tenant (a) at the time of
Lease execution or (b) at the time of such assignment (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form
reasonably acceptable to Landlord) from a corporation (a) that is the parent of, or
is otherwise affiliated with, said corporation and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, (whichever is greater).”

     17. DESTRUCTION: Effective as of the first day of the Third Option Period, Lease
Paragraph 61 (“Destruction”) shall be deleted in its entirety and replaced with the following:

     “61. DESTRUCTION: Paragraph 21 is modified by the following:

     A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may
terminate this Lease in the event of an uninsured event or if insurance proceeds,
net of the deductible, are insufficient to cover one hundred percent of the
rebuilding costs; provided, however, Tenant shall have the right to elect, in its
discretion, to contribute such excess funds to permit Landlord to repair the
Premises.

     B. Except as provided in Paragraph 61C, Landlord may not terminate the Lease
if the Premises are damaged by a peril whereby the cost to replace and/or repair is
one hundred percent (100%) covered by the insurance carried by Landlord pursuant to
Paragraph 12, but instead shall restore the Premises in the manner described by
Paragraph 21.

     C. If the Premises are damaged by a peril covered by the insurance carried by
Landlord pursuant to Paragraph 12, Landlord shall have the option to terminate the
Lease if each of the following conditions is satisfied: (i) the cost to repair or
the damage exceeds thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than five (5)
years remaining in the term of the Lease.

     D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12,
and said insurance would have been available to cover any damage or destruction to
the Premises, Landlord shall be required to rebuild, at its cost, net
of the deductible which would have been required under said insurance policy
(which deductible Tenant is required to pay).

16

 

     E. If the Premises are damaged by any peril, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the 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 only by
delivery to Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time needed to complete
such restoration:

          (1) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) and, in the
reasonable opinion of Landlord’s architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within 180 days
after the date of such damage (subject to force majeure conditions); or

          (2) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) within
twelve (12) months of the last day of the Lease term, and, in the reasonable opinion
of Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within sixty (60) days after the date of
such damage and Tenant has not exercised its Option to Extend said Term (or Extended
Term as the case may be).”

     18. LIABILITY INSURANCE: Effective as of the first day of the Third Option Period,
the first sentence of Lease Paragraph 10 (“Liability Insurance”) shall be deleted and replaced with
the following: “Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease
a policy of commercial general liability insurance with combined single limit coverage of not less
than Two Million Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped areas.”

     19. LIMITATION OF LIABILITY: Effective as of the first day of the Third Option
Period, Lease Paragraph 36 (“Limitation of Liability”) shall be deleted in its entirety and
replaced with the following:

     “36. LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:

(i) the sole and exclusive remedy shall be against Landlord’s interest in the
Premises leased herein;

(ii) no partner of Landlord shall be sued or named as a party in any suit or action
(except as may be necessary to secure jurisdiction of the partnership);

(iii) no service of process shall be made against any partner of Landlord (except as
may be necessary to secure jurisdiction of the partnership);

17

 

(iv) no partner of Landlord shall be required to answer or otherwise plead to any
service of process;

(v) no judgment will be taken against any partner of Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set aside
at any time without hearing;

(vii) no writ of execution will ever be levied against the assets of any partner of
Landlord;

(viii) these covenants and agreements are enforceable both by Landlord and also by
any partner of Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease or
imposed by statute or at common law.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said September 17,
1990 Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA
SURVIVOR’S TRUST	 	 	 	QUANTUM CORPORATION,
		 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
 

	 	 	 	By
	 	/s/ Andrew Kryder
 

	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 
	 	 	 	 	 	 	Andrew Kryder
	 

	 	 
	 	 	 	 
	 	 	 	 	 	 	 
	Date	 	6/30/97 
	 	 	 	Print or Type Name
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	Title	 	VP Finance and Corp.
General Counsel  

	 

	 	 	 	 	 	 	 	
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard Peery
	 	 	 	Date
	 	6/25/97 

	 

	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date

	 	6/26/97 
	 	 	 	 	 	 

18

 

AMENDMENT NO. 2

TO LEASE

     THIS AMENDMENT NO. 2 is made and entered into this 26th day of March, 2001, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and MAXTOR CORPORATION, a Delaware corporation, as
“ASSIGNEE” OR “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated September 17, 1990 Landlord leased to QUANTUM
CORPORATION, a Delaware corporation (the “ASSIGNOR” or “QUANTUM”) all of that certain 101,253+
square foot building located at 1000 Sumac Drive, Milpitas, California, the details of which are
more particularly set forth in said September 17, 1990 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated December 6, 1991 which
established the December 6, 1991 Lease Commencement Date, and established the Termination Date of
September 30, 2006, and,

     C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 16, 1997, which amended the
Lease by (i) extending the Term for five years, changing the Termination Date from September 30,
2006 to September 30, 2011, (ii) amending the Basic Rent schedule and Aggregate Rent accordingly,
(iii) adding a third Five Year Option to Extend, (iv) replacing Paragraphs 40C (“Lease Terms
Co-extensive”) and 47 (“Cross Default”) and 52 (“Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling
of the Premises”), (v) amending Lease Paragraph 12 (“Property Insurance”) and (vi) amending and/or
replacing certain provisions of the Lease commencing as of the commencement of the Third Extended
Term of said Lease, and

     D. WHEREAS, the Lease, together with those certain Amendments described above in Recitals B
and C shall hereinafter collectively be referred to as “the Lease Agreement”, and

     E. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraph 42
(“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. 1 dated April 16, 1997
(“Third Five Year Option to Extend”) as hereinafter set forth.

1

 

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary
contained in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to
Landlord, Landlord hereby acknowledges that the following transactions have occurred:

     A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

     B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement’), wherein they agreed that:

                    (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

                    (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock, such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

                    (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

     C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be assigned by Quantum to Insula
and Insula will assume and agree to be liable for all of the obligations of Quantum, as Tenant,
under the Lease.

     As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated September 17, 1990, as amended.

     Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as
expressly set forth below, Landlord’s Consent shall in no way void or alter any of the terms of

2

 

the Lease Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or
diminish in any way Tenant’s obligations to Landlord.

     Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor,
and Landlord shall not be bound by any agreement other than the terms of the Lease Agreement
between Landlord and Tenant. Landlord does not make any warranties or representations as to the
condition of the Leased Premises or the terms of the Lease Agreement between Landlord and Quantum.
Landlord’s consent to the assignment shall in no way obligate Landlord to any further consents or
agreements between Quantum and/or Assignee. So long as Quantum continues to exist as a Delaware
corporation, it is agreed that both Quantum and Maxtor will be jointly and severally liable for all
the terms and conditions of the Lease and all Amendments thereto; provided, however, that so long
as Quantum remains liable for said Lease, no material amendment to the Lease Agreement after the
date hereof shall be binding upon Quantum without the prior written consent of Quantum, which
consent shall not be unreasonably withheld, and Quantum’s approval shall not be required on
transactions related to Landlord’s Waivers, Landlord’s Consents to Sublease and/or Landlord’s
Consents to Alterations. The foregoing, however, shall not prevent Tenant and Landlord from
entering into any such modification or amendment between themselves.

     It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     2. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 42 (“Second Five Year Option to Extend”) and Paragraph 3 to Amendment No. I dated
April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall
be replaced with the following:

     A. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“Second
Extended Term”) upon the following terms and conditions:***

          1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term pursuant to Paragraph
A hereof (not later than April 3, 2011), in which event the Term of the Lease shall be considered
extended for an additional five (5) years, subject to the Basic Rent set forth below and with: (i)
the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and the terms
and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion,
may, but is not required to, incorporate its then current Lease provisions that are standard in
Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its Option to
Extend); and (iii) this Paragraph 2.A thereafter deleted. In the event that Tenant fails to timely
exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further Option to
Extend this Lease, and the Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 2.

     2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced

3

 

in Paragraph 2.A.1(ii) above) and the Basic Rent (which shall not be less than the Basic Rent
for the fifth year of the current Term) required for the Extended Term of the Lease to make the
Basic Rent for the Premises comparable to the then current market triple net basic rent for
comparable properties either (i) then owned in whole or in part by the above mentioned Landlord or
by members of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord
or its family as stated herein, other third party properties in the vicinity of the Premises.
Tenant shall have five (5) days after receipt from the Landlord of said new terms and conditions
and Basic Rent in which to accept said new terms and conditions and Basic Rent and enter into
written documentation confirming same. In the event Tenant fails to execute said written
documentation confirming said new terms and conditions and Basic Rent for the Second Extended Term
of Lease within said five (5) day period, Tenant shall have no further Option to Extend this Lease,
and this Lease shall continue in full force and effect for the full remaining term hereof absent of
this Paragraph 2, with Landlord having no further responsibility or obligation to Tenant with
respect to Tenant’s Option to Extend.

     3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

     4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

     5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

     B. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

          1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than April 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Third Extended Term”) subject to the Basic Rent set

4

 

forth below and with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below;
(ii) the management fee and the terms and conditions subject to amendment by Landlord (Landlord, in
its sole and absolute discretion, may, but is not required to, incorporate its then current Lease
provisions that are standard in Landlord’s leases for comparable buildings as of the date of
Tenant’s exercise of its Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In
the event that Tenant fails to timely exercise Tenant’s Option as set forth herein in writing,
Tenant shall have no further Option to Extend this Lease, and the Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 2.B.

          2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.1 (ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

          3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at its sole and
absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force
and effect for the full remaining Term hereof, absent of this Paragraph 2.B.

          4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

          5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In

5

 

the event said Option to Extend is forfeited as stated herein, Tenant shall have no further
Option to Extend this Lease.

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said September 17,
1990 Lease Agreement, as heretofore amended, shall remain in full force and effect.IN WITNESS
WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the day and year
last written below.

6

 

	 	 	 
	LANDLORD:

	 	ASSIGNEE/MAXTOR:
	 
	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST

	 	MAXTOR CORPORATION,

a Delaware corporation

	 	 	 	 	 	 	 
	By:
	 	/s/ John Arrillaga by attorney-in-fact, Richard Peery
	 	  By:
	 	/s/ Glenn Stevens
	 
	 	 
	 	 	 	 
	 
	 	John Arrillaga, Trustee	 	 	 	 

	 	 	 	 	 
	 
	 	 	 	Glen H. Stevens
	 
	 	 	 	 
	Date:
	 	3/30/01
	 	Print or Type Name
	 
	 	 	 	 

	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	 
	PROPERTY TRUST
	 	 Title:
	 	V.P. General Counsel & Secretary
	 
	 	 	 	 

	 	 	 	 	 	 	 
	By:
	 	/s/ Richard Peery
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Richard T. Peery, Trustee
	 	Date:
	 	4/1/01
	 
	 	 	 	 	 	 

	 	 	 	 	 
	Date:
	 	3/30/01
	 	ASSIGNOR/QUANTUM
	 
	 	 	 	 

	 	 	 	 	 
	 	QUANTUM CORPORATION

a Delaware corporation

 	 
	 	By: 	/s/
Norm Claus
 	 
	 	Norm
Claus
 	 	 
	 	Print or Type Name
 	 	 

	 	 	 	 	 
	 
	 	Title:
	 	V.P. Real Estate
	 
	 	 	 	 

	 	 	 	 	 
	 
	 	 Date:
	 	3/30/01
	 
	 	 	 	 

7

 

LEASE AGREEMENT

     THIS LEASE, made this 23rd day of March, 1994 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SEPARATE PROPERTY TRUST) as amended, and
RICHARD T. PEERY Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE
PROPERTY TRUST) as amended, hereinafter called Landlord and QUANTUM CORPORATION, a Delaware
corporation, hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit “A”, attached hereto and incorporated herein
by this reference thereto more particularly described as follows:

All of that land containing approximately 5.131± acres and that certain
94,484± square foot two-story building (“Building 5”) and parking appurtenant
thereto, to be constructed and installed by Landlord as shown within the area
outlined in Red (“Lot 5”) on Exhibit A to be located at 1100 Sumac Drive,
Milpitas, California, 95035. Said Premises is more particularly shown within the
area outlined in Red on Exhibit A attached hereto and incorporated herein by
this reference. The interior of the Leased Premises shall be improved in the
configuration as shown in Red on Exhibit B to be attached hereto and
incorporated herein by this reference. The building shell shall be constructed in
accordance with the shell and site improvement specifications set forth on
Exhibit A, and the general building elevation set forth on Exhibit
A. SEE PARAGRAPH 48.

     The word “Premises” as used throughout this lease is hereby defined to include the
nonexclusive use of sidewalks and driveways in front of or adjacent to the Premises, and the
nonexclusive use of the area directly underneath or over such sidewalks and driveways. The gross
leasable area of the building shall be measured from outside of exterior walls to outside of
exterior walls, and shall include any atriums, covered entrances or egresses and covered loading
areas.

     Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE: Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of office, sales and R&D and
related uses necessary for the use of Tenant or any approved assignee or subtenant to conduct its
business providing any and all uses of the Premises shall be subject to and in conformance with all
governmental laws and ordinances and for no other purpose without Landlord’s prior written consent.
Tenant shall not do or permit to be done in or about the Premises nor bring or keep or permit to
be brought or kept in or about the Premises anything which is prohibited by or will in any way
increase the existing rate of (or otherwise affect) fire or

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any insurance covering the Premises or any part thereof, or any of its contents without the
prior written consent of Landlord, and provided Tenant bears any cost related to such increased
rate, or will cause a cancellation of any insurance covering the Premises or any part thereof, or
any of its contents. Tenant shall not do or permit to be done anything in, on or about the
Premises which will in any way obstruct or interfere with the rights of other tenants or occupants
of the Premises or neighboring premises or injure or annoy them, or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain
or permit any nuisance in, on or about the Premises. No sale by auction shall be permitted on the
Premises. Tenant shall not place any loads upon the floors, walls, or ceiling which endanger the
structure, or place any harmful fluids or other materials in the drainage system of the building,
or overload existing electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of the building in
which the Premises are a part, except in trash containers placed inside exterior enclosures
designated by Landlord for that purpose or inside of the building proper where designated by
Landlord. No materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted to remain outside the
Premises. Tenant shall not place anything or allow anything to be placed near the glass of any
window, door partition or wall which may appear unsightly from outside the Premises. No
loudspeaker or other device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord. Tenant shall not commit
or suffer to be committed any waste in or upon the Premises. Tenant shall indemnify, defend and
hold Landlord harmless against any loss, expense, damage, reasonable attorneys’ fees, or liability
arising out of failure of Tenant to comply with any applicable law that governs Tenant use of the
Premises. Tenant shall comply with any covenant, condition or restriction (“CC&R’s”) affecting the
Premises. The provisions of this paragraph are for the benefit of Landlord only and shall not be
construed to be for the benefit of any tenant or occupant of the Premises.

     2. TERM AND COMMENCEMENT DATE OF LEASE: See Paragraphs 40, 41 and 42 of this Lease.

     3. POSSESSION: If Landlord, for any reason whatsoever other than Landlord’s default
cannot deliver possession of said premises to Tenant at the commencement of the said term, as
hereinbefore specified, this Lease shall not be void or voidable; no obligation of Tenant shall be
affected thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any loss or
damage resulting therefrom, but in that event the commencement and termination dates of the Lease,
and all other dates affected thereby shall be revised to conform to the date of Landlord’s delivery
of possession, as specified in Paragraph 2B, above; provided, however, it is agreed that in no
event shall the Lease commence sooner than January 1, 1995 unless the parties agree in writing to
an earlier date for the Lease to commence. The above is, however, subject to the provision that
the period of delay of delivery of the Premises shall not exceed 180 days from the commencement
date herein (except those delays caused by Acts of God, strikes, war, utilities, governmental
bodies, weather, unavailable materials, and delays beyond Landlord’s control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by written notice to
Landlord, terminate this lease. SEE PARAGRAPH 46.

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     4. RENT:

          A. Basic Rent: Tenant agrees to pay to Landlord at such place as Landlord may designate
without deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for
the leased Premises the total sum of the amount to be calculated pursuant to Paragraph 39 in lawful
money of the United States of America, payable as follows: See Paragraphs 39 through 42.

          B. Time for Payment: Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences on a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar moth of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day and said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge: Notwithstanding any other provision of this Lease, if Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal five percent (5%) of each rental payment so in
default. See Paragraph 49.

          D. Additional Rent: Beginning with the commencement date of the term of this Lease, Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following:

               (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.

     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days after presentation of invoice from Landlord or Landlord’s agent setting forth such
Additional Rent and/or (ii) at the option of Landlord, Tenant shall pay to Landlord monthly,

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in advance. Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s
approximate average monthly expenditure for such Additional Rent items, which estimated amount
shall be reconciled at the end of each calendar year as compared to Landlord’s actual expenditure
for said Additional Rent items, with Tenant paying to Landlord, upon demand, any amount of actual
expenses expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant
(providing Tenant is not in default in the performance of any of the terms, covenants and
conditions of this Lease in which case such amount shall be held by Landlord as a credit for
Tenant’s account until such default has been cured any amount of estimated payments made by Tenant
in excess of Landlord’s actual expenditures for said Additional Rent Items.

     The respective obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          E. Place of Payment of Rent and Additional Rent: All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Peery/Arrillaga, File 1504, P.O. Box 60000, San Francisco, CA 94160 or to such other person or to
such other place as Landlord may from time to time designate in writing.

          F. Security Deposit: Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
with Landlord the sum of THREE HUNDRED SIX THOUSAND ONE HUNDRED TWENTY EIGHT AND 16/100 Dollars
($306,128.16). Said sum shall be held by Landlord as the Security Deposit for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease including, but not limited to, the provisions relating to the payment of rent and any of
the monetary sums due herewith. Landlord may (but shall not be required to) use, apply or retain
all or any part of this Security Deposit for the payment of any other amount which Landlord may
spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant’s default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefore, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its original amount. Tenant’s
failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest
on such Deposit. If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) at the expiration of the
Lease term and after Tenant has vacated the Premises. In the event of termination of Landlord’s
interest in this Lease, Landlord shall transfer said Deposit to Landlord’s successor in interest
whereupon Tenant agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor. SEE PARAGRAPH 50.

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     5. ACCEPTANCE AND SURRENDER OF PREMISES: By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts the building and
improvements included in the Premises in their present condition and without representation or
warranty by Landlord as to the condition of such building or as to the use or occupancy which may
be made thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed; all broken, marred or nonconforming acoustical ceiling
tiles replaced; all windows washed; the airconditioning and heating systems serviced by a reputable
and licensed service firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any burned out or broken
light bulbs or ballasts; the lawn and shrubs in good condition including the replacement of any
dead or damaged plantings; the sidewalk, driveways and parking areas in good order, condition and
repair; together with all alterations, additions, and improvements which may have been made in, to,
or on the Premises (except moveable trade fixtures installed at the expense of Tenant) except that
Tenant shall ascertain from Landlord within ninety (90) days before the end of the term of this
Lease whether Landlord desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if Landlord shall so
desire, then Tenant shall restore said Premises or such part or parts thereof before the end of
this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of the term or sooner
termination of this Lease, shall remove all of Tenant’s personal property and trade fixtures from
the Premises, and all property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to same shall thereupon
pass to Landlord without compensation to Tenant. Landlord may, upon termination of this Lease,
remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost, and
repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such delay. Nothing
contained herein shall be construed as an extension of the term hereof or as a consent of Landlord
to any holding over by Tenant. The voluntary or other surrender of this Lease or the Premises by
Tenant or a mutual cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies or operate as an
assignment to Landlord of all or any such subleases or subtenancies. SEE PARAGRAPH 51.

     6. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written consent of
Landlord first had and obtained by Tenant (such consent not to be unreasonably withheld), but at
the cost of Tenant, and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to Landlord. Landlord
reserves the right to approve all contractors and mechanics proposed by Tenant to make such
alterations and additions. Tenant shall retain title to all moveable furniture and trade

5

 

fixtures
placed in the Premises. All heating, lighting, electrical airconditioning, partitioning,
drapery, carpeting, and floor installations made by Tenant, together with all property that
has become an integral part of the Premises, shall not be deemed trade fixtures. Tenant agrees
that it will not proceed to make such alteration or additions, without having obtained consent from
Landlord to do so, and until five (5) days from the receipt of such consent, in order that Landlord
may post appropriate notices to avoid any liability to contractors or material suppliers for
payment for Tenant’s improvements. Tenant will at all times permit such notices to be posted and
to remain posted until the completion of work. Tenant shall, if required by Landlord, secure at
Tenant’s own cost and expense, a completion and lien indemnity bond, satisfactory to Landlord, for
such work. Tenant further covenants and agrees that any mechanic’s lien filed against the Premises
for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond or otherwise, within ten (10) days after the filing thereof, at
the cost and expense of Tenant. Any exceptions to the foregoing must be made in writing and
executed by both Landlord and Tenant. Tenant receives notice of SEE PARAGRAPH 51.

     7. TENANT MAINTENANCE: Tenant shall, at its sole cost and expense, keep and maintain
the Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and airconditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of the floor
coverings, partitioning, ceilings, doors (both interior and exterior), including closing
mechanisms, latches, locks, skylights (if any), automatic fire extinguishing systems, and elevators
and all other interior improvements of any nature whatsoever, and all exterior improvements
including but not limited to landscaping, sidewalks, driveways, parking lots including striping and
sealing, sprinkler systems, lighting, ponds, fountains, waterways, and drains. Tenant agrees to
provide carpet shields under all rolling chairs or to otherwise be responsible for wear and tear of
the carpet caused by such rolling chairs if such wear and tear exceeds that caused by normal foot
traffic in surrounding areas. Areas of excessive wear shall be replaced at Tenant’s sole expense
upon Lease termination. Tenant hereby waives all rights under, and benefits of, Subsection 1 of
Section 1932 and Section 1941 and 1942 of the California Civil Code and under any similar law,
statute or ordinance now or hereafter in effect. In the event any of the above maintenance
responsibilities apply to any other tenants(s) of Landlord where there is common usage with other
tenant(s), such maintenance responsibilities and charges shall be allocated to the leased Premises
by square footage or other equitable basis as calculated and determined by Landlord. SEE PARAGRAPH
52.

     8. UTILITIES: Tenant shall pay promptly, as the same become due, all charges for
water, gas, electricity, telephone, telex and other electronic communication service, sewer
service, waste pick-up and any other utilities, materials or services furnished directly to or used
by Tenant on or about the Premises during the term of this Lease, including, without limitation,

6

 

any temporary or permanent utility surcharge or other exactions whether or not hereinafter imposed.
In the event the above charges apply to any other tenant(s) of Landlord where there is
common usage with other tenant(s), such charges shall be allocated to the leased Premises by
square footage or other equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES:

     A. Notwithstanding the following and pursuant to the terms of the Option Agreement dated
October 31, 1989 related to this Lease Tenant is responsible for paying all real estate taxes and
assessments assessed against the Premises leased hereunder from August 27, 1990, the date Tenant
exercised its first option under the Option Agreement dated October 31, 1989. As Additional Rent
and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord, or if Landlord so
directs, directly to the Tax Collector, all Real Property Taxes relating to the Premises. In the
event the Premises leased hereunder consist of only a portion of the entire tax parcel, Tenant
shall pay to Landlord Tenant’s proportionate share of such real estate taxes allocated to the
leased Premises by square footage or other reasonable basis as calculated and determined by
Landlord. If the tax billing pertains 100% to the leased Premises, and Landlord chooses to have
Tenant pay said real estate taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior to delinquency, the
applicable real property taxes and assessments pertaining to the leased Premises, and failure to
receive a bill for taxes and/or assessments shall not provide a basis for cancellation of or
nonresponsiblity for payment of penalties for nonpayment or late payment by Tenant. The term “Real
Property Taxes”, as used herein, shall mean (i) all taxes, assessments, levies and other charges of
any kind or nature whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any change in
ownership of the Premises) now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy assessments, which
are levied or assessed against, or with respect to the value, occupancy or use of, all or any
portion of the Premises (as now constructed or as may at any time hereafter be constructed, altered
or otherwise changed) or Landlord’s interest therein; any improvements located within the Premises
(regardless of ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking areas, public
utilities, or energy within the Premises; (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Premises; and (iii) all costs and
fees (including reasonable attorneys’ fees) incurred by Landlord in reasonably contesting any Real
Property Tax and in negotiating with public authorities as to any Real Property Tax. If at any
time during the term of this Lease the taxation or assessment of the Premises prevailing as of the
commencement date of this Lease shall be altered so that in lieu of or in addition to any Real
Property Tax described above there shall be levied, assessed or

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imposed (whether by reason of a
change in the method of taxation or assessment, creation of a new tax or charge, or any other
cause) an alternate or additional tax or charge (i) on the value, use or occupancy of the Premises
or Landlord’s interest therein or (ii) on or measured by the
gross receipts, income or rentals from the Premises, on Landlord’s business of leasing the
Premises, or computed in any manner with respect to the operation of the Premises, then any such
tax or charge, however designated, shall be included within the meaning of the term “Real Property
Taxes” for purposes of this Lease. If any Real Property Tax is based upon property or rents
unrelated to the Premises, then only that part of such Real Property Tax that is fairly allocable
to the Premises shall be included within the meaning of the term “Real Property Taxes”.
Notwithstanding the foregoing, the term “Real Property Taxes” shall not include estate,
inheritance, gift or franchise taxes of Landlord or the federal or state net income tax imposed on
Landlord’s income from all sources. SEE PARAGRAPH 53.

          B. Taxes on Tenant’s Property: Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant, Tenant shall upon demand, as the case may be, repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from such increase in
the assessment; provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction
to recover the amount of such taxes so paid under protest, and any amount so recovered shall belong
to Tenant.

     10. LIABILITY INSURANCE: Tenant, at Tenant’s expense, agrees to keep in force during
the term of this Lease a policy of comprehensive general liability insurance for bodily injury and
property damage occurring in, on or about the Premises, including parking and landscaped areas, in
the amount of $2,000,000 combined single limit. Such insurance shall be primary and on
noncontributory as respects any insurance carried by Landlord. The policy or policies effecting
such insurance shall name Landlord as additional insureds, and shall insure any liability of
Landlord, contingent or otherwise, as respects acts or omissions of Tenant, its agents, employees
or invitees or otherwise by any conduct or transactions of any of said persons in or about or
concerning the Premises, including any failure of Tenant to observe or perform any of its
obligations hereunder; shall be issued by an insurance company admitted to transact business in the
State of California; and shall provide that the insurance effected thereby shall not be canceled,
except upon thirty (30) days’ prior written notice to Landlord. A copy of said policy shall be
delivered to Landlord. If, during the term of this Lease, in the considered opinion of Landlord’s
Lender, insurance advisor, or counsel, the amount of insurance described in this Paragraph 10 is
not adequate, Tenant agrees to increase said coverage to such reasonable amount as Landlord’s
Lender, insurance advisor, or counsel shall deem adequate.

     11. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE: Tenant
shall maintain a policy or policies of fire and

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property damage insurance in “all risk” form with a
sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement of such items so
insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE: Landlord shall purchase and keep in force, and as Additional
Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord Tenant’s
proportionate share (allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord) of the cost of, policy or policies or insurance covering
loss or damage to the Premises (excluding routine maintenance and repairs and incidental damage or
destruction caused by accidents or vandalism for which Tenant is responsible under Paragraph 7) in
the amount of the full replacement value thereof, providing protection against those perils
included within the classification of “all risks” insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one hundred (100%) percent
of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If such insurance cost is
increased due to Tenant’s use of the Premises, Tenant agrees to pay to Landlord the full cost of
such increase. Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty; provided, however, that if the insurance policy of either
releasing party prohibits such waiver, then this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof. SEE PARAGRAPH 54.

     13. INDEMNIFICATION: Landlord shall not be liable to Tenant and Tenant hereby waives
all claims against landlord for any injury to or death of any person or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, including, without limitation,
gas, fire, oil, electricity or leakage of any charter from the roof, walls, basement or other
portion of the Premises but excluding, however, the negligence of Landlord, its agents, servants,
employees, invitees, or contractors of which negligence Landlord has knowledge and reasonable time
to correct. Except as to injury to persons or damage to property the principal cause of which is
the negligence of Landlord, and subject to the last two sentences of Paragraph 12, Tenant shall
hold Landlord harmless from and defend Landlord against any and all expenses, including reasonable
attorneys’ fees, in connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or any part thereof,
from any cause whatsoever.

     14. COMPLIANCE: Tenant, at its sole cost and expense, shall promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements now or hereafter in
effect; with the requirements of any board of fire underwriters or other similar body

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now or
hereafter constituted; and with any direction or occupancy certificate issued pursuant to law by
any public officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or rectify said failure.
The judgment of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction or
provision, shall be conclusive of that fact as between Landlord and Tenant. Tenant shall, at
its sole cost and expense, comply with any and all requirements pertaining to said Premises, of any
insurance organization or company, necessary for the maintenance of reasonable fire and public
liability insurance covering requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises. SEE PARAGRAPHS 44 AND 52.

     15. LIENS: Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection therewith, shall
be payable to Landlord by Tenant on demand with interest at the prime rate of interest as quoted by
the Bank of America.

     16. ASSIGNMENT AND SUBLETING: Tenant shall not assign, transfer, or hypothecate the
leasehold estate under this Lease, or any interest therein, and shall not sublet the Premises, or
any part thereof, or any right or privilege appurtenant thereto, or suffer any other person or
entity to occupy or sue the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld. In the event Tenant
is allowed to assign, transfer or sublet the whole or any part of the Premises, with the prior
written consent of Landlord, no assignee, transferee or subtenant shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any part of the Premises, without also
having obtained the prior written consent of Landlord. A consent of Landlord to one assignment,
transfer, hypothecation, subletting, occupation or use by any other person shall not release Tenant
from any of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar
or dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other
person. Any such assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of this Lease by Tenant and shall, at the
option of Landlord exercised by written notice to Tenant, terminate this Lease. The leasehold
estate under this Lease shall not, nor shall any interest therein, be assignable for any purpose by
operation of law without the written consent of Landlord. As a condition to its consent, Landlord
may require Tenant to pay all reasonable expenses in connection with the assignment, and Landlord
may require Tenant’s assignee or transferee (or other assignees or transferees) to assume in
writing all of the obligations under this Lease and for Tenant to remain liable to Landlord under
this Lease. SEE PARAGRAPHS 55 AND 56.

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     17. SUBORDINATION AND MORTGAGES: In the event Landlord’s title or leasehold interest
is now or hereafter encumbered by a deed of trust, upon the interest of Landlord in the land and
buildings in which the demised Premises are located, to secure a loan from a lender (hereinafter
referred to as “Lender”) to Landlord, Tenant shall, at the request of Landlord or Lender, execute
in writing an agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender’s deed of trust shall be or remain
subject and subordinate to the rights of Tenant under this Lease. Notwithstanding any such
subordination, Tenant’s possession under this Lease shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay all rent and observe and
perform all of the provisions set forth in this Lease. SEE PARAGRAPH 57.

     18. ENTRY BY LANDLORD: Landlord reserves, and shall at all reasonable times have, the
right to enter the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s); to submit the
Premises to prospective purchasers, mortgagers or tenants; to post notices of nonresponsibility;
and to alter, improve or repair the Premises or other parts of the building, all without abatement
of rent, and may erect scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided, however that the
business of Tenant shall be interfered with to the least extent that is reasonably practical. Any
entry to the Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. SEE PARAGRAPH 58.

     19. BANKRUPTCY AND DEFAULT: The commencement of a bankruptcy action or liquidation
action or reorganization action or insolvency action or an assignment of or by Tenant for the
benefit of creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant,
shall, at Landlord’s option, constitute a breach of this Lease by Tenant. If the trustee or
receiver appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar
action elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in
writing of its election within thirty (30) days after an order for relief in a liquidation action
or within thirty (30) days after the commencement of any action.

     Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate assurance
of future performance, as used therein, includes, but shall not be limited to: (i) assurance of
source and payment of rent, and other consideration due under this Lease; (ii) assurance that the
assumption or assignment of this Lease will not breach substantially any provision, such as radius,
location, use, or exclusivity provision, in any agreement relating to the above described Premises.

     Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,

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reorganization or insolvency action or an assignment of Tenant for the benefit of creditors or other similar act. Nothing contained in this Lease shall be construed as giving or granting or creating an equity in the demised Premises to Tenant. In no event shall the leasehold estate under this Lease, or any interest therein, be assigned by voluntary or involuntary bankruptcy proceeding without the prior written consent of Landlord. In no event shall this Lease or any rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or reorganization proceedings.

     The failure to perform or honor any covenant, condition or representation made under this Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace period hereinafter provided. Tenant shall have a period of ten (10) days from the date of written notice from Landlord within which to cure any default in the payment of rental or adjustment thereto. Tenant shall have a period of thirty (30) days from the date of written notice from Landlord within which to cure any other default under this Lease. Upon an uncured default of this Lease by Tenant, Landlord shall have the following rights and remedies in addition to any other rights or remedies available to Landlord at law or in equity:

               (a)The rights and remedies provided for by California Civil Code Section 1951.2, including but not limited to, recovery of 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 rental loss for the same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b) of said Section 1951.2.

               (b)The rights and remedies provided by California Civil Code Section which allows Landlord to continue the Lease in effect and to enforce all of its rights and remedies under this Lease, including the right to recover rent as it becomes due, for so long as Landlord does not terminate Tenant’s right to possession; acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver upon Landlord’s initiative to protect its interest under this Lease shall not constitute a termination of Tenant’s right to possession.

               (c)The right to terminate this Lease by giving notice to Tenant in accordance with applicable law.

               (d)The right and power, after compliance with all statutory requirements
and in any event on not less than three (3) business days prior written notice, to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell such property and apply such proceeds therefrom pursuant to applicable California law. Landlord, may from time to time sublet the Premises or any part thereof for such term or terms (which may extend beyond the term of this Lease) and at such rent and such other terms as Landlord in its reasonable sole discretion may deem advisable, with the right to make alterations and repairs to the Premises. Upon each subletting, (i) Tenant shall be immediately liable to pay Landlord, in addition to indebtedness other than rent due hereunder, the reasonable cost of such subletting, including, but not limited to, reasonable attorneys’ fees, and any real estate commissions actually paid, and the cost of such reasonable alterations and repairs incurred by Landlord and the

12

 

amount, if any, by which the rent hereunder for the period of such subletting (to the extent such period does not exceed the term hereof) exceeds the amount to be paid as rent for the Premises for such period or (ii) at the option of Landlord, rents received from such subletting shall be applied first to payment of indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such subletting and or such alterations and repairs; third to payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same becomes due hereunder. If Tenant has been credited with any rent to be received by such subletting under option (i) and such rent shall not be promptly paid to Landlord by the subtenant(s), or if such rentals received from such subletting under option (ii) during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No taking possession of the Premises by Landlord, shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant. Notwithstanding any such subletting without termination, Landlord may at any time hereafter elect to terminate this Lease for such previous breach.

               (e)The right to have a receiver appointed for Tenant upon application by Landlord, to take possession of the Premises and to apply any rental collected from the Premises and to exercise all other rights and remedies granted to Landlord pursuant to subparagraph d above. SEE PARAGRAPH 59.

     20.
ABANDONMENT: Tenant shall not vacate or abandon the Premises at any time during the term of this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be dispossessed by the process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be mortgaged to Landlord. SEE PARAGRAPH 60.

     21.
DESTRUCTION: In the event the Premises are destroyed in whole or in part from any cause, except for routine maintenance and repairs and incidental damage and destruction caused from vandalism and accidents for which Tenant is responsible, under Paragraph 7 Landlord may, at its option:

               (a)Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b)Terminate this Lease.

     If Landlord does not give Tenant notice in writing within thirty (30) days from the destruction of the Premises of its election to either rebuild and restore them, or to terminate this Lease, Landlord shall be deemed to have elected to rebuild or restore them, in which event Landlord agrees, at its expense, promptly to rebuild or restore the Premises to their condition prior to the damage or destruction. Tenant shall be entitled to a reduction in rent while such repair is being made in the proportion that the area of the Premises rendered untenantable by such damage bears to the total area of the Premises. If Landlord does not complete the rebuilding or restoration within one hundred eighty (180) days following the date of destruction (such period of time to be extended for delays caused by the fault or neglect of Tenant or because of Acts of God, acts of public agencies, labor disputes, strikes, fires, freight embargos, rainy or

13

 

stormy weather, inability to obtain materials, supplies or fuels, acts of contractors or subcontractors, or delay of the contractors or subcontractors due to such causes or other contingencies beyond the control of landlord), then Tenant shall have the right to terminate this Lease by giving fifteen (15) days prior written notice to Landlord. Notwithstanding anything herein to the contrary, Landlord’s obligation to rebuild or restore shall be limited to the building and interior improvements constructed by Landlord as they existed as of the commencement date of the Lease and shall not include restoration of Tenant’s trade fixtures, equipment, merchandise, or any improvements, alterations or additions made by Tenant to the Premises, which Tenant shall forthwith replace or fully repair at Tenant’s sole cost and expense provided this Lease is not cancelled according to the provisions above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain in full force and effect. Tenant hereby expressly waives the provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

     In
the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 331/3% of the replacement cost thereof, Landlord may elect to terminate this Lease, whether the Premises be injured or not. In the event the destruction of the Premises is caused by Tenant. Tenant shall pay the deductible portion of Landlord’s insurance proceeds. SEE PARAGRAPH 61.

     22.
EMINENT DOMAIN: If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this Lease shall terminate as to any portion of the Premises so taken or conveyed on the date when title vests in the condemnor, and Landlord shall be entitled to any and all payment, income, rent, award, or any interest therein whatsoever which may be paid or made in connection with such taking or conveyance, and Tenant shall have no claim against Landlord or otherwise for the value of any unexpired term of this Lease. Notwithstanding the foregoing paragraph, any compensation specifically awarded Tenant for loss of business, Tenant’s personal property, moving cost or loss of goodwill shall be and remain the property of Tenant.

     If any action or proceeding is commenced for such taking of the Premises or any part thereof, of it Landlord is advised in writing by any entity or body having the right or power of condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60) days of the date of receipt of said written advice, or commencement of said action or proceeding, or taking conveyance, which termination shall take place as of the first to occur of the last day of the calendar month next following the month in which such notice is given or the date on which title to the Premises shall vest in the condemnor.

     In the event of such a partial taking or conveyance of the Premises, if the portion of the Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and upon giving of such notice this Lease shall terminate on the last day of the calendar month

14

 

next following the month in which such notice is given, upon payment by Tenant of the rent
from the date of such taking or conveyance to the date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate this Lease as provided herein, this Lease shall
continue in full force and effect as to the part of the Premises not so taken or conveyed, and the
rent herein shall be apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking. SEE PARAGRAPH 62.

     23. SALE OF CONVEYANCE BY LANDLORD: In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then constituting Landlord, the
transferor shall thereby be released from any further liability upon any of the terms, covenants or
conditions (express or implied) herein contained in favor of Tenant, and in such event, insofar as
such transfer is concerned. Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. SEE PARAGRAPH 63.

     24. ATTORNMENT TO LENDER OR THIRD PARTY: In the event the interest of Landlord in the
land and buildings in which the leased Premises are located (whether such interest of Landlord is a
fee title interest or a leasehold interest) is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale. Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved and upon all the other
terms, conditions and covenants herein contained.

     25. HOLDING OVER: Any holding over by Tenant after expiration or other termination of
the term of this Lease with the written consent of Landlord delivered to Tenant shall not
constitute a renewal or extension of the Lease or give Tenant any rights in or to the leased
Premises except as expressly provided in this Lease. Any holding over after the expiration or
other termination of the term of this Lease, with the consent of Landlord, shall be construed to be
a tenancy from month to month, on the same terms and conditions herein specified insofar as
applicable except that the monthly Basic Rent shall be increased to an amount equal to one hundred
twenty five (125%) percent of the monthly Basic Rent required during the last month of the Lease
term.

     26. CERTIFICATE OF ESTOPPEL: Either party shall at any time upon not less than ten
(10) days prior written notice from the other party execute, acknowledge and deliver to the
requesting party a statement in writing (i) 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

15

 

are paid in advance, if any, and (ii) acknowledging that there are not, to the best of such
party’s knowledge, any uncured defaults on the part of the other party hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises. A party’s failure to deliver such statement
within such time shall be conclusive upon the party receiving such request that this Lease is in
full force and effect, without modification except as may be represented by Landlord; that there
are no uncured defaults in the requesting party’s performance, and that not more than one month’s
rent has been paid in advance.

     27. CONSTRUCTION CHANGES: It is understood that the description of the Premises and
the location of ductwork, plumbing and other facilities therein are subject to such minor changes
as Landlord or Landlord’s architect determines to be desirable in the course of construction of the
Premises, and no such changes shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of such drawing
resists with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM: All terms, covenants and conditions of this Lease
to be performed or observed by Tenant shall be performed or observed by Tenant at Tenant’s sole
cost and expense and without any reduction of rent. If Tenant shall fail to pay any sum of money,
or other rent, required to be paid by it hereunder or shall fail to perform any other term or
covenant hereunder on its part to be performed, and such failure shall continue for five (5) days
after written notice thereof by Landlord, Landlord, without waiving or releasing Tenant from any
obligation of Tenant hereunder, may, but shall not be obliged to, make any such payment or perform
any such other term or covenant on Tenant’s part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest thereon at the rate of
the prime rate of interest per annum as quoted by the Bank of America from the date of such payment
on performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord
on demand by Landlord, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of
failure by Tenant in the payment of rent hereunder.

29. ATTORNEYS’ FEES:

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the breach of any
provision of this Lease, or for any other relief against the other party hereunder, then all costs
and expenses, including reasonable attorneys’ fees, incurred by the prevailing party therein shall
be paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be enforceable whether or not the
action is prosecuted to judgment.

          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

16

 

     30. WAIVER: The waiver by either party of the other party’s failure to perform or
observe any term, covenant or condition herein contained to be performed or observed by such
waiving party shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent failure of the party failing to perform or observe the same or any other such term,
covenant or condition therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way affect, the right
of either party to insist upon performance and observance by the other party in strict accordance
with the terms hereof.

     31. NOTICES: All notices, demands, requests, advices or designations which may be or
are required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advices or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises of if sent by
United Stated certified or registered mail, postage prepaid, addressed to Tenant at the Premises.
All notices, demands, requests, advices or designations by Tenant to Landlord shall be sent by
United States certified or registered mail, postage prepaid, addressed to Landlord at its offices
at Peery/Arrillaga, 2560 Mission College Blvd., Suite 101, Santa Clara, CA 95054. Each notice,
request, demand, advice or designation referred to in this paragraph shall be deemed received on
the date of the personal service or mailing thereof in the manner herein provided, as the case may
be.

     32. EXAMINATION OF LEASE: Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or option for a lease, and this instrument is not
effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no event earlier than
(30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or
deed of trust covering the Premises whose name and address shall have heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord’s obligations is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY: If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership) represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation
(or partnership) in accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement) and that this Lease is binding upon said corporation (or
partnership) in accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty
(30) days after execution of this Lease, deliver to Landlord a certified copy of the resolution of
the Board of Directors of said corporation authorizing or ratifying the execution of this Lease.

     35. INTENTIONALLY LEFT BLANK

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     36. LIMITATION OF LIABILITY: In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:

               (a) the sole and exclusive remedy shall be against Landlord and Landlord’s assets;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as may be
necessary to secure jurisdiction of the partnership);

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process;

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord may be vacated and set aside at any
time without hearing;

               (g) no writ of execution will every be levied against the assets of any partner of Landlord;

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS: No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of the Premises or any
exterior windows of the Premises without the written consent of Landlord first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or
in any way place a sign in, on, or about the Premises, upon expiration or other sooner termination
of this Lease, Tenant at Tenant’s sole cost and expense shall both remove such sign and repair all
damage in such a manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.

     All approved signs or lettering on outside doors shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person reasonably approved of by Landlord.

     Tenant shall not place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.

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     38. MISCELLANEOUS AND GENERAL PROVISIONS

          A. Use of Building Name: Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

          B. Choice of Law; Severability: This Lease shall in all respects be governed by and construed
in accordance with the laws of the State of California. If any provision of this Lease shall be
invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall
be and remain in full force and effect.

          C. Definition of Terms: The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as
well as the singular and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof and the provisions of this Lease shall inure to the benefit of and
bind such heirs, executors, administrators, successors and permitted assigns.

     The term “person” includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations. Words used in any gender include other genders. If
there be more than one Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.

          D. Time of Essence: Time is of the essence of this Lease and of each and all of its
provisions.

          E. Quitclaim: At the expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim deed or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

          F. Incorporation of Prior Agreements; Amendments: This agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.

          G. Recording: Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit D.

          H. Amendments for Financing: Tenant further agrees to execute any amendments reasonably
required by a lender to enable Landlord to obtain financing, so long as

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Tenant’s rights hereunder are not materially and adversely affected and there is no change in
the Basic Rent, Options to Renew, Lease Term or Construction obligations of Landlord.

          I. Additional Paragraphs: Paragraphs 39 through 64 are added hereto and are included as a
part of this lease.

          J. Clauses, Plats and Riders: Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          K. Diminution of Light, Air or View: Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect his Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant.

     IN WITNESS THEREOF, Landlord and Tenant have executed and delivered this Lease as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SEPARATE	 	 	 	QUANTUM CORPORATION	 	 
	PROPERTY TRUST	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Deborah E. Barber	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title
	 	Vice President, Human Resources	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 

20

 

Paragraphs 39 through 64 to Lease Agreement dated March 23, 1994, By and Between JOHN ARRILLAGA AND
RICHARD T. PEERY SEPARATE PROPERTY TRUSTS, as Landlord, and QUANTUM CORPORATION, a Delaware
corporation, as Tenant for 94,484 ± Square Feet of Space Located at 1100 Sumac Drive, Milpitas,
California.

     39. BASIC RENT: In accordance with Paragraph 4A, subject to the provisions of
Paragraphs 40 and 41, Basic Rent shall be payable as follows during the indicated months of the
term of the Lease based upon the gross leasable area within the building that is part of the
Premises:

	 	 	 
	Period	 	Monthly Basic Rent
	Months
1-12 (plus the partial calendar month, if any, following the
Commencement Date)
	 	$1.32/sf
	 
	 	 
	Months 13-24

	 	$1.37/sf
	 
	 	 
	Months 25-36

	 	$1.42/sf
	 
	 	 
	Months 37-48

	 	$1.47/sf
	 
	 	 
	Months 49-60

	 	$1.52/sf
	 
	 	 
	Months 61-72

	 	$1.57/sf
	 
	 	 
	Months 73-84

	 	$1.62/sf
	 
	 	 
	Months 85-96

	 	$1.67/sf
	 
	 	 
	Months 97-108

	 	$1.72/sf
	 
	 	 
	Months 109-120

	 	$1.77/sf
	 
	 	 
	Months 121-132

	 	$1.82/sf
	 
	 	 
	Months 133-141

	 	$1.87/sf

     Example of calculation of Basic Rent per month for the period commencing with the
first through the twelfth months of said Lease:

	 	 	 	 	 
	Square footage of Building
	 	 	94,484	 
	Per square foot Basic Monthly Rent
	 	 	x       $1.32	 
	 
	 	 	 
	Basic Rent per Month
	 	$	124,718.88	 
	 
	 	 	 

 

*  
In the event this Lease commences on June 1, 1995 or thereafter, the Basic Rent schedule shown
above may be amended in accordance with Article I.F.2.(b)(1) entitled “Basic Monthly Rental” of
Option Agreement dated October 31, 1989 between the parties.

21

 

     40. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as defined
herein) which is projected to be January 1, 1995, and shall continue for a period of eleven years
nine months plus the partial calendar month, if any, in which the Commencement Date occurs, subject
to the terms of this Lease and subject to (i) earlier termination rights of Landlord in accordance
with the provisions of this Lease, and (ii) extension pursuant to the options to renew granted by
Paragraphs 41 and 42, and the provisions of this Paragraph 40.C.

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean the
later to occur of the following: (i) the date upon which the “Improvements” are “Substantially
Completed”; or (ii) January I, 1995; provided, however, that if prior to the later of such dates
Tenant’s operating personnel enter into occupancy of the Premises and commence the operation of
Tenant’s business within the Premises, the Commencement Date shall be the date such personnel of
Tenant so enter into occupancy of the Premises. The term “Substantially Completed” and/or
“Substantial Completion” shall mean the date when all of the following have occurred with respect
to the Improvements in question: (i) the construction of the Improvements in question has been
substantially completed in accordance with the approved plans therefor except for punch list items
which do not prevent Tenant from reasonably using the Premises to conduct Tenant’s business; (ii)
Landlord has executed a certificate or statement representing that the Improvements in question
have been substantially completed in accordance with the plans and specifications therefor except
for the punch list items which do not prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; and (iii) the Building Department of the City of Milpitas has completed its
final inspection of such Improvements and has “signed off” the building inspection card approving
such work as complete except for punch list items which do not prevent Tenant from reasonably using
the Premises to conduct Tenant’s business. Notwithstanding the foregoing, Substantial Completion
of the Interior Improvements shall not be deemed to have occurred until Landlord has obtained final
or conditional approval from the Fire Department of the City of Milpitas that the Improvements have
been completed in accordance with such department’s requirements (subject only to conditions that
do not prevent Tenant from occupying the Improvements).

          C. Lease Terms Co-extensive: It is acknowledged that (i) Landlord and Tenant have previously
executed four separate leases. Two of said leases dated October 31, 1989 are for Premises located
at 1130 Bellew Drive and 490 McCarthy Blvd., Milpitas, California (the “1989 Leases”; one of said
leases dated September 17, 1990 is for Premises located at 1000 Sumac Drive, Milpitas, California,
and one of said leases dated April 10, 1992 is for Premises located at 900 Sumac Drive, Milpitas,
California (hereinafter collectively referred to as the “Existing Leases”), and (ii) it is the
intention of the parties that the term of this Lease be co-extensive with the term of the Existing
Leases, such that the terms of all five leases (“the Leases”) expire on the same date. It is
hereby agreed that following the date upon which the Commencement Date of this Lease becomes
established as a date certain following completion of improvements and satisfaction of any other
conditions related to determining such date, the term of this Lease may be extended to coincide
with the termination dates of the Existing Leases,

22

 

however, in no event will the term of this Lease be for a period of less than ten (10) years
nor will the termination dates of the Existing Leases be prior to the termination date of this
Lease. As soon as the parties are able to implement the provisions of this Paragraph because the
Commencement Date of this Lease has been determined following completion of improvements and
satisfaction of other appropriate conditions, the parties shall execute an amendment to (i) this
Lease establishing the applicable Commencement Date in accordance with the foregoing provisions of
this Paragraph 40C, the actual rent based upon the measurements of the completed building covered
by this Lease as certified prior to the Commencement Date by an architect or general contractor
reasonably approved by the parties, and the actual date for each rent adjustment provided for in
this Lease, based upon the actual Lease Commencement Date. The provisions of this Paragraph 40C
also requires the terms of all the Leases to be extended accordingly if Tenant exercises its Option
to Extend under any of the Leases. The monthly Basic Rent during the extended term under each of
the Leases shall be increased by $.05 per square foot on the commencement date of the extended term
and thereafter on each and every anniversary of the respective lease Commencement Date.

     41. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions:

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at lease one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 41 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 41.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$1.92/sf
	Months 13-24

	 	$1.97/sf
	Months 25-36

	 	$2.02/sf
	Months 37-48

	 	$2.07/sf
	Months 49-60

	 	$2.12/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to renew
granted by this Paragraph 41 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 41
notwithstanding such non-curable default.

23

 

     42. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 41, Landlord hereby grants to Tenant an
option to extend the term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 41, in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this Paragraph 42.A and
subject to the rental as set forth below. In the event that Tenant fails to timely exercise
Tenant’s option as set forth herein in writing, Tenant shall have no further option to extend this
Lease, and this Lease shall continue in full force and effect for the full remaining term hereof,
absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.17/sf
	Months 13-24

	 	$2.22/sf
	Months 25-36

	 	$2.27/sf
	Months 37-48

	 	$2.32/sf
	Months 49-60

	 	$2.37/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 42 at any time that Tenant is in material default of its obligations
under this Lease, if Tenant has received written notice from Landlord that Tenant is in default,
and such default has not been timely cured within the time period provided for in this Lease;
provided, however, that if such default of Tenant is not for money due under this Lease and cannot
be cured, and if Landlord does not elect to terminate this Lease as a result of such non-curable
default by Tenant, Tenant may exercise the option to extend granted by this Paragraph 42
notwithstanding such non-curable default.

     43. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide for
construction contingencies and reserve funds. Interest will be earned on such funds created for
contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be credited on assessments otherwise due against the
demised premises, Tenant shall pay to Landlord, as additional rent if, and at the time of any such
credit of surpluses, an amount equal to all such surpluses so credited

     44. HAZARDOUS MATERIALS: The parties agree as follows with respect to the existence
or the use of hazardous material on the Premises:

24

 

          A. Tenant shall have no obligations to “clean up”, to comply with any law regarding, or to
reimburse, release, indemnify, or defend Landlord with respect to any hazardous materials or wastes
which Tenant or other parties on the Premises did not store, dispose, or transport in, use, or
cause to be on the Premises in violation of applicable law during the term of this Lease. Any
handling, transportation, storage, treatment, disposal or use of hazardous materials by Tenant or
other parties in or about the Premises during the term of this Lease shall strictly comply with all
applicable laws and regulations. Tenant will be 100 percent liable and responsible for any and all
“clean up” of said toxic waste and/or hazardous materials contamination which Tenant, its agents,
or future subtenants, if any, does store, dispose, or transport in, use or cause to be on the
Premises in violation of applicable law or governing agency(s) or which originate on Premises,
during the term of this Lease from any manner whatsoever, including but not limited to, dumping by
others, (or which originate on the surface of the Premises any time after October 28, 1989, the
date the Option Agreement dated October 31, 1989 related to said Lease was executed by all parties,
and before the Commencement Date of this Lease, but excluding Hazardous Materials on the Premises
prior to the Lease Commencement Date because of the storage, use, disposal, or transportation of
such materials or waste by any of Landlord’s contractors or otherwise arising out of construction
work performed by or under the direction of Landlord on the Premises and Landlord shall be
responsible for all required actions with respect to such materials or wastes), and will indemnify
Landlord and hold Landlord harmless from any liabilities, demands, costs, expenses and damages,
including attorney fees incurred as a result of any claims resulting from such contamination, or
from any claims for personal injury or property damage or diminution in the value of the Premises
caused by the use, storage, disposal or transportation of hazardous materials on the Premises by
Tenant or other parties during the term of this Lease. It is agreed that the Tenant’s
responsibilities related to toxic waste and hazardous materials will survive the termination date
of the Lease. Tenant agrees to complete compliance with governmental regulations regarding use or
removal or remediation of Hazardous Materials used, stored, disposed, transported or caused to be
on the Premises by Tenant or its agents or subtenants, or which originate on the Premises during
the term of this Lease, and prior to the termination of said Lease Tenant agrees to follow the
proper closure procedures and will obtain a clearance from the local fire department and/or the
appropriate city agency. Tenant also agrees to install such toxic waste and/or hazardous materials
monitoring devices as Landlord reasonably deems necessary to monitor any use of hazardous materials
by Tenant, its agents or subtenants, originating from the Premises during the Lease term, if
recommended by a qualified environmental consulting firm.

          B. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this Lease, without any
inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

               (1) The soil and ground water on or under the Premises does not contain hazardous materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such hazardous materials.

25

 

               (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the presence of hazardous
material on the Premises, or (iii) any pending investigation by any governmental agency concerning
the Premises relating to hazardous materials.

          C. Landlord and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority concerning hazardous
materials which relates to the Premises, and (ii) any contamination of the Premises by hazardous
materials which constitutes a violation of any law. If during the Lease term Tenant proposes to
use other hazardous materials at the Premises, Tenant shall inform Landlord of such use,
identifying the hazardous materials and the manner of their use, storage and disposal, and shall
agree (i) to use, store and dispose of such materials strictly in compliance with all laws and (ii)
that the indemnity set forth in Paragraph 44A shall be applicable to Tenant’s use of such material.

          D. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of hazardous material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
hazard materials laws, or Tenant or parties on the Premises during the term of this Lease have
contaminated the Premises as determine by regulatory agencies pursuant to hazardous materials laws,
or that Tenant has liability to Landlord pursuant to Paragraph 44A, then Tenant shall pay for 100
percent of the cost of the test and all related expense. Prior to the expiration of the Lease
term, Tenant shall remove any testing wells it has installed at the Premises, and return the
Premises to the condition existing prior to the installation of such wells, unless Landlord
requests in writing that Tenant leave all or some of the testing wells in which instance the wells
requested to be left shall not be removed.

          E. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
hazardous materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such materials at the Premises. The
Commencement Date shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.

          F. The obligations of Landlord and Tenant under this Paragraph 45 shall survive the expiration
or earlier termination of the term of this Lease. The rights and obligations of Landlord and
Tenant with respect to issues relating to hazardous materials are exclusively established by this
Paragraph 44.

     45. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall not be
unreasonably withheld or delayed.

     46. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can

26

 

commence. Therefore, it is agreed that in the event Landlord cannot obtain all the necessary
building permits for the building shell by June 1, 1994, then either Landlord or Tenant can
terminate this Lease by written notice to the other party given within thirty (30) days thereafter,
without any liability to the other party of any type whatsoever, and that this Lease Agreement
shall be null and void as of the date of receipt of such notice. Landlord agrees to use its best
efforts to obtain the required permits by June 1, 1994.

     47. CROSS DEFAULT: As set forth in Paragraph 40C, Landlord and Tenant have entered
into other leases referred to herein as the “Existing Leases”. As a material part of the
consideration for the execution of this Lease by Landlord, it is agreed between Landlord and Tenant
that a default under this Lease, or a default under any of the Existing Leases may, at the option
of Landlord, be considered a default under all leases, in which event Landlord shall be entitled
(but in no event required) to apply all rights and remedies of Landlord under the terms of one
lease to all the Leases including, but not limited to, the right to terminate any or all of the
aforementioned Existing Leases or this Lease by reason of a default under the Leases or hereunder.

     48. SUBDIVISION: With respect to the development of the Premises:

     Landlord and Tenant agree that the Premises and all of Parcels 1, 2, 3, 4, and 5 shown on that
certain parcel map, recorded on July 23, 1990 in Book 616 of Maps, Page 20 (the “Larger Parcel”)
during (and limited to) the term of this Lease shall be developed and used only in accordance with
a master plan, developed by Landlord. The parties have mutually agreed to a Master Plan for the
general development of the Premises and the Larger Parcel which is attached hereto as Exhibit
“Al” and entitled “Master Site Plan”. Said Master Site Plan sets forth the buildings and land
to be leased under this Lease (Building 5 on Lot 5), the 1989 Leases (Buildings 1 and 2 on Lots 1
and 2, respectively), the 1990 Lease (Building 4 on Lot 4) and the 1992 Lease (Building 3 on Lot 3)
as well as the general location of the parking and landscaping pertaining thereto. The parties
agree that the Master Site Plan may be modified provided that (i) a perimeter driveway is developed
in front of each building which generally runs near and parallel with the street surrounding the
37 1 acre site, (ii) all buildings will be similar and generally architecturally compatible, (iii) a
landscape area is developed along the frontage of all streets between the street and parking area
closest to the street and (iv) a landscape and recreation area at the rear of Lot 4 (as shown on
the Site Plan) is developed when a building is constructed on Lot 4. The parties agree that (i)
Landlord may change the Master Plan, shape and sizes of the buildings, parking and landscaping as
long as the general development concept set forth above is generally followed by Landlord, and (ii)
any successor or assign of Landlord or Tenant shall be required to consent and agree to develop the
Premises and the Larger Parcel in accordance with the foregoing, and shall be deemed to have
assumed the obligation to so develop such property by acceptance of a deed, assignment or other
means of transfer of Landlord’s or Tenant’s interest in such property or any portion thereof, as
the case may be. Further, the memorandum of lease to be recorded by Landlord and Tenant pursuant
to Paragraph 38G shall contain the following statement:

	 	 	“The Lease provides that from and after the commencement date of the 1989 Leases (as
defined in the Lease) and continuing for a period of fifteen (15) years, or the date
of termination of the Lease, whichever first occurs, the Premises and

27

 

	 	 	the larger 37.096 acre parcel which the Premises were originally included, and which
is described on the attached Exhibit “A”, incorporated herein by this
reference, shall be developed by Landlord and Tenant or their successors or assigns,
as more particularly set forth in the Lease, so that (i) a perimeter driveway is
developed in front of each building which generally runs near and parallel with the
street surrounding the 37? acre site, (ii) a landscape area is developed along the
frontage of all streets between the street and parking area closest to the street,
(iii) a landscape and recreation area at the rear of Lot 4 (as shown on the Site
Plan identified in the Lease) is developed when a building is constructed on Lot 4,
and (iv) all buildings will be similar and generally architecturally compatible, it
being agreed that Landlord may change the shape and sizes of the buildings, parking
and landscaping as long as the general development concept set forth above and in
the Lease is generally followed by Landlord. If a Public Agency requires
modifications to the lot lines as shown on the Master Plan, the parties agree to
reasonable lot line modifications.”

     49. LIMITATION ON IMPOSITION OF LATE CHARGE: Notwithstanding anything contained in
Paragraph 4C, if Tenant is delinquent in the payment of Basic Rent or Additional Rent and is
subject to a late charge, Landlord agrees to waive the late charge if the Basic Rent or Additional
Rent due is paid within five days of Landlord’s written notice to Tenant of the delinquent amount
owed and provided Tenant has not been delinquent in its payment of Basic Rent or Additional Rent
owed under the Lease or the Existing Leases during the twelve (12) month period preceding the rent
delinquency in question.

     50. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4F:

          A. Within thirty (30) days after the expiration or earlier termination of the Lease term and
after Tenant has vacated the Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed by Landlord to cure
defaults of Tenant under the Lease or compensate Landlord for damages for which Tenant is liable
pursuant to this Lease. The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.

          B. During the first thirty (30) days following execution of this Lease Agreement, Tenant shall
have the one-time option of satisfying its obligation with respect to an amount equal to one-half
(1/2) ($153,064.08) of the $306,128.16 Security Deposit required under Paragraph 4.C. by providing
to Landlord, at Tenant’s sole cost, a letter of credit which (i) is drawn upon an institutional
lender reasonably acceptable to Landlord, (ii) is in the amount of one-half (1/2) of the Security
Deposit, (iii) is for a term of at lease twelve (12) months, (iv) with respect to any letter of
credit in effect within the six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at least thirty (30) days past
the Lease expiration date, (v) may be drawn upon by Landlord upon submission of a declaration of
Landlord that Tenant is in default (as defined in Paragraph 19 and as modified by Paragraph 59).
Landlord shall not be obligated to furnish proof of default to such institutional lender, and
Landlord shall only be required to give the institutional lender written notification that Tenant
is in default and upon receiving such written notification from Landlord the institutional lender
shall be obligated to immediately deliver cash to Landlord equal to the

28

 

amount Landlord may spend or become obligated to spend by reason of Tenant’s default or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default
up to 1/2 of the total Security Deposit required under Paragraph 4.f., (vi) shall provide that if
the letter of credit is not renewed, replaced or extended within twenty (20) days of its expiration
date the issuer of the credit shall automatically make payment of the amount of the letter of
credit directly to Landlord after the date which is twenty (20) days before the expiration date,
and no later than the expiration date, without Landlord being required to make demand upon the
letter of credit, and (vii) is otherwise in form and content reasonably satisfactory to Landlord.
If Tenant provides Landlord with a letter of credit, within thirty (30) days of the execution of
this Lease, meeting the foregoing requirements, one-half (1/2) of the cash Security Deposit
(i.e., $153,064.08 of the $306,128.16 Deposit) shall be returned to Tenant by Landlord
inasmuch as the cash deposit remaining and the Letter of Credit equal the total Security Deposit
required in Paragraph 4F. If Tenant defaults with respect to any provisions of this Lease,
including but not limited to provisions relating to the payment of rent, Landlord may (but shall
not be required to) draw down on the letter of credit for payment of any sum which Landlord may
spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant’s default. Landlord and Tenant
acknowledge that such letter of credit will be treated as if it were a cash security deposit, and
such letter of credit may be drawn down upon by Landlord upon demand and presentation of evidence
of the identity of Landlord to the issuer, in the event that Tenant defaults with respect to any
provision of this Lease and such default is not cured within any applicable cure period.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be obligated to furnish
proof of default to such institutional lender and Landlord is only required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit. Landlord acknowledges that it
is not entitled to draw down such letter of credit unless Landlord would have been entitled to draw
upon the cash security deposit pursuant to the terms of Paragraph 4F of the Lease. Concurrently
with the delivery of the required information to the issuer, Landlord shall deliver to Tenant
written evidence of the default upon which the draw down was based, together with evidence that
Landlord has provided to Tenant the written notice of such default which was required under the
applicable provision of the Lease, and evidence of the failure of Tenant to cure such default
within the applicable grace period following receipt of such notice of default. Any proceeds
received by Landlord by drawing upon the letter of credit shall be applied in accordance with the
provisions governing the Security Deposit imposed by Paragraph 4F and this Paragraph 50. If
Landlord draws upon the letter of credit, thereafter Tenant shall once again shall have the right
to post a letter of credit in place of one-half (1/2) of a cash Security Deposit so long as Tenant
is not then in default. In any event Tenant will be obligated to replenish the amount drawn to
restore the Security Deposit to its original amount as provided for in Paragraph 4F. If any
portion of the
 letter of credit is used or applied pursuant hereto, Tenant shall, within ten (10)
days after receipt of a written demand therefor from Landlord, restore and replace the value of
such security by either (i) depositing cash with Landlord in the amount equal to the sum drawn down
under the letter of credit, or (ii) increasing the letter of credit to its value immediately prior
to such application. Tenant’s failure to replace

29

 

the value of the security as provided in the preceding sentence shall be a material breach of
its obligation under this Lease.

     51. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 51 shall modify
Paragraphs 5 and 6:

          A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include Tenant’s trade
fixtures so long as such trade fixtures are not installed in such a manner that they have become an
integral part of the building.

          B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval: (i) if Tenant is in default under this Lease or any of the
Existing Leases, or (ii) if Tenant is not in default under this Lease or any of the Existing Leases
and if the total cost of such Alterations exceeds $20,000 per the scope of any single remodeling
job to the Premises, or if such Alteration is structural in nature. Any other non-structural
Alteration of less than $20,000 for the total cost of the remodeling job may be undertaken by
Tenant without Landlord’s prior written approval but with the understanding that Tenant shall be
obligated to restore the Premises as set forth in Paragraph 5 at the termination of this Lease,
except as otherwise provided in Paragraph 51.D. Notwithstanding the foregoing, Tenant shall have
the right to reconfigure modular freestanding walls and partitions without Landlord’s prior
consent, which have been installed by Tenant and paid for by Tenant.

          C. At all times during the Lease Term (i) Tenant shall maintain and keep up dated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

          D. Provided Tenant is not in default under this Lease or under any of the Existing Leases,
Tenant shall have the right to remove at any time during the Lease term or prior to the expiration
thereof any (i) process equipment such as clean hoods, thermal cycling chambers, freon piping, high
temperature furnaces, air handlers and special air-conditioning, and (ii) process systems such as
compressed air or processed exhaust systems and (iii) the clean room modules and all related
process equipment which are paid for 100% by Tenant (excluding building standard HVAC, electrical,
plumbing and other building standard systems which are an integral part of the building not related
to Tenant’s clean room modules or other special purpose process equipment or systems), which
systems, equipment and modules the parties agree for the purposes of this Lease shall be deemed to
be trade fixtures, so long as Tenant repairs all damage caused by the installation and/or removal
thereof, returns the Premises prior to the termination of the Lease to the condition existing prior
to the installation of such item, and repairs and restores any so-called “doughnuts” or gaps in the
roof and/or floor tiles and/or ceiling and lighting resulting from such removal. At the time
Tenant requests the consent of Landlord to approve the installation of an Alteration requiring the
consent of Landlord, Tenant shall seek from Landlord a written statement of whether or not Landlord
will require Tenant to remove such Alteration and restore all or part of the Premises as required
by Landlord in accordance with this paragraph and Paragraph 5 at the expiration or earlier
termination of the term of the Lease. If Tenant does not obtain from Landlord a statement in
writing that Landlord will not require such Alteration to be removed, then at the expiration or
sooner termination of the term of the Lease, it is agreed that

30

 

Tenant may be required to remove all or part of such Alterations, and return the Premises to
the condition existing prior to the Installation of such Alterations as provided for in Paragraph 5
above. In addition, if Tenant has installed Alterations without Landlord’s consent, if Landlord so
requires, Tenant shall also remove all or part of such Alterations so installed without Landlord’s
consent as Landlord may designate and return the Premises to the condition existing prior to the
installation of such Alteration. Alterations for which Landlord has given its written consent to
Tenant that such Alteration need not be removed, shall not be removed by Tenant at the expiration
or earlier termination of the term of the Lease.

          E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation thereof and returns the Premises to the
condition existing prior to the installation of such fixtures and repairs and restores any so
called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-floor and
appropriate floor covering for said area) and/or floor tiles and/or ceiling tiles and lighting
resulting from such removal.

     52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions
of this Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 41 and 42, or during either of the five (5) year extension
periods permitted by Paragraphs 41 and 42 or Paragraph 40.C., it becomes necessary (due to any
governmental requirement for continued occupancy of the Premises) to make structural improvements
required by laws enacted or legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements exceeds $100,000, then if
such legal requirement is not imposed because of Tenant’s specific use of the Premises and is not
“triggered” by Tenant’s Alterations or Tenant’s application for a building permit or any other
governmental approval (in which instance Tenant shall be responsible for 100% of the cost of such
improvements), Landlord shall be responsible for paying the cost of such improvement and
constructing such improvement, subject to a cash contribution from Tenant of a portion of the cost
thereof as provided for and calculated in Paragraph 52B.

          B. When Landlord makes an improvement pursuant to Paragraph 52A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost thereof prior to the commencement of the work by Landlord. It is
agreed that Tenant shall pay to Landlord 100% of the cost of the first $100,000.00 worth of each
improvement. After the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease term from the date work
on such improvement commences.

     For example, if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be responsible for
reimbursing Landlord in cash $130,000.00 computed as follows:

31

 

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	-100.000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 52B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 41, or 42, upon the exercise of
any such option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total amount
of said improvement less the amount previously paid for by Tenant. Using the example in Paragraph
52B above, Tenant would owe Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00).

     53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of hazardous materials on the Premises unless directly
related to Tenant’s activities, which subject is exclusively governed by Paragraph 44.

          B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on Tenant’s part to pay
such Real Property Taxes being so contested shall not constitute a default so long as Tenant
complies with the provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord. In that case Landlord shall join
in the proceedings or contest or permit it to be brought in Landlord’s name as long as Landlord is
not required to bear any cost. Tenant, on final determination of the proceeding or contest, shall
immediately pay or discharge its share of any Real Property Taxes determined by any decision or
judgment rendered, together with all costs, charges, interest, and penalties incidental to the
decision or judgment. If Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this paragraph, before the
commencement of the proceeding or contest Tenant shall furnish to Landlord a surety bond in form
reasonably satisfactory to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the

32

 

total amount of Real Property Taxes in dispute and any such bond shall be assignable to any
lender or purchaser of the Premises. The bond shall hold Landlord and the Premises harmless from
any damage arising out of the proceeding or contest and shall insure the payment of any judgment
that may be rendered.

     54. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

          A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga and Richard T. Peery Separate
Property Trusts or an affiliated entity; (ii) the insurance to be carried by Tenant to satisfy this
requirement strictly complies with all of the provisions of Paragraph 12; (iii) such insurance
shall name Landlord as the insured and provide that it is to be payable to Landlord in the same
manner as if such insurance had been carried by Landlord pursuant to Paragraph 12 (subject to the
rights of any lender holding a mortgage or deed of trust encumbering the Premises); (iv) each
lender holding a mortgage or deed of trust encumbering the Premises shall have given its written
consent to Tenant carrying such insurance and such insurance shall comply with the requirements of
any such lender; (v) Tenant must notify Landlord, by certified mail, no later than one hundred
eighty (180) days prior to the expiration date of Landlord’s insurance policy (which expiration
date is currently 3/13/xx of a given year and is subject to change; Landlord shall notify Tenant in
the event Landlord’s insurance year changes) that Tenant will directly obtain the required
insurance coverage for the insurance year commencing 3/14/XX through 3/13/XX and each insurance
year through the termination date of this Lease, or until Tenant is no longer able to comply with
all of the provisions of this paragraph 55; (vi) the annual premium must be paid in full at the
commencement of the policy; (vii) the insurance policy must be issued for a one-year period
following the expiration date of Landlord’s insurance policy (i.e., from 3/14/XX to
3/13/XX; (viii) any and all deductibles required under the policy will be paid entirely by Tenant;
(ix) the terms of the coverage must be broad form and cover all items to be covered as set forth in
Paragraph 12 of this Lease; (x) the Building and Premises must be insured for their full
replacement cost; (xi) the insurance policy containing the required coverage in accordance with the
provisions of this paragraph must be sent to Landlord for retention within thirty (30) days prior
to the expiration date of Landlord’s insurance policy, and may not be terminated or altered without
thirty (30) days written notice to Landlord by the company providing such insurance (it is agreed
that if the insurance policy is cancelled or altered, Landlord will have the right to obtain the
property insurance coverage on said building, and Landlord will bill the Tenant for the related
insurance premium); and (xii) at all times while Tenant is so carrying such insurance, Tenant is
Quantum Corporation or a successor entity and the then net worth of such corporation is
substantially the same as the net worth of Quantum corporation as of the date of this Lease is
executed by Landlord and Tenant. Tenant shall provide such evidence as is required by Landlord and
any lender to establish that the insurance that Tenant carries pursuant to this Paragraph 54 has
been obtained and meets the requirement of this Paragraph 54. Such insurance carried by Tenant
shall be in form and provided by an insurance company that is reasonably acceptable to Landlord,
which must be rated “A plus” or better by Best’s Insurance Service (or an equivalent rating from
another rating agency should Best’s no longer provide such service). A copy of any such policy
shall be delivered to Landlord. If Tenant elects to insure and such insurance provided by Tenant
does not

33

 

satisfy the requirements of Paragraph 12, in the event of a subsequent casualty, Tenant shall
be responsible for and shall pay for that portion of the restoration cost, in excess of the
insurance proceeds actually available that would have been covered by insurance satisfying the
requirements of Paragraph 12.

          B. Tenant shall not be obligated to contribute to the cost of earthquake insurance more than
an amount equal to six (6) times the then annual cost of fire and “all risk” insurance per year.
For example, if the 1994 annual premium for fire and “all risk” insurance is $9,000, then Tenant’s
share of the cost of any premium for earthquake insurance for the following year (1995) shall be
limited to $54,000 ($9,000 x 6). Tenant shall have the right to require earthquake insurance
providing it is available if Tenant agrees to pay full cost thereof.

     55. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i) to withhold its
consent to such assignment or sublease, as permitted pursuant to Paragraph 1, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its obligations under
the Lease, and the following shalt apply (except the following shall not apply to a “Permitted
Transfer” described in Paragraph 56):

               (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all consideration received by
Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant under this
Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing commissions paid
to third parties not affiliated with Tenant in order to obtain the assignment or sublease in
question.

               (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the rental provided for in this Lease fifty percent (50%) of the positive difference,
if any, between (i) all rent and other consideration paid by the subtenant to Tenant, less (ii) all
rent paid by Tenant to Landlord pursuant to this Lease which is allocable to the area so sublet and
all Permitted Transfer Costs related to such sublease. After Tenant has recovered all Permitted
Transfer Costs Tenant shall pay to Landlord the amount specified in the preceding sentence on the
same basis, whether periodic or in lump sum, that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by Tenant.

               (3) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the right to inspect
Tenant’s books and records relating to the payments due pursuant to this

34

 

subparagraph. Upon request therefor, Tenant shall deliver to Landlord copies of all bills,
invoices or other documents upon which its calculations are based.

               (4) As used herein, the term “consideration” shall mean any consideration of any kind
received, or to be received, by Tenant as a result of the assignment or sublease, if such sums are
paid for Tenant’s interest in this Lease or in the Premises.

     56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 1, so long as Tenant otherwise complies with the provisions of Paragraph 1 and the
Permitted Transfer does not release Tenant from its obligations hereunder, Tenant may enter into
any of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent,
and the provisions of Paragraph 55A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of rent and full performance of the lease;

          B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
95% of all assets of Tenant are permanently transferred to such assignee. In the event there is
not a permanent transfer of 95% or more of the assets and liabilities from Tenant to a third party,
and Tenant continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;

          C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets of Tenant are permanently transferred to
such assignee (in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of the Lease).

     57. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or
deed of trust enters into a written subordination, non-disturbance and attornment agreement in
which the Lender agrees that notwithstanding any subordination of this Lease to such Lender’s
mortgage or deed of trust, (i) such Lender shall recognize all of Tenant’s rights under this Lease,
and (ii) in the event of a foreclosure this Lease shall not be terminated so long as Tenant is not
in material default of its obligations under this Lease, but shall continue in effect and Tenant
and such Lender (or any party acquiring the Premises through such foreclosure) shall each be bound
to perform the respective obligations of Tenant and Landlord with respect to the Premises arising
after such foreclosure.

     58. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (i)
except in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior
to entering the Premises, agrees to comply with any reasonably safety

35

 

and/or security regulations imposed by Tenant with respect to such entry, and shall only enter
the Premises when accompanied by Tenant or its agent (so long as Tenant makes itself reasonably
available for this purpose), and (ii) Landlord may install “for lease” signs relating to the
Premises only during the last 150 days of the Lease term. Landlord agrees to use its reasonable,
good faith efforts such that any entry by Landlord, and Landlord’s agents, employees, contractors
and invitees shall be performed in a manner with as minimal interference as possible with Tenant’s
business at the Premises. Subject to the foregoing, Tenant agrees to cooperate with Landlord and
Landlord’s agents, employees and contractors so that responsibilities of Landlord under the Lease
can be fulfilled in a reasonable manner during normal business hours so that no extraordinary costs
are incurred by Landlord.

     59. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30) days is
required to cure such non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

     60. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is
performing all of its other obligations under the Lease including the obligation to pay Basic Rent
and Additional Rent (ii) Tenant provides on-site security during normal business hours for those
parts of the Premises left vacant, (iii) such vacancy does not materially and adversely affect the
validity or coverage of any policy of insurance carried by Landlord with respect to the Premises,
and (iv) the utilities and heating and ventilation system are operated to the extent necessary to
prevent damage to the Premises or its systems.

     61. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Except as provided in Paragraph 61B, Landlord may not terminate the Lease if the Premises
are damaged by a peril that is covered by the insurance carried by Landlord pursuant to Paragraph
12, but instead shall restore the Premises in the manner described by Paragraph 21.

          B. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of the
following conditions is satisfied: (i) the cost to repair or the damage exceeds thirty-three
percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs at a time
when there is less than five (5) years remaining in the term of the Lease. Notwithstanding the
foregoing, if such damage occurs at a time when there is less than five (5) years remaining in the
term of the Lease and Landlord notifies Tenant of Landlord’s election to terminate the Lease
pursuant to the provisions of this Paragraph 61B, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 41 or 42 such that the remaining term of the Lease
(including the option period) will be more than five (5) years following the date of such damage,
this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise of an
option to extend granted to Tenant by either Paragraph 41 or 42. In such event, this Lease shall
not

36

 

terminate, the term shall be so extended, and Landlord shall restore the Premises in the
manner provided in Paragraph 21.

          C. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the 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
only by delivery to Landlord of a written notice of election to terminate within seven (7) days
after Tenant receives from Landlord the estimate of the time needed to complete such restoration:

               (1) The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage; or

               (2) The Premises are damaged by any peril within twelve (12) months of the last day of the
Lease term and provided Tenant has not exercised an option to renew pursuant to the provisions of
Paragraph 41 or 42, and, in the reasonable opinion of Landlord’s architect or construction
consultant, the restoration of the Leased Premises cannot be substantially completed within sixty
(60) days after the date of such damage.

     62. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than one third (1/3) of the building is taken by
condemnation or if a taking by condemnation is only threatened.

     63. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the Security Deposit
to its successor in interest (transferee) in accordance with the provisions of California Civil
Code Section 1950.7, as amended or recodified.

     64. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably required by any
supplier, lessor, or lender in connection with the installation in the Premises of the Tenant’s
personal property or trade fixtures providing Landlord approves the form of any such waiver and
Landlord’s rights under this Lease are not materially and adversely affected.

37

 

	 	 	 	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION,	 	 	 	JOHN ARRILLAGA SEPARATE	 	 
	a Delaware corporation	 	 	 	PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Deborah E. Barber
	 	 	 	By
	 	/s/ John Arrillaga	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	John Arrillaga, Trustee	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title	 	Vice President, Human Resources	 	 	 	RICHARD T. PEERY SEPARATE	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	/s/ Richard T. Peery	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Richard T. Peery, Trustee	 	 

38

 

Quantum 5

AMENDMENT NO. 1

TO LEASE

     THIS AMENDMENT NO. 1 is made and entered into this 16th day of April, 1997, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/2/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD and QUANTUM CORPORATION, a Delaware corporation, as
TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated March 23, 1994 Landlord leased to Tenant all o that
certain 94,484 ± square foot building located at 1101 Sumac Drive, Milpitas, California, the details
of which are more particularly set forth in said March 23, 1994 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated December I5, 1994 which
established the January 1, 1995 Commencement Date of the Lease, and the Termination Date of
September 30, 2006, and,

     C. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) extending,
the Term for five (5) years pursuant to Lease Paragraph 41 (“First Five-Year Option to Extend”),
(ii) amending the Basic Rent schedule and Aggregate Rent, (iii) adding a Third Option to Extend,
(vi) amending Paragraphs 47 (“Cross Default”) and 12 (“Property Insurance”), (v) replacing Lease
Paragraph 52 (“Structural Capital Costs Regulated by Governmental Agencies After the Commencement
of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) and (vi)
amending and/or replacing certain provisions of the Lease commencing as of the commencement of the
Third Extended Term of said Lease Agreement as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. TERM OF LEASE: It is agreed between the parties that Tenant has exercised its
First Five-Year Option to Extend said Lease as detailed in Lease Paragraph 41. Pursuant to the
terms of said Paragraph 41, the Term of said Lease Agreement shall be extended for an additional
five (5) year period from the schedule Lease Termination Date of September 30, 2006; therefore the
Lease Termination Date shall be changed from September 30, 2006 to September 30, 2011.

     2. CONCURRENT EXERCISE OF OPTION TO EXTEND: Pursuant to Lease Paragraph 40C (“Lease
Terms Co-Extensive”), it is understood between the parties that if Tenant exercises its Option to
Extend this Lease, the terms of the Building 1, Building 2, Building 3 and

1

 

Quantum 5

Building 4 Leases (the “Existing Leases”) are to be extended accordingly. The monthly Basic
Rent during the extended term under each of the Leases shall be increased by $.05 per square foot
on the commencement date of the extended term and thereafter on each and every anniversary of the
respective lease commencement date; therefore, concurrently with the execution of this Amendment
No. 1, Landlord and Tenant shall execute amendments to the Existing Leases, extending the terms of
each of the Existing Leases for five years pursuant to said lease’s respective First Five-Year
Option to Extend. It is also understood that in the event Tenant (i) exercises any of its Options
to Extend this Lease, or if Tenant exercises any of its Options to Extend any of the Existing
Leases, each of the five Leases shall be extended accordingly.

     3. BASIC RENTAL FOR EXTENDED TERM OF LEASE: The monthly Basic Rental for the Extended
Term of Lease shall be as follows:

     On October 1, 2006, the sum of ONE HUNDRED EIGHTY ONE THOUSAND FOUR HUNDRED NINE AND 28/100
DOLLARS ($181,409.28) shall be due, and a like sum due on the first day of each month thereafter
through and including September 1, 2007.

     On October 1, 2007, the sum of ONE HUNDRED EIGHTY SIX THOUSAND ONE HUNDRED THIRTY THREE AND
48/100 DOLLARS ($186,133.48) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2008.

     On October 1, 2008, the sum of ONE HUNDRED NINETY THOUSAND EIGHT HUNDRED FIFTY SEVEN AND
68/100 DOLLARS ($190,857,68) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2009.

     On October 1, 2009, the sum of ONE HUNDRED NINETY FIVE THOUSAND FIVE HUNDRED EIGHTY ONE AND
88/100 DOLLARS ($195,581.88) shall be due, and a like sum due on the first day of each month
thereafter through and including September 1, 2010.

     On October 1, 2010, the sum of TWO HUNDRED THOUSAND THREE HUNDRED SIX AND 08/100 DOLLARS
($200,306.08) shall be due, and a like sum due on the first day of each month thereafter through
and including September 1, 2011.

     The Aggregate Basic Rent for the Lease shall be increased by $11,451,460.80 or from
$21,171,029.88 to $32,622,490.68.

     4. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period pursuant to Lease Paragraph 42 (“Second Five Year Option To
Extend”), Landlord hereby grants to Tenant a third option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term as extended pursuant
to Lease Paragraph 42 (“Second Five Year Option To Extend”), in which event the Lease shall be
considered extended for an additional five (5) year period upon the same terms and conditions as
this Lease, absent this Paragraph 4 and subject to the Rental as set forth below. In the event
that Tenant fails to timely exercise Tenant’s option as set forth herein in

2

 

Quantum 5

writing, Tenant shall have no further option to extend this Lease or the Other Leases, and
this Lease shall continue in full force and effect for the full remaining term hereof, absent this
Paragraph 4.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.42/sf
	Months 13-24

	 	$2.47/sf
	Months 25-36

	 	$2.52/sf
	Months 37-48

	 	$2.57/sf
	Months 49-60

	 	$2.62/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 4 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 4 notwithstanding such non-curable default.

     5. CROSS DEFAULT: Notwithstanding anything to the contrary in Paragraph 47 of this
Lease, said Paragraph 47 is hereby amended to include the following: “Landlord shall have the
option of considering a default under this Lease or a default under any of the Existing Leases
(i.e. The Leases for Building 1, Building 2, Building 3 and Building 4) to be a default under all
such leases, only with respect to such leases under which Landlord is also the ‘Landlord’ at the
time such default occurs. By way of example, if at the time a default of Tenant occurs under this
Lease, Landlord has sold the premises described in any of the Existing Leases and is no longer the
‘Landlord’ thereunder, then a default under this Lease shall not constitute a default under
any of such Existing Leases so sold by Landlord (unless the premises leased under this Lease and
the Existing Leases are sold to the same entity), and a default by Tenant under any of such
Existing Leases so sold by Landlord shall not constitute a default under this Lease or any
other of the Existing Leases then remaining between Landlord and Tenant. However, if the Landlord
under this Lease and the Existing Leases is one in the same at the time of said default, said cross
default provisions shall apply.”

     6. PROPERTY INSURANCE: Lease Paragraph 12 (“Property Insurance”) is hereby amended to
include the following: “Tenant acknowledges that as part of the cost of insurance policies for the
Premises, Tenant is responsible for the payment of insurance deductibles on insurance claims as
they relate to the Premises subject to the limitations provided in Lease Paragraph 54 (“Property
Insurance”) which limitations are applicable only during the

3

 

Quantum 5

initial Lease Term and the First Lease Extension Period and the Second Lease Extension Period.
Said limitation provided for in Lease Paragraph 54 are null and void at the commencement of the
Third Lease Extended Term”.

     7. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: Lease
Paragraph 52 (“Structural Capital Costs Regulated by Governmental Agencies after the Commencement
of this Lease Not Caused by Tenant or Tenant’s Uses or Remodeling of the Premises”) is hereby
deleted and replaced with the following:

     “52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF
THE PREMISES: The provisions of this Paragraph 52 shall modify Paragraphs 7 and
14:

     A. If (i) during the last five (5) years of the First Extended Term of the
Lease if said Lease has not been extended as provided for in Lease Paragraph 42
(“Second Five Year Option To Extend”) or in Paragraph 4 (“Third Five Year Option to
Extend”) above or Lease Paragraph 40C (“Lease Terms Co-Extensive”), or (ii) during
either of the five (5) year extension periods permitted by Lease Paragraph 42 or
Paragraph 4 above, or Lease Paragraph 40C above, it becomes necessary (due to any
governmental requirement for continued occupancy of the Premises) to make structural
improvements required by laws enacted or legal requirements imposed by governmental
agency(s) after the Commencement Date, and the cost for each required work or
improvements exceeds $100,000, then if such legal requirement is not imposed because
of Tenant’s specific use of the Premises and is not “triggered” by Tenant’s
Alterations or Tenant’s application for a building permit or any other governmental
approval (collectively “Tenant’s Actions”) in which instance Tenant shall be
responsible for 100% of the cost of such improvements, Landlord shall be responsible
for paying the cost of such improvement and constructing such improvement, subject
to a cash contribution from Tenant of a portion of the cost thereof as provided for
and calculated in Paragraph 52B.

     B. When Landlord makes an improvement pursuant to Paragraph 52A, and as a
condition to Landlord’s obligation to construct such improvement, Tenant shall make
the following contribution in cash to Landlord for the cost thereof prior to the
commencement of the work by Landlord. It is agreed that Tenant shall pay to
Landlord 100% of the cost of the first $100,000.00 worth of each improvement. After
the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease Term
from the date work on such improvement commences.

4

 

quantum 5

     For example, if the improvement is not required as a result of Tenant’s Actions
and if the cost of such improvement was $400,000 and there was one year and six
months remaining in the Lease term when the work commenced, then Tenant would be
responsible for reimbursing Landlord in cash $130,000.00 computed as follows:

	 	 	 	 	 
	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	-100.000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

     C. If Landlord has made improvements, for which Tenant has reimbursed Landlord
for the cost thereof pursuant to Paragraph 52B, and the term of this Lease is
subsequently extended pursuant to the exercise by Tenant of an option to renew
pursuant to Lease Paragraph 42 or Paragraph 4 above, upon the exercise of any such
option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by Tenant. Using the
example in Paragraph 52B above, Tenant would owe Landlord the additional amount of
$270,000.00 ($400,000.00 — $130,000.00 = $270,000.00).”

     8. THIRD OPTION PERIOD — LEASE PROVISION CHANGES: In the event Tenant exercises its
Third Option to Extend as provided for in Paragraph 4 above, the following amendments (contained
within Paragraphs 9 through 18) are herein made to the Lease to be effective upon the commencement
of the third option period (“Third Option Period”), or during any period following the expiration
of the Lease Term or expiration of the Lease when Tenant is in possession of the Premises.

     9. LATE CHARGE: Effective as of the first day of the Third Option Period, the Late
Charge referenced in Lease Paragraph 4.D (“Late Charge”) shall be changed from five percent (5%) to
ten percent (10%), and Lease Paragraph 49 (“Limitation on Late Charge”) shall be deleted in its
entirety and of no further force or effect.

     10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the Lease, effective
as of the first day of the Third Option Period, and on the first day of each month thereafter,
Tenant shall pay to Landlord, in addition to the Basic Rent and Additional Rent, a fixed monthly
management fee (“Management Fee”) equal to one percent (1%) of the Basic Rent due for each month
during the Lease Term.

     11. HAZARDOUS MATERIALS: Effective as of the first day of the Third Option Period,
Lease Paragraph 44 (“Hazardous Materials”) shall be deleted in its entirety and replaced with the
following:

5

 

Quantum 5

     ”44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of “Hazardous Materials” (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A to the Lease (hereinafter collectively referred to as the
“Property”):

     A. As used herein, the term “Hazardous Materials” shall mean any material,
waste, chemical, mixture or byproduct which is or hereafter is defined, listed or
designated under Environmental Laws (defined below) as a pollutant, or as a
contaminant, or as a toxic or hazardous substance, waste or material, or any other
unwholesome, hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or restricted by any
Environmental Law (including, without limitation, petroleum hydrocarbons or any
distillates or derivatives or fractions thereof, polychlorinated biphenyls, or
asbestos). As used herein, the term “Environmental Laws” shall mean any applicable
Federal State of California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement, agreement, or
approval, or any determination, judgment, directive, or order of any executive or
judicial authority at any level of Federal, State of California or local government
(whether now existing or subsequently adopted or promulgated) relating to pollution
or the protection of the environment, ecology, natural resources, or public health
and safety.

     B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s
Hazardous Materials Activities (defined below). Landlord acknowledges that Tenant
shall use, in compliance with applicable Environmental Laws, customary household and
office supplies (Tenant shall first provide Landlord with a list of said materials
use), such as mild cleaners, lubricants and copier toner. Any and all of Tenant’s
Hazardous Materials Activities shall be conducted in conformity with this Paragraph
44, Paragraph 14 of this Lease, and in compliance with all Environmental Laws and
regulations. As used herein, the term “Tenant’s Hazardous Materials Activities”
shall mean any and all use, handling, generation, storage, disposal, treatment,
transportation, release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with Tenant’s use of the
Property, or by Tenant or by any of Tenant’s agents, employees, contractors,
vendors, invitees, visitors or its future subtenants or assignees or other third
parties (including “dumping” by others) (or which Hazardous Materials originate on
the surface of the Premises any time on or after the Commencement Date of this
Lease, but excluding Hazardous Materials on the Premises prior to the Lease
Commencement Date because of the storage, use, disposal, or transportation of such
materials or waste by any of Landlord’s contractors or otherwise arising out of
construction work performed by or under the direction of Landlord on the Premises
and Landlord shall be responsible for all required actions with respect to such
materials or wastes). Tenant agrees to provide Landlord with prompt written notice
of any spill or release of Hazardous Materials at the Property during the term of
the

6

 

Quantum 5

Lease of which Tenant becomes aware, and further agrees to provide Landlord
with prompt written notice of any violation of Environmental Laws in connection with
Tenant’s Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s
Hazardous Materials Activities involve Hazardous Materials other than normal use of
customary household and office supplies, Tenant also agrees at Tenant’s expense:
(i) to install such Hazardous Materials monitoring, storage and containment devices
as may be required by Environmental Laws, regulations and/or governing agencies;
(ii) to provide Landlord with a written inventory of such Hazardous Materials,
including an update of same each year upon the anniversary date of the Commencement
Date of the Lease (“Anniversary Date”); and (iii) on each Anniversary Date to
provide to Landlord copies of all documentation and records, required by applicable
Environmental Laws to be prepared and submitted to governmental authorities,
relating to use at the Property of Hazardous Materials or to Tenant’s Hazardous
Materials Activities, if any. If upon completion of Landlord’s review of said
documentation and records, Landlord reasonably questions if Tenant is in compliance
with all applicable Environmental Laws with respect to Tenant’s Hazardous Materials
Activities, Tenant agrees within thirty (30) days following receipt of written
notice from Landlord, to retain a qualified environmental consultant, acceptable to
Landlord, to evaluate whether Tenant is in compliance with all applicable
Environmental Laws with respect to Tenant’s Hazardous Materials Activities. Tenant,
at its expense, shall submit to Landlord a report from such environmental consultant
which discusses the environmental consultant’s findings within two (2) months of
each Anniversary Date. Tenant, at its expense, shall promptly undertake and
complete any and all steps necessary, and in full compliance with applicable
Environmental Laws, to fully correct any and all problems or deficiencies identified
by the environmental consultant, and promptly provide Landlord with documentation of
all such corrections.

     C. Prior to termination or expiration of the Lease, Tenant, at its expense,
shall (i) properly remove from the Property all Hazardous Materials which come to be
located at the Property in connection with Tenant’s Hazardous Materials Activities,
and (ii) fully comply with and complete all facility closure requirements of
applicable Environmental Laws regarding Tenant’s Hazardous Materials Activities,
including but not limited to (x) properly restoring and repairing the Property to
the extent damaged by such closure activities, and (y) obtaining from the local Fire
Department or other appropriate governmental authority with any legal or regulatory
jurisdiction a written concurrence that closure has been completed in compliance
with applicable Environmental Laws. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any such closure activities.

     D. If Landlord, upon consultation with Tenant, reasonably concludes that the
Property has become contaminated as a result of Tenant’s Hazardous Materials
Activities, Landlord in addition to any other rights it may have under this Lease or
under Environmental Laws or other laws, may enter upon the

7

 

Quantum 5

Property and conduct inspection, sampling and analysis, including but not
limited to obtaining and analyzing samples of soil and groundwater, for the purpose
of determining the nature and extent of such contamination except to the extent that
such activities may be inconsistent with Tenant’s compliance with Environmental
Laws. Tenant shall promptly reimburse Landlord for the costs of such an
investigation, including but not limited to reasonable attorneys’ fees Landlord
incurs with respect to such investigation to the extent, and only to the extent,
that it that discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Except as may be required of Tenant by applicable Environmental
Laws, Tenant shall not perform any sampling, testing, or drilling to identify the
presence of any Hazardous Materials at the Property, without Landlord’s prior
written consent which shall not be unreasonably withheld. Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and reports
prepared, received or submitted in connection with any sampling, testing or drilling
performed pursuant to the preceding sentence.

     E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord,
whose consent shall not unreasonably be withheld) and hold harmless Landlord, its
employees, assigns, successors, successors-in-interest, agents and representatives
from and against any and all claims (including but not limited to third party claims
from a private party or a government authority), liabilities, obligations, losses,
causes of action, demands, governmental proceedings or directives, fines, penalties,
expenses, costs (including but not limited to reasonable attorneys’, consultants’
and other experts’ fees and costs), and damages, which arise from or relate to: (i)
Tenant’s Hazardous Materials Activities; (ii) any Hazardous Materials contamination
caused by Tenant prior to the Commencement Date of the Lease; or (iii) the breach of
any obligation of Tenant under this Paragraph 44 (collectively, “Tenant’s
Environmental Indemnification”). Tenant’s Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair market
value of the Property. Tenant’s Environmental Indemnification shall further include
but is not limited to the obligation to diligently and properly implement to
completion, at Tenant’s expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other environmental
response action as may be required by applicable Environmental Laws, regulations or
governing agencies (collectively, “Response Actions”). Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and reports
prepared, received or submitted in connection with any Response Actions.

     F. Landlord hereby makes the following representations to Tenant, each of which
is made only to the best of Landlord’s knowledge as of the date Landlord executes
this Lease, without any inquiry or investigation having been made or required by
Landlord regarding this subject, nor does Landlord have any obligation to
investigate or make inquiry regarding the subject:

8

 

Quantum 5

          (1) The soil and ground water on or under the Premises does not contain
Hazardous Materials in amounts which violate any laws to the extent that any
governmental entity could require either Landlord or Tenant to take any remedial
action with respect to such Hazardous Materials.

          (2) During the time that Landlord has owned the Premises, Landlord has received
no notice of (i) any violation, or alleged violation, of any law that has not been
corrected to the satisfaction of the appropriate authority (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or (iii) any pending
investigation by any governmental agency concerning the Premises relating to
Hazardous Materials.

     G. Landlord and Tenant shall each give written notice to the other as soon as
reasonably practicable of (i) any communication received from any governmental
authority concerning Hazardous Materials which relates to the Premises, and (ii) any
contamination of the Premises by Hazardous Materials which constitutes a violation
of any law. Attached as Exhibit “C” to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the Lease Term
Tenant proposes to use other Hazardous Materials at the Premises, Tenant shall
inform Landlord of such use, identifying the Hazardous Materials and the manner of
their use, storage and disposal, and shall agree (i) to use, store and dispose of
such Hazardous Materials strictly in compliance with all laws, regulations and
governing agencies and (ii) that the indemnity set forth in Paragraph 44 shall be
applicable to Tenant’s use of such Hazardous Material.

     H. Landlord or Tenant may, at any time, cause testing wells to be installed on
the Premises, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for such
purposes. Testing wells installed by Tenant shall be paid for by Tenant. If tests
conducted by Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to Hazardous
Materials laws, or that Tenant has liability to Landlord pursuant to Paragraph 44A,
then Tenant shall pay for 100 percent of the cost of the test and all related
expense. Prior to the expiration of the Lease Term, Tenant shall remove any testing
wells it has installed at the Premises, and return the Premises to the condition
existing prior to the installation of such wells, unless Landlord requests in
writing that Tenant leave all or some of the testing wells in which instance the
wells requested to be left shall not be removed.

     I. If any tests performed by Tenant or Landlord prior to the Commencement Date
disclose Hazardous Materials at the Premises, Landlord at its expense will promptly
take all reasonable action required by law with respect to the existence of such
Hazardous Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is prohibited
by law.

9

 

Quantum 5

     J. The obligations of Landlord and Tenant under this Paragraph 44 shall survive
the expiration or earlier termination of the Term of this Lease. The rights and
obligations of Landlord and Tenant with respect to issues relating to Hazardous
Materials are exclusively established by this Paragraph 44.”

     12. REAL ESTATE TAXES: Effective as of the first day of the Third Option Period,
Lease Paragraph 53 (“Real Estate Taxes”) shall be deleted in its entirety and replaced with the
following:

     ”53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

     A. The term “Real Property Taxes” shall not include charges, levies or fees
directly related to the use, storage, disposal or release of Hazardous Materials on
the Premises unless directly related to Tenant’s Activities at this site or on other
sites leased and/or owned by Tenant; however, Tenant shall be responsible for
general or special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or assessment is
not imposed due to on-site originated contamination on the Property (by third
parties not related to Tenant) prior to the Lease Commencement Date. Subject to the
terms and conditions stated herein, Tenant shall be responsible for paying one
hundred percent (100%) of said taxes and/or assessments allocated to the Property.

     B. If any assessments for public improvements are levied against the Premises,
Landlord may elect either to pay the assessment in full or to allow the assessment
to go to bond. If Landlord pays the assessment in full, Tenant shall pay to
landlord or any assignee or purchaser of the Premises each time payment of Real
Property Taxes is made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to bond.

     C. Tenant at its cost shall have the right, at any time, to seek a reduction in
the assessed valuation of the Premises or to contest any Real Property Taxes that
are to be paid by Tenant. If Tenant seeks a reduction or contests such Real
Property Taxes, the failure on Tenant’s part to pay such Real Property Taxes being
so contested shall not constitute a default so long as Tenant complies with the
provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require
that the proceeding or contest be brought by or in the name of Landlord. In that
case Landlord shall join in the proceedings or contest or permit it to be brought in
Landlord’s name as long as Landlord is not required to bear any cost. Tenant, on
final determination of the proceeding or contest, shall immediately pay or discharge
its share of any Real Property Taxes determined by any decision or judgment
rendered, together with all costs, charges, interest, and penalties incidental to
the decision or judgment. If Tenant does not pay the Real Property Taxes when due
pursuant to the Lease and Tenant seeks a reduction or contests

10

 

Quantum 5

them as provided in this paragraph, before the commencement of the proceeding
or contest Tenant shall furnish to Landlord a surety bond in form reasonably
satisfactory to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total amount of Real
Property Taxes in dispute and any such bond shall be assignable to any lender or
purchaser of the Premises. The bond shall hold Landlord and the Premises harmless
from any damage arising out of the proceeding or contest and shall insure the
payment of any judgment that may be rendered.”

     13. PROPERTY INSURANCE: Effective as of the first day of the Third Option Period,
section B of Lease Paragraph 54 (“Property Insurance”) shall be deleted in its entirety and be of
no further force or effect.

     14. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the Third Option
Period, Lease Paragraph 55 (“Assignment and Subletting”) shall be deleted in its entirety and
replaced with the following:

     ”55. ASSIGNMENT AND SUBLETTING: The following modifications are made
to Paragraph 16:

     In the event that Tenant seeks to make any assignment or sublease, then
Landlord, by giving Tenant written notice of its election within fifteen (15) days
after Tenant’s notice of intent to assign or sublease has been given to Landlord,
shall have the right to elect (i) to withhold its consent to such assignment or
sublease, as permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its
obligations under the Lease, and the following shall apply (except the following
shall not apply to a “Permitted Transfer” described in Paragraph 56):

          (1) If Tenant assigns its interest in this Lease, then in addition to the
rental provided for in this Lease, Tenant shall pay to Landlord fifty percent (50%)
of all Rent and other consideration received by Tenant over and above (i) the
assignee’s agreement to assume the obligations of Tenant under this Lease and (ii)
all “Permitted Transfer Costs” (as defined herein) related to such assignment. As
used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing
commissions paid to third parties not affiliated with Tenant in order to obtain the
assignment or sublease in question.

          (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to
Landlord in addition to the Rent provided for in this Lease fifty percent (50%) of
the positive difference, if any, between (i) all rent and other consideration paid
or provided to Tenant by the subtenant, less (ii) all Rent paid by Tenant to
Landlord pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the
preceding sentence on the same basis, whether periodic or in lump

11

 

Quantum 5

sum, that such rent and other consideration is paid to Tenant by its subtenant,
within seven (7) days after it is received by Tenant.

          (3) Tenant’s obligations under this subparagraph shall survive any assignment
or sublease. At the time Tenant makes any payment to Landlord required by this
subparagraph, Tenant shall deliver an itemized statement of the method by which the
amount to which Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant’s books and records
relating to the payments due pursuant to this subparagraph. Upon request therefor,
Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

          (4) As used herein, the term “consideration” shall mean any consideration of
any kind received, or to be received (including, but not limited to, services
rendered and/or value received) by Tenant as a result of the assignment or sublease,
if such sums are paid or provided to Tenant for Tenant’s interest in this Lease or
in the Premises.

          (5) This Paragraph 55. A does not apply to a “Permitted Transfer”, as provided
in Paragraph 56 hereof. The parties agree that if any of the following transactions
occur and do not qualify as “Permitted Transfers”, Tenant must obtain Landlord’s
consent to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as “Permitted Transfers”, then the
provisions of this Paragraph 55.A shall not apply to the following transactions:
(i) a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the assets of
Tenant so long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee and Tenant remains liable and responsible under the
Lease to the extent Tenant continues in existence following such transaction.”

     15. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day of the Third
Option Period, Lease Paragraph 56 (“Permitted Assignments and Subleases”) shall be deleted in its
entirety and replaced with the following:

     ”56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything
contained in Paragraph 16, so long as Tenant otherwise complies with the provisions
of Paragraph 16 and the Permitted Transfer does not release Tenant from its
obligations hereunder, Tenant may enter into any of the following transfers (a
“Permitted Transfer”) without Landlord’s prior written consent, and the provisions
of Paragraph 55A shall not apply to any such Permitted Transfer:

     A. Tenant may sublease all or part of the Premises or assign its interest in
this Lease to any corporation which controls, is controlled by, or is

12

 

Quantum 5

under common control with Tenant by means of an ownership interest of more than
fifty percent (50%) providing Tenant remains liable for the payment of Rent and full
performance of the Lease;

     B. Tenant may assign its interest in the Lease to a corporation which results
from a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as (i) 95% of all assets and liabilities of Tenant are
permanently transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which Tenant is be
merged has a net worth equal to or greater than the net worth of Tenant at the time
of Lease execution or at the time of such assignment, merger, consolidation or
reorganization (whichever is greater), or if it does not, Landlord is
provided guaranty of the Lease (in a form reasonably acceptable to Landlord) from a
corporation (a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, merger, consolidation or reorganization (whichever
is greater). In the event there is not a permanent transfer of 95% or more of the
assets and liabilities from Tenant to a third party, and Tenant continues to exist
as a separate entity, both companies shall be jointly and severally liable for the
full terms and conditions of the Lease;

     C. Tenant may assign this Lease to a corporation which purchases or otherwise
acquires 95% or more of the assets of Tenant so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee (in the event
there is not a permanent transfer of 95% or more of the assets and liabilities from
Tenant to a third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and conditions of
the Lease), and provided that immediately prior to such assignment said corporation,
has a net worth equal to or greater than the net worth of Tenant (a) at the time of
Lease execution or (b) at the time of such assignment (whichever is greater), or if
it does not, Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of, or is
otherwise affiliated with, said corporation and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease execution or
at the time of such assignment, (whichever is greater).”

     16. DESTRUCTION: Effective as of the first day of the Third Option Period, Lease
Paragraph 61 (“Destruction”) shall be deleted in its entirety and replaced with the following:

     ”61. DESTRUCTION: Paragraph 21 is modified by the following:

     A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may
terminate this Lease in the event of an uninsured event or if insurance proceeds,
net of the deductible, are insufficient to cover one hundred percent of the
rebuilding costs; provided, however, Tenant shall have the right to

13

 

Quantum 5

elect, in its discretion, to contribute such excess funds to permit Landlord to
repair the Premises.

     B. Except as provided in Paragraph 61C, Landlord may not terminate the Lease if
the Premises are damaged by a peril whereby the cost to replace and/or repair is one
hundred percent (100%) covered by the insurance carried by Landlord pursuant to
Paragraph 12, but instead shall restore the Premises in the manner described by
Paragraph 21.

     C. If the Premises are damaged by a peril covered by the insurance carried by
Landlord pursuant to Paragraph 12, Landlord shall have the option to terminate the
Lease if each of the following conditions is satisfied: (i) the cost to repair or
the damage exceeds thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than five (5)
years remaining in the term of the Lease.

     D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12,
and said insurance would have been available to cover any damage or destruction to
the Premises, Landlord shall be required to rebuild, at its cost, net of the
deductible which would have been required under said insurance policy (which
deductible Tenant is required to pay).

     E. If the Premises are damaged by any peril, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the 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 only by
delivery to Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time needed to compete
such restoration:

          (1) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) and, in the
reasonable opinion of Landlord’s architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within 180 days
after the date of such damage (subject to force majeure conditions); or

          (2) The Premises are damaged by any peril (not caused by or resulting from an
action of Tenant or Tenant’s agents, employees, contractors or invitees) within
twelve (12) months of the last day of the Lease term, and, in the reasonable opinion
of Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within sixty (60) days after the date of
such damage and Tenant has not exercised its Option to Extend said Term (or Extended
Term as the case may be).”

14

 

Quantum 5

     17. LIABILITY INSURANCE: Effective as of the first day of the Third Option Period,
the first sentence of Lease Paragraph 10 (“Liability Insurance”) shall be deleted and replaced with
the following: ‘Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease
a policy of commercial general liability insurance with combined single limit coverage of not less
than Two Million Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped areas.”

     18. LIMITATION OF LIABILITY: Effective as of the first day of the Third Option
Period, Lease Paragraph 36 (“Limitation of Liability”) shall be deleted in its entirety and
replaced with the following:

     ”36. LIMITATION OF LIABILITY: In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and agree that,
in the event of any actual or alleged failure, breach or default hereunder by
Landlord:

(i) the sole and exclusive remedy shall be against Landlord’s interest in the
Premises leased herein;

(ii) no partner of Landlord shall be sued or named as a party in any suit or action
(except as may be necessary to secure jurisdiction of the partnership);

(iii) no service of process shall be made against any partner of Landlord (except as
may be necessary to secure jurisdiction of the partnership);

(iv) no partner of Landlord shall be required to answer or otherwise plead to any
service of process;

(v) no judgment will be taken against any partner of Landlord;

(vi) any judgment taken against any partner of Landlord may be vacated and set aside
at any time without hearing;

(vii) no writ of execution will ever be levied against the assets of any partner of
Landlord;

(viii) these covenants and agreements are enforceable both by Landlord and also by
any partner of Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease or
imposed by statute or at common law.”

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said March 23, 1994
Lease Agreement shall remain in full force and effect.

(This Space Left Blank Intentionally)

15

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST	 	 	 	QUANTUM CORPORATION	 	 
	 	 	 	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	 	 	By
	 	/s/ Andrew Kryder	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee	 	 	 	 	 	 	 	 
	 
	Date:	 	 June 30, 1997	 	 	 	Andrew Kryder	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 
	 	 	 	 	 	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	Title:	 	Vice President Finance and Corp.	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	General Counsel	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:
	 	June 25, 1997	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 June 26, 1997	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

16

 

Quantum 5

AMENDMENT NO. 2

TO LEASE

     THIS AMENDMENT NO. 2 is made and entered into this 22nd day of March, 2001, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) (previously known as the “John Arrillaga Separate Property Trust”) as amended, and RICHARD
T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and MAXTOR CORPORATION, a Delaware corporation, as
“ASSIGNEE” or “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated March 23, 1994 Landlord leased to QUANTUM CORPORATION, a
Delaware corporation (“ASSIGNOR” or “QUANTUM”) all of that certain 94,484 ± square foot building
located at 1101 Sumac Drive, Milpitas, California, the details of which are more particularly set
forth in said March 23, 1994 Lease Agreement, and

     B. WHEREAS, said Lease was amended by the Commencement Letter dated December 15, 1994 which
established the January 1, 1995 Commencement Date of the Lease, and the Termination Date of
September 30, 2006, and,

     C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 16, 1997, which amended the
Lease by (i) extending the Term for five (5) years pursuant to Lease Paragraph 41 (“First Five-Year
Option to Extend”), (ii) amending the Basic Rent schedule and Aggregate Rent, (iii) adding a Third
Option to Extend, (vi) amending Paragraphs 47 (“Cross Default”) and 12 (“Property Insurance”), (v)
replacing Lease Paragraph 52 (“Structural Capital Costs Regulated by Governmental Agencies After
the Commencement of this Lease not Caused by Tenant or Tenant’s Uses or Remodeling of the
Premises”), and (vi) amending and/or replacing certain provisions of the Lease commencing as of the
commencement of the Third Extended Term, and

     D. WHEREAS, the Lease, together with those certain Amendments described above in Recitals B
and C shall hereinafter collectively be referred to as “the Lease Agreement”, and

     E. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraph 42
(“Second Five Year Option to Extend”) and Paragraph 4 to Amendment No. 1 dated April 16, 1997
(“Third Five Year Option to Extend”) as hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

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Quantum 5

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary
contained in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to
Landlord, Landlord hereby acknowledges that the following transactions have occurred:

          A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

          B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement’), wherein they agreed that:

               (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

               (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock, such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

               (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

          C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be assigned by Quantum to Insula
and Insula will assume and agree to be liable for all of the obligations of Quantum, as Tenant,
under the Lease.

     As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated March 23, 1994, as amended.

     Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as
expressly set forth below, Landlord’s Consent shall in no way void or alter any of the terms of the
Lease Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or diminish
in any way Tenant’s obligations to Landlord.

     Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor,
and Landlord shall not be bound by any agreement other than the terms of the Lease Agreement
between Landlord and Tenant. Landlord does not make any warranties or representations as to the
condition of the Leased Premises or the terms of the Lease Agreement between Landlord and Quantum.
Landlord’s consent to the assignment shall in no way obligate

18

 

Quantum 5

Landlord to any further consents or agreements between Quantum and/or Assignee. So long as
Quantum continues to exist as a Delaware corporation, it is agreed that both Quantum and Maxtor
will be jointly and severally liable for all the terms and conditions of the Lease and all
Amendments thereto; provided, however, that so long as Quantum remains liable for said Lease, no
material amendment to the Lease Agreement after the date hereof shall be binding upon Quantum
without the prior written consent of Quantum, which consent shall not be unreasonably withheld, and
Quantum’s approval shall not be required on transactions related to Landlord’s Waivers, Landlord’s
Consents to Sublease and/or Landlord’s Consents to Alterations. The foregoing, however, shall not
prevent Tenant and Landlord from entering into any such modification or amendment between
themselves.

     It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     2. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 42 (“Second Five Year Option to Extend”) and Paragraph 4 to Amendment No. 1 dated
April 16, 1997 (“Third Five Year Option to Extend”) are hereby deleted in their entirety and shall
be replaced with the following:

          A. SECOND FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“Second
Extended Term”) upon the following terms and conditions:

               1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term pursuant to Paragraph
A hereof (not later than April 3, 2011), in which event the Term of the Lease shall be considered
extended for an additional five (5) years, subject to the Basic Rent set forth below and with: (i)
the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and the terms
and conditions subject to amendment by Landlord (Landlord, in its sole and absolute discretion,
may, but is not required to, incorporate its then current Lease provisions that are standard in
Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its Option to
Extend); and (iii) this Paragraph 2.A thereafter deleted. In the event that Tenant fails to timely
exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further Option to
Extend this Lease, and the Lease shall continue in full force and effect for the full remaining
term hereof, absent this Paragraph 2.

               2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.A.1(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year
the current Term) required for the Extended Term of the Lease to make the Basic Rent for the
Premises comparable to the then current market triple net basic rent for comparable properties
either (i) then owned in whole or in part by the above mentioned Landlord or by members of its
immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its family as
stated herein, other third party properties in the vicinity of the Premises. Tenant shall have
five (5) days after receipt from the Landlord of said new terms and conditions and Basic Rent in
which to accept said new terms and conditions and Basic Rent and

19

 

Quantum 5

enter into written documentation confirming same. In the event Tenant fails to execute said
written documentation confirming said new terms and conditions and Basic Rent for the Second
Extended Term of Lease within said five (5) day period, Tenant shall have no further Option to
Extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof absent of this Paragraph 2, with Landlord having no further responsibility or
obligation to Tenant with respect to Tenant’s Option to Extend.

               3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

               4) The Option rights of Tenant under this Paragraph 2.A, and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant: except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

               5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

          B. THIRD FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

               1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than April 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Third Extended Term”) subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee
and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this Paragraph 2.B thereafter deleted. In the event that Tenant fails
to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further
Option to Extend this Lease,

20

 

Quantum 5

and the Lease shall continue in full force and effect for the full remaining term hereof,
absent this Paragraph 2.B.

               2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.1(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the Second Extended Term) required for the Third Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

               3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at its sole and
absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force
and effect for the full remaining Term hereof, absent of this Paragraph 2.B.

               4) The Option rights of Tenant under this Paragraph 2.B and the Third Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

               5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said March 23, 1994
Lease Agreement shall remain in full force and effect.

21

 

Quantum 5

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	ASSIGNE	 	E/MAXTOR:
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST	 	 	 	MAXTOR CORPORATION
	 	 	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga by Richard T.
Peery his attorney in fact
	 	 	 	By
	 	/s/ Glenn H. Stevens
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:	 	March 30, 2001	 	 	 	 	 	Glenn H. Stevens
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Print or Type Name
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	Title:	 	V.P., General Counsel and Secretary
	 

	 	 
	 	 	 	 	 	 	 	 
	PROPERTY TRUST

	 	 	 	 	 	
	 

	 	 	 	 	 	Date:
	 	April 1, 2001
	 

	 	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:	 	March 30, 2001	 	 	 	ASSIGNOR/QUANTUM:
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	QUANTUM CORPORATION
	 	 	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	/s/ Norm Claus
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 	 	 	 	 	Print or Type Name
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	V.P. Real Estate
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	Date:
	 	March 30, 2001
	 

	 	 
	 	 	 	 	 	 	 	 

22

 

Quantum 2

LEASE AGREEMENT

     THIS LEASE, made this 16th day of April, 1997 between JOHN ARRILLAGA, Trustee, or his
Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S TRUST) as amended, and RICHARD T.
PERRY, Trustee, or his Successor Trustee, UTA dated 7/20/77 (RICHARD T. PERRY SEPARATE PROPERTY
TRUST) as amended, hereinafter called Landlord and QUANTIM CORPORATION, a Delaware corporation,
hereinafter called Tenant.

WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain
premises (the “Premises”) outlined in red on Exhibit “A”, attached hereto and incorporated herein
by this reference thereto more particularly described as follows:

All of that land containing approximately 9,656 ± acres and that certain 182,355 ±
square foot two-story building (“Building 6”) and parking appurtenant thereto, to be
constructed and installed by Landlord as shown within the area outlined in Green on
Exhibit A to be located on Sumac Drive, Milpitas, California, 95035. Said
Premises is more particularly shown within the area outlined in Red on Exhibit
A attached hereto and incorporated herein by this reference. The interior of
the Leased Premises shall be improved by Landlord in the configuration as shown in
Red on Exhibit B to be attached hereto and incorporated herein by this
reference. The building shell shall be constructed in accordance with the shell and
site improvement specifications set forth on Exhibit A, and the general
building elevation set forth on Exhibit A.

     The word “Premises” as used throughout this lease is hereby defined to include the
Hetch-Hetchy Land as described in Paragraph 49, the nonexclusive use of landscaped areas, sidewalks
and driveways in front of or adjacent to the Premises, and the nonexclusive use of the area
directly underneath or over such sidewalks and driveways. The gross leasable area of the building
shall be measured from outside of exterior walls, and shall include any atriums, covered entrances
or egresses and covered loading areas.

     Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter
set forth and Tenant covenants as a material part of the consideration for this Lease to perform
and observe each and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.

     1. USE: Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of office, sales and R&D, and
related uses necessary for the use of Tenant or any approved assignee or subtenant to conduct its
business providing any and all uses of the Premises shall be subject to and in conformance with all
governmental laws and ordinances, and for no other purpose without Landlord’s prior written
consent, Tenant shall not do or permit to be done in or about the Premises nor bring or keep or
permit to be brought or kept in or about the Premises anything which is prohibited by or will in
any way increase the existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents without the prior

 

 

written consent of Landlord, and provided Tenant bears any cost related to such increased rate
or will cause a cancellation of any insurance covering the Premises or any part thereof, or any of
its contents. Tenant shall not do or permit to be done anything in, on or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or occupants of the Premises
or neighboring premises or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. No sale by auction shall be permitted on the Premises.
Tenant shall not place any loads upon the floors, walls, or ceiling which endanger the structure,
or place any harmful fluids or other materials in the drainage system of the building or overload
existing electrical or other mechanical systems. No waste materials or refuse shall be dumped upon
or permitted to remain upon any part of the Premises or outside of the building in which the
Premises are a part except on trash containers placed inside exterior enclosures designated by
Landlord for that purpose or inside of the building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the Premises. Tenant
shall not place anything or allow anything to be placed near the glass of any window, door
partition or wall which may appear unsightly from outside the Premises. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnity, defend and hold landlord
harmless against any loss, expense, damage, reasonable attorneys’ fees, or liability arising out of
failure of Tenant to comply with any applicable law that governs Tenant’s use of the Premises.
Tenant shall comply with any covenant, condition, or restriction (“CC&R’s”) affecting the Premises.
The Provisions of this paragraph are for the benefit of Landlord only and shall not be construed
to be for the benefit of any tenant or occupant of the Premises.

     2. TERM AND COMMENCEMENT DATE OF LEASE: See Paragraph 40, 41 and 42 of this Lease.

     3. POSSESSION: If Landlord, for any reason whatsoever other than Landlord’s default
cannot deliver possession of said premises to Tenant at the commencement of the said term, as
hereinbefore specified, this Lease shall not be void or voidable; no obligation of Tenant shall be
affected thereby; nor shall Landlord or Landlord’s agents be liable to Tenant for any loss or
damage resulting therefrom; but in that event the commencement and termination dales of the Lease,
and all other dates affected thereby shall be revised to conform to the date of Landlord’s delivery
of possession, as specified in Paragraph 2B, above. The above is, however, subject to the
provision that the period of delay of delivery of the Premises shall not exceed 180 days from the
commencement date herein (except those delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond Landlord’s control shall be
excluded in calculating such period) in which instance Tenant, at its option, may, by written
notice to Landlord, terminate this Lease.

     4. RENT:

          A. Basic Rent: Tenant agrees to pay to Landlord at such place as Landlord may designate
without deduction, offset, prior notice, or demand, and Landlord agrees to accept

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as Basic Rent for the leased premises the total sum of the amount for the original Lease Term
to be calculated pursuant to Paragraph 39.

          B. Time for Payment: Full monthly rent is due in advance on the first day of each calendar
month. In the event that the term of this Lease commences a date other than the first day of a
calendar month, on the date of commencement of the term hereof Tenant shall pay to Landlord as rent
for the period from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days between such date of
commencement and the first day of the next succeeding calendar month bears to thirty (30). In the
event that the term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder which the number of
days between said first day of said last calendar month and the last day of the term hereof bears
to thirty (30).

          C. Late Charge: Notwithstanding any other provision of this Lease, if Tenant is in default in
the payment of rental as set forth in this Paragraph 4 when due, or any part thereof, Tenant agrees
to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in
default ten (10) days. Said late charge shall equal ten percent (10%) of each rental payment so in
default.

          D. Additional Rent: Beginning with the commencement data of the term of this Lease. Tenant
shall pay to Landlord or to Landlord’s designated agent in addition to the Basic Rent and as
Additional Rent the following;

               (a) All Taxes relating to the Premises as set forth in Paragraph 9, and

               (b) All insurance premiums relating to the Premises, as set forth in Paragraph 12, and

               (c) All charges, costs and expenses, which Tenant is required to pay hereunder, together with
all interest and penalties, costs and expenses including reasonable attorneys’ fees and legal
expenses, that may accrue thereto in the event of Tenant’s failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant’s part to comply with the terms of this Lease. In the event of nonpayment by
Tenant of Additional Rent landlord shall have all the rights and remedies with respect to thereto
as Landlord has for nonpayment of rent.

     The Additional Rent due hereunder shall be paid to Landlord or Landlord’s agent (i) within
five days for taxes and insurance and within thirty (30) days for all other Additional Rent items
after presentation of invoice from Landlord or Landlord’s agent setting forth such Additional Rent
and/or (ii) at the option of Landlord. Tenant shall pay to Landlord monthly, in advance, Tenant’s
prorata share of an amount estimated by Landlord to be landlord’s approximate average monthly
expenditure for such Additional Rent items, which estimated amount shall be reconciled within 180
days of the end of each calendar year or more frequently if Landlord elects to do so at Landlord’s
sole and absolute discretion as compared to Landlord’s

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actual expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said estimated amount, or
Landlord crediting to Tenant’s account (providing Tenant is not in default in the performance of
any of the terms, covenants and conditions of this Lease, in which case such amount shall be held
by Landlord as a credit for Tenant’s account until such default has been cured) any amount of
estimated payments made by Tenant in excess of Landlord’s actual expenditures for said Additional
Rent items.

          E. Fixed Management Fee: Beginning with the Commencement Date of the Term of this Lease,
Tenant shall pay to Landlord, in addition to the Basic Rent, a fixed monthly management fee
(“Management Fee”) equal to 1% of the Basic Rent due for each month during the Lease Term.

     The respective Obligations of Landlord and Tenant under this paragraph shall survive the
expiration or other termination of the term of this Lease, and; if the term hereof shall expire or
shall otherwise terminate on a day other than the last day of a calendar year, the actual
Additional Rent incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number of days in such
calendar year preceding such expiration or termination bears to 365.

          F. Place of Payment of Rent and Additional Rent: All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at
Peery/Arrillaga, File 1504, P.O. Box 60000, San Francisco, CA 94160 or to such other person or to
such other place as Landlord may from time to time designate in writing.

          G. Security Deposit: Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
with Landlord the sum of SEVEN HUNDRED ELEVEN THOUSAND ONE HUNDRED EIGHTY FOUR AND 50/100 Dollars
($711,184.50). Said sum shall be held by Landlord as a Security Deposit for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the payment of rent and any
of the monetary sums due herewith, Landlord may (but shall not be required to) use, apply or retain
all or any part of this Security Deposit for the payment of any other amount which Landlord may
spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant’s default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its original amount. Tenant’s
failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest
on such Deposit. If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) at the expiration of the
Lease term and after Tenant has vacated the Premises. In the event of termination of Landlord’s
interest in this Lease, Landlord shaft transfer said Deposit to Landlord’s successor in interest
whereupon Tenant agrees

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     to release Landlord from liability for the return of such Deposit or the accounting therefor.
See Paragraph 50

     5. ACCEPTANCE AND SURRENDER OF PREMISES: By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts the building and
improvements included in the Premises in their present condition and without representation or
warranty by Landlord as to the condition of such building or as to the use or occupancy which may
be made thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner termination of this
Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair
(damage by Acts of God, fire, normal wear and tear excepted), with all interior walls cleaned so
that they appear freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed; all broken, marred or nonconforming accoustical ceiling
tiles replaced; all windows washed; the airconditioning and heating systems serviced by a reputable
and licensed service firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any burned out or broken
light bulbs or ballasts; the lawn and shrubs in good condition including the replacement of any
dead or damaged plantings; the sidewalk, driveways and parking areas in good order, condition and
repair; together with all alterations, additions, and improvements which may have been made in to,
or on the Premises (except moveable trade fixtures installed at the expense of Tenant) except that
Tenant shall ascertain from Landlord within ninety (90) days before the end of the term of this
Lease whether Landlord desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if Landlord shall so
desire, then Tenant shall restore said Premises or such part or parts thereof before the end of
this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of the term or sooner
termination of this Lease, shall remove all of Tenant’s personal property and trade fixtures from
the Premises, and all property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to same shall thereupon
pass to Landlord without compensation to Tenant. Landlord may upon termination of this Lease,
remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost, and
repair any damage caused by such removal at Tenant’s sole cost. It the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such delay. Nothing
contained herein shall be construed as an extension of the term hereof or as a consent of Landlord
to any holding over by Tenant. The voluntary or other surrender of this Lease or the Premises by
Tenant or a mutual cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies or operate as an
assignment to Landlord of all or any such subleases or subtenancies. See Paragraph 51

     6. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written consent of
Landlord first had and obtained by Tenant (such consent not to be unreasonably withheld), but at
the cost of Tenant, and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to Landlord.

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Landlord reserves the right to approve all contractors and mechanics proposed by Tenant to
make such alterations and additions. Tenant shall retain title to all moveable furniture and trade
fixtures placed in the Premises. All heating, lighting, electrical, airconditioning, floor to
ceiling partitioning, drapery, carpeting, and floor installations made by Tenant, together with all
property that has become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions, without having
obtained consent from Landlord to do so, and until five (5) days from the receipt of such consent,
in order that Landlord may post appropriate notices to avoid any liability to contractors or
material suppliers for payment for Tenant’s improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant shall, if required
by Landlord, secure at Tenant’s own cost and expense, a completion and lien indemnity bond,
satisfactory to Landlord, for such work. Tenant further covenants and agrees that any mechanic’s
lien filed against the Premises for work claimed to have been done for, or materials claimed to
have been furnished to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after Tenant receives notice of the filing thereof, at the cost and expense of Tenant. Any
exceptions to the foregoing must be made in writing and executed by both Landlord and Tenant. See
Paragraph 51.

     7. TENANT MAINTENANCE: Tenant shall, at its sole cost and expense, keep and maintain
the Premises (including appurtenances) and every part thereof in a high standard of maintenance and
repair, or replacement, and in good and sanitary condition. Tenant’s maintenance and repair
responsibilities herein referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by accident or act of
third parties), truck doors, plumbing systems (such as water and drain lines, sinks, toilets,
faucets, drains, showers and water fountains), electrical systems (such as panels, conduits,
outlets, lighting fixtures, lamps, bulbs, tubes and ballasts), heating and airconditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of the building,
store fronts, roofs, downspouts, all interior improvements within the premises including but not
limited to wall coverings, window coverings, carpet, floor coverings, partitioning, ceilings, doors
(both interior and exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to landscaping,
sidewalks, driveways, parking lots including striping and sealing, sprinkler systems, lighting,
ponds, fountains, waterways, and drains. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by such rolling chairs
if such wear and tear exceeds that caused by normal foot traffic in surrounding areas. Areas of
excessive wear shall be replaced at Tenant’s sole expense upon Lease termination. Tenant hereby
waives all rights under, and benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of
the California Civil Code and under any similar law, statute or ordinance now or hereafter in
effect. In the event any of the above maintenance responsibilities apply to any other tenant(s) of
Landlord where there is common usage with other tenant(s), such maintenance responsibilities and
charges shall be allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord. See Paragraph 52

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     8. UTILITIES: Tenant shall pay promptly, as the same become due, all charges for
water, gas, electricity, telephone, telex and other electronic communication service, sewer
service, waste pick-up and any other utilities, materials or services furnished directly to or used
by Tenant on or about the Premises during the term of this Lease, including, without limitation,
any temporary or permanent utility surcharge or other exactions whether or not hereinafter imposed.
In the event the above charges apply to any other tenant(s) of Landlord where there is common
usage with other tenant(s), such charges shall be allocated to the leased Premises by square
footage or other equitable basis as calculated and determined by Landlord.

     Landlord shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services to the Premises when
such interruption or failure is caused by accident, breakage, repair, strikes, lockouts, or other
labor disturbances or labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

     9. TAXES:

          A. Notwithstanding the following, Tenant is responsible for paying all real estate taxes and
assessments assessed on the Premises leased hereunder from November 1, 1995. As Additional Rent
and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord, or if Landlord so
directs, directly to the Tax Collector, all Real Property Taxes relating to the Premises. In the
event the Premises leased hereunder consist of only a portion of the entire tax parcel, Tenant
shall pay to Landlord Tenant’s proportionate share of such real estate taxes allocated to the
leased Premises by square footage or other reasonable basis as calculated and determined by
Landlord. If the tax billing pertains 100% to the leased Premises, and Landlord chooses to have
Tenant pay said real estate taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior to delinquency, the
applicable real property taxes and assessments pertaining to the leased Premises, and failure to
receive a bill for taxes and/or assessments shall not provide a basis for cancellation of or
nonresponsibility for payment of penalties for nonpayment or late payment by Tenant. The term
“Real Property Taxes,” as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including
all installments of principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any change in
ownership of the Premises) now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy assessments, which
are levied or assessed against, or with respect to the value, occupancy or use of, all or any
portion of the Premises (as now constructed or as may at any time hereafter be constructed, altered
or otherwise changed) or Landlord’s interest therein; any improvements located within the Premises
(regardless of ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking areas, public
utilities, or energy within the Premises; (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Premises; and (iii) all costs and
fees (including reasonable attorneys’ fees) incurred by Landlord in reasonably contesting any Real
Property Tax and in negotiating with public authorities as to any Real Property Tax. If at any time
during the term of this Lease the taxation or assessment of the Premises prevailing as of the
commencement dale of this Lease shall be altered so that in lieu

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of or in addition to any Real Property Tax described above there shall be levied, assessed or
imposed (whether by reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate or additional tax or charge (i) on the value, use
or occupancy of the Premises or Landlord’s interest therein or (ii) on or measured by the gross
receipts, income or rentals from the Premises, on Landlord’s business of leasing the Premises, or
computed in any manner with respect to the operation of the Premises, then any such tax or charge,
however designated, shall be included within the meaning of the term “Real Property Taxes” for
purposes of this Lease. If any Real Property Tax is based upon property or rents unrelated to the
Premises, than only that part of such Real Property Tax that is fairy allocable to the Premises
shall be Included within the meaning of the term “Real Property Taxes”, Notwithstanding the
foregoing, the term “Real Property Taxes” shall not include estate, inheritance, gift or franchise
taxes of Landlord or the federal or state net Income tax imposed on Landlord’s income from all
sources. See Paragraph 53.

          B. Taxes on Tenant’s Property: Tenant shall be liable for and shall pay ten days before
delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied
against Landlord or Landlord’s property or if the assessed value of the Premises is increased by
the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and
if Landlord, after written notice to Tenant, pays the taxes based on such increased assessment,
which landlord shall have the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant, Tenant shall upon demand, as the case may be, repay to Landlord the
taxes so levied against Landlord, or the proportion of such taxes resulting from such increase in
the assessment; provided that in any such event Tenant shall have the right in the name of Landlord
and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction to
recover the amount of such taxes so paid under protest, and any amount so recovered shall belong to
Tenant.

     10. LIABILITY INSURANCE: Tenant, at Tenant’s expense, agrees to keep in force during
the term of this Lease a policy of commercial general liability insurance with combined single
limit coverage of not less than Two Million Dollars ($2,000,000) per occurrence for bodily injury
and property damage occurring in, on or about the Premises, including parking and landscaped areas.
Such insurance shall be primary and noncontributory as respects any insurance carried by Landlord.
The policy or policies effecting such insurance shall name Landlord as additional insureds, and
shall insure any liability of Landlord, contingent or otherwise, as respects acts or omissions of
Tenant, its agents, employees or invitees or otherwise by any conduct or transactions of any of
said persons in or about or concerning the Premises, including any failure of Tenant to observe or
perform any of its obligations hereunder; shall be issued by an insurance company admitted to
transact business in the State of California; and shall provide that the insurance effected thereby
shall not be canceled, except upon thirty (30) days’ prior written notice to Landlord. A
certificate of insurance of said policy shall be delivered to Landlord. If, during the term of
this Lease, in the considered opinion of Landlord’s Lender, insurance advisor, or counsel, the
amount of insurance described in this Paragraph 10 is not adequate, Tenant agrees to increase said
coverage to such reasonable amount as Landlord’s Lender, insurance advisor, or counsel shall deem
adequate.

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     11. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKMAN’S COMPENSATION INSURANCE:
Tenant shall maintain a policy or policies of fire and property damage insurance in “all risk” form
with a sprinkler leakage endorsement insuring the personal property, inventory, trade fixtures, and
leasehold improvements within the leased Premises for the full replacement value thereof. The
proceeds from any of such policies shall be used for the repair or replacement of such items so
insured.

     Tenant shall also maintain a policy or policies of workman’s compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.

     12. PROPERTY INSURANCE: Landlord shall purchase and keep in force, and as Additional
Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord (or Landlord’s
agent if so directed by Landlord) Tenant’s proportionate share (allocated to the leased Premises by
square footage or other equitable basis as calculated and determined by Landlord) of the
deductibles on insurance claims and the cost of, policy or policies of insurance covering loss or
damage to the Premises (excluding routine maintenance and repairs and incidental damage or
destruction caused by accidents or vandalism for which Tenant is responsible under Paragraph 7) in
the amount of the full replacement value thereof, providing protection against those perils
included within the classification of “all risks” insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one hundred (100%) percent
of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If such insurance cost is
increased due to Tenant’s use of the Premises, Tenant agrees to pay to Landlord the full cost of
such increase. Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.

     Landlord and Tenant do each hereby respectively release the other, to the extent of insurance
coverage of the releasing party, from any liability for loss or damage caused by fire or any of the
extended coverage casualties included in the releasing party’s insurance policies, irrespective of
the cause of such fire or casualty; provided, however, that if the Insurance policy of either
releasing party prohibits such waiver, than this waiver shall not take effect until consent to such
waiver is obtained. If such waiver is so prohibited, the insured party affected shall promptly
notify the other party thereof.

     13. INDEMNIFICATION: Landlord shall not be liable to Tenant and Tenant hereby waives
all claims against Landlord or any injury to or death of any person or damage to or destruction of
property in or about the Premises by or from any cause whatsoever, including, without limitation,
gas, fire, oil, electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises but excluding, however, the willful misconduct or negligence of Landlord,
its agents, servants employees, invitees, or contractors of which negligence Landlord has knowledge
and reasonable time to correct. Except as to injury to persons or damage to property to the extent
arising from the willful misconduct or the negligence of Landlord, its agents, servants, employees,
invitees or contractors, and subject to the last two sentences of Paragraph 12, Tenant shall hold
Landlord harmless from and defend Landlord against any and all expenses, including reasonable
attorneys’ fees, in connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or any part thereof,
from any cause whatsoever.

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     14. COMPLIANCE: Tenant, at its sole cost and expense, shall promptly comply with all
Laws, statutes, ordinances and governmental rules, regulations of requirements now or hereafter in
effect; with the requirements of any board of fire underwriters or other similar body now or
hereafter constituted; and with any direction or occupancy certificate issued pursuant to law by
any public officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or rectify said failure.
The judgment of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its sole cost and
expense, comply with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability insurance covering
the Premises. See Paragraphs 44 and 52

     15. LIENS: Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished or obligation incurred by Tenant. In the event that Tenant shall
not, within ten (10) days following Tenant’s receipt of notice of the imposition of such lien,
cause the same to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection therewith shall be
payable to Landlord by Tenant on demand with interest at the prime rate of interest as quoted by
the Bank of America.

     16. ASSIGNMENT AND SUBLETTING: Tenant shall not assign, transfer, or hypothecate the
leasehold estate under this Lease, or any interest therein, and shall not sublet the Premises, or
any part thereof, or any right, or privilege appurtenant thereto or suffer any other person or
entity to occupy or use the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld. In the event Tenant
is allowed to assign, transfer or sublet the whole or any part of the Premises, with the prior
written consent of Landlord no assignee, transferee or subtenant shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any part of the Premises, without also
having obtained the prior written consent of Landlord. A consent of Landlord to one assignment,
transfer, hypothecation, subletting, occupation or use by any other person shall not release Tenant
from any of Tenant’s obligations hereunder or be deemed to be a consent to any subsequent similar
or dissimilar assignment, transfer, hypothecation, subletting, occupation or use by any other
person. Any such assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of this Lease by Tenant and shall, at the
option of Landlord exercised by written notice to Tenant, terminate this Lease. The leasehold
estate under this Lease shall not, nor shall any interest therein, be assignable for any purpose by
operation of law without the written consent of Landlord. As a condition to its consent, Landlord
shall require Tenant to pay all reasonable expenses in connection with the assignment and Landlord
shall require Tenant’s assignee or transferee (or other assignees or transferees) to assume in
writing all of the obligations under this Lease and for Tenant to remain liable to Landlord under
the Lease. See Paragraphs 55 and 56

10

 

     17. SUBORDINATION AND MORTGAGES: In the event Landlord’s title or leasehold interest
is now or hereafter encumbered by a deed of trust, upon the Interest of Landlord in the land and
buildings in which the demised Premises are located, to secure a loan from a lender (hereinafter
referred to as “Lender”) to Landlord. Tenant shall, at the request of Landlord or Lender, execute
in writing an agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender’s deed of trust shall be or remain
subject and subordinate to the rights of Tenant under this Lease. Notwithstanding any such
subordination, Tenant’s possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of the provisions set
forth in this Lease. See Paragraph 57.

     18. ENTRY BY LANDLORD: Landlord reserves, and shall at all reasonable times have, the
right to enter the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s); to submit the
Premises to prospective purchasers, mortgagors or tenants; to post notices of nonresponsibility;
and to alter, improve or repair the Premises or other parts of the building, all without abatement
of rent, and may erect scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided, however that the
business of Tenant shall be interfered with to the least extent that is reasonably practical. Any
entry to the Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. See Paragraph 58

     19. BANKRUPTCY AND DEFAULT: The commencement of a bankruptcy action or liquidation
action or reorganization action or insolvency action or an assignment of or by Tenant for the
benefit of creditors, or any similar action undertaken by Tenant, or the insolvency of Tenant,
shall, at Landlord’s option, constitute a breach of this Lease by Tenant, if the trustee or
receiver appointed to serve during a bankruptcy, liquidation, reorganization, insolvency or similar
action elects to reject Tenant’s unexpired Lease, the trustee or receiver shall notify Landlord in
writing of its election within thirty (30) days after an order for relief in a liquidation action
or within thirty (30) days after the commencement of any action.

     Within thirty (30) days after court approval of the assumption of this Lease, the trustee or
receiver shall cure (or provide adequate assurance to the reasonable satisfaction of Landlord that
the trustee or receiver shall cure) any and all previous defaults under the unexpired Lease and
shall compensate Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord. Adequate assurance
of future performance, as used herein, includes, but shall not be limited to: (i) assurance of
source and payment of rent, and other consideration due under this Lease; (ii) assurance that the
assumption or assignment of this Lease will not breach substantially any provision, such as radius,
location, use, or exclusivity provision, in any agreement relating to the above described Premises.

     Nothing contained in this section shall affect the existing right of Landlord to refuse to
accept an assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the benefit of creditors or

11

 

other similar act. Nothing contained in this Lease shall be construed as giving or granting
or creating an equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or involuntary bankruptcy
proceeding without the prior written consent of Landlord. In no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings.

     The failure to perform or honor any covenant, condition or representation made under this
Lease shall constitute a default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of written notice from
Landlord within which to cure any other default under this Lease. Upon an uncured default of this
Lease by Tenant, Landlord shall have the following rights and remedies in addition to any other
rights or remedies available to Landlord at law or in equity:

               (a) The rights and remedies provided for by California Civil Code Section 1951.2, including
but not limited to, recovery of 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 rental loss for the
same period that Tenant proves could be reasonably avoided, as computed pursuant to subsection (b)
of said Section 1951.2.

               (b) The rights and remedies provided by California Civil Code Section which allows Landlord to
continue the Lease in effect and to enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, for so long as Landlord does not terminate
Tenant’s right to possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord’s initiative to protect its interest under this
Lease shall not constitute a termination of Tenant’s right to possession.

               (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable
law.

               (d) To the extent permitted by law, the right and power, after compliance with all statutory
requirements and in any event on not less than three (3) business days prior written notice, to
enter the Premises and remove therefrom all persons and property, to store such property in a
public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell such
property and apply such proceeds therefrom pursuant to applicable California law. Landlord may,
from time to time, sublet the Premises or any part thereof for such term or terms (which may extend
beyond the term of this Lease) and at such rent and such other terms as Landlord in its reasonable
sole discretion may deem advisable, with the right to make alterations and repairs to the Premises.
Upon each subletting, (i) Tenant shall be immediately liable to pay Landlord, in addition to
indebtedness other than rent due hereunder, the reasonable cost of such subletting, including, but
not limited to, reasonable attorneys’ fees, and any real estate commissions actually paid, and the
cost of such reasonable alterations and repairs incurred by Landlord and the amount, if any, by
which the rent hereunder for the period of such subletting (to the extent such period does not
exceed the term hereof) exceeds the amount

12

 

to be paid as rent for the Premises for such period or (ii) at the option of Landlord, rents
received from such subletting shall be applied first to payment of indebtedness other than rent due
hereunder from Tenant to Landlord; second, to the payment of any costs of such subletting and of
such alterations and repairs; third to payment of rent due and unpaid hereunder; and the residue,
if any, shall be held by Landlord and applied in payment of future rent as the same becomes due
hereunder. If Tenant has been credited with any rent to be received by such subletting under
option (i) end such rent shall not be promptly paid to Landlord by the subtenant(s), or if such
rentals received from such subletting under option (ii) during any month be less than that to be
paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No taking possession of the Premises by Landlord,
shall be construed as an election on its part to terminate this Lease unless a written notice of
such intention be given to Tenant. Notwithstanding any such subletting without termination
Landlord may at anytime hereafter elect to terminate this Lease for such previous breach.

               (e) The right to have a receiver appointed for Tenant upon application by Landlord to take
possession of the Premises and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord pursuant to subparagraph d. above. See Paragraph 59

     20. ABANDONMENT: Tenant shall not vacate or abandon the Premises at any time during
the term of this Lease; and if Tenant shall abandon, vacate or surrender said Premises, or be
dispossessed by the process of law, or otherwise, any personal property belonging to Tenant and
left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such
property as may be mortgaged to Landlord. See Paragraph 60.

     21. DESTRUCTION: In the event the Premises are destroyed in whole or in part from any
cause, except for routine maintenance and repairs and incidental damage and destruction caused from
vandalism and accidents for which Tenant is responsible under Paragraph 7, Landlord may, at its
option:

               (a) Rebuild or restore the Premises to their condition prior to the damage or destruction, or

               (b) Terminate this Lease.

     If Landlord does not give Tenant notice in writing within thirty (30) days from the
destruction of the Premises of its election to either rebuild and restore them, or to terminate
this Lease, Landlord shall be deemed to have elected to rebuild or restore them, in which event
Landlord agrees, at its expense, promptly to rebuild or restore the Premises to their condition
prior to the damage or destruction. Tenant shall be entitled to a reduction in rent while such
repair is being made in the proportion that the area of the Premises rendered untenantable by such
damage bears to the total area of the Premises. If Landlord does not complete the rebuilding or
restoration within one hundred eighty (180) days following the date of destruction (such period of
time to be extended for delays caused by the fault or neglect of Tenant or because of Acts of God,
acts of public agencies, labor disputes, strikes, fires, freight embargo, rainy or stormy weather,
inability to obtain materials, supplies or fuels, acts of contractors or

13

 

subcontractors, or delay of the contractors or subcontractors due to such causes or other
contingencies beyond the control of Landlord), then Tenant shall have the right to terminate this
Lease by giving fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord’s obligation to rebuild or restore shall be limited to the
building and interior improvements constructed by Landlord as they existed as of the commencement
date of the Lease and shall not include restoration of Tenant’s trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant’s sole cost and expense provided this
Lease is not cancelled according to the provisions above.

     Unless this Lease is terminated pursuant to the foregoing provisions, this Lease shall remain
in full force and effect. Tenant hereby expressly waives the provisions of Section 1932,
Subdivision 2, in Section 1933, Subdivision 4 of the California Civil Code.

     In the event that the building in which the Premises are situated is damaged or destroyed to
the extent of not less than 33 1/3% of the replacement cost thereof, Landlord may elect to
terminate this Lease, whether the Premises be injured or not. See Paragraph 61

     22. EMINENT DOMAIN: If all or any part of the Premises shall be taken by any public
or quasi-public authority under the power of eminent domain or conveyance in lieu thereof, this
Lease shall terminate as to any portion of the Premises so taken or conveyed on the date when title
vests in the condemnor, and Landlord shall be entitled to any and all payment, income, rent, award,
or any interest therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the value of any
unexpired term of this Lease. Notwithstanding the foregoing paragraph, any compensation
specifically awarded Tenant for loss of business, Tenant’s personal property, moving cost or loss
of goodwill, shall be and remain the property of Tenant.

     If any action or proceeding is commenced for such taking of the Premises or any part thereof,
or if Landlord is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the premises or any portion thereof, then Landlord shall
have the right to terminate this Lease by giving Tenant written notice thereof within sixty (60)
days of the date of receipt of said written advice, or commencement of said action or proceeding,
or taking conveyance, which termination shall take place as of the first to occur of the last day
of the calendar month next following the month in which such notice is given or the date on which
title to the Premises shall vest in the condemnor.

     In the event of such a partial taking or conveyance of the Premises, if the portion of the
Premises taken or conveyed is so substantial that the Tenant can no longer reasonably conduct its
business, Tenant shall have the privilege of terminating this Lease within sixty (60) days from the
date of such taking or conveyance, upon written notice to Landlord of its intention so to do, and
upon giving of such notice this Lease shall terminate on the last day of the calendar month next
following the month in which such notice is given, upon payment by Tenant of the rent from the date
of such taking or conveyance to the date of termination.

     If a portion of the Premises be taken by condemnation or conveyance in lieu thereof and
neither Landlord nor Tenant shall terminate this Lease as provided herein, this Lease shall

14

 

continue in full force and effect as to the part of the Premises not so taken or conveyed, and
the rent herein shall be apportioned as of the data of such taking or conveyance so that thereafter
the rent to be paid by Tenant shall be in the ratio that the area of the portion of the Premises
not so taken or conveyed bears to the total area of the Premises prior to such taking. See
Paragraph 62

     23. SALE OR CONVEYANCE BY LANDLORD: In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then constituting Landlord, the
transferor shall thereby be released from any further liability upon any of the terms, covenants or
conditions (express or implied) herein contained in favor of Tenant and in such event, insofar as
such transfer is concerned. Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the successor in interest
of such transferor. See Paragraph 63

     24. ATTORNMENT TO LENDER OR THIRD PARTY: In the event the interest of Landlord in the
land and buildings in which the leased Premises are located (whether such interest of Landlord is a
tee title Interest or a leasehold interest) is encumbered by deed of trust, and such interest is
acquired by the lender or any third party through judicial foreclosure or by exercise of a power of
sale at private trustee’s foreclosure sale. Tenant hereby agrees to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and effect for the
remainder of the unexpired term hereof, at the same rental herein reserved and upon all the other
terms, conditions and covenants herein contained.

     25. HOLDING OVER: Any holding over by Tenant after expiration or other termination of
the term of this Lease with the written consent of Landlord delivered to Tenant shall not
constitute a renewal or extension of the Lease or give Tenant any rights in or to the leased
Premises except as expressly provided in this Lease. Any holding over after the expiration or
other termination of the term of this Lease, with the consent of Landlord, shall be construed to be
a tenancy from month to month, on the same terms and conditions herein specified insofar as
applicable except that the monthly Basic Rent shall be increased to an amount equal to one hundred
twenty five (125%) percent of the monthly Basis Rent required during the last month of the Lease
term.

     26. CERTIFICATE OF ESTOPPEL: Either party shall at any time upon not less than ten
(10) days prior written notice from the other party execute, acknowledge and deliver to the
requesting party a statement in writing (i) 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 (ii) acknowledging that there are not, to the best of such
party’s knowledge, any uncured defaults on the part of the other party hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises. A party’s failure to deliver such statement
within such time shall be conclusive upon the party receiving such request that this Lease is in
full force and effect, without modification except as may be represented by Landlord;

15

 

that there are no uncured defaults in the requesting party’s performance, and that not more
than one month’s rent has been paid in advance.

     27. CONSTRUCTION CHANGES: It is understood that the description of the Premises and
the location of ductwork, plumbing and other facilities therein are subject to such minor changes
as Landlord or Landlord’s architect determines to be desirable in the course of construction of the
Premises, and no such changes shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of such drawings rests
with Tenant.

     28. RIGHT OF LANDLORD TO PERFORM: All terms, covenants and conditions of this Lease
to be performed or observed by the Tenant shall be performed or observed by the Tenant at Tenant’s
sole cost and expense and without any reduction of rent. If Tenant shall fail to pay any sum of
money, or other rent, required to be paid by it hereunder and such failure shall continue for five
(5) days after written notice thereof by Landlord, or shall fail to perform any other term or
covenant hereunder on its part to be performed and such failure shall continue for thirty (30) days
after written notice thereof by Landlord, Landlord, without waiving or releasing Tenant from any
obligation of Tenant hereunder, may, but shall not be obliged to, make any such payment or perform
any such other term or covenant on Tenant’s part to be performed. All sums so paid by Landlord and
all necessary costs of such performance by Landlord together with interest thereon at the rate of
the prime rate of interest per annum as quoted by the Bank of America from the date of such payment
on performance by Landlord, shall be paid (and Tenant covenants to make such payment) to Landlord
on demand by Landlord, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant as in the case of
failure by Tenant in the payment of rent hereunder.

     29. ATTORNEYS’ FEES:

          A. In the event that either Landlord or Tenant should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the breach of any
provision of this Lease, or for any other relief against the other party hereunder, then all costs
and expenses including reasonable attorneys’ fees incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be enforceable whether or not the
action is prosecuted to judgment.

          B. Should Landlord be named as a defendant in any suit brought against Tenant in connection
with or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

     30. WAIVER: The waiver by either party of the other party’s failure to perform or
observe any term, covenant or condition herein contained to be performed or observed by such
waiving party shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent failure of the party failing to perform or observe the same or any other such term,
covenant or condition therein contained, and no custom or practice which may develop between

16

 

the parties hereto during the term hereof shall be deemed a waiver of, or in any way affect,
the right of either party to insist upon performance and observance by the other party in strict
accordance with the terms hereof.

     31. NOTICES: All notices, demands, requests, advices or designations which may be or
are required to be given by either party to the other hereunder shall be in writing. All notices,
demands, requests, advices or designations by Landlord to Tenant shall be sufficiently given, made
or delivered if personally served on Tenant by leaving the same at the Premises of if sent by
United Stated certified or registered mail, postage prepaid, addressed to Tenant at the Premises.
All notices, demands, requests, advices or designations by Tenant to Landlord shall be sent by
United States certified, or registered mail, postage prepaid, addressed to Landlord at its offices
at Peery/Arrillaga, 2560 Mission College Blvd., Suite 101, Santa Clara, CA 95054. Each
notice, request, demand, advice or designation referred to in this paragraph shall be deemed
received on the date of the personal service or mailing thereof in the manner herein provided, as
the case may be.

     32. EXAMINATION OF LEASE: Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or option for a lease, and this instrument is not
effective as a lease or otherwise until its execution and delivery by both Landlord and Tenant.

     33. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no event earlier than
(30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or
deed of trust covering the Premises whose name and address shall have heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord’s obligations is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default If Landlord commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

     34. CORPORATE AUTHORITY: If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership) represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation
(or partnership) in accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement) and that this Lease is binding upon said corporation (or
partnership) in accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty
(30) days after execution of this Lease, deliver to Landlord a certified copy of the resolution of
the Board of Directors of said corporation authorizing or ratifying the execution of this Lease.

     35. INTENTIONALLY LEFT BLANK

     36. LIMITATION OF LIABILITY: In consideration of the benefits accruing hereunder.
Tenant and all successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:

17

 

               (a) the sole and exclusive remedy shall be against Landlord’s interest in the Premises leased
herein;

               (b) no partner of Landlord shall be sued or named as a party in any suit or action (except as
may be necessary to secure jurisdiction of the partnership);

               (c) no service of process shall be made against any partner of Landlord (except as maybe
necessary to secure jurisdiction of the partnership);

               (d) no partner of Landlord shall be required to answer or otherwise plead to any service of
process

               (e) no judgment will be taken against any partner of Landlord;

               (f) any judgment taken against any partner of Landlord may be vacated and set aside at any
lime without hearing;

               (g) no writ of execution will ever by levied against the assets of any partner of Landlord;

               (h) these covenants and agreements are enforceable both by Landlord and also by any partner of
Landlord.

     Tenant agrees that each of the foregoing covenants and agreements shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by statute or at common
law.

     37. SIGNS: No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of the Premises or any
exterior windows of the Premises without the written consent of Landlord first had and obtained and
Landlord shall have the right to remove any such sign, placard, picture, advertisement, name or
notice without notice to and at the expense of Tenant. If Tenant is allowed to print or affix or
in any was place a sign in, on, or about the Premises, upon expiration or other sooner termination
of this Lease, Tenant at Tenant’s sole cost and expense shall both remove such sign and repair all
damage in such a manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.

     All approved signs or lettering on outside doors shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person reasonably approved of by Landlord.

     Tenant shall not place anything or allow anything to be placed near the glass of any window,
door partition or wall which may appear unsightly from outside the Premises.

     38. MISCELLANEOUS AND GENERAL PROVISIONS:

          
A. Use of Building Name: Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business conducted by Tenant
in the Premises.

18

 

          
B. Choice of Law; Severability: This Lease shall in all respects be governed by and construed
in accordance with the laws of the State of California. If any provision of this Lease shall be
invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall
be and remain in full force and effect.

          
C. Definition of Terms: The term “Premises” includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term “Landlord” or any
pronoun used in place thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term “Tenant” or any pronoun used in place thereof includes the plural as
well as the singular and individuals firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof, and the provisions of this Lease shall inure to the benefit of and
bind such heirs, executors, administrators, successors and permitted assigns.

     The term “person”
 includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations. Words used in any gender include other genders. If
there be more than one Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.

          
D. Time of Essence: Time is of the essence of this Lease and of each and all of its
provisions.

          
E. Quitclaim: At the expiration or earlier termination of this Lease, Tenant shall execute,
acknowledge and deliver to Landlord, within ten (10) days after written demand from Landlord to
Tenant, any quitclaim dead or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance created by this Lease from
the real property of which Tenant’s Premises are a part.

          
F. Incorporation of Prior Agreements; Amendments: This instrument along with any exhibits and
attachments hereto constitutes the entire agreement between Landlord and Tenant relative to the
Premises and this agreement and the exhibits and attachments may be altered, amended or revoked
only by an instrument in writing signed by both Landlord and Tenant. Landlord and Tenant agree
hereby that all prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Premises are merged in or revoked by this
agreement.

          
G. Recording: Landlord and Tenant shall record a short form memorandum hereof in the form
attached hereto as Exhibit C.

          
H. Amendments for Financing: Tenant further agrees to execute any reasonable amendments
required by a lender to enable Landlord to obtain financing, so long as Tenant’s rights hereunder
are not materially affected and there is no change in the Basic Rent, Options to Renew, Lease Term
or Construction obligations of Landlord.

          
I. Additional Paragraphs: Paragraphs 39 through 65 are added hereto and are included as a
part of this lease.

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J. Clauses, Plats and Riders: Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.

          
K. Diminution of Light, Air or View: Tenant covenants and agrees that no diminution or
shutting off of light, air or view by any structure which may be hereafter erected (whether or not
by Landlord) shall in any way affect his Lease, entitle Tenant to any reduction of rent hereunder
or result in any liability of Landlord to Tenant

20

 

     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease as of the day
and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S TRUST	 	QUANTUM CORPORATION

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	By
	 	/s/ Andrew Kryder	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	John Arrillaga, Trustee
	 	 	 	Andrew Kryder, Vice President Finance
and Corporate General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	June 30, 1997
	 	Date:
	 	June 25, 1997	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery
	 	By
	 	/s/ Norm Claus	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee
	 	 	 	Norm Claus, Vice President Real Estate
and Corporate Services	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	June 26, 1997
	 	Date:
	 	June 25, 1997	 	 
	 

	 	 
	 	 	 	 	 	 

21

 

Paragraphs 39 through 65 to Lease Agreement dated April 16, 1997, By and Between THE JOHN ARRILLAGA
SURVIVOR’S TRUST AND THE RICHARD T. PEERY SEPARATE PROPERTY, as Landlord, and QUANTUM CORPORATION,
a Delaware corporation, as Tenant for 182,355+ Square Feet of Space Located on Sumac Drive,
Milpitas, California.

     39. BASIC RENT: In accordance with Paragraph 4A, and subject to the provisions of
Paragraphs 40 and 41, Basic Rent shall be payable as follows during the indicated months of the
term of the Lease based upon the gross leasable area within the building that is part of the
Premises:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12 (plus the partial calendar month, if any, following the
Commencement Date *)

	 	$1.60/sf
	Months 13-24

	 	$1.65/sf
	Months 25-36

	 	$1.70/sf
	Months 37-48

	 	$1.75/sf
	Months 49-60

	 	$1.80/sf
	Months 61-72

	 	$1.85/sf
	Months 73-84

	 	$1.90/sf
	Months 85-96

	 	$1.95/sf
	Months 97-108

	 	$2.00/sf
	Months 109-120

	 	$2.05/sf
	Months 121-132

	 	$2.10/sf
	Months 133-144

	 	$2.15/sf
	Months 145-156

	 	$2.20/sf
	Months 157-168

	 	$2.25/sf
	Months 169-180

	 	$2.30/sf

     Example of calculation of Basic Rent per month for the period commencing with the
first through the twelfth months of said Lease:

	 	 	 	 	 
	Square footage of Building

	 	 	182,355	 
	Per square foot Basic Monthly Rent

	 	 	x $1.60	 
	 

	 	 	 
	Basic Rent per Month

	 	$	291,768.00	 
	 

	 	 	 

22

 

     It is agreed in the event said Lease commences on a date other than the first day of the month
the Term of the Lease will be extended to account for the number of days in the partial month. The
Basic Rent during the resulting partial month will be pro-rated (for the number of days in the
partial month) at the Basis Rent rate scheduled for the projected Commencement Date as shown above.

     40. LEASE TEEM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:

          A. Lease Term: The term of this Lease shall commence on the “Commencement Date” (as defined
herein) which is projected to be May 1, 1998, and shall continue for a period of fifteen (15) years
plus the partial calendar month, if any, in which the Commencement Date occurs, subject to the
terms of this Lease and subject to (i) earlier termination rights of Landlord in accordance with
the provisions of this Lease, and (ii) extension pursuant to the options to renew granted by
Paragraphs 41 and 42 and the provisions of this Paragraph 40.C.

          B. Commencement Date Defined: As used herein, the term “Commencement Date” shall mean the
later to occur of the following: (i) the date upon which the “Improvements” are “Substantially
Completed” or (ii) May 1, 1998, subject to (a) delays caused by Tenant and/or Tenant’s agents and
(b) provided, however, that if prior to the later of such dates Tenant’s operating personnel enter
into occupancy of the Premises and commence the operation of Tenant’s business within the Premises,
the Commencement Date shall be the date such personnel of Tenant so enter into occupancy of the
Premises. The term “Substantially Completed” and/or “Substantial Completion” shall mean the date
when all of the following have occurred with respect to the Improvements in question: (i) the
construction of the Improvements in question has been substantially completed in accordance with
the approved plans therefor except for punch list items which do not prevent Tenant from reasonably
using the Premises to conduct Tenant’s business; (ii) Landlord has executed a certificate or
statement representing that the Improvements in question, for which Landlord is responsible, have
been substantially completed in accordance with the plans and specifications therefor except for
the punch list items which do not prevent Tenant from reasonably using the Premises to conduct
Tenant’s business; and (iii) the Building Department of the City of Milpitas has completed its
final inspection of such Improvements and has “signed off” the building inspection card approving
such work as complete except for punch list items which do not prevent Tenant from reasonably using
the Premises to conduct Tenant’s business. Notwithstanding the foregoing, Substantial Completion
of the Interior Improvements shall not be deemed to have occurred until Landlord has obtained final
or conditional approval from the Fire Department of the City of Milpitas that the Improvements have
been completed in accordance with such department’s requirements (subject only to conditions that
do not prevent Tenant from occupying the Improvements).

          C. Lease Terms Co-extensive: It is acknowledged that (i) Landlord has granted Tenant,
pursuant to a separate Option Agreement of even date herewith, an Option to Lease an additional
building on the parcel adjacent to the Premises ( the “Building 7 Lease”), and (ii) it is the
intention of the parties that the Term of this Lease be co-extensive with the term of the Building
7 Lease, such that the terms of both leases (“the Leases”) expire on the same date. In the event
Tenant exercises its Option to Lease Building 7 (pursuant to the terms and

23

 

conditions of the Option Agreement), it is hereby agreed that following the date upon which
the Commencement Date of the Building 7 Lease becomes established as a date certain following
completion of improvements and satisfaction of any other conditions related to determining such
date, the Term of this Lease shall be extended such that the scheduled Termination Date of this
Lease coincides with the scheduled termination date of the Building 7 Lease. As soon as the
parties are able to implement the provisions of this Paragraph because the Commencement Date of the
Building 7 Lease has been determined following completion of improvements and satisfaction of other
appropriate conditions, the parties shall execute an amendment to this Lease (i) extending the
initial Term of this Lease (if necessary) to be co-terminous with the initial termination date of
the Building 7 Lease and (ii) adjusting the Options to Extend accordingly. The monthly Basic Rent
on this Lease during the Extension Period shall be increased by $.05 per square foot on the
commencement date of said Extension Period. For example, if the Building 7 Lease commences on May
1, 2004, and this Lease commences the scheduled Commencement Date of May 1, 1998, the initial Term
of this Lease shall be extended by one year and the per square foot monthly Basic Rent during the
Extension Period shall be $[Illegible].35 per square foot. The provisions of this Paragraph 40C
also requires the terms of both of the Leases to be extended accordingly if Tenant exercises its
Option to Extend under either of the Leases. The monthly Basic Rent during the extended term under
each of the Leases shall be increased by $.05 per square foot on the commencement date of the
extended term and thereafter on each and every anniversary of the respective lease Commencement
Date.

     41. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to
extend the term of this Lease for an additional five (5) year period upon the following terms and
conditions:

          A. If Tenant elects to exercise the option to extend, Tenant shall give Landlord written
notice of Tenant’s exercise of this option to extend at least one hundred eighty (180) days prior
to the expiration of the Basic Term hereof, in which event the Lease shall be considered extended
for an additional five (5) year period upon the same terms and conditions as this Lease, absent
this Paragraph 41 and subject to the rental as set forth below. In the event that Tenant fails to
timely exercise Tenant’s option as set forth herein in writing, Tenant shall have no further option
to extend this Lease or the Building 7 Lease, and this Lease shall continue in full force and
effect for the full remaining term hereof, absent this Paragraph 41.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.35/sf
	Months 13-24

	 	$2.40/sf
	Months 25-36

	 	$2.45/sf
	Months 37-48

	 	$2.50/sf
	Months 49-60

	 	$2.55/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to renew
granted by this Paragraph 41 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant

24

 

has received written notice from Landlord that Tenant is in default, and such default has not
been timely cured within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be cured, and if Landlord
does not elect to terminate this Lease as a result of such non-curable default by Tenant, Tenant
may exercise the option to extend granted by this Paragraph 41 notwithstanding such non-curable
default.

     42. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five (5) year period as set forth in Paragraph 41, Landlord hereby grants to Tenant an
option to extend the Term of this Lease for an additional five (5) year period upon the following
terms and conditions:

          A. Tenant shall give Landlord written notice of Tenant’s exercise of this option to extend at
least one hundred eighty (180) days prior to the expiration of the Lease term as extended pursuant
to Paragraph 41, in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this Paragraph 42.A and
subject to the Rental as set forth below. In the event that Tenant fails to timely exercise
Tenant’s option as set forth herein in writing, Tenant shall have no further option to extend this
Lease or the Building 7 Lease, and this Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 42.

          B. The monthly Basic Rent for the option period shall be as follows in the event the option is
exercised:

	 	 	 
	Period	 	Monthly Basic Rent
	Months 1-12

	 	$2.60/sf
	Months 13-24

	 	$2.65/sf
	Months 25-36

	 	$2.70/sf
	Months 37-48

	 	$2.75/sf
	Months 49-60

	 	$2.80/sf

          C. Notwithstanding anything contained herein, Tenant may not exercise the option to extend
granted by this Paragraph 42 at any time that Tenant is in default (default for monetary and
material default for non-monetary) of its obligations under this Lease, if Tenant has received
written notice from Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if such default of
Tenant is not for money due under this Lease and cannot be cured, and if Landlord does not elect to
terminate this Lease as a result of such non-curable default by Tenant, Tenant may exercise the
option to extend granted by this Paragraph 42 notwithstanding such non-curable default.

     43. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a part of said
special assessment proceedings, additional bonds were sold and assessments levied to provide for
construction contingencies and reserve funds. Interest will be earned on such funds created for
contingencies and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused contingency funds,

25

 

interest earnings or reserve funds, such surpluses shall be deemed the property of Landlord.
Notwithstanding that such surpluses may be credited on assessments otherwise due against the
demised premises, Tenant shall pay to Landlord, as additional rent if, and at the time of any such
credit of surpluses, an amount equal to all such surpluses so credited.

     44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to the
existence or use of “Hazardous Materials” (as defined herein) on, in, under or about the Premises
and real property located beneath said Premises, which includes the entire parcel of land on which
the Premises are located as shown in Green on Exhibit A attached hereto (hereinafter collectively
referred to as the “Property”):

          A. As used herein, the term “Hazardous Materials” shall mean any material, waste, chemical,
mixture or byproduct which is or hereafter is defined, listed or designated under Environmental
Laws (defined below) as a pollutant, or as a contaminant, or as a toxic or hazardous substance,
waste or material, or any other unwholesome, hazardous, toxic, biohazardous, or radioactive
material, waste, chemical, mixture or byproduct, or which is listed, regulated or restricted by any
Environmental Law (including, without limitation, petroleum hydrocarbons or any distillates or
derivatives or fractions thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term “Environmental Laws” shall mean any applicable Federal, State of California or local
government law (including common law), statute, regulation, rule, ordinance, permit, license,
order, requirement, agreement, or approval, or any determination, judgment, directive, or order of
any executive or judicial authority at any level of Federal, State of California or local
government (whether now existing or subsequently adopted or promulgated) relating to pollution or
the protection of the environment, ecology, natural resources, or public health and safety.

          B. Tenant shall notify Landlord prior to the occurrence of any Tenant’s Hazardous Materials
Activities (defined below). Landlord acknowledges that Tenant shall use, in compliance with
applicable Environmental Laws, customary household and office supplies (Tenant shall first provide
Landlord with a list of said materials use), such as mild cleaners, lubricants and copier toner.
Any and all of Tenant’s Hazardous Materials Activities shall be conducted in conformity with this
Paragraph 44, Paragraph 14 of this Lease, and in compliance with all Environmental Laws and
regulations. As used herein, the term “Tenant’s Hazardous Materials Activities” shall mean any and
all use, handling, generation, storage, disposal, treatment, transportation, release, discharge, or
emission of any Hazardous Materials on, in, beneath, to, from, at or about the Property, in
connection with Tenant’s use of the Property, or by Tenant or by any of Tenant’s agents, employees,
contractors, vendors, invitees, visitors or its future subtenants or assignees or other third
parties (including “dumping” by others) (or which Hazardous Materials originate from on the surface
of the Premises any time after November 1, 1995, the date of the Option Agreement related to said
Lease, and before the Commencement Date of this Lease, but excluding Hazardous Materials on the
Premises prior to the Lease Commencement Date because of the storage, use, disposal, or
transportation of such materials or waste by any of Landlord’s contractors or otherwise arising out
of construction work performed by or under the direction of Landlord on the Premises and Landlord
shall be responsible for all required actions with respect to such materials or wastes). Tenant
agrees to provide Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant becomes aware, and further
agrees to provide Landlord

26

 

with prompt written notice of any violation of Environmental Laws in connection with Tenant’s
Hazardous Materials Activities of which Tenant becomes aware. If Tenant’s Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary household and office
supplies, Tenant also agrees at Tenant’s expense: (i) to install such Hazardous Materials
monitoring, storage and containment devices as may be required by Environmental Laws, regulations
and/or governing agencies; (ii) to provide Landlord with a written inventory of such Hazardous
Materials, including an update of same each year upon the anniversary date of the Commencement Date
of the Lease (“Anniversary Date”); and (iii) on each Anniversary Date to provide to Landlord copies
of all documentation and records, required by applicable Environmental Laws to be prepared and
submitted to governmental authorities, relating to use at the Property of Hazardous Materials or to
Tenant’s Hazardous Materials Activities, if any. If upon completion of Landlord’s review of said
documentation and records, Landlord reasonably questions if Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant’s Hazardous Materials Activities, Tenant
agrees within thirty (30) days following receipt of written notice from Landlord, to retain a
qualified environmental consultant, acceptable to Landlord, to evaluate whether Tenant is in
compliance with all applicable Environmental Laws with respect to Tenant’s Hazardous Materials
Activities. Tenant, at its expense, shall submit to Landlord a report from such environmental
consultant which discusses the environmental consultant’s findings within two (2) months of each
Anniversary Date. Tenant, at its expense, shall promptly undertake and complete any and all steps
necessary, and in full compliance with applicable Environmental Laws, to fully correct any and all
problems or deficiencies identified by the environmental consultant, and promptly provide Landlord
with documentation of all such corrections.

          C. Prior to termination or expiration of the Lease, Tenant, at its expense, shall (i) properly
remove from the Property all Hazardous Materials which come to be located at the Property in
connection with Tenant’s Hazardous Materials Activities, and (ii) fully comply with and complete
all facility closure requirements of applicable Environmental Laws regarding Tenant’s Hazardous
Materials Activities, including but not limited to (x) properly restoring and repairing the
Property to the extent damaged by such closure activities, and (y) obtaining from the local Fire
Department or other appropriate governmental authority with any legal or regulatory jurisdiction a
written concurrence that closure has been completed in compliance with applicable Environmental
Laws. Tenant shall promptly provide Landlord with copies of any claims, notices, work plans, data
and reports prepared, received or submitted in connection with any such closure activities.

          D. If Landlord, upon consultation with Tenant, reasonably concludes that the Property has
become contaminated as a result of Tenant’s Hazardous Materials Activities, Landlord in addition to
any other rights it may have under this Lease or under Environmental Laws or other laws, may enter
upon the Property and conduct inspection, sampling and analysis, including but not limited to
obtaining and analyzing samples of soil and groundwater, for the purpose of determining the nature
and extent of such contamination except to the extent that such activities may be inconsistent with
Tenant’s compliance with Environmental Laws. Tenant shall promptly reimburse Landlord for the
costs of such an investigation, including but not limited to reasonable attorneys’ fees Landlord
incurs with respect to such investigation to the extent, and only to the extent,-that it that
discloses Hazardous Materials contamination for which Tenant is liable under this Lease. Except as
may be required of Tenant by applicable Environmental Laws,

27

 

Tenant shall, not perform any sampling, testing, or drilling to identify the presence of any
Hazardous Materials at the Property, without Landlord’s prior written consent which shall not be
unreasonably withheld. Tenant shall promptly provide Landlord with copies of any claims, notices,
work plans, data and reports prepared, received or submitted in connection with any sampling,
testing or drilling performed pursuant to the preceding sentence.

          E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord, whose consent
shall not unreasonably be withheld) and hold harmless Landlord, its employees, assigns, successors,
[Illegible], and representatives from and against any and all claims (including but not limited to
third party claims from a private party or a government authority), liabilities, obligations,
losses, causes of action, demands, governmental proceedings or directives, fines, penalties,
expenses, costs (including but not limited to reasonable attorneys’, consultants’ and other
experts’ fees and costs), and damages, which arise from or relate to: (i) Tenant’s Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by Tenant prior to the
Commencement Date of the Lease; or (iii) the breach of any obligation of Tenant under this
Paragraph 44 (collectively, “Tenant’s Environmental Indemnification”). Tenant’s Environmental
Indemnification shall include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair market value of the
Property. Tenant’s Environmental Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at Tenant’s expense, any and all
environmental investigation, removal, remediation, monitoring, reporting, closure activities, or
other environmental response action as may be required by applicable Environmental Laws,
regulations or governing agencies (collectively, “Response Actions”). Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and reports prepared,
received or submitted in connection with any Response Actions.

          F. Landlord hereby makes the following representations to Tenant, each of which is made only
to the best of Landlord’s knowledge as of the date Landlord executes this Lease, without any
inquiry or investigation having been made or required by Landlord regarding this subject, nor does
Landlord have any obligation to investigate or make inquiry regarding the subject:

               (1) The soil and ground water on or under the Premises does not contain Hazardous Materials in
amounts which violate any laws to the extent that any governmental entity could require either
Landlord or Tenant to take any remedial action with respect to such Hazardous Materials.

               (2) During the time that Landlord has owned the Premises, Landlord has received no notice of
(i) any violation, or alleged violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the presence of Hazardous
Material on the Premises, or (iii) any pending investigation by any governmental agency concerning
the Premises relating to Hazardous Materials.

          G. Landlord and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority concerning Hazardous
Materials which relates to the Premises, and (ii) any contamination of the

28

 

Premises by Hazardous Materials which constitutes a violation of any law. Attached as
Exhibit “D” hereto is a list of Hazardous Materials that Tenant intends to use at the
Premises. If during the Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the Hazardous Materials and the
manner of their use, storage and disposal, and shall agree (i) to use, store and dispose of such
Hazardous Materials strictly in compliance with all laws, regulations and governing agencies and
(ii) that the indemnity set forth in Paragraph 44 shall be applicable to Tenant’s use of such
Hazardous Material.

          H. Landlord or Tenant may, at any time, cause testing wells to be installed on the Premises,
and may cause the ground water to be tested to detect the presence of Hazardous Material by the use
of such tests as are then customarily used for such purposes. Testing wells installed by Tenant
shall be paid for by Tenant. If tests conducted by Landlord disclose that Tenant has violated any
Hazardous Materials laws, or Tenant or parties on the Premises during the Term of this Lease have
contaminated the Premises as determined by regulatory agencies pursuant to Hazardous Materials
laws, or that Tenant has liability to Landlord pursuant to Paragraph 44A, then Tenant shall pay for
100 percent of the cost of the test and all related expense. Prior to the expiration of the Lease
Term, Tenant shall remove any testing wells it has installed at the Premises, and return the
Premises to the condition existing prior to the installation of such wells, unless Landlord
requests in writing that Tenant leave all or some of the testing wells in which instance the wells
requested to be left shall not be removed.

          I. If any tests performed by Tenant or Landlord prior to the Commencement Date disclose
Hazardous Materials at the Premises, Landlord at its expense will promptly take all reasonable
action required by law with respect to the existence of such Hazardous Materials at the Premises.
The Commencement Date shall not be delayed because of such action by Landlord unless occupation of
the Premises is prohibited by law.

          J. The obligations of Landlord and Tenant under this Paragraph 44 shall survive the expiration
or earlier termination of the Term of this Lease. The rights and obligation of Landlord and Tenant
with respect to issues relating to Hazardous Materials are exclusively established by this
Paragraph 44.

     45. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall not be
unreasonably withheld or delayed.

     46. LANDLORD’S RIGHT TO TERMINATE: It is understood that the Premises to be leased by
Tenant are to be constructed by Landlord, and that Landlord is required to obtain the necessary
building permits for the building shell before construction of said Premises can commence.
Therefore, it is agreed that in the event Landlord cannot obtain all the necessary building permits
for the building shell by December 31, 1997, then either Landlord or Tenant can terminate this
Lease by written notice to the other party given within thirty (30) days thereafter, without any
liability to the other party of any type whatsoever, and that this Lease Agreement shall be null
and void as of the date of receipt of such notice. Landlord agrees to use its best efforts to
obtain the required permits by December 31, 1997.

29

 

     47. CROSS DEFAULT: As set forth in Paragraph 40C, Landlord and Tenant have entered an
Option Agreement related to Building 7. In the event Tenant exercises its option to lease Building
7, and as a material part of the consideration for the execution of this Lease by Landlord, it is
agreed between Landlord and Tenant that a default under this Lease, or a default under the Building
7 Lease may, at the option of Landlord, be considered a default under both leases, in which event
Landlord shall be entitled (but in no event required) to apply all rights and remedies of Landlord
under the terms of one lease to both of the Leases including, but not limited to, the right to
terminate the Building 7 Lease or this Lease by reason of a default under the Building 7 Lease or
hereunder.

     48. ADDRESS FOR LEASED PREMISES: It is understood that the address for the Premises
will be assigned by the City of Milpitas (the “City”) upon issuance of a building permit for the
Interior Improvements. Once the address has been assigned to the Premises by the City, this Lease
shall thereafter be amended to reflect the assigned address for the Premises leased hereunder.

     49. HETCH-HETCHY LAND: Landlord hereby assigns to Tenant during the Term of this
Lease, all of Landlord’s right, title, and interest, in and to the property owned by the City and
County of San Francisco shown in Orange on Exhibit A attached hereto, and Tenant hereby
assumes all responsibilities and liabilities (including, but not limited to a fee and/or tax for
the right to use said property including any use provided for in the Deed attached hereto as
Exhibit E) that may be imposed by the City and County of San Francisco pertaining to their
property and Tenant’s use and occupancy thereof. Tenant’s right to use the area outlined in Orange
will continue until this right to use said property is revoked or terminated by the City and County
of San Francisco, at which time said property outlined in Orange belonging to the City and County
of San Francisco will no longer be available for Tenant’s use, and this lease will continue in full
force and effect excluding Tenant’s right to use the property outlined in Orange on Exhibit
A attached hereto.

     Tenant’s use of the property owned by the City and County of San Francisco shall be governed
by the terms and conditions of the Deed dated February 5, 1951 between Chinn Oyama Takeda and
George Shoji Takeda, as Grantors, and the City and County of San Francisco, as Grantee (the
‘Deed”). Said Deed is attached hereto as Exhibit E. Among the provisions of said Deed is
the restriction that the property shall not be used for parking, and Tenant understands that at no
time during the Term of the Lease shall Tenant be allowed to use said property for parking.

     Notwithstanding the foregoing Tenant may use the Hetch-Hetchy Land for such additional uses as
may not be permissible to the [Illegible] provided Tenant (i) obtains written permission from the
City and County of San Francisco to do so in form reasonably acceptable to landlord, (ii) removes
the “bridge” which is contemplated to go over said Hetch-Hetchy Land if requested by the City and
County of San Francisco and/or if Landlord requires said “bridge” to be removed by the Lease
Termination Date, (iii) pays all costs and expenses imposed by the City and County of San Francisco
in connection with such permission and use, and (iv) Tenant indemnifies and holds harmless Landlord
from any loss, expense, cost, claim, or liability arising in connection with such permission or any
use pursuant to such permission of the Hetch-Hetchy Land undertaken by Tenant, its agents,
employees, contractors, invitees, visitors, subtenants

30

 

and/or assignees. Landlord and Tenant agree that if the City of Milpitas will not issue a
building permit for Building 6 in the configuration and location for which it is designed as of the
date of this Lease because of the proximity to the Hetch-Hetchy Land or for any other reason, then
Tenant shall have the option to cause Building 6 to be relocated on the land and redesigned in a
new configuration acceptable to the City, Landlord and Tenant, provided the square footage of the
relocated and redesigned building is no less than approximately 182,355 square feet and the parking
allocation is not reduced due to said redesign and/or relocation.

     50. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4G:

          A. Within thirty (30) days after the expiration or earlier termination of the Lease term and
after Tenant has vacated the Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed by Landlord to cure
defaults of Tenant under the Lease or compensate Landlord for damages for which Tenant is liable
pursuant to this Lease. The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.

          B. During the first thirty (30) days following execution of this Lease Agreement, and only
during said thirty day period, Tenant shall have the one-time option of satisfying its obligation
with respect to an amount equal to one-half (1/2) ($355,592.25) of the $711,184.50 Security Deposit
required under Paragraph 4.G. by providing to Landlord, at Tenant’s sole cost, a letter of credit
which: (i) is drawn upon an institutional lender reasonably acceptable and accessible to Landlord
in form and content reasonably satisfactory to Landlord; (ii) is in the amount of one-half (1/2) of
the Security Deposit; (iii) is for a term of at lease twelve (12) months; (iv) with respect to any
letter of credit in effect within the six month period immediately prior to the expiration of the
Lease term, shall provide that the term of such letter of credit shall extend at least forty five
(45) days past the Lease expiration date (including any extensions thereof); and (v) may be drawn
upon by Landlord upon submission of a declaration of Landlord that Tenant is in default (as defined
in Paragraph 19 and as modified by Paragraph 59). Landlord shall not be obligated to furnish proof
of default to such institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and upon receiving such written
notification from Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant’s default or to compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant’s default up to 1/2 of the total Security Deposit required under Paragraph 4.G.
Said letter of credit shall provide that if the letter of credit is not renewed, replaced or
extended within twenty (20) days prior to its expiration date the issuer of the credit shall
automatically issue a cashiers check payable to Landlord in the amount of the letter of credit
after the date which is twenty (20) days before the expiration date, and no later than the
expiration date, without Landlord being required to make demand upon the letter of credit. If
Tenant provides Landlord with a letter of credit, within thirty (30) days of the execution of this
Lease, meeting the foregoing requirements, one-half (1/2) of the cash Security Deposit (i.e.,
$355.592.25 of the $711,184.50 Security Deposit) shall be returned to Tenant by Landlord
inasmuch as the cash deposit remaining and the Letter of Credit equal the total Security Deposit
required in Paragraph 4G. If Tenant defaults with respect to any provisions of this Lease,
including but not limited to provisions relating to the payment of Rent, Landlord may (but shall
not be required to) draw down on the letter of credit for payment of any

31

 

sum which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if it were a cash
security deposit, and such letter of credit may be drawn down upon by Landlord upon demand and
presentation of evidence of the identity of Landlord to the issuer, in the event that Tenant
defaults with respect to any provisions of the Lease and such default is not cured within any
applicable cure period. Notwithstanding anything to the contrary in this Lease, Landlord shall not
be obligated to furnish proof of default to such institutional lender and Landlord is only required
to give the institutional lender written notification that Tenant is in default and upon receiving
such written notification from Landlord the institutional lender shall be obligated to immediately
deliver cash to Landlord equal to the amount Landlord may spend or become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant’s default up to 1/2 of the total Security Deposit. Landlord
acknowledges that it is not entitled to draw down such letter of credit unless Landlord would have
been entitled to draw upon the cash security deposit pursuant to the terms of Paragraph 4G of the
Lease. Concurrently with the delivery of the required information to the issuer, Landlord shall
deliver to Tenant written evidence of the default upon which the draw down was based, together with
evidence that Landlord has provided to Tenant the written notice of such default which was required
under the applicable provision of the Lease, and evidence of the failure of Tenant to cure such
default within the applicable grace period following receipt of such notice of default. Any
proceeds received by Landlord by drawing upon the letter of credit shall be applied in accordance
with the provisions governing the Security Deposit imposed by Paragraph 4G and this Paragraph 50.
If Landlord draws upon the letter of credit, thereafter Tenant shall once again have the right to
post a letter of credit in place of one-half (1/2) of a cash Security Deposit so long as Tenant is
not then in default. In any event Tenant will be obligated to replenish the amount drawn to
restore the Security Deposit to its original amount as provided for in Paragraph 4G. If any
portion of the letter of credit is used or applied pursuant hereto, Tenant shall, within ten (10)
days after receipt of a written demand therefor from Landlord, restore and replace the value of
such security by either (i) depositing cash with Landlord in the amount equal to the sum drawn down
under the letter of credit, or (ii) increasing the letter of credit to its value immediately prior
to such application. Tenant’s failure to replace the value of the security as provided in the
preceding sentence shall be a material breach of its obligation under this Lease.

     51. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 51 shall modify
Paragraphs 5 and 6:

          A. As used herein, the term “Alteration” shall mean any alteration, addition or improvement
made by Tenant to the Premises during the term of the Lease, but shall not include Tenant’s trade
fixtures so long as such trade fixtures are not installed in such a manner that they have become an
integral part of the building.

          B. Tenant shall not construct any Alterations or otherwise alter the Premises without
Landlord’s prior written approval: (i) if Tenant is in default under this Lease or any of the
Existing Leases, or (ii) if Tenant is not in default under this Lease or the Building 7 Lease (if
Tenant has exercised its Option to lease Building 7) and if the total cost of such Alterations
exceeds $20,000 per the scope of any single remodeling job to the Premises, or if such Alteration

32

 

is structural in nature and provided Tenant gives Landlord notice of the planned alterations
and a 1/8” scale sepia reflecting said alterations ten (10) business days prior to the commencement
of construction of said alterations. Any other non-structural Alteration of less than $20,000 for
the total cost of the remodeling job may be undertaken by Tenant without Landlord’s prior written
approval, except as noted herein, but with the understanding that Tenant shall be obligated to
restore the Premises as set forth in Paragraph 5 at the termination of this Lease, except as
otherwise provided in Paragraph 51.D. Notwithstanding the foregoing, Tenant shall have the right
to reconfigure modular freestanding walls and partitions without Landlord’s prior consent, which
are not part of the original Interior Improvements shown on Exhibit B and which have been installed
by Tenant and paid for by Tenant. Notwithstanding the above, Tenant shall not have the right,
without Landlord’s prior written consent, to remove any floor-to-ceiling partitions within the
Premises.

          C. At all times during the Lease Term (i) Tenant shall maintain and keep up dated “as-built”
plans for all Alterations constructed by Tenant, and (ii) Tenant shall provide to Landlord copies
of such “as-built” plans as such Alterations are made.

          D. Provided Tenant is not in default under this Lease or under any of the Existing Leases,
Tenant shall have the right to remove at any time during the Lease term or prior to the expiration
thereof any process equipment such as clean hoods, thermal cycling chambers, freon piping, high
temperature furnaces, air handlers, which equipment the parties agree for the purposes of this
Lease shall be deemed to be trade fixtures, so long as Tenant repairs all damages caused by the
insulation and/or removal thereof, returns the Premises prior to the termination of the Lease to
the condition existing prior to the installation of such item, and repairs and restores any
so-called “doughnuts” or gaps in the roof and/or floor tiles and/or ceiling and lighting resulting
from such installation and/or removal. At the time Tenant requests the consent of Landlord to
approve the installation of an Alteration requiring the consent of Landlord, Tenant shall seek from
Landlord a written statement of whether or not Landlord will require Tenant to remove such
Alteration and restore all or part of the Premises as required by Landlord in accordance with this
paragraph and Paragraph 5 at the expiration or earlier termination of the term of the Lease. If
Tenant does not obtain from Landlord a statement in writing that Landlord will not require such
Alteration to be removed, then at the expiration or sooner termination of the term of the Lease, it
is agreed that Tenant may be required by Landlord to remove all or part of such Alterations, and
return the Premises to the condition existing prior to the installation of such Alterations as
provided for in Paragraph 5 above. In addition, if Tenant has installed Alterations without
Landlord’s consent, if Landlord so requires, Tenant shall also remove all or part of such
Alterations so installed without Landlord’s consent as Landlord may designate and return the
Premises to the condition existing prior to the installation of such Alteration. Alterations for
which Landlord has given its written consent to Tenant that such Alteration need not be removed,
shall not be removed by Tenant at the expiration or earlier termination of the term of the Lease.

          E. At all times during the term of the Lease, Tenant shall have the right to install and
remove trade fixtures as defined in the Lease and installed and paid for by Tenant, so long as
Tenant repairs all damage caused by the installation and removal thereof and returns the Premises
to the condition existing prior to the installation of such fixtures and repairs and restores any
so called “doughnuts” or gaps in the roof and/or floor (including floor structure, sub-

33

 

floor and appropriate floor covering for said area) and/or floor tiles, and/or ceiling tiles,
wall damage and lighting resulting from such removal.

          F. Notwithstanding anything to the contrary herein, Tenant shalt be one hundred percent (100%)
responsible and liable for obtaining any and all permits (and the cost related thereto) required by
the governing agencies for any and all alterations and/or modifications Tenant makes to the Leased
Premises.

     52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE COMMENCEMENT OF
THIS LEASE NOT CAUSED BY TENANT OR TENANT’S USES OR REMODELING OF THE PREMISES: The provisions
of this Paragraph 53 shall modify Paragraphs 7 and 14:

          A. If during the last five (5) years of the term of the Lease if Tenant has not extended the
Lease as provided for in Paragraphs 41 and 42, or during either of the five (5) year extension
periods permitted by Paragraphs 41 and 42 or Paragraph 40.C., it becomes necessary (due to any
governmental requirement for continued occupancy of the Premises) to make structural improvements
required by laws enacted or legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements exceeds $100,000, then if
such legal requirement is not imposed because of Tenant’s specific use of the Premises and is not
“triggered” by Tenant’s Alterations or Tenant’s application for a building permit or any other
governmental approval (collectively “Tenant’s Actions”) in which instance Tenant shall be
responsible for 100% of the cost of such improvements, Landlord shall be responsible for paying the
cost of such improvement and constructing such improvement, subject to a cash contribution from
Tenant of a portion of the cost thereof as provided for and calculated in Paragraph 52B.

          B. When Landlord makes an improvement pursuant to Paragraph 52A, and as a condition to
Landlord’s obligation to construct such improvement, Tenant shall make the following contribution
in cash to Landlord for the cost thereof prior to the commencement of the work by Landlord. It is
agreed that Tenant shall pay to Landlord 100% of the cost of the first $100,000.00 worth of each
improvement. After the first $100,000.00, all costs above $100,000.00 shall be divided by 15 and
multiplied by the time period remaining in the last five years of the Lease term from the date work
on such improvement commences. [Illegible]

          For example, if the improvement is not required as a result of Tenant’s Actions and if the
cost of such improvement was $400,000 and there was one year and six months remaining in the Lease
term when the work commenced, then Tenant would be responsible for reimbursing Landlord in cash
$130,000.00 computed as follows:

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	Total Cost of Work
	 	$	400,000.00	 
	Tenant Responsible for
1st $100,000
	 	 	-100.000.00	 
	 
	 	 	 
	Total Amount To Be Amortized
	 	$	300,000.00	 
	 
	 	 	 	 
	$300,000.00/15 = $20,000.00/yr. x 1.5 yrs =
	 	$	30,000.00	 
	 
	 	 	 	 
	Tenant responsible for $100,000 + $30,000.00 =
	 	$	130,000.00	 

          C. If Landlord has made improvements, for which Tenant has reimbursed Landlord for the cost
thereof pursuant to Paragraph 52B, and the term of this Lease is subsequently extended pursuant to
the exercise by Tenant of an option to renew pursuant to Paragraph 41, or 42, upon the exercise of
any such option by Tenant, Tenant shall pay to Landlord an additional sum equal to the total amount
of said improvement less the amount previously paid for by Tenant. Using the example in Paragraph
52B above, Tenant would owe Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00).

     53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:

          A. The term “Real Property Taxes” shall not include charges, levies or fees directly related
to the use, storage, disposal or release of Hazardous Materials on the Premises unless directly
related to Tenant’s Activities at this site or on other sites leased and/or owned by Tenant;
however, Tenant shall be responsible for general or special tax and/or assessments (related to
Hazardous Materials and/or toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on the Property (by third parties
not related to Tenant) prior to the Lease Commencement Date. Subject to the terms and conditions
stated herein, Tenant shall be responsible for paying one hundred percent (100%) of said taxes
and/or assessments allocated to the Property.

          B. If any assessments for public improvements are levied against the Premises, Landlord may
elect either to pay the assessment in full or to allow the assessment to go to bond. If Landlord
pays the assessment in full, Tenant shall pay to Landlord or any assignee or purchaser of the
Premises each time payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to go to bond.

          C. Tenant at its cost shall have the right, at any time, to seek a reduction in the assessed
valuation of the Premises or to contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the failure on Tenant’s part to pay
such Real Property Taxes being so contested shall not constitute a default so long as Tenant
complies with the provisions of this Paragraph. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord. In that case Landlord shall join
in the proceedings or contest or permit it to be brought in Landlord’s name as long as Landlord is
not required to bear any cost. Tenant, on final determination of the proceeding or contest, shall
immediately pay or discharge its share of any Real Property Taxes determined by any decision or
judgment rendered, together with all costs, charges, interest, and penalties

35

 

incidental to the decision or judgment. If Tenant does not pay the Real Property Taxes when
due pursuant to the Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant shall furnish to Landlord a
surety bond in form reasonably satisfactory to Landlord issued by an insurance company qualified to
do business in California. The amount of the bond shall equal 125% of the total amount of Real
Property Taxes in dispute and any such bond shall be assignable to any lender or purchaser of the
Premises. The bond shall hold Landlord and the Premises harmless from any damage arising out of
the proceeding or contest and shall insure the payment of any judgment that may be rendered.

     54. PROPERTY INSURANCE: Paragraph 12 is modified by the following:

          A. If Tenant so elects, Tenant may obtain from a third party insurance company the insurance
required to be carried by Landlord pursuant to Paragraph 12 so long as each of the following
conditions is satisfied: (i) the Landlord is not the John Arrillaga Survivor’s Trust and/or the
Richard T. Peery Separate Property Trust or an affiliated entity or entities as the case may be;
(ii) the insurance to be carried by Tenant to satisfy this requirement strictly complies with all
of the provisions of Paragraph 12; (iii) such insurance shall name Landlord as the insured and
provide that it is to be payable to Landlord in the same manner as if such insurance had been
carried by Landlord pursuant to Paragraph 12 (subject to the rights of any lender holding a
mortgage or deed of trust encumbering the Premises); (iv) each lender holding a mortgage or deed of
trust encumbering the Premises shall have given its written consent to Tenant carrying such
insurance and such insurance shall comply with the requirements of any such lender; (v) Tenant must
notify Landlord, by certified mail, no later than one hundred eighty (180) days prior to the
expiration date of Landlord’s insurance policy (which expiration date is currently 3/13/xx of a
given year and is subject to change; Landlord shall notify Tenant in the event Landlord’s insurance
year changes) that Tenant will directly obtain the required insurance coverage for the insurance
year commencing 3/14/XX through 3/13/XX and each insurance year through the termination date of
this Lease, including any extensions thereof, or until Tenant is no longer able to comply with all
of the provisions of this paragraph 55; (vi) the annual premium must be paid in full at the
commencement of the policy; (vii) the insurance policy must be issued for a one-year period
following the expiration date of Landlord’s insurance policy (i.e., from 3/14/XX to
3/13/XX; (viii) any and all deductibles required under the policy will be paid entirely by Tenant;
(ix) the terms of the coverage must be broad form and cover all items to be covered as set forth in
Paragraph 12 of this Lease; (x) the Building and Premises must be insured for their full
replacement cost; (xi) the insurance policy containing the required coverage in accordance with the
provisions of this paragraph must be sent to Landlord for retention within thirty (30) days prior
to the expiration date of Landlord’s insurance policy, and may not be terminated or altered without
thirty (30) days written notice to Landlord by the company providing such insurance (it is agreed
that if the insurance policy is canceled or altered, Landlord will have the right to obtain the
property insurance coverage on said building, and Landlord will bill the Tenant for the related
insurance premium); and (xii) at all times while Tenant is so carrying such insurance, Tenant is
Quantum Corporation or a successor entity and the then net worth of such corporation is equal to or
greater than the net worth of Quantum corporation as of the date of this Lease is executed by
Landlord and Tenant. Tenant shall provide such evidence as is required by Landlord and any lender
to establish that the insurance that Tenant carries pursuant to this Paragraph 54 has been obtained
and meets the requirement of this Paragraph 54. Such insurance

36

 

carried by Tenant shall be in form and provided by an insurance company that is reasonably
acceptable to Landlord, which must be rated “A plus” or better by Best’s Insurance Service (or an
equivalent rating from another rating agency should Best’s no longer provide such service). A copy
of any such policy shall be delivered to Landlord. If Tenant elects to insure and such insurance
provided by Tenant does not satisfy the requirements of Paragraph 12, in the event of a subsequent
casualty, Tenant shall be responsible for and shall pay for that portion of the restoration cost,
in excess of the insurance proceeds actually available, that would have been covered by insurance
satisfying the requirements of Paragraph 12.

     55. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph 16:

          A. In the event that Tenant seeks to make any assignment or sublease, then Landlord, by giving
Tenant written notice of its election within fifteen (15) days after Tenant’s notice of intent to
assign or sublease has been given to Landlord, shall have the right to elect (i) to withhold its
consent to such assignment or sublease, as permitted pursuant to Paragraph I, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which event Tenant may do
so, but without being released of its liability for the performance of all of its obligations under
the Lease, and the following shall apply (except the following shall not apply to a “Permitted
Transfer” described in Paragraph 56):

                    (1) If Tenant assigns its interest in this Lease, then in addition to the rental provided for
in this Lease, Tenant shall pay to Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee’s agreement to assume the obligations of Tenant
under this Lease and (ii) all “Permitted Transfer Costs” (as defined herein) related to such
assignment. As used herein, the term “Permitted Transfer Costs” shall mean all reasonable leasing
commissions paid to third parties not affiliated with Tenant in order to obtain the assignment or
sublease in question.

                    (2) If Tenant sublets all or part of the Premises, then Tenant shall pay to Landlord in
addition to the Rent provided for in this Lease fifty percent (50%) of the positive difference, if
any, between (i) all rent and other consideration paid or provided to Tenant by the subtenant, less
(ii) all Rent paid by Tenant to Landlord pursuant to this Lease which is allocable to the area so
sublet and all Permitted Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount specified in the preceding
sentence on the same basis, whether periodic or in lump sum, that such rent and other consideration
is paid to Tenant by its subtenant, within seven (7) days after it is received by Tenant.

                    (3) Tenant’s obligations under this subparagraph shall survive any assignment or sublease. At
the time Tenant makes any payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the right to inspect
Tenant’s books and records relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to Landlord copies of all bills, invoices or other documents
upon which its calculations are based.

37

 

                    (4) As used herein, the term “consideration shall mean any consideration of any kind received,
or to be received (including, but not limited to, services rendered and/or value received) by
Tenant as a result of the assignment or sublease, if such sums are paid or provided to Tenant for
Tenant’s interest in this Lease or in the Premises.

                    (5) This Paragraph 55.A does not apply to a “Permitted Transfer”, as provided in Paragraph 56
hereof. The parties agree that if any of the following transactions occur and do not qualify as
“Permitted Transfers”, Tenant must obtain Landlord’s consent to such transaction and if Landlord
consents to any of the following transactions which do not otherwise qualify as “Permitted
Transfers”, then the provisions of this Paragraph 55.A shall not apply to the following
transactions: (i) a merger, consolidation or other reorganization in which Tenant is not the
surviving corporation so long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a corporation which purchases
or otherwise acquires 95% or more of the assets of Tenant so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee and Tenant remains liable and
responsible under the Lease to the extent Tenant continues in existence following such transaction.

     56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 16, so long as Tenant otherwise complies with the provisions of Paragraph 16 and the
Permitted Transfer does not release Tenant from its obligations hereunder, Tenant may enter into
any of the following transfers (a “Permitted Transfer”) without Landlord’s prior written consent,
and the provisions of Paragraph 55A shall not apply to any such Permitted Transfer:

          A. Tenant may sublease all or part of the Premises or assign its interest in this Lease to any
corporation which controls, is controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant remains liable for the payment
of Rent and full performance of the Lease;

          B. Tenant may assign its interest in the Lease to a corporation which results from a merger,
consolidation or other reorganization in which Tenant is not the surviving corporation so long as
(i) 95% of all assets and liabilities of Tenant are permanently transferred to such assignee, and
(ii) immediately prior to the merger, consolidation or other reorganization, the corporation into
which Tenant is to be merged [Illegible] the net worth of the Tenant at the time of lease
execution or [Illegible] whichever is greater), or if it does not, Landlord is provided a
guaranty of the Lease (in a form reasonably acceptable to Landlord) from a corporation (a) that is
the parent of, or is otherwise affiliated with, the corporation into which Tenant is to be merged,
and (b) which has a current net worth equal to or greater than the net worth of Tenant at the time
of Lease execution or at the time of such assignment, merger, consolidation or reorganization
(whichever is greater). In the event there is not a permanent transfer of 95% or more of the
assets and liabilities from Tenant to a third party, and Tenant continues to exist as a separate
entity, both companies shall be jointly and severally liable for the full terms and conditions of
the Lease;

          C. Tenant may assign this Lease to a corporation which purchases or otherwise acquires 95% or
more of the assets of Tenant so long as 95% of all assets and

38

 

liabilities of Tenant are permanently transferred to such assignee (in the event there is not
a permanent transfer of 95% or more of the assets and liabilities from Tenant to a third party and
Tenant continues to exist as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than the net worth of Tenant (a)
at the time of Lease execution or (b) at the time of such assignment (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form reasonably acceptable
to Landlord) from a corporation (a) that is the parent of, or is otherwise affiliated with, said
corporation and (b) which has a current net worth equal to or greater than the net worth of Tenant
at the time of Lease execution or at the time of such assignment, (whichever is greater).

     57. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this Lease
shall not be subordinate to a mortgage or deed of trust unless the Lender holding such mortgage or
deed of trust enters into a written subordination, non-disturbance and attornment agreement in
which the Lender agrees that notwithstanding any subordination of this Lease to such Lender’s
mortgage or deed of trust, (i) such Lender shall recognize all of Tenant’s rights under this Lease,
and (ii) in the event of a foreclosure this Lease shall not be terminated so long as Tenant is not
in material default of its obligations under this Lease, but shall continue in effect and Tenant
and such Lender (or any party acquiring the Premises through such foreclosure) shall each be bound
to perform the respective obligations of Tenant and Landlord with respect to the Premises arising
after such foreclosure.

     58. LANDLORD’S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18, (1)
except in the event of an emergency, Landlord shall give Tenant twenty-four (24) hours notice prior
to entering the Premises, agrees to comply with any reasonably safety and/or security regulations
imposed by Tenant with respect to such entry, and shall only enter the Premises when accompanied by
Tenant or its agent (so long as Tenant makes itself reasonably available for this purpose), and
(ii) Landlord may install “for lease” signs relating to the Premises only during the last 150 days
of the Lease term. Landlord agrees to use its reasonable, good faith efforts such that any entry
by Landlord, and Landlord’s agents, employees, contractors and invitees shall be performed in a
manner with as minimal interference as possible with Tenant’s business at the Premises. Subject to
the foregoing, Tenant agrees to cooperate with Landlord and Landlord’s agents, employees and
contractors so that responsibilities of Landlord under the Lease can be fulfilled in a reasonable
manner during normal business hours so that no extraordinary costs are incurred by Landlord.

     59. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with respect to
non-monetary defaults not involving Tenant’s failure to pay Basic Rent or Additional Rent, Tenant
shall not be in default of any non-monetary obligation if (i) more than thirty (30) days is
required to cure such non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from Landlord and
thereafter continuously and with due diligence prosecutes such cure to completion.

     60. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long as (i) Tenant is
performing all of its other obligations under the Lease including the obligation to pay Basic Rent

39

 

and Additional Rent, (ii) Tenant provides on-site security during normal business hours for
those parts of the Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord with respect to the
Premises, and (iv) the utilities and heating and ventilation system are operated to the extent
necessary to prevent damage to the Premises or its systems.

     61. DESTRUCTION: Paragraph 21 is modified by the following:

          A. Notwithstanding anything to the contrary within Paragraph 21, Landlord may terminate this
Lease in the event of an uninsured event or if insurance proceeds, net of the deductible, are
insufficient to cover one hundred percent of the rebuilding costs; provided, however, Tenant shall
have the right to elect, in its discretion, to contribute such excess funds to permit Landlord to
repair the Premises.

          B. Except as provided in Paragraph 61C, Landlord may not terminate the Lease if the Premises
are damaged by a peril whereby the cost to replace and/or repair is one hundred percent (100%)
covered by the insurance carried by Landlord pursuant to Paragraph 12, but instead shall restore
the Premises in the manner described by Paragraph 21.

          C. If the Premises are damaged by a peril covered by the insurance carried by Landlord
pursuant to Paragraph 12, Landlord shall have the option to terminate the Lease if each of the
following conditions is satisfied: (i) the cost to repair or the damage exceeds thirty-three
percent (33%) of the then replacement cost of the Premises; and (ii) the damage occurs at a time
when there is less than five (5) years remaining in the term of the Lease. Notwithstanding the
foregoing, if such damage occurs at a time when there is less than five (5) years remaining in the
term of the Lease and Landlord notifies Tenant of Landlord’s election to terminate the Lease
pursuant to the provisions of this Paragraph 61B, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 41 or 42 such that the remaining term of the Lease
(including the option period) will be more than five (5) years following the date of such damage,
this Lease shall not terminate if Tenant notifies Landlord in writing of Tenant’s exercise of an
option to extend granted to Tenant by either Paragraph 41 or 42. In such event, this Lease shall
not terminate, the term shall be so extended, and Landlord shall restore the Premises in the manner
provided in Paragraph 21.

     D. If Landlord fails to obtain insurance as required pursuant to Paragraph 12, and said
insurance would have been available to cover any damage or destruction to the Premises, Landlord
shall be required to rebuild, at its cost, net of the deductible which would have been required
under said insurance policy (which deductible Tenant is required to pay).

     E. If the Premises are damaged by any peril, then as soon as reasonably practicable, Landlord
shall furnish Tenant with the 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
only by delivery to Landlord of a written notice of election to terminate within seven (7) days
after Tenant receives from Landlord the estimate of the time needed to complete such restoration:

40

 

                    (1) The Premises are damaged by any peril (not caused by or resulting from an action of Tenant
or Tenant’s agents, employees, contractors or invitees) and, in the reasonable opinion of
Landlord’s architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within 180 days after the date of such damage (subject to force majeure
conditions); or

                    (2) The Premises are damaged by any peril (not caused by or resulting from an action of Tenant
or Tenant’s agents, employees, contractors or invitees) within twelve (12) months of the last day
of the Lease term and provided Tenant has not exercised an option to renew pursuant to the
provisions of Paragraph 41 or 42, and, in the reasonable opinion of Landlord’s architect or
construction consultant, the restoration of the Leased Premises cannot be substantially completed
within sixty (60) days after the date of such damage and Tenant has not exercised its Option to
Extend said Term (or Extended Term as the case may be).

     62. EMINENT DOMAIN: Paragraph 22 is modified by the following:

     Landlord may not terminate the Lease if less than one third (1/3) of the building is taken by
condemnation or if a taking by condemnation is only threatened.

     63. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the contrary
notwithstanding, Landlord shall not be relieved of its obligations under the Lease which may accrue
after the date of a sale or other transfer unless and until (i) the transferee agrees to assume and
be bound by the terms of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers the cash balance of
the Security Deposit (net of any offsets used to cure defaults under the Lease) to its successor in
interest (transferee) in accordance with the provisions of California Civil Code Section 1950.7, as
amended or recodified.

     64. LANDLORD’S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably required by any
supplier, lessor, or lender in connection with the installation in the Premises of the Tenant’s
personal property or trade fixtures providing Landlord approves the form of any such waiver and
Landlord’s rights under this Lease are not materially and adversely affected.

     65. AUTHORITY TO EXECUTE: The parties executing this Lease Agreement hereby warrant
and represent that they are properly authorized to execute this Lease Agreement and bind the
parties on behalf of whom they execute this Lease Agreement and to all of the terms, covenants and
conditions of this Lease Agreement as they relate to the respective parties hereto.

41

 

	 	 	 	 	 	 	 	 	 
	QUANTUM CORPORATION,

a Delaware corporation	 	JOHN ARRILLAGA SURVIVOR’S

TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Andrew Kryder
	 	By
	 	/s/ John Arrillaga	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Andrew Kryder, Vice President Finance
and Corporate General Counsel
	 	 	 	John Arrillaga, Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	June 25, 1997
	 	Date:
	 	June 30, 1997	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	RICHARD T. PEERY SEPARATE PROPERTY TRUST	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Norm Claus
	 	By
	 	/s/ Richard T. Peery	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Norm Claus, Vice President Real Estate
and Corporate Services
	 	 	 	Richard T. Peery, Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	June 25, 1997
	 	Date:
	 	June 26, 1997	 	 
	 

	 	 
	 	 	 	 	 	 

42

 

Quantum 6

AMENDMENT NO. 1

TO LEASE

     THIS AMENDMENT NO. 1 is made and entered into this 15th day of April, 1998, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77
(RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, collectively as LANDLORD, and QUANTUM
CORPORATION, a Delaware corporation, as TENANT.

RECITALS

     A. WHEREAS, by Lease Agreement dated April 16, 1997 and the related Construction Agreement of
even date therewith, Landlord leased to Tenant all of that certain 182,355 ± square foot building to
be constructed by Landlord for Tenant and to be located on Sumac Drive in Milpitas, California, the
details of which are more particularly set forth in said April 16, 1997 Lease Agreement, and

     B. WHEREAS, it is now the desire of the parties hereto to amend the Lease by: (i) changing
the square footage of the Leased Premises pursuant to the Architect’s final measurement; (ii)
setting a fixed Commencement Date for the Lease; (iii) establishing the Basic Rent Schedule and
Aggregate Rent under said Lease Agreement; (iv) increasing the Security Deposit requirement under
the Lease pursuant to the change in the square footage of the Premises; and (v) amending Lease
Paragraphs 41 (“First Five-Year Option to Extend”) and 42 (“Second Five-Year Option to Extend”) as
hereinafter set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. LEASED PREMISES SQUARE FOOTAGE: The parties hereto agree, that upon final approval
of the Definitive Shell Plans (as defined in Section 3.A. of the Construction Agreement) the actual
square footage of the Premises, as measured by the Architect in accordance with said Section 3.A of
the Construction Agreement, shall be 187,134 square feet. This square footage shall be the basis
for calculating the Basic Rent due under the Lease, the Security Deposit required under the Lease
and Landlord’s Tenant Improvement Allowance as provided for in the Construction Agreement.

     2. COMMENCEMENT DATE: The parties hereto agree that the Commencement Date of the
Lease shall be June 1, 1998, regardless of the status of the construction of the Interior
Improvements. Said June 1, 1998, is the date on which the Interior Improvements would have been
completed, absent changes requested by Tenant to the Interior Improvements which have caused delays
in the construction.

     3. BASIC RENT SCHEDULE: The Basic Rent schedule for the Initial Lease Term shall be
as follows:

1

 

Quantum 6

     On June 1, 1998, the sum of TWO HUNDRED NINETY NINE THOUSAND FOUR HUNDRED FOURTEEN AND 40/100
DOLLARS ($299,414.40) shall be due, and a like sum due on the first day of each month thereafter,
through and including May 1, 1999.

     On June 1, 1999, the sum of THREE HUNDRED EIGHT THOUSAND SEVEN HUNDRED SEVENTY ONE AND 10/100
DOLLARS ($308,771.10) shall be due, and a like sum due on the first day of each month thereafter,
through and including May 1,2000.

     On June 1, 2000, the sum of THREE HUNDRED EIGHTEEN THOUSAND ONE HUNDRED TWENTY SEVEN AND
80/100 DOLLARS ($318,127.80) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2001.

     On June 1, 2001, the sum of THREE HUNDRED TWENTY SEVEN THOUSAND FOUR HUNDRED EIGHTY FOUR AND
50/100 DOLLARS ($327,484.50) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2002.

     On June 1, 2002, the sum of THREE HUNDRED THIRTY SIX THOUSAND EIGHT HUNDRED FORTY ONE AND
20/100 DOLLARS ($336,841.20) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2003.

     On June 1, 2003, the sum of THREE HUNDRED FORTY SIX THOUSAND ONE HUNDRED NINETY SEVEN AND
90/100 DOLLARS ($346,197.90) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2004.

     On June 1, 2004, the sum of THREE HUNDRED FIFTY FIVE THOUSAND FIVE HUNDRED FIFTY FOUR AND
60/100 DOLLARS ($355,554.60) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2005.

     On June 1, 2005, the sum of THREE HUNDRED SIXTY FOUR THOUSAND NINE HUNDRED ELEVEN AND 30/100
DOLLARS ($364,911.30) shall be due and a like sum due on the first day of each month thereafter,
through and including May 1, 2006.

     On June 1, 2006, the sum of THREE HUNDRED SEVENTY FOUR THOUSAND TWO HUNDRED SIXTY EIGHT AND
NO/100 DOLLARS ($374,268.00) shall be due, and a like sum, due on the first day of each month
thereafter, through and including May 1, 2007.

     On June 1, 2007, the sum of THREE HUNDRED EIGHTY THREE THOUSAND SIX HUNDRED TWENTY FOUR AND
70/100 DOLLARS ($383,624.70) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2008.

     On June 1, 2008, the sum of THREE HUNDRED NINETY TWO THOUSAND NINE HUNDRED EIGHTY ONE AND
40/100 DOLLARS ($392,981.40) shall be due, and a like sum due on the first day of each month
thereafter, through and including May 1, 2009.

     On June 1, 2009, the sum of FOUR HUNDRED TWO THOUSAND THREE HUNDRED THIRTY EIGHT AND 10/100
DOLLARS ($402,338.10) shall be due, and a like sum due on the first day of each month thereafter,
through and including May 1, 2010.

2

 

Quantum 6

     On June 1, 2010, the sum of FOUR HUNDRED ELEVEN THOUSAND SIX HUNDRED NINETY FOUR AND 80/100
DOLLARS ($411,6194.80) shall be due, and a like sum due on the first day of each month thereafter,
through and including May 1, 2011.

     On June 1, 2011, the sum of FOUR HUNDRED TWENTY ONE THOUSAND FIFTY ONE AND 50/100 DOLLARS
($421,051.50) shall be due, and a like sum due on the first day of each month thereafter, through
and including May 1, 2012.

     On June 1, 2012, the sum of FOUR HUNDRED THIRTY THOUSAND FOUR HUNDRED EIGHT AND 20/100 DOLLARS
($430,408.20) shall be due, and a like sum due on the first day of each month thereafter, through
and including May 1, 2013.

     The Aggregate Basic Rent for the Initial Lease Term shall be $65,684,034.00.

     4. SECURITY DEPOSIT: Due to the increase in the total square footage of the Premises,
the Security Deposit required under the Lease shall be increased by $18,638.10, or from $711,184.50
to $729,822.60, payable upon Tenant’s execution of this Amendment No. 1.

     5. FIRST FIVE-YEAR OPTION TO EXTEND: Subject to the terms of Lease Paragraph 41, the
latest date Tenant may exercise its First Five-Year Option to Extend, as provided for in Lease
Paragraph 41, shall be December 2, 2012. In the event Tenant timely exercises its First Five-Year
Option to Extend, the monthly Basic Rent for the First Option Period shall be as follows:

	 	 	 	 	 	 	 	 	 
	Period	 	Rate PSF	 	Monthly Basic Rent
	06/01/13-05/31/14

	 	$	2.35	 	 	$	439,764.90	 
	06/01/14-05/31/15

	 	$	2.40	 	 	$	449,121.60	 
	06/01/15-05/31/16

	 	$	2.45	 	 	$	458,478.30	 
	06/01/16-05/31/17

	 	$	2.50	 	 	$	467,835.00	 
	06/01/17-05/31/18

	 	$	2.55	 	 	$	477,191.70	 

     6. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease for an
additional five year period as set forth in Lease Paragraph 41 (as amended above), and subject to
the terms of Lease Paragraph 42, the latest date Tenant may exercise its Second Five-Year Option to
Extend, as provided for in Lease Paragraph 42, shall be December 2, 2017. In the event Tenant
timely exercises its Second Five-Year Option to Extend, the monthly Basic Rent for the Second
Option Period shall be as follows:

	 	 	 	 	 	 	 	 	 
	Period	 	Rate PSF	 	Monthly Basic Rent
	06/01/18-05/31/19

	 	$	2.60	 	 	$	486,548.40	 
	06/01/19-05/31/20

	 	$	2.65	 	 	$	495,905.10	 
	06/01/20-05/31/21

	 	$	2.70	 	 	$	505,261.80	 
	06/01/21-05/31122

	 	$	2.75	 	 	$	514,618.50	 
	06/01/22-05/31/23

	 	$	2.80	 	 	$	523,975.20	 

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said April 16, 1997
Lease Agreement shall remain in full force and effect.

3

 

Quantum 6

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S

TRUST	 	QUANTUM CORPORATION

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga
	 	By
	 	/s/ Andrew Kryder	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	John Arrillaga, Trustee	 	 	 	 
	 
	 	 	 	Andrew Kryder	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	May 15, 1998	 	Title:
	 	General Counsel	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE	 	 	 	 	 	 
	PROPERTY TRUST	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery
	 	Date:
	 	May 13, 1998	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	May 14, 1998	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	/s/ Norm Claus	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	May 13, 1998	 	 
	 	 	 	 	 	 	 

4

 

Quantum 6

AMENDMENT NO. 2

TO LEASE

     THIS AMENDMENT NO. 2 is made and entered into this 22nd day of March, 2001, by and between
JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR’S
TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77
(RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, collectively as LANDLORD, and MAXTOR
CORPORATION, a Delaware corporation, as “ASSIGNEE” or “MAXTOR”.

RECITALS

     A. WHEREAS, by Lease Agreement dated April 16, 1997 and the related Construction Agreement of
even date therewith, Landlord leased to QUANTUM CORPORATION, a Delaware corporation (the “ASSIGNOR
or “QUANTUM”) all of that certain 182,355+ square foot building to be constructed by
Landlord for Tenant and to be located on Sumac Drive in Milpitas, California, (also to be
identified as 601 McCarthy Boulevard, Milpitas, CA) the details of which are more particularly set
forth in said April 16, 1997 Lease Agreement, and

     B. WHEREAS, said Lease was amended by Amendment No. 1 dated April 15, 1998, which amended the
Lease by: (i) changing the square footage of the Leased Premises pursuant to the Architect’s final
measurement; (ii) setting a fixed Commencement Date of June 1, 1998 and a Termination Date of May
31, 2012 for the Lease; (iii) establishing the Basic Rent Schedule and Aggregate Rent under said
Lease Agreement; (iv) increasing the Security Deposit requirement under the Lease pursuant to the
change in the square footage of the Premises; and (v) amending Lease Paragraphs 41 (“First
Five-Year Option to Extend”) and 42 (“Second Five-Year Option to Extend”), and

     C. WHEREAS, the Lease, together with those certain Amendments described above in Recital B
shall hereinafter collectively be referred to as “the Lease Agreement”, and

     D. WHEREAS, it is now the desire of the parties hereto to amend the Lease by (i) acknowledging
Landlord’s consent to the assignment of said Lease from “Quantum Corporation, a Delaware
corporation” to “Maxtor Corporation, a Delaware corporation”, and (ii) replacing Lease Paragraphs
41 (“First Five Year Option to Extend”) and 42 (“Second Five Year Option to Extend”) as hereinafter
set forth.

AGREEMENT

     NOW THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree as follows:

     1. ASSIGNMENT OF TENANT’S INTEREST: Notwithstanding anything to the contrary
contained in the Lease Agreement, Landlord hereby understands that based on Quantum’s notice to
Landlord, Landlord hereby acknowledges that the following transactions have occurred:

1

 

Quantum 6

          A. Quantum has operated its business at the Premises through two separate business groups:
Quantum HDD, tracked by Quantum HDD common stock, and Quantum DSS, tracked by Quantum DSS common
stock.

          B. On or about, October 3, 2000, Quantum and Maxtor entered into that certain an Amended and
Restated Agreement and Plan of Merger and Reorganization, dated as of October 3, 2000 (the “Merger
Agreement’), wherein they agreed that:

               (i) Quantum will separate its Quantum HDD business from its Quantum DSS and transfer the
assets of Quantum HDD to a newly-formed subsidiary, Insula Corporation, a Delaware corporation
(“Insula”), in exchange for all of Insula’s common stock and Insula’s agreement to be entirely
responsible for all of the Quantum HDD obligations and liabilities.

               (ii) Immediately after such separation, each currently outstanding share of Quantum HDD common
stock will be redeemed in return for a share of Insula common stock such that the holders of
Quantum HDD common stock shall own all of the common stock of Insula.

               (iii) Immediately after said redemption, Insula will merge into Maxtor and each share of the
Insula’s common stock will be converted into the right to receive approximately 1.52 shares of
Maxtor common stock, subject to possible adjustment as described in the Merger Agreement.

          C. As part of the legal separation of the Quantum HDD business from the Quantum DSS business,
all of the right title and interest of Quantum in the Lease will be assigned by Quantum to Insula
and Insula will assume and agree to be liable for all of the obligations of Quantum, as Tenant,
under the Lease.

          D. Because the actual physical separation of the Quantum HDD business from the Quantum DSS
business cannot be completed prior to the closing of the foregoing transactions described above,
Insula has agreed to provide to Quantum with a limited license for the use of the premises subject
to the Leases, identified as “License Back” Leases in attached Exhibit A for a period of
time not exceeding the number of months specified in attached Exhibit A.

     As a result of said merger transaction, as of April 2, 2001, the effective date of the merger,
Maxtor will become the Tenant under the Lease Agreement, and Maxtor shall assume all obligations of
Tenant under the Lease Agreement dated April 16, 1997, as amended.

     Landlord hereby consents to the foregoing transactions (“Landlord’s Consent”). Except as
expressly set forth below, Landlord’s Consent shall in no way void or alter any of the terms of the
Lease Agreement by and between Landlord and Tenant, nor shall Landlord’s Consent alter or diminish
in any way Tenant’s obligations to Landlord.

     Landlord has not reviewed the terms of any agreement between Quantum, Insula and/or Maxtor,
and Landlord shall not be bound by any agreement other than the terms of the Lease Agreement
between Landlord and Tenant. Landlord does not make any warranties or

2

 

Quantum 6

representations as to the condition of the Leased Premises or the terms of the Lease Agreement
between Landlord and Quantum. Landlord’s consent to the assignment shall in no way obligate
Landlord to any further consents or agreements between Quantum and/or Assignee. So long as Quantum
continues to exist as a Delaware corporation, it is agreed that both Quantum and Maxtor will be
jointly and severally liable for all the terms and conditions of the Lease and all Amendments
thereto; provided, however, that so long as Quantum remains liable for said Lease, no material
amendment to the Lease Agreement after the date hereof shall be binding upon Quantum without the
prior written consent of Quantum, which consent shall not be unreasonably withheld, and Quantum’s
approval shall not be required on transactions related to Landlord’s Waivers, Landlord’s Consents
to Sublease and/or Landlord’s Consents to Alterations. The foregoing, however, shall not prevent
Tenant and Landlord from entering into any such modification or amendment between themselves.

     It is further understood that the Security Deposit of Quantum is being transferred to Maxtor.

     2. OPTIONS TO EXTEND: As consideration for the consent of Landlord herein set forth,
Lease Paragraph 41 (“First Five Year Option to Extend”), as amended by Paragraph 6 to Amendment No.
1, and Lease Paragraph 42 (“Second Five Year Option to Extend”), as amended by Paragraph 7 to
Amendment No. 1, are hereby deleted in their entirety and shall be replaced with the following:

          A. FIRST FIVE YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
this Lease Agreement (“Option to Extend” or the “Option”) for an additional five years (“First
Extended Term”) upon the following terms and conditions:

                    (1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Lease Term pursuant to Paragraph
A hereof (not later than December 3, 2011), in which event the Term of the Lease shall be
considered extended for an additional five (5) years, subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) management fee and
the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this Paragraph 2.A thereafter deleted. In the event that Tenant fails
to timely exercise Tenant’s Option as set forth herein in writing, Tenant shall have no further
Option to Extend this Lease, and the Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 2.

                    (2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of the Option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.A.1(ii) above) and the Basic Rent (which shall not be less than the Basic Rent for the fifth year
of the current Term) required for the Extended Term of the Lease to make the Basic Rent for the
Premises comparable to the then current market triple net basic rent for comparable properties
either (i) then owned in whole or in part by the above mentioned Landlord or by members of its
immediate family in the vicinity of the Premises or (ii)

3

 

Quantum 6

if not owned by Landlord or its family as stated herein, other third party properties in the
vicinity of the Premises. Tenant shall have five (5) days after receipt from the Landlord of said
new terms and conditions and Basic Rent in which to accept said new terms and conditions and Basic
Rent and enter into written documentation confirming same. In the event Tenant fails to execute
said written documentation confirming said new terms and conditions and Basic Rent for the Second
Extended Term of Lease within said five (5) day period, Tenant shall have no further Option to
Extend this Lease, and this Lease shall continue in full force and effect for the full remaining
term hereof absent of this Paragraph 2, with Landlord having no further responsibility or
obligation to Tenant with respect to Tenant’s Option to Extend.

                    (3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2 shall be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the time the lease commences on the Second Extended Term, Landlord may at its sole and absolute
discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force and effect
for the full remaining Term hereof, absent of this Paragraph 2.

                    (4) The Option rights of Tenant under this Paragraph 2.A, and the First Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

                    (5) Notwithstanding anything to the contrary in this Paragraph, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

          B. SECOND FIVE (5)-YEAR OPTION PERIOD: Provided Tenant has extended the Lease for an
additional five year period as set forth in Paragraph A above, Landlord hereby grants to Tenant
another Option to Extend the Lease Agreement upon the following terms and conditions;

                    (1) Tenant shall give Landlord written notice of Tenant’s exercise of this Option to Extend at
least one hundred eighty (180) days prior to the expiration of the Basic Term hereof (not later
than December 3, 2016), in which event the Term of the Lease shall be considered extended for an
additional five (5) years (“Second Extended Term”) subject to the Basic Rent set forth below and
with: (i) the Basic Rent to be determined pursuant to Paragraph 2) below; (ii) the management fee
and the terms and conditions subject to amendment by Landlord (Landlord, in its sole and absolute
discretion, may, but is not required to, incorporate its then current Lease provisions that are
standard in Landlord’s leases for comparable buildings as of the date of Tenant’s exercise of its
Option to Extend); and (iii) this

4

 

Quantum 6

Paragraph 2.B thereafter deleted. In the event that Tenant fails to timely exercise Tenant’s
Option as set forth herein in writing, Tenant shall have no further Option to Extend the Lease, and
the Lease shall continue in full force and effect for the full remaining term hereof, absent this
Paragraph 2.B.

                    (2) In the event Tenant timely exercises Tenant’s Option to Extend as set forth herein,
Landlord shall, within fifteen (15) days after receipt of Tenant’s exercise of option, advise
Tenant of any changes in the management fee and the terms and conditions as referenced in Paragraph
2.B.1(ii) above and Basic Rent (which shall not be less than the Basic Rent for the fifth year of
the First Extended Term) required for the Second Extended Term of the Lease to make the Basic Rent
for the Premises comparable to the then current market triple net basic rent for comparable
properties either (i) then owned in whole or in part by the above mentioned Landlord or by members
of its immediate family in the vicinity of the Premises or (ii) if not owned by Landlord or its
family as stated herein, other third party properties in the vicinity of the Premises. Tenant
shall have five (5) days after receipt from the Landlord of said new terms and conditions and Basic
Rent in which to accept said new terms and conditions and Basic Rent and enter into written
documentation confirming same. In the event Tenant fails to execute said written documentation
confirming said new terms and conditions and Basic Rent for the Third Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this Lease, and this Lease
shall continue in full force and effect for the full remaining term hereof absent of this Paragraph
2.B, with Landlord having no further responsibility or obligation to Tenant with respect to
Tenant’s Option to Extend.

                    (3) It is agreed that if Tenant is at any time prior to exercising its Option to Extend in
default of this Lease and has failed to cure the default in the time period allowed, this Paragraph
2.B will be null and void and Tenant will have no further rights under this Paragraph. It is
further agreed that if Tenant has exercised its Option to Extend and is subsequently in default,
and has failed to cure the default in the time period allowed by the Lease at any time prior to, or
at the scheduled Commencement Date of the Third Extended Term, Landlord may at its sole and
absolute discretion, cancel Tenant’s Option to Extend, and this Lease will continue in full force
and effect for the full remaining Term hereof, absent of this Paragraph 2.B.

                    (4) The Option rights of Tenant under this Paragraph 2.B and the Second Extended Term
thereunder, are granted for Tenant’s personal benefit and may not be assigned or transferred by
Tenant, except as provided for in Lease Paragraph 56 (“Permitted Assignments and Subleases”),
either voluntarily or by operation of law, in any manner whatsoever.

                    (5) Notwithstanding anything to the contrary in this Paragraph 2.B, this Option to Extend is
automatically forfeited by Tenant (without notice from Landlord) in the event Tenant is, at any
time during the Term of this Lease, in default of said Lease and if Tenant does not completely cure
said default within five days for a monetary default and thirty days for a non-monetary default (or
such longer time as permitted by cure in the Lease Agreement). In the event said Option to Extend
is forfeited as stated herein, Tenant shall have no further Option to Extend this Lease.

5

 

Quantum 6

     EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of said April 16, 1997
Lease Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2 to Lease as of the
day and year last written below.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	ASSIGNEE/MAXTOR:	 	 
	 
	 	 	 	 	 	 	 	 
	JOHN ARRILLAGA SURVIVOR’S

TRUST	 	MAXTOR CORPORATION

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ John Arrillaga by Richard
T. Peery
	 	By
	 	/s/ Glenn H. Stevens	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	his attorney in fact	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	John Arrillaga, Trustee	 	Glenn H. Stevens	 	 
	 	 	 	 	 	 	 
	 
Date:	 	 
March 30, 2001	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 
	RICHARD T. PEERY SEPARATE
PROPERTY TRUST	 	Title:	 	Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Richard T. Peery
	 	Date:
	 	April 1, 2001	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Richard T. Peery, Trustee	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	March 30, 2001	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	ASSIGNEE/QUANTUM:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	QUANTUM CORPORATION

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	/s/ Norm Claus	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Print or Type Name	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	V.P. Real Estate	 	 
	 
	 

	 	 	 	Date:
	 	March 30, 2001	 	 

10

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