{"id":41781,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1290-parkmoor-avenue-san-jose-ca-sublease-raytheon-co.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1290-parkmoor-avenue-san-jose-ca-sublease-raytheon-co","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/1290-parkmoor-avenue-san-jose-ca-sublease-raytheon-co.html","title":{"rendered":"1290 Parkmoor Avenue (San Jose, CA) Sublease &#8211; Raytheon Co., Concentric Network Corp. and The Sobrato Group"},"content":{"rendered":"<pre>                                   SUBLEASE\n                                   --------\n\n     THIS SUBLEASE (this \"Sublease\") is made and entered into this _____ day of\nSeptember, 1999, by and between Raytheon Company, a Delaware corporation\n(\"Sublessor\"), and Concentric Network Corporation, a Delaware corporation\n(\"Sublessee\").\n\n                                R E C I T A L S\n                                - - - - - - - -\n\n     A.  Tiburon Systems, Inc. (\"Tiburon\") entered into that certain Lease dated\nMay 23, 1991, an option agreement dated September 18, 1991 and amendments dated\nApril 7, 1992 and July 28, 1992 (collectively, \"Master Lease\"), with The Sobrato\nGroup, a California limited partnership (\"Master Lessor\"), for the lease of that\ncertain real property commonly known as 1290 Parkmoor Avenue, San Jose, CA,\nconsisting of approximately 66,479 square feet (the \"Master Premises\"). A copy\nof the Master Lease is attached as Exhibit \"A\" hereto.\n\n     B.  Texas Instruments Incorporated (\"TI\") purchased the stock of Tiburon on\nSeptember 22, 1995 and assignment of the lease to TI was approved by the Master\nLessor on October 31, 1995.\n\n     C.  TI assigned the Master Lease to Raytheon TI Systems Inc., a wholly\nowned subsidiary of Sublessor and said assignment was consented to by Master\nLessor on May 27, 1997.\n\n  D. Raytheon TI Systems was merged into Sublessor on December 28, 1998.\n\n     E.  Sublessor and Sublessee desire to provide for a sublease of the Master\nPremises consisting of approximately 66,479 rentable square feet, (the\n\"Premises\") pursuant to the provisions hereof.\n\n  NOW, THEREFORE, the parties agree as follows:\n\n     1.  SUBLEASE. Subject and pursuant to the provisions hereof, Sublessor\n         --------                                                          \nsubleases to Sublessee, and Sublessee subleases from Sublessor, the Premises.\n\n     2.  TERM. The term of this Sublease shall be for approximately Twenty Nine\n         ----                                                                  \n(29) months (the \"Term\") commencing on the latter of November 1, 1999 or the\ndate on which Sublessor has delivered legal possession of the Premises to\nSublessee in the condition required hereunder (the \"Commencement Date\") and\nending on March 22, 2002, unless sooner terminated hereunder. If the\nCommencement Date has not occurred for any reason whatsoever (other than delay\non the part of Sublessee) on or before February 28, 2000, then, Sublessee may\nterminate the Sublease by written notice to Sublessor, whereupon any monies\npreviously paid by Sublessee to Sublessor shall be reimbursed to Sublessee or,\nat Sublessee's election, the date Sublessee is otherwise obliged to commence\npayment of Rent shall be delayed by one day for each day that the Commencement\nDate is delayed beyond such date.\n\n                                       1\n\n \n  3. RENT. During the term of this Sublease, Sublessee shall pay as rent\n     ----                                                               \n(\"Rent\") for the Premises an amount equal to the monthly Rent under the Master\nLease, which at the commencement of this sublease is $84,999.99. The Rent shall\nincrease periodically during the term pursuant to the same terms and conditions\nby which Rent shall increase under the Master Lease.\n\nRent shall be paid to Sublessor without demand, deduction, set-off or\ncounterclaim, in advance on the first day of each calendar month during the term\nof this Sublease, and in the event of a partial rental month, rent shall be\nprorated on the basis of the number of days in the month. Sublessee shall pay to\nSublessor upon the execution hereof the first full monthly installment of Rent.\n\nIn addition to the above Sublessee shall pay to Sublessor on a monthly basis as\nAdditional Rent all costs and expenses attributable to the Premises payable\nunder the Master Lease, as incorporated herein, including but not limited to\nutilities, real estate taxes, insurance and other operating expenses which\nSublessor is required to pay under the Master Lease. In no event shall\nSublessee's obligation to pay Additional Rent exceed the amount attributable to\nthe Premises due and payable by Sublessor under the Master Lease. To the extent\npaid by Sublessee, Sublessee shall be entitled to all credits, if any, given by\nMaster Lessor to Sublessor for Sublessor's overpayments of Additional Rent.\n\nPayment of all Rent Additional Rent and other amounts due and payable from\nSublessee to Sublessor, shall paid in accordance with this Lease at the\nfollowing address, or such other address as the Sublessor shall instruct the\nSublessee in writing:\n\n     Raytheon Company\n     7700 Arlington Boulevard\n     Falls Church, VA 22042-2900\n     ATTN: Angie Rickett\n\n     4.  SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon\n         ----------------                                             \nSublessee's execution hereof Eighty-five Thousand dollars ($85,000.00)\n(\"Deposit\") as security for Sublessee's faithful performance of Sublessee's\nobligations hereunder. If Sublessee fails to pay rent or other charges due\nhereunder, or otherwise defaults with respect to any provision of this Sublease,\nin each case after expiration of applicable notice and cure periods Sublessor\nmay use, apply or retain all or any portion of the Deposit for the payment of\nany rent or other charge in default or for the payment of any other sum to which\nSublessor may become obligated by reason of Sublessee's default, or to\ncompensate Sublessor for any loss or damage which Sublessor may suffer thereby\nto the extent permitted by law. If Sublessor so uses or applies all or any\nportion of the Deposit, Sublessee shall within ten (10) days after written\ndemand therefor deposit cash with Sublessor in an amount sufficient to restore\nthe Deposit to its full amount and Sublessee's failure to do so shall be a\nmaterial breach of this Sublease. Sublessor shall not be required to keep the\nDeposit separate from its general accounts. If Sublessee performs all of\nSublessee's obligations hereunder, the Deposit, or so much thereof as has not\ntheretofore been applied by Sublessor, shall be returned, without payment of\ninterest or other increment for its use to Sublessee (or at Sublessor's option,\nto the last assignee, if any, of Sublessee's interest\n\n                                       2\n\n \nhereunder) at the expiration of the term hereof, and after Sublessee has vacated\nthe Premises. No trust relationship is created herein between Sublessor and\nSublessee with respect to the Deposit. Any deposit under the Master Lease which\nmay be returned by the Master Lessor shall be the property of Sublessor.\n\n     5.  USE. Sublessee shall use and occupy the Premises only for the purposes\n         ---                                                                   \ndescribed in Section 3 of the Master Lease and for no other purpose without the\nSublessor's and Master Lessor's prior written consent.\n\n     6.  MASTER LEASE.\n         ------------ \n\n       6.01  COMPLIANCE WITH MASTER LEASE.\n             ---------------------------- \n\n               (a) Definitions. Except as otherwise expressly provided herein,\n                   -----------   \nduring the Term and for all subsequent periods with respect to obligations\narising prior to the termination of the Sublease, Sublessee shall comply with\nand perform, for the benefit of Master Lessor and Sublessor, all of the terms,\ncovenants, conditions and obligations of the \"tenant\" or \"lessee\" under the\nMaster Lease allocable or applicable to the Premises. Such terms, covenants,\nconditions and obligations shall, unless the context of the Master Lease\nindicates otherwise, be applied with the terms \"Sublessor\" and \"Sublessee\"\nsubstituted respectively for \"Landlord\" (or \"Lessor\") and \"Tenant\" (or \"Lessee\")\nand with the term \"Premises\" under the Master Lease meaning the Premises demised\nhereunder. Sublessee acknowledges that it has read the attached copy of the\nMaster Lease and agrees that this Sublease shall be subject and subordinate to\nthe provisions thereof Sublessee shall not do, permit or suffer any act,\noccurrence or omission which if done, permitted or suffered by Sublessor would\nbe (with notice, the passage of time or both) in violation of or default by the\ntenant under the Master Lease, or could lead in any respect to the termination\nof the Master Lease.\n\n               (b) Consents. Sublessor shall use reasonable efforts to obtain\n                   --------\nfrom the Master Lessor any approvals or consents reasonably requested by\nSublessee and any work, services, repairs or other performance to be performed\nby the Master Lessor under the Master Lease; provided, however, in the case of\nlegal proceedings requested by Sublessee to be instituted, Sublessee shall\nindemnify, defend, protect and hold Sublessor harmless from and against any\nlegal fees and disbursements and all other costs, expenses, liabilities, claims\nand obligations incurred by or asserted against Sublessor in connection with any\nsuch proceedings.\n\n       6.02  INCORPORATION BY REFERENCE.\n             -------------------------- \n\n               (a) Incorporation. Subject to the provisions of Section 6.01 and\n                   -------------  \nthis Section 6.02 and this Sublease, the provisions of the Master Lease are\nhereby incorporated by this reference; provided, however, that in the event that\nany provision of the Master Lease shall explicitly conflict with the provisions\nof this Sublease, the provisions of this Sublease shall prevail.\n\n               (b) Deletions. Notwithstanding any provision of this Sublease \n                   ---------\nto the contrary, Sublessee shall not be responsible, and does not expressly\nassume, the following\n\n                                       3\n\n \nprovisions of the Master Lease: Option to Lease document dated September 18,\n1991, Article 5, 7, 37, 37(a), 40, 42 Exhibits B-F. References in the following\nprovisions to \"Landlord\" shall mean \"Master Lessor\": Articles 13, 28, 30, 31\n(the first sentence only) and 43. The first reference to \"Landlord\" in the fifth\nline of Section 19 shall mean Master Lessor. In addition, (a) Sublessor shall\nnot exercise its \"recapture\" right under Section 29 (i) unless Master Lessor\nexercises such right under the Master Lease, (b) Sublessor shall not withhold\nits consent to a sublease due to Section 29(d) unless Master Lessor withholds\nits consent and (c) the limitation on liability in Section 41 shall apply to\nMaster Lessor only. Sublessor agrees that it will not extend the term of the\nMaster Lease, including any exercise of the option to extend in Section 37 of\nthe Master Lease.\n\nAs to the aforesaid provisions, Sublessor shall agree to perform and be\nresponsible for the same.\n\n     6.03 NO ASUMPTION BY SUBLESSOR. Sublessor does not assume the obligations\n          -------------------------                                           \nof the Master Lessor under the Master Lease. Sublessee acknowledges that\nSublessor's obligation to perform services, provide utilities, make repairs and\ncarry insurance shall be satisfied only to the extent that the Master Lessor\nunder the Master lease satisfies those same obligations. With respect to the\nperformance by Master Lessor of its obligations under the Master Lease,\nSublessor's sole obligation with respect thereto will be to request the same, on\nrequest in writing from Sublessee, and to use reasonable efforts to obtain the\nsame from Landlord; provided, however, Sublessor will have no obligation to\ninstitute legal action against Master landlord.\n\n     6.04 PERFORMANCE DIRECTLY TO LANDLORD. At any time and on reasonable prior\n          --------------------------------                                     \nnotice to Sublessee, Sublessor may elect to require Sublessee to perform its\nobligations under this Sublease directly to the Master Lessor, in which event\nSublessee will send to Sublessor from time to time copies of all notices and\nother communications it will send to and receive from Master Lessor.\n\n     6.05 TERMINATION OF MASER LEASE. If the Master Lease terminates under the\n          --------------------------                                          \nspecific provisions of the Master Lease, this Sublease will terminate, unless\nthe Master Lessor elects to accept this Sublease as a direct lease between the\nMaster Lessor and Subtenant, and the parties will be relieved from all\nliabilities and obligations under this Sublease excepting obligations which have\naccrued as of the date of the termination.\n\n\n     7.   MODIFICATIONS TO CERTAIN INCORPORATED PROVISIONS. Notwithstanding the\n          ------------------------------------------------                     \nincorporation of the provisions of the Master Lease above provided in Paragraph\n6, certain of those provisions as the same apply to this Sublease are modified\nas follows:\n\n       7.01 NOTICES. In the event that Sublessor shall receive any notice from\n            -------                                                      \n Master Lessor for any reason pertaining to the Master Lease, then, within three\n(3) days from the date of such receipt, Sublessor shall send a copy of such\nnotice to Sublessee.\n\n                                       4\n\n \n          The provisions of the Master Lease regarding the giving of notices\nshall apply to the Sublease, and notices to Sublessor and Sublessee shall be\nsent to the following address::\n\n     Notices To Sublessor:    Raytheon Company\n                              Office of General Counsel\n                              141 Spring Street\n                              Lexington, MA 02421\n                              Attention: Robert Moore\n\n     Notices To Sublessee:    Concentric Network Corporation\n                              1400 Parkmoor Avenue\n                              San Jose, CA 95126\n                              Attention: Peter Bergeron\n\n\n          7.02 CONDITION OF PREMISES. Sublessee has inspected the Premises and\n               ---------------------                                          \nall improvements located thereon, and has agreed to accept the Premises in an\n\"AS-IS\" condition, in its condition existing as of the date of this Sublease\nsubject to all applicable municipal, county, state and federal laws, ordinances\nand regulations governing and regulating the use and occupancy of the Premises,\nand accepts the Sublease subject thereto and to all matters disclosed thereby,\nwithout warranty or representation concerning the same. Sublessor hereby\nacknowledges that the Premises are to be delivered to Sublessee at the\ncommencement of the term of the Sublease, unoccupied, and in a broom-swept\ncondition. Sublessee acknowledges that the taking of possession of the Premises\nby Sublessee will be conclusive evidence that the Premises were in good and\nsatisfactory condition at the time possession was taken. Sublessee specifically\nagrees that, except as specifically provided by laws in force as of the date\nhereof, Sublessor has no duty to make any disclosures concerning the condition\nof the Buildings or Premises and\/or the fitness of the Buildings or Premises for\nSublessee's intended use.\n\n          7.03 ASSIGNMENT, SUBLETTING AND ENCUMBRANCE. Sublessee shall not\n               --------------------------------------                     \nvoluntarily or involuntarily assign, sublet, mortgage or otherwise encumber all\nor any portion of its interest in this Sublease or in the Premises, without\nobtaining the prior written consent of Sublessor thereto, which Sublessor may\ngrant or withhold in Sublessor's reasonable discretion. Any assignment,\nsubletting, mortgage or other encumbrance attempted by Sublessee to which\nSublessor has not consented in writing shall be null and void and of no effect.\n\n          7.04  ALTERATIONS.\n                ----------- \n\n                    (a) Alterations and Improvements By Sublessee. Sublessee \n                        -----------------------------------------\nshall not make any alterations, additions or improvements to the Premises\n(collectively \"Alterations\") without obtaining the prior written consent of\nSublessor thereto, which Sublessor may grant or withhold, and to which Sublessor\nmay impose any conditions in Sublessor's reasonable discretion. All such\nAlterations shall be constructed only after necessary permits, licenses and\napprovals have been obtained from appropriate governmental agencies and all\nimprovements shall be constructed as to conform to all relevant codes,\nregulations, and ordinances. All such Alterations shall be made at Sublessee's\nsole cost and shall be diligently prosecuted to\n\n                                       5\n\n \ncompletion. All such alterations shall be subject to all of the terms and\nconditions imposed under the Master Lease. In addition to consent of the\nSublessor, consent of the Master Lessor, if required under the Master lease\nshall also be a precondition to Sublessee commencing any improvements to the\nPremises.\n\nAny contractor or person making such Alterations shall first be approved in\nwriting by Sublessor. Upon the expiration or earlier termination of this\nSublease, Sublessor may elect to have Sublessee either (i) surrender with the\nPremises any or all of such Alterations as Sublessor shall determine (except\npersonal property Sublessee's equipment and trade fixtures as provided in\nSubsection (b) below), in which case, such Alterations shall become the property\nof Sublessor, or (ii) in the event Master Lessor requires Sublessor to remove\nthe Alterations under the Master Lease, Sublessee shall promptly remove any or\nall of such Alterations designated by Master Lessor or Sublessor to be removed,\nin which case, Sublessee shall repair and restore the Premises to its original\ncondition as of the Commencement Date, reasonable wear and tear, casualty and\ncondemnation excepted. Sublessee shall permit no mechanic's or other liens to be\nrecorded against the Premises. Should a lien be made or filed against the\nPremises Master Premises or real property on which the Premises are situated,\nSublessee at its sole cost, shall bond against or discharge said lien within 10\ndays after Sublessor's or Master Lessor's request to do so. Notwithstanding\nanything to the contrary herein, Sublessor shall not require Sublessee to remove\nor restore any Alterations unless Master Lessor requires Sublessor to remove,\nrestore or pay the cost of removing or restoring such Alterations.\n\n          (b) Removal of Personal Property. All articles of personal property,\n              ----------------------------                                    \nand all business and trade fixtures, machinery and equipment, cabinet work,\nfurniture and movable partitions, if any, owned or installed by Sublessee at its\nexpense in the Premises shall be and remain the property of Sublessee and may be\nremoved by Sublessee at any time, provided that Sublessee, at its expense, shall\nrepair any damage to the Premises caused by such removal or by the original\ninstallation. Sublessor may elect to require Sublessee to remove all or any part\nof the aforementioned property at the expiration or sooner termination of the\nSublease, in which event such removal shall be done at Sublessee's expense, and\nSublessee shall at its own expense repair any damage to the Premises caused by\nsuch removal prior to the termination of this Sublease.\n\n          (c) At the end of the Sublease Term, Sublessee shall restore the\nPremises in accordance with the Terms of Article 8 of the Master Lease to the\ncondition required under the Master Lease as if the Sublessee were tenant under\nthe Master Lease.\n\n       7.05 HOLDING OVER. If Sublessee holds over after the expiration or\n            ------------                                                 \nearlier termination of this Sublease, with or without the express or implied\nconsent of Sublessor, then at the option of Sublessor Sublessee shall become and\nbe only a holdover tenancy at a rent equal to the greater of(a) one hundred\nfifty percent (150%) of the Rent payable by Sublessee immediately prior to such\nexpiration or termination or (b) one hundred and fifty (150%) percent of the\nFair Market Rental (as defined in the master lease), pro rated on a daily basis\nand otherwise upon the terms, covenants and conditions herein specified.\nNotwithstanding any provision to the contrary contained herein, (i) Sublessor\nexpressly reserves the right to require Sublessee to surrender possession of the\nPremises upon the expiration of the Term or upon the\n\n                                       6\n\n \nearlier termination hereof and the right to assert any remedy at law or in\nequity to evict Sublessee and\/or collect damages in connection with any such\nholding over, and (ii) Sublessee shall indemnify, defend and hold Sublessor\nharmless from and against any and all claims, demands, actions, losses, damages,\nobligations, costs and expenses, including, without limitation, attorneys' fees\nincurred or suffered by Sublessor by reason of Sublessee's failure to surrender\nthe Premises on the expiration or earlier termination of this Sublease in\naccordance with the provisions of this Sublease.\n\n     8.  ENVIRONMENTAL MATTERS.\n         --------------------- \n\n       8.01 HAZARDOUS MATERIAL. As used herein, the term \"Hazardous Material\"\n            ------------------                                               \nmeans any hazardous, toxic, explosive or radioactive substance, material or\nwaste which is or becomes regulated by any local governmental authority, the\nState of California or the United States Government, including, without\nlimitation, any material or substance which is (i) defined or listed as a\n\"hazardous waste,\" \"extremely hazardous waste,\" \"restricted hazardous waste,\"\n\"hazardous substance,\" \"hazardous material,\" \"pollutant\" or \"contaminant\" under\nany applicable federal, state or local law or administrative code promulgated\nthereunder, (ii) petroleum, (iii) asbestos, (iv) flammable explosives, (v)\nradioactive materials or (vi) polychlorinated biphenyls.\n \n       8.02 SUBLESSEE'S USE OF PREMISES. Sublessee hereby agrees, represents,\n            ---------------------------                                      \ncovenants, and warrants that neither it nor its employees, agents, contractors,\nsublessees, assignees, licensees and invitees, shall engage in or permit to\nexist anywhere in, on, under above or about the Premises any Hazardous Material\nwithout Sublessor's prior written consent. Notwithstanding the foregoing,\nSublessee may, but in strict compliance with all Environmental Laws, use\ndeminimus amounts of ordinary and customary materials such as office supplies\nreasonably required in the normal course of Sublessee's use of the Premises for\ngeneral office purposes, so long as Sublessee's use of such materials does not\nexpose the Premises or any other adjacent property to any risk of contamination\nby a Hazardous Material or expose the Landlord to any liability therefore.\n\n       8.03 INDEMNIFICATION OF SUBLESSOR. Sublessee shall indemnify, defend,\n            ----------------------------                                    \nprotect and hold Sublessor and its partners, officers, directors, employees,\ntrustees, successors, assigns, agents, servants, affiliates, representatives and\ncontractors (collectively, herein \"Sublessor Affiliates\") harmless from any and\nall claims, actions, administrative proceedings (including informal\nproceedings), judgments, damages, punitive and consequential damages, penalties,\nfines, costs, liabilities, interest or losses, including reasonable attorneys'\nfees and expenses, consultant fees, and expert fees, together with all other\ncosts and expenses of any kind or nature that arise during or after the term of\nthis Sublease directly or indirectly from, attributable to or in connection with\nthe presence, suspected presence, release or suspected release of any Hazardous\nMaterial in or into the air, soil, surface, surface water or groundwater at, on,\nabout, under or within the Premises or the Master Premises, or any portion\nthereof, by Sublessee, Sublessee Affiliates, or any invitee of Sublessee.\n\n       8.04 MASTER LEASE. In addition to the obligations of this Section 8,\n            ------------                                                   \nSublessee agrees to be bound and fulfill all environmental provisions of the\nMaster Lease and those provisions are hereby incorporated and restated.\n\n                                       7\n\n \n          8.05 SURVIVABILITY. Each of the covenants and agreements of Sublessee\n               -------------                                                   \nset forth in this Section 8 shall survive the expiration or earlier termination\nof this Sublease.\n\n     9.  REPRESENTATIONS AND WARRANTIES BY SUBLESSOR. Sublessor represents and\n         -------------------------------------------                          \nwarrants, to the best of Sublessor's knowledge, as follows:\n\n          a.  Sublessor is the \"Tenant\" or \"Lessee\" under the Master Lease, and\nthat no portion of the Premises have been assigned or sublet to any other person\nor entity other than Sublessee;\n\n          b.  The Master Lease is in full force and effect and has not been\nmodified, altered or amended except as herein identified and the copy of the\nMaster Lease attached hereto is a true, correct and complete copy of the Master\nLease;\n\n          c.  Sublessor has not received any written notice of default under the\nMaster Lease or notice of termination of the Master Lease from Master Lessor,\nnor has Sublessor received any written notice of violation or condemnation from\nany federal, state, municipal or local governmental authority relating to the\nPremises; and\n\n          d.  Sublessor has not received a Notice of Default from Master Lessor\nthat remains uncured, and to the best of the actual knowledge of Sublessor,\nthere exists under the Master Lease no default by either Master Lessor or\nSublessor.\n\n     10.  INDEMNIFICATION: EXCULPATION\n          ----------------------------\n\n         10.01  NON-LIABILITY OF SUBLESSOR. Sublessor shall not be liable to\n                --------------------------                                  \nSublessee and Sublessee hereby waives and releases all claims against Sublessor\nand Sublessor Affiliates (as defined in Section 8.03 above) for injury or damage\nto any person or property occurring or incurred in connection with or in any way\nrelating to the Premises or the Master Premises. Without limiting the foregoing,\nneither Sublessor nor any of the Sublessor Affiliates shall be liable for and\nthere shall be no abatement of Rent for (i) any damage to Sublessee's property\nstored with or entrusted to Sublessor or Sublessor Affiliates, (ii) loss of or\ndamage to any property by theft or any other wrongful or illegal act, or (iii)\nany injury or damage to persons or property resulting from fire, explosion,\nfalling plaster, steam, gas, electricity, water or rain which may leak from\npipes, appliances, appurtenances or plumbing works therein or from the roof,\nstreet or sub-surface or from any other place or resulting from dampness or any\nother cause whatsoever or from the acts or omissions of other sublessees,\noccupants or other visitors to the Premises or the Master Premises or from any\nother cause whatsoever, or (iv) any latent or other defect in the Premises or\nthe Master Premises. Notwithstanding anything to the contrary herein, Sublessor\nshall not be released or indemnified from any losses, damages, liabilities,\nclaims, attorneys' fees, costs and expenses arising from the gross negligence or\nwillful misconduct of Sublessor or Sublessor's Affiliates, Sublessor's violation\nof any law, order or regulation, or breach of Sublessor's obligations or\nrepresentations under the Sublease.\n\n                                       8\n\n \n          10.02  INDEMNIFICATION OF SUBLESSOR. Sublessee shall indemnify, \n                 ----------------------------                            \ndefend, protect and hold Sublessor harmless from and against any and all claims,\nsuits, judgments, losses, costs, obligations, damages, expenses, interest and\nliabilities, including, without limitation, actual attorneys' fees and costs,\nincurred or asserted in connection with (i) injury or damage to any person or\nproperty whatsoever arising out of or in connection with this Sublease, the\nPremises or Sublessee's activities in or about the Premises including, without\nlimitation, when such injury or damage has been caused in whole or in part by\nthe act, negligence, fault or omission of Sublessee, its agents, servants,\ncontractors, employees, representatives, licensees or invitees, or (ii) any\nbreach or default by Sublessee of its obligations under this Sublease. The\nprovisions of this Section 10.02 shall survive the expiration or earlier\ntermination of this Sublease.\n\n          10.03  MASTER LESSOR DEFAULT; CONSENTS. Notwithstanding any provision\n                 -------------------------------                               \nof this Sublease to the contrary, provided Sublessor performs its obligations\nhereunder, (a) Sublessor shall not be liable or responsible in any way for any\nloss, damage, cost, expense, obligation or liability suffered by Sublessee by\nreason or as the result of any breach, default or failure to perform by the\nMaster Lessor under the Master Lease and (b) whenever the consent or approval of\nSublessor and Master Lessor is required for a particular act, event or\ntransaction (i) any such consent or approval by Sublessor shall be subject to\nthe consent or approval of Master Lessor and (ii) should Master Lessor refuse to\ngrant such consent or approval, under all circumstances, Sublessor shall be\nreleased from any obligation to grant its consent or approval.\n\n\n     11.    INSURANCE. Sublessee shall procure and maintain, at its own cost and\n            ---------                                                           \nexpense, such insurance as is required to be carried by Sublessor under the\nMaster Lease as incorporated herein, naming Sublessor, as well as Master Lessor,\nin the manner required therein.\n\n     12.    MISCELLANEOUS.\n            ------------- \n\n        12.01  COUNTERPARTS. This Sublease may be executed in one or more\n                ------------                                              \ncounterparts by the parties hereto. All counterparts shall be construed together\nand shall constitute one agreement.\n \n        12.02  SOLE AGREEMENT. This Agreement contains all of the \n               --------------  \nunderstandings of the parties and all representations made by either party to\nthe other are merged herein.\n \n        12.03  MODIFICATION. This Agreement may not be modified in any respect\n               ------------                                                   \nexcept by a document in writing executed by both parties hereto or their\nrespective successors.\n \n        12.04  ATTORNEYS' FEES. If any party commences an action against the\n               ---------------                                              \nother, the prevailing party shall be entitled to recover from the losing party\nreasonable attorneys' fees and costs.\n \n        12.05  BINDING EFFECT. This Agreement shall be binding on and inure to\n               --------------                                                 \nthe benefit of the parties and their respective heirs, successors and assigns.\n\n                                       9\n\n \n        12.06  BROKER COMMISSION. Sublessee acknowledges that Cushman &amp; -----------------                                       \nWakefield of California and Spallino Reid Corporate Real Estate Services (the\n\"Brokers\") are the only real estate brokers responsible for bringing about or\nnegotiating this Lease and are the only Brokers with whom Sublessee has dealt\nwith regarding this Lease. In addition to any other Rent or Additional Rent,\nSublessee agrees to pay Sublessor $5,659.71 per month for each month during the\nterm of this sublease. This payment is to reimburse Sublessor for the brokerage\ncommission amortized over the term of the Sublease at 8.5%. In the event that\nthe Sublease terminates before March 31, 2002, due in any part to a default by\nSublessee, Sublessee shall immediately pay, in additional to any other amounts\nwhich may then be due and payable, a payment which equals the number of months\nremaining from the date of termination to March 31, 2002 times $5,659.71.\n \n        12.07  SUBLESSORS OBLIGATIONS. Provided Sublessee is not in default,\n               ----------------------                                       \nSublessor shall not terminate or take any actions which could give rise to the\ntermination of the Master Lease, amend or waive any provisions under the Master\nLease or make any elections, exercise any right or remedy or give any consent or\napproval under the master Lease to the extent the foregoing would have a\nmaterial adverse effect on Sublessee's rights or obligations hereunder without\nin each instance, Sublessee's prior written consent not unreasonably withheld.\nSublessor, with respect to the obligations of Master Lessor under the Master\nLease, shall use Sublessor's good faith efforts to cause Master Lessor to\nperform such obligations for the benefit of Sublessee, however, nothing herein\nshall require Sublessor to incur any costs or expenses. Such good faith efforts\nshall include: (a) upon Sublessee's written request, promptly notifying Master\nLessor of its nonperformance under the Master Lease, and requesting that Master\nLessor perform its obligations under the Master Lease; and (b) permitting\nSublessee to commence a lawsuit or other action in Sublessor's name to obtain\nthe performance required from Master Lessor under the Master Lease; provided,\nhowever, that if Sublessee commences a lawsuit or other action, Sublessee shall\npay all costs and expenses incurred in connection therewith, and Sublessee shall\nindemnify Sublessor against, and hold Sublessor harmless from, all costs and\nexpenses incurred by Sublessor in connection therewith.\n\n        12.08  ASSIGNMENT OF RIGHTS. To the extent assignable and at no cost and\n               --------------------                                         \nexpense to Sublessor, Sublessor hereby assigns to Sublessee all warranties and\nindemnities made by Master Lessor to Sublessor under the Master Lease which\nwould reduce Sublessee's obligations hereunder, and shall cooperate with\nSublessee to enforce all such warranties and indemnities.\n \n        12.09  SUBORDINATION. Sublessor shall use its best efforts, without\n               -------------                                               \nincurring any cost or expense, to obtain from any lenders or ground Sublessor of\nthe Premises or the building in which the Premises are located a written\nagreement providing for recognition of Sublessee's interests under the Sublease\nin the event of a foreclosure of the lender's security interest or termination\nof the ground lease. Further, prior to Sublessor's subordination of its\nleasehold interest to a ground lease or instrument of security, Sublessor shall,\nwithout being required to incur any costs or expenses, use reasonable efforts to\nobtain from any such ground lessor or lenders such a recognition agreement. The\ninability of Sublessor to obtain such recognition of the Sublessee shall not\nconstitute a default under this Sublease.\n\n                                       10\n\n \n        12.10  AUTHORIZATION TO DIRECT SUBLEASE PAYMENTS. Sublessee shall have\n               -----------------------------------------                      \nthe right to pay all rent and other sums owing by Sublessee to Sublessor\nhereunder for those items which also are owed by Sublessor to Master Lessor\nunder the Master Lease directly to Master Lessor if Sublessor fails to make any\npayment required to be made by Sublessor to Master Lessor under the Master\nLease. Sublessee shall provide to Sublessor concurrently with any payment to\nMaster Lessor reasonable evidence of such payment. Any sums paid directly by\nSublessee to Master Lessor in accordance with this paragraph shall be credited\ntoward the amounts payable by Sublessee to Sublessor under the Sublease.\n\n        12.11  APPROVALS. Whenever the Sublease requires an approval, consent,\n               ---------                                                      \ndesignation, determination, selection or judgment by either Sublessor or\nSublessee, unless another standard is expressly set forth, such approval,\nconsent, designation, determination, selection or judgment and any conditions\nimposed thereby shall be reasonable and shall not be unreasonably withheld or\ndelayed.\n\n        12.12  MASTER LESSOR CONSENT. The Sublease and the obligations of the\n               ---------------------                                         \nparties thereto are conditioned upon receipt of Master Lessor's consent to the\nSublease. In the event that Master Lessor fails to consent to the Sublease as\nprovided in the Master Lease, and within the time period specified under the\nMaster Lease, either party shall have the right to terminate the Sublease.\n\n        12.13  CORPORATE AUTHORITY. If Tenant is a corporation, Tenant\n               -------------------                                    \nrepresents and warrants that each individual executing this Sublease on its\nbehalf is duly authorized to execute and deliver this Sublease on behalf of said\ncorporation, in accordance with a duly adopted resolution of the Board of\nDirectors of said corporation or in accordance with the by-laws of said\ncorporation, and that this Sublease is binding upon said corporation in\naccordance with its terms.\n\n\n\n        IN WITNESS WHEREOF, the parties hereto have hereunto set their hand on\nthe date first above written.\n \n\nSUBLESSOR:                                SUBLESSEE:                       \n                                                                           \n                                                                           \nRAYTHEON COMPANY                        CONCENTRIC NETWORK CORPORATION     \na Delaware corporation                    a Delaware corporation           \n                                                                           \n                                                                           \n                                                                           \nBy: \/s\/ Thomas D. Hyde                    By: \/s\/ Henry R. Nothhaft        \n    --------------------------                -------------------------    \n                                                                           \n                                                                           \nName:   Thomas D. Hyde                    Name:   Henry R. Nothhaft        \n      ------------------------                                             \nTitle:  Senior Vice President             Title:  Chairman, President &amp; CEO \n      ------------------------\n        Secretary &amp; General Counsel\n\n                                       11\n\n \n                                                                          [LOGO]\n                                                                         SOBRATO\n                                                           DEVELOPMENT COMPANIES\n\n                        LANDLORD'S CONSENT TO SUBLEASE\n\nThe Sobrato Group (\"Landlord\"), as Landlord under that certain Lease (the\n\"Lease\") dated May 23, 1991 as amended by First Amendment to Lease dated April\n7, 1992, and by Second Amendment to Lease dated July 28, 1992, by and between\nLandlord and Raytheon TI Systems, Inc., as successor in interest to Texas\nInstruments Inc., as successor in interest to Tiburon Ssytems, Inc. (\"Tenant\"),\nas Tenant, subject to and specifically conditioned upon the following terms and\nconditions hereby grants its consent to the Sublease dated October 25, 1999 made\nby and between the Tenant, as sublandlord, and Concentric Network Corporation\n(\"Subtenant\"), as subtenant, a copy of which is attached as Exhibit B (\"the\nSublease\"), covering that certain premises (the \"Premises\") commonly known as\n1290 Parkmoor Avenue, San Jose, California.\n\nAs conditions to the consent of Landlord to the Sublease, it is understood and\nagreed as follows:\n\n1. No Release. This Consent to Sublease shall in no way release the Tenant or\nany person or entity claiming by, through or under Tenant, including Subtenant,\nfrom any of its covenants, agreements, liabilities and duties under the Lease,\nas the same may be amended from time to time, without respect to any provision\nto the contrary in the Sublease.\n\n2. Specific Provisions of Lease and Sublease. This Consent to Sublease\nconsenting to a sublease to Subtenant does not constitute approval by Landlord\nof any of the provisions of the Sublease document or agreement thereto or\ntherewith; nor shall the same be construed to amend the Lease in any respect,\nany purported modifications being solely for the purpose of setting forth the\nrights and obligations as between Tenant and Subtenant, but not binding\nLandlord. The Sublease is, in all respects, subject and subordinate to the\nLease, as the same may be amended. Furthermore, in the case of any conflict\nbetween the provisions of this Consent to Sublease or the Lease and the\nprovisions of the Sublease, the provisions of this Consent to Sublease or (as\nbetween Landlord and Tenant) the Lease, as the case may be, shall prevail\nunaffected by the Sublease.\n\n3. Limited Consent. This Consent to Sublease does not and shall not be construed\nor implied to be a consent to any other matter for which Landlord's consent is\nrequired under the Lease, including, without limitation, any Alterations under\nthe Lease.\n\n4. Tenant's Continuing Liability. Tenant shall be liable to Landlord for any\ndefault under the Lease, whether such default is caused by Tenant or Subtenant\nor anyone claiming by or through either Tenant or Subtenant, but the foregoing\nshall not be deemed to restrict or diminish any right which Landlord may have\nagainst Subtenant pursuant to the Lease, in law or in equity for violation of\nthe Lease or otherwise,\n\n \nincluding, without limitation, the right to enjoin or otherwise restrain any\nviolation of the Lease by Subtenant.\n\n5. Default by Tenant under the Lease. If Tenant defaults under the Lease,\nLandlord may elect to receive directly from Subtenant all sums due or payable to\nTenant by Subtenant pursuant to the Sublease. Upon written notice from Landlord,\nSubtenant shall thereafter pay to Landlord any and all sums due or payable under\nthe Sublease. In such event, Tenant shall receive from Landlord a corresponding\ncredit for such sums against any payments then due or thereafter becoming due\nfrom Tenant.\n\n6. Termination of Lease. If at any time prior to the expiration of the term of\nthe Sublease the Lease shall terminate or be terminated for any reason, the\nSublease shall simultaneously terminate. However, Subtenant agrees, at the\nelection and upon written demand of Landlord, and not otherwise, to attorn to\nLandlord for the remainder of the term of the Sublease, such attornment to be\nupon all of the terms and conditions of the Lease, except that the Base Rent set\nforth in the Sublease shall be substituted for the Base Rent set forth in the\nLease and the computation of Additional Rent as provided in the Lease shall be\nmodified as set forth in the Sublease. The foregoing provisions of this\nparagraph shall apply notwithstanding that, as a matter of law, the Sublease may\notherwise terminate upon the termination of the Lease and shall be self-\noperative upon such written demand of the Landlord, and no further instrument\nshall be required to give effect to said provisions. Upon the demand of\nLandlord, however, Subtenant agrees to execute, from time to time, documents in\nconfirmation of the foregoing provisions of this paragraph satisfactory to\nLandlord in which Subtenant shall acknowledge such attornment and shall set\nforth the terms and conditions of its tenancy.\n\n7. Sublease Profits. Landlord and Tenant agree that no consideration is due in\nexcess of base monthly rent pursuant to section 29 of the Lease Agreement.\n\n8. No Waiver; No Privity. Nothing herein contained shall be deemed a waiver of\nany of the Landlord's rights under the Lease. In no event, however, shall\nLandlord be deemed to be in privity of contract with Subtenant or owe any\nobligation or duty to Subtenant under the Lease or otherwise, any duties of\nLandlord under the Lease being in favor of, for the benefit of and enforceable\nsolely by Tenant.\n\n9. Notices. Subtenant agrees to promptly deliver a copy to Landlord of all\nnotices of default and all other notices sent to Tenant under the Sublease, and\nTenant agrees to promptly deliver a copy to Landlord of all such notices sent to\nSubtenant under the Sublease. All copies of any such notices shall be delivered\npersonally or sent by United States registered or certified mail, postage\nprepaid, return receipt requested, to Landlord.\n\n10. Additional Provisions. Landlord and Subtenant further agree as follows:\n\n     (a)    In the event that the Lease terminates prior to the expiration of\n            the term thereof for any reason other than as a result of an event\n            of default by Subtenant under the Sublease shall continue in full\n            force and effect as a direct lease between Landlord and Subtenant\n            upon all of the terms, \n\n                                    Page 2\n\n \n            covenants and conditions of the Sublease; provided, however, that\n            the rental rate thereunder shall be increased to the same per square\n            foot rental rate schedule as in the Lease between Landlord and\n            Subtenant dated May 15, 1998 for the building located at 1400\n            Parkmoor Avenue, San Jose, California.\n\n     (b)    Notwithstanding anything to the contrary herein, the release and\n            waiver of subrogation in Section 12 of the Lease shall apply as\n            between Landlord and Subtenant.\n\n     (c)    Landlord shall not exercise any recapture right it may have under\n            the Lease in the event Subtenant sublets the Premises or assigns the\n            Sublease to an entity controlling, controlled by or under common\n            control with Subtenant, a successor entity related to Subtenant by\n            merger or consolidation, or a purchaser of substantially all of\n            Subtenant's assets or stock. Landlord acknowledges that Subtenant\n            intends to sublease portions of the Premises and agrees not to\n            exercise any recapture right that it may have with respect to such\n            subletting portions of the premises in the first year of the\n            Sublease term.\n\n\nLandlord\nThe Sobrato Group, a California limited Partnership\n\nby   \/s\/ [\"ILLEGIBLE\"]\n     ------------------\nits   GP.\n      -----------------\n\nTenant\nRaytheon TI Systems, Inc., a Delaware corporation\n\nby_____________________\n\nits____________________\n\nSubtenant\nConcentric Network Corporation, a Delaware corporation\n\nby   \/s\/ [\"ILLEGIBLE\"]\n     --------------------\n\nits   Corporate Secretary\n      -------------------\n\n                                    Page 3\n\n \n          covenants and conditions of the Sublease; provided, however, that the\n          rental rate thereunder shall be increased to the same per square foot\n          rental rate schedule as in the Lease between Landlord and Subtenant\n          dated May 15, 1998 for the building located at 1400 Parkmoor Avenue,\n          San Jose, California.\n\n     (b)  Notwithstanding anything to the contrary herein, the release and\n          waiver of subrogation in Section 12 of the Lease shall apply as\n          between Landlord and Subtenant.\n\n     (c)  Landlord shall not exercise any recapture right it may have under the\n          Lease in the event Subtenant sublets the Premises or assigns the\n          Sublease to an entity controlling, controlled by or under common\n          control with Subtenant, a successor entity related to Subtenant by\n          merger or consolidation, or a purchaser of substantially all of\n          Subtenant's assets or stock. Landlord acknowledges that Subtenant\n          intends to sublease portions of the Premises and agrees not to\n          exercise any recapture right that it may have with respect to such\n          subletting portions of the premises in the first year of the Sublease\n          term.\n\n\nLandlord\nThe Sobrato Group, a California limited Partnership\n\nby________________________\n\nits_______________________\n\nTenant Raytheon Company, successor by merger to\nRaytheon TI Systems, Inc, a Delaware corporation\n\nby \/s\/ Thomas D. Hyde\n   -------------------------\n       Thomas D. Hyde\nits    Senior Vice President\n       ---------------------\n       Secretary and General Counsel\n\nSubtenant\nConcentric Network Corporation, a Delaware corporation\n\nby________________________\n\nits_______________________\n\n                                    Page 3\n\n \n                           [LETTERHEAD APPEARS HERE]\n\n\n                           SECOND AMENDMENT TO LEASE\n\n     This Amendment is made this 28th day of July 1992 by and between The\n     Sobrato Group having an address at 10600 N. De Anza Blvd., Suite 200,\n     Cupertino, California 95014 (\"Landlord\") and Tiburon Systems, Inc., a\n     California corporation (\"Tenant\").\n\n                                   WITNESSETH\n\n     WHEREAS Landlord and Tenant entered into a lease (\"Lease\") dated May 23,\n     1991 for the premises (\"Premises\") located at 1290 Parkmoor Avenue, San\n     Jose, California.\n\n     WHEREAS effective July 28, 1992, Landlord and Tenant wish to modify the\n     Lease to reflect the increase in rent by acceptance of the Tenant\n     Improvement costs to Tenant in the amount of $897,219.33 totaling\n     $232,429.33 more than the Tenant Interior Improvement Allowance of\n     $664,790.00 as defined in paragraph 7 of the Lease; and\n\n     WHEREAS effective July 28, 1992, Landlord and Tenant wish to document the\n     elimination of the Option to Lease dated September 18, 1991 by and between\n     The Sobraro Group and Tiburon Systems, Inc., for the Option Building;\n\n     NOW, THEREFORE, in order to effect the intent of the parties as set forth\n     above and for good and valuable consideration exchanged between the\n     pasties, the Lease is amended effective July 28, 1992 as follows:\n\n          1.   The initial monthly rent shall be increased by $3,486.44 per\n               month to a total of $71,959.81 per month;\n\n          2.   The Option to Lease dated September 18, 1991 is hereby eliminated\n               and a rental credit of $35,000.00 given to Tenant;\n\n          3.   Except as hereby amended, the Lease and all of the terms,\n               covenants and conditions thereof are ratified and confirmed.\n\n     IN WITNESS WHEREOF, the parties hereto have set their hands to this\n     Amendment as of the day and date first above written.\n\n       LANDLORD                     TENANT\n       The Sobrato Group            Tiburon Systems, Inc.,\n                                    a California corporation\n\n\n\nBY:   \/s\/ [\"ILLEGIBLE\"]             BY:   \/s\/ [\"ILLEGIBLE\"]\n      -----------------                  ------------------\n\nITS:  Trustee                       ITS:    President\n                                          -----------------\n\n \n                           [LETTERHEAD APPEARS HERE]\n\n\n                           FIRST AMENDMENT TO LEASE\n\nThis Amendment is made this 7\/th\/,day of April 1992 by and between The Sobrato\nGroup having an address at 10600 N. De Anza Blvd., Suite 200, Cupertino,\nCalifornia 95014 (\"Landlord\") and Tiburon Systems, Inc., a California\ncorporation (\"Tenant\").\n\n                                  WITNESSETH\n\nWHEREAS Landlord and Tenant entered into a lease (\"Lease\") dated May 23, 1991\nfor the premises (\"Premises\") located at 1290 Parkmoor Avenue, San Jose,\nCalifornia; and\n\nWHEREAS effective March 23, 1992, Landlord and Tenant wish to modify the Lease\nto document the Commencement Date based on Substantial Completion of the Tenant\nImprovements which occurred on March 23, 1992;\n\nNOW, THEREFORE, in order to effect the intent of the parties as set forth above\nand for good and valuable consideration exchanged between the parties, the Lease\nis amended effective March 23, 1992 as follows:\n\n  1.   The Commencement Date of the Lease shall be March 23, 1992.\n\n  2.   Except as hereby amended, the Lease and all of the terms, covenants and\n       conditions thereof are ratified and confirmed.\n\nIN WITNESS WHEREOF, the parries hereto have set their hands to this Amendment as\nof the day and date first above written.\n\nLANDLORD                                     TENANT\nThe Sobrato Group                            Tiburon Systems, Inc.,\n \n\nBY: \/s\/ [ILLEGIBLE]^^                        BY: \/s\/ [ILLEGIBLE]^^\n    ---------------------                       -----------------------\n\nITS:  Trustee                                ITS: Facilities Mgr.\n                                                  ---------------------\n\n \n                                OPTION TO LEASE\n\n     THIS AGREEMENT is entered as of the 18th  day of September, 1991, by and\nbetween THE SOBRATO GROUP, a California Limited partnership (hereinafter\ncollectively called \"Landlord\"), and TIBURON SYSTEMS, INC. (hereinafter called\n\"Tenant\"), a California corporation.\n\n                                   Recitals:\n\n     A.   Concurrently with the execution of this Agreement, Landlord and Tenant\nare entering into a lease (\" 1290 Parkmoor Lease\") respecting premises (the\n\"Premises\") located at 1290 Parkmoor, San Jose, California.\n\n     B.   As part of the consideration for Tenant entering into the 1290\nParkmoor Lease, Landlord is willing to grant to Tenant an option to lease a\nbuilding on adjacent land on which Landlord has an option to purchase outlined\non Exhibit A (the \"Property\").  Such building currently does not exist, but\nLandlord agrees to exercise its option to purchase the Property and construct\nthe building if Tenant exercises such option to lease. Such building and\nProperty is herein referred to as the \"Option Building\".\n\n     C.   The parties now wish to document the terms of such option to lease the\nOption Building.\n\n     NOW, THEREFORE, in consideration of the execution of the 1290 Parkmoor\nLease by both parties, and in consideration of the mutual covenants set forth\nbelow, the parties agree as follows:\n\n     1.   Grant of Option. Landlord hereby grants to Tenant an option to lease\nthe Option Building (the \"Option\") subject to the terms and conditions set forth\nin this Agreement.\n\n     2.   Term of Option. Tenant shall be entitled to exercise the Option at any\ntime during the period commencing on the Commencement Date of the 1290 Parkmoor\nLease (as the Commencement Date is therein defined) and ending at 5:00 p.m. June\n26, 1992. Such period shall herein be referred to as the \"Option Period\".\n\n     3.   Exercise of Option. Tenant shall exercise the Option by delivery of\nwritten notice to Landlord within the option Period of such exercise. Tenant\nshall be entitled to exercise the option only if (i) Tenant has not been in\ndefault under the terms of the 1290 Parkmoor Lease, and (ii) Tenant's financial\ncondition is such that an institutional lender is willing to commit to make a\nnon-recourse loan to Landlord in a minimum amount equal to seventy five percent\n(75%) of the value of the Option Building.\n\n     4.   Lease of the Option Building. Within thirty (30) days after Tenant's\nexercise of the Option, Landlord and Tenant shall enter into a written lease of\nthe Option Building (the \"Option Building Lease\"). The Option Building Lease\nshall be on the same terms as the 1290 Parkmoor Lease, except as follows:\n\n          (a)  The Premises shall be Option Building. References in the 1290\nParkmoor Lease format shall be changed in the Option Building Lease to refer to\nOption Building.\n\n          (b)  Landlord shall provide 3.4 parking spaces per 1,000 square feet\nof leasable space within the option Building.\n\n          (c)  The term shall commence upon the date of Substantial Completion\nof Tenant Improvements for the Option Building (\"Commencement Date\"), and end on\nthe tenth (10th)\n\n                                    Page 1\n\n \nanniversary thereof, subject to two (2) options to extend the term for five (5)\nyears each.\n\n          (d)  Rent shall be payable beginning on the Commencement Date referred\nto in paragraph 2 hereinabove. The monthly rent for the Option Building shall be\nthe total achieved by multiplying the same per square foot rent each month as is\napplicable for the 1290 Parkmoor Lease by the number of leasable square feet for\nthe Option Building. Monthly rent for the Option Building shall be subject to\nadjustment on the same dates as the rent under the 1290 Parkmoor Lease.\n\n          (e)  The security deposit shall be equal to the rent amount for the\nOption Building for the first month of the term.\n\n          (f)  The Tenant Improvement Allowance shall be modified to (i) reflect\na Tenant Improvement Allowance of Twenty Five Dollars ($25.00) times the number\nof leasable square feet of space in the Option Building, and (ii) require\nTenant's submission to Landlord of its Working Drawings as set forth below in\nthis Agreement.\n\n          (g)  A default under the 1290 Parkmoor Lease shall be deemed a default\nunder the Option Building Lease; and a default under the Option Building Lease\nshall be deemed a default under the 1290 Parkmoor Lease.\n\n          (h)  Tenant may elect, prior to the Commencement Date of the Option\nBuilding Lease, to extend the term of the 1290 Parkmoor Lease so as to be co-\nterminous with the Option Building Lease. If said election is made by Tenant,\nthe rent for the Premises during said extension period under the 1290 Parkmoor\nLease shall be at Fair Market Value (as the term is therein defined.)\n\n     5.   Construction of Shell and Tenant Improvements.\n\n          (a)  Within thirty (30) days after Tenant's exercise of the Option,\nLandlord shall deliver to Tenant plans and specifications for construction of\nthe shell of Option Building (together called the \"Shell Plans\"). The Shell\nPlans shall contemplate construction of a building containing approximately\n26,000 square feet of leasable square feet in a single story building with\nparking sufficient to provide at least 3.4 parking spaces per 1,000 square feet\nof leasable space in the building. \"Leasable Square Feet\" shall include all\nsquare footage within the Option Building measuring from the exterior surface of\nexterior building walls as to each such floor, including any covered loading\ndocks. The Shell Plans shall contemplate construction of a building of a design\nand quality comparable to the Premises and shall include a covered walkway\nconnecting the Premises with the Option Building.\n\n          (b)  Within ninety (90) days after Tenant's receipt of the Shell\nPlans, Tenant shall submit to Landlord Working Drawings respecting Tenant\nImprovements that Tenant desires Landlord to construct in the Option Building.\nThe respective rights and obligations of Landlord and Tenant regarding the\nTenant Improvements shall be as otherwise set forth in the 1290 Parkmoor lease.\n\n          (c)  Landlord shall commence construction of Option Building as soon\nas reasonably possible after Tenant's exercise of the Option, and continue\ndiligently to construct the same until completion thereof in accordance with the\nShell Plans. All costs of construction of the shell of Option Building shall be\nborne solely by Landlord. The costs included within the shell construction shall\nbe as set forth on Exhibit B hereto. The costs of the Tenant Improvements\nconstructed therein shall be borne as set forth in the 1290 Parkmoor Lease.\n\n     6.   Failure by Landlord to Purchase the Property. Tenant acknowledges that\nLandlord does not own the Property as of the date of this Agreement In the event\nthat Tenant\n\n                                    Page 2\n\n \nexercises the Option and Landlord is unable to purchase the Property through no\nfault of Landlord, the Option shall be of no further force and effect, and\nLandlord shall have no further liability to Tenant hereunder.\n\n     7.   Memorandum of Option. The parties shall record within ten (10) days\nafter execution of this Agreement by both parties hereto a short form memorandum\nof this Agreement in form reasonably satisfactory to both parties against title\nto the Property.\n\n     8.   Notices. All notices, consents, approvals, or other communications\ndesired or required to be given under this Agreement to either party shall be\ngiven in writing personally (including by courier), or by depositing the same in\nthe United States mail, postage prepaid, registered or certified mail, return\nreceipt requested, and addressed to the parties as follows:\n\n    If to Tenant    Tiburon Systems, Inc\n                    2085 Hamilton Avenue\n                    San Jose, CA 95125\n                    Attention: Lynn Canda\n\n    If to Landlord: The Sobrato Group\n                    10600 N. De Anza Blvd., Suite 200\n                    Cupertino, CA. 95014-2031\n                    Attn: John Michael Sobrato\n\n     All notices shall be deemed received upon actual receipt thereof; or if\ngiven by U.S. mail, then three (3) days after the posted date of mailing. Either\nparty may change its address by written notice to the other party in accordance\nwith the provisions of this paragraph.\n \n     9.   Entire Agreement. This Agreement and the 1290 Parkmoor Lease contain\nall representations and the entire understanding between the parties hereto with\nrespect to the subject matter hereof. Any prior correspondence, memoranda or\nagreements are replaced in total by this Agreement.\n\n     10.  Time. Time is of the essence in the performance of the parties'\nrespective obligations herein contained.\n\n     11.  Attorneys' Fees. In the event any dispute between the parties hereto\nshould result in litigation, the prevailing party shall be reimbursed for all\nreasonable costs, including, but not limited to, reasonable attorney's fees.\n\n     12.  Severability. If any provision of this Agreement as applied to either\nparty or to any circumstances shall be adjudged by a court of competent\njurisdiction to be void or unenforceable for any reason, the same shall in no\nway affect (to the maximum extent permissible by law) any other provision under\ncircumstances different from those adjudicated by the court, or the validity or\nenforceability of the Agreement as a whole.\n\n     13.  Amendments. No addition to or modification of any provisions contained\nin the Agreement shall be effective unless fully set forth in writing by both\nLandlord and Tenant.\n\n     14.  Successors. The terms and provisions hereof shall be binding upon and\ninure to the benefit of the successors and assigns of the parties hereto.\nHowever, Tenant shall not assign its interest, or any portion thereof, in this\nAgreement, unless such assignment is in conjunction with and effective\nconcurrently with an assignment of Tenant's interest in the 1290 Parkmoor Lease.\nFurthermore, Landlord shall not assign its interest under this Agreement, or\ndelegate any obligations hereunder, without Tenant's prior written consent,\nwhich shall not unreasonably be withheld. \n\n                                    Page 3\n\n \n     15.  Quitclaim Deed. In the event Tenant does not exercise the Option\nwithin the Option Period, then upon request to do so by Landlord, Tenant shall\nexecute a quitclaim deed transferring any right, rifle, or interest it may have\nunder this Agreement to Landlord. Such quitclaim deed shall be in form\nreasonably designed to effectuate the foregoing.\n\n     16.  Captions. The marginal headings or rifles to the paragraphs of this\nAgreement are not a part of this Agreement and shall have no effect upon the\nconstruction or interpretation of any part thereof.\n\n     17.  Governing Law. This Agreement shall be construed and enforced in\naccordance with the laws of State of California.\n\n     IN WITNESS WHEREOF, Landlord and Tenant have executed these presents, the\nday and year first above written.\n\nLANDLORD: THE SOBRATO GROUP                  TENANT: TIBURON SYSTEMS\n\na California Limited Partnership             a California Corporation\n\n\nBY: \/s\/ [ILLEGIBLE]^^                        BY: \/s\/ [ILLEGIBLE]^^\n   ------------------------------               ---------------------------\n\nITS: General Partner                         ITS: _________________________\n    -----------------------------\n\n                                    Page 4\n\n \n                                  EXHIBIT \"A\"\n                                   Property\n\n                                    Page 5\n\n \n                                  EXHIBIT \"B\"\n                               Shell Definition\n\nBuilding Shell Definition\n\nThe Building Shell includes the following items:\n\n1.   Site Work\n\n     a.   Asphalt concrete paving, wheel stops, and striping.\n\n     b.   concrete sidewalks, curbs, gutter, driveway, approaches, and planter\n          walls.\n\n     c.   Landscaping, landscape lighting, waterscape, and irrigation.\n\n     d.   Underground utilities - water, gas, fire line, sanitary line, site\n          storm drainage system and primary and secondary electrical line\n          stubbed into building.\n\n2.   Building Structure\n\nIncludes all elements necessary to provide for a completely waterproof Building\nShell including but not limited to:\n\n     a.   Concrete foundation and slab on grade including all reinforcing steel\n          and ire mesh including loading dock if applicable.\n\n     b.   Structural steel, columns and beams.\n\n     c.   Wood panelized gluelam roof structure with fiberglass built-up roofing\n          including roof drainage plumbing.\n\n     d.   Glass, glazing and perimeter roll up or hollow metal doors including\n          normal passage hardware.\n\n     e.   Concrete tilt up or plaster on metal stud framed exterior walls.\n\n     f.   Exterior painting.\n\nOther than those items delineated above, all other costs associated with\nbuilding construction shall be included as part of the interior improvement\nallowance.\n\n \n                                                                         Annex 1\n\n                                    (LOGO)\n\n                                 Lease between\n                  Tiburon Systems, Inc. and The Sobrato Group\n\n<\/pre>\n<table>\n<s>                                                            <c><br \/>\nParties&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   1<br \/>\nPremises&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   1<br \/>\nUse&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   1<br \/>\nTerm and Rental&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   1<br \/>\n   Rental Adjustment&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   1<br \/>\nSecurity Deposit&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   1<br \/>\nLate Charges&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   2<br \/>\nConstruction and Possession&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   2<br \/>\nAcceptance of Possession and Covenants to Surrender&#8230;&#8230;&#8230;.   3<br \/>\nUses Prohibited&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   4<br \/>\nAlterations and Additions&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   4<br \/>\nMaintenance of Premises&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   4<br \/>\nHazard Insurance&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   5<br \/>\nTaxes&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   5<br \/>\nUtilities&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   6<br \/>\nAbandonment&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   6<br \/>\nFree From Liens&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   6<br \/>\nCompliance With Governmental Regulations&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   6<br \/>\nToxic Waste and Environmental Damage&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   6<br \/>\nIndemnity&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   7<br \/>\nAdvertisements and Signs&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   7<br \/>\nAttorney&#8217;s Fees&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   7<br \/>\nTenant&#8217;s Default&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   7<br \/>\n   Remedies&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   8<br \/>\n   Right to Re-enter&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   8<br \/>\n   Abandonment&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   8<br \/>\n   No Termination&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   8<br \/>\nSurrender of Lease&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   9<br \/>\nHabitual Default&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   9<br \/>\nLandlord&#8217;s Default&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.   9<br \/>\nNotices&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;   9<br \/>\nEntry by Landlord&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   9<br \/>\nDestruction of Premises&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..   9<br \/>\nAssignment or Sublease&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  10<br \/>\nCondemnation&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  11<br \/>\nEffects of Conveyance&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  11<br \/>\nSubordination&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  11<br \/>\nWaiver&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  12<br \/>\nHolding Over&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  12<br \/>\nSuccessors and Assigns&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  12<br \/>\nEstoppel Certificates&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  12<br \/>\nOption to Extend the Term&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  12<br \/>\n   Resolution of a Disagreement over the Fair Market Rental..  13<br \/>\nOptions&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  14<br \/>\nQuiet Enjoyment&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  14<br \/>\nBrokers&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  14<br \/>\nLandlord&#8217;s Liability&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..  14<br \/>\nAuthority of Parties&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..  14<br \/>\n   Corporate Authority&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;  14<br \/>\n   Limited Partnerships&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..  14<br \/>\nTransportation Demand Management Programs&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..  14<br \/>\nMiscellaneous Provisions&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  14<br \/>\n<\/c><\/s><\/table>\n<p>                                    Page i<\/p>\n<table>\n<s>                                                                 <c><br \/>\nExhibit &#8220;A&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  16<br \/>\nExhibit &#8220;B&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  17<br \/>\nExhibit &#8220;C&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  18<br \/>\nExhibit &#8220;D&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  19<br \/>\nExhibit &#8220;E&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  20<br \/>\nExhibit &#8220;F&#8221;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.  21<br \/>\n<\/c><\/s><\/table>\n<p>                                    Page ii<\/p>\n<p>1.   PARTIES:  THIS LEASE, is entered into on this 23\/RD\/ day of May, 1991,<br \/>\nbetween THE SOBRATO GROUP, a California Limited Partnership, and TIBURON<br \/>\nSYSTEMS, INC., a California Corporation, hereinafter called respectively<br \/>\nLandlord and Tenant.<\/p>\n<p>2.   PREMISES:  Landlord hereby leases to Tenant, and Tenant hires from Landlord<br \/>\nthose certain Premises with the appurtenances, more particularly described as<br \/>\nfollows, to-wit:<\/p>\n<p>That certain real property commonly known and designated as 1290 Parkmoor<br \/>\nAvenue, San Jose, California, consisting of 66,479 square feet (&#8220;Building&#8221;) as<br \/>\noutlined in red on Exhibit &#8220;A&#8221;.<\/p>\n<p>3.   USE:  Tenant shall use the Premises only for the following purposes and<br \/>\nshall not change the use of the Premises without the prior written consent of<br \/>\nLandlord: Office, research, development, testing, light manufacturing, ancillary<br \/>\nwarehouse, and related legal uses.<\/p>\n<p>4.   TERM AND RENTAL: The term shall be for One Hundred Twenty (120) months,<br \/>\ncommencing, as adjusted pursuant to paragraph 7, on the first day of April, 1992<br \/>\n(&#8220;Commencement Date&#8221;), and ending on the 30th day of March, 2002, at the total<br \/>\nrent or sum, as adjusted pursuant to paragraph 4(a), of Eight Million Two<br \/>\nHundred Sixteen Thousand Eight Hundred Four and 40\/100 Dollars ($8,216,804.40),<br \/>\npayable, without deduction or offset, in monthly installments of Sixty Eight<br \/>\nThousand Four Hundred Seventy Three and 37\/100 Dollars ($68,473.37), due on or<br \/>\nbefore the first day of each calendar month during the term hereof. Said rental<br \/>\nshall be paid in lawful money of the United States of America, without offset or<br \/>\ndeduction, and shall be paid to Landlord at such place or places as may be<br \/>\ndesignated from time to time by Landlord. Rent for any period less than a<br \/>\ncalendar month shall be a pro rata portion of the monthly installment.<\/p>\n<p>4. (a)      Rental Adjustment: Beginning thirty (30) months after the<br \/>\nCommencement Date, and every thirty (30) months thereafter, the then payable<br \/>\nmonthly rent shall be subject to adjustment based on the increase, if any, in<br \/>\nthe Consumer Price Index (&#8220;Adjustment Date&#8221;). The basis for computing the<br \/>\nadjustment shall be the U.S. Department of Labor, Bureau of Labor Statistic&#8217;s<br \/>\nConsumer Price Index for All Urban Consumers, All Items, 1982-84=100, for the<br \/>\nSan Francisco-Oakland &#8211; San Jose area, (&#8220;Index&#8221;). The Index most recently<br \/>\npublished preceding the commencement of the Lease (or previous Adjustment Date,<br \/>\nas applicable), shall be considered the &#8220;Base Index&#8221;. If the Index most recently<br \/>\npublished preceding the Adjustment Date (&#8220;Comparison Index&#8221;) is greater than the<br \/>\nBase Index, the then payable monthly rent shall be increased by multiplying the<br \/>\nmonthly rent by a fraction, the numerator of which is the Comparison Index and<br \/>\nthe denominator of which is the Base Index. Notwithstanding any subsequent<br \/>\ndecrease in the Index, the increase in the CPI for any calendar year shall never<br \/>\nbe less than four percent (4%) per year compounded annually nor more than eight<br \/>\npercent (8%) per year compounded annually. Landlord&#8217;s calculation of the rent<br \/>\nescalation shall be conclusive and binding unless Tenant objects to said<br \/>\ncalculation within a thirty (30) day period. On adjustment of the monthly rent<br \/>\nLandlord shall notify Tenant by letter stating the new monthly rent. If the<br \/>\nIndex base year is changed so that it differs from 1982-84=100, the Index shall<br \/>\nbe converted in accordance with the conversion factor published by the United<br \/>\nStates Department of Labor, Bureau of Labor Statistics. If the Index is<br \/>\ndiscontinued or revised during the term, such other government index or<br \/>\ncomputation with which it is replaced shall be used in order to obtain<br \/>\nsubstantially the same result as would be obtained if the index had not been<br \/>\ndiscontinued or revised.<\/p>\n<p>5.   SECURITY DEPOSIT:   On or before December 20th, 1991, Tenant shall deposit<br \/>\nwith Landlord the sum of Seventy Thousand and No\/100 Dollars ($70,000.00) as a<br \/>\nsecurity deposit. If Tenant defaults with respect to any provisions of this<br \/>\nLease, including but not limited to the provisions relating to payment of rent<br \/>\nor other charges. Landlord may, to the extent reasonably necessary to remedy<br \/>\nTenant&#8217;s default, use all or any part of said deposit for the payment of rent or<br \/>\nother charges in default or the payment of any other payment of any other amount<br \/>\nwhich Landlord may spend or become obligated to spend by reason of Tenant&#8217;s<br \/>\ndefault or to compensate Landlord<\/p>\n<p>                                    Page 1<\/p>\n<p>for any other loss or damage which Landlord may suffer by reason of Tenant&#8217;s<br \/>\ndefault. If any portion of said deposit is so used or applied, Tenant shall,<br \/>\nwithin ten (10) days after written demand therefor, deposit cash with Landlord<br \/>\nin an amount sufficient to restore said deposit to the full amount hereinabove<br \/>\nstated and shall pay to Landlord such other sums as shall be necessary to<br \/>\nreimburse Landlord for any sums paid by Landlord. Said deposit shall be returned<br \/>\nto Tenant within thirty (30) days after the expiration of the term hereof less<br \/>\nany amount deducted in accordance with this paragraph, together with Landlord&#8217;s<br \/>\nwritten notice itemizing the amounts and purposes for such retention. In the<br \/>\nevent of termination of Landlord&#8217;s interest in this Lease, Landlord shall<br \/>\ntransfer said deposit to Landlord&#8217;s successor in interest.<\/p>\n<p>Notwithstanding the foregoing provisions of this paragraph 5, Landlord agrees<br \/>\nthat in lieu of a cash security deposit in the amounts specified above, Tenant<br \/>\nmay deposit an irrevocable letter of credit in favor of Landlord in the initial<br \/>\nsum of Seventy Thousand and No\/100 Dollars ($70,000.00), in a form reasonably<br \/>\nacceptable to Landlord. Landlord shall be entitled to draw against the letter of<br \/>\ncredit in accordance with the preceding paragraph, provided that Landlord<br \/>\ncertifies to the issuer of the letter of credit under penalty of perjury that<br \/>\nTenant is in default under the Lease (as defined in paragraph 22 hereof). Tenant<br \/>\nshall keep the letter of credit in effect during the entire Lease Term, as the<br \/>\nsame may be extended, plus a period of eight (8) weeks thereafter. At least<br \/>\nsixty (60) days prior to expiration of any letter of credit, the term thereof<br \/>\nshall be renewed or extended. Tenant&#8217;s failure to so renew or extend the letter<br \/>\nof credit shall be a material default of this Lease by Tenant. If Landlord draws<br \/>\nagainst the letter of credit, Tenant shall replenish the existing letter of<br \/>\ncredit or cause a new letter of credit to be issued such that the aggregate<br \/>\namount of letters of credit available to Landlord at all times during the Lease<br \/>\nTerm is the amount of the security deposit required herein<\/p>\n<p>6.   LATE CHARGES:   Tenant hereby acknowledges that late payment by Tenant to<br \/>\nLandlord of rent and other sums due hereunder will cause Landlord to incur costs<br \/>\nnot contemplated by this Lease, the exact amount of which will be extremely<br \/>\ndifficult to ascertain. Such costs include, but are not limited to,<br \/>\nadministrative, processing, accounting charges, and late charges, which may be<br \/>\nimposed on Landlord by the terms of any contract, revolving credit, mortgage or<br \/>\ntrust deed covering the Premises. Accordingly, if any installment of rent or any<br \/>\nother sum due from Tenant shall not be received by Landlord or Landlord&#8217;s<br \/>\ndesignee within ten (10) days after written notice from Landlord that such<br \/>\namount is due, Tenant shall pay to Landlord a late charge equal to five (5%)<br \/>\npercent of such overdue amount which shall be due and payable with the payment<br \/>\nthen delinquent. The parties hereby agree that such late charge represents a<br \/>\nfair and reasonable estimate of the costs Landlord will incur by reason of late<br \/>\npayment by Tenant. Acceptance of such late charge by Landlord shall in no event<br \/>\nconstitute a waiver of Tenant&#8217;s default with respect to such overdue amount, nor<br \/>\nprevent Landlord from exercising any of the other rights and remedies granted<br \/>\nhereunder. In the event that a late charge is payable hereunder, whether or not<br \/>\ncollected, for three (3) consecutive installments of rent, then rent shall<br \/>\nautomatically become due and payable quarterly in advance, rather than monthly,<br \/>\nnotwithstanding any provision of this Lease to the contrary.<\/p>\n<p>IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:<\/p>\n<p>7.   CONSTRUCTION AND POSSESSION:   The Tenant Improvements shall be constructed<br \/>\nby independent contractors to be employed by and under the supervision of<br \/>\nLandlord, as general contractor, in accordance with plans prepared by Dennis<br \/>\nKobza &amp; Associates, Inc. Landlord shall construct the Tenant Improvements in<br \/>\naccordance with all existing applicable municipal, local, state and federal<br \/>\nlaws, statutes, rules, regulations and ordinances.<\/p>\n<p>Landlord shall be responsible for and shall pay the cost of the Tenant<br \/>\nImprovements up to the amount of Six Hundred Sixty Four Thousand Seven Hundred<br \/>\nNinety and No\/100 Dollars ($664,790.00) (&#8220;Tenant Improvement Allowance&#8221;). In the<br \/>\nevent the cost of Tenant Improvements is more than the Tenant Improvement<br \/>\nAllowance, the monthly rental under the Lease shall be increased at the rate of<br \/>\nFifteen Dollars ($15.00) per month for each One Thousand Dollars ($1,000.00) of<br \/>\nthe increase in the Tenant Improvement Allowance up to a maximum increase in the<br \/>\nTenant Improvement Allowance of Three Hundred Thirty Two Thousand Three Hundred<br \/>\nNinety Five and No\/100 Dollars ($332,395.00). In the event the cost of Tenant<br \/>\nImprovements is less than<\/p>\n<p>                                    Page 2<\/p>\n<p>the Tenant Improvement Allowance, the monthly rental under the Lease shall be<br \/>\nreduced at the rate of Ten Dollars ($10.00) per month for each One Thousand<br \/>\nDollars ($1,000.00) of the Tenant Improvement Allowance not used. The cost of<br \/>\nthe Tenant Improvements including fit-up of special areas shall include a fee of<br \/>\nNine percent (9%) to cover all of the following: a field superintendent,<br \/>\ntemporary on-site facilities; home office administration, supervision, and<br \/>\ncoordination; financing fees, and construction interest. Costs in excess of said<br \/>\nTenant Improvement Allowance, if any, shall be paid for by Tenant in cash within<br \/>\nten (10) days after Landlord has provided Tenant with evidence that Landlord&#8217;s<br \/>\nprogress payments to sub-contractors has exceeded said Tenant Improvement<br \/>\nbudget. All costs for Tenant Improvements shall be fully documented to and<br \/>\nverified by Tenant.<\/p>\n<p>Landlord and Tenant have approved the preliminary working drawings (&#8220;Preliminary<br \/>\nWorking Drawings&#8221;) attached as Exhibit &#8220;B&#8221; and the preliminary budget for the<br \/>\nTenant Improvement costs (&#8220;Preliminary Budget&#8221;) attached as Exhibit &#8220;C&#8221;. Based<br \/>\non this information, Landlord shall prepare the final working drawings (&#8220;Final<br \/>\nWorking Drawings&#8221;) attached as Exhibit &#8220;D&#8221; and final budget for the Tenant<br \/>\nImprovement costs (&#8220;Final Budget&#8221;) attached as Exhibit &#8220;E&#8221;. In the event the<br \/>\nFinal Budget exceeds the Tenant Improvement Allowance, Landlord shall have the<br \/>\nright to require Tenant to post a letter to credit to secure Tenant&#8217;s<br \/>\nreimbursement obligation for the difference between the Final Budget and the<br \/>\nTenant Improvement Allowance. In the event Tenant makes any changes to the Final<br \/>\nWorking Drawings which cause Landlord&#8217;s construction schedule to be delayed, the<br \/>\nCommencement Date shall occur one (1) day in advance of Substantial Completion<br \/>\nas defined below for each day of delay.<\/p>\n<p>If Landlord, for any reason whatsoever, cannot deliver possession of the said<br \/>\nPremises to Tenant by the Commencement Date, this Lease shall not be void or<br \/>\nvoidable, nor shall Landlord be liable to Tenant for any loss or damage<br \/>\nresulting therefrom; but in that event the Commencement Date and termination<br \/>\ndate of the Lease and all other dates affected thereby shall be revised to<br \/>\nconform to the date of Landlord&#8217;s delivery of possession. The term of the Lease<br \/>\nshall not commence until substantial completion of the Premises occurs.<br \/>\n&#8220;Substantial Completion&#8221; shall mean that: (i) all necessary governmental<br \/>\napprovals, permits, consents, and certificates have been obtained by or for<br \/>\nLandlord for the lawful construction by Landlord, and occupancy by Tenant, or<br \/>\nsaid Premises, excluding work attributable to any special fit-up requested or<br \/>\nrequired by Tenant, (ii) all of the Premises interior fully meet all of the<br \/>\nFinal Working Drawings, excluding Tenant&#8217;s special fit-up, (iii) all of the<br \/>\nPremises exterior substantially meets the applicable Final Working Drawings,<br \/>\nincluding paved parking areas, and (iv) said interior is in a &#8220;broom clean&#8221;<br \/>\nfinished condition. If necessary, Landlord reserves the right to post a bond for<br \/>\nthe uncompleted portion of the landscaping.<\/p>\n<p>8.   ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER: By entry hereunder,<br \/>\nTenant accepts the Premises as being in good and sanitary order, condition and<br \/>\nrepair and accepts the Building and the other improvements in their present<br \/>\ncondition, except for the &#8220;punch list&#8221; as set forth on Exhibit &#8220;F&#8221;, attached<br \/>\nhereto. The Tenant agrees on the last day of the term hereof, or on the sooner<br \/>\ntermination of this Lease, to surrender the Premises to Landlord in good<br \/>\ncondition and repair, reasonable wear and tear excepted. &#8220;Good condition&#8221; shall<br \/>\nmean that the interior walls, floors, suspended ceilings, and carpeting within<br \/>\nthe Premises will be cleaned to the same condition as existed at the<br \/>\ncommencement of the Lease, normal wear and tear excepted. Tenant agrees to<br \/>\nremove all phone and data cabling from the suspended ceiling and repair any<br \/>\ndamage to the ceiling caused by such cabling. Tenant shall ascertain from<br \/>\nLandlord within thirty (30) days before the end of the term of this Lease<br \/>\nwhether Landlord desires to have the Premises or any part or parts thereof<br \/>\nrestored to their condition as of the commencement of this Lease or to cause<br \/>\nTenant to surrender all post-commencement alterations, additions, and<br \/>\nimprovements in place to Landlord. If Landlord shall so desire, then Tenant<br \/>\nshall remove such post-commencement alterations, additions, and improvements as<br \/>\nLandlord may require and shall repair and restore said Premises or such part or<br \/>\nparts thereof before the termination of this Lease at Tenant&#8217;s sole cost and<br \/>\nexpense. Tenant on or before the end of the term or sooner termination of this<br \/>\nLease, shall remove all its personal property and trade fixtures from the<br \/>\nPremises, and all property not so removed shall be deemed to be abandoned by<br \/>\nTenant. If the Premises are not surrendered at the end of the term or sooner<br \/>\ntermination of this Lease, Tenant shall indemnify Landlord against loss or<br \/>\nliability resulting from delay by Tenant in so surrendering the Premises<br \/>\nincluding, without limitation, any claims made by any succeeding tenant founded<br \/>\non such delay.<\/p>\n<p>                                    Page 3<\/p>\n<p>9.   USES PROHIBITED:   Tenant shall not commit, or suffer to be committed, any<br \/>\nwaste upon the said Premises, or any nuisance, or other act or thing which may<br \/>\ndisturb the quiet enjoyment of any other tenant in or around the Building or<br \/>\nallow any sale by auction upon the Premises, or allow the Premises to be used<br \/>\nfor any unlawful or objectionable purpose, or place any loads upon the floor,<br \/>\nwalls, or ceiling which endanger the structure, or use any machinery or<br \/>\napparatus which will in any manner vibrate or shake the Building, or place any<br \/>\nharmful liquids, waste materials, or hazardous materials in the drainage system<br \/>\nof, or upon or in the soils surrounding the Building. No materials, supplies,<br \/>\nequipment, finished products or semi-finished products, raw materials or<br \/>\narticles of any nature or any waste materials, refuse, scrap or debris shall be<br \/>\nstored upon or permitted to remain on any portion of the Premises outside of the<br \/>\nBuilding proper without Landlord&#8217;s prior approval, which approval may be<br \/>\nwithheld in its sole discretion.<\/p>\n<p>10.  ALTERATIONS AND ADDITIONS:  Tenant shall not make, or suffer to be made,<br \/>\nany alteration or addition to the said Premises, or any part thereof, without<br \/>\n(i) the written consent of Landlord first had and obtained, and (ii) delivering<br \/>\nto Landlord the proposed architectural and structural plans for all such<br \/>\nalterations. Any addition or alteration to the Premises, except movable<br \/>\nfurniture and trade fixtures, shall become at once a part of the realty and<br \/>\nbelong to Landlord. Alterations and additions which are not to be deemed as<br \/>\ntrade fixtures shall include heating, lighting, electrical systems, air<br \/>\nconditioning, partitioning, carpeting, or any other installation which has<br \/>\nbecome an integral part of the Premises. After having obtained Landlord&#8217;s<br \/>\nconsent, Tenant agrees that prior to the commencement of any alterations and<br \/>\nadditions, Tenant shall cause to be provided to Landlord, payment and<br \/>\nperformance bonds satisfactory to Landlord, to assure timely completion of such<br \/>\nwork and payment of all costs of such work. Tenant will at all times permit such<br \/>\nnotices to be posted and to remain posted until the completion of work. Tenant<br \/>\nacknowledges Landlord&#8217;s right to and hereby consents to construction of<br \/>\nadditional building(s) on the land where the Premises are located or on adjacent<br \/>\nland owned by Landlord.<\/p>\n<p>11.  MAINTENANCE OF PREMISES: Landlord warrants that as of the date of this<br \/>\nLease, the roof and the roof membrane, exterior walls, glazing, plumbing,<br \/>\nelectrical and HVAC systems, sidewalks and parking areas, of the Premises are in<br \/>\ngood and sanitary order, condition, and repair. Tenant shall, at its sole cost,<br \/>\nkeep and maintain, repair and replace, said Premises and appurtenances and every<br \/>\npart hereof, including but not limited to, the roof membrane, glazing,<br \/>\nsidewalks, parking areas, plumbing, electrical and HVAC systems, and all the<br \/>\nTenant Interior Improvements in good and sanitary order, condition, and repair.<br \/>\nNotwithstanding the foregoing, Landlord at its sole cost and expense, shall<br \/>\nmaintain in good condition, order, and repair, and replace as and when<br \/>\nnecessary, the foundation, exterior walls, structure and structural members, and<br \/>\nroof structure of the Building. Subject to the obligations of Tenant to provide<br \/>\nperiodic routine maintenance of the Premises in accordance with the provisions<br \/>\nset forth in Paragraph 11 above, Landlord shall also provide a contractor&#8217;s<br \/>\nwarranty on the Tenant Improvements for a period of one (1) year from the<br \/>\nCommencement Date. Tenant shall provide Landlord with a copy of a service<br \/>\ncontract between Tenant and a licensed air-conditioning and heating contractor<br \/>\nwhich contract shall provide for bimonthly maintenance of all air conditioning<br \/>\nand heating equipment at the Premises. Tenant shall pay the cost of all air-<br \/>\nconditioning and heating equipment repairs or replacements which are either<br \/>\nexcluded from such service contract or any existing equipment warranties. Tenant<br \/>\nshall be responsible for the preventive maintenance of the membrane of the roof,<br \/>\nwhich responsibility shall be deemed properly discharged if (i) Tenant contracts<br \/>\nwith a licensed roof contractor who is reasonably satisfactory to both Tenant<br \/>\nand Landlord, at Tenant&#8217;s sole cost, to inspect the roof membrane at least every<br \/>\nsix (6) months, with the first inspection due the sixth (6th) month after the<br \/>\nCommencement Date, and (ii) Tenant performs, at Tenant&#8217;s sole cost, all<br \/>\npreventive maintenance recommendations made by such contractor within a<br \/>\nreasonable time after such recommendations are made. Such preventive maintenance<br \/>\nmight include acts such as clearing storm gutters and drains, removing debris<br \/>\nfrom the roof membrane, trimming trees overhanging the roof membrane, applying<br \/>\ncoating materials to seal roof penetrations, repairing blisters, and other<br \/>\nroutine measures. Tenant shall provide to Landlord a copy of such preventive<br \/>\nmaintenance contract and paid invoices for the recommended work. All vinyl wall<br \/>\nsurfaces and floor tile are to be maintained in an as good a condition as when<br \/>\nTenant took possession free of holes, gouges, or defacements. Tenant agrees to<br \/>\nlimit attachments to vinyl wall surfaces exclusively to V-joints. Tenant agrees<br \/>\nto water, maintain and replace, when necessary, any shrubbery and landscaping.<\/p>\n<p>                                    Page 4<\/p>\n<p>Notwithstanding anything to the contrary in this Lease, if Tenant&#8217;s maintenance<br \/>\nor repair obligations as set forth in this Lease would require Tenant to perform<br \/>\nor pay for any item which (i) would be properly be capitalized under generally<br \/>\naccepted accounting principles, and (ii) costs in excess of $25,000.00 per<br \/>\noccurrence, then Landlord shall perform such repair or make such replacement<br \/>\npromptly following written notice by Tenant of the need therefor and the cost of<br \/>\nsuch item or improvement shall be allocated as follows: Tenant shall pay to<br \/>\nLandlord within ten (10) days after receipt of Landlord&#8217;s written demand and<br \/>\nsupporting documentation a proportion of the cost equal to the actual cost of<br \/>\nsuch improvement or item as paid by landlord to third parties times a fraction,<br \/>\nthe numerator of which is the number of months remaining in the initial Lease<br \/>\nTerm, and the denominator of which is the useful life of the improvement in<br \/>\nmonths, and Landlord shall pay the balance of such cost.<\/p>\n<p>12.  HAZARD INSURANCE:  Tenant shall not use, or permit said Premises, or any<br \/>\npart thereof, to be used, for any purpose other than that for which the said<br \/>\nPremises am hereby leased; and no use shall be made or permitted to be made of<br \/>\nthe said Premises, nor acts done, which will cause an increase in premiums or a<br \/>\ncancellation of any insurance policy covering said Building, or any part<br \/>\nthereof, nor shall Tenant sell or permit to be kept, used or sold, in or about<br \/>\nsaid Premises, any article which may be prohibited by the standard form of fire<br \/>\ninsurance policies. Tenant shall, at its sole cost and expense, comply with any<br \/>\nand all requirements, pertaining to said Premises, of any insurance organization<br \/>\nor company, necessary for the maintenance of reasonable fire and public<br \/>\nliability insurance, covering said Building and appurtenances. The Landlord<br \/>\nagrees to purchase and keep in force fire, earthquake (at Landlord&#8217;s election),<br \/>\nand extended coverage insurance covering the Premises in amounts not to exceed<br \/>\nthe actual insurable value of the Building as determined by Landlord&#8217;s insurance<br \/>\ncompany&#8217;s appraisers. The Tenant agrees to pay to the Landlord as additional<br \/>\nrent, on demand, the full cost of said insurance as evidenced by insurance<br \/>\nbillings to the Landlord, and in the event of damage covered by said insurance,<br \/>\nthe amount of any deductible under such policy. Tenant shall have the  to<br \/>\nspecify the amount of any insurance policy to be carried by Landlord under this<br \/>\nLease and shall reimburse Landlord for the premiums payable with respect to<br \/>\ninsurance policies for which Tenant is responsible containing the deductible so<br \/>\nspecified by Tenant or on insurance policies for which Tenant fails to specify a<br \/>\ndeductible amount within ten (10) days following Landlord&#8217;s written demand for<br \/>\nsuch deductible specification. In the event of damage to the Premises covered by<br \/>\nLandlord&#8217;s &#8220;all risk&#8221; casualty policy (and not caused by the negligence or<br \/>\nwillful misconduct of Landlord or Landlord&#8217;s employees, agents, contractors,<br \/>\nsubcontractors, or invitees), Tenant shall pay the amount of any deductible<br \/>\nunder such policy if this Lease is not terminated in connection with such<br \/>\ncasualty as provided in paragraph 28. Payment shall be due to Landlord within<br \/>\nten (10) days after written invoice to Tenant. Notwithstanding the foregoing,<br \/>\nTenant&#8217;s obligation to pay for the cost of any earthquake insurance premiums<br \/>\nshall be limited to an amount equal or less than four (4) times the cost of the<br \/>\nfire and extended coverage premiums.<\/p>\n<p>In addition, Tenant agrees to insure its personal property, additions,<br \/>\nalterations, and improvements for their full replacement value (without<br \/>\ndepreciation) and to obtain worker&#8217;s compensation and public liability and<br \/>\nproperty damage insurance for occurrences within the Premises of $5,000,000.00<br \/>\ncombined single limit for bodily injury and property damage. Tenant shall name<br \/>\nLandlord and Landlord&#8217;s lender as an additional insured, shall deliver a copy of<br \/>\nthe policies and renewal certificate to Landlord. All such policies shall<br \/>\nprovide for thirty (30) days&#8217; prior written notice to Landlord of any<br \/>\ncancellation or termination. Notwithstanding the above, Landlord retains the<br \/>\nright to have Tenant provide other forms of insurance which may be reasonably<br \/>\nrequired to cover future risks.<\/p>\n<p>It is understood and agreed that Tenant&#8217;s obligation under this paragraph will<br \/>\nbe prorated to reflect the commencement and termination dates of this Lease.<br \/>\nLandlord and Tenant hereby waive any rights each may have against the other on<br \/>\naccount of any loss or damage occasioned to the Landlord or the Tenant as the<br \/>\ncase may be, or to the Premises or its contents, and which may arise from any<br \/>\nrisk covered by their respective insurance policies, as set forth above. The<br \/>\nparties shall use their best efforts to obtain from their respective insurance<br \/>\ncompanies a waiver of any right of subrogation which said insurance company may<br \/>\nhave against the Landlord or the Tenant, as the case may be.<\/p>\n<p>13.  TAXES: Tenant shall be liable for all taxes levied against personal<br \/>\nproperty and trade or business fixtures, and agrees to pay, as additional<br \/>\nrental, all real estate taxes and special<\/p>\n<p>Page 5<\/p>\n<p>assessment installments levied on the Premises, upon the occupancy of the<br \/>\nPremises and including any substitute or additional charges which may be imposed<br \/>\nduring, or applicable to the Lease term including real estate tax increases due<br \/>\nto a sale or other transfer of the Premises, as they appear on the City and<br \/>\nCounty tax bills during the Lease term, and as they be, come due. It is<br \/>\nunderstood and agreed that Tenant&#8217;s obligation under this paragraph will be<br \/>\nprorated to reflect the commencement and termination dates of this Lease. In any<br \/>\ntime during the term of this Lease a tax, excise on rents, business license tax,<br \/>\nor any other tax, however described, is levied or assessed against Landlord, as<br \/>\na substitute or addition in whole or in part for taxes assessed or imposed on<br \/>\nland or Buildings, Tenant shall pay and discharge his pro rata share of such tax<br \/>\nor excise on rents or other tax before it becomes delinquent, except that this<br \/>\nprovision is not intended to cover income taxes, inheritance, gift or estate tax<br \/>\nimposed upon the Landlord. In the event that a tax is placed, levied, or<br \/>\nassessed against Landlord and the taxing authority takes the position that<br \/>\nTenant cannot pay and discharge his pro rata share of such tax on behalf of the<br \/>\nLandlord, then at the sole election of the Landlord, the Landlord may increase<br \/>\nthe rental charged hereunder by the exact amount of such tax.<\/p>\n<p>14.  UTILITIES: Tenant shall pay directly to the providing utility all water,<br \/>\ngas, heat, light, power, telephone and other utilities supplied to the Premises.<br \/>\nLandlord shall not be liable for a loss of or injury to property, however<br \/>\noccurring, through or in connection with or incidental to furnishing or failure<br \/>\nto furnish any of utilities to the Premises and Tenant shall not be entitled to<br \/>\nabatement or reduction of any portion of the rent so long as any failure to<br \/>\nprovide and furnish the utilities to the Premises due to any cause beyond the<br \/>\nLandlord&#8217;s reasonable control.<\/p>\n<p>15.  ABANDONMENT: Tenant shall not vacate or abandon the Premises at any time<br \/>\nduring the term; and if Tenant shall abandon, vacate or surrender said Premises,<br \/>\nor be dispossessed by process of law, or otherwise, any personal property<br \/>\nbelonging to Tenant and left on the Premises shall be deemed to be abandoned, at<br \/>\nthe option of Landlord, except such property as may be mortgaged to Landlord.<\/p>\n<p>16.  FREE FROM LIENS: Tenant shall keep the Premises and the Building free from<br \/>\nany liens arising out of any work performed, materials furnished, or obligations<br \/>\nincurred by Tenant.<\/p>\n<p>17.  COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Tenant shall, at its sole cost<br \/>\nand expense, comply with all of the requirements of all Municipal, State and<br \/>\nFederal authorities now in force, or which may hereafter be in force, pertaining<br \/>\nto the said Premises, and shall faithfully observe in the uses of the Premises<br \/>\nall Municipal ordinances and State and Federal statutes now in force or which<br \/>\nmay hereafter be in force. The judgement of any court of competent jurisdiction,<br \/>\nor the admission of Tenant in any action or proceeding against Tenant, whether<br \/>\nLandlord be a party thereto or not, that Tenant has violated any such ordinance<br \/>\nor statute in the use of the Premises, shall be conclusive of that fact as<br \/>\nbetween Landlord and Tenant.<\/p>\n<p>18.  TOXIC WASTE AND ENVIRONMENTAL DAMAGE:   Without the prior written consent<br \/>\nof Landlord, Tenant shall not bring, use, or permit upon the Premises, or<br \/>\ngenerate, emit, or dispose from the Premises any chemicals, toxic or hazardous<br \/>\ngaseous, liquid or solid materials or waste, including without limitation,<br \/>\nmaterial or substance having characteristics of ignitability, corrosivity,<br \/>\nreactivity, or toxicity or substances or materials which are listed on any of<br \/>\nthe Environmental Protection Agency&#8217;s lists of hazardous wastes or which am<br \/>\nidentified in Sections 66680 through 66685 of Title 22 of the California<br \/>\nAdministrative Code as the same may be amended from time to time (&#8220;Hazardous<br \/>\nMaterials&#8221;). Tenant shall comply, at its sole cost, with all laws pertaining to,<br \/>\nand shall indemnify and hold Landlord harmless from any claims, liabilities,<br \/>\ncosts or expenses incurred or suffered by Landlord arising from such bringing,<br \/>\nusing, permitting, generating, emitting or disposing of Hazardous Materials.<br \/>\nTenant&#8217;s indemnification and hold harmless obligations include, without<br \/>\nlimitation, (i) claims, liability, costs or expenses resulting from or based<br \/>\nupon administrative, judicial (civil or criminal) or other action, legal or<br \/>\nequitable, brought by any private or public person under common law or under the<br \/>\nComprehensive Environmental Response. Compensation and Liability Act of 1980<br \/>\n(&#8220;CERCLA&#8221;), the Resource Conservation and Recovery Act of 1980 (&#8220;RCRA&#8221;) or any<br \/>\nother Federal, State, County or Municipal law, ordinance or regulation, (ii)<br \/>\nclaims, liabilities, costs or expenses pertaining to the identification,<br \/>\nmonitoring, cleanup, containment, or removal of Hazardous Materials from soils,<br \/>\nriverbeds or aquifers including the provision of an alternative public drinking<br \/>\nwater source, and (iii) all costs of defending such claims.<\/p>\n<p>                                    Page 6<\/p>\n<p>In order to obtain consent, Tenant shall deliver to Landlord its written<br \/>\nproposal describing the toxic material to be brought onto the Premises, measures<br \/>\nto be taken for storage and disposal thereof, safety measures to be employed to<br \/>\nprevent pollution of the air, ground, surface and ground water. Landlord&#8217;s<br \/>\napproval may be withheld in its reasonable judgement. In the event Landlord<br \/>\nconsents to Tenant&#8217;s use of Hazardous Materials on the Premises. Tenant<br \/>\nrepresents and warrants that Tenant will (i) adhere to all reporting and<br \/>\ninspection requirements imposed by Federal, State, County or Municipal laws,<br \/>\nordinances or regulations and will provide Landlord a copy of any such reports<br \/>\nor agency inspections, (ii) obtain and provide Landlord copies of all necessary<br \/>\npermits required for the use and handling Hazardous Materials on the Premises,<br \/>\n(iii) enforce Hazardous Materials handling and disposal practices consistent<br \/>\nwith industry standards, and (iv) properly close the facility with regard to<br \/>\nHazardous Materials including the removal or decontamination of any process<br \/>\npiping, mechanical ducting,  storage tanks, containers, or trenches which have<br \/>\ncome into contact with Hazardous Materials and obtain a closure certificate from<br \/>\nthe local administering agency. Tenant shall have the right to approve the<br \/>\nselection of Landlord&#8217;s attorneys and the attorney&#8217;s fee schedule prior to the<br \/>\nengagement by Landlord of any attorneys pursuant to this paragraph 18.<\/p>\n<p>19.  INDEMNITY:   As a material part of the consideration to be rendered to<br \/>\nLandlord, Tenant hereby waives all claims against Landlord for damages to goods,<br \/>\nwares and merchandise, and all other personal property in, upon or about said<br \/>\nPremises and for injuries to persons in or about said Premises, from any cause<br \/>\narising at any time except due to the negligence or willful misconduct of<br \/>\nLandlord, and Tenant will hold Landlord exempt and harmless from any damage or<br \/>\ninjury to any person, or to the goods, wares and merchandise and all other<br \/>\npersonal property of any person, arising from the use of the Premises by Tenant,<br \/>\nor from the failure of Tenant to keep the Premises in good condition and repair,<br \/>\nas herein provided. Further, in the event Landlord is made party to any<br \/>\nlitigation due to the acts or omission of Tenant, Tenant will indemnify and hold<br \/>\nLandlord harmless from any such claim or liability including Landlord&#8217;s costs<br \/>\nand expenses and reasonable attorney&#8217;s fees incurred in defending such claims.<br \/>\nTenant shall have the right to approve the selection of Landlord&#8217;s attorneys and<br \/>\nthe attorney&#8217;s fee schedule prior to the engagement by Landlord of any attorneys<br \/>\npursuant to this paragraph 19.<\/p>\n<p>20.  ADVERTISEMENTS AND SIGNS:    Tenant will not place or permit to be placed,<br \/>\nin, upon or about the said Premises any unusual or extraordinary signs, or any<br \/>\nsigns not approved by the city or other governing authority. The Tenant will not<br \/>\nplace, or permit to be placed, upon the Premises, any signs, advertisements or<br \/>\nnotices without the written consent of the Landlord as to type, size, design,<br \/>\nlettering, coloring and location, and such consent will not be unreasonably<br \/>\nwithheld. Any sign so placed on the Premises shall be so placed upon the<br \/>\nunderstanding and agreement that Tenant will remove same at the termination of<br \/>\nthe Lease and repair any damage or injury to the Premises caused thereby, and if<br \/>\nnot so removed by Tenant then Landlord may have same so removed at Tenant&#8217;s<br \/>\nexpense.<\/p>\n<p>21.  ATTORNEY&#8217;S FEES:    In case suit should be brought for the possession of<br \/>\nthe Premises, for the recovery of any sum due hereunder, or because of the<br \/>\nbreach of any other covenant herein, the losing party shall pay to the<br \/>\nprevailing party a reasonable attorney&#8217;s fee as part of its costs which shall be<br \/>\ndeemed to have accrued on the commencement of such action.<\/p>\n<p>22.  TENANT&#8217;S DEFAULT:   The occurrence of any of the following shall<br \/>\nconstitute a material default and breach of this Lease by Tenant: a) Any failure<br \/>\nby Tenant to pay the rental or to make any other payment required to be made by<br \/>\nTenant hereunder, where such failure continues for ten (10) days after written<br \/>\nnotice thereof by Landlord to Tenant; b) The abandonment or vacation of the<br \/>\nPremises by Tenant; c) A failure by Tenant to observe and perform any other<br \/>\nprovision of this Lease to be observed or performed by Tenant, where such<br \/>\nfailure continues for thirty (30) days after written notice thereof by Landlord<br \/>\nto Tenant; provided, however, that if the nature of such default is such that<br \/>\nthe same cannot reasonably be cured within such thirty (30) day period Tenant<br \/>\nshall not be deemed to be in default if Tenant shall within such period commence<br \/>\nsuch cure and thereafter diligently prosecute the same to completion; d) The<br \/>\nmaking by Tenant of any general assignment for the benefit of creditors; the<br \/>\nfiling by or against Tenant of a petition to have Tenant adjudged a bankrupt or<br \/>\nof a petition for reorganization or arrangement under any law relating to<br \/>\nbankruptcy (unless, in the case era petition fried against Tenant, the same is<br \/>\ndismissed after the filing); the appointment of a trustee or receiver to take<br \/>\npossession of substantially all of Tenant&#8217;s assets located at the Premises or of<br \/>\nTenant&#8217;s interest in this Lease, where possession is<\/p>\n<p>                                    Page 7<\/p>\n<p>not restored to Tenant within thirty (30) days; or the attachment, execution or<br \/>\nother judicial seizure of substantially all of Tenant&#8217;s assets located at the<br \/>\nPremises or of Tenant&#8217;s interest in this Lease, where such seizure is not<br \/>\ndischarged within thirty (30) days. The notice requirements set forth herein are<br \/>\nin lieu of and not in addition to the notices required by California Code of<br \/>\nCivil Procedure Section 1161.<\/p>\n<p>22.(a)   Remedies:   In the event of any such default by Tenant, then in<br \/>\naddition to any other remedies available to Landlord at law or in equity,<br \/>\nLandlord shall have the immediate option to terminate this Lease and all rights<br \/>\nof Tenant hereunder by giving written notice of such intention to terminate. In<br \/>\nthe event Landlord shall elect to so terminate this Lease, Landlord may recover<br \/>\nfrom Tenant: a) the worth at the time of award of any unpaid rent which had been<br \/>\nearned at the time of such termination; plus b) the worth at the time of award<br \/>\nof the amount by which the unpaid rent would have been earned after termination<br \/>\nuntil the rime of award exceeds the amount of such rental loss Tenant proven<br \/>\ncould have been reasonably avoided; plus c) the worth at the time of award of<br \/>\nthe amount by which the unpaid rent for the balance of the term after the time<br \/>\nof award exceeds the amount of such rental loss that Tenant proves could Be<br \/>\nreasonably avoided; plus d) any other amount necessary to compensate Landlord<br \/>\nfor all the detriment proximately caused by Tenant&#8217;s failure to perform his<br \/>\nobligations under this Lease or which in the ordinary come of things would be<br \/>\nlikely to result therefrom, and c) at Landlord&#8217;s election, such other amounts in<br \/>\naddition to or in lieu of the foregoing as may be permitted from time to time by<br \/>\napplicable California law. The term &#8220;rent&#8221;, as used herein, shall be deemed to<br \/>\nbe and to mean the minimum monthly installments of rent and all other sums<br \/>\nrequired to be paid by Tenant pursuant to the terms of this Lease, all other<br \/>\nsuch sums being deemed to be additional rent due hereunder. As used in (a) and<br \/>\n(b) above, the &#8220;worth at the time of award&#8221; is computed by allowing interest at<br \/>\nthe rate of the discount rate of the Federal Reserve Bank of San Francisco plus<br \/>\nfive (5%) percent per annum. As used in (c) above, &#8220;worth at the time of award<br \/>\nis computed by discounting such amount at the discount rate of the Federal<br \/>\nReserve Bank of San Francisco at the time of award plus one (1%) percent.<\/p>\n<p>22.(b)   Right to Re-enter:   In the event of any such default by Tenant,<br \/>\nLandlord shall also have the right, with or without terminating this Lease, to<br \/>\nre-enter the Premises and remove all persons and property from the Premises;<br \/>\nsuch property may be removed and stored in a public warehouse or elsewhere at<br \/>\nthe cost of and for the account of Tenant.<\/p>\n<p>22.(c)   Abandonment:   In the event of the vacation or abandonment of the<br \/>\nPromises by Tenant or in the event that Landlord shall elect to re-enter as<br \/>\nprovided in paragraph 22.(b) above or shall take possession of the Premises<br \/>\npursuant to legal proceeding or pursuant to any notice provided by law, then if<br \/>\nLandlord does not elect to terminate this Lease as provided in paragraph 22.(a)<br \/>\nabove, then the provisions of California Civil Coda Section 1951.4, as amended<br \/>\nfrom time to time, shall apply and Landlord may from time to time, without<br \/>\nterminating this Lease, either recover all rental as it becomes due or relet the<br \/>\nPromises or any part thereof for such term or terms and at such rental or<br \/>\nrentals and upon such other terms and conditions as Landlord in its sole<br \/>\ndiscretion may deem advisable with the right to make alterations and repairs to<br \/>\nthe Premises. In the event that Landlord shall elect to so relet, then rentals<br \/>\nreceived by Landlord from such reletting shall be applied: first, to the payment<br \/>\nof any indebtedness other than rent due hereunder from Tenant to Landlord;<br \/>\nsecond, to the payment of any cost of such reletting; third, to the payment of<br \/>\nthe cost of any alterations and repairs to the Premises; fourth, to the payment<br \/>\nof rent due and unpaid hereunder; and the residue, if any, shall be held by<br \/>\nLandlord and applied in payment of future rent as same may become due and<br \/>\npayable hereunder. Should that portion of such rentals received from such<br \/>\nreletting during any month, which is applied by payment of rent hereunder, be<br \/>\nless than the rent payable during that month by Tenant hereunder, then Tenant<br \/>\nshall pay such deficiency to Landlord immediately upon demand therefor by<br \/>\nLandlord. Such deficiency shall be calculated and paid monthly. Tenant shall<br \/>\nalso pay to Landlord, as soon as ascertained, any costs and expenses incurred by<br \/>\nLandlord in such reletting or in making such alterations and repairs not covered<br \/>\nby the rentals received from such reletting.<\/p>\n<p>22.(d)   No Termination:   No re-entry or taking possession of the Premises by<br \/>\nLandlord pursuant to 22.(a) or 22.(c) of this Article 22 shall be construed as<br \/>\nan election to terminate this Lease unless a written notice of such intention be<br \/>\ngiven to Tenant or unless the termination thereof be decreed by a court of<br \/>\ncompetent jurisdiction. Notwithstanding any reletting without termination by<br \/>\nLandlord because of any default by Tenant, Landlord may at any time after such<br \/>\nreletting elect to terminate this Lease for any such default.<\/p>\n<p>                                    Page 8<\/p>\n<p>23.  SURRENDER OF LEASE:   The voluntary or other surrender of this Lease by<br \/>\nTenant, or a mutual cancellation thereof, shall not automatically effect a<br \/>\nmerger of the Lease with Landlord&#8217;s ownership of the Building or Premises.<br \/>\nInstead, at the option of Landlord, Tenant&#8217;s surrender may terminate all or any<br \/>\nexisting sublease or subtenancies, or may operate as an assignment to Landlord<br \/>\nof any or all such subleases or subtenancies, thereby creating a direct<br \/>\nLandlord-Tenant relationship between Landlord and any subtenants.<\/p>\n<p>24.  HABITUAL DEFAULT:   Notwithstanding anything to the contrary contained in<br \/>\nparagraph 22, 22 (a) (b) (c) and (d), the parties hereto agree that if the<br \/>\nTenant shall have defaulted in the performance of any (but not necessarily the<br \/>\nsame) term or condition of this Lease for three or more times during any twelve<br \/>\nmonth period during the term hereof, then such conduct shall, at the election of<br \/>\nthe Landlord, represent a separate event of default which cannot be cured by the<br \/>\nTenant. Tenant acknowledges that the purpose of this provision is to prevent<br \/>\nrepetitive defaults by the Tenant under the Lease, which work a hardship upon<br \/>\nthe Landlord, and deprive the Landlord of the timely performance by the Tenant<br \/>\nhereunder.<\/p>\n<p>25.  LANDLORD&#8217;S DEFAULT:   In the event of Landlord&#8217;s failure to perform any of<br \/>\nits covenants or agreements under this Lease, Tenant shall give Landlord written<br \/>\nnotice of such failure and shall give Landlord thirty (30) days or such other<br \/>\nreasonable opportunity to cure such failure prior to any claim for breach or for<br \/>\ndamages resulting from such failure.<\/p>\n<p>26.  NOTICES:   All notices required to be given under this Lease shall be sent<br \/>\nby U.S. certified mail, return receipt requested, or by personal delivery<br \/>\naddressed to the party to be notified at the address for such party specified in<br \/>\nparagraph 1 of this Lease, or to such other place as the party to be notified<br \/>\nmay from time to time designate by at least fifteen (15) days notice to the<br \/>\nnotifying party.<\/p>\n<p>27.  ENTRY BY LANDLORD:   Tenant shall permit Landlord and his agents to enter<br \/>\ninto and upon said Premises at all reasonable times subject to any security<br \/>\nregulations of Tenant for the purpose of inspecting the same or for the purpose<br \/>\nof maintaining the Premises or for the purpose of making repairs, alterations or<br \/>\nadditions to any other portion of said Premises or for the purpose of erecting<br \/>\nadditional building(s) and improvements on the land where the Premises are<br \/>\nsituated, or on adjacent land owned by Landlord, including the erection and<br \/>\nmaintenance of such scaffolding, canopies, fences and props as may be required<br \/>\nwithout any rebate of rent or without any liability to Tenant for any loss of<br \/>\noccupation or quiet enjoyment of the Premises thereby occasioned; and Tenant<br \/>\nshall permit Landlord and his agents, at any time within one hundred eighty<br \/>\n(180) days prior to the expiration of this Lease, to place upon the Premises any<br \/>\n&#8220;For Sale&#8221; or &#8220;For Lease&#8221; signs and exhibit the Premises to prospective tenants<br \/>\nat reasonable hours.<\/p>\n<p>28.  DESTRUCTION OF PREMISES:   In the event of a partial destruction of the<br \/>\nPremises by an insured causality during the term from any cause, Landlord shall<br \/>\nforthwith repair the same, provided such repairs can be made within one hundred<br \/>\neighty (180) days from the date of receipt of all necessary governmental<br \/>\napprovals necessary under the laws and regulations of State, Federal, County or<br \/>\nMunicipal authorities, such partial destruction shall in no way annul or void<br \/>\nthis Lease, except that Tenant shall be entitled to a proportionate reduction of<br \/>\nrent while such repairs are being made, such proportionate reduction to be based<br \/>\nupon the extent to which the making of such repairs shall interfere with the<br \/>\nbusiness carried on by Tenant in the Premises, in the reasonable judgement of<br \/>\nLandlord. For purposes of this paragraph &#8220;partial destruction&#8221; shall mean<br \/>\ndestruction of no greater than one-third (1\/3) of the replacement cost of the<br \/>\nPremises, including the replacement cost of the Tenant Improvements paid for by<br \/>\nLandlord. In the event the Premises are more than partially destroyed, or in the<br \/>\nevent the repairs cannot be made in one hundred eighty  (180) days, Landlord or<br \/>\nTenant may elect to terminate this Lease. Landlord shall not be required to<br \/>\nrestore additions, alterations or improvements made by Tenant or replace<br \/>\nTenant&#8217;s fixtures or personal property. In respect to any partial destruction<br \/>\nwhich Landlord is obligated to repair or may elect to repair under the terms of<br \/>\nthis paragraph, the provision of Section 1932, Subdivision 2, and of Section<br \/>\n1933, Subdivision 4, of the Civil Code of the State of California am waived by<br \/>\nTenant.<\/p>\n<p>In the event of a total or partial destruction of the Premises by an uninsured<br \/>\ncasualty, the Lease shall automatically terminate, unless (i) Landlord elects to<br \/>\nrebuild, and (ii) the damage can be repaired within one hundred eighty (180)<br \/>\ndays.<\/p>\n<p>                                    Page 9<\/p>\n<p>29. ASSIGNMENT OR SUBLEASE: In the event Tenant desires to assign this Lease or<br \/>\nany interest therein including, without limitation, a pledge, mortgage or other<br \/>\nhypothecation, or sublet the Premises or any part thereof, Tenant shall deliver<br \/>\nto Landlord executed counterparts of any such agreement and of all ancillary<br \/>\nagreements with the proposed assignee or subtenant, financial statements, and<br \/>\nany additional information as reasonably required to determine whether it will<br \/>\nconsent to the proposed assignment or sublease. The notice shall give the name<br \/>\nand current address of the proposed assignee\/subtenant, proposed use of the<br \/>\nPremises, rental rate and current financial statement and upon request to<br \/>\nTenant, Landlord shall be given additional information as reasonably required to<br \/>\ndetermine whether it will consent to the proposed assignment or sublease.<br \/>\nLandlord shall then have a period of thirty (30) days following receipt of such<br \/>\nnotice within which to notify Tenant in writing that Landlord elects (i) to<br \/>\nterminate this Lease as to the space to affected as of the date so specified by<br \/>\nTenant in which event Tenant will be relieved of all further obligations<br \/>\nhereunder as to such space, (ii) to permit Tenant to assign or sublet such space<br \/>\nto the named assignee\/subtenant on the terms and conditions set forth in the<br \/>\nnotice, or (iii) to refuse consent. If Landlord should fail to notify Tenant in<br \/>\nwriting of such election within said thirty (30) day period, Landlord shall be<br \/>\ndeemed to have elected option (ii) above. Any rent or other economic<br \/>\nconsideration realized by Tenant under any such sublease and assignment in<br \/>\nexcess of the rent payable hereunder (including an allocation of the purchase<br \/>\nprice attributable to Tenant&#8217;s leasehold interest in the event of a sale of the<br \/>\nTenant&#8217;s business), after the net unamortized cost of the Tenant Improvements<br \/>\nfor which Tenant has itself paid, and reasonable subletting and assignment<br \/>\ncosts, shall be divided and paid sixty-seven percent (67%) to Landlord and<br \/>\nthirty-three percent (33%) to Tenant. Tenant&#8217;s obligation to pay over Landlord&#8217;s<br \/>\nportion of the consideration shall constitute an obligation for additional rent<br \/>\nhereunder. The above provisions relating to Landlord&#8217;s right to terminate the<br \/>\nLease and relating to the allocation of bonus rent are independently negotiated<br \/>\nterms of the Lease, constitute a material inducement for the Landlord to enter<br \/>\ninto the Lease, and are agreed as between the parties to be commercially<br \/>\nreasonable. No assignment or subletting by Tenant shall relieve Tenant of any<br \/>\nobligation under this Lease. Any assignment or subletting which conflicts with<br \/>\nthe provisions hereof shall be void.<\/p>\n<p>If Landlord exercises its option to terminate this Lease in part in the event<br \/>\nTenant desires to sublet or assign part of the Premises, then (a) this Lease<br \/>\nshall end and expire, with respect to such part of the Premises, on the date<br \/>\nupon which the proposed sublease was to commence, and (b) from and after such<br \/>\ndate, the rent and Tenant&#8217;s allocable share of all other costs and charges shall<br \/>\nbe adjusted, based upon the proportion that the rentable area of the Premises<br \/>\nremaining bears to the total rentable area of the Premises.<\/p>\n<p>If Landlord does not exercise its option to terminate this Lease, Landlord&#8217;s<br \/>\nconsent (which must be in writing and in form reasonably satisfactory to<br \/>\nLandlord) to the proposed assignment or sublease shall not be unreasonably<br \/>\nwithheld or delayed, provided and upon condition that:<\/p>\n<p>(a) The proposed assignee or subtenant is engaged in a business that is limited<br \/>\nto the use expressly permitted under this Lease;<\/p>\n<p>(b) The proposed assignee or subtenant is a company with sufficient financial<br \/>\nworth and management ability to undertake the financial obligation of this<br \/>\nLease, and Landlord has been furnished with reasonable proof thereof;<\/p>\n<p>(c) The proposed sublease shall be in form reasonably satisfactory to Landlord;<\/p>\n<p>(d) The amount of the aggregate rent to be paid by the proposed subtenant is not<br \/>\nless than the then current &#8220;Fair Market Value&#8221; as defined in paragraph 38 below;<\/p>\n<p>(e) Tenant shall reimburse Landlord on demand for any costs that may be incurred<br \/>\nby Landlord in connection with said assignment or sublease, including the costs<br \/>\nof making investigations as to the acceptability of the proposed assignee or<br \/>\nsubtenant and legal costs incurred in connection with the granting of any<br \/>\nrequested consent; and<\/p>\n<p>(f) Tenant shall not have advertised or publicized in any way the availability<br \/>\nof the Premises without prior notice to, and approval by Landlord.<\/p>\n<p>                                    Page 10<\/p>\n<p>Any assignment or transfer shall be made only if and shall not be effective<br \/>\nuntil the assignee shall execute, acknowledge and deliver to Landlord an<br \/>\nagreement, in form and substance satisfactory to Landlord, whereby the assignee<br \/>\nshall assume all of the obligations of this Lease on the part of Tenant to be<br \/>\nperformed or observed and shall be subject to all of the covenants, agreements,<br \/>\nterms, provisions and conditions contained in this Lease. Notwithstanding any<br \/>\nsuch sublease or assignment and the acceptance of rent or additional rent by<br \/>\nLandlord from any subtenant or assignee, Tenant shall and will remain fully<br \/>\nliable for the payment of the rent and additional rent due, and to become due<br \/>\nhereunder, for the performance of all of the covenants, agreements, terms,<br \/>\nprovisions and conditions contained in this Lease on the part of Tenant to be<br \/>\nperformed and for all acts and omissions of any licensee, subtenant, assignee or<br \/>\nany other person claiming under or through any subtenant that shall be in<br \/>\nviolation of any of the obligations of this Lease, and any such violation shall<br \/>\nbe deemed to be a violation by Tenant. Tenant shall further indemnify, defend<br \/>\nand hold Landlord harmless from and against any and all losses, liabilities,<br \/>\ndamages, costs and expenses (including reasonable attorney fees) resulting from<br \/>\nany claims that may be made against Landlord by the proposed assignee or<br \/>\nsubtenant or by any real estate brokers or other persons claiming a commission<br \/>\nor similar compensation in connection with the proposed assignment or sublease.<\/p>\n<p>In the event of Tenant&#8217;s default, Tenant hereby assigns all rents due from any<br \/>\nassignment or subletting to Landlord as security for performance of its<br \/>\nobligations under this Lease and Landlord may collect such rents as Tenant&#8217;s<br \/>\nAttorney-in-Fact, except that Tenant may collect such rents unless a default<br \/>\noccurs as described in paragraph 22 above. The termination of this Lease due to<br \/>\nTenant&#8217;s default shall not automatically terminate any assignment or sublease<br \/>\nthen in existence.  At the election of Landlord, the assignee or subtenant shall<br \/>\nattorn to Landlord and Landlord shall undertake the obligations of the Tenant<br \/>\nunder the sublease or assignment; provided the landlord shall not be liable for<br \/>\nprepaid rent, security deposits or other defaults of the Tenant to the subtenant<br \/>\nor assignee.<\/p>\n<p>If Tenant is a corporation or partnership, all the above provisions shall apply<br \/>\nto a transfer (by one or more transfers) of a majority of the stock of the<br \/>\ncorporation or the majority of ownership or control of the partnership, as if<br \/>\nsuch transfer were an assignment of this Lease.<\/p>\n<p>30. CONDEMNATION: If any part of the Premises shall be taken for any public or<br \/>\nquasi-public use, under any statute or by right of eminent domain or private<br \/>\npurchase in lieu thereof, and a part thereof remains which is susceptible of<br \/>\noccupation hereunder, this Lease shall as to the part so taken, terminate as of<br \/>\nthe date title shall vest in the condemnor or purchaser, and the rent payable<br \/>\nhereunder shall be adjusted so that the Tenant shall be required to pay for the<br \/>\nremainder of the term only such portion of such rent as the value of the part<br \/>\nremaining after such taking bears to the value of the entire Premises prior to<br \/>\nsuch taking;, but in such event Landlord shall have the option to terminate this<br \/>\nLease as of the date when title to the part so taken vests in the condemnor or<br \/>\npurchaser. If all of the Premises, or such part thereof be taken so that there<br \/>\ndoes not remain a portion susceptible for occupation hereunder, this Lease shall<br \/>\nthereupon terminate. If a part or all of the Premises be taken, all compensation<br \/>\nawarded upon such taking shall go to the Landlord and the Tenant shall have no<br \/>\nclaim thereto but Landlord shall cooperate with Tenant to mover compensation for<br \/>\ndamage to or taking of any alterations, additions or improvements made by Tenant<br \/>\nor Tenant&#8217;s moving costs. Tenant hereby waives the provisions of California Code<br \/>\nof Civil Procedures Section 1265.130.<\/p>\n<p>31. EFFECTS OF CONVEYANCE: The term Landlord as used in this Lease, means only<br \/>\nthe owner for the time being of the land and Building, containing the Premises,<br \/>\nso that, in the event of any sale of said land or Building, or in the event of a<br \/>\nmaster Lease of the Building, the Landlord shall be and hereby is entirely freed<br \/>\nand relieved of all covenants and obligations of the Landlord hereunder, and it<br \/>\nshall be deemed and construed, without further agreement between the parties and<br \/>\nthe purchaser at any such sale, or the master tenant of the Building, that the<br \/>\npurchaser or master tenant of the Building has assumed and agreed to carry out<br \/>\nany and all covenants and obligations of the Landlord hereunder. Landlord shall<br \/>\ntransfer and deliver Tenant&#8217;s security deposit, to the purchaser at any such<br \/>\nsale or the master tenant of the Building, and thereupon the Landlord shall be<br \/>\ndischarged from any further liability in reference thereto.<\/p>\n<p>32. SUBORDINATION: In the event Landlord notifies Tenant in writing, this Lease<br \/>\nshall be subordinate to any ground Lease, deed of trust, or other hypothecation<br \/>\nfor security now or<\/p>\n<p>                                    Page 11<\/p>\n<p>hereafter placed upon the real property of which the Premises are a part and to<br \/>\nany and all advances made on the security the, roof and to renewals,<br \/>\nmodifications, replacements and extensions thereof. Tenant agrees to promptly<br \/>\nexecute any documents which may be required to effectuate such subordination.<br \/>\nNotwithstanding such subordination, Tenant&#8217;s right to quiet possession of the<br \/>\nPremises shall not be disturbed if Tenant is not in default and so long as<br \/>\nTenant shall pay the rent and observe and perform all of the provisions of this<br \/>\nLease. At the request of any lender, Tenant agrees to execute and deliver any<br \/>\nreasonable modifications of this Lease which do not materially adversely affect<br \/>\nTenant&#8217;s s hereunder.<\/p>\n<p>33. WAIVER: The waiver by Landlord of any breach of any term, covenant or<br \/>\ncondition, herein contained shall not be deemed to be a waiver of such term,<br \/>\ncovenant or condition or any subsequent breach of the same or any other term,<br \/>\ncovenant or condition herein contained. The subsequent acceptance of rent<br \/>\nhereunder by Landlord shall not be deemed to be a waiver of any preceding breach<br \/>\nby Tenant of any term, covenant or condition of this Lease, other than the<br \/>\nfailure of Tenant to pay the particular rental so accepted, regardless of<br \/>\nLandlord&#8217;s knowledge of such preceding breach at the time of acceptance of such<br \/>\nrent.<\/p>\n<p>34. HOLDING OVER: Any holding over after the termination or expiration of<br \/>\nthe said term, shall be construed to be a hold over tenancy and Tenant shall pay<br \/>\nrent to Landlord at a rate equal to the greater of (i) one hundred fifty percent<br \/>\n(150%) of the monthly rental installment due in the month preceding the<br \/>\ntermination or expiration of the Lease, pro rated on a daily basis or (ii) one<br \/>\nhundred fifty percent (150%) of the Fair Market Rental (as defined in paragraph<br \/>\n37), pro rated on a daily basis. Any holding over shall otherwise be on the<br \/>\nterms and conditions herein specified, except those provisions relating to the<br \/>\nterm and any options to extend or renew, which terms are expressly waived during<br \/>\nany hold over. Furthermore, no holding over shall be deemed or construed to<br \/>\nexercise any option to extend or renew this Lease in lieu of full and timely<br \/>\nexercise of any such option as required hereunder.<\/p>\n<p>35. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained<br \/>\nshall, subject to the provisions as to assignment, apply to and bind the heirs,<br \/>\nsuccessors, executors, administrators and assigns of all the parties hereto; and<br \/>\nall of the parties hereto shall be jointly and severally liable hereunder.<\/p>\n<p>36. ESTOPPEL CERTIFICATES: Tenant shall at any time during the term of this<br \/>\nLease, upon not less than ten (10) days prior written notice from Landlord,<br \/>\nexecute and deliver to Landlord a statement in writing certifying that this<br \/>\nLease is unmodified and in full force and effect (or, if modified, stating the<br \/>\nnature of such modification) and the date to which the rent and other charges<br \/>\nare paid in advance, if any, and acknowledging that there are not, to Tenant&#8217;s<br \/>\nknowledge, any uncured defaults on the part of Landlord hereunder or specifying<br \/>\nsuch defaults if they are claimed. Any such statement may be conclusively relied<br \/>\nupon by any prospective purchaser or encumbrancer of the Premises. Tenant&#8217;s<br \/>\nfailure to deliver such statement within such time shall be conclusive upon the<br \/>\nTenant that: (a) this Lease is in full force and effect, without modification<br \/>\nexcept as may be represented by Landlord; (b) there are not uncured defaults in<br \/>\nLandlord&#8217;s performance. Tenant also agrees to provide thee (3) years of audited<br \/>\nfinancial statements within five (5) days of a request by Landlord for<br \/>\nLandlord&#8217;s use in financing the Premises with commercial lenders.<\/p>\n<p>37. OPTION TO EXTEND THE TERM: Landlord hereby grants to Tenant, upon and<br \/>\nsubject to the terms and conditions set forth in this paragraph, the option (the<br \/>\n&#8220;Option&#8221;) to extend the term of this Lease for an additional term (the &#8220;Option<br \/>\nTerm&#8221;), which option Term shall be a period of Sixty (60) months. The Option<br \/>\nTerm shall be exercised, if at all, by written notice to Landlord on or before<br \/>\nthe date that is six (6) months prior to the expiration date of the initial term<br \/>\nof the Lease. If Tenant exercises the Option, each of the terms, covenants and<br \/>\nconditions of this Lease except this paragraph shall apply during the Option<br \/>\nTerm as though the expiration date of the Option Term was the date originally<br \/>\nset forth herein as the expiration date of the initial term, provided that the<br \/>\nrent to be paid shall be the greater of (i) the rent applicable to the period<br \/>\nimmediately prior to the commencement of the Option Term, or (ii) the Fair<br \/>\nMarket Rental, as hereinafter defined, for the Premises for the Option Term.<br \/>\nAnything contained herein to the contrary notwithstanding, if Tenant is in<br \/>\nmonetary or material non-monetary default under any of the terms, covenants or<br \/>\nconditions of this Lease either at the time Tenant exercises the Option or at<br \/>\nany time thereafter prior to the commencement date of the Option Term, Landlord<br \/>\nshall have, in<\/p>\n<p>                                    Page 12<\/p>\n<p>addition to all of Landlord&#8217;s other rights and remedies provided in this Lease,<br \/>\nthe right to terminate the Option upon notice to Tenant, in which event the<br \/>\nexpiration date of this Lease shall be and remain the expiration date of the<br \/>\ninitial term. As used herein, the term &#8220;Fair Market Rental&#8221; for the Premises<br \/>\nshall mean the base rent that Landlord could obtain during the Option Term from<br \/>\na third party desiring to lease the Premises for the Option Term, taking into<br \/>\naccount concessions being offered on the market at that time, the age of the<br \/>\nBuilding, the quality of construction of the Building and the Premises, the<br \/>\nservices provided under the terms of this Lease, the rental and other monetary<br \/>\npayments, any escalations and adjustments thereto (including without limitation<br \/>\nConsumer Price Indexing) then being obtained for new leases of space comparable<br \/>\nto the Premises in the locality of the Building, and all other factors that<br \/>\nwould be relevant to a third party desiring to lease the Premises for the Option<br \/>\nTerm in determining the rental such party would be willing to pay therefor. The<br \/>\ndetermination of Fair Market Value shall also take into account that (i) Tenant<br \/>\nis in occupancy and making functional use of the space in its then existing<br \/>\ncondition, and (ii) no brokerage commission is payable.<\/p>\n<p>If Tenant exercises the Option, Landlord shall send to Tenant a notice setting<br \/>\nforth the Fair Market Rental for the Premises for the Option Term, on or before<br \/>\nthe date that is one hundred fifty (150) days prior to the expiration date of<br \/>\nthe initial terra. If Tenant disputes Landlord&#8217;s determination of the Fair<br \/>\nMarket Rental for the Option Term, Tenant shall, within thirty (30) days after<br \/>\nthe date of Landlord&#8217;s notice setting forth the Fair Market Rental for the<br \/>\nOption Term, send to Landlord a notice stating that Tenant either (x) elects to<br \/>\nterminate its exercise of the Option, in which event the Option shall lapse and<br \/>\nthis Lease shall terminate on the expiration date of the initial term in the<br \/>\nmanner provided herein, or (y) disagrees with Landlord&#8217;s determination of Fair<br \/>\nMarket Rental for the Option Term and elects to resolve the disagreement as<br \/>\nprovided in paragraph 37(a) below, If Tenant does not send to Landlord a notice<br \/>\nas provided in the previous sentence, Landlord&#8217;s determination of the Fair<br \/>\nMarket Rental shall be the basis for determining the rent to be paid by Tenant<br \/>\nhereunder during the Option Term. If Tenant elects to resolve the disagreement<br \/>\nas provided in paragraph 37(a) below and such procedures shall not have been<br \/>\nconcluded prior to the commencement date of the Option Term, Tenant shall pay<br \/>\nrent to Landlord hereunder adjusted to reflect the Fair Market Rental as<br \/>\ndetermined by Landlord in the manner provided above. If the amount of Fair<br \/>\nMarket Rental as finally determined pursuant to in paragraph 37(a) below is<br \/>\ngreater than Landlord&#8217;s determination, Tenant shall pay to Landlord the<br \/>\ndifference between the amount paid by Tenant and the Fair Market Rental as so<br \/>\ndetermined in paragraph 37(a) below within thirty (30) days after the<br \/>\ndetermination. If the Fair Market Rental as finally determined in paragraph<br \/>\n37(a) below is less than Landlord&#8217;s determination, the difference between the<br \/>\namount paid by Tenant and the Fair Market Rental as so determined in paragraph<br \/>\n37(a) below shall be credited against the next installments of rent due from<br \/>\nTenant to Landlord hereunder.<\/p>\n<p>37(a). Resolution of a Disagreement over the Fair Market Rental:   Any<br \/>\ndisagreement regarding the Fair Market Rental shall be resolved as follows:<\/p>\n<p>(i)   Within thirty (30) days after Tenant&#8217;s response to Landlord&#8217;s notice to<br \/>\nTenant of the Fair Market Rental, Landlord and Tenant shall meet no less than<br \/>\ntwo (2) times, at a mutually agreeable time and place, to attempt to resolve any<br \/>\nsuch disagreement.<\/p>\n<p>(ii)  If within the thirty (30) day period referred to in (i) above, Landlord<br \/>\nand Tenant can not reach agreement as to the Fair Market Rental, they shall each<br \/>\nselect one appraiser determine the Fair Market Rental. Each such appraiser shall<br \/>\narrive at a determination of the Fair Market Rental and submit their conclusions<br \/>\nto Landlord and Tenant within thirty (30) days after the expiration of the<br \/>\nthirty (30) day consultation period described in (i) above.<\/p>\n<p>(iii) If only one appraisal is submitted within the requisite time period, it<br \/>\nshall be deemed to be the Fair Market Rental. If both appraisals are submitted<br \/>\nwithin such time period and the two appraisals so submitted differ by less than<br \/>\nten percent (10%) of the higher of the two, the average of the two shall be the<br \/>\nFair Market Rental. If the two appraisals differ by more than ten percent (10%)<br \/>\nof the higher of the two, then the two appraisers shall immediately select a<br \/>\nthird appraiser who shall within thirty (30) days after his or her selection<br \/>\nmake a determination of the Fair Market Rental and submit such determination to<br \/>\nLandlord and Tenant. This third appraisal will then be averaged with the closer<br \/>\nof the two previous appraisals and the result shall be the Fair Market Rental.<\/p>\n<p>                                    Page 13<\/p>\n<p>(iv)  All appraisers specified pursuant to this paragraph shall be members of<br \/>\nthe American Institute of Real Estate Appraisers with not less than ten (10)<br \/>\nyears experience appraising commercial properties in the Santa Clara Valley.<br \/>\nEach party shall pay the cost of the appraiser selected by such party and one-<br \/>\nhalf of the cost of the third appraiser plus one-half of any other costs<br \/>\nincurred in resolving the dispute pursuant to this paragraph.<\/p>\n<p>38. OPTIONS: All Options provided Tenant in this Lease are personal and granted<br \/>\nto original Tenant and arc not exercisable by any third party should Tenant<br \/>\nassign or sublet all or a portion of its rights under this Lease, unless<br \/>\nLandlord consents to permit exercise of any option by any assignee or subtenant,<br \/>\nin Landlord&#8217;s sole discretion. In the event that Tenant hereunder has any<br \/>\nmultiple options to extend this Lease, a later option to extend the Lease cannot<br \/>\nbe exercised unless the prior option has been so exercised. Notwithstanding the<br \/>\nforegoing, the option shall be transferable or assignable to any entity that<br \/>\nacquires either a majority of the shares of stock of Tenant or a majority of the<br \/>\nassets of Tenant.<\/p>\n<p>39. QUIET ENJOYMENT:  Upon Tenant&#8217;s faithful and timely performance of all the<br \/>\nterms and covenants of the Lease, Tenant shall quietly have and hold the<br \/>\nPremises for the term and any extensions thereof.<\/p>\n<p>40. BROKERS: Tenant represents it has not utilized or contacted a real estate<br \/>\nbroker or finder with respect to this Lease other than Cornish &amp; Carey<br \/>\nCommercial and McMillan, Moore, Buchanan, and Tenant agrees to indemnify and<br \/>\nhold Landlord harmless against any claim, cost, liability or cause of action<br \/>\nasserted by any other broker or finder claiming through Tenant.<\/p>\n<p>41. LANDLORD&#8217;S LIABILITY:  If Tenant should recover a money judgment against<br \/>\nLandlord arising in connection with this Lease, the judgment shall be satisfied<br \/>\nonly out of Landlord&#8217;s interest in the Premises including the improvements and<br \/>\nreal property and neither Landlord or any of its partners shall be liable<br \/>\npersonally for any deficiency.<\/p>\n<p>42.  AUTHORITY OF PARTIES:<\/p>\n<p>42.(a)  Corporate Authority: If Tenant is a corporation, each individual<br \/>\nexecuting this Lease on behalf of said corporation represents and warrants that<br \/>\nhe is duly authorized to execute and deliver this Lease on behalf of said<br \/>\ncorporation, in accordance with a duly adopted resolution of the Board of<br \/>\nDirectors of said corporation or in accordance with the by-laws of said<br \/>\ncorporation, and that this Lease is binding upon said corporation in accordance<br \/>\nwith its terms.<\/p>\n<p>42.(b)  Limited Partnerships: If the Landlord herein is a limited partnership,<br \/>\nit is understood and agreed that any claims by Tenant on Landlord shall be<br \/>\nlimited to the assets of the limited partnership. And furthermore, Tenant<br \/>\nexpressly waives any and all rights to proceed against the individual partners<br \/>\nor the officers, directors or shareholders of any corporate partner, except to<br \/>\nthe extent of their interest in said limited partnership.<\/p>\n<p>43.  TRANSPORTATION DEMAND MANAGEMENT PROGRAMS Should a government agency or<br \/>\nmunicipality require Landlord to institute TDM (Transportation Demand<br \/>\nManagement) facilities and\/or program, Tenant hereby agrees that the cost of TDM<br \/>\nimposed facilities required on the Premises, including but not limited to<br \/>\nemployee showers, lockers, cafeteria, or lunchroom facilities, shall be included<br \/>\nas Tenant Improvement Costs and any ongoing costs or expenses associated with a<br \/>\nTDM program, such as an on-site TDM coordinator, which arc required for the<br \/>\nPremises and not provided by Tenant shall be provided by Landlord with such<br \/>\ncosts being included as additional rent and reimbursed to Landlord by Tenant.<\/p>\n<p>44.  MISCELLANEOUS PROVISIONS:<br \/>\nAll monetary sums due from Tenant to Landlord under this Lease shall be deemed<br \/>\nto be rent.<\/p>\n<p>Subject to the written notice and aim opportunity requirements of Paragraph 22<br \/>\nof this Lease, if after said notice and at the expiration of said cure period,<br \/>\nTenant has failed to perform any obligation required under this Lease or by law<br \/>\nor governmental regulation, Landlord may in its sole discretion without notice<br \/>\nperform such obligation, in which event Tenant shall pay Landlord as additional<br \/>\nrent all sums paid by Landlord in connection with such substitute performance<br \/>\nwithin ten (10) days following Landlord&#8217;s written notice for such payment.<\/p>\n<p>                                    Page 14<\/p>\n<p>All sums due hereunder, including rent and additional rent, if not paid when<br \/>\ndue, shall bear interest at the maximum rate permitted under California law<br \/>\naccruing from the date due until the date paid to Landlord.<\/p>\n<p>All rights and remedies hereunder are cumulative and not alternative to the<br \/>\nextent permitted by law and are in addition to all other rights and remedies in<br \/>\nlaw and in equity.<\/p>\n<p>If any term or provision of this Lease is held unenforceable or invalid by a<br \/>\ncourt of competent jurisdiction, the remainder of the Lease shall not be<br \/>\ninvalidated thereby but shall be enforceable in accordance with its terms,<br \/>\nomitting the invalid or unenforceable term.<\/p>\n<p>This Lease shall be governed by and construed in accordance with California law.<\/p>\n<p>Time is of the essence hereunder.<\/p>\n<p>This instrument contains all of the agreements and conditions made between the<br \/>\nparties hereto and may not be modified orally or in any other manner than by an<br \/>\nagreement in writing signed by all of the parties hereto or their respective<br \/>\nsuccessors in interest.<\/p>\n<p>Tenant acknowledges that neither Landlord or its affiliates or agents have made<br \/>\nany agreements, representations, warranties or promises with respect to the<br \/>\ndemised Premises or the Building of which they are a part, or with respect to<br \/>\npresent or future rents, expenses, operations, tenancies or any other matter.<br \/>\nExcept as herein expressly set forth herein, Tenant relied on no statement of<br \/>\nLandlord or its agents for that purpose.<\/p>\n<p>The headings or titles to the paragraphs of this Lease are not a part of this<br \/>\nLease and shall have no effect upon the construction or interpretation of any<br \/>\npart thereof.<\/p>\n<p>IN WITNESS WHEREOF, Landlord and Tenant have executed these presents, the day<br \/>\nand year first above written.<\/p>\n<p>LANDLORD: THE SOBRATO GROUP                  TENANT: TIBURON SYSTEMS, INC.<\/p>\n<p>a California Limited Partnership             a California Corporation<\/p>\n<p>BY: \/s\/ [ILLEGIBLE]^^                        BY:  \/s\/ [ILLEGIBLE]^^<br \/>\n   &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-                 &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-<\/p>\n<p>ITS:___________________________              ITS:___________________________<\/p>\n<p>                                    Page 15<\/p>\n<p>                                  EXHIBIT &#8220;A&#8221;<br \/>\n                                   Premises<\/p>\n<p>                                    [Image]<\/p>\n<p>                                    Page 16<\/p>\n<p>                                  EXHIBIT &#8220;B&#8221;<br \/>\n                     Approved Preliminary Working Drawings<\/p>\n<p>                                    Page 17<\/p>\n<p>                                  EXHIBIT &#8220;C&#8221;<br \/>\n                          Approved Preliminary Budget<\/p>\n<p>                      Tiburon Preliminary Budget 5\/14\/91<\/p>\n<p>This budget is per Kobza&#8217;s drawings, sheets T-l, T-3 and T-5, dated 5\/3\/91.<\/p>\n<p>Total square feet:                                                      66,479<\/p>\n<table>\n<caption>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n  COST<br \/>\n  CODE                   DESCRIPTION                        VALUE       PSF<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n<s>      <c>                                                <c>         <c><br \/>\n  40200  Demolition                                         $ 12,500    $ 0.19<br \/>\n  42200  HVAC                                               $ 60,000    $ 0.90<br \/>\n  42600  Fire Sprinklers                                    $  9,500    $ 0.14<br \/>\n  43600  Fire Extinguishers                                 $  1,000    $ 0.02<br \/>\n  43900  Electrical                                         $183,000    $ 2.75<br \/>\n  44600  Plumbing                                           $  5,000    $ 0.08<br \/>\n  45400  Acoustical Ceiling                                 $ 10,000    $ 0.15<br \/>\n  46100  Drywall                                            $ 48,000    $ 0.72<br \/>\n  47200  Doors, Frames &amp; Hardware                           $ 39,600    $ 0.60<br \/>\n  47600  Insulation                                         $  2,000    $ 0.03<br \/>\n  48300  Glass                                              $  4,700    $ 0.07<br \/>\n  49100  Ceramic Tide                                       $  2,000    $ 0.03<br \/>\n  50800  Cabinets &amp; Tops                                    $ 14,000    $ 0.21<br \/>\n  51300  Paint                                              $ 32,000    $ 0.48<br \/>\n  53900  Carpet Removal, New Carpet &amp; Base, Wt Room Floor   $125,000    $ 1.88<br \/>\n  54500  Window Coating                                     $  4,000    $ 0.06<br \/>\n  55100  Computer Floor                                     $ 45,000    $ 0.68<br \/>\n  58500  Fencing (Chain Link)                               $  7,500    $ 0.11<br \/>\n  60800  Plan Check Fee (allowance)                         $  2,000    $ 0.03<br \/>\n  60900  Permit &amp; Construction Tax @ 5% (allowance)         $ 30,500    $ 0.46<br \/>\n  62500  Blueprinting (allowance)                           $  3,000    $ 0.05<br \/>\n  64900  Architect Fee (Kobza)                              $39,4501    $ 0.59<br \/>\n  65200  Construction Clean-up                              $ 10,000    $ 0.15<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n                              Subtotal:                     $689,750    $10.38<br \/>\n  61000  Contingency @ 5%                                   $ 34,488    $ 0.52<br \/>\n         Contractor&#8217;s Fee @ 10%                             $ 72,424    $ 1.09<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n                                               TOTAL:       $796,661    $11.98<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n<p>Qualifications:<br \/>\n               Painting of door frames excluded<br \/>\n               24 gauge sheetmetal at SCIF room roof<\/p>\n<p>                                    Page 18<\/p>\n<p>                                  EXHIBIT &#8220;D&#8221;<br \/>\n                        Approved Final Working Drawings<\/p>\n<p>                                    Page 19<\/p>\n<p>                                  EXHIBIT &#8220;E&#8221;<br \/>\n                             Approved Final Budget<\/p>\n<p>                                    Page 20<\/p>\n<p>                                  EXHIBIT &#8220;F&#8221;<br \/>\n                                  Punch List<\/p>\n<p>                                    Page 21<\/p>\n<p>[LOGO OF THERMA INC.]                                                  Quotation<\/p>\n<p>                                                           Date    May 13,  1991<br \/>\n                                                               &#8212;&#8212;&#8212;-     &#8212;<\/p>\n<p>&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n     TO:<br \/>\n         Sobrato Dev. Cos.<br \/>\n     &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n         10600 N. DeAnza Blvd. #200<br \/>\n     &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n         Cupertino, CA 95014<br \/>\n     &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n         Attention: Mr. Don Jones<br \/>\n     &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<\/p>\n<p>     We propose to furnish you with the following material and\/or service under<br \/>\n conditions herein stipulated<\/p>\n<p>     Subject: Tiburon Systems<br \/>\n              1290 Parkmoor Ave.<\/p>\n<p>     Please find below, cost breakdown for the subject project.<\/p>\n<p>     1st Floor<br \/>\n        Warehouse  (11&#8242;-0&#8243; clear, no ceiling)<br \/>\n        &#8211; Remove and replace 4 zones with galvanized spiral pipe (#&#8217;s 101, 102,<br \/>\n          103, 104)<br \/>\n        &#8211; Remove and replace half the duct of 3 zones with galvanized spiral<br \/>\n          pipe ( #&#8217;s 109, 110, 111)<br \/>\n        &#8211; Replace heating duct with spiral pipe an insulate <\/p>\n<p>     Office #132 and #133<br \/>\n          Sput one zone into 2-offices<\/p>\n<p>     Office #121<br \/>\n          Add cooling only VAV zone<\/p>\n<p>                                          FOR THE SUM OF &#8230;&#8230;&#8230;&#8230; $11,000.00<\/p>\n<p>     Page 1 of 2<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n     2051 Ringwood Avenue   San Jose, CA 95131  (408) 433-5577  FAX: 434-0773<\/p>\n<p>                     Contractor&#8217;s State License No. 270648<br \/>\n               TERMS OF PAYMENT: NET DUE UPON RECEIPT OF INVOICE<br \/>\n    Sales tax, use or similar State or Federal Tax to be paid by purchaser.<\/p>\n<p>     We hereby accept the proposal.     Respectfully Submitted for the Company.<\/p>\n<p>     ________________________________   By____________________________<br \/>\n                                          Howard Hakamura<\/p>\n<p>     ________________________________   Approved<\/p>\n<p>     Dated at________________________   By____________________________<\/p>\n<p>     _________________ 19____________   Dated at___________ 19________<br \/>\n     HN\/tdp,to911.quo<\/p>\n<p>     ________________________________   ________________________________<\/p>\n<p>                                               May 13, 1991<br \/>\nDon Jones<br \/>\n                                               Page 2 of 2<\/p>\n<p>2nd Floor<br \/>\n  &#8211;  Office #21, 232, 233<br \/>\n     Add cooling only VAV zone<\/p>\n<p>  &#8211;  Office #228, 229, 230<br \/>\n     Add cooling only VAV zone<\/p>\n<p>  &#8211;  Office #225<br \/>\n     Tie into existing VAV zone #215<\/p>\n<p>  &#8211;  Office #221 and 222<br \/>\n     Revise existing duct<\/p>\n<p>  &#8211;  Office #218<br \/>\n     Tie into existing zone #228<\/p>\n<p>  &#8211;  Office #214 and 215<br \/>\n     Add cooling only VAV zone<\/p>\n<p>  &#8211;  Office #210, 211, 212<br \/>\n     Add cooling only VAV zone<\/p>\n<p>  &#8211;  Office #208 and 209<br \/>\n     Add cooling only VAV zone<br \/>\n                                            FOR THE SUM OF &#8230;&#8230;&#8230;.. $9,400.00<br \/>\n3rd Floor<br \/>\n  &#8211;  Add 3 ton split system AC-unit for SCIF area<\/p>\n<p>  &#8211;  Add switched main for pneumatic controls around classified area.<\/p>\n<p>  &#8211;  Add duct to AC unit #1 in shaft to supply air to 3\/rd\/ floor<\/p>\n<p>  &#8211;  Office #326<br \/>\n     Add cooling only VAV zone<\/p>\n<p>  &#8211;  Office #327<br \/>\n     Add one each cooling only and heating\/cooling zone<\/p>\n<p>  &#8211;  Office #328<br \/>\n     Add cooling only VAV zone<\/p>\n<table>\n<caption>\n<s>                                         <c><br \/>\n                                            FOR THE SUM OF&#8230;&#8230;&#8230;&#8230;$20,450.00<br \/>\n                                                      XXX&#8230;&#8230;&#8230;&#8230;.    800.00<\/p>\n<p>Miscellaneous Work<br \/>\n  Replace Exhaust Fans &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.    $ 2,150.00<br \/>\n  24 gauge metal over SCIF&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.    $   980.00<br \/>\n  Air balance&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..    $15,000.00<br \/>\n  Misc. plumbing allow&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..    $ 5,000.00<\/p>\n<p>                                             TOTAL&#8230;&#8230;&#8230;&#8230;&#8230;.    $63,980.00<br \/>\n<\/c><\/s><\/caption>\n<\/table>\n<p>Respectfully Submitted,<br \/>\n \/s\/ Howard Hakamura<br \/>\nHoward Hakamura<\/p>\n<p>Cupertino, CA 95014<\/p>\n<p>ATTN: Mr. Don Jones<\/p>\n<p>RE: Tiburon Systems<br \/>\n    WSJCC Bldg. #5<br \/>\n    San Jose, CA<\/p>\n<p>Gentlemen,<\/p>\n<p>     We are pleased to quote you for the electrical work required on the above<br \/>\nref. Protect as follows. Our quote is based on out meeting with Tiburon on<br \/>\nMonday May 6, our walk thru the bldg. With you and the new floor plan by Dennis<br \/>\nKobza &amp; Assoc. dated 5\/3\/91.<\/p>\n<p>Lighting:<br \/>\n     Remove:<br \/>\n            8 &#8211; 2&#8217;x2&#8242; T- bar Fixtures<br \/>\n          100 &#8211; 2&#8217;x4&#8242; T-bar Fixtures<br \/>\n           28 &#8211; 4&#8242; Fluorescent Strips<br \/>\n            5 &#8211; Exit Lights<br \/>\n           12 &#8211; Twin Head Battery Packs<br \/>\n           10 &#8211; Double Switches<br \/>\n            4 &#8211; 4 Gang Switches<br \/>\n           12 &#8211; Down Lights in T-bar<\/p>\n<p>     Reinstall Existing Features:<br \/>\n            8 &#8211; 2&#8217;x2&#8242; T-bar Fixtures<br \/>\n           72 &#8211; 2&#8217;x4&#8242; T-bar Fixtures<br \/>\n            5 &#8211; Exit Lights<\/p>\n<p>     New Fixtures:<br \/>\n            2 &#8211; 2&#8217;x2&#8242; T-bar Fixtures<br \/>\n           24 &#8211; 8&#8242;, 2-Lamp Industrial Fluorescent Fixtures<br \/>\n            9 &#8211; Exit Lights<br \/>\n            7 &#8211; New Batt. Packs<\/p>\n<p>          XXX &#8211; 8&#8242; Lite Track<br \/>\n           20 &#8211; 75 Watt Lite Track Fixtures<br \/>\n            5 &#8211; Single Switches<br \/>\n           41 &#8211; Double Switches<br \/>\n            4 &#8211; 4 Gang Switches<br \/>\n            2 &#8211; Dimmers<br \/>\n          Lot &#8211; Replace burn out fluorescent and incandell lamps and ballasts<br \/>\n          Lot &#8211; Replace broken and missing lenses<\/p>\n<p>Power:<br \/>\n     Remove:<br \/>\n          230&#8242;- of existing 2000 wiremold<br \/>\n           12 &#8211; Cord Drops<br \/>\n           27 &#8211; Duplex Receptacles in walls<br \/>\n            3 &#8211; 30amp Receptacles in walls<br \/>\n            5 &#8211; Surface Mtd. Receptacles<br \/>\n            7 &#8211; Power Poles<br \/>\n           22 &#8211; Remove Floor Boxes<\/p>\n<p>New:<br \/>\n           73 &#8211; Duplex Receptacles<br \/>\n            5 &#8211; Dedicated Receptacles<br \/>\n           48 &#8211; 4 Plex Receptacles<br \/>\n            5 &#8211; 30A, 209V, 10 Receptacles<br \/>\n            1 &#8211; 50A, 209V, 10 Receptacles<br \/>\n           12 &#8211; J.B.&#8217;s in Ceiling for Security Power<br \/>\n           17 &#8211; Floor Fees for Partitions with 3-Circuits each<br \/>\n           14 &#8211; Wall or Column Feeds for Partitions w\/ 3-Circuits each<br \/>\n            2 &#8211; Electric Screens<br \/>\n           44 &#8211; Telephone Ring and Pull String<br \/>\n            1 &#8211; Replace Noisey 75KVA Transformer in 3\/rd\/ Floor               <\/p>\n<p>Depot Repair:<br \/>\n            1 &#8211; new 75 KVA Transformer and Feeder from MSB<br \/>\n            1 &#8211; new 2- section panel w\/ main and feeder from tansf.<br \/>\n           60&#8242;- 4000 wiremold w\/ 6 &#8211; 30A, 280V, 30 outlets, 3 -30A,<br \/>\n                208V, 10 outlets, 3 -20A, 208V, 14 outlets,<br \/>\n                  6 &#8211; dedicated duplex, &amp; 12 &#8211; STD. Duplex<\/p>\n<p>           12  &#8211; Plex Cord Drops for work benches<br \/>\n            1  &#8211; E.P.O Switch <\/p>\n<p>1\/st\/ Floor Computer Room:<br \/>\n            1  &#8211; new 42 circuit panel fed from exist. Panel<br \/>\n           30&#8242; &#8211; 6000 wiremold under (E) computer floor of<br \/>\n                   3  &#8211; 30A, 208V, 30 outlets on 10&#8242; S.T. Flex<br \/>\n                   6  &#8211; 20A, 208V, 14 &#8221;  &#8221;  &#8221;<br \/>\n                  20  &#8211; 4 Plex            &#8221;  &#8221;  &#8221;<br \/>\n            1  &#8211; Rolm Tel. Equip. power and connection          <\/p>\n<p>3\/rd\/ Floor Computer Room:<br \/>\n            1  &#8211; new 112 1\/2 KVA Transformer, 1 -175A fused switch in MSB w\/<br \/>\n                 feeder from MSB<br \/>\n            1  &#8211; new 3 &#8211; section 400A panel w\/ main breaker<br \/>\n            2  &#8211; E.P.O. switches<br \/>\n          400&#8242; &#8211; 40000 wiremold under computer floor w\/<br \/>\n                  19  &#8211; 30A, 208V, 30 outlets on 10&#8242; S.T. Flex<br \/>\n                   5  &#8211; 30A, 208V, 10    &#8221;  &#8221;<br \/>\n                  10  &#8211; 20A, 208V, 10   &#8221;  &#8221;<br \/>\n                  84  &#8211; 4-Plex outlets in 10&#8242; S.T. Flex<br \/>\n            1  &#8211; New 100AMP loadcenter for screen room w\/ feeder from 3\/rd\/<br \/>\n                 floor computer panel<br \/>\n           12  &#8211; connect lights in screen room<\/p>\n<p>Misc:<br \/>\n            1  &#8211; Feeder, Connection and Combo Starter for new condensing unit on<br \/>\n                 roof<br \/>\n            1  &#8211; Feeder, Connection and Combo Starter for new fan coil in SCIF<br \/>\n                 room<br \/>\n            1  &#8211; Feeder, Connection and Disconnet for condensate drain pump<br \/>\n          Lot  &#8211; Control wire to stat.<br \/>\n          Lot  &#8211; Replace all painted switch and receptacle plates with ivory<br \/>\n                 plates<br \/>\n          Lot  &#8211; Cut and patch concrete floor for new feeds to (E) floor boxes<br \/>\n                 in rooms 127 &amp; 128<br \/>\n          Lot  &#8211; Core floors for partition floor feeds<\/p>\n<p>          Our quote for the above electrical work, $183,000.00<\/p>\n<p>Exclusions:<br \/>\n            1  &#8211; Disconnection and moving of Tiburons equipment at their<br \/>\n                 existing location.<\/p>\n<p>     If you should have any questions please feel free to contact us.<\/p>\n<p>                                                       Sinc<br \/>\n                                                       \/s\/ [ILLEGIBLE]^^<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7174,8652],"corporate_contracts_industries":[9476,9519],"corporate_contracts_types":[9583,9579],"class_list":["post-41781","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-concentric-network-corp","corporate_contracts_companies-raytheon-co","corporate_contracts_industries-aerospace__space","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-land__ca","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41781"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41781"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41781"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}